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CREDIT AGREEMENT
Dated as of February 27, 1997
among
THE SOUTHLAND CORPORATION,
THE FINANCIAL INSTITUTIONS PARTY HERETO
as Senior Lenders,
CITIBANK, N.A.,
as Administrative Agent
and
THE SAKURA BANK, LIMITED, NEW YORK BRANCH,
as Co-Agent
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Tab 2
ARTICLE I
DEFINITIONS
Section Page
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1.01. Certain Defined Terms 1
1.02. References to this Agreement 22
1.03. Computation Of Time Periods 22
1.04. Accounting Terms 23
1.05. Miscellaneous Terms 23
1.06. Other Defined Terms 23
1.07. Schedules and Exhibits 23
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01. Term Loans 23
2.02. Revolving Loans 25
2.03. Competitive Bid Loans 28
2.04. Use of Proceeds of Loans 31
2.05. Interest on the Loans 31
2.06. Fees 35
2.07. Prepayments of Loans; Reductions and Termination of Commitments 36
2.08. Payments 37
2.09. Special Provisions Governing Eurodollar Rate Loans 40
2.10. Increased Capital 45
2.11. Replacement of Senior Lender in Event of Adverse Condition 45
2.12. Authorized Officers and Agents 46
ARTICLE III
THE LETTER OF CREDIT SUBFACILITY
3.01. Obligation to Issue 46
3.02. Types and Amounts 46
3.03. Conditions 47
3.04. Issuance of Facility Letters of Credit 48
3.05. Reimbursement Obligations; Duties of Issuing Banks 48
3.06. Participations 49
3.07. Payment of Reimbursement Obligations 51
3.08. Compensation for Facility Letters of Credit ▇▇
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▇▇▇▇▇▇▇ Page
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3.09. Issuing Bank Reporting Requirements 52
3.10. Indemnification; Exoneration 53
3.11. Transitional Provisions 54
3.12. Amount of Letter of Credit Subfacility 54
3.13. Obligations Several 55
ARTICLE IV
CONDITIONS TO LOANS AND FACILITY LETTERS OF CREDIT
4.01. Conditions Precedent to Initial Loans and Facility Letters of Credit 55
4.02. Conditions Precedent to All Subsequent Revolving Loans and
Facility Letters of Credit 58
4.03. Conditions Precedent to All Subsequent Competitive Bid Loans 59
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01. Representations and Warranties 60
ARTICLE VI
REPORTING COVENANTS
6.01. Financial Statements 68
6.02. Environmental Notices 72
6.03. Other Reports 72
ARTICLE VII
AFFIRMATIVE COVENANTS
7.01. Corporate Existence, etc. 73
7.02. Compliance with Laws, etc. 73
7.03. Payment of Taxes and Claims 73
7.04. Maintenance of Properties; Insurance 74
7.05. Inspection of Property; Books and Records; Discussions 74
7.06. Release of Liens 74
ARTICLE VIII
NEGATIVE COVENANTS
8.01. Indebtedness 75
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Section Page
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8.02. Dispositions of Assets; Liens 77
8.03. Investments 79
8.04. Accommodation Obligations 80
8.05. Restricted Junior Payments 81
8.06. Conduct of Business 82
8.07. Transactions with Shareholders and Affiliates 82
8.08. Restriction on Fundamental Changes 83
8.09. ERISA 83
8.10. Commercial Paper Facility 84
8.11. Sales and Leasebacks 84
8.12. Subordinated Indebtedness 84
8.13. Amendment of Charter or By-Laws 85
8.14. Disposal of Subsidiary Stock 85
8.15. Margin Regulations 85
8.16. Interest Rate Contracts 85
ARTICLE IX
FINANCIAL COVENANTS
9.01. Senior Indebtedness to EBITDA 86
9.02. Minimum Interest and Rent Coverage Ratio 86
9.03. Minimum Fixed Charge Coverage Ratio 87
ARTICLE X
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
10.01. Events of Default 88
10.02. Rights and Remedies 92
ARTICLE XI
THE ADMINISTRATIVE AGENT; THE CO-AGENT
11.01. Appointment 93
11.02. Nature of Duties 94
11.03. Rights, Exculpation, etc. 94
11.04. Reliance 95
11.05. Indemnification 95
11.06. The Administrative Agent Individually 95
11.07. Successor Administrative Agent; Resignation of Agent 96
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Section Page
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11.08. The Co-Agent 96
ARTICLE XII
MISCELLANEOUS
12.01. Assignments and Participations 96
12.02. Expenses 98
12.03. Indemnity 99
12.04. Change in Accounting Principles 100
12.05. Set-Off 100
12.06. Ratable Sharing 101
12.07. Amendments and Waivers 102
12.08. Independence of Covenants 102
12.09. Notices 102
12.10. Survival of Warranties and Agreements 103
12.11. Failure of Indulgence Not Waiver; Remedies Cumulative 103
12.12. Advice of Counsel 103
12.13. Marshaling; Payments Set Aside 103
12.14. Severability 104
12.15. Headings 104
12.16. Governing Law 104
12.17. Limitation of Liability 104
12.18. Successors and Assigns; Subsequent Holders of Notes 104
12.19. Consent to Jurisdiction and Service of Process; Waiver of Jury Trail 104
12.20. Counterparts; Effectiveness; Inconsistencies 105
12.21. Foreign Bank Certifications 106
12.22. Performance of Obligations 107
12.23. Limitation on Agreements 107
12.24. Construction 108
12.25. Confidentiality 108
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EXHIBITS
Exhibit 1 - Form of Assignment and Acceptance
Exhibit 2 - Terms of Commercial Paper
Exhibit 3 - Form of Compliance Certificate
Exhibit 4-A - Notice of Borrowing (Term Loans)
Exhibit 4-B - Notice of Borrowing (Revolving Loans)
Exhibit 4-C - Notice of Borrowing (Competitive Bid Loans)
Exhibit 5 - Notice of Conversion/Continuation
Exhibit 6 - Form of Term Note
Exhibit 7 - Form of Revolving Note
Exhibit 8 - Form of Competitive Bid Note
Exhibit 9 - [Intentionally omitted]
Exhibit 10-A - Form of Opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇
Exhibit 10-B - Form of Opinion of Shearman & Sterling
Exhibit 11 - Form of Letter from Coopers & ▇▇▇▇▇▇▇
Exhibit 12 - Form of Officers' No Default Certificate
Exhibit 13 - Form of Southland Canada Subordination Agreement
Exhibit 14 - Form of Consent to Assignments and Participations
Exhibit 15-A - Form of Certificate Relating to Section ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Withholding Tax
Exhibit 15-B - Form of Certificate Relating to Section ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Withholding Tax
SCHEDULES
Schedule 1.01-A - Existing Indebtedness
Schedule 1.01-B - Existing Liens
Schedule 3.11 - Existing Letters of Credit
Schedule 5.01(iii) - Subsidiaries; Ownership of Capital Stock
Schedule 5.01(xi) - Pending Litigation
Schedule 5.01(xxii) - Environmental Matters
Schedule 5.01(xxiii) - ERISA Matters
Schedule 5.01(xxv) - Conflicts
v
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of February 27, 1997
(as amended, restated, supplemented or otherwise modified
from time to time, the "Agreement") is entered into by and
among THE SOUTHLAND CORPORATION, a Texas corporation
("Southland"), the FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS "SENIOR LENDERS" OR "ISSUING BANKS" (each as
defined below), CITIBANK, N.A. ("Citibank"), in its separate
capacity as Administrative Agent for the Senior Lenders and
the Issuing Banks hereunder (in such capacity, together with
any successor administrative agent appointed pursuant to
SECTION 11.07, the "Administrative Agent") and THE SAKURA
BANK, LIMITED, NEW YORK BRANCH, as Co-Agent (in such
capacity, the "Co-Agent").
ARTICLE I
DEFINITIONS
1.01. Certain Defined Terms The following terms
used in this Agreement shall have the following meanings
(such meanings to be applicable both to the singular and the
plural forms of the terms defined):
"ACCOMMODATION OBLIGATION", as applied to any
Person, shall mean any contractual obligation, contingent or
otherwise, of that Person with respect to any Indebtedness
or other obligation or liability of another, including,
without limitation, any such Indebtedness, obligation or
liability directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary
course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person
is otherwise directly or indirectly liable, including
Contractual Obligations (contingent or otherwise) arising
through any agreement to purchase, repurchase, or otherwise
acquire such Indebtedness, obligation or liability or any
security therefor, or to provide funds for the payment or
discharge thereof (whether in the form of loans, advances,
stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other
financial condition, or to make payment other than for value
received.
"ADMINISTRATIVE AGENT" shall have the meaning
ascribed to it in the preamble hereto.
"AFFILIATE", as applied to any Person, shall mean
any other Person directly or indirectly controlling,
controlled by, or under common control with, that Person.
For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled
by" and "under common control with"), as applied to any
Person, shall mean the possession, directly or indirectly,
of the power to vote five percent (5%) or
more of the Securities having voting power for the election
of directors of such Person or otherwise to direct or cause
the direction of the management and policies of that Person,
whether through the ownership of voting Securities or by
contract or otherwise.
"AGREEMENT" shall have the meaning ascribed to it in
the preamble hereto.
"ASSIGNMENT AND ACCEPTANCE" shall mean, with respect
to any Senior Lender, an Assignment and Acceptance in
substantially the form of EXHIBIT 1, executed by each party
thereto with blanks appropriately completed.
"BASE RATE" shall mean, for any period, a
fluctuating interest rate per annum as shall be in effect
from time to time, which rate per annum shall at all times
be equal to the highest of:
(i) the rate of interest announced publicly by
Citibank in New York, New York, from time to time,
as Citibank's base rate;
(ii) the sum (adjusted to the nearest one-quarter
of one percent (1/4 of 1%) or, if there is no
nearest one-quarter of one percent (1/4 of 1%), to
the next higher one-quarter of one percent (1/4 of
1%)) of (a) one-half of one percent (1/2 of 1%) per
annum PLUS (b) the latest three-week moving average
of secondary market morning offering rates in the
United States for three-month certificates of
deposit of major United States money market banks,
such three-week moving average (adjusted to the
basis of a year of 365 days) being determined weekly
by Citibank on the basis of such rates reported by
certificate of deposit dealers to, and published by,
the Federal Reserve Bank of New York, or, if such
publication shall be suspended or terminated, on the
basis of quotations for such rates received by
Citibank from three New York certificate of deposit
dealers of recognized standing selected by Citibank;
and
(iii) the sum of (A) one-half of one percent
(0.50%) per annum PLUS (B) the Federal Funds Rate in
effect from time to time during such period.
"BASE RATE LOANS" shall mean all Loans outstanding
which bear interest at a rate determined by reference to the
Base Rate as provided in SECTION 2.05(a)(i).
"BENEFIT PLAN" shall mean any employee benefit plan
defined in Section 3(3) of ERISA, other than a Multiemployer
Plan, in respect of which Southland, any Subsidiary of
Southland or any ERISA Affiliate is an "employer" as defined
in Section 3(5) of ERISA.
"BORROWING" shall mean, except as otherwise provided
in SECTION 2.09(e)(ii), (i) a borrowing consisting of Term
Loans or Revolving Loans of the same Type made on the same
day by the Senior Lenders and (ii) a borrowing
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consisting of simulataneous Competitive Bid Loans from each
of the Senior Lenders whose offer to make one or more
Competitive Bid Loans as part of such borrowing has been
accepted by Southland under the auction bidding procedure
described in SECTION 2.03.
"BUSINESS DAY" shall mean (i) for all purposes other
than as covered by CLAUSE (ii) below, any day excluding
Saturday, Sunday, and any day which is a legal holiday under
the law of the State of New York or the State of Texas, or
is a day on which banking institutions located in either
such state are required or authorized by law or other
governmental action to close and (ii) with respect to all
notices, determinations, fundings and payments in connection
with the Eurodollar Rate, any day which is a Business Day
described in CLAUSE (i) and which is also a day for trading
by and between banks in the London interbank Eurodollar
market.
"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.
"CAPITAL LEASE", as applied to any Person, shall
mean any lease of any property (whether real, personal, or
mixed) by that Person as lessee which, in conformity with
GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"CASH EQUIVALENTS" shall mean (i) marketable direct
obligations issued or unconditionally guaranteed by the
United States Government or issued by an agency thereof and
backed by the full faith and credit of the United States, in
each case maturing within one hundred eighty (180) days
after the date of acquisition thereof; (ii) marketable
direct obligations issued by any state of the United States
of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one
hundred eighty (180) days after the date of acquisition
thereof and, at the time of acquisition, having one of the
two highest ratings obtainable from either S&P or ▇▇▇▇▇'▇
(or, if at any time neither S&P nor ▇▇▇▇▇'▇ shall be rating
such obligations, then from such other nationally recognized
rating services acceptable to the Administrative Agent) and
not listed in Credit Watch published by S&P;
(iii) commercial paper, other than commercial paper issued
by Southland or any of its Affiliates, maturing no more than
one hundred eighty (180) days after the date of creation
thereof and, at the time of acquisition, having a rating of
at least A-1 or Prime-1 from either S&P or ▇▇▇▇▇'▇ (or, if
at any time neither S&P nor ▇▇▇▇▇'▇ shall be rating such
obligations, then the highest rating from such other
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nationally recognized rating services as are acceptable to
the Administrative Agent); (iv) domestic and Eurodollar
certificates of deposit or time deposits or bankers'
acceptances maturing within one hundred eighty (180) days
after the date of acquisition thereof issued by any
commercial bank organized under the laws of the United
States of America or any state thereof or the District of
Columbia or by any foreign bank which acts through a branch
or funding office located in the United States of America
and, in any case, having (A) combined capital and surplus of
not less than $250,000,000 and (B) a long term debt rating
of A or better by S&P or A2 or better by ▇▇▇▇▇'▇ (or, if at
any time neither S&P nor ▇▇▇▇▇'▇ shall be rating such
obligations, then from such other nationally recognized
rating services acceptable to the Administrative Agent); (v)
overnight investments in an aggregate amount not to exceed
$50,000,000 at any one time in money-market funds in which
such investments are made by any commercial bank which is an
Affiliate of one of the fifty (50) largest bank holding
companies in the United States in connection with deposit
accounts maintained at such commercial bank; and (vi)
investments by Southland Canada, Inc., not exceeding
$30,000,000 in the aggregate at any one time, in Canadian
Securities of the same type as the Securities described in
CLAUSES (i) through (iv).
"CERCLA" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C.,
9601 ET SEQ., any amendments thereto, any successor
statutes and any regulations or guidance promulgated
thereunder.
"CHANGE OF CONTROL" shall mean the occurrence of
either of the following:
(i) the Majority Owners shall cease to be
the direct or indirect owners, or shall cease to
direct the voting and disposition, of (A) at least
50%, in the aggregate, of the outstanding shares of
Common Stock and (B) Securities of Southland (or
other Securities convertible into such Securities)
representing at least 50%, in the aggregate, of the
combined voting power of all Securities of Southland
entitled to vote in the election of directors (other
than Securities having such power only by reason of
the happening of a contingency); or
(ii) the Majority Owners shall cease to
have the power, in the aggregate, to elect at least
a majority of the directors on the Board of
Directors of Southland, or at any time, the Majority
Owners shall not have voted in favor of the election
of directors constituting at least a majority of the
Board of Directors of Southland.
"CITIBANK" shall have the meaning ascribed to it in
the preamble hereto.
"CITICORP SECURITIES" shall mean Citicorp
Securities, Inc., a Delaware corporation.
"CO-AGENT" shall have the meaning ascribed to it in
the preamble hereto.
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"COMMERCIAL LETTER OF CREDIT" shall mean any
documentary Letter of Credit which is drawable upon
presentation of documents evidencing the sale
yor shipment of goods purchased by Southland in the ordinary
course of its business.
"COMMERCIAL PAPER" shall mean (i) commercial paper
issued by Southland (A) which is unsecured, (B) which
qualifies for the exemption from registration under Section
3(a)(3) of the Securities Act, (C) direct payment of which
is fully and unconditionally guaranteed by Ito-Yokado and
(D) which is otherwise issued and outstanding on
substantially the terms set forth in EXHIBIT 2, together
with such other or different terms, and governed by such
documents, as are permitted by SECTION 8.10 or otherwise
acceptable to the Requisite Senior Lenders and (ii)
unsecured Indebtedness for money borrowed (to be used as a
backup line for the commercial paper described in CLAUSE (i)
above) (A) which is subject to terms, conditions and
documentation satisfactory in form and substance to the
Requisite Senior Lenders, (B) resulting from advances (if
any) which are applied to repay the commercial paper
described in CLAUSE (i) above at the maturity thereof and
(C) direct payment of which is fully and unconditionally
guaranteed by Ito-Yokado.
"COMMISSION" shall mean the Securities and Exchange
Commission or any Person succeeding to the functions
thereof.
"COMMITMENT" shall mean, with respect to any Senior
Lender, such Senior Lender's Term Loan Commitment and
Revolving Credit Commitment as adjusted in accordance with
the terms of this Agreement, and "COMMITMENTS" shall mean,
collectively, the Term Loan Commitments and Revolving Credit
Commitments of all of the Senior Lenders.
"COMMON STOCK" shall mean the common stock of
Southland, $.0001 par value per share.
"COMPETITIVE BID AVAILABILITY" shall have the
meaning ascribed to it in SECTION 2.03(a)(i).
"COMPETITIVE BID LOAN" shall have the meaning
ascribed to it in SECTION 2.03(a)(i).
"COMPETITIVE BID NOTE" shall have the meaning
ascribed to it in SECTION 2.03(d).
"COMPLIANCE CERTIFICATE" shall mean a certificate
substantially in the form of EXHIBIT 3 delivered to the
Senior Lenders by Southland pursuant to SECTION 6.01(iv)(B).
"CONSOLIDATED CASH INTEREST EXPENSE" shall mean, for
any period, total interest expense, whether paid or accrued
(including the interest component of Capital Leases and cash
payments made as interest under the
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Senior Subordinated Debenture Indentures and accounted for
as a reduction of principal pursuant to Statement of
Financial Accounting Standards No. 15 of the Financial
Accounting Standards Board), of Southland and its
Subsidiaries on a consolidated basis, including, without
limitation, all commissions, discounts and other fees and
charges owed with respect to letters of credit and net costs
under Interest Rate Contracts, but excluding, however, (a)
interest expenses not payable in cash (including
amortization of discount), all as determined in conformity
with GAAP and (b) Past Default Interest.
"CONSOLIDATED FIXED CHARGES" shall mean, for any
period, the amounts for such period of (i) Consolidated Cash
Interest Expense, PLUS (ii) scheduled principal payments on
the Term Loans (net of the application of all prepayments
not paid during such period with respect to such scheduled
principal payments) and scheduled principal payments on all
Other Indebtedness (including the principal component of
Capital Lease obligations), MINUS (iii) cash payments made
as interest under the Senior Subordinated Debenture
Indentures and accounted for as a reduction of principal
pursuant to Statement of Financial Accounting Standards No.
15 of the Financial Accounting Standards Board.
"CONSOLIDATED NET INCOME" shall mean, for any
period, the net earnings (or loss) after taxes of Southland
and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity
with GAAP.
"CONTRACTUAL OBLIGATION", as applied to any Person,
shall mean any provision of any Securities issued by that
Person or any indenture, mortgage, deed of trust, contract,
undertaking, document, instrument or other agreement or
instrument to which that Person is a party or by which it or
any of its properties is bound, or to which it or any of its
properties is subject (including, without limitation, any
restrictive covenant affecting such Person or any of its
properties).
"CURE LOANS" shall have the meaning ascribed to it
in SECTION 2.08(b)(iii)(C).
"CUSTOMARY PERMITTED LIENS" shall mean
(i) Liens (other than Environmental Liens and any
Lien imposed under ERISA) for taxes, assessments or
charges of any Governmental Authority or claims not
yet due or which are being contested in good faith
by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions
are being maintained in accordance with the
provisions of GAAP;
(ii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and
other Liens, other than any Lien imposed under
ERISA, imposed by law created in the ordinary course
of business for amounts not yet due or which are
being contested in good faith by appropriate
proceedings and with respect to which adequate
reserves or other appropriate provisions are being
maintained in accordance with the provisions of
GAAP;
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(iii) Liens (other than any Lien imposed under
ERISA) incurred or deposits made in the ordinary
course of business (including, without limitation,
surety bonds and appeal bonds) in connection with
workers' compensation, unemployment insurance and
other types of social security benefits or to secure
the performance of tenders, bids, leases, contracts
(other than for the repayment of Indebtedness),
statutory obligations and other similar obligations
or arising as a result of progress payments under
government contracts;
(iv) easements (including, without limitation,
reciprocal easement agreements and utility
agreements), rights-of-way, covenants, consents,
reservations, encroachments, variations and other
restrictions, charges or encumbrances (whether or
not recorded), which do not interfere materially
with the ordinary conduct of the business of
Southland or its Subsidiaries and which do not
materially detract from the value of the property to
which they attach or impair the use thereof to
Southland or its Subsidiaries;
(v) rights of tenants, subtenants, franchisees or
parties in possession (other than a debtor in
possession, trustee in bankruptcy or receiver in
respect of Southland), or options or rights of first
refusal, whether pursuant to leases, subleases,
franchise agreements, other occupancy agreements or
otherwise, if such rights were vested on the
Effective Date or created thereafter in the ordinary
course of business in transactions permitted under
this Agreement;
(vi) extensions, renewals or replacements of any
Lien referred to in CLAUSES (i) through (v) above,
provided that the principal amount of the obligation
secured thereby is not increased and that any such
extension, renewal or replacement is limited to the
property originally encumbered thereby; and
(vii) building restrictions, zoning laws and other
statutes, laws, rules, regulations, ordinances and
restrictions, and any amendments thereto, now or at
any time hereafter adopted by any governmental or
quasi-Governmental Authority having jurisdiction.
"DEFAULTING L/C PARTICIPANT" shall have the meaning
ascribed to it in SECTION 3.06(b)(ii).
"DEFINED BENEFIT PLAN" shall mean any employee
benefit plan defined in Section 3(3) of ERISA, other than a
Multiemployer Plan, which is subject to the provisions of
Title IV of ERISA and which is, or was at any time during
the then five (5) preceding years, maintained for employees
of Southland, any Subsidiary of Southland or any ERISA
Affiliate.
"DOLLARS" and "$" shall mean the lawful money of the
United States of America.
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"EBITDA" shall mean, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, PLUS
(ii) depreciation and amortization expense, PLUS (iii)
interest expense, PLUS (iv) federal, state and foreign
income taxes, PLUS (v) extraordinary losses (and any unusual
losses in excess of $5,000,000 arising in or outside of the
ordinary course of business not included in the
extraordinary losses determined in accordance with GAAP
which have been included in the determination of
Consolidated Net Income), MINUS (vi) extraordinary gains
(and any unusual gains in excess of $5,000,000 arising in or
outside of the ordinary course of business not included in
extraordinary gains determined in accordance with GAAP which
have been included in the determination of Consolidated Net
Income).
"EFFECTIVE DATE" shall mean the date on which this
Agreement shall become effective in accordance with SECTION
12.20.
"EMPLOYEE CONVERTIBLE SUBORDINATED DEBENTURES" shall
mean Southland's Employee Convertible Subordinated
Debentures due December 31, 1997 issued pursuant to that
certain Indenture dated as of January 1, 1989 between
Southland and The Bank of New York, as trustee.
"ENVIRONMENTAL LIEN" shall mean a Lien in favor of
any Governmental Authority for (i) any liability under
federal or state environmental laws or regulations, or (ii)
damages arising from or costs incurred by such Governmental
Authority in response to a release or threatened release of
a hazardous or toxic waste, substance or constituent, or
other substance into the environment.
"EQUITY PARTICIPATION PLAN" shall mean the Equity
Participation Plan adopted by Southland's board of directors
on July 22, 1988, relating to the issuance of options for
Southland's common stock and Employee Convertible
Subordinated Debentures to certain Southland employees.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, any amendments thereto, any successor
statutes and any regulations or guidance promulgated
thereunder.
"ERISA AFFILIATE" shall mean (i) any corporation
which is a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the
Internal Revenue Code) as Southland; (ii) a trade or
business (whether or not incorporated) which is under common
control (within the meaning of Section 414(c) of the
Internal Revenue Code) with Southland; and (iii) a member of
the same affiliated service group (within the meaning of
Section 414(m) of the Internal Revenue Code) as Southland,
any corporation described in CLAUSE (i) above or any trade
or business described in CLAUSE (ii) above.
"EURODOLLAR AFFILIATE" shall mean, with respect to
each Senior Lender, the Affiliate of such Senior Lender set
forth below such Senior
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Lender's name under the heading "Eurodollar Affiliate" on
the signature pages of this Agreement or of the Assignment
and Acceptance pursuant to which such Person became a Senior
Lender under this Agreement or as otherwise set forth in a
written notice to Southland and the Administrative Agent in
accordance with SECTION 12.09.
"EURODOLLAR INTEREST PAYMENT DATE" shall mean, with
respect to any Eurodollar Rate Loan, the last day of each
Eurodollar Interest Period applicable to such Loan and, in
the case of a Eurodollar Interest Period in excess of three
months applicable to a Borrowing of Eurodollar Rate Loans,
the corresponding date at the end of each three month period
after the commencement date of such Eurodollar Interest
Period and the last day of such Eurodollar Interest Period.
"EURODOLLAR INTEREST PERIOD" shall have the meaning
ascribed to it in SECTION 2.09(b).
"EURODOLLAR INTEREST RATE DETERMINATION DATE" shall
mean the date on which the Administrative Agent determines
the Eurodollar Rate applicable to a Borrowing, continuation
or conversion of Eurodollar Rate Loans. The Eurodollar
Interest Rate Determination Date shall be the second
Business Day prior to the first day of the Eurodollar
Interest Period applicable to such Borrowing, continuation
or conversion.
"EURODOLLAR RATE" shall mean, with respect to any
Eurodollar Interest Period applicable to a Borrowing of
Eurodollar Rate Loans, an interest rate per annum obtained
by dividing (i) the rate of interest determined by the
Administrative Agent to be the average (rounded upward to
the nearest whole multiple of one one-hundredth of one
percent (1/100 of 1%) per annum if such average is not such
a multiple) of the rate per annum determined by each of the
Reference Banks to be the rate per annum at which deposits
in Dollars are offered by such Reference Bank to major banks
in the London interbank Eurodollar market at approximately
11:00 a.m. (London time) on the Eurodollar Interest Rate
Determination Date for such Eurodollar Interest Period for a
period equal to such Eurodollar Interest Period and in an
amount substantially equal to the amount of the Eurodollar
Rate Loan to be made by such Reference Bank to be
outstanding during such Eurodollar Interest Period, by (ii)
a percentage equal to 100% minus the Eurodollar Reserve
Percentage. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change
in the Eurodollar Reserve Percentage.
"EURODOLLAR RATE LOANS" shall mean those Loans
outstanding which bear interest at a rate determined by
reference to the Eurodollar Rate as provided in SECTION
2.05(a)(ii).
"EURODOLLAR RESERVE PERCENTAGE" shall mean for any
date that percentage (expressed as a decimal) which is in
effect on such date, as prescribed by the Federal Reserve
Board for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of
the Federal Reserve
-9-
System in New York City with deposits exceeding five billion
Dollars in respect of "Eurocurrency liabilities" having a
term equal to the applicable Eurodollar Interest Period (or
in respect of any other category of liabilities which
includes deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined or any category of
extensions of credit or other assets which includes loans by
a non-United States office of any bank to United States
residents).
"EVENT OF DEFAULT" shall mean any of the occurrences
set forth in SECTION 10.01 after the expiration of any
applicable grace period expressly provided therein.
"EXISTING CREDIT AGREEMENT" shall mean that certain
Credit Agreement dated as of July 31, 1987, amended and
restated as of November 5, 1987, further amended and
restated as of February 17, 1993, further amended and
restated as of December 16, 1994, and as further amended
through the Effective Date, among Southland (as successor in
interest to JT Acquisition Corporation), the financial
institutions from time to time party thereto as "Senior
Lenders" or "Issuing Banks" (each as defined therein) and
Citicorp North America, Inc. (formerly known as Citicorp
Industrial Credit, Inc.), in its separate capacity as
"Administrative Agent" (as defined therein) and The Sakura
Bank, Limited, New York Branch, as "Co-Agent" (as defined
therein).
"FACILITY LETTER OF CREDIT" shall mean any
Commercial Letter of Credit or any Standby Letter of Credit
issued by an Issuing Bank for the account of Southland
pursuant to ARTICLE III.
"FACILITY LETTER OF CREDIT OBLIGATIONS" shall mean,
at any particular time, the sum of (i) the aggregate
Reimbursement Obligations at such time, PLUS (ii) the
aggregate maximum amount available for drawing under the
Facility Letters of Credit at such time.
"FDIC" shall mean the Federal Deposit Insurance
Corporation or any Person succeeding to the functions
thereof.
"FEDERAL FUNDS RATE" shall mean, for any period, a
fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on
overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as
published for such day (or, if such day is not a Business
Day, for the immediately preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average
of the quotations for such day on such transactions received
by the Administrative Agent from three Federal Funds brokers
of recognized standing selected by the Administrative Agent.
"FEDERAL RESERVE BOARD" shall mean the Board of
Governors of the Federal Reserve System or any Person
succeeding to the functions thereof.
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"FEE LETTER" shall mean the letter agreement dated
December 19, 1996 among the Administrative Agent, Citicorp
Securities and Southland.
"FISCAL YEAR" shall mean the fiscal year of
Southland, which shall be the twelve (12) month period
ending on December 31 in each year or such other period as
Southland may designate and the Requisite Senior Lenders may
approve in writing.
"FOREIGN AFFILIATE" shall mean any Affiliate of
Southland (i) which is not organized under the laws of the
United States of America, any state thereof or the District
of Columbia or (ii) with respect to which a majority of such
Affiliate's property is not located within any State of the
United States of America or the District of Columbia.
"FUNDING DATE" shall mean, with respect to any
Revolving Credit Advance, the date of the funding of that
Revolving Credit Advance.
"GAAP" shall mean generally accepted accounting
principles set forth in the opinions and pronouncements of
the Accounting Principles Board and the American Institute
of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board,
or in such other statements by such other entity as may be
in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of
the date of determination.
"GOVERNMENT ACTS" shall have the meaning ascribed to
it in SECTION 3.10(a).
"GOVERNMENTAL AUTHORITY" shall mean any nation or
government, any state or other political subdivision thereof
and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"HOLDERS" shall mean the holders of the Obligations
and shall refer to (i) each Senior Lender in respect of its
Loans and as holder of its Notes, (ii) each Issuing Bank in
respect of Reimbursement Obligations owed to it, (iii) the
Administrative Agent, Senior Lenders and Issuing Banks in
respect of all other present and future obligations and
liabilities of Southland of every type and description
arising under or in connection with this Agreement or any
other Loan Document, (iv) each other Person entitled to
indemnification pursuant to SECTION 12.03, in respect of the
obligations and liabilities of Southland to such Person
thereunder and (v) their respective successors, transferees
and assigns (to the extent permitted by the terms of the
Loan Documents).
"INDEBTEDNESS", as applied to any Person, shall
mean, at any time, without duplication, (i) the principal of
(a) all indebtedness, obligations or other liabilities of
such Person for borrowed money, (b) all indebtedness,
obligations or other liabilities of such Person evidenced by
bonds, debentures, notes or other similar instruments,
(c) all reimbursement
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obligations and other liabilities of such Person with
respect to letters of credit issued for such Person's
account, (d) all obligations of such Person to pay the
deferred purchase price of property or services (including
employee compensation), except trade accounts payable and
accrued expenses arising in the ordinary course of business
but only if and so long as the same are payable on available
trade terms, (e) all obligations in respect of Capitalized
Leases of such Person, (f) all Accommodation Obligations of
such Person, and (g) all indebtedness, obligations or other
liabilities of such Persons or others secured by a Lien on
any asset of such Person, whether or not such indebtedness,
obligations or liabilities are assumed by such Person, all
as of such time, and (ii) all indebtedness, obligations or
other liabilities in respect of Interest Rate Contracts and
foreign currency exchange agreements, net of indebtedness,
obligations or other liabilities owed to such Person by its
counterparties in respect of Interest Rate Contracts and
foreign currency exchange agreements.
"INTEREST RATE CONTRACTS" shall mean interest rate
exchange, collar or cap agreements or non-leveraged options
providing interest rate protection.
"INTERNAL REVENUE CODE" shall mean the Internal
Revenue Code of 1986, any amendments thereto, any successor
statutes and any regulations or guidance promulgated
thereunder.
"INVESTMENT" shall mean, as applied to any Person,
any direct or indirect purchase or other acquisition by that
Person of Securities, or of a beneficial interest in
Securities, of any other Person, and any direct or indirect
loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid
expenses, advances to employees, deposits made to secure the
performance of contracts and similar items made or incurred
in the ordinary course of business), or capital contribution
by that Person to any other Person, including all
Indebtedness and accounts owed by that other Person which
are not current assets or did not arise from sales of goods
or services to that Person in the ordinary course of
business. The amount of any Investment shall be determined
in conformity with GAAP.
"ISSUING BANKS" shall mean Citibank, any other
Senior Lender which has issued a Letter of Credit listed in
SCHEDULE 3.11 (with respect to that Letter of Credit) and
any other Senior Lender (or its Affiliate) which agrees
(with the consent of Southland and the Administrative Agent)
to become an Issuing Bank for the purpose of issuing
Facility Letters of Credit pursuant to ARTICLE III. When a
Senior Lender is referred to in its capacity as an Issuing
Bank hereunder, such reference to an Issuing Bank shall be
interpreted to refer to such Senior Lender solely in its
capacity as an Issuing Bank.
"ITO-YOKADO" means Ito-Yokado Co., Ltd., a Japanese
corporation.
"JOINT VENTURE" shall mean a Person which is an
Affiliate of Southland solely by reason of ownership of an
interest in such Person by Southland or a Subsidiary of
Southland.
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"KNOWLEDGE", when used in respect of a natural
person, shall mean actual knowledge of that person and shall
mean, when used in respect of a corporate Person, the actual
knowledge of any executive officer of such Person.
"LETTER OF CREDIT" shall mean each letter of credit
issued by any Person for the account of Southland or any of
its Subsidiaries.
"LETTER OF CREDIT COMMITMENT" shall mean, with
respect to any Issuing Bank, such Issuing Bank's commitment
to issue Facility Letters of Credit, in an amount (which,
together with the Letter of Credit Commitments of all other
Issuing Banks, shall not exceed the then amount of the
Letter of Credit Subfacility) agreed upon among Southland,
such Issuing Bank and the Administrative Agent, as such
amount may be modified from time to time pursuant to SECTION
2.07(c), 2.07(d), 3.12 or 10.02(a).
"LETTER OF CREDIT REIMBURSEMENT AGREEMENT" shall
mean, with respect to a Facility Letter of Credit, such form
of application therefor and form of reimbursement agreement
therefor (whether in a single or several documents, taken
together) as the Issuing Bank from which the Facility Letter
of Credit is requested may employ in the ordinary course of
business for its own account, whether or not providing for
collateral security, with such modifications thereto as may
be agreed upon by the Issuing Bank and Southland and as are
not materially adverse to the interest of the Senior
Lenders; PROVIDED, HOWEVER, in the event of any conflict
between the terms of any Letter of Credit Reimbursement
Agreement and this Agreement, the terms of this Agreement
shall control and no event (other than failure to pay
Reimbursement Obligations) which constitutes a default under
a Letter of Credit Reimbursement Agreement shall constitute
an Event of Default solely by reason of any default
provisions contained in such Letter of Credit Reimbursement
Agreement.
"LETTER OF CREDIT SUBFACILITY" shall mean, at any
time, the maximum aggregate amount of Facility Letter of
Credit Obligations which may be outstanding at any time,
which shall be equal to $150,000,000, as such amount may be
reduced from time to time pursuant to SECTION 2.07(c),
2.07(d), or 10.02(a).
"LIEN" shall mean any mortgage, deed of trust,
pledge, hypothecation, assignment, deposit arrangement,
security interest, encumbrance (including, but not limited
to, easements, rights of way, zoning restrictions and the
like), lien (statutory or other), preference, priority or
other security agreement or preferential arrangement of any
kind or nature whatsoever, including, without limitation,
any conditional sale or other title retention agreement, the
interest of a lessor under a Capital Lease, any financing
lease having substantially the same economic effect as any
of the foregoing and the filing of any financing statement
(other than a financing statement filed by a "true" lessor
pursuant to 9-408 of the Uniform Commercial Code) naming
the owner of the asset to which such Lien relates as debtor,
under the Uniform Commercial Code or other comparable law of
any jurisdiction.
-13-
"LOAN" shall mean a Term Loan, a Revolving Loan or
a Competitive Bid Loan.
"LOAN DOCUMENTS" shall mean this Agreement, the
Notes, the Letter of Credit Reimbursement Agreements and all
other agreements, instruments and written indicia of
Contractual Obligations between Southland and the
Administrative Agent, the Co-Agent, any Senior Lender, any
Issuing Bank or any successor in interest to any of them,
delivered to the Administrative Agent, the Co-Agent, Senior
Lender, Issuing Bank or such successor in interest by or on
behalf of Southland pursuant to or in connection with the
transactions contemplated hereby.
"MAJORITY OWNERS" shall mean, collectively, Ito-
Yokado Co., Ltd., Seven-Eleven Japan Co., Ltd. or any
Subsidiary of either of them, all of whose capital stock is
owned by either Ito-Yokado Co., Ltd. or Seven-Eleven Japan
Co., Ltd.
"MARGIN STOCK" shall have the meaning ascribed to it
in Regulation U and Regulation G.
"MASTER ASSIGNMENT AGREEMENT" shall mean the Master
Assignment Agreement dated as of December 16, 1994 among
Southland and certain financial institutions from time to
time party to the Existing Credit Agreement.
"MASTER LEASE DOCUMENTS" shall mean a Master Lease
evidencing the terms of the Master Lease Facility and any
agreements, documents and instruments executed in connection
therewith, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"MASTER LEASE FACILITY" shall mean a lease facility
provided to Southland, as lessee, by Citicorp Bankers
Leasing Corporation or an Affiliate or wholly-owned
Subsidiary thereof and the other financial institutions
parties thereto on substantially the terms set forth in the
Revised Proposal dated January 27, 1997, executed by
Citicorp Bankers Leasing Corporation and Citicorp Securities
and accepted by Southland, PROVIDED that the aggregate
Dollar amount advanced for assets leased under the lease
facility shall not exceed $115,000,000.
"MATERIAL ADVERSE EFFECT" shall mean, with respect
to Southland, individually, or Southland and its
Subsidiaries, taken as a whole, a material adverse effect
upon the business, assets or other properties, liabilities
or condition (financial or otherwise) or results of
operations of Southland, individually, or Southland and its
Subsidiaries, taken as a whole, or the ability of Southland
to perform under the Loan Documents.
"MOODY'S" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
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"MULTIEMPLOYER PLAN" shall mean a "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA which is, or
was at any time during the then five preceding years,
contributed to on behalf of employees of Southland, any
Subsidiary of Southland or any ERISA Affiliate.
"NON PRO RATA LOAN" shall have the meaning ascribed
to it in SECTION 2.08(b)(iii).
"NOTES" shall mean the Term Notes, the Revolving
Notes and the Competitive Bid Notes.
"NOTICE OF BORROWING" shall mean, with respect to a
proposed Borrowing pursuant to SECTION 2.01(b), 2.02(b) or
2.03(b), as applicable, a notice in substantially the form
of EXHIBIT 4-A, 4-B or 4-C, respectively.
"NOTICE OF CONVERSION/CONTINUATION" shall mean, with
respect to a proposed conversion or continuation of a Loan
pursuant to SECTION 2.05(c), notice substantially in the
form of EXHIBIT 5.
"OBLIGATIONS" shall mean all present and future
obligations and liabilities of Southland of every type and
description arising under or in connection with this
Agreement or any other Loan Document, due or to become due
to the Administrative Agent, the Co-Agent, any Senior
Lender, any Issuing Bank or any Person entitled to
indemnification pursuant to SECTION 12.03, or any of their
respective successors, transferees or assigns, and shall
include, without limitation, (i) all liability of Southland
for principal of and interest on the Loans or under the
Notes, (ii) all Reimbursement Obligations of Southland to
any Issuing Bank and (iii) all liability of Southland under
the Loan Documents for any fees, expense reimbursements and
indemnifications.
"OFFICERS' CERTIFICATE" shall mean, as to a
corporation, a certificate executed on behalf of such
corporation by (i) its chairman or vice-chairman of the
board (if an officer) or its president or any vice-president
and (ii) by its principal financial officer, its controller
or its treasurer.
"OTHER INDEBTEDNESS" shall mean all of the
Indebtedness other than the Obligations.
"PAST DEFAULT INTEREST" shall have the meaning
ascribed to it in the Master Assignment Agreement.
"PAYOFF LETTER" shall mean a letter dated the
Effective Date or as of a recent date prior to the Effective
Date, in form and substance satisfactory to the
Administrative Agent and the Senior Lenders, addressed to
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the Administrative Agent, the Co-Agent and the Senior
Lenders and executed by the "Administrative Agent" and each
of the "Senior Lenders" and "Issuing Banks" under (and in
each case defined in) the Existing Credit Agreement (i)
stating that the Existing Credit Agreement has been
terminated (other than provisions which, by their terms,
survive the termination of the Existing Credit Agreement)
and that all outstanding indebtedness and obligations
thereunder or with respect thereto have been repaid in full
in cash and discharged, (ii) agreeing that all Liens held by
or for the benefit of any such Person under the "Loan
Documents" under (and as defined in) the Existing Credit
Agreement shall, upon receipt of payment in full in cash of
all outstanding indebtedness and obligations thereunder, be
released, terminated and discharged, (iii) directing such
Administrative Agent to execute and deliver any and all
agreements, documents and instruments evidencing the
release, termination and discharge of such Liens and (iv)
directing such Administrative Agent to execute and deliver
the acknowledgment described in SECTION 4.01(a)(iv)(B).
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any Person succeeding to the functions
thereof.
"PERMITTED EXISTING INDEBTEDNESS" shall mean the
Indebtedness of Southland and its Subsidiaries reflected on
SCHEDULE 1.01-A.
"PERMITTED EXISTING INVESTMENTS" shall mean the
Investments of Southland and its Subsidiaries reflected on
Part B of SCHEDULE 5.01(iii).
"PERMITTED EXISTING LIENS" shall mean the Liens on
assets of Southland and its Subsidiaries reflected on
SCHEDULE 1.01-B.
"PERSON" shall mean any natural person, corporation,
limited partnership, limited liability company, general
partnership, joint stock company, joint venture,
association, company, trust, bank, trust company, land
trust, business trust or other organization, whether or not
a legal entity, and any Governmental Authority.
"POTENTIAL EVENT OF DEFAULT" shall mean an event
which, with the giving of notice or the lapse of time, or
both, would constitute an Event of Default.
"PRO RATA SHARE" shall mean, with respect to any
Senior Lender, a fraction (expressed as a percentage), the
numerator of which shall be the amount of such Senior
Lender's Commitments and the denominator of which shall be
the aggregate amount of all of the Senior Lenders'
Commitments, as adjusted from time to time in accordance
with the provisions of SECTION 12.01(a) (notwithstanding the
termination of any such Commitments pursuant to SECTION
10.02(a)).
"QUARTERLY DETERMINATION DATE" shall mean each March
31, June 30, September 30 and December 31 during the term of
this Agreement.
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"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") 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, upon the exercise by any holder
thereof 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.
"REFERENCE BANKS" shall mean Citibank and, at the
discretion of the Administrative Agent, one or more Senior
Lenders (or Affiliates thereof) approved by the
Administrative Agent.
"REGULATION A" shall mean Regulation A of the
Federal Reserve board as in effect from time to time.
"REGULATION D" shall mean Regulation D of the
Federal Reserve Board as in effect from time to time.
"REGULATION G" shall mean Regulation G of the
Federal Reserve Board as in effect from time to time.
"REGULATION U" shall mean Regulation U of the
Federal Reserve Board as in effect from time to time.
"REGULATION X" shall mean Regulation X of the
Federal Reserve Board as in effect from time to time.
"REIMBURSEMENT OBLIGATIONS" shall mean the
reimbursement or repayment obligations of Southland to the
Issuing Banks pursuant to Letter of Credit Reimbursement
Agreements with respect to Facility Letters of Credit, for
amounts paid out thereunder.
"RENT EXPENSE ON OPERATING LEASES," as applied to
Southland and its Subsidiaries, shall mean, for any period,
the amount for such period of (i) total rent expense on
operating leases, including contingent rent expense, MINUS
(ii) sublease rent income from property subject to operating
leases, all such income and expense accounted for on a
consolidated basis pursuant to GAAP.
"REPORTABLE EVENT" shall mean with respect to any
Benefit Plan any event described in Section 4043(b) of ERISA
other than any such event as to
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which the requirement of thirty (30) days' notice to PBGC
contained in Section 4043(a) of ERISA is waived under
applicable regulations.
"REQUIREMENTS OF LAW" shall mean, as to any Person,
the charter and by-laws or other organizational or governing
documents of such Person, and any law, rule or regulation,
or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which
such Person or any of its property is subject, including,
without limitation, the Securities Act, the Securities
Exchange Act, Regulations G, U and X, and any certificate of
occupancy, zoning ordinance, building, environmental or land
use requirement or permit or occupational safety or health
law, rule or regulation.
"REQUISITE SENIOR LENDERS" shall mean Senior Lenders
whose Pro Rata Shares, in the aggregate, are more than fifty
percent (50%).
"RESTRICTED JUNIOR PAYMENT" shall mean (i) any
dividend or other distribution, direct or indirect, on
account of any shares of any class of capital stock of
Southland or any of its Subsidiaries now or hereafter
outstanding, except a dividend payable solely in shares of
that class of stock or in any junior class of stock to the
holders of that class, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of
any class of capital stock of Southland or any of its
Subsidiaries now or hereafter outstanding, (iii) any payment
or prepayment of principal of, premium, if any, or interest
on, and any redemption, purchase, retirement, defeasance,
sinking fund or similar payment with respect to, any
Subordinated Indebtedness or any Indebtedness permitted by
SECTION 8.01(xiv)(B), and (iv) any payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender
of, any outstanding warrants, options or other rights to
acquire shares of any class of capital stock of Southland or
any of its Subsidiaries now or hereafter outstanding (other
than the issuance of Common Stock upon the exercise of any
warrants, options or rights to acquire such stock).
"REVOLVING CREDIT ADVANCE" shall mean a Revolving
Loan or a Competitive Bid Loan.
"REVOLVING CREDIT COMMITMENT" shall mean, with
respect to any Senior Lender, the obligation of such Senior
Lender to make Revolving Loans and to participate in
Facility Letters of Credit pursuant to the terms and condi-
tions of this Agreement, in an aggregate amount at any time
outstanding which shall not exceed the principal amount set
forth opposite such Senior Lender's name under the heading
"Revolving Credit Commitment" on the signature pages hereof
or the signature page of the Assignment and Acceptance by
which it became a Senior Lender, as modified from time to
time pursuant to the terms of this Agreement or to give
effect to any applicable Assignment and Acceptance, and
"REVOLVING CREDIT COMMITMENTS" shall mean the aggregate
principal amount of the Revolving Credit Commitments of all
the Senior
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Lenders, the maximum amount of which shall be $400,000,000,
as such amount may be reduced from time to time pursuant to
SECTION 2.07(c), 2.07(d) or 10.02(a).
"REVOLVING CREDIT OBLIGATIONS" shall mean, at any
particular time, the sum of (i) the outstanding principal
amount of the Revolving Credit Advances at such time, plus
(ii) the Facility Letter of Credit Obligations at such time.
"REVOLVING CREDIT TERMINATION DATE" shall mean the
earlier of (i) the fifth anniversary of the Effective Date
and (ii) the date of termination of the Revolving Credit
Commitments pursuant to SECTION 10.02(a).
"REVOLVING LOAN" shall have the meaning ascribed to
it in SECTION 2.02(a)(i).
"REVOLVING LOAN AVAILABILITY" shall have the meaning
ascribed to it in SECTION 2.02(a)(i).
"REVOLVING NOTE" shall have the meaning ascribed to
it in SECTION 2.02(d).
"S&P" shall mean Standard & Poor's Rating Group, a
division of McGraw Hill, Inc.
"SECURITIES" shall mean any stock, shares, voting
trust certificates, limited partnership certificates, bonds,
debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as
"securities", including, without limitation, any "security"
as such term is defined in Section 8-102 of the Uniform
Commercial Code, or any certificates of interest, shares, or
participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, but shall not
include the Notes or any other evidence of the Obligations.
"SECURITIES ACT" shall mean the Securities Act of
1933, as amended to the date hereof and from time to time
hereafter, and any successor statute.
"SECURITIES EXCHANGE ACT" shall mean the Securities
Exchange Act of 1934, as amended to the date hereof and from
time to time hereafter, and any successor statute.
"SENIOR INDEBTEDNESS" shall mean, at any time, (i)
consolidated total Indebtedness of Southland and its
Subsidiaries, to the extent required, in conformity with
GAAP, to be reflected on a balance sheet of Southland and
its Subsidiaries at that time, PLUS (ii) the maximum amount
available to be drawn under outstanding Letters of Credit at
that time, MINUS (iii) the aggregate principal amount of
Subordinated Indebtedness outstanding at that time (to the
extent included in CLAUSE (i) above).
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"SENIOR LENDER" shall mean, at any particular time,
any Person who holds a Term Loan Commitment and Revolving
Credit Commitment at such time, whether as a signatory to
this Agreement or pursuant to an Assignment and Acceptance.
"SENIOR SUBORDINATED DEBENTURE INDENTURES" shall
mean the indentures pursuant to which the Senior
Subordinated Debentures have been issued.
"SENIOR SUBORDINATED DEBENTURE REPURCHASE" shall
mean (i) the issuance by Southland to Ito-Yokado and Seven-
Eleven Japan Co., Ltd., of QUIDS Subordinated Notes in an
aggregate principal amount of $300,000,000 and (ii) the
repurchase for cancellation with the proceeds of such QUIDS
Subordinated Notes of (A) $180,621,000 in aggregate
principal amount of Southland's outstanding 5% First
Priority Senior Subordinated Debentures due December 15,
2003 and (B) $82,719,000 in aggregate principal amount of
Southland's 4.5% Second Priority Senior Subordinated
Debentures (Series A) due June 15, 2004.
"SENIOR SUBORDINATED DEBENTURES" shall mean
Southland's 5% First Priority Senior Subordinated Debentures
due December 15, 2003, Southland's 4.5% Second Priority
Senior Subordinated Debentures (Series A) due June 15, 2004,
and Southland's 4% Second Priority Senior Subordinated
Debentures (Series B) due June 15, 2004, and Southland's 12%
Second Priority Senior Subordinated Debentures (Series C)
due June 15, 2009.
"SOUTHLAND" shall have the meaning ascribed to it in
the preamble hereto.
"STANDBY LETTER OF CREDIT" shall mean any Facility
Letter of Credit which is not a Commercial Letter of Credit.
"SUBORDINATED INDEBTEDNESS" shall mean the
Indebtedness evidenced by, or in respect of, (i) the Senior
Subordinated Debentures, (ii) the Employee Convertible
Subordinated Debentures, (iii) the QUIDS Subordinated Notes
and (iv) any additional Indebtedness (A) subordinated in
right of payment on terms not less favorable to the Senior
Lenders, and subject to covenants and events of default not
more burdensome to Southland, than the subordination
provisions, covenants and events of default applicable to
the Senior Subordinated Debentures or (B) incurred on other
terms approved in writing by the Requisite Senior Lenders.
"SUBSIDIARY" of a Person shall mean any corporation,
limited liability company, general or limited partnership,
or other entity of which Securities or other ownership
interests having ordinary voting power to elect a majority
of the board of directors or other managers of such entity
are at the time directly or indirectly owned or controlled
by, or the management of which is otherwise controlled
directly or indirectly through one or more intermediaries,
or both, by such Person, one or more subsidiaries of such
Person or any combination thereof.
"TERM LOAN" shall have the meaning ascribed to it in
SECTION 2.01(a).
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TERM LOAN COMMITMENT" shall mean, with respect to
any Senior Lender, the obligation of such Senior Lender to
make its Term Loan pursuant to the terms and conditions of
this Agreement, in an amount equal to the amount set forth
under such Senior Lender's name under the heading "Term Loan
Commitment" on the signature pages hereof or the signature
page of the Assignment and Acceptance by which it became a
Senior Lender, as modified from time to time pursuant to the
terms of this Agreement or to give effect to any applicable
Assignment and Acceptance, and "TERM LOAN COMMITMENTS" shall
mean the aggregate principal amount of the Term Loan
Commitments of all the Senior Lenders, the maximum amount of
which shall be $225,000,000, as reduced from time to time
pursuant to SECTION 2.01(d), 2.07(a) or 10.02(a).
TERM NOTE" shall have the meaning ascribed to it in
SECTION 2.01(d).
TERMINATION EVENT" shall mean (i) a Reportable
Event, (ii) the withdrawal of Southland, any Subsidiary of
Southland or any ERISA Affiliate from a Defined Benefit Plan
during a plan year in which it is a "substantial employer"
as defined in Section 4001(a)(2) of ERISA, (iii) the filing
under Section 4041 of ERISA of a notice of intent to
terminate a Defined Benefit Plan, (iv) the treatment of a
Defined Benefit Plan amendment as a termination under
Section 4041 of ERISA, (v) the institution of proceedings by
the PBGC to terminate a Defined Benefit Plan, (vi) any other
event or condition which would constitute ground under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Defined Benefit
Plan, (vii) the termination of, or appointment of a trustee
to administer, any Defined Benefit Plan pursuant to Section
4042 of ERISA, or (viii) the partial or complete withdrawal
of Southland or any ERISA Affiliate from a Multiemployer
Plan if the amount of the withdrawal liability assessed by
the plan sponsor against Southland or any such ERISA
Affiliate would have a Material Adverse Effect.
"TRANCHE A REVOLVING CREDIT NOTE" shall mean a
Revolving Note.
"TRANCHE B REVOLVING CREDIT NOTE" shall mean a
Competitive Bid Note.
"TRANSACTION COSTS" shall mean the fees, costs and
expenses payable by Southland pursuant hereto or in
connection herewith or in respect hereof and the fees, costs
and expenses payable by Southland in connection with the
Master Lease Facility.
"TYPE" shall mean, with respect to any Term Loan or
Revolving Loan, a Base Rate Loan or a Eurodollar Rate Loan.
"UNIFORM COMMERCIAL CODE" shall mean the Uniform
Commercial Code as enacted in the State of New York, as it
may be amended from time to time.
"UNREIMBURSED ISSUING BANK" shall have the meaning
ascribed to it in SECTION 3.06(b)(ii).
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"YEN ROYALTY FINANCING AGREEMENT" shall mean the
Credit Agreement dated as of March 21, 1988 among Southland,
the Yen Royalty Lender and Citicorp International Limited,
as amended, supplemented or otherwise modified from time to
time, PROVIDED that no amendment, supplement or other
modification pertaining to the Yen Royalty Financing
Collateral or the recourse of the Yen Royalty Lender 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 the
"Collateral" (as defined in the Assignment and Security
Agreement dated as of March 21, 1988 between Southland and
the Yen Royalty Lender entered into in connection with the
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 a principal amount
which shall not exceed Japanese Yen 41,000,000,000 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 Citicorp (Channel
Islands) Limited, a company organized and existing under the
laws of Jersey in the Channel Islands, together with
successors to and assignees of its rights thereunder.
1.02. REFERENCES TO THIS AGREEMENT. The words
"hereof", "herein", "hereunder" and similar terms when used
in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and
article, section, subsection, clause, schedule and exhibit
references herein are references to articles, sections,
subsections, clauses, schedules and exhibits to this
Agreement unless otherwise specified.
1.03. COMPUTATION OF TIME PERIODS. In this
Agreement, in the computation of periods of time from a
specified date to a later specified date, the word "from"
shall mean "from and including" and the words "to" and
"until" each mean "to but excluding". Periods of days
referred to in this Agreement shall be counted in calendar
days unless Business Days are expressly prescribed. Any
period determined hereunder by reference to a month or
months or year or years shall end on the day in the relevant
calendar month in the relevant year, if applicable,
immediately preceding the date numerically corresponding to
the first day of such period, PROVIDED that if such period
commences on the last day of a calendar month (or on a day
for which there is no numerically corresponding day in the
calendar month during which such period is to end), such
period shall, unless otherwise expressly required by the
other provisions of this Agreement, end on the last day of
the calendar month.
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1.04. ACCOUNTING TERMS. Subject to SECTION 12.04,
for purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to
them in conformity with GAAP.
1.05. MISCELLANEOUS TERMS. All terms defined in
this Agreement in the singular shall have comparable
meanings when used in the plural, and VICE VERSA, unless
otherwise specified. The term "including" is by way of
example and not limitation.
1.06. OTHER DEFINED TERMS. All other terms
contained in this Agreement shall, unless the context
indicates otherwise, have the meanings assigned to such
terms by the Uniform Commercial Code to the extent the same
are defined therein.
1.07. SCHEDULES AND EXHIBITS. The schedules and
exhibits to this Agreement, either as originally existing or
as the same may from time to time be supplemented, modified
or amended, are incorporated herein and shall be considered
a part of this Agreement for the purposes stated herein.
ARTICLE II
AMOUNTS AND TERMS OF LOANS
2.01. TERM LOANS.
(a) AMOUNT OF TERM LOANS. Subject to the terms and
conditions set forth in this Agreement, each Senior Lender
on the Effective Date hereby severally and not jointly
agrees to make on the Effective Date, a term loan, in
Dollars, to Southland in an amount equal to such Senior
Lender's Term Loan Commitment (each individually, a "Term
Loan" and, collectively, the "Term Loans"). All Term Loans
shall be made by the Senior Lenders on the Effective Date
simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that no Senior Lender shall
be responsible for any failure by any other Senior Lender to
perform its obligation to make any Term Loan hereunder nor
shall the Term Loan Commitment of any Senior Lender be
increased or decreased as a result of any such failure.
(b) NOTICE OF BORROWING. Southland shall deliver to
the Administrative Agent on or before the Effective Date a
Notice of Borrowing, signed by it, with respect to the Term
Loans to be made on the Effective Date. Such Notice of
Borrowing shall specify (i) the aggregate amount of the Term
Loans (which shall not exceed an amount equal to the
aggregate Term Loan Commitments) and (ii) instructions for
the disbursement of the proceeds of the Term Loans. The
Term Loans shall initially be Base Rate Loans and thereafter
may be continued as Base Rate Loans or converted into Euro-
dollar Rate Loans in the manner provided in SECTION 2.05(c)
and subject to the
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conditions and limitations therein set forth and set forth
in SECTION 2.09. Any Notice of Borrowing given pursuant to
this SECTION 2.01(b) shall be irrevocable.
(c) MAKING OF TERM LOANS. (i) On the Effective
Date, each Senior Lender which is also a Senior Lender under
(and as defined in) the Existing Credit Agreement shall be
deemed to have advanced funds to Southland in respect of the
Term Loans in an amount equal to the Senior Lender's Pro
Rata Share (as defined in the Existing Credit Agreement) of
the aggregate principal amount of the Term Loans outstanding
under the Existing Credit Agreement. Southland and such
Senior Lender acknowledge and agree that, upon the
effectiveness of this Credit Agreement and the payment by
such Senior Lender of the amounts described in SECTION
2.01(c)(ii) to be paid on the Effective Date with respect to
such Senior Lender's Term Loans under this Agreement, the
aggregate principal amount of such Senior Lender's Term
Loans outstanding under the Existing Credit Agreement shall
have been paid in full, and such Senior Lender shall be
deemed to have advanced the full amount of its Pro Rata
Share of Term Loans to be made on the Effective Date.
(ii) Promptly after receipt of the Notice of
Borrowing under SECTION 2.01(b) in respect of the Term
Loans, the Administrative Agent shall notify each Senior
Lender of the proposed Borrowing. Each Senior Lender shall
deposit with the Administrative Agent at its office in New
York, New York, in immediately available funds, on the
Effective Date an amount equal to the excess of (A) its Pro
Rata Share of Term Loans requested in accordance with
SECTION 2.01(b) over (B) the Senior Lender's Pro Rata Share
(as defined in the Existing Credit Agreement) of the
aggregate principal amount of the Term Loans outstanding
under the Existing Credit Agreement. Subject to the
fulfillment of the conditions precedent set forth in SECTION
4.01, the Administrative Agent shall make the proceeds of
such amounts received by it available to Southland at the
Administrative Agent's office in New York, New York on the
Effective Date and shall disburse such proceeds in Dollars
and in immediately available funds in accordance with
Southland's disbursement instructions set forth in such
Notice of Borrowing.
(iii) The failure of any Senior Lender to deposit
with the Administrative Agent the amount described in
SECTION 2.01(c)(ii) on the Effective Date shall not relieve
any other Senior Lender of its obligations hereunder to make
its Term Loan on the Effective Date. In the event the
conditions precedent set forth in SECTION 4.01 are not
fulfilled or duly waived as of the date specified as the
Effective Date in the Notice of Borrowing delivered pursuant
to SECTION 2.01(b), the Administrative Agent shall promptly
return, by wire transfer of immediately available funds, the
amount deposited hereunder by each Senior Lender to such
Senior Lender.
(d) TERM NOTES; REPAYMENT OF TERM LOANS. Southland
shall execute and deliver to each Senior Lender on or before
the Effective Date a promissory note, in substantially the
form of EXHIBIT 6 and otherwise in form
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and substance satisfactory to the Senior Lenders, in the
principal amount of that Senior Lender's Term Loan
Commitment (each individually, a "Term Note" and
collectively, the "Term Notes"). Subject to SECTIONS
2.07(a) and 10.02, the Term Loans shall mature in sixteen
(16) consecutive quarterly installments of $14,062,500 each,
payable on the last Business Day in each calendar quarter,
commencing March 31, 1998, and the Term Loan Commitments
shall be permanently reduced by the amount of each
installment on the date payment thereof is required to be
made hereunder. The Term Loans shall be paid in full on or
before December 31, 2001.
2.02. Revolving Loans.
(a) AVAILABILITY. (i) Subject to the terms and
conditions set forth in this Agreement, each Senior Lender
hereby severally and not jointly agrees to make to Southland
from time to time on any Business Day during the period from
the Effective Date through and including the Business Day
immediately preceding the Revolving Credit Termination Date
revolving loans (each individually, a "Revolving Loan" and
collectively, the "Revolving Loans"), in an amount which
shall not exceed, in the aggregate at any time outstanding,
such Senior Lender's Pro Rata Share of an amount equal to
(A) the aggregate Revolving Credit Commitments at such time,
MINUS (B) the aggregate Facility Letter of Credit
Obligations at such time, MINUS (C) the aggregate principal
amount of Competitive Bid Loans outstanding at such time
(the "Revolving Loan Availability" at such time).
(ii) All Revolving Loans under this Agreement shall
be made by the Senior Lenders simultaneously and
proportionately to their respective Pro Rata Shares, it
being understood that no Senior Lender shall be responsible
for any failure by any other Senior Lender to perform its
obligation to make a Revolving Loan hereunder nor shall the
Revolving Credit Commitment of any Senior Lender be
increased or decreased as a result of the failure by any
other Senior Lender to perform its obligation to make a
Revolving Loan.
(iii) Within the limits and on the conditions set
forth in this Agreement, Southland may from time to time
borrow and repay Revolving Loans under this SECTION 2.02,
prepay Revolving Loans pursuant to SECTION 2.07(a) and
reborrow Revolving Loans under this SECTION 2.02.
(b) NOTICE OF BORROWING. (i) Whenever Southland
desires to borrow under this SECTION 2.02, it shall deliver
to the Administrative Agent a Notice of Borrowing, signed by
it, (A) on or before the Effective Date, in the case of a
Borrowing of Revolving Loans on the Effective Date and (B)
no later than 11:00 a.m. (New York time) (I) on the proposed
Funding Date in the case of a Borrowing of Base Rate Loans
and (II) no later than 11:00 a.m. (New York time) at least
three (3) Business Days in advance of the proposed Funding
Date in the case of a Borrowing of Eurodollar Rate Loans.
(ii) Each Notice of Borrowing for Revolving Loans
shall specify (A) the Funding Date (which shall be a
Business Day) in respect of such Revolving Loans, (B) the
amount of the proposed Borrowing (which shall not be less
than
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$5,000,000 and, after giving effect to such Borrowing and
all other Revolving Credit Advances and Facility Letters of
Credit requested to be made or issued on the same Funding
Date, shall not exceed the Revolving Loan Availability as of
such Funding Date), (C) whether the proposed Borrowing will
be of Base Rate Loans or Eurodollar Rate Loans, (D) in the
case of Eurodollar Rate Loans, the requested Eurodollar
Interest Period and (E) instructions for the disbursement of
the proceeds of the Revolving Loans. The Revolving Loans
made on the Effective Date shall initially be Base Rate
Loans and thereafter may be continued as Base Rate Loans or
converted into Eurodollar Rate Loans, in the manner provided
in SECTION 2.05(c) and subject to the conditions therein set
forth and in SECTION 2.09.
(iii) In lieu of delivering the above-described
Notice of Borrowing, Southland may give the Administrative
Agent telephonic notice of any proposed Borrowing by the
time required under this SECTION 2.02(b); PROVIDED, that
such notice shall be confirmed in writing by delivery to the
Administrative Agent promptly (but in no event later than
the Funding Date of the requested Revolving Loan) of a
Notice of Borrowing.
(iv) Any Notice of Borrowing (or telephone notice
in lieu thereof) pursuant to this SECTION 2.02(b) shall be
irrevocable.
(c) MAKING OF REVOLVING LOANS. (i) On the
Effective Date, each Senior Lender which is also a Senior
Lender under (and as defined in) the Existing Credit
Agreement shall be deemed to have advanced funds to
Southland in respect of the Revolving Loans in an amount
equal to the Senior Lender's Pro Rata Share (as defined in
the Existing Credit Agreement) of the aggregate principal
amount of the Revolving Loans outstanding under the Existing
Credit Agreement. Southland and such Senior Lender
acknowledge and agree that, upon the effectiveness of this
Credit Agreement and the payment by such Senior Lender of
the amounts described in SECTION 2.02(c)(ii) to be paid on
the Effective Date with respect to such Senior Lender's
Revolving Loans under this Agreement, the aggregate
principal amount of such Senior Lender's Revolving Loans
outstanding under the Existing Credit Agreement shall have
been paid in full, and such Senior Lender shall be deemed to
have advanced the full amount of its Pro Rata Share of
Revolving Loans to be made on the Effective Date.
(ii) Promptly after receipt of a Notice of
Borrowing under SECTION 2.02(b) (or telephonic notice in
lieu thereof) in respect of Revolving Loans, the
Administrative Agent shall notify each Senior Lender of the
proposed Borrowing. Each Senior Lender shall make available
to the Administrative Agent in Dollars and in immediately
available funds, to such bank and account, in New York, New
York, as the Administrative Agent may designate, not later
than 11:00 a.m. (New York time), (A) on the Effective Date,
the excess of (1) the amount of such Senior Lender's
Revolving Loan to be made on the Effective Date over (2) the
aggregate principal amount of such Senior Lender's Revolving
Loans deemed made pursuant to SECTION 2.02(c)(i) and (B) on
each Funding Date other than the Effective Date, the amount
of such Senior Lender's Revolving Loan to be made on that
Funding Date. Subject to the fulfillment of the conditions
precedent set forth in SECTION 4.01 or 4.02, as
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applicable, after the Administrative Agent's receipt of the
proceeds of such Revolving Loans the Administrative Agent
shall make the proceeds of such Revolving Loans available to
Southland in New York, New York, on such Funding Date and
shall disburse such funds in Dollars and in immediately
available funds in accordance with Southland's disbursement
instructions set forth in the Notice of Borrowing.
(iii) The failure of any Senior Lender to deposit
with the Administrative Agent the amount described in
SECTION 2.02(c)(ii) on any Funding Date shall not relieve
any other Senior Lender of its obligations hereunder to make
its Revolving Loan on any such date. In the event the
conditions precedent set forth in SECTION 4.01 or 4.02, as
applicable, are not fulfilled or duly waived as of the
applicable Funding Date, the Administrative Agent shall
promptly return, by wire transfer of immediately available
funds, the amount deposited hereunder by each Senior Lender
to such Senior Lender.
(iv) Unless the Administrative Agent shall have
been notified by any Senior Lender prior to any Funding Date
in respect of any Borrowing of Revolving Loans that such
Senior Lender does not intend to make available to the
Administrative Agent such Senior Lender's Revolving Loan on
such Funding Date, the Administrative Agent may assume that
such Senior Lender has made such amount available to the
Administrative Agent on such Funding Date and the
Administrative Agent in its sole discretion may, but shall
not be obligated to, make available to Southland a
corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to the
Administrative Agent by such Senior Lender on or prior to a
Funding Date, such Senior Lender agrees to pay and Southland
agrees to repay severally to the Administrative Agent
forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is
made available to Southland until the date such amount is
paid or repaid to the Administrative Agent, at (A) in the
case of Southland, the interest rate applicable at the time
to a Borrowing of Base Rate Loans made on such Funding Date
and (B) in the case of such Senior Lender, the Federal Funds
Rate. If such Senior Lender shall pay to the Administrative
Agent such corresponding amount, such amount so paid shall
constitute such Senior Lender's Revolving Loan, and if both
such Senior Lender and Southland shall have paid and repaid
such corresponding amount, the Administrative Agent shall
promptly return to Southland such corresponding amount in
same day funds. Nothing in this SECTION 2.02(c) shall be
deemed to relieve any Senior Lender of its obligation
hereunder to make its Revolving Loan on any Funding Date.
(d) REVOLVING NOTES. Southland shall execute and
deliver to each Senior Lender on or before the Effective
Date a promissory note, in substantially the form of EXHIBIT
7 and otherwise in form and substance satisfactory to the
Senior Lenders, in the principal amount of that Senior
Lender's Revolving Credit Commitment (each individually, a
"Revolving Note" and collectively, the "Revolving Notes").
The Revolving Note delivered to
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each Senior Lender shall mature, and all Revolving Credit
Obligations evidenced thereby shall be paid in full (or, in
the case of unmatured Facility Letter of Credit Obligations,
provision for payment shall be made to the satisfaction of
the Issuing Banks and the Requisite Lenders), on the
Revolving Credit Termination Date. Each Senior Lender is
hereby authorized, at its option, to either (i) endorse the
date and amount of each Revolving Loan made by such Senior
Lender and each prepayment of principal of Revolving Loans
made with respect to such Revolving Note on the back of such
Note or (ii) record such Revolving Loans and prepayments in
its books and schedule or such books and records, as the
case may be, constituting PRIMA FACIE evidence, absent
manifest error, of the accuracy of the information contained
therein.
2.03. COMPETITIVE BID LOANS.
(a) AVAILABILITY. (i) Subject to the terms and
conditions set forth in this Agreement, each Senior Lender
hereby severally and not jointly agrees that Southland may
borrow from time to time on any Business Day during the
period from the Effective Date through the date occurring
thirty (30) days (or, in the case of Competitive Bid Loans
bearing interest at a fixed rate, seven (7) days) prior to
the Revolving Credit Termination Date revolving loans (each
individually, a "Competitive Bid Loan" and collectively, the
"Competitive Bid Loans") in the manner set forth in this
SECTION 2.03 in an amount which shall not exceed, in the
aggregate at any time outstanding, (A) the lesser of (1) the
aggregate Revolving Credit Commitments at such time and (2)
$200,000,000, MINUS (B) the aggregate Facility Letter of
Credit Obligations at such time, MINUS (C) the aggregate
principal amount of Revolving Loans outstanding at such time
(the "Competitive Bid Availability" at such time).
(ii) Within the limits and on the conditions set
forth in this Agreement, Southland may from time to time
borrow and repay Competitive Bid Loans under this SECTION
2.03, prepay Competitive Bid Loans pursuant to SECTION
2.07(a), and reborrow Competitive Bid Loans under this
SECTION 2.03, PROVIDED that a Borrowing of Competitive Bid
Loans shall not be made within three (3) Business Days of
the date of any other Borrowing of Competitive Bid Loans.
(b) NOTICE OF BORROWING. (i) Whenever Southland
desires to borrow under this SECTION 2.03, it shall deliver
to the Administrative Agent a Notice of Borrowing, signed by
it, no later than 11:00 a.m. (New York time) (A) at least
one (1) Business Day prior to the date of the proposed
Funding Date for such Borrowing, if Southland shall specify
in the Notice of Borrowing that the rates of interest to be
offered by the Senior Lenders shall be fixed rates per annum
and (B) at least four (4) Business Days prior to the date of
the proposed Funding Date for such Borrowing, if Southland
shall specify in the Notice of Borrowing a different basis
to be used by the Senior Lenders in determining the rates of
interest to be offered by them.
(ii) Each Notice of Borrowing for Competitive Bid
Loans shall specify (A) the Funding Date (which shall be a
Business Day) in respect of such Competitive Bid Loans,
(B) the minimum and maximum amounts of the
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proposed Borrowing (which amounts shall not be less than
$10,000,000 and, after giving effect to such Borrowing and
all other Revolving Credit Advances requested to be advanced
and Facility Letters of Credit requested to be issued on the
same Funding Date, shall not exceed the Competitive Bid
Availability as of such Funding Date), (C) the maturity date
for repayment of each Competitive Bid Loan to be made as
part of such Borrowing (which maturity date may not be
earlier than the date occurring 30 days (or, in the case of
Competitive Bid Loans bearing interest at a fixed rate,
seven (7) days) after the Funding Date of such Borrowing or
later than the Revolving Credit Termination Date), (D) the
interest payment date or dates relating thereto, (E)
instructions for the disbursement of the proceeds of the
Competitive Bid Loans and (F) any other terms to be
applicable to such Borrowing.
(c) MAKING OF COMPETITIVE BID LOANS; AUCTION
BIDDING PROCEDURE. (i) Promptly after receipt of a Notice
of Borrowing under SECTION 2.03(b) in respect of Competitive
Bid Loans, the Administrative Agent shall notify each Senior
Lender by telex or telecopy or other similar form of
transmission of the proposed Borrowing, together with a copy
of the related Notice of Borrowing.
(ii) Each Senior Lender may, in its sole
discretion, irrevocably offer to make one or more
Competitive Bid Loans to Southland as part of the proposed
Borrowing at a rate or rates of interest specified by such
Senior Lender in its sole discretion, by notifying the
Administrative Agent (which shall give prompt notice thereof
to Southland), before 10:00 a.m. (New York time) (A) on the
date of such proposed Borrowing, in the case of a Notice of
Borrowing delivered pursuant to SECTION 2.03(b)(i)(A) and
(B) three (3) Business Days before the date of such proposed
Borrowing, in the case of a Notice of Borrowing delivered
pursuant to SECTION 2.03(b)(i)(B), of (X) the minimum amount
and maximum amount of each Competitive Bid Loan which such
Senior Lender would be willing to make as part of such
proposed Borrowing (which amounts may exceed such Senior
Lender's Revolving Credit Commitment but in no event shall
such amounts exceed the Competitive Bid Availability as of
the Funding Date for such Borrowing), (Y) the rate or rates
of interest therefor and (Z) such Senior Lender's lending
office with respect to such Competitive Bid Loan, PROVIDED
that, if the Administrative Agent in its capacity as a
Senior Lender shall, in its sole discretion, elect to make
any such offer, it shall notify Southland of such offer
before 9:00 a.m. (New York time) on the date on which notice
of such election is to be given to the Administrative Agent
by the other Senior Lenders. If any Senior Lender shall
elect not to make such an offer, such Senior Lender shall so
notify the Administrative Agent, before 10:00 a.m. (New York
time) on the date on which notice of such election is to be
given to the Administrative Agent by the other Senior
Lenders, and such Senior Lender shall not be obligated to,
and shall not, make any Competitive Bid Loan as part of such
Borrowing, PROVIDED that the failure by any Senior Lender to
give such notice shall not cause such Senior Lender to be
obligated to make any Competitive Bid Loan as part of such
proposed Borrowing.
(iii) Southland shall, in turn, (A) before 11:00
a.m. (New York time) on the date of such proposed Borrowing,
in the case of a Notice of
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Borrowing delivered pursuant to SECTION 2.03(b)(i)(A) and
(B) before 1:00 p.m. (New York time) three (3) Business Days
before the date of such proposed Borrowing, in the case of a
Notice of Borrowing delivered pursuant to SECTION
2.03(b)(i)(B), either:
(X) cancel such Borrowing by giving the
Administrative Agent notice to that effect (and if
Southland shall not have notified the Administrative
Agent of its acceptance of any offers pursuant to
SECTION 2.03(c)(iii)(Y) prior to the times stated in
this Section 2.03(c)(iii), such Borrowing shall be
deemed to have been canceled), or
(Y) accept one or more of the offers made by any
Senior Lender or Senior Lenders pursuant to SECTION
2.03(c)(ii), in its sole discretion, by giving
notice to the Administrative Agent of the amount of
each Competitive Bid Loan (which amount shall be
equal to or greater than the minimum amount, and
equal to or less than the maximum amount, notified
to Southland by the Administrative Agent on behalf
of such Senior Lender for such Competitive Bid Loan
pursuant to SECTION 2.03(c)(ii)) to be made by each
Senior Lender as part of such Borrowing, and reject
any remaining offers made by Senior Lenders pursuant
to SECTION 2.03(c)(ii) by giving the Administrative
Agent notice to that effect.
(iv) If Southland notifies the Administrative Agent
that such Borrowing is canceled (or if such Borrowing is
deemed to be canceled) pursuant to SECTION 2.03(c)(iii)(X),
the Administrative Agent shall give prompt notice thereof to
the Senior Lenders and such Borrowing shall not be made. If
Southland accepts one or more of the offers made by any
Senior Lender or Senior Lenders pursuant to SECTION
2.03(c)(iii)(Y), the Administrative Agent shall in turn
promptly notify (A) each Senior Lender that has made an
offer or offers as described in SECTION 2.03(c)(ii), of the
date and aggregate amount of such Borrowing and whether any
such offer or offers made by such Senior Lender have been
accepted by Southland, (B) each Senior Lender that is to
make a Competitive Bid Loan as part of such Borrowing, of
the amount of each Competitive Bid Loan to be made by such
Senior Lender as part of such Borrowing, and (C) each Senior
Lender that is to make a Competitive Bid Loan as part of
such Borrowing, upon receipt, that the Administrative Agent
has received forms of documents appearing to fulfill the
conditions set forth in SECTION 4.01 or SECTION 4.03, as
applicable. Each Senior Lender that is to make a
Competitive Bid Loan as part of such Borrowing shall, not
later than 12:00 noon (New York time) on the Funding Date
specified in the notice received from the Administrative
Agent pursuant to CLAUSE (A) of the immediately preceding
sentence or any later time when such Senior Lender shall
have received notice from the Administrative Agent pursuant
to CLAUSE (C) of the immediately preceding sentence, make
available to the Administrative Agent in Dollars and in
immediately available funds to such bank account, in New
York, New York, as the Administrative Agent may designate.
Subject to the fulfillment of the conditions set forth in
SECTION 4.01 or SECTION 4.03, as applicable, after the
Administrative Agent's
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receipt of the proceeds of such Competitive Bid Loans, the
Administrative Agent will make such proceeds available to
Southland in New York, New York, on such Funding Date and
shall disburse such funds in Dollars and in immediately
available funds in accordance with Southland's disbursement
instructions set forth in the Notice of Borrowing. Promptly
after each Borrowing of Competitive Bid Loans, the
Administrative Agent will notify each Senior Lender of the
amount of such Borrowing, the Funding Date for the
Competitive Bid Loans comprising such Borrowing and the
maturity date for such Competitive Bid Loans.
(d) COMPETITIVE BID NOTES. 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 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 (each
individually, a "Competitive Bid Note" and collectively, the
"Competitive Bid Notes"). The Competitive Bid Note
delivered to each Senior Lender shall mature, and all
Revolving Credit Obligations evidenced thereby shall be paid
in full on the maturity date specified in such Note (such
maturity date being that specified by Southland for
repayment of such Competitive Bid Loan in the related Notice
of Borrowing delivered pursuant to SECTION 2.03(b)).
2.04. USE OF PROCEEDS OF LOANS. The proceeds of the
Loans made (or deemed to have been made) on the Effective
Date shall be used (i) to repay in full all outstanding
obligations of Southland under the Existing Credit
Agreement, (ii) to pay the Transactions Costs and (iii) for
the purposes described in the following sentence. The pro-
ceeds of all other Loans shall be used for working capital
in the ordinary course of business and for other lawful and
permitted corporate purposes of Southland.
2.05. INTEREST ON THE LOANS.
(a) RATE OF INTEREST. All Loans shall bear
interest on the unpaid principal amount thereof from the
date made until paid in full. The applicable basis for
determining the rate of interest shall be selected by
Southland at the time a Notice of Borrowing is given by
Southland pursuant to SECTION 2.01(b), 2.02(b) or 2.03(b)
(as applicable) or, in the case of all Base Rate Loans or
Eurodollar Rate Loans, at the time a Notice of
Conversion/Continuation is delivered by Southland pursuant
to SECTION 2.05(c); PROVIDED, HOWEVER, that (x) Southland
may not select the Eurodollar Rate as the applicable basis
for determining the rate of interest on a Term Loan or
Revolving Loan if at the time of such selection an Event of
Default or a Potential Event of Default has occurred and is
continuing and (y) all Loans (other than Competitive Bid
Loans) made on the Effective Date shall be
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Base Rate Loans. If on any day any Loan (other than a
Competitive Bid Loan) is outstanding with respect to which
notice has not been delivered to the Administrative Agent in
accordance with the terms of this Agreement specifying the
basis for determining the rate of interest, then for that
day that Loan shall be a Base Rate Loan. The Loans and
other Obligations shall bear interest, subject to SECTIONS
2.05(d) and 12.23, as follows:
(i) If a Base Rate Loan or such other Obligation
(other than a Competitive Bid Loan), then at a rate
per annum equal to the Base Rate as in effect from
time to time as interest accrues;
(ii) If a Eurodollar Rate Loan, then at a rate per
annum equal to the sum of (A) 0.225% per annum PLUS
(B) the Eurodollar Rate determined for the
applicable Eurodollar Interest Period; or
(iii) If a Competitive Bid Loan, then at a rate per
annum equal for such Competitive Bid Loan specified
by the Senior Lender making such Competitive Bid
Loan in its notice with respect thereto delivered
pursuant to Section 2.03(c)(ii), as provided in the
Competitive Bid Note evidencing such Competitive Bid
Loan.
(b) INTEREST PAYMENTS. Subject to Sections 2.05(d)
and 12.23, interest accrued on all Base Rate Loans in any
calendar quarter shall be payable in arrears (i) on the
first Business Day of the immediately succeeding calendar
quarter, commencing on the first such day following the
making of each such Base Rate Loan, (ii) upon the prepayment
thereof in full or in part and (iii) at maturity. Interest
accrued on each Eurodollar Rate Loan shall be payable in
arrears (x) on each Eurodollar Interest Payment Date
applicable to that Loan, (y) upon the prepayment thereof in
full or in part (together with payment of the amounts
described in SECTION 2.09(f)) and (z) at maturity. Interest
accrued on each Competitive Bid Loan shall be payable on the
interest payment date or dates specified by Southland for
such Competitive Bid Loan in the related Notice of Borrowing
delivered pursuant to SECTION 2.03(b), as provided in the
Competitive Bid Note evidencing such Competitive Bid Loan.
(c) CONVERSION OR CONTINUATION. Subject to the
provisions of SECTION 2.09, Southland shall have the option
(i) to convert at any time all or any part of outstanding
Term Loans and Revolving Loans which comprise part of the
same Borrowing and which, in the aggregate, equal
$10,000,000 or an integral multiple of $5,000,000 in excess
of that amount from Base Rate Loans to Eurodollar Rate
Loans; or (ii) to convert all or any part of outstanding
Term Loans and Revolving Loans which comprise part of the
same Borrowing and which, in the aggregate, equal
$10,000,000 or an integral multiple of $5,000,000 in excess
of that amount from Eurodollar Rate Loans to Base Rate Loans
on the expiration date of any Eurodollar Interest Period
applicable thereto; or (iii) upon the expiration of any
Eurodollar Interest Period applicable to Borrowing of
Eurodollar Rate Loans, to continue all or any portion of
such Loans equal to $10,000,000 or an integral multiple of
$5,000,000 in excess of that amount as Eurodollar Rate Loans
of the same type, and the succeeding Eurodollar Interest
Period of such continued Loans shall commence on the
expiration date of the Eurodollar Interest Period applicable
thereto; PROVIDED, that no outstanding Term Loan or
Revolving Loan
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may be continued as, or be converted into, a Eurodollar Rate
Loan when any Event or Default or Potential Event of Default
has occurred and is continuing.
In the event Southland shall elect to convert or
continue a Loan under this SECTION 2.05(c), Southland shall
deliver a Notice of Conversion/Continuation to the
Administrative Agent no later than 11:00 a.m. (New York
time) on the proposed conversion date in the case of a
conversion to a Base Rate Loan, and not later than 11:00
a.m. (New York time) at least three (3) Business Days in
advance of the proposed conversion/continuation date in the
case of a conversion to, or a continuation of, a Eurodollar
Rate Loan. A Notice of Conversion/Continuation shall
specify (i) the proposed conversion/continuation date (which
shall be a Business Day), (ii) the amount of the Term Loan
or Revolving Loan to be converted/continued, (iii) the
nature of the proposed conversion/continuation, and (iv) in
the case of a conversion to, or continuation of, a
Eurodollar Rate Loan, the requested Eurodollar Interest
Period. In lieu of delivering the above-described Notice of
Conversion/Continuation, Southland may give the
Administrative Agent telephonic notice of any proposed
conversion/continuation by the time required under this
SECTION 2.05(c); PROVIDED, that such notice shall be
confirmed in writing by delivery to the Administrative Agent
promptly (but in no event later than the proposed
conversion/continuation under this SECTION 2.05(c).
Promptly after receipt of a Notice of
Conversion/Continuation under this SECTION 2.05(c) (or
telephonic notice in lieu thereof), the Administrative Agent
shall notify each Senior Lender by telex, telecopy,
telegram, telephone or other similar form of transmission,
of the proposed conversion/continuation.
Any Notice of Conversion/Continuation for conversion
to, or continuation of, a Loan (or telephonic notice in lieu
thereof) shall be irrevocable and Southland shall be bound
to convert or continue such Loan in accordance therewith.
(d) DEFAULT INTEREST. Notwithstanding the rates of
interest specified in SECTION 2.05(a), effective upon notice
from the Administrative Agent or the Requisite Senior
Lenders at any time after (i) the occurrence of an Event of
Default under SECTION 10.01(a) or (ii) the date of
acceleration of the maturity of the Obligations pursuant to
SECTION 10.02(a) and for as long thereafter as such Event of
Default shall be continuing or until such acceleration has
been rescinded pursuant to SECTION 10.02(c) (as applicable),
the principal balance of all Loans and other Obligations
then outstanding shall bear interest payable upon demand at
a rate which is two percent (2%) per annum in excess of the
rate of interest otherwise payable under this Agreement, but
not to exceed the maximum rate permitted by applicable law.
(e) COMPUTATION OF INTEREST. Interest on Base Rate
Loans and Eurodollar Rate Loans shall be computed on the
basis of the actual number of days elapsed in the period
during which interest accrues and a year of 360 days
(subject to the provisions of this Agreement, the Term Notes
and the Revolving Notes limiting the rate of interest to
that permitted by applicable law). Interest on Competitive
Bid Loans shall be computed on the basis set forth in the
related Competitive Bid Notes. In computing interest on any
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Loan, the date of the making of the Loan or the first day of
a Eurodollar Interest Period, as the case may be, shall be
excluded; PROVIDED that if a Loan is repaid on the same day
on which it is made, one day's interest shall be paid on
that Loan.
(f) CHANGES; LEGAL RESTRICTIONS. Except as
provided in SECTION 2.09(d) with respect to certain
determinations on Eurodollar Interest Rate Determination
Dates, in the event that after the date hereof (a) the
adoption of or any change in any law, treaty, rule,
regulation, guideline or determination of a court or
Governmental Authority or any change in the interpretation
or application thereof by a court or Governmental Authority,
or (b) compliance by any Senior Lender or Issuing Bank with
any request or directive (whether or not having the force of
law and whether or not the failure to comply therewith would
be unlawful) from any central bank or other Governmental
Authority or quasi-governmental authority:
(i) does or will subject a Senior Lender or Issuing
Bank (or its applicable lending office or Eurodollar
Affiliate) to any tax, duty or other charge of any
kind which such Senior Lender or Issuing Bank
reasonably determines to be applicable to this
Agreement, the Notes, the Commitments, the Loans or
the Facility Letters of Credit or change the basis
of taxation of payments to that Senior Lender or
Issuing Bank of principal, fees, interest, or any
other amount payable hereunder, except for taxes
imposed on or measured by the overall net income of
that Senior Lender or Issuing Bank or its applicable
lending office or Eurodollar Affiliate or franchise
taxes imposed by the jurisdiction in which such
Senior Lender's or Issuing Bank's principal
executive office, applicable lending office or
Eurodollar Affiliate is located (all such non-
excepted taxes, duties and other charges being
hereinafter referred to as "Taxes"); or
(ii) does or will impose, modify, or hold
applicable, in the determination of a Senior Lender
or Issuing Bank, any reserve, special deposit,
compulsory loan, FDIC insurance, capital allocation
or similar requirement against assets held by, or
deposits or other liabilities (including those
pertaining to Facility Letters of Credit) in or for
the account of, advances or loans by, Commitments
made, or other credit extended by, or any other
acquisition of funds by, a Senior Lender or any
applicable lending office or Eurodollar Affiliate of
that Senior Lender or Issuing Bank (except, with
respect to Base Rate Loans, to the extent that the
reserve and FDIC insurance requirements are
reflected in the definition of "Base Rate" and, with
respect to Eurodollar Rate Loans, to the extent that
the reserve requirements are reflected in the
definition of "Eurodollar Rate"); or
(iii) does or will impose on that Senior Lender or
Issuing Bank any other condition materially more
burdensome in nature, extent or consequence than
those in existence as of the Effective Date;
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and the results of any of the foregoing is to increase the
cost to the Senior Lender or Issuing Bank of making,
renewing or maintaining the Loans or its Commitment or
issuing or participating in the Facility Letters of Credit
or to reduce any amount receivable thereunder; THEN, in any
such case, Southland shall promptly pay to that Senior
Lender or Issuing Bank, upon demand, such amount or amounts
(based upon a reasonable allocation thereof by such Senior
Lender or Issuing Bank to the financing transactions
contemplated by this Agreement and affected by this SECTION
2.05(f)) as may be necessary to compensate that Senior
Lender or Issuing Bank for any such additional cost incurred
or reduced amount received. Such Senior Lender or Issuing
Bank shall deliver to Southland a written statement of the
costs or reductions claimed and the basis therefor, and the
reasonable allocation made by that Senior Lender or Issuing
Bank of such costs and reductions shall be conclusive,
absent manifest error. If a Senior Lender or Issuing Bank
subsequently recovers any amount of Taxes previously paid by
Southland pursuant to this SECTION 2.05(f), such Senior
Lender or Issuing Bank shall, within 30 days after receipt
of such refund and to the extent permitted by applicable
law, pay to Southland the amount of any such recovery.
(g) REFERENCE BANKS. Each Reference Bank which is
also a Senior Lender agrees to furnish to the Administrative
Agent timely information for the purpose of determining each
Eurodollar Rate. Upon the reasonable request of Southland
from time to time, the Administrative Agent shall promptly
provide to Southland such information with respect to the
applicable Eurodollar Rate as may be reasonably required by
Southland, and each Reference Bank which is also a Senior
Lender agrees to furnish to the Administrative Agent such
information as may be required in connection therewith.
2.06. Fees. (a) FEE LETTER. Southland shall pay to
the Administrative Agent and to Citicorp Securities, in each
case solely for its own account, the fees payable to the
Administrative Agent or Citicorp Securities, respectively,
as specified in the Fee Letter and on the dates specified
therein. No Person other than the Administrative Agent or
Citicorp Securities, as the case may be, shall have any
interest in these fees.
(b) COMPETITIVE BID AUCTION FEE. Southland shall
pay to the Administrative Agent, together with each Notice
of Borrowing delivered pursuant to SECTION 2.03(b), a fee in
the amount of $1,500.
(c) FACILITY FEE. Southland shall pay to the
Administrative Agent, for the account of each Senior Lender,
a fee accruing at the rate of 0.15% per annum applied to
the aggregate amount of the Commitments in effect from day
to day during any calendar quarter, payable quarterly in
arrears on the first Business Day of the immediately
succeeding calendar quarter.
(d) LETTER OF CREDIT FEES. Southland shall pay to
the Administrative Agent, for the account of the Senior
Lenders or the Issuing Banks, as applicable, the fee for
Facility Letters of Credit, determined as set forth in
SECTIONS 3.08(a) and (b).
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(e) PAYMENT OF FEES. The fees described in this
SECTION 2.06 represent compensation for services rendered
and to be rendered separate and apart from the lending of
money or the provision of credit and do not constitute
compensation for the use, detention or forbearance of money,
and the obligation of Southland to pay each fee described
herein shall be in addition to, and not in lieu of, the
obligation of Southland to pay interest, other fees
described herein and expenses otherwise described in this
Agreement. Fees shall be payable when due in New York, New
York in immediately available funds. All fees shall be non-
refundable when paid. All fees specified or referred to in
this Agreement due to a Senior Lender, including, without
limitation, those referred to in this SECTION 2.06, shall
bear interest, if not paid when due, at the rate then
applicable to past due Base Rate Loans (but not to exceed
the maximum rate permitted by law) and shall constitute
Obligations.
2.07.Prepayments of Loans; Reductions and
Termination of Commitments.
(a) VOLUNTARY PREPAYMENTS OF LOANS. Southland may,
upon not less than two (2) Business Days' prior written or
telephonic notice confirmed promptly in writing to the
Administrative Agent (which notice the Administrative Agent
shall promptly transmit by telegram, telex or telephone to
each Senior Lender), at any time and from time to time,
prepay any Base Rate Loans in whole or in part, without
premium or penalty, in an aggregate minimum amount of
$5,000,000, PROVIDED, HOWEVER, that Southland may prepay
such Loans in full without regard to such minimum amount.
Eurodollar Rate Loans may be prepaid in whole or in part,
without premium or penalty, on the expiration date of the
Eurodollar Interest Period applicable thereto and otherwise
only upon payment of the amounts described in SECTION
2.09(f). Southland shall have no right to prepay any
principal amount of any Competitive Bid Loan unless, and
then only on the terms, specified by Southland for such
Competitive Bid Loan in the related Notice of Borrowing
delivered pursuant to SECTION 2.03(b) and set forth in the
Competitive Bid Note evidencing such Competitive Bid Loan
(or as otherwise agreed by the holder of the Competitive Bid
Note). Any notice of prepayment given to the Administrative
Agent under this SECTION 2.07(a) shall specify the date of
prepayment, the aggregate principal amount of the prepayment
and the allocation of such amount among Base Rate Loans,
Eurodollar Rate Loans and Competitive Bid Loans. Voluntary
prepayments of the Term Loans shall be applied to unpaid
installments thereof in the direct order of their maturity
(with a corresponding permanent reduction in the Term Loan
Commitment of each Senior Lender proportionately in
accordance with its Pro Rata Share). Notice of prepayment
having been delivered as provided herein, the principal
amount of the Loans specified in such notice shall become
due and payable on the prepayment date.
(b) MANDATORY PREPAYMENT OF REVOLVING CREDIT
ADVANCES. Southland shall make prepayments of Revolving
Loans to the extent necessary to assure that the Revolving
Credit Obligations at any time do not exceed the Revolving
Credit Commitments at such time. If, after giving effect to
any prepayment of the Revolving Loans made pursuant to the
immediately preceding sentence, the Revolving Credit
Obligations at such time continue to exceed the
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Revolving Credit Commitments at such time, Southland shall,
notwithstanding any provision to the contrary herein or in
any Competitive Bid Note, make prepayments of Competitive
Bid Loans to the extent necessary to assure that the
Revolving Credit Obligations at such time do not exceed the
Revolving Credit Commitments at such time.
(c) VOLUNTARY REDUCTION AND TERMINATION OF
REVOLVING CREDIT COMMITMENTS. Southland shall have the
right, at any time and from time to time, to terminate in
whole or permanently reduce in part, without premium or
penalty, the Revolving Credit Commitments; PROVIDED,
HOWEVER, that (A) the aggregate amount of the Revolving
Credit Commitments shall not be reduced to an amount which
is less than the sum of (I) the aggregate principal amount
of the Competitive Bid Loans at such time, PLUS (II) the
Facility Letter of Credit Obligations at such time, (B) each
partial reduction shall be in the aggregate amount of
$5,000,000 and integral multiples of $1,000,000 in excess of
that amount and (C) Southland shall have made whatever
payment may be required to reduce the Revolving Credit
Obligations to an amount less than or equal to the Revolving
Credit Commitments as reduced or terminated. Southland
shall give not less than three (3) Business Days' prior
written notice to the Administrative Agent designating the
date (which shall be a Business Day) of such termination or
reduction of the Revolving Credit Commitments and, in the
case of a partial reduction, the amount of such reduction.
Promptly after receipt of a notice of such termination or
reduction, the Administrative Agent shall notify each Senior
Lender of the proposed termination or reduction. Such
termination or reduction of the Revolving Credit Commitments
shall be effective on the date specified in Southland's
notice and shall terminate or permanently reduce the
Revolving Credit Commitment of each Senior Lender
proportionately in accordance with its Pro Rata Share.
(d) MANDATORY TERMINATION OF REVOLVING CREDIT
COMMITMENTS. Each Senior Lender's Revolving Credit
Commitment shall expire without further action on the part
of the Administrative Agent, any Senior Lender or Southland
on the Revolving Credit Termination Date.
2.08. Payments. (a) MANNER AND TIME OF PAYMENT.
All payments of principal, interest, Reimbursement
Obligations and fees hereunder and under the Notes or a
Facility Letter of Credit payable to the Senior Lenders or
any Issuing Bank shall be made without condition or
reservation of right, in Dollars and in immediately
available funds, delivered to the Administrative Agent not
later than 11:00 a.m. (New York time) on the date due, to
such account of the Administrative Agent in New York, New
York, as the Administrative Agent may designate, for the
account of the Senior Lenders or such Issuing Bank, as the
case may be, and funds received by the Administrative Agent
after that time, shall be deemed to have been paid on the
next succeeding Business Day. Payments actually received by
the Administrative Agent for the account of the Senior
Lenders or the Issuing Banks, or any of them, shall be paid
to them promptly after receipt thereof by the Administrative
Agent, PROVIDED, that the Administrative Agent shall pay to
such Senior Lenders or Issuing Banks interest thereon, at
the Federal
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Funds Rate, from the Business Day following receipt of such
funds by the Administrative Agent until such funds are paid
to such Senior Lenders and Issuing Banks.
(b) APPORTIONMENT OF PAYMENTS. (i) Subject to the
provisions of SECTION 2.05(f), SECTION 2.06, SECTION 2.07,
SECTION 2.08(b)(ii), SECTION 2.08(b)(iii), SECTION 3.05 and
SECTION 3.06(b)(ii), all payments of principal and interest
in respect of outstanding Loans (other than Competitive Bid
Loans), all payments in respect of Reimbursement Obliga-
tions, all payments of fees and all other payments in
respect of any other Obligations (other than Competitive Bid
Loans), shall be allocated among such of the Senior Lenders
and Issuing Banks as are entitled thereto, in proportion to
their respective Pro Rata Shares or otherwise as provided
herein. Except as provided in SECTION 2.08(b)(ii) with
respect to payments received after the occurrence of an
Event of Default, all such payments and any other amounts
received by the Administrative Agent from or for the benefit
of Southland shall be allocated among such of the Senior
Lenders as are entitled thereto, in proportion to their
respective Pro Rata Shares, or otherwise as provided herein.
All such principal and interest payments in respect of Term
Loans and Revolving Loans shall be applied FIRST, to the
Term Loans and accrued interest thereon and SECOND, to the
Revolving Loans and accrued interest thereon; in either
case, FIRST, to repay outstanding Base Rate Loans and THEN
to repay outstanding Eurodollar Rate Loans with those
Eurodollar Rate Loans which have earlier expiring Eurodollar
Interest Periods being repaid prior to those which have
later expiring Eurodollar Interest Periods. All such
principal and interest payments in respect of Competitive
Bid Loans shall be applied in accordance with the related
Competitive Bid Note.
(ii) After the occurrence of an Event of
Default and while the same is continuing, the Administrative
Agent shall apply all payments in respect of any Obligations
in the following order:
(A) FIRST, to pay Obligations in respect
of any fees, expense reimbursements or indemnities
then due to the Administrative Agent from Southland;
(B) SECOND, to pay Obligations in respect
of any fees and indemnities then due to the Senior
Lenders from Southland;
(C) THIRD, to pay interest due in respect
of Loans and other Obligations; PROVIDED, that if
sufficient funds are not available to fund all
payments to be made to the Holders in respect of the
Obligations described in this CLAUSE (C), the
available funds shall be allocated to the payment of
such Obligations ratably, based on the proportion of
the amount of interest due each Holder;
(D) FOURTH, to pay or prepay principal of
Loans and Reimbursement Obligations and to pay (or,
to the extent such Obligations are contingent,
prepay or provide cash collateral in
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respect of) Facility Letter of Credit Obligations;
PROVIDED, that if sufficient funds are not available
to fund all payments to be made to the Holders in
respect of the Obligations described in this CLAUSE
(D), the available funds shall be allocated to the
payment of such Obligations ratably, based on the
proportion of each Holder's interest in the
aggregate outstanding Loans, Reimbursement
Obligations and other Facility Letter of Credit
Obligations (in each instance whether or not due);
(E) FIFTH, to the ratable payment of all
other Obligations then due and payable for expense
reimbursements; and
(F) SIXTH, to the ratable payment of all
other Obligations due to any and all Holders.
Subject to SECTION 2.08(b)(iii) and SECTION 3.06(b)(ii), the
Administrative Agent shall promptly distribute to each
Senior Lender and Issuing Bank at its primary address set
forth on the appropriate signature page hereof, or the
signature page to the Assignment and Acceptance by which
such Person became a Lender or Issuing Bank, or at such
other address as a Senior Lender, an Issuing Bank or Holder
may request in writing, such funds as it may be entitled to
receive, subject to the provisions of ARTICLE XI and
PROVIDED THAT the Administrative Agent shall in any event
not be bound to inquire into or determine the validity,
scope or priority of any interest or entitlement of any
Holder and may suspend all payments or seek appropriate
relief (including, without limitation, instructions from the
Requisite Senior Lenders or an action in the nature of
interpleader) in the event of any doubt or dispute as to any
apportionment or distribution contemplated hereby. The
order of priority herein is set forth solely to determine
the rights and priorities of the Senior Lenders and other
Holders as among themselves and may at any time or from time
to time be changed by the Senior Lenders as they may elect,
in writing in accordance with Section 12.07, without
necessity of notice to or consent of or approval by
Southland or any other Person.
(iii) In the event that any Senior Lender fails to
fund its Pro Rata Share of any Revolving Loan requested by
Southland which such Senior Lender is obligated to fund
under the terms of this Agreement (the funded portion of
such Borrowing of Revolving Loans being hereinafter referred
to as a "Non Pro Rata Loan"), until the earlier of such
Senior Lender's cure of such failure and the termination of
the Revolving Credit Commitments, the proceeds of all
amounts thereafter repaid to the Administrative Agent by
Southland and otherwise required to be applied to such
Senior Lender's share of all other Obligations pursuant to
the terms of this Agreement shall be advanced to Southland
by the Administrative Agent on behalf of such Senior Lender
to cure, in full or in part, such failure by such Senior
Lender, but shall nevertheless be deemed to have been paid
to such Senior Lender in satisfaction of such other
Obligations. Notwithstanding anything in this Agreement to
the contrary:
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(A) the foregoing provisions of this
SECTION 2.08(b)(iii) shall apply only with respect
to the proceeds of payments of Obligations and shall
not affect the conversion or continuation of Loans
pursuant to SECTION 2.05(c);
(B) a Senior Lender shall be deemed to
have cured its failure to fund its Pro Rata Share of
any Revolving Loan at such time as an amount equal
to such Senior Lender's original Pro Rata Share of
the requested principal portion of such Revolving
Loan is fully funded to Southland, whether made by
such Lender itself or by operation of the terms of
this SECTION 2.08(b)(iii), and whether or not the
Non Pro Rata Loan with respect thereto has been
repaid, converted or continued;
(C) amounts advanced to Southland to cure,
in full or in part, any such Senior Lender's failure
to fund its Pro Rata Share of any Revolving Loan
("Cure Loans") shall bear interest at the rate in
effect from time to time pursuant to SECTION
2.05(a)(i) and for all other purposes of this
Agreement shall be treated as if they were Base Rate
Loans; and
(D) regardless of whether or not an Event
of Default has occurred or is continuing, and
notwithstanding the instructions of Southland as to
its desired application, all repayments of principal
which, in accordance with the other terms of this
SECTION 2.08, would be applied to the outstanding
Revolving Loans which are Base Rate Loans shall be
applied FIRST, ratably to all such Base Rate Loans
constituting Non Pro Rata Loans, SECOND, ratably to
such Base Rate Loans other than those constituting
Non Pro Rata Loans or Cure Loans and THIRD, ratably
to such Base Rate Loans constituting Cure Loans.
(c) PAYMENTS ON NON-BUSINESS DAYS. Whenever any
payment to be made by Southland hereunder or under the Notes
shall be stated to be due on a day which is not a Business
Day, payments shall be made on the next succeeding Business
Day and such extension of time shall be included in the
computation of the payment of interest hereunder or under
the Notes and of any of the fees specified in Section 2.06,
as the case may be.
(d) ADMINISTRATIVE AGENT'S, ISSUING BANK'S OR
SENIOR LENDER'S ACCOUNTING. Any accounting as to Loans,
fees or Facility Letters of Credit which any of the
Administrative Agent, any Issuing Bank or any of the Senior
Lenders at its option may provide to Southland, including
any periodic statement of account, will be presumed,
rebuttably, to be correct.
2.09. Special Provisions Governing Eurodollar Rate
Loans. Notwithstanding other provisions of this Agreement,
the following provisions shall govern with respect to
Eurodollar Rate Loans as to the matters covered:
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(a) AMOUNT OF EURODOLLAR RATE LOANS. Each
Eurodollar Rate Loan shall be for a minimum amount of
$10,000,000 and in integral multiples of $5,000,000 in
excess of that amount.
(b) DETERMINATION OF EURODOLLAR INTEREST PERIOD.
By giving notice as set forth in SECTION 2.02(b) (with
respect to a Borrowing of Eurodollar Rate Loans after the
Effective Date) or SECTION 2.05(c) (with respect to a
conversion into or continuation of Eurodollar Rate Loans),
Southland shall have the option, subject to the other
provisions of this SECTION 2.09, to specify an interest
period (each a "Eurodollar Interest Period") to apply to the
Borrowing of Eurodollar Rate Loans described in such notice,
which Eurodollar Interest Period shall be a period of either
one, two, three, six or, if available to each of the Senior
Lenders, twelve months. The determination of Eurodollar
Interest Periods shall be subject to the following
provisions:
(i) In the case of immediately successive
Eurodollar Interest Period applicable to a Borrowing
of Eurodollar Rate Loans, each successive Eurodollar
Interest Period shall commence on the day on which
the immediately preceding Eurodollar Interest Period
expires;
(ii) If any Eurodollar Interest Period would
otherwise expire on a day which is not a Business
Day, the Eurodollar Interest Period shall be
extended to expire on the next succeeding Business
Day; PROVIDED, that if any such Eurodollar Interest
Period applicable to a Borrowing of Eurodollar Rate
Loans would otherwise expire on a day which is not a
Business Day but is a day of the month after which
no further Business Day occurs in that month, that
Eurodollar Interest Period shall expire on the
immediately preceding Business Day;
(iii) Southland may not select a Eurodollar
Interest Period for any Borrowing of Revolving Loans
which terminates later than the Revolving Credit
Termination Date; or for the Term Loans, or any
portion thereof, which terminates later than
December 31, 2001;
(iv) Southland may not select a Eurodollar Interest
Period with respect to any portion of principal of a
Eurodollar Rate Loan which extends beyond a date on
which Southland is required to make a scheduled
payment of that portion of principal, it being
understood and agreed that any Eurodollar Rate Loan
whose Eurodollar Interest Period ends less than one
month prior to such date shall be deemed converted
to a Base Rate Loan as of the last day of such
Eurodollar Interest Period for purposes of
determining whether any portion of principal of any
Eurodollar Rate Loan is required in order to make a
mandatory payment of principal; and
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(v) There shall be no more than ten (10) Eurodollar
Interest Periods in effect at any one time.
(c) DETERMINATION OF INTEREST RATE. As soon as
practicable after 11:00 a.m. (New York time) on the
Eurodollar Interest Rate Determination Date, the
Administrative Agent shall determine (which determination
shall, absent manifest error, be presumptively correct,
subject, however, to the provisions of SECTION 12.23) the
interest rate which shall apply to the Eurodollar Rate Loans
for which an interest rate is then being determined for the
applicable Eurodollar Interest Period and shall promptly
give notice thereof (in writing or by telephone confirmed in
writing) to Southland and to each Senior Lender.
(d) INTEREST RATE UNASCERTAINABLE, INADEQUATE OR
UNFAIR. If with respect to any Eurodollar Interest Period:
(i) the Administrative Agent is advised by any
Reference Bank that deposits in Dollars (in the
applicable amounts) are not being offered by such
Reference Bank in the relevant market for such
Eurodollar Interest Period; or
(ii) Requisite Senior Lenders advise the
Administrative Agent that the Eurodollar Rate as
determined by the Administrative Agent is less than
the cost to such Senior Lenders of obtaining funds
in the London interbank Eurodollar market in the
amount substantially equal to such Senior Lenders'
Eurodollar Rate Loans and for a period equal to such
Eurodollar Interest Period;
the Administrative Agent shall forthwith give notice thereof
to Southland, whereupon until the Administrative Agent
notifies Southland that the circumstances giving rise to
such suspension no longer exist, the right of Southland to
elect to have the Term Loans and the Revolving Loans bear
interest based on the Eurodollar Rate shall be suspended,
and each outstanding Eurodollar Rate Loan made by the Senior
Lenders shall be converted into a Base Rate Loan on the last
day of the then current Eurodollar Interest Period therefor,
notwithstanding any prior election by Southland to the
contrary.
(e) ILLEGALITY. (i) In the event that on any date
any Senior Lender shall have determined (which determination
shall, absent manifest error, be final and conclusive and
binding upon all parties) that the making or continuation of
any Eurodollar Rate Loan has become unlawful by compliance
by that Senior Lender in good faith with any law,
governmental rule, regulation or order of any Governmental
Authority (whether or not having the force of law and
whether or not failure to comply therewith would be
unlawful), then, and in any such event, that Senior Lender
shall promptly give notice (by telephone promptly confirmed
in writing) to Southland and the Administrative Agent (which
notice the Administrative Agent shall promptly transmit to
each Senior Lender) of that determination.
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(ii) Upon the giving of the notice referred to in
SECTION 2.09(e)(i), (A) Southland's right to request and
such Senior Lender's obligation to make Eurodollar Rate
Loans shall be immediately suspended, and such Senior Lender
shall make a Loan, as part of any requested Borrowing of
Eurodollar Rate Loans, as a Base Rate Loan, which Base Rate
Loan shall, for all purposes, be considered a part of such
Borrowing, and (B) if the affected Eurodollar Rate Loan(s)
are then outstanding, Southland shall immediately, or if
permitted by applicable law, no later than the date
permitted thereby, upon at least one (1) Business Day's
written notice to the Administrative Agent and the affected
Senior Lender, convert each such Eurodollar Rate Loan into a
Base Rate Loan.
(iii) In the event that such Senior Lender
determines at any time following its giving of the notice
referred to in SECTION 2.09(e)(i) that such Senior Lender
may lawfully make Eurodollar Rate Loans of the type referred
to in such notice, such Senior Lender shall promptly give
notice (by telephone confirmed in writing) to Southland and
the Administrative Agent (which notice the Administrative
Agent shall promptly transmit to each Senior Lender) of that
determination, whereupon Southland's right to request and
such Senior Lender's obligation to make Eurodollar Rate
Loans of such type(s) shall be restored.
(f) COMPENSATION. In addition to such amounts as
are required to be paid by Southland pursuant to SECTIONS
2.05(a), 2.05(d) and 2.05(f), Southland shall compensate
each Senior Lender, upon written request by that Senior
Lender (which request shall set forth in reasonable detail
the basis for requesting such amounts), for all losses,
expenses and liabilities, including, without limitation, any
loss or expense incurred by reason of the liquidation of
reemployment of deposits or other funds acquired by that
Senior Lender to fund or maintain that Senior Lender's
Eurodollar Rate Loans to Southland which that Senior Lender
may sustain (i) if for any reason a Borrowing, conversion or
continuation of Eurodollar Rate Loans does not occur on a
date specified therefor in a Notice of Borrowing or a Notice
of Conversion/Continuation or in a telephonic request for
borrowing or conversion/continuation or a successive
Eurodollar Interest Period does not commence after notice
therefor is given pursuant to SECTION 2.05(c), (ii) if any
prepayment of any Eurodollar Rate Loan (including without
limitation, any prepayments pursuant to SECTION 2.07) occurs
for any reason on a date which is not the last day of the
applicable Eurodollar Interest Period, (iii) as a
consequence of any required conversion of a Eurodollar Rate
Loan to a Base Rate Loan as a result of any of the events
indicated on SECTION 2.09(e), or (iv) as a consequence of
any other default by Southland to repay Eurodollar Rate
Loans when required by the terms of this Agreement.
(g) QUOTATION OF EURODOLLAR RATE. If on any
Eurodollar Interest Rate Determination Date any of the
Reference Banks shall have failed to provide offered
quotations to the Administrative Agent in accordance with
the definition of "Eurodollar Rate" the Administrative Agent
shall determine the Eurodollar Rate using the quotation of
the other Reference Banks.
(h) EURODOLLAR RATE TAXES. Southland agrees that:
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(i) Southland will pay, prior to the date on which
penalties attach thereto, all present and future
income, stamp and other taxes, levies, or costs and
charges whatsoever imposed, assessed, levied or
collected on or in respect of a Loan solely as a
result of the interest rate being determined by
reference to the Eurodollar Rate or the provisions
of this Agreement relating to the Eurodollar Rate or
the recording, registration, notarization or other
formalization of any thereof or any payments of
principal, interest or other amounts made on or in
respect of a Loan when the interest rate is
determined by reference to the Eurodollar Rate (all
such taxes, levies, costs and charges being herein
collectively called "Eurodollar Rate Taxes");
PROVIDED that Eurodollar Rate Taxes shall not
include: taxes imposed on or measured by the
overall net income of the Senior Lender or any
foreign branch or Subsidiary of that Senior Lender
by the United States of America or any taxing
authority of any jurisdiction in which the Senior
Lender or any such foreign branch or Subsidiary
conducts business. Southland shall also pay such
additional amounts equal to increases in taxes
payable by that Senior Lender described in the
foregoing proviso which increases are attributable
to payments made by Southland described in this
sentence and in the immediately preceding sentence
of this CLAUSE (i). Promptly after the date on
which payment of any such Eurodollar Rate Tax is due
pursuant to applicable law, Southland will, at the
request of that Senior Lender, furnish to that
Senior Lender evidence, in form and substance
satisfactory to that Senior Lender, that Southland
has met its obligation under this SECTION 2.09(h);
and
(ii) Southland will indemnify each Senior Lender
against, and reimburse each Senior Lender on demand
for, any Eurodollar Rate Taxes paid by such Senior
Lender, as determined by that Senior Lender in its
sole discretion. That Senior Lender shall provide
Southland with (A) appropriate receipts for any
payments or reimbursements made by Southland
pursuant to this SECTION 2.09(h)(ii) and (B) such
information as may reasonably be required to
indicate the basis for such Eurodollar Rate Taxes;
PROVIDED that if a Senior Lender or Issuing Bank
subsequently recovers, or receives a net tax benefit
with respect to, any amount of Eurodollar Rate Taxes
previously paid by Southland pursuant to this
SECTION 2.09(h)(ii), such Senior Lender or Issuing
Bank shall, within 30 days after receipt of such
refund, and to the extent permitted by applicable
law, pay to Southland the amount of any such
recovery or permanent net tax benefit.
(i) BOOKING OF EURODOLLAR RATE LOANS. Any Senior
Lender may make, carry or transfer Eurodollar Rate Loans at,
to, or for the account of, any of its branch offices or the
office of an Affiliate of that Senior Lender; PROVIDED,
however, no such Senior Lender shall be entitled to receive
any greater amount under SECTION 2.05(f) or 2.09(h) as a
result of the transfer of any such Eurodollar Rate Loan than
such Senior Lender would be entitled to immediately prior
thereto unless (A) such transfer occurred at a time when
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circumstances giving rise to the claim for such greater
amount did not exist and (B) such claim would have arisen
even if such transfer had not occurred.
(j) AFFILIATES NOT OBLIGATED. No Eurodollar
Affiliate or other Affiliate of any Senior Lender shall be
deemed a party to this Agreement or shall have any rights,
liability or obligation under this Agreement.
2.10. INCREASED CAPITAL. If either (i) the
introduction of or any change in or in the interpretation of
any law or regulation or (ii) compliance by any Senior
Lender with any guideline or request from any central bank
or other Governmental Authority (whether or not having the
force of law and whether or not the failure to comply
therewith would be unlawful) affects or would affect the
amount of capital required or expected to be maintained by
such Senior Lender or any corporation controlling such
Senior Lender and such Senior Lender reasonably determines
that the amount of such capital is increased by or based
upon the existence of such Senior Lender's Commitment and
other commitments of this type then, upon demand by such
Senior Lender, Southland shall immediately pay to such
Senior Lender, from time to time as specified by such Senior
Lender, additional amounts sufficient to compensate such
Senior Lender in the light of such circumstances, to the
extent that such Senior Lender reasonably determines such
increase in capital to be allocable to the existence of such
Senior Lender's Commitment. A certificate as to such
amounts submitted to Southland by such Senior Lender, shall,
in the absence of manifest error, be conclusive and binding
for all purposes.
2.11. REPLACEMENT OF SENIOR LENDER IN EVENT OF
ADVERSE CONDITION. In the event Southland becomes obligated
to pay additional amounts to any Senior Lender or Issuing
Bank pursuant to SECTION 2.05(f), 2.09(h), 2.10 or 3.08(c)
as a result of any condition described in any such Section,
then, unless such Senior Lender or Issuing Bank has
theretofore taken reasonable steps (to the extent not
inconsistent with the internal policies of such Senior
Lender or Issuing Bank and any applicable legal or
regulatory restrictions) to remove or cure, and has removed
or cured, the conditions creating the cause for such
obligation to pay such additional amounts (to the extent
such removal or cure would not, in the determination of the
Senior Lender or Issuing Bank, otherwise adversely affect
its Commitments, Loans or Letters of Credit), Southland may
designate another bank or financial institution which is
reasonably acceptable to the Administrative Agent and the
Requisite Senior Lenders (any such bank or financial
institution being herein called a "Replacement Lender") to
purchase the Notes of such Senior Lender and such Senior
Lender's rights hereunder, without recourse to or warranty
by, or expense to, such Senior Lender for a purchase price
equal to the outstanding principal amount of such Notes
payable to such Senior Lender plus any accrued but unpaid
interest on such Notes plus the greatest amount for which
all outstanding Facility Letters of Credit issued by such
Senior Lender may be drawn plus accrued but unpaid fees
payable pursuant to Section 2.06 and any other amounts due
and payable hereunder and upon such purchase, such Senior
Lender shall no longer be a party hereto or have any rights
hereunder, and the Replacement Lender shall succeed to the
rights of such Senior Lender hereunder.
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2.12. AUTHORIZED OFFICERS AND AGENTS. Southland
shall notify the Administrative Agent in writing of the
names of the officers and employees authorized to request
Loans on behalf of Southland and shall provide the
Administrative Agent with a specimen signature of each such
officer or employee. The officers and employees of
Southland authorized to request a Loan on behalf of
Southland shall also be authorized to request a
conversion/continuation of any Revolving Loan or any Term
Loan on behalf of Southland. The Administrative Agent shall
be entitled to rely conclusively on such officer's or
employee's authority to request, convert or continue a Loan
on behalf of Southland until the Administrative Agent
receives written notice to the contrary. The Administrative
Agent shall have no duty to verify the authenticity of the
signature appearing on any written Notice of Borrowing or
Notice of Conversion/Continuation and, with respect to an
oral request for a Loan or a conversion or continuation
thereof, the Administrative Agent shall have no duty to
verify the identity of any person representing himself as
one of the officers or employees authorized to make such
request on behalf of Southland. Neither the Administrative
Agent nor any Senior Lender shall incur any liability to
Southland in acting upon any telephonic notice referred to
above which the Administrative Agent believes in good faith
to have been given by a duly authorized officer or other
person authorized to borrow on behalf of Southland or for
otherwise acting in good faith under this Agreement.
ARTICLE III
THE LETTER OF CREDIT SUBFACILITY
3.01. OBLIGATION TO ISSUE. Subject to the terms
and conditions set forth in this Agreement, each Issuing
Bank hereby severally agrees to issue for the account of
Southland one or more Facility Letters of Credit, up to an
aggregate face amount at any one time outstanding equal to
its Letter of Credit Commitment, from time to time through
the earlier of (i) the expiration of such Issuing Bank's
Letter of Credit Commitment or (ii) the Business Day
immediately preceding the Revolving Credit Termination Date.
3.02. TYPES AND AMOUNTS. (a) An Issuing Bank shall
not have any obligation to issue, amend or extend, and shall
not issue, amend or extend, any Facility Letter of Credit at
any time:
(i) if the aggregate maximum amount then available
for drawing under Facility Letters of Credit issued
by such Issuing Bank after giving effect to the
Facility Letter of Credit requested hereunder, shall
exceed any limit imposed by law or regulation upon
such Issuing Bank;
(ii) if, immediately after the issuance of such
Facility Letter of Credit, the aggregate principal
amount of Facility Letter of Credit Obligations then
existing with respect to Facility Letters of Credit
issued by that Issuing Bank (which amount shall be
calculated without giving effect to the
participation of the Senior
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Lenders pursuant to SECTION 3.06) would exceed such
Issuing Bank's then effective Letter of Credit
Commitment;
(iii) if the Issuing Bank receives written notice
from the Administrative Agent or the Requisite
Senior Lenders at or before 11:00 a.m. (New York
time) on the date of the proposed issuance,
amendment or extension of such Facility Letter of
Credit that (A) immediately after the issuance,
amendment or extension of such Facility Letter of
Credit, (I) the Facility Letter of Credit
Obligations at such time would exceed the Letter of
Credit Subfacility then in effect or (II) the
Revolving Credit Obligations at such time would
exceed the aggregate Revolving Credit Commitments
then in effect, or (B) one or more of the conditions
precedent contained in SECTION 4.01 or 4.02, as
applicable, will not on such date be satisfied, and
an Issuing Bank shall not otherwise be required to
determine that, or take notice whether, the
conditions precedent set forth in SECTION 4.01 or
4.02, as applicable, have been satisfied; or
(iv) which has an expiration date (A) more than one
year after the date of issuance or extension, as
applicable or (B) after the Business Day immediately
preceding the Revolving Credit Termination Date.
(b) Any Senior Lender may, in its discretion, issue
or extend Letters of Credit permitted under SECTION
8.01(vii) without regard to the terms and provisions of this
ARTICLE III, and no other Senior Lender will have any
obligation to purchase any participation or any other
interest in such Letters of Credit pursuant to SECTION 3.06.
3.03. CONDITIONS. In addition to being subject to
the satisfaction of the conditions precedent contained in
SECTION 4.01 or 4.02, as applicable, the obligation of an
Issuing Bank to issue any Facility Letter of Credit is
subject to the satisfaction in full of the following
conditions:
(i) Southland shall have delivered to that Issuing
Bank, at such times and in such manner as that
Issuing Bank may prescribe, a Letter of Credit
Reimbursement Agreement and such other documents and
materials as may be required pursuant to the terms
thereof and the terms of the proposed Letter of
Credit shall be satisfactory to that Issuing Bank;
and
(ii) As of the date of issuance no order, judgment
or decree of any court, arbitrator or Governmental
Authority shall purport by its terms to enjoin or
restrain that Issuing Bank from issuing the Facility
Letter of Credit and no law, rule or regulation
applicable to that Issuing Bank and no request or
directive (whether or not having the force of law
and whether or not the failure to comply therewith
would be unlawful) from any Governmental Authority
with jurisdiction over that Issuing Bank shall
prohibit or request that such Issuing Bank refrain
from the issuance of Letters of Credit generally or
the issuance of that Facility Letter of Credit.
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3.04. ISSUANCE OF FACILITY LETTERS OF CREDIT.
(a) Southland shall give an Issuing Bank and the
Administrative Agent written notice that it has selected
that Issuing Bank to issue a Facility Letter of Credit not
later than 11:00 a.m. (New York time) on the fifth (5th)
Business Day preceding the requested issuance thereof under
this Agreement, or such shorter notice as may be acceptable
to such Issuing Bank and the Administrative Agent. Such
notice shall be irrevocable and shall specify (i) the stated
amount of the Facility Letter of Credit requested, (ii) the
effective date (which day shall be a Business Day) of
issuance of such requested Facility Letter of Credit, (iii)
the date on which such requested Facility Letter of Credit
is to expire (which date shall be a Business Day and shall
in no event be later than the expiration date permitted by
SECTION 3.02(a)(iv)), (iv) the Person for whose benefit the
requested Facility Letter of Credit is to be issued, and (v)
the amount of then outstanding Facility Letter of Credit
Obligations in respect of Facility Letters of Credit issued
by that Issuing Bank.
(b) An Issuing Bank shall not extend or amend any
Facility Letter of Credit if the issuance of a new Facility
Letter of Credit having the same terms as such Facility
Letter of Credit as so extended or amended would be
prohibited by SECTION 3.02(a).
3.05. REIMBURSEMENT OBLIGATIONS; DUTIES OF ISSUING.
(a) Notwithstanding any provisions to the contrary in any
Letter of Credit Reimbursement Agreement:
(i) Southland shall reimburse an Issuing Bank for
drawings under a Facility Letter of Credit used by
it no later than the earlier of (a) the time
specified in such Letter of Credit Reimbursement
Agreement, and (b) three (3) Business Days after the
payment by that Issuing Bank; and
(ii) any Reimbursement Obligation with respect to
any Facility Letter of Credit shall bear interest
from the date of the relevant drawing under the
pertinent Facility Letter of Credit at the interest
rate applicable to Base Rate Loans for three (3)
Business Days after such date and thereafter at the
interest rate for past due Base Rate Loans in
accordance with SECTION 2.05(d).
(b) No action taken or omitted to be taken by an
Issuing Bank under or in connection with any Facility Letter
of Credit, if taken or omitted in the absence of gross
negligence or willful misconduct, shall put that Issuing
Bank under any resulting liability to any Senior Lender or,
subject to SECTION 3.02, relieve that Senior Lender of its
obligations hereunder to that Issuing Bank. In determining
whether to pay under any Facility Letter of Credit, an
Issuing Bank shall have no obligation to the Senior Lenders
other
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than to confirm that any documents required to be delivered
under such Facility Letter of Credit appear to have been
delivered and that they appear on their face to comply with
the requirements of such Facility Letter of Credit.
3.06. PARTICIPATIONS. (a) Immediately upon
issuance by an Issuing Bank of any Facility Letter of Credit
in accordance with the procedures set forth in this ARTICLE
III and immediately upon conversion of a Letter of Credit of
an Issuing Bank to a Facility Letter of Credit pursuant to
SECTION 3.11, each Senior Lender shall be deemed to have
irrevocably and unconditionally purchased and received from
that Issuing Bank, without recourse or warranty, an
undivided interest and participation to the extent of such
Senior Lender's Pro Rata Share in such Facility Letter of
Credit (including, without limitation, all obligations of
Southland with respect thereto other than amounts owing to
the Issuing Bank under SECTIONS 3.08(b) and 3.08(c)) and any
security therefor or guaranty pertaining thereto.
(b) (i) If any Issuing Bank makes any payment
under any Facility Letter of Credit and Southland does not
repay such amount to such Issuing Bank pursuant to SECTION
3.05(a) or 3.07, such Issuing Bank shall promptly notify the
Administrative Agent, which shall promptly notify each
Senior Lender of such failure, and each Senior Lender shall
promptly and unconditionally pay to the Administrative Agent
for the account of such Issuing Bank the amount of such
Senior Lender's Pro Rata Share of such payment, in Dollars
and in same day funds, and the Administrative Agent shall
promptly pay such amount, and any other amounts received by
the Administrative Agent for such Issuing Bank's account
pursuant to this SECTION 3.06(b)(i), to the Issuing Bank.
If the Administrative Agent so notifies such Senior Lender
prior to 11:00 a.m. (New York time) on any Business Day,
such Senior Lender shall make available to the
Administrative Agent for the account of such Issuing Bank
its Pro Rata Share of the amount of such payment on such
Business Day in immediately available funds in New York, New
York.
(ii) If and to the extent such Senior Lender shall
not have so made its Pro Rata Share of the amount of such
payment available to the Administrative Agent for the
account of such Issuing Bank, (A) such Senior Lender agrees
to pay to the Administrative Agent for the account of such
Issuing Bank forthwith on demand such amount together with
interest thereon, for each day from the date such payment
was first due until the date such amount is paid to the
Administrative Agent for the account of such Issuing Bank,
at the Federal Funds Rate, (B) with respect to any Senior
Lender which is also an Issuing Bank hereunder or whose
Affiliate is an Issuing Bank hereunder and, in either case,
such Issuing Bank has not received a requested reimbursement
under SECTION 3.06(b)(i) in respect of a payment made by
such Issuing Bank under a Facility Letter of Credit (an
"Unreimbursed Issuing Bank"), the obligations of such Senior
Lender under SECTION 3.06(b)(i) shall be suspended solely as
to any Issuing Bank with respect to which such Issuing Bank
(in its capacity as a Senior Lender) or the Affiliate of
such Issuing Bank which is a Senior Lender has failed to
reimburse such Unreimbursed Issuing Bank (a "Defaulting L/C
Participant"), until the amount of such reimbursement is
paid in full and (C) until the earlier of such Defaulting
L/C Participant's cure of such failure to reimburse such
Unreimbursed Issuing
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Bank, the proceeds of all amounts thereafter repaid to the
Administrative Agent by Southland and otherwise required to
be applied to such Defaulting L/C Participant's share of all
other Obligations pursuant to the terms of this Agreement
shall be advanced to the Unreimbursed Issuing Bank by the
Administrative Agent on behalf of such Defaulting L/C
Participant to cure, in full or in part, such failure by
such Defaulting L/C Participant, but shall nevertheless be
deemed to have been paid to such Defaulting L/C Participant
in satisfaction of such other Obligations. Notwithstanding
anything in this Agreement to the contrary, a Defaulting L/C
Participant shall be deemed to have cured its failure to
fund its Pro Rata Share of any reimbursement requested under
SECTION 3.06(b)(i) at such time as an amount equal to such
Defaulting L/C Participant's original Pro Rata Share of the
requested principal portion of such reimbursement is fully
funded to the Unreimbursed Issuing Bank, whether made by
such Defaulting L/C Participant itself or by operation of
the terms of this SECTION 3.06(b)(ii).
(iii) The failure of any Senior Lender to make
available to the Administrative Agent for the account of any
Issuing Bank its Pro Rata Share of any such payment shall
not relieve any other Senior Lender of its obligation
hereunder to make available to the Administrative Agent for
the account of such Issuing Bank its Pro Rata Share of any
payment on the date such payment is to be made.
(c) Whenever an Issuing Bank receives a payment on
account of a Reimbursement Obligation, including any
interest thereon, as to which the Administrative Agent has
previously received payments from any or all of the Senior
Lenders for the account of such Issuing Bank pursuant to
this SECTION 3.06, such Issuing Bank shall promptly pay to
the Administrative Agent and the Administrative Agent shall
promptly pay to each Senior Lender which has funded its
participating interest therein, in New York, New York, in
Dollars and in the kind of funds so received, an amount
equal to (i) the amount paid by such Issuing Bank,
MULTIPLIED BY (ii) a fraction, the numerator or which shall
be the amount funded by such Senior Lender in respect of its
participating interest and the denominator of which shall be
the amount funded by all of the Senior Lenders in respect of
their respective participating interests. Each such payment
shall be made by the Issuing Bank or the Administrative
Agent, as the case may be, on the Business Day on which such
Person receives the funds paid to such Person pursuant to
the preceding sentence, if received prior to 11:00 a.m. (New
York time) on such Business Day, and otherwise on the next
succeeding Business Day.
(d) Upon the request of the Administrative Agent or
any Senior Lender, an Issuing Bank shall furnish to the
Administrative Agent or such Senior Lender copies of any
Facility Letter of Credit or Letter of Credit Reimbursement
Agreement to which that Issuing Bank is party and such other
documentation as may reasonably be requested by the
Administrative Agent or such Senior Lender.
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(e) The obligations of a Senior Lender to make
payments to the Administrative Agent for the account of each
Issuing Bank with respect to a Facility Letter of Credit
shall be irrevocable, shall not be subject to any
qualification or exception whatsoever, and shall be honored
in accordance with the terms and conditions of this
Agreement under all circumstances (subject to SECTION 3.02),
including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, set-off, defense
or other right which Southland may have at any time
against a beneficiary named in a Facility Letter of
Credit or any transferee of any Facility Letter of
Credit (or any Person for whom any such transferee
may be acting), the Administrative Agent, the
Issuing Bank, any Senior Lender, or any other
Person, whether in connection with this Agreement,
any Facility Letter of Credit, the transactions
contemplated herein or any unrelated transactions
(including any underlying transactions between
Southland or any Subsidiary of Southland and the
beneficiary named in any Facility Letter of Credit);
(iii) any draft, certificate of any other document
presented under the Facility Letter of Credit
proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;
(iv) any failure by the Administrative Agent or
that Issuing Bank to make any reports required
pursuant to SECTION 3.09; or
(v) the occurrence of any Event of Default or
Potential Event of Default.
3.07. PAYMENT OF REIMBURSEMENT OBLIGATIONS. (a)
Southland agrees to pay to each Issuing Bank the amount of
all Reimbursement Obligations, interest and other amounts
payable to such issuing Bank under or in connection with any
Facility Letter of Credit immediately when due; irrespective
of any claim, setoff, defense or other right which Southland
may have at any time against any Issuing Bank or any other
Person.
(b) In the event any payment by Southland received
by an Issuing Bank with respect to a Facility Letter of
Credit and distributed by the Administrative Agent to the
Senior Lenders on account of their participations is
thereafter set aside, avoided or recovered from that Issuing
Bank in connection with any receivership, liquidation or
bankruptcy proceeding, each Senior Lender which received
such distribution shall, upon demand by that
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Issuing Bank, contribute such Senior Lender's Pro Rata Share
of the amount set aside, avoided or recovered together with
interest at the rate required to be paid by that Issuing
Bank upon the amount required to be repaid by it.
3.08. COMPENSATION FOR FACILITY LETTERS OF CREDIT.
(a) FACILITY LETTER OF CREDIT FEES. Southland
shall pay quarterly in arrears, on the tenth (10th) Business
Day of each calendar quarter in respect of the previous
calendar quarter and promptly upon receipt of each quarterly
report referred to in SECTION 3.09, in the case of each
Facility Letter of Credit covered by such quarterly report,
a fee equal to 0.225% per annum applied (on the basis of
actual days elapsed in a 360 day year) to the maximum amount
available to be drawn under such Facility Letter of Credit
from day to day during the previous calendar quarter. This
fee shall be paid to the Administrative Agent for the
account of the Senior Lenders in proportion to their
respective Pro Rata Shares.
(b) ISSUING BANK CHARGES. Southland shall pay to
each Issuing Bank, solely for the account of the Issuing
Bank, (i) by the tenth Business Day of each calendar
quarter, a fee equal to one-tenth of one percent (0.10%) per
annum applied (on the basis of actual days elapsed in a 360-
day year) to the maximum amount available to be drawn from
day to day during the immediately preceding calendar quarter
under each Facility Letter of Credit issued by the Issuing
Bank, and (ii) upon the Issuing Bank's demand therefor, the
standard charges assessed by such Issuing Bank in connection
with the issuance, administration, amendment and payment or
cancellation of each Facility Letter of Credit issued by the
Issuing Bank.
(c) INCREASED CAPITAL. If either (i) the
introduction of or any change in or in the interpretation of
any law or regulation or (ii) compliance by any Issuing Bank
or Senior Lender with any guideline or request from any
central bank or other Governmental Authority (whether or not
having the force of law and whether or not the failure to
comply therewith would be unlawful) affects or would affect
the amount of capital required or expected to be maintained
by it or any corporation controlling it and such Senior
Lender or Issuing Bank determines, on the basis of
reasonable allocations, that the amount of such capital is
increased by or is based upon its issuance or maintenance of
or participation in, or commitment to issue or to
participate in, the Facility Letters of Credit then, upon
demand by any such Senior Lender or Issuing Bank, Southland
shall immediately pay to such Senior Lender or Issuing Bank,
from time to time as specified by such Senior Lender or
Issuing Bank, additional amounts sufficient to compensate
such Senior Lender or Issuing Bank therefor. A certificate
as to such amounts submitted to Southland by any such Senior
Lender or Issuing Bank shall, in the absence of manifest
error, be conclusive and binding for all purposes.
3.09. ISSUING BANK REPORTING REQUIREMENTS. Each
Issuing Bank shall, no later than the tenth Business Day
following the last day of each calendar quarter, provide to
the Administrative Agent and Southland separate schedules
for Commercial Letters of Credit and Standby Letters of
Credit issued as Facility Letters of Credit, in form and
substance reasonably
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satisfactory to the Administrative Agent, showing the date
of issue, account party, amount, expiration date and the
reference number of each Facility Letter of Credit issued by
it outstanding at any time during such calendar quarter and
the aggregate amount paid by Southland during the calendar
quarter pursuant to SECTION 3.07. Copies of such reports
shall be provided promptly to each Senior Lender by the
Administrative Agent.
3.10. INDEMNIFICATION; EXONERATION. (a) In
addition to amounts payable as elsewhere provided in this
ARTICLE III, Southland hereby agrees to protect, indemnify,
pay and save the Administrative Agent, each Issuing Bank and
each Senior Lender harmless from and against any and all
claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees)
which the Administrative Agent or such Issuing Bank or
Senior Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Facility
Letter of Credit other than, in the case of an Issuing Bank,
as a result of its gross negligence or willful misconduct,
as determined by a court of competent jurisdiction or (ii)
the failure of the Issuing Bank issuing a Facility Letter of
Credit to honor a drawing under such Facility Letter of
Credit as a result of any act or omission, whether rightful
or wrongful, of any present or future de jure or de facto
government or Governmental Authority (all such acts or
omissions herein called "Government Acts").
(b) As between Southland, the Senior Lenders and
each Issuing Bank issuing a Facility Letter of Credit,
Southland assumes all risks of the acts and omissions of, or
misuse of such Facility Letters of Credit by, the respective
beneficiaries of the Facility Letters of Credit. In
furtherance and not in limitation of the foregoing, subject
to the provisions of the Letter of Credit applications, the
Issuing Banks and the Senior Lenders shall not be
responsible: (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application
for and issuance of the Facility Letters of Credit, even if
it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged;
(ii) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or
assign a Facility Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason; (iii)
for failure of the beneficiary of a Facility Letter of
Credit to comply duly with conditions required in order to
draw upon such Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (v) for errors in
interpretation of technical terms; (vi) for any loss or
delay in the transmission or otherwise of any document
required in order to make a drawing under any Facility
Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of a Facility Letter of
Credit of the proceeds of any drawing under such Letter of
Credit; and (viii) for any consequences arising from causes
beyond the control of the Administrative Agent, Issuing
Banks and Senior Lenders including, without limitation, any
Government Acts. None of the above shall affect, impair, or
prevent the vesting of any of an Issuing Bank's rights or
powers under this SECTION 3.10.
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(c) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by an Issuing Bank under or in
connection with the Facility Letters of Credit or any
related certificates, if taken or omitted in good faith,
shall not put the Issuing Bank, the Administrative Agent or
any Senior Lenders under any resulting liability to
Southland or relieve Southland of any of its obligations
hereunder to any such Person.
(d) Notwithstanding anything to the contrary
contained in this Section 3.10, Southland shall have no
obligation to indemnify an Issuing Bank under this Section
3.10 in respect of any liability incurred by such Issuing
Bank arising out of the gross negligence or willful
misconduct of such Issuing Bank.
3.11. TRANSITIONAL PROVISIONS. SCHEDULE 3.11
contains a schedule of certain Letters of Credit issued for
the account of Southland outstanding as of the Effective
Date by one or more of the Issuing Banks. Subject to the
satisfaction of the conditions precedent contained in
ARTICLE IV, on the Effective Date (i) such Letters of
Credit, to the extent still outstanding, shall be deemed to
be converted into Facility Letters of Credit issued pursuant
to SECTION 3.04 and subject to the provisions of this
Agreement, and for this purpose the fees specified in
SECTION 3.08 shall be payable as if such Letters of Credit
had been issued on the Effective Date, (ii) the face amount
of such Letters of Credit shall be included in the
calculation of Facility Letter of Credit Obligations which
when, aggregated with all other Facility Letter of Credit
Obligations outstanding as of the Effective Date, shall not
exceed the Letter of Credit Subfacility, and (iii) all
liabilities of Southland with respect to such Letters of
Credit shall constitute Obligations.
3.12. AMOUNT OF LETTER OF CREDIT SUBFACILITY. (a)
The amount of the Letter of Credit Subfacility shall
initially be equal to $150,000,000, but in any event shall
not exceed the aggregate amount of the Revolving Credit
Commitments. Any termination of the Revolving Credit
Commitments pursuant to SECTION 2.07 shall terminate each
Issuing Bank's Letter of Credit Commitment.
(b) The amount of the Letter of Credit Subfacility
shall be determined as set forth in SECTION 3.12(a) whether
or not the aggregate of all of the Issuing Banks' then
effective Letter of Credit Commitments shall exceed the
amount of the then Letter of Credit Subfacility.
(c) Upon five (5) Business Days' prior written
notice thereof to the Administrative Agent and each Issuing
Bank, or upon such other prior written notice as the
Administrative Agent may elect to accept in any particular
instance, Southland may:
(i) with the written consent of such Senior Lender
(or Affiliate thereof) and the Administrative Agent,
designate as an Issuing Bank any Senior Lender (or
Affiliate thereof) which is not then an Issuing Bank
and the Letter of Credit Commitment of such newly-
designated Issuing Bank; and
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(ii) whether or not in connection with the addition
of an Issuing Bank pursuant to this SECTION 3.12(c),
reduce or (with the consent of the Issuing Bank)
increase any Issuing Bank's Letter of Credit
Commitment, subject to SECTION 3.12(d) below.
(d) The appointment of additional Issuing Banks
pursuant to SECTION 3.12(c)(i) and the reduction or increase
of any Issuing Bank's Letter of Credit Commitment pursuant
to SECTION 3.12(a) or 3.12(c)(ii) shall at all times be
subject to the qualifications and restrictions that (i) at
no time shall any Issuing Bank's Letter of Credit Commitment
exceed the amount agreed to by such Issuing Bank and (ii)
Southland shall not reduce any Issuing Bank's Letter of
Credit Commitment to an amount less than the amount of all
of the then existing Facility Letter of Credit Obligations
in respect of Facility Letters of Credit issued by such
Issuing Bank.
3.13. OBLIGATIONS SEVERALY. The obligation of each
Issuing Bank and each Senior Lender under this ARTICLE III
is several and not joint, and no Issuing Bank or Senior
Lender shall be responsible for the Letter of Credit
Commitment or participation obligation hereunder,
respectively, of any other Issuing Bank or Senior Lender.
ARTICLE IV
CONDITIONS TO LOANS AND FACILITY LETTERS OF
CREDIT
4.01. CONDITIONS PRECEDENT TO INITIAL LOANS AND
FACILITY LETTERS OF CREDIT. The obligation of each Senior
Lender on the Effective Date to make its Term Loan and any
Revolving Credit Advance requested to be made by it, and the
agreement of each Issuing Bank on the Effective Date to
issue Facility Letters of Credit, shall be subject to the
satisfaction of all of the following conditions precedent:
(a) DOCUMENTS. The Administrative Agent shall have
received on or before the Effective Date all of the
following, each of which shall be duly executed, completed
and acknowledged where appropriate and in form and substance
satisfactory to Southland, the Administrative Agent and the
Senior Lenders:
(i) this Agreement, together with all Schedules
hereto which shall be in each case true, complete
and correct in all material respects as of the
Effective Date;
(ii) (A) for the benefit of each Senior Lender, a
Term Note and a Revolving Note dated the Effective
Date and made payable to the order of such Senior
Lender and (B) to the extent any Competitive Bid
Loans are to be made on the Effective Date, for the
benefit of each Senior Lender making such Loans, a
Competitive Bid Note, dated the Effective Date and
made payable to the order of such Senior Lender;
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(iii) Notices of Borrowing completed in accordance
with the provisions of SECTION 2.01(b), SECTION
2.02(b) and, if applicable, SECTION 2.03(b);
(iv) (A) A certified copy of the resolutions of
Southland's Board of Directors designating this
Agreement as the "Credit Agreement" or the "Bank
Credit Agreement" (as applicable) under the
documents governing Southland's Subordinated
Indebtedness and (B) an acknowledgment of Citicorp
North America, Inc., as "Administrative Agent" under
(and as defined in) the Existing Credit Agreement
that the Existing Credit Agreement has been
terminated (other than provisions which, by their
terms, survive the termination of the Existing
Credit Agreement) and that all outstanding
indebtedness and obligations thereunder or with
respect thereto have been repaid in full in cash and
discharged;
(v) the Payoff Letter;
(vi) a commitment (subject to review of definitive
documentation) from each of the Senior Lenders to
fund its Pro Rata Share of "Tranche A" under (and as
defined in) the Master Lease Facility;
(vii) Favorable legal opinions, each dated the
Effective Date and otherwise in form and substance
satisfactory to the Administrative Agent, addressed
to the Administrative Agent, the Senior Lenders and
the Issuing Banks from:
(A) ▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President and
General Counsel of Southland, dated the
Effective Date, in substantially the form
of EXHIBIT 10-A attached hereto; and
(B) Shearman & Sterling, New York counsel
to Southland, dated the Effective Date, in
substantially the form of EXHIBIT 10-B
attached hereto;
Southland hereby directs its counsel to prepare and
deliver to the Administrative Agent, the Senior
Lenders and the Issuing Banks the respective
opinions described in CLAUSES (A) and (B) above;
(viii) a letter to Southland, dated on or near the
Effective Date, from Coopers & ▇▇▇▇▇▇▇, in
substantially the form attached as EXHIBIT 11;
(ix) Southland's Articles of Incorporation, as
amended, modified or supplemented to the Effective
Date, certified to be true, correct and complete by
the Secretary of State of Texas as of a recent date
prior to the Effective Date, together with good
standing certificates from the Secretaries of State
of such States
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in which Southland is qualified to do business as
the Administrative Agent may request, each to be
dated a recent date prior to the Effective Date;
(x) A certificate of the Secretary or Assistant
Secretary of Southland, in each case dated the
Effective Date, certifying (A) the names and true
signatures of the incumbent officers of Southland
authorized to sign the Loan Documents, (B) the By-
Laws of Southland as in effect on the date of such
certification, (C) the resolutions of Southland's
Board of Directors approving and authorizing the
execution, delivery and performance of the Loan
Documents executed by such Person, and (D) that
Southland's Articles of Incorporation have not been
amended, supplemented or otherwise modified since
the date of certification from the Secretary of
State of Texas under SECTION 4.01(a)(ix) and that
such Articles of Incorporation are in full force and
effect;
(xi) the financial statements and materials
referred to in SECTION 5.01(viii), in form and
substance satisfactory to the Administrative Agent;
(xii) a certificate signed by the principal
financial officer or treasurer of Southland
certifying that all conditions precedent set forth
in this Agreement have been met and no Potential
Event of Default or Event of Default has occurred or
is continuing; and
(xiii) such additional documentation as the
Administrative Agent may reasonably request.
(b) FEES AND EXPENSES PAID. Southland shall have
paid to the Administrative Agent, for the benefit of the
Persons entitled thereto, all fees and expenses due and
payable on or before the Effective Date.
(c) REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of Southland contained in
SECTION 5.01 and in any other Loan Documents (other than
representations and warranties which expressly speak only as
of a different date) shall be true and correct in all
material respects on and as of the Effective Date as though
made on and as of that date.
(d) NO DEFAULT. No Event of Default or Potential
Event of Default shall have occurred and be continuing or
would result from the effectiveness of this Agreement, the
making of the Loans requested or deemed to be made on the
Effective Date or the issuance of or participation in the
Facility Letters of Credit requested to be issued or
converted on the Effective Date.
(e) NO LEGAL IMPEDIMENTS. No law, regulation,
order, judgment or decree of any Governmental Authority
shall, and the Administrative Agent
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shall not have received any notice that litigation is
pending or threatened which seeks to enjoin, prohibit or
restrain the making of the Loans requested or deemed to be
made on the Effective Date or the issuance of or
participation in the Facility Letters of Credit requested to
be issued or converted on the Effective Date.
(f) NO NOTICE FROM SENIOR LENDERS. The
Administrative Agent shall not have received any
notification from the Requisite Senior Lenders that any
condition precedent set forth in this SECTION 4.01 has not
then been satisfied.
(g) NO CHANGE IN CONDITION. No change in the
business, assets, operations or condition (financial or
otherwise) of Southland or any of its Subsidiaries shall
have occurred since December 31, 1995 which change will, or
is reasonably likely to, result in a Material Adverse
Effect.
4.02. CONDITIONS PRECEDENT TO ALL SUBSEQUENT
REVOLVING LOANS AND FACILITY LETTERS OF CREDIT. The
obligation of each Senior Lender to make any Revolving Loan
requested to be made by it and the agreement of each Issuing
Bank to issue any Facility Letter of Credit pursuant to
ARTICLE III, on any date after the Effective Date, is
subject to the following conditions precedent as of such
date:
(a) NOTICE OF BORROWING. With respect to a request
for a Revolving Loan, the Administrative Agent shall have
received in accordance with the provisions of SECTION
2.02(b), on or before any Funding Date, an original and duly
executed Notice of Borrowing.
(b) ADDITIONAL MATTERS. As of the Funding Date for
any Revolving Loan and the date of issuance of any Facility
Letter of Credit:
(i) All of the representations and warranties of
Southland contained in SECTION 5.01 (other than the
statements set forth in SECTION 5.01(iii)(A)) and in
any other Loan Document (in each case, other than
representations and warranties which expressly speak
only as of a different date) shall be true and
correct in all material respects on and as of that
Funding Date or issuance date, as though made on and
as of that date;
(ii) No Event of Default or Potential Event of
Default shall have occurred and be continuing or
would result from the making of the requested
Revolving Loan or issuance of the requested Facility
Letter of Credit; and
(iii) No law or regulation shall prohibit, and no
order, judgment or decree of any Governmental
Authority shall, and no litigation shall be pending
or threatened which in the judgment of the
Administrative Agent or the Requisite Senior Lenders
would,
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enjoin, prohibit or restrain, or impose or result in
the imposition of any material adverse condition
upon, any Senior Lender or Issuing Bank from making
the requested Revolving Loan or issuing or
participating in the requested Facility Letter of
Credit.
Each submission by Southland to the Administrative
Agent of a Notice of Borrowing with respect to a Revolving
Loan and the acceptance by Southland of the proceeds of each
such Loan made hereunder, or submission to an Issuing Bank
of a request for the issuance of a Facility Letter of Credit
and the issuance of such Facility Letter of Credit, shall
constitute a representation and warranty by Southland as of
the Funding Date in respect of such Revolving Loan or the
issuance of such Facility Letter of Credit that all the
conditions contained in this SECTION 4.02 have been
satisfied.
4.03. CONDITIONS PRECEDENT TO ALL SUBSEQUENT
COMPETITIVE BID LOANS. The obligation of each Senior Lender
which has agreed pursuant to the procedures set forth
SECTION 2.03 to make any Competitive Bid Loan requested to
be made by it on any date after the Effective Date, is
subject to the following conditions precedent as of such
date:
(a) NOTICE OF BORROWING. The Administrative Agent
shall have received in accordance with the provisions of
SECTION 2.03(b), on or before any Funding Date, an original
and duly executed Notice of Borrowing.
(b) COMPETITIVE BID NOTES. The Administrative
Agent shall have received on or before any Funding Date, but
prior to the time proceeds of Competitive Bid Loans are made
available to Southland a Competitive Bid Note payable to the
order of each Senior Lender for each of the one or more
Competitive Bid Loans to be made by such Senior Lender as
part of the Borrowing, in a principal amount equal to the
principal amount of the Competitive Bid Loan to be evidenced
thereby and otherwise on such terms as were agreed to for
such Competitive Bid Loan in accordance with SECTION 2.03.
(c) ADDITIONAL MATTERS. As of the Funding Date for
any Competitive Bid Loan:
(i) All of the representations and warranties of
Southland contained in SECTION 5.01 (other than the
statements set forth in SECTION 5.01(iii)(A)) and in
any other Loan Document (in each case, other than
representations and warranties which expressly speak
only as of a different date) shall be true and
correct in all material respects on and as of that
Funding Date, as though made on and as of that date;
(ii) No Event of Default or Potential Event of
Default shall have occurred and be continuing or
would result from the making of the requested
Competitive Bid Loan; and
(iii) No law or regulation shall prohibit, and no
order, judgment or decree of any Governmental
Authority shall, and no litigation shall be pending
or threatened which in the judgment of
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the Administrative Agent or of any Senior Lender or
Lenders making such Competitive Bid Loan would,
enjoin, prohibit or restrain, or impose or result in
the imposition of any material adverse condition
upon, any such Senior Lender from making the
requested Competitive Bid Loan.
Each submission by Southland to the Administrative
Agent of a Notice of Borrowing with respect to a Competitive
Bid Loan and the acceptance by Southland of the proceeds of
each such Loan made hereunder shall constitute a
representation and warranty by Southland as of the Funding
Date in respect of such Competitive Bid Loan that all the
conditions contained in this SECTION 4.03 have been
satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01. REPRESENTATIONS AND WARRANTIES. In order to
induce the Senior Lenders and the Issuing Banks to enter
into this Agreement and to make the Loans and the other
financial accommodations to Southland and to issue the
Facility Letters of Credit described herein, Southland
hereby represents and warrants to each Senior Lender, each
Issuing Bank and the Administrative Agent that the following
statements are true, correct and complete:
(i) ORGANIZATION; CORPORATE POWERS. Southland and
each Subsidiary of Southland (A) is a corporation duly
organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (B) is duly
qualified to do business as a foreign corporation and in
good standing under the laws of each jurisdiction in which
it owns or leases real property or in which failure to be so
qualified and in good standing would be likely to have a
Material Adverse Effect, and (C) has all requisite corporate
power and authority to own, operate and encumber its
property and assets and to conduct its business as presently
conducted.
(ii) AUTHORITY. (A) Southland has the requisite
corporate power and authority (I) to execute, deliver and
perform each of the Loan Documents executed by it, or to be
executed by it, and (II) to file the Loan Documents filed by
it, or to be filed by it, with any Governmental Authority.
(B) The execution, delivery and performance (or
filing, as the case may be) of each of the Loan Documents to
which it is party and the consummation of the transactions
contemplated thereby, have been duly approved by the Board
of Directors of Southland and no other corporate proceedings
on the part of Southland are necessary to consummate such
transactions.
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(C) Each of the Loan Documents to which it is party
has been duly executed and delivered (or filed, as the case
may be) by Southland and constitutes its legal, valid and
binding obligation, enforceable against it in accordance
with its terms, is in full force and effect and no material
term or condition thereof has been amended, modified or
waived from the terms and conditions contained in the Loan
Documents without the prior written consent of the
Administrative Agent, and no material default by any such
party exists thereunder.
(iii) SUBSIDIARIES AND OWNERSHIP OF CAPITAL STOCK;
INVESTMENTS. (A) Part A of SCHEDULE 5.01(iii) attached
hereto (I) contains a summary of the corporate structure of
Southland and its Subsidiaries and (II) accurately sets
forth (a) the correct legal name of each Subsidiary, the
jurisdiction of its incorporation or organization and the
jurisdictions in which it is qualified to transact business
as a foreign corporation or otherwise and (b) the
authorized, issued and outstanding shares or interests of
each class of equity Securities of Southland and each of its
Subsidiaries and, with respect to each Subsidiary, the
owners of such shares or interests. As of December 31,
1996, the Majority Owners owned more than 65% of the Common
Stock of Southland outstanding on such date. Other than the
preferential purchase rights with respect to shares of
Puerto Rico-7, Inc., as set forth in the By-Laws dated as of
April 23, 1987 of Puerto Rico-7, Inc., none of the issued
and outstanding equity Securities of any Subsidiary of
Southland is subject to any vesting, redemption, or
repurchase agreement, and no warrants or options granted by
Southland or any of its Subsidiaries are outstanding with
respect to such equity Securities. There are outstanding no
shares of any class of capital stock of Southland other than
Common Stock, and other than pursuant to the QUIDS
Subordinated Notes, not more than five percent (5%) of the
Common Stock, on a fully-diluted basis, is subject to
issuance upon the exercise of outstanding options, warrants
or other similar rights to acquire shares of such stock
which have been granted by Southland. The outstanding
equity Securities of Southland and each of its Subsidiaries
are duly authorized, validly issued, fully paid and
nonassessable free and clear of any Liens (except for the
Liens described in CLAUSE (i) of the definition of
"Customary Permitted Liens") and are not Margin Stock.
(B) Part B of SCHEDULE 5.01(iii) accurately sets
forth, as of December 31, 1996, the aggregate outstanding
amount of all Investments of Southland or any of its
Subsidiaries (other than Cash Equivalents and interests in
Subsidiaries of Southland or such Subsidiary) as of such
date. Except for permitted Investments in excess of
$5,000,000 disclosed in writing to the Administrative Agent,
neither Southland nor any Subsidiary of Southland holds a
direct or indirect partnership, joint venture or other
equity interest in any Person (other than a Subsidiary of
Southland) as the result of an Investment with respect to
which the unrecovered amount is greater than or equal to
$5,000,000.
(iv) NO CONFLICT. The execution, delivery and
performance of each Loan Document to which it is party by
Southland do not and will not (A) constitute a tortious
interference with any Contractual Obligation of any Person
or conflict with, result in a breach of or constitute (with
or without notice or lapse of time or both) a default under
any Requirement of Law or Contractual Obligation of
Southland, or require termination of any
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Contractual Obligation, the consequences of which violation,
breach or default or termination, singly or in the
aggregate, are likely to have a material adverse effect on
the ability of Southland to perform its obligations under
any Loan Document or likely to have a Material Adverse
Effect, or likely to subject the Administrative Agent, any
of the Senior Lenders or any of the Issuing Banks to any
liability (whether criminal or civil, other than as a result
of a regulatory requirement applicable to it in its capacity
as a bank or commercial lender), or (B) result in or require
the creation or imposition of any Lien whatsoever upon any
of the properties or assets of Southland, or (C) require any
approval of stockholders.
(v) GOVERNMENT CONSENTS. The execution, delivery
and performance of each Loan Document to which it is party
by Southland do not and will not require any registration
with, consent or approval of, or notice to, or other action
to, with or by any Governmental Authority, except filings,
consents or notices which have been, or will in due course,
be made, obtained or given (or the failure to obtain which
will not have a Material Adverse Effect), and except any
consents, approval or filings required as to a Senior Lender
because of a regulatory requirement applicable to it in its
capacity as a bank or a commercial lender.
(vi) GOVERNMENTAL REGULATION. Southland is not
subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, the Investment Company Act of 1940 or any
other federal or state statute or regulation such that its
ability to incur indebtedness is limited or its ability to
consummate the transactions contemplated hereby is
materially impaired.
(vii) RESTRICTED JUNIOR PAYMENTS. Since December
31, 1995, neither Southland nor any Subsidiary of Southland
has directly or indirectly declared, ordered, paid or made
or set apart any sum or property for any Restricted Junior
Payment or agreed to do so, except as may be permitted
pursuant to this Agreement.
(viii) FINANCIAL POSITION. Complete and accurate
copies of the following financial statements and materials
have been delivered to each of the Senior Lenders: the
Annual Reports of Southland on Form 10-K for each of the
Fiscal Years ended during 1994 and 1995 (including audited
financial statements) and the Quarterly Report on Form 10-Q
for the first three fiscal quarters of 1996. All financial
statements included in such materials were prepared in
conformity with GAAP, except as otherwise noted therein, and
fairly present the consolidated financial position of
Southland and its Subsidiaries as at the respective dates
thereof and the consolidated results of operations and
changes in the financial position of Southland and its
Subsidiaries for each of the periods covered thereby,
subject, in the case of any unaudited interim financial
statements, to changes resulting from audit and normal year-
end adjustments. As of the Effective Date, Southland does
not have any Accommodation Obligation, contingent liability
or liability for any taxes, long-term lease or commitment,
not reflected in its audited financial statements for its
Fiscal Year ended December 31, 1995, or otherwise disclosed
to the Administrative Agent in writing prior to the
Effective Date, which has or is likely to have a Material
Adverse Effect.
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(ix) FUNDAMENTAL CHANGES. Since December 31, 1995,
Southland has not entered into any agreement with respect to
a merger or consolidation or adopted a plan of
recapitalization or liquidation, except as permitted by this
Agreement.
(x) INDEBTEDNESS; EXISTING CREDIT AGREEMENT
OBLIGATIONS. SCHEDULE 1.01-A accurately describes all
Indebtedness for borrowed money and Accommodation
Obligations of Southland and its Subsidiaries, and with
respect to any Indebtedness or Accommodation Obligations
with a principal amount in excess of $5,000,000, there are
no defaults in the payment of principal or interest on any
such Indebtedness or Accommodation Obligations and no
payments thereunder have been deferred or extended beyond
their stated maturity (except as disclosed on such
Schedule). All obligations and liabilities of Southland
under the Existing Credit Agreement have been paid in full,
and there are no setoffs, defenses or counterclaims with
respect to such obligations and liabilities.
(xi) LITIGATION; ADVERSE EFFECTS. Except as set
forth in SCHEDULE 5.01(xi) hereto, (A) there is no action,
suit, proceeding, governmental investigation or arbitration,
at law or in equity, before or by any federal, state,
municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or
foreign, pending, or to the Knowledge of Southland, probable
of assertion against Southland or any of the Subsidiaries of
Southland or any property of any of them which could
reasonably be expected (I) to result in any Material Adverse
Effect, (II) materially and adversely to affect the ability
of any party to any of the Loan Documents to perform its
obligations thereunder, or (III) materially and adversely to
affect the ability of Southland to perform its obligations
to the Senior Lenders or the Senior Lenders' ability to
enforce such obligations, and (B) there is no material loss
contingency within the meaning of GAAP which has not been
reflected in the consolidated financial statements of
Southland. Neither Southland nor any of Southland's
Subsidiaries is (x) in violation of any applicable law which
violation has or is likely to have a Material Adverse
Effect, or (y) subject to or in default with respect to any
final judgment, writ, injunction, decree, rule or regulation
of any court or Governmental Authority which has or is
likely to have a Material Adverse Effect. Except as set
forth in SCHEDULE 5.01(xi) hereto, there is no action, suit,
proceeding or investigation pending or, to the Knowledge of
Southland, threatened against or affecting Southland or any
of the Subsidiaries of Southland challenging the validity or
the enforceability of any of the Loan Documents.
(xii) NO MATERIAL ADVERSE CHANGES. Since December
31, 1995, there has occurred no event which materially and
adversely affects, and no material adverse change in, the
business, ownership, operations, properties, assets or
condition (financial or otherwise) of Southland or Southland
and its Subsidiaries, taken as a whole, or the ability of
Southland to perform its obligations under the Loan
Documents to which it is a party and the transactions
contemplated thereby.
(xiii) TAX EXAMINATIONS. The Federal income tax
returns of Southland have been examined by the Internal
Revenue Service (or closed by
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applicable statutes) for all tax periods prior to and
including the taxable year ending December 31, 1993. All
deficiencies which have been asserted against Southland as a
result of such examination for each taxable year in respect
of which an examination has been conducted have been fully
paid or finally settled or are being contested in good
faith, and no issue has been raised in any such examination
which, by application of similar principles, reasonably can
be expected to result in a deficiency which will have a
Material Adverse Effect unless such issue is being contested
in good faith or such deficiency has been reserved for in
Southland's audited financial statements for its Fiscal Year
ended December 31, 1995. To its Knowledge, Southland has
not taken any reporting positions in its Federal income tax
returns for which it does not have a reasonable basis and
does not anticipate any further tax liability with respect
to the years which have not been examined by the Internal
Revenue Service (or closed by applicable statutes), taken as
a whole, except for tax liabilities which will not have a
Material Adverse Effect and (x) which have been reserved for
in Southland's audited financial statements for its Fiscal
Year ended December 31, 1995 or (y) are being contested in
good faith. For purposes of this SECTION 5.01(xiii), the
term "Southland" shall include each other corporation with
which Southland files consolidated or combined income tax
returns or reports.
(xiv) PAYMENT OF TAXES. All tax returns and
reports of Southland and each Subsidiary of Southland
required to be filed, the failure of which to file has or is
likely to have a Material Adverse Effect, have been timely
filed, and all taxes, assessments, fees and other
governmental charges thereupon and upon their respective
properties, assets, income and franchises which are due and
payable, the failure of which to pay when due and payable
has or is likely to have a Material Adverse Effect, have
been paid when due and payable. Southland has no Knowledge
of any proposed tax assessment against Southland or any
Subsidiary of Southland, that is likely to have a Material
Adverse Effect, which is not being actively contested in
good faith by such Person.
(xv) CONDUCT OF BUSINESS. Southland and its
Subsidiaries are principally engaged only in the businesses
described in Southland's Annual Report on Form 10-K for its
1995 Fiscal Year and other businesses permitted by SECTION
8.06.
(xvi) MATERIAL ADVERSE AGREEMENTS. Neither
Southland nor any Subsidiary of Southland is a party to or
subject to any material Contractual Obligation or other
restriction contained in their respective charters, By-laws
or similar governing documents which has or is likely to
have a Material Adverse Effect.
(xvii) PERFORMANCE. Neither Southland nor any
Subsidiary of Southland is in default in the performance,
observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual
Obligation applicable to it, and no condition exists which,
with the giving of notice of the lapse of time or both,
would constitute a default, in each case, except where the
consequences, direct or indirect, of such default or
defaults, if any, would not have a Material Adverse Effect.
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(xviii) SECURITIES ACTIVITIES. Neither Southland
nor any Subsidiary of Southland is engaged principally in
the business of extending credit for the purpose of
purchasing or carrying any Margin Stock.
(xix) DISCLOSURE. The representations and
warranties of Southland made to the Senior Lenders contained
in the Loan Documents, and all certificates and other
documents delivered to the Administrative Agent in
connection therewith, taken as a whole, do not contain any
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances
under which they were made, not misleading. Southland has
not withheld any fact from the Senior Lenders in regard to
any matter with respect to which Southland has Knowledge or
reasonably should have Knowledge and which has or is likely
to have a Material Adverse Effect.
(xx) REQUIREMENTS OF LAW. Southland and each
Person acting on behalf of Southland is in compliance with
all Requirements of Law (including, without limitation, the
Securities Act and the Securities Exchange Act, and the
applicable rules and regulations thereunder, state
Securities law and "Blue Sky" law) applicable to them and
their respective businesses, in each case where the failure
to so comply would have a Material Adverse Effect.
(xxi)PATENTS, TRADEMARKS, PERMITS, ETC. Southland
and each Subsidiary of Southland owns, is licensed or
otherwise have the lawful right to use, or have all permits
and other governmental approvals, patents, trademarks, trade
names, copyrights, technology, know-how and processes used
in or necessary for the conduct of its business as currently
conducted which are material to its business, ownership,
operations, properties, assets or condition (financial or
otherwise), taken as a whole. To the Knowledge of
Southland, the use of such permits and other governmental
approvals, patents, trademarks, trade names, copyrights,
technology, know-how and processes by Southland and each of
its Subsidiaries, does not infringe on the rights of any
Person, subject to such claims and infringements as do not,
in the aggregate, give rise to any liability on the part of
Southland or any of its Subsidiaries which has or is likely
to have a Material Adverse Effect.
(xxii) ENVIRONMENTAL MATTERS. (A) Except as
disclosed on SCHEDULE 5.01(xxii) or as disclosed to the
Senior Lenders pursuant to SECTION 6.02 (or as disclosed in
the quarterly or annual reports filed with the Commission
and delivered to the Senior Lenders prior to the Effective
Date), neither Southland nor any of its Subsidiaries (I) has
received notice or otherwise learned of any claim, demand,
action, event, condition, report or investigation indicating
or concerning any potential or actual liability which would
individually or in the aggregate have a Material Adverse
Effect arising in connection with: (x) any noncompliance
with or violation of the requirements of any applicable
federal, state and local environmental health and safety
statutes and regulations or (y) the release or threatened
release of any toxic or hazardous waste, substance or
constituent, or other substance into the environment, (II)
has any threatened or actual liability in connection with
the release or threatened release of any toxic or hazardous
waste, substance or constituent, or other substance into the
environment
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which would individually or in the aggregate have a Material
Adverse Effect or (III) has received notice that Southland
or any of its Subsidiaries is or may be liable to any Person
under CERCLA or any analogous state law.
(B) Southland has entered into an effective and
fully-executed administrative consent order (the "Order")
with the New Jersey Department of Environmental Protection
pursuant to the Industrial Site Recovery Act, N.J.S.A.
13:1K-6 et seq. ("ISRA") which Order provides that Southland
will comply with the requirements of ISRA, and Southland has
obtained the financial assurance required under the Order.
The Order is in full force and effect and has not been
rescinded or revoked and Southland is in compliance with the
terms and conditions of the Order.
(C) Southland and each of its Subsidiaries is in
compliance with the financial responsibility requirements of
federal and state environmental laws, including, without
limitation, those contained in 40 C.F.R., Parts 264 and 265,
Subps. H, and any state law equivalents.
(xxiii) ERISA. No Defined Benefit Plan has or will
have as of the most recent plan year any "accumulated
funding deficiency", as defined in Section 302(a)(2) of
ERISA and Section 412(a) of the Internal Revenue Code,
whether or not waived. Each Benefit Plan which is intended
to be a qualified plan under Section 401(a) of the Internal
Revenue Code as currently in effect has been determined by
the Internal Revenue Service to be qualified under Section
401(a) of the Internal Revenue Code as currently in effect
(or timely applications for such determinations are pending
with the Internal Revenue Service) and the trust related
thereto is exempt from federal income tax under Section
501(a) of the Internal Revenue Code. Each Benefit Plan has
been administered in substantial compliance with ERISA, and
each Benefit Plan intended to be qualified under Section
401(a) of the Internal Revenue Code has been administered in
substantial compliance with such section. Neither
Southland, any Subsidiary of Southland nor any ERISA
Affiliate has any liability to the PBGC other than the
payment of premiums, and there are no premium payments which
have become due which are unpaid. Neither Southland, any
Subsidiary of Southland, nor any ERISA Affiliate has
breached any of the responsibilities, obligations or duties
imposed on it by ERISA with respect to any Benefit Plan
resulting or which will result in an obligation of
Southland, any such Subsidiary or any ERISA Affiliate to pay
money which payment has or will have a Material Adverse
Effect. Except as disclosed on SCHEDULE 5.01(xxiii),
neither Southland, any Subsidiary of Southland, any ERISA
Affiliate, nor any fiduciary of or any trustee to any
Benefit Plan has engaged in a nonexempt "prohibited
transaction" described in Section 406 of ERISA or Section
4975 of the Internal Revenue Code, or taken any action which
would constitute or result in a Termination Event, with
respect to any Benefit Plan which prohibited transaction or
Termination Event has caused or would in the future cause a
Material Adverse Effect. No Defined Benefit Plan has been
terminated by the plan administrator thereof or by the PBGC
for which there is any liability of Southland or any
Subsidiary of Southland or any ERISA Affiliate for unfunded
accrued benefits in excess of $5,000,000. The present value
of the accrued benefits of all Defined Benefit Plans as of
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the end of the most recent plan year of such plans did not
exceed the current value of the assets of all Defined
Benefit Plans by more than $5,000,000, and neither Southland
nor any such Subsidiary knows or has reason to know of any
facts or circumstances occurring since such year which would
change the value of such assets or such benefits of such
Defined Benefit Plan such that the value of such benefits
would exceed the value of such assets by more than
$5,000,000. For purposes of the preceding sentence, the
current value as of any day of the assets of any Defined
Benefit Plan and the present value as of any day of the
accrued benefits under any Defined Benefit Plan shall be
such values as calculated for purposes of completing Form
5500 for such Defined Benefit Plan for the plan year of such
Defined Benefit Plan ending on such day. No liability
having a Material Adverse Effect has been, or is expected to
be, incurred by Southland or any of its Subsidiaries with
respect to any applicable collective bargaining agreement.
Full payment has been made of all contributions which
Southland, any of its Subsidiaries or any ERISA Affiliate is
required under the terms of any Multiemployer Plan or
applicable collective bargaining agreement to have paid as a
contribution to any Multiemployer Plan, except that this
representation and warranty shall not apply to any such
contributions which at any one time are in the aggregate
less than $3,000,000 and are being reasonably contested by
either Southland, its Subsidiaries or its ERISA Affiliates.
Full payment has been made of all withdrawal liability which
Southland or any of its Subsidiaries or any ERISA Affiliate
is required under the terms of any Multiemployer Plan to
have paid to any Multiemployer Plan. Southland and each
Subsidiary of Southland has delivered to the Administrative
Agent all of the following: a copy or summary plan
description of each Defined Benefit Plan in existence or
committed to, the most recent Form 5500 filed in respect of
each such Benefit Plan in existence (other than Benefit
Plans not required under applicable law or regulations to
file Form 5500), a copy of the most recent report of
valuation prepared with respect to each Defined Benefit
Plan, a list designating each Multiemployer Plan to which
Southland, any Subsidiary of Southland or any ERISA
Affiliate is obligated to make an annual contribution in
excess of $500,000 and listing the amount of such annual
contribution, a copy of any information which is provided to
Southland, any Subsidiary of Southland or any ERISA
Affiliate regarding withdrawal liability under any such
plan, and a copy of the collective bargaining agreement or
trade association agreement pursuant to which such
contribution is required to be made.
(xxiv) CONSENTS AND AUTHORIZATIONS. Southland has
obtained all consents and authorizations required pursuant
to any of its material Contractual Obligations with any
other Person and shall have obtained all consents and
authorizations of, and effected all notices to and filings
with, any Governmental Authority, as may be necessary to
allow Southland, lawfully to execute, deliver and perform
its obligations under the Loan Documents and each other
agreement or instrument to be executed and delivered by it
pursuant thereto or in connection therewith, except where
the failure to obtain any such consent or authorization
would not have a Material Adverse Effect.
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(xxv) NO NEGATIVE PLEDGES. Except for this
Agreement and the Master Lease and as set forth on SCHEDULE
5.01(xxv), no Contractual Obligation to which Southland is a
party or by which it or any of its properties is bound or to
which it or any of its properties is subject restricts
Southland from granting security interests or liens in its
real or personal property.
(xxvi) NO IMPAIRMENT. The consummation of the
transactions contemplated by the Loan Documents will not
impair the ownership of or rights under (or the license or
other right to use, as the case may be) any permits and
governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how or processes by Southland
or any of its Subsidiaries in any manner which has or is
likely to have a Material Adverse Effect.
(xxvii) OBLIGATIONS CONSTITUTE SENIOR INDEBTEDNESS.
The obligations of Southland for principal of and interest
on all Loans and other extensions of credit under this
Agreement and all fees, expenses, reimbursements,
indemnities and other amounts owing by Southland pursuant to
this Agreement to the Administrative Agent, any Senior
Lender or Issuing Bank (whether or not such Person then is
acting in its capacity as a Senior Lender or Issuing Bank)
and all other Obligations, and any renewals, extensions,
modifications or refinancings thereof, constitute "Senior
Indebtedness" within the meanings ascribed to such term in
QUIDS Subordinated Notes and each indenture pertaining to
any outstanding Subordinated Indebtedness.
ARTICLE VI
REPORTING COVENANTS
Southland covenants and agrees that so long as any
Senior Lender shall have any obligation hereunder and until
payment in full of all of the Obligations, unless the
Requisite Senior Lenders shall otherwise give prior written
consent thereto:
6.01. FINANCIAL STATEMENTS. Southland shall
maintain or cause to be maintained a system of accounting
established and administered in accordance with sound
business practices to permit preparation of financial
statements in conformity with GAAP, and each of the
financial statements described below shall be prepared from
such system and records. Southland shall deliver or cause
to be delivered to each Senior Lender:
(i) As soon as practicable, and in any event within
thirty-five (35) days after the end of each month other than
December and within forty (40) days after the end of each
December, the internal report on operations of Southland in
respect of such month and for the period from the beginning
of the current Fiscal Year to the end of such month, in
substantially the
same format, and containing substantially the same types of
information in
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the same level of detail, as the internal report on
operations of Southland covering the month of November, 1996
and the period commencing January 1, 1996 and ending
November 30, 1996 and provided to the Senior Lenders prior
to the Effective Date (the "Report on Operations"),
including, without limitation, such information with respect
to each of Southland's business units, certified by the
principal financial officer or treasurer of Southland that
the consolidated balance sheet and statements of earnings
and changes in financial position included in the Report on
Operations fairly present the consolidated financial
position of Southland and its Subsidiaries as at the dates
indicated, subject to normal year-end adjustment.
(ii) As soon as practicable, and in any event
within fifty (50) days after the end of each fiscal quarter
in each Fiscal Year (except the fourth quarter in each
Fiscal Year), Southland's Quarterly Report on Form 10-Q
filed with the Commission in respect of such fiscal quarter,
which shall be prepared and presented in accordance with the
rules and regulations of the Commission applicable thereto
at the time of such filing, together with a summary,
prepared in reasonable detail, of asset dispositions
consummated since the beginning of the current Fiscal Year,
PROVIDED, HOWEVER, that if at any time Southland is not
required under the Commission's rules and regulations to
file a Quarterly Report on Form 10-Q in respect of any
fiscal quarter, it shall furnish to each Senior Lender in
lieu thereof, within the time specified above, the
information that would have been required to be included
therein if Southland had been required to file such
Quarterly Report with the Commission, prepared and presented
in accordance with the rules and regulations which would
have been applicable thereto, certified by the principal
financial officer or treasurer of Southland that the
consolidated balance sheets and statements of earnings and
changes in financial position of Southland and its
Subsidiaries included therein fairly present the
consolidated financial position of Southland and its
Subsidiaries as at the dates indicated in accordance with
GAAP, subject to normal year end adjustment.
(iii) As soon as practicable, and in any event
within ninety-five (95) days after the end of each Fiscal
Year, Southland's Annual Report on Form 10-K filed with the
Commission in respect of such Fiscal Year, which shall be
prepared and presented in accordance with the rules and
regulations of the Commission applicable thereto at the time
of such filing, together with a summary, prepared in
reasonable detail, of asset dispositions consummated during
the preceding Fiscal Year, PROVIDED, HOWEVER, that the
report of Coopers & ▇▇▇▇▇▇▇ or other independent certified
public accountants of recognized national standing
satisfactory to the Administrative Agent, which accompanies
the consolidated balance sheets and statements of earnings
and changes in financial position of Southland and its
Subsidiaries included in such Form 10-K shall be unqualified
as to going concern and scope of audit, PROVIDED, FURTHER,
that if at any time Southland is not required under the
Commission's rules and regulations to file an Annual Report
on Form 10-K in respect of any Fiscal Year, it shall furnish
to each Senior Lender in lieu thereof, within the time
specified above, the information that would have been
required to be included therein if Southland had been
required to file such Annual Report with the Commission,
prepared and presented in accordance with the rules and
regulations which would have been applicable thereto,
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accompanied by a report thereon of Coopers & ▇▇▇▇▇▇▇ or
other independent certified public accountants of recognized
national standing satisfactory to the Administrative Agent,
which report shall be unqualified as to going concern and
scope of audit and state that the consolidated balance
sheets and statements of earnings and changes in financial
position of Southland and its Subsidiaries included therein
fairly present the consolidated financial position of
Southland and its Subsidiaries as at the dates indicated in
conformity with GAAP and that the examination by such
accountants in connection with such consolidated financial
statements has been made in accordance with generally
accepted auditing standards.
(iv) Together with each delivery of any financial
statements pursuant to SECTIONS 6.01(ii) and 6.01(iii), (A)
an Officers' Certificate of Southland substantially in the
form of EXHIBIT 12, stating that the executive officers
signatory thereto have reviewed the terms of this Agreement
and the principal Loan Documents, and have made, or caused
to be made under their supervision, a review in reasonable
detail of the transactions and condition of Southland and
its Subsidiaries taken as a whole, during the accounting
period covered by such financial statements, and that such
review has not disclosed the existence during or at the end
of such accounting period, and that the signers do not have
knowledge of the existence as at the date of the Officers'
Certificate, of any condition or event which constitutes an
Event of Default or Potential Event of Default, or, if any
such condition or event existed or exists, specifying the
nature and period of existence thereof and what action
Southland or its applicable Subsidiaries have taken, is
taking and proposes to take with respect thereto; and (B) a
Compliance Certificate demonstrating in reasonable detail
compliance at the end of such accounting periods (and during
such periods to the extent such compliance is required
hereby) with the covenants contained in ARTICLE IX.
(v) Simultaneously with the delivery of an Annual
Report on Form 10-K or the financial statements referred to
in SECTION 6.01(iii), (A) a statement of the firm of
independent certified public accountants which reported on
the financial statements included therein that nothing has
come to their attention to cause such independent certified
public accountants to believe that the financial covenant
calculations in the Compliance Certificate are inaccurate,
or that on the last day of such accounting period Southland
is not in compliance with SECTIONS 8.01(ii), (iv), (xi),
(xii) and (xvi); 8.02(a)(ii) and (iv); 8.03(ii), (iii), (v)
and (vii); 8.05(i), (iii), (iv), (v) and (vi); and 8.11 and
(B) a letter to Southland from Coopers & ▇▇▇▇▇▇▇, in
substantially the form attached as EXHIBIT 11, with respect
to the financial statements included therein.
(vi) As soon as practicable, and in any event no
later than September 15 of each Fiscal Year, Southland's
financial forecast for the
remainder of such Fiscal Year and the two subsequent Fiscal
Years, in substantially the form of the financial forecast
prepared by Southland and delivered to the Senior Lenders
prior to the Effective Date.
(vii) Promptly upon Southland obtaining Knowledge
(A) of any condition or event which constitutes an Event of
Default or Potential Event
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of Default, or becoming aware that any Senior Lender has
given any notice or taken any other action with respect to a
claimed Event of Default or Potential Event of Default under
this Agreement, (B) of any condition or event which would be
required to be disclosed in a current report filed by
Southland with the Commission on Form 8-K (Items 1, 2 and 4
of such Form as in effect on the Effective Date), or (C) of
any condition or event which would be likely to have a
Material Adverse Effect, an Officers' Certificate specifying
the nature and period of existence of any such condition or
event, or specifying the notice given or action taken by
such Senior Lender and the nature of such claimed default,
Event of Default, Potential Event of Default, event or
condition, and what action Southland has taken, is taking
and proposes to take with respect thereto.
(viii) Promptly upon Southland obtaining Knowledge
of (A) the institution of, or threat of, any action, suit,
proceeding, governmental investigation or arbitration
against or affecting Southland or any of its Subsidiaries or
any property of Southland or any of its Subsidiaries not
previously disclosed in writing by Southland to the Senior
Lenders pursuant to this SECTION 6.01(viii), or (B) any
material development in any action, suit, proceeding,
governmental investigation or arbitration already disclosed,
which is likely to, in either case, have a Material Adverse
Effect, Southland shall promptly give notice thereof to the
Senior Lenders and provide such other information as may be
reasonably available to it to enable the Senior Lenders and
their counsel to evaluate such matters.
(ix) Promptly upon becoming aware of the occurrence
of any Reportable Event, Termination Event, or "prohibited
transaction", as such term is defined in Section 4975 of the
Internal Revenue Code, in connection with any Benefit Plan
or Multiemployer Plan or any trust created thereunder, a
written notice specifying the nature thereof, what action
Southland, any Subsidiary of Southland or any ERISA
Affiliate, as applicable, has taken, and, when known, any
action taken or threatened by the Internal Revenue Service,
the Department of Labor or the PBGC with respect thereto.
(x) With reasonable promptness, copies of (A) all
notices received by Southland, any Subsidiary of Southland
or any ERISA Affiliate of the PBGC's intent to terminate any
Defined Benefit Plan or to have a trustee appointed to
administer any Defined Benefit Plan; (B) upon the request of
any Senior Lender, each actuarial report and each annual
report (Form 5500 Series, including any Schedule B
(Actuarial Information) thereto) filed by Southland, any
Subsidiary of Southland or any ERISA Affiliate with the
Internal Revenue Service with respect to any or all Benefit
Plans; (C) all notices received by Southland, any Subsidiary
of Southland or any ERISA Affiliate from a Multiemployer
Plan sponsor, pursuant to Section 4202 of ERISA, involving a
withdrawal liability payment in excess of $100,000; and (D)
all funding waiver requests filed by Southland, any
Subsidiary of Southland or any ERISA Affiliate with the
Internal Revenue Service with respect to any Benefit Plan
and all communications received by Southland, any Subsidiary
of Southland or any ERISA Affiliate from the Internal
Revenue Service with respect to any such funding waiver
request.
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(xi) As promptly as practicable after approval
thereof by the Board of Directors, an annual budget for each
Fiscal Year, in form and substance satisfactory to the
Senior Lenders.
(xii) As soon as practicable, and in any event no
later than April 30 of each Fiscal Year, a statement of
earnings for the immediately preceding Fiscal Year and
balance sheet as of the last day of such Fiscal Year for
each Subsidiary of Southland which accounts for more than
five percent (5%) of either Consolidated Net Income or the
total assets of Southland and its Subsidiaries on a
consolidated basis.
(xiii) With reasonable promptness, such other
information, reports, filings, projections, business plans
and data with respect to Southland or any of its
Subsidiaries as from time to time may be reasonably
requested by the Administrative Agent or the Requisite
Senior Lenders.
6.02. ENVIRONMENTAL NOTICES. Except as disclosed
on SCHEDULE 5.01(xxii), Southland shall notify each Senior
Lender, in writing, promptly upon Southland's learning that
either Southland or any of its Subsidiaries has received
notice or otherwise learned of any claim, demand, action,
event, condition, or report or investigation indicating any
potential or actual liability arising in connection with:
(A) a non-compliance with or violation of the requirements
of any applicable federal, state or local environmental
health and safety statute or regulation which individually
or in the aggregate would be likely to have a Material
Adverse Effect; (B) the release or threatened release of any
toxic or hazardous waste, substance or constituent, or other
substance into the environment which individually or in the
aggregate would be likely to have a Material Adverse Effect
or which release Southland or one of its Subsidiaries would
have a duty to report to a Governmental Authority under
CERCLA or any analogous state law; or (C) the existence of
any Environmental Lien on any properties or assets of
Southland or its Subsidiaries; PROVIDED, HOWEVER, if
Southland or any of its Subsidiaries has received a notice
from any Governmental Authority stating (i) that Southland
or any of its Subsidiaries is or may be liable to any person
under CERCLA or any analogous state law or (ii) alleging a
violation of any federal, state or local environmental
health and safety statute or regulation where such alleged
violation which would be likely to have a Material Adverse
Effect and is not cured or such notice is not withdrawn
within thirty (30) days from the date of receipt thereof,
then Southland shall deliver a copy of such notice to each
Senior Lender.
6.03. OTHER REPORTS. Southland shall deliver or
cause to be delivered to the Senior Lenders (i) copies of
all financial statements, reports and notices, if any, sent
or made available generally by Southland to its Securities
holders or filed with the Commission, and of all press
releases made available generally by Southland or any of its
Subsidiaries to the public concerning material developments
in the business of Southland or any such Subsidiary, (ii)
copies of any management reports prepared by Southland's
independent certified public accountants in connection with
the annual audit and (iii) such other information in respect
of the condition
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(financial or otherwise) or operations of Southland or any
of its Subsidiaries that the Administrative Agent may
request from time to time.
ARTICLE VII
AFFIRMATIVE COVENANTS
Southland covenants and agrees that so long as any
Senior Lender shall have any obligation hereunder and until
payment in full of all of the Obligations, unless the
Requisite Senior Lenders shall otherwise give prior written
consent thereto:
7.01. CORPORATE EXISTENCE, ETC. Southland shall at
all times maintain its corporate existence and preserve and
keep in full force and effect its rights and franchises the
loss or termination of which would be likely to have a
Material Adverse Effect. Southland shall cause to be
maintained, preserved and kept the corporate existence and
rights and franchises of each of its Subsidiaries if the
loss or termination thereof would be likely to have a
Material Adverse Effect, except for transactions permitted
pursuant to SECTION 8.08. Southland shall promptly provide
the Senior Lenders with a complete list of the Subsidiaries
of Southland together with the delivery of the financial
statements required by SECTION 6.01(iii).
7.02. COMPLIANCE WITH LAWS, etc. Southland shall,
and shall cause its Subsidiaries to, exercise all due
diligence in order to comply with all Requirements of Law
and all restrictive covenants, noncompliance with which
would be likely to have a Material Adverse Effect.
7.03. PAYMENT OF TAXES AND CLAIMS. Southland shall
pay, and cause each of its Subsidiaries to pay, (i) all
taxes, assessments and other charges of Governmental
Authorities which, to its Knowledge, it is obligated to pay,
including any such tax, assessment or other charge on any of
its properties or assets or in respect of any of its
franchises, business, income or property before any penalty
or interest accrues thereon, and (ii) all claims (including,
without limitation, claims for labor, services, materials
and supplies) for sums, material in the aggregate to
Southland or any such Subsidiary, as the case may be, which
have become due and payable and which by law have or may
become a Lien (other than a Customary Permitted Lien) upon
any of Southland's or such Subsidiary's properties or
assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; PROVIDED that no such taxes,
assessments and governmental charges referred to in CLAUSE
(i) above (including interest or penalties thereon) or
claims referred to in CLAUSE (ii) above (including any
penalties or fines with respect thereto) need be paid if
such taxes, assessments, charges of Governmental Authorities
or claims are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and
if such reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been
made therefor.
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7.04. MAINTENANCE OF PROPERTIES; INSURANCE.
Southland shall maintain or cause to be maintained in good
repair, working order and condition, excepting ordinary wear
and tear and damage due to casualty, all of its properties
material to the operations of Southland and its Subsidiaries
taken as a whole (other than closed convenience stores
deemed by management not to be material) and will make or
cause to be made all appropriate repairs, renewals and
replacements thereof, consistent with past practice.
Southland shall maintain or cause to be maintained, with
financially sound and reputable insurers, insurance policies
and programs in such amounts (subject to customary
deductibles and retentions) and against such risks as is
usually carried by responsible companies of similar size
engaged in similar businesses and owning similar assets in
the general areas in which Southland and its Subsidiaries
operate.
7.05. INSPECTION OF PROPERTY; BOOKS AND RECORDS;
DISCUSSIONS. Southland shall permit, and cause each of its
Subsidiaries to permit, any authorized representative(s)
designated by the Administrative Agent or the Requisite
Senior Lenders to inspect any of the properties of Southland
or any of its Subsidiaries, including their financial and
accounting records, and to make copies and take extracts
therefrom, and to discuss their affairs, finances and
accounts with their officers and independent certified
public accountants, all upon reasonable notice and at such
reasonable times during normal business hours, as often as
may be reasonably requested. Each such inspection by or on
behalf of the Administrative Agent (or any Senior Lender
acting on behalf of the Requisite Senior Lenders) shall be
at Southland's expense. Southland will, and will cause each
of its Subsidiaries to, keep proper books of record and
account in which entries in conformity with GAAP (and all
legal requirements) shall be made of all dealings and
transactions in relation to their businesses and activities.
7.06 RELEASE OF LIENS. Southland shall use its
best efforts to cause the termination of all filings
(including, without limitation, filings under the Uniform
Commercial Code and filings in the real property records)
with respect to Liens securing obligations under the
Existing Credit Agreement as promptly as practicable after
(but in any event no later than 60 days after) the Effective
Date. To the extent such filings cannot be terminated
within 60 days after the Effective Date, despite Southland's
best efforts to effect such termination, Southland shall
continue to use its best efforts with reasonable diligence
to cause the termination of such filings.
ARTICLE VIII
NEGATIVE COVENANTS
Southland covenants and agrees that so long as any
Senior Lender shall have any obligation hereunder and until
payment in full of all of the Obligations, unless the
Requisite Senior Lenders shall otherwise give prior written
consent thereto:
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8.01. INDEBTEDNESS. Southland shall not, and shall
not permit any of its Subsidiaries to, directly or
indirectly create, incur, assume or otherwise become or
remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) the Obligations and the obligations under the
Master Lease Facility;
(ii) Permitted Existing Indebtedness and
extensions, renewals, replacements and refinancings
of Permitted Existing Indebtedness (other than
Subordinated Indebtedness), not exceeding the
principal amount outstanding on the Effective Date
(together with, in the case of a refinancing,
interest accrued thereon and reasonable costs
incurred in connection with the refinancing);
(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 Effective Date as
set forth on SCHEDULE 1.01-A (which aggregate
principal amount 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);
(iv) Present or future Indebtedness of any
Subsidiary of Southland to Southland in an amount
not exceeding $100,000,000; and present and future
Indebtedness of Southland to any of its Subsidiaries
or of any such Subsidiary to any other such
Subsidiary; PROVIDED, HOWEVER, that any Indebtedness
of Southland to any such Subsidiary shall be
unsecured and subordinated in right of payment to
the Obligations;
(v) (A) Capital Lease obligations (other than such
obligations included in Permitted Existing
Indebtedness and the Master Lease Facility) 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
Expenditures in each case which are part of the same
transaction, (B) sale and leaseback transactions
(other than the Master Lease Facility), 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
$150,000,000 (of which no more than $50,000,000
shall be used
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in transactions other than sales and leasebacks of
store sites) at any time outstanding, and (C)
extensions, renewals, replacements or refinancings
thereof, not exceeding the principal amount
outstanding before giving effect to the extension,
renewal, replacement or refinancing (together with,
in the case of a refinancing, interest accrued
thereon and reasonable costs incurred in connection
with the refinancing);
(vi) Transaction Costs, not included in the
Obligations, incurred in connection with the Master
Lease Facility and the transactions contemplated
thereby;
(vii) Indebtedness in respect of Letters of Credit
(other than Facility Letters of Credit) reasonably
incident to Southland's business;
(viii) Indebtedness in respect of foreign currency
exchange agreements reasonably incident to
Southland's business and Interest Rate Contracts
permitted pursuant to SECTION 8.17;
(ix) Indebtedness in respect of Accommodation
Obligations permitted by SECTION 8.04;
(x) surety bonds and appeal bonds required in the
ordinary course of business or in connection with
the enforcement of rights or claims of Southland or
its Subsidiaries or in connection with judgments
which do not result in an Event of Default hereunder
or other breach hereof;
(xi) Indebtedness of Southland Canada, Inc. to
obligees other than Southland or its other
Subsidiaries in an amount not exceeding $30,000,000
(or the Canadian dollar equivalent thereof) in the
aggregate at any one time outstanding, PLUS
Permitted Existing Indebtedness owing by Southland
Canada, Inc. and any refinancings thereof, PROVIDED,
HOWEVER, that at no time shall the aggregate of all
of such Indebtedness exceed $90,000,000 (or the
Canadian dollar equivalent);
(xii) the Yen Royalty Financing Indebtedness;
(xiii) Capital Lease obligations of Southland under
the Lease Agreement dated as of February 15, 1987,
as amended and restated as of December 21, 1990,
between Southland and Cityplace Center East
Corporation;
(xiv) unsecured Indebtedness which is either (A)
Commercial Paper or (B) owing to Ito-Yokado in
connection with payments by Ito-Yokado of the
principal of or interest on (or other amounts owing
with respect to) Commercial Paper, PROVIDED that the
instrument
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evidencing the Indebtedness permitted by this
SECTION 8.01(xiv)(B) shall provide that no payment
(whether in respect of principal, interest or
otherwise) of such Indebtedness shall be permitted
or required other than (1) payments after the date
which is one year after payment in full in cash of
the Obligations and termination of the Commitments
and (2) so long as there does not exist an Event of
Default or Potential Event of Default and the
Commercial Paper shall then have a rating of at
least A-1 from S&P or Prime-1 from ▇▇▇▇▇'▇ (or, if
at any time neither S&P nor ▇▇▇▇▇'▇ shall be rating
the Commercial Paper, the Commercial Paper shall
then have a rating at least equal to the highest
rating from such other nationally recognized rating
service as is acceptable to the Administrative
Agent), payments of the principal amount of such
Indebtedness made solely with proceeds of subsequent
issuances of Commercial Paper by Southland;
(xv) commercial paper (other than the Commercial
Paper) issued by Southland (A) which is unsecured,
(B) which qualifies for the exemption from
registration under Section 3(a)(3) or Section 4(2)
of the Securities Act and (C) the aggregate
outstanding principal amount of which does not at
any time exceed the lesser of (1) $200,000,000 and
(2) the amount (if any) by which the Revolving Loan
Availability exceeds the aggregate outstanding
principal amount of Revolving Loans at that time;
and
(xvi) other present or future Indebtedness not in
excess of $40,000,000 at any time outstanding;
PROVIDED, that any Indebtedness arising from an
election by Southland to pay a "Benefit" for "Value"
pursuant to Section 9 of Southland's Equity
Participation Plan shall be limited so that the
amount payable by Southland in respect of all such
Indebtedness complies with the restrictions set
forth in SECTION 8.05(iv);
PROVIDED, that no Indebtedness for borrowed money permitted
hereunder, except for Permitted Existing Indebtedness to the
extent provided therein or in extensions or renewals
thereof, shall contain any provisions making a default under
or in respect of some other Indebtedness for money borrowed,
a default thereunder, unless such cross default provisions
are applicable only with respect to defaults which have
resulted in the acceleration of payment obligations for
money borrowed in an amount not less than, in any particular
case, $15,000,000.
8.02. DISPOSITIONS OF ASSETS; LIENS.
(a) DISPOSITIONS. Southland shall not, and shall
not permit any of its Subsidiaries to, sell, assign,
transfer, lease, convey or otherwise dispose of any
properties or assets, whether now owned or hereafter
acquired, or any income or profits therefrom, or enter into
any agreement to do so, other than pursuant to a sale,
assignment, transfer, lease, conveyance or other disposition
(i) upon foreclosure on the Yen Royalty Financing Collateral
by the Yen Royalty Lender, (ii) dispositions not covered by
CLAUSES (i), (iii), (iv), (v) or (vi) involving assets with
a sales price of
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not more than $50,000,000 in the aggregate in any calendar
year (including any insurance proceeds or a condemnation
award with respect to property (except Cityplace Center)
having a fair market value in excess of $10,000,000 with
respect to which Southland does not restore or replace the
property damaged, lost or taken), (iii) constituting sales
of inventory and transactions with franchisees occurring in
the ordinary course of business; PROVIDED, HOWEVER, that
neither Southland nor any of its Subsidiaries shall sell,
assign, or otherwise transfer any interest in accounts
receivable except in connection with a disposition of any
business unit as a going concern, (iv) constituting a sale
of vacant sites, surplus land or surplus convenience store
properties which are no longer being used as or in
connection with an operating retail convenience store of
Southland made for immediate cash consideration or
promissory notes on which not more than $25,000,000 (in the
aggregate) is outstanding at any one time, (v) dispositions
of assets in sale and leaseback transactions permitted by
SECTION 8.11 or (vi) leases or sub-leases of real property
pursuant to that certain Master Lease Agreement dated as of
October 3, 1996 between Southland and AT&T Wireless
Services, Inc.
(b) LIENS. Southland shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly
create, incur, assume or permit to exist any Lien on or with
respect to any of their properties or assets except:
(i) Permitted Existing Liens;
(ii) any interest or title of a lessor or secured
by a lessor's interest under any lease permitted by
this Agreement, including, without limitation, such
interests or title arising under the Master Lease
Facility;
(iii) Customary Permitted Liens;
(iv) purchase money Liens (including the interest
of a lessor under a Capital Lease) and Liens on
property existing at the time of acquisition thereof
by Southland or any of its Subsidiaries securing
Indebtedness permitted by SECTION 8.01(v), PROVIDED
that the Lien does not extend (or otherwise permit
recourse) to any property other than the property
being purchased or acquired;
(v) Liens with respect to judgments or attachments
which do not result in an Event of Default hereunder
or other breach hereof;
(vi) Liens securing reimbursement obligations for
trade Letters of Credit permitted by SECTION
8.01(vii) which encumber only goods, or documents of
title covering goods, which are purchased in
transactions for which such trade Letters of Credit
are issued;
(vii) Environmental Liens with respect to
liability or damages not in excess of $5,000,000;
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(viii) Liens securing Indebtedness permitted by
SECTION 8.01(xvi); PROVIDED that (A) the
Indebtedness is incurred or assumed in connection
with an acquisition of assets by Southland or a
Subsidiary of Southland, (B) the amount of the
Indebtedness so incurred or assumed in connection
with such acquisition does not exceed 80% of the
fair value of the assets at the time of their
acquisition, (C) the Liens encumber only the assets
acquired by Southland or its Subsidiary and (D) the
aggregate outstanding principal amount of
Indebtedness secured by the Liens does not exceed
$20,000,000 at any time;
(ix) Liens on property and (for so long as no
Investment in Southland Canada, Inc. is outstanding
under SECTION 8.03(iii) capital stock of Southland
Canada, Inc., securing Indebtedness permitted under
SECTION 8.01(xi);
(x) Liens on the Yen Royalty Financing Collateral
securing the Yen Royalty Financing Indebtedness;
(xi) Liens constituting collateral assignments of
the interest of Southland as lessor under any
sublease (and any tenant improvements made in
connection with such sublease) of any part of
Cityplace East Tower currently leased to Southland
under the Lease Agreement dated February 15, 1987,
as amended and restated as of December 21, 1990,
between Southland and Cityplace Center East
Corporation; and
(xii) to the extent Indebtedness secured thereby is
permitted to be extended, renewed, replaced or
refinanced pursuant to SECTION 8.01, a future Lien
upon any property which is subject to a Lien
described in SECTION 8.02(b)(i), (iv), (viii), (ix),
or (x), if such future Lien attaches only to the
same property, secures only such permitted
extensions, renewals, replacements or refinancings
and is of like quality, character and extent.
8.03. INVESTMENTS. Southland shall not, and shall
not permit any of its Subsidiaries to, directly or
indirectly make or own any Investment in any Person except:
(i) Investments in Cash Equivalents;
(ii) Permitted Existing Investments; PROVIDED that
Southland shall not, directly or indirectly, make
any additional Investments, in cash or in kind, in
the Cityplace real estate development project in
Dallas, Texas, except to the extent necessary to
fulfill existing completion guaranties and to
satisfy requirements of any Governmental Authority
in effect on July 31, 1987;
(iii) Investments between Southland and its
Affiliates, other than Investments by Southland
Canada, Inc. or any other
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Foreign Affiliate in Southland, PROVIDED that (A)
the aggregate amount of such Investments shall not
exceed $150,000,000 at any one time outstanding, (B)
the aggregate amount of Investments by Southland in
Southland Canada, Inc. and any other Foreign
Affiliate shall not exceed $50,000,000 at any one
time outstanding, (C) the aggregate amount of
Investments by Southland or its Subsidiaries in
▇▇▇▇▇ Enterprises, Inc., a Colorado corporation,
shall not exceed $5,000,000 at any one time
outstanding and (D) Investments constituting
Indebtedness shall be permitted only to the extent
permitted by SECTION 8.01(iv);
(iv) Investments in the capital stock of newly
acquired convenience store businesses (and food
service businesses dedicated to Southland's
convenience store and distribution businesses),
PROVIDED THAT, after giving effect to such
Investment, such businesses are owned and operated
by a Person that is a Subsidiary of Southland;
(v) Investments by Southland Canada, Inc. and other
Foreign Affiliates in Southland in compliance with
all applicable laws and agreements; PROVIDED that
(a) the amount of such Investments shall not exceed
$50,000,000 at any one time outstanding, (b) before
the Investment is made, Southland Canada or the
Foreign Affiliate making the Investment shall
execute and deliver to the Administrative Agent a
Subordination Agreement substantially in the form of
EXHIBIT 13, and (c) all such Investments shall be
evidenced by a non-negotiable subordinated
promissory note which by its terms shall be subject
to the provisions of such Subordination Agreement,
executed by Southland in favor of Southland Canada
or such other Foreign Affiliate and delivered to the
Administrative Agent pursuant to the provisions of
such Subordination Agreement;
(vi) The promissory notes referred to in SECTION
8.02(a)(iv), up to the amount stated therein; and
(vii) Other Investments not in excess of
$30,000,000.
8.04. ACCOMMODATION OBLIGATIONS. Southland shall
not, and shall not permit any of its Subsidiaries to,
directly or indirectly create or become or be liable with
respect to any Accommodation Obligation EXCEPT (i)
guaranties resulting from endorsement of negotiable
instruments for collection in the ordinary course of
business; (ii) any guaranty of the Obligations by any
Subsidiary of Southland; (iii) reasonable obligations,
warranties and indemnities made under any contracts
effectuating any sale or transfer permitted under SECTION
8.02; (iv) obligations, warranties and indemnities, not
relating to Indebtedness of any Person, which have been or
are undertaken or made in the ordinary course of business
(including reasonable and customary indemnities in
engagement letters for professionals with respect to
transactions permitted by this Agreement) and not for the
benefit or in favor
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of an Affiliate of Southland; (v) Accommodation Obligations
of Southland with respect to any Indebtedness of any of its
Subsidiaries permitted by SECTION 8.01 or any other
obligation or liability of any of its Subsidiaries, except
to the extent that such other obligation or liability
otherwise constitutes a breach of this Agreement; (vi)
Accommodation Obligations for Subsidiaries or Foreign
Affiliates (including, for purposes of this SECTION
8.04(vi), all Joint Ventures) in lieu of Investments
permitted under SECTION 8.03; (vii) Accommodation
Obligations constituting Permitted Existing Indebtedness and
extensions and renewals thereof, and substitutions therefor
in the same or a lesser amount and in respect of the same
transaction; (viii) Accommodation Obligations for the
benefit of Southland's franchisees arising in the ordinary
course of business; (ix) Accommodation Obligations arising
in connection with the Transaction Documents; (x)
indemnities made in the Yen Royalty Financing Agreement;
(xi) Accommodation Obligations in an amount not to exceed
$10,000,000 in the aggregate at any one time outstanding
with respect to any obligation or liability of any Joint
Venture or Foreign Affiliate; (xii) reasonable and customary
indemnification obligations (not directly or indirectly
supporting payment of any other Indebtedness) in favor of
any dealer, placement agent or issuing and paying agent
engaged to provide services related to the Commercial Paper
(or the commercial paper described in SECTION 8.01(xv)) in
respect of claims arising out of or resulting from such
services; (xiii) indemnities continuing or made in favor of
the "Assignors" or the "Past Default Interest Manager" under
(and, in each case, as defined in) the Master Assignment
Agreement; and (xiv) other Accommodation Obligations in an
aggregate amount not to exceed $5,000,000 at any time
outstanding.
8.05. RESTRICTED JUNIOR PAYMENTS. Southland shall
not, and shall not permit any of its Subsidiaries to,
declare or make any Restricted Junior Payment, except:
(i) payments due on Subordinated Indebtedness and
permitted to be made pursuant to the terms of such
Subordinated Indebtedness, and repayment of
Subordinated Indebtedness from the proceeds of new
Subordinated Indebtedness;
(ii) any dividends or distributions to Southland on
the capital stock of any of its Subsidiaries or from
any of such Subsidiaries to any other of such
Subsidiaries;
(iii) so long as there does not exist an Event of
Default or a Potential Event of Default under
SECTION 10.01(a) or (by reason of a breach of one or
more covenants set forth in ARTICLE IX) SECTION
10.01(b) or an Event of Default or such Potential
Event of Default would result therefrom, Southland
may repurchase or redeem its Senior Subordinated
Debentures, PROVIDED that such repurchases and
redemptions shall be made with the proceeds of
Common Stock or Subordinated Indebtedness issued
after the Effective Date;
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(iv) so long as there does not exist an Event of
Default or Potential Event of Default, payments in
respect of the repurchase of capital stock of
Southland arising from an election by Southland to
pay a "Benefit" for "Value" pursuant to Section 9 of
Southland's Equity Participation Plan or otherwise
required or permitted pursuant to agreements with
employees of Southland, upon death, retirement or
termination of employment of such employees, which
payments (including payments on Indebtedness of
Southland arising from any such election under its
Equity Participation Plan) shall not in the
aggregate exceed $2,000,000 per annum, PLUS the
amount of consideration paid by the purchasers of
such capital stock upon its issuance or reissuance
by Southland;
(v) so long as there does not exist an Event of
Default or Potential Event of Default, dividends
payable in kind, but not in cash, on any class or
series of Southland's preferred stock and payments
of cash (in an aggregate amount not in excess of
$500,000) in lieu of the issuance of fractional
shares; and
(vi) the payments described in CLAUSES (1) and (2)
of SECTION 8.01(xiv)(B) with respect to Indebtedness
permitted under SECTION 8.01(xiv)(B).
8.06. CONDUCT OF BUSINESS. Southland shall not, and
shall not permit any of its Subsidiaries to, engage in any
business other than (i) the businesses engaged in by
Southland and its Subsidiaries on December 31, 1995 and (ii)
any business or activities substantially similar or related
thereto (including, without limitation, food distribution
and food service businesses).
8.07. TRANSACTIONS WITH SHAREHOLDERS AND
AFFILIATES. Southland shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly enter into or
permit to exist any transaction (including, without
limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder or
holders of more than five percent (5%) of any class of
equity Securities of Southland, or with any Affiliate
thereof or of any such holder, on terms that are less
favorable to any such corporation than those that might be
obtained in an arm's-length transaction at the time from
Persons who are not such a holder or Affiliate. Nothing
contained in this SECTION 8.07 shall prohibit (i) any
transaction expressly permitted by SECTION 8.05, (ii)
customary directors' indemnities, (iii) the execution,
delivery and performance by Southland of the Shareholders
Agreement dated as of March 5, 1991 by and among Southland,
Ito-Yokado, IYG Holding Company and certain other holders of
Common Stock and extensions and renewals thereof on the
terms as in effect on the date hereof and (iv) compensation
arrangements for officers, directors and employees of
Southland and its Subsidiaries approved by the board of
directors (or a duly authorized committee thereof) of
Southland.
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8.08. RESTRICTION ON FUNDAMENTAL CHANGES.
Southland shall not, and shall not permit any of its
Subsidiaries with total assets in excess of $5,000,000 to,
enter into any merger or consolidation, or liquidate, wind-
up or dissolve (or suffer any liquidation or dissolution),
or convey, lease, sell, transfer or otherwise dispose of, in
one transaction or series of transactions, all or any
substantial part of its business, property or assets,
whether now or hereafter acquired, except for (i) the merger
of a wholly-owned Subsidiary of Southland into Southland,
(ii) the sale or other transfer of all or any substantial
part of the business, property or assets of any Subsidiary
of Southland to Southland or any other Subsidiary of
Southland, (iii) with respect to Subsidiaries of Southland
with less than $5,000,000 in total assets, the merger or
consolidation of a Subsidiary of Southland with or into any
other Subsidiary of Southland, or (iv) as permitted by
SECTION 8.02(a).
8.09. ERISA. Southland shall not, and shall not
permit any of its Subsidiaries or ERISA Affiliates to:
(i) Engage in any prohibited transaction for which
an exemption is not available or has not been
previously obtained from the Department of Labor and
in connection with which Southland, any Subsidiary
of Southland or any ERISA Affiliate could be subject
to either a civil penalty assessed pursuant to
Section 502(i) of ERISA, or a tax imposed under
Section 4975 of the Internal Revenue Code, in an
amount which exceeds $5,000,000;
(ii) Fail to make full payment when due of all
amounts which, under the provisions of any Defined
Benefit Plan, Southland, any of its Subsidiaries or
any ERISA Affiliate is required to pay as
contributions thereto, or permit to exist any
"accumulated funding deficiency" (as defined in
Section 302(a) of ERISA and Section 412(a) of the
Internal Revenue Code) with respect to any Defined
Benefit Plan, or fail to pay any installment
necessary to amortize any waived funding deficiency,
with respect to any Defined Benefit Plan;
(iii) (A) Fail to make any payments of withdrawal
liability to any Multiemployer Plan, or (B) fail to
make any contribution payments to any Multiemployer
Plan that Southland, any of its Subsidiaries or any
ERISA Affiliate may be required to make under any
agreement relating to such Multiemployer Plan, or
any law pertaining thereto, PROVIDED, HOWEVER, that
this CLAUSE (B) shall not apply to any such payments
which at any one time are in the aggregate less than
$3,000,000 and are being reasonably contested by
either Southland, any of its Subsidiaries or any
ERISA Affiliate;
(iv) Terminate any Defined Benefit Plan so as to
result in any liability of Southland, any Subsidiary
of Southland or any ERISA Affiliate under Title IV
of ERISA in an amount which would have a Material
Adverse Effect; or
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(v) Permit to exist any occurrence of any
Reportable Event, or any other event or condition
which, in the reasonable opinion of the
Administrative Agent communicated to Southland in
accordance with SECTION 12.09, presents a material
risk of a liability of Southland, any Subsidiary of
Southland or any ERISA Affiliate under ERISA or the
Internal Revenue Code which could have a Material
Adverse Effect; or
(vi) (A) Enter into any new Benefit Plans (other
than welfare benefit plans, as defined in ERISA)
under which Southland, its Subsidiaries and ERISA
Affiliates would have annual costs in the aggregate
among all such Benefits Plans in excess of
$5,000,000, or (B) modify any existing Benefit Plan
so as to increase its obligations thereunder in an
amount which could have a Material Adverse Effect.
8.10. COMMERCIAL PAPER FACILITY. Southland shall
not amend the terms of the documents governing or relating
to the Commercial Paper other than (i) increases in the
maximum amount of Commercial Paper which may at any time be
outstanding and (ii) extensions of the date beyond which
Southland may not issue Commercial Paper pursuant to such
documents (including an extension of the guaranty of Ito-
Yokado with respect to the Commercial Paper).
8.11. SALES AND LEASEBACKS. Southland shall not,
and shall not permit any of its Subsidiaries to become
liable, directly or by way of Accommodation Obligation, with
respect to any lease (including a Capital Lease), of any
property (whether real or personal or mixed) whether now
owned or hereafter acquired, (i) which Southland or a
Subsidiary of Southland has sold or transferred or is to
sell or transfer to any other Person, or (ii) which
Southland or a Subsidiary of Southland intends to use for
substantially the same purposes as any other property which
has been or is to be sold or transferred by that entity to
any other Person in connection with such lease, except (a)
as permitted by SECTION 8.01(v)(B), (b) the Master Lease
Facility and (c) transactions involving properties owned by
Southland or its Subsidiaries on the date hereof which have
an aggregate fair market value of not more than $30,000,000.
8.12. SUBORDINATED INDEBTEDNESS.
(a) NO CHANGE. Southland shall not, and shall not
permit any of its Subsidiaries to, amend or otherwise change
the terms applicable to any Subordinated Indebtedness.
(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
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issued pursuant to an indenture (including, without
limitation, notice of the election of any Extension Period
(as defined therein) under a QUIDS Subordinated Note), 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.
(c) NOTICE UNDER QUIDS SUBORDINATED NOTE INDENTURE.
In the event that Southland is required to enter into an
indenture with respect to the QUIDS Subordinated Notes upon
the exercise by Ito-Yokado or Seven-Eleven Japan Co., Ltd.,
of its registration rights with respect thereto, Southland
shall promptly deliver to the Administrative Agent a
certified copy of the resolutions of Southland's Board of
Directors designating this Agreement as the "Credit
Agreement" under the indenture.
8.13. AMENDMENT OF CHARTER OR BY-LAWS. Neither
Southland nor any of its Subsidiaries shall amend its
charter documents or By-Laws, except upon at least ten days'
prior written notice to the Administrative Agent and then
only if no Event of Default or Potential Event of Default
would result therefrom.
8.14. DISPOSAL OF SUBSIDIARY STOCK. Except as
permitted by SECTION 8.02 or SECTION 8.08, Southland will
not (i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock
or other equity Securities of (or warrants, rights or
options to acquire shares or other equity Securities of) any
of its Subsidiaries, except to qualify directors if required
by applicable law; or (ii) permit any of its Subsidiaries
directly or indirectly to sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other
Securities of (or warrants, rights or options to acquire
shares or other Securities of) such Subsidiary, or any other
Subsidiary of Southland, except to qualify directors if
required by applicable law and except that any Subsidiary of
Southland may issue additional shares of its capital stock
to any other Subsidiary of Southland or to Southland.
8.15. MARGIN REGULATIONS. No portion of the
proceeds of any credit extended under this Agreement shall
be used in any manner which might cause the extension of
credit or the application of such proceeds to violate
Regulation G, Regulation U or Regulation X or any other
regulation of the Federal Reserve Board or to violate the
Securities Exchange Act or the Securities Act, in each case
as in effect on the date or dates of such Borrowing and such
use of proceeds.
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
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the then aggregate outstanding principal amount of
obligations of Southland bearing interest at a variable
rate.
ARTICLE IX
FINANCIAL COVENANTS
Southland covenants and agrees that so long as any
Senior Lender shall have any obligation hereunder and until
payment in full of all of the Obligations, unless the
Requisite Senior Lenders shall otherwise give prior written
consent thereto:
9.01. SENIOR INDEBTEDNESS TO EBITDA. Southland
shall not on any Quarterly Determination Date occurring
during any period set out below permit the ratio of (i)
Senior Indebtedness (other than Indebtedness not exceeding
$35,000,000 under the Master Lease Facility) as of such
Quarterly Determination Date to (ii) EBITDA as determined as
of such Quarterly Determination Date for the four (4)
calendar quarters ending on such date, to be greater than
the ratio set out below opposite such period:
Period Maximum
Ratio
----------------------- -------------
Effective Date through
March 31, 1998 3.40x
April 1, 1998 through
December 31, 1998 3.20x
January 1, 1999 through
December 31, 1999 2.80x
January 1, 2000 and
thereafter 2.25x
9.02. MINIMUM INTEREST AND RENT COVERAGE RATIO.
Southland shall not on any Quarterly Determination Date
occurring during any period set out below permit the ratio
of (i) the sum of (A) EBITDA, PLUS (B) Rent Expense on
Operating Leases to (ii) the sum of (A) Consolidated Cash
Interest Expense, PLUS (B) Rent Expense on Operating Leases,
in each case as determined as of such Quarterly
Determination Date for the four (4) calendar quarters ending
on such date, to be less than the ratio set out below
opposite such period:
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Period
Minimum Ratio
----------------------- --------------
Effective Date through
December 31, 1999 2.00x
January 1, 2000 through
December 31, 2000 2.25x
January 1, 2001 and
thereafter 2.50x
9.03. MINIMUM FIXED CHARGE COVERAGE RATIO.
Southland shall not on any Quarterly Determination Date
occurring during any period set out below permit the ratio
of (i) EBITDA, MINUS Capital Expenditures to
(ii) Consolidated Fixed Charges, in each case as determined
as of such Quarterly Determination Date for the four (4)
calendar quarters ending on such date, to be less than the
ratio set out below opposite such period:
Period
Minimum Ratio
----------------------- -------------
Effective Date through
December 31, 1997 0.65x
January 1, 1998 through
December 31, 1998 0.35x
January 1, 1999 through
March 31, 1999 0.50x
April 1, 1999 through
June 30, 1999 0.65x
July 1, 1999 through
September 30, 1999 0.80x
October 1, 1999 through
December 31, 1999 0.85x
January 1, 2000 through
December 31, 2000 1.10x
January 1, 2001 and
thereafter 1.30x
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ARTICLE X
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
10.01. Events of Default. Each of the following
occurrences shall constitute an Event of Default under this
Agreement:
(a) FAILURE TO MAKE PAYMENTS WHEN DUE. Southland
shall fail to pay when due (i) any interest on any Loan or
any fee or other amount payable hereunder (other than
amounts described in SECTIONS 10.01(a)(ii) or
10.01(a)(iii)), and such failure shall continue for five (5)
Business Days, or (ii) any Reimbursement Obligation, or
(iii) any amount payable for principal on the Loans,
including any mandatory prepayment payable under SECTION
2.07(b), but excluding any voluntary prepayment payable
under SECTION 2.07(a).
b) BREACH OF CERTAIN COVENANTS. Southland shall
fail duly and punctually to perform or observe any
agreement, covenant or obligation binding on Southland under
ARTICLE VIII or Article IX.
(c) BREACH OF REPRESENTATION OR WARRANTY. Any
representation or warranty made or deemed made by Southland
to the Administrative Agent, any Senior Lender or any
Issuing Bank herein or in any of the other Loan Documents or
in any statement or certificate at any time given by
Southland or any of its Subsidiaries pursuant to any of the
Loan Documents shall be false or misleading in any material
respect on the date as of which made.
(d) OTHER DEFAULTS. Southland shall default in the
payment of any Obligation which is not referred to in
SECTION 10.01(a) or in the performance of or compliance with
any term contained in this Agreement or in any of the Loan
Documents (other than as covered by SECTION 10.01(a) or
10.01(b)), and such default or event of default shall
continue for thirty (30) days after (i) the Administrative
Agent or any Senior Lender (acting through the
Administrative Agent) notifies Southland or the applicable
Subsidiary of Southland of any such default, or (ii)
Southland or such Subsidiary acknowledges such default in
writing. Notwithstanding the foregoing, the failure of
Southland to deliver the Officers' Certificate required
pursuant to SECTION 6.01(iv) shall constitute an Event of
Default on the day such Officers' Certificate is due whether
or not it continues thereafter and whether or not any notice
is given to or received by Southland.
(e) DEFAULTS AS TO OTHER INDEBTEDNESS, MASTER LEASE
FACILITY. (i) Southland or any Subsidiary of Southland
shall fail to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration,
demand or otherwise) on any Indebtedness, other than an
Obligation, if the aggregate amount of such Indebtedness is
$15,000,000 or more, and such failure shall continue beyond
the applicable stated cure period therefor; or any breach,
default or event of default shall occur, or any other event
shall occur or condition shall exist, under any instrument,
agreement or indenture pertaining
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thereto, if the effect thereof (with or without the giving
of notice or lapse of time or both) is to accelerate, or
permit the holder(s) of such Indebtedness to accelerate, the
maturity of any such Indebtedness and such breach, default,
event of default, event or condition shall continue beyond
the applicable stated cure period therefor; or any such
Indebtedness shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled
required prepayment prior to the stated maturity thereof),
or the holder of any Lien (other than Liens upon property
leased to Southland which were created by the landlord prior
to the commencement of the lease), in any amount, shall
commence foreclosure of such Lien upon property of Southland
or any of its Subsidiaries having a value in excess of
$1,000,000 and such foreclosure shall continue against such
property to a date less than thirty (30) days prior to the
date of the proposed foreclosure sale; PROVIDED, HOWEVER,
that the failure to make a payment, or any such breach,
default or event of default, under the Yen Royalty Financing
Agreement or otherwise in respect of the Yen Royalty
Financing Indebtedness shall not constitute an Event of
Default hereunder unless recourse or recovery in respect
thereof in excess of $15,000,000 is claimed or sought
against Southland personally or against or out of any
property of Southland other than the Yen Royalty Financing
Collateral; PROVIDED, FURTHER, HOWEVER, that if, upon the
maturity (whether by lapse of time, acceleration or
otherwise) of any Commercial Paper permitted to be issued
hereunder, Ito-Yokado (as opposed to Southland) makes
payment (in accordance with the terms applicable to the
Commercial Paper) of the Indebtedness evidenced by such
Commercial Paper, Southland's failure to pay shall not be an
Event of Default for purposes of this SECTION 10.01(e) to
the extent such failure to pay is cured (at the maturity of
such Commercial Paper) by the payment by Ito-Yokado.
(ii) Southland shall fail to make any payment when
due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) under the Master Lease
Documents and such failure shall continue beyond the
applicable cure period therefor; or any breach, default or
event of default shall occur, or any other event shall occur
or condition shall exist, under the Master Lease Documents
if the effect thereof (with or without the giving of notice
or lapse of time or both) is to accelerate, or permit the
lessor(s) thereunder to accelerate, the maturity of any
payment required thereunder and such breach, default, event
of default, event or condition shall continue beyond the
applicable cure period therefor; or any such payment shall
be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled required prepayment
prior to the stated maturity thereof), or the lessor(s)
thereunder shall commence any proceeding to repossess any
property leased thereunder and such repossession proceeding
shall not be dismissed within thirty (30) days after the
commencement thereof.
(f) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF
RECEIVER, ETC. (i) An involuntary case shall be commenced
against Southland or any of its Subsidiaries and the
petition shall not be dismissed within sixty (60) days after
commencement of the case, or a court having jurisdiction in
the premises
shall enter a decree or order for relief in respect of
Southland or any of its Subsidiaries in an involuntary case,
under any applicable bankruptcy,
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insolvency or other similar law now or hereinafter in
effect; or any other similar relief shall be granted under
any applicable federal or state law.
(ii) A decree or order of a court having jurisdiction
in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other
officer having similar powers over Southland or any of its
Subsidiaries or over all or a substantial part of the
property of Southland or any of is Subsidiaries, shall be
entered; or an interim receiver, trustee or other custodian
of Southland or any of its Subsidiaries or of all or a
substantial part of the property of Southland or any of its
Subsidiaries shall be appointed or a warrant of attachment,
execution or similar process against any substantial part of
the property of Southland or any of its Subsidiaries shall
be issued and any such event shall not be stayed, dismissed,
bonded or discharged within thirty (30) days of entry,
appointment or issuance.
(g) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER,
ETC. Southland or any of its Subsidiaries shall have an
order for relief entered with respect to it or commence a
voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall
consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a
substantial part of its property; Southland or any of its
Subsidiaries shall make any assignment for the benefit of
creditors or shall be unable or fail, or admit in writing
its inability, to pay its debts as such debts become due; or
the Board of Directors of Southland or any of its
Subsidiaries (or any committee thereof) adopts any
resolution or otherwise authorizes any action to approve any
of the foregoing.
(h) JUDGMENTS AND ATTACHMENTS. Any money judgment,
arbitration award (other than a money judgment or award
covered by insurance, but only if the insurer has admitted
liability with respect to such money judgment), writ or
warrant of attachment, or similar process involving in any
case an amount in excess of $5,000,000 shall be entered or
filed against Southland or any of its Subsidiaries or any of
their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of sixty (60)
days.
(i) DISSOLUTION. Any order, judgment or decree
shall be entered against Southland or any of its
Subsidiaries decreeing its involuntary dissolution or split
up and such order shall remain undischarged and unstayed for
a period in excess of thirty (30) days; or Southland or,
except as permitted by this Agreement, any of its
Subsidiaries shall otherwise dissolve or cease to exist.
(j) LOSS OF PAYMENT PRIORITY; FAILURE OF
SUBORDINATION. For any reason any of the subordination
provisions of the documents and instruments evidencing any
Subordinated Indebtedness shall, at any time, be invalidated
or otherwise cease to be in full force and effect, or the
Obligations shall be subordinated or shall not have the
priority contemplated by this Agreement or such
subordination provisions, for any reason; and the Requisite
Senior Lenders shall have determined that any event
described in this Section
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10.01(j) has or is likely to have Material Adverse Effect.
(k) CHANGE OF CONTROL. A Change of Control shall
have occurred.
(l) UNFUNDED ERISA LIABILITIES. Any Defined
Benefit Plan shall be terminated within the meaning of Title
IV of ERISA or a trustee shall be appointed by an
appropriate United States District Court to administer any
Defined Benefit Plan or the PBGC shall institute proceedings
to terminate any Defined Benefit Plan or to appoint a
trustee to administer any Defined Benefit Plan, if, as of
the date of such termination, appointment or institution of
proceedings, the liability (after giving effect to the tax
consequences thereof) of Southland, any Subsidiary of
Southland or any ERISA Affiliate to the PBGC under Section
4062 of ERISA exceeds the current value of assets
accumulated in such Defined Benefit Plan by more than
$1,000,000 (or in the case of a termination of a Defined
Benefit Plan involving a "substantial employer" (as defined
in Section 4001(a)(2) of ERISA), Southland's, such
Subsidiary's or any ERISA Affiliate's proportionate share of
such excess shall exceed such amount).
(m) WITHDRAWAL LIABILITY UNDER MULTIEMPLOYER PLANS.
Either (i) any Multiemployer Plan shall notify Southland,
any Subsidiary of Southland of any ERISA Affiliate that it
has incurred a withdrawal liability in an amount exceeding
$1,000,000 and the installment payments of such liability
shall not be paid when required to be paid in accordance
with applicable law or the provisions of the subject
Multiemployer Plan, or within five (5) Business Days
thereafter; or (ii) any Multiemployer Plan shall be
terminated within the meaning of Title IV of ERISA, or a
trustee shall be appointed by an appropriate United States
District Court to administer any Multiemployer Plan, or the
PBGC shall commence proceedings to terminate any
Multiemployer Plan or to appoint a trustee to administer any
Multiemployer Plan and the aggregate outstanding liability
of Southland and all of its Subsidiaries and all of its
ERISA Affiliates with respect to such Multiemployer Plan
(assuming that the Multiemployer Plan has terminated as of
the day of any such appointment or commencement of
proceedings) is an amount which exceeds $5,000,000.
(n) OTHER ERISA LIABILITIES. Southland or any of
its Subsidiaries or any ERISA Affiliate of Southland (i)
shall engage in any prohibited transaction (other than the
alleged prohibited transaction described on SCHEDULE
5.01(xxiii)) for which an exemption is not available or has
not been previously obtained from the Department of Labor
and in connection with which Southland or any such
Subsidiary or any ERISA Affiliate could reasonably be
expected to be subject to either a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Internal Revenue Code, which penalty or
tax is in excess of $5,000,000; (ii) shall fail to make full
payment when due of all amounts which under the provisions
or any Defined Benefit Plan it is required to pay as
contributions thereto, or permit to exist any "accumulated
funding deficiency" (as defined in Section 302(a) of ERISA
and Section 412(a) of the Internal Revenue Code) or fail to
pay any installment necessary to amortize each waived
funding deficiency with respect to any Defined Benefit Plan,
(iii) fail to make any contribution payments of
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any Multiemployer Plan that Southland or any ERISA Affiliate
may be required
to make under any agreement relating to such Multiemployer
Plan or under such Multiemployer Plan or any law pertaining
thereto, PROVIDED, however, that this CLAUSE (iii) shall not
apply to any such payments which at any one time are in the
aggregate less than $3,000,000 and are being reasonably
contested by either Southland, any of its Subsidiaries or
any ERISA Affiliates, or (iv) permit to exist any occurrence
of any Reportable Event (other than the alleged prohibited
transaction described on SCHEDULE 5.01(xxiii)) or any other
event or condition which, in the opinion of the
Administrative Agent communicated to Southland in accordance
with SECTION 12.09 hereto, presents a material risk of
liability of Southland, any Subsidiary of Southland or any
ERISA Affiliate under ERISA or the Internal Revenue Code in
an amount which exceeds $5,000,000.
(o) MATERIAL ADVERSE CHANGE. There shall have
occurred or been disclosed to the Senior Lenders any
condition or event which the Requisite Senior Lenders
determine has or is likely to have a Material Adverse
Effect.
An Event of Default shall be deemed "continuing"
until cured or waived in writing in accordance with SECTION
12.07 to the extent and under the circumstances provided for
therein.
10.02. RIGHTS AND REMEDIES.
(a) ACCELERATION. Upon the occurrence of any Event
of Default described in the foregoing SECTION 10.01(f) or
10.01(g) with respect to Southland, the Commitments shall
automatically and immediately terminate and the unpaid
principal amount of and any and all accrued interest on the
Loans and all other Obligations shall automatically become
immediately due and payable, with all additional interest
from time to time accrued thereon and without presentment,
demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement,
diligence, presentment, notice of intent to demand or
accelerate and of acceleration), all of which are hereby
expressly waived by Southland, and the obligation of each
Senior Lender to make any Loan hereunder and of each Senior
Lender or Issuing Bank to issue or participate in any
Facility Letter of Credit shall thereupon terminate; and
upon the occurrence and during the continuance of any other
Event of Default, the Administrative Agent shall at the
request, or may with the consent, of the Requisite Senior
Lenders, by written notice to Southland, (i) declare that
the Commitments are terminated, whereupon the Commitments
and the obligation of each Senior Lender to make any Loan
hereunder and of each Senior Lender or Issuing Bank to issue
or participate in any Facility Letter of Credit shall
immediately terminate, and/or (ii) declare the unpaid
principal amount of, and any and all accrued and unpaid
interest on, the Loans and all other Obligations to be, and
the same shall thereupon be, immediately due and payable
with all additional interest from time to time accrued
thereon and without presentment, demand, or protest or other
requirements of any kind (including, without limitation,
valuation and
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appraisement, diligence, presentment, notice of intent to
demand or accelerate and of acceleration), all of which are
hereby expressly waived by Southland.
(b) DEPOSIT FOR FACILITY LETTERS OF CREDIT. In
addition, upon demand by the Administrative Agent or the
Requisite Senior Lenders after the occurrence of any Event
of Default, Southland shall deposit with the Administrative
Agent for the benefit of the Senior Lenders with respect to
each Facility Letter of Credit then outstanding, promptly
upon the demand of the Administrative Agent, cash or Cash
Equivalents in an amount equal to the greatest amount for
which such Facility Letter of Credit may be drawn. Such
deposit shall be held by the Administrative Agent for the
benefit of the Senior Lenders as security for, and to
provide for the payment of, the Reimbursement Obligations.
(c) RESCISSION. If at any time after acceleration
of the maturity of the Loans, Southland shall pay all
arrears of interest and all payments on account of principal
of the Loans and Reimbursement Obligations which shall have
become due otherwise than by acceleration (with interest on
principal and, to the extent permitted by law, on overdue
interest, at the rates specified in this Agreement) and all
Events of Default and Potential Events of Default (other
than nonpayment of principal of and accrued interest on the
Loans due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to SECTION 12.07, then
by written notice to Southland, the Requisite Senior Lenders
may elect, in the sole discretion of such Requisite Senior
Lenders, to rescind and annul the acceleration and its
consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or
impair any right or remedy consequent thereon. The
provisions of the preceding sentence are intended merely to
bind the Senior Lenders and the Issuing Banks to a decision
which may be made at the election of the Requisite Senior
Lenders; they are not intended to benefit Southland and do
not give Southland the right to require the Senior Lenders
to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
ARTICLE XI
THE ADMINISTRATIVE AGENT; THE CO-AGENT
11.01. APPOINTMENT. (a) Each Senior Lender and
each Issuing Bank hereby designates and appoints Citibank as
the Administrative Agent of such Senior Lender and such
Issuing Bank under this Agreement and the Loan Documents,
and each Senior Lender and each Issuing Bank hereby
irrevocably authorizes the Administrative Agent to take such
action on its behalf under the provisions of this Agreement
and the Loan Documents and to exercise such powers as set
forth herein or therein, together with such other powers as
are reasonably incidental thereto. The Administrative Agent
agrees to act as such on the express conditions contained in
this ARTICLE XI.
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(b) The provisions of this ARTICLE XI are solely
for the benefit of the Administrative Agent and the Senior
Lenders and Issuing Banks, and neither Southland nor any
Subsidiary of Southland shall have any rights to rely on or
enforce any of the provisions hereof (other than as
expressly set forth in SECTION 11.07). In performing its
functions and duties under this Agreement, the
Administrative Agent shall act solely as agent of the Senior
Lenders and the Issuing Banks and does not assume and shall
not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for Southland or any
Subsidiary of Southland.
1.02. NATURE OF DUTIES. The Administrative Agent
shall not have any duties or responsibilities except those
expressly set forth in this Agreement or in the Loan
Documents. The duties of the Administrative Agent shall be
mechanical and administrative in nature. The Administrative
Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Senior Lender or Issuing
Bank. Nothing in this Agreement or any of the Loan
Documents, expressed or implied, is intended to or shall be
construed to impose upon the Administrative Agent any
obligations in respect of this Agreement or any of the Loan
Documents except as expressly set forth herein or therein.
Each Senior Lender and each Issuing Bank shall make its own
independent investigation of the financial condition and
affairs of Southland in connection with the making and the
continuance of the Loans hereunder and with the issuance of
the Facility Letters of Credit and shall make its own
appraisal of the creditworthiness of Southland, and the
Administrative Agent shall not have any duty or
responsibility, either initially or on a continuing basis,
to provide any Senior Lender or Issuing Bank with any credit
or other information with respect thereto. If the
Administrative Agent seeks the consent or approval of the
Requisite Senior Lenders to the taking or refraining from
taking any action hereunder, the Administrative Agent shall
send notice thereof to each Senior Lender. The
Administrative Agent shall promptly notify each Senior
Lender at any time that the Requisite Senior Lenders have
instructed the Administrative Agent to act or refrain from
acting pursuant hereto.
11.03. RIGHTS, EXCULPATION, etc. Neither the
Administrative Agent nor any of its officers, directors,
employees or agents shall be liable to any Senior Lender or
Issuing Bank for any action taken or omitted by them
hereunder or under any of the Loan Documents, or in
connection herewith or therewith, except that the
Administrative Agent shall be obligated on the terms set
forth herein for performance of its express obligations
hereunder and except that no Person shall be relieved of any
liability imposed by law for intentional tort. The
Administrative Agent shall not be liable for any
apportionment or distribution of payments made by it in good
faith pursuant to SECTION 2.08(b) or SECTION 3.06, and if
any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of
any Holder to whom payment was due, but not made, shall be
to recover from other Holders (or former Holders) any
payment in excess of the amount to which they are determined
to have been entitled. The Administrative Agent shall not
be responsible to any Senior Lender, Issuing Bank or Holder
for any recitals, statements, representations or warranties
herein or for the execution, effectiveness, genuineness,
validity, enforceability, collectibility, or
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sufficiency of this Agreement or any of the Loan Documents
or any of the other Loan Documents, or for the financial
condition of Southland or any of its Subsidiaries. The
Administrative Agent shall not be required to make any
inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement
or any of the Loan Documents or the financial condition of
Southland or any of its Subsidiaries, or the existence or
possible existence of any Potential Event of Default or
Event of Default. The Administrative Agent may at any time
request instructions from the Senior Lenders with respect to
any actions or approvals which by the terms of this
Agreement or of any of the Loan Documents the Administrative
Agent is permitted or required to take or to grant, and if
such instructions are promptly requested, the Administrative
Agent shall be absolutely entitled to refrain from taking
any action or to withhold any approval and shall not be
under any liability whatsoever to any person for refraining
from any action or withholding any approval under any of the
Loan Documents until it shall have received such
instructions from the Requisite Senior Lenders. Without
limiting the foregoing, no Senior Lender or Issuing Bank
shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent
acting or refraining from acting under this Agreement, the
Notes or any of the other Loan Documents in accordance with
the instructions of the Requisite Senior Lenders.
11.04. RELIANCE. The Administrative Agent shall be
entitled to rely upon any written notices, statements,
certificates, orders or other documents or any telephone
message believed by it in good faith to be genuine and
correct and to have been signed, sent or made by the proper
Person, and with respect to all matters pertaining to this
Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by
it.
11.05. INDEMNIFICATION. To the extent that the
Administrative Agent is not reimbursed and indemnified by
Southland, the Senior Lenders will reimburse and indemnify
the Administrative Agent for and against any and all
liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against it in any way relating to
or arising out of this Agreement or any of the other Loan
Documents or any action taken or omitted by the
Administrative Agent under this Agreement or any of the
other Loan Documents, proportionately based upon a fraction,
the numerator of which is the amount of such Senior Lender's
Commitment, and the denominator of which is the aggregate
amount of the Commitments of all Senior Lenders PROVIDED
that no Senior Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent's gross negligence
or willful misconduct. The obligations of the Senior
Lenders under this SECTION 11.05 shall survive the payment
in full of the Loans and Reimbursement Obligations and the
termination of this Agreement.
11.06. THE ADMINISTRATIVE AGENT INDIVIDUALLY. In the
event the Administrative Agent at any time has a Commitment
hereunder (a) with respect to its Pro Rata Share of the
Commitments hereunder, the Loans made by it or
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its Affiliates and any Notes issued to or held by it or its
Affiliates, the Administrative Agent shall have and may
exercise the same rights and powers hereunder and is subject
to the same obligations and liabilities as and to the extent
set forth herein for any other Senior Lender or holder of a
Note and (b) the terms "Senior Lenders" or "Requisite Senior
Lenders" or any similar terms shall, unless the context
clearly otherwise indicates, include the Administrative
Agent or its Affiliates as a Senior Lender or one of the
Requisite Senior Lenders. The Administrative Agent may
accept deposits from, lend money to, and generally engage in
any kind of banking, trust or other business with Southland
or any of its Subsidiaries as if it were not acting as
Administrative Agent pursuant hereto.
11.07. SUCCESSOR ADMINISTRATIVE AGENT; RESIGNATION
OF AGENT. (a) The Administrative Agent may resign from the
performance of all its functions and duties hereunder at any
time by giving at least thirty (30) Business Days' prior
written notice to the Senior Lenders and Southland. Such
resignation shall take effect upon the acceptance by a
successor Administrative Agent of appointment pursuant to
SECTION 11.07(b) or 11.07(c) or as otherwise provided below.
(b) Upon any such notice of resignation by the
Administrative Agent, the Requisite Senior Lenders shall
appoint a successor Administrative Agent who shall be
satisfactory to Southland.
(c) If a successor Administrative Agent shall not
have been so appointed within said thirty (30) Business Day
period, the retiring Administrative Agent, with the consent
of Southland (which may not be withheld unreasonably), shall
then appoint a successor Administrative Agent who shall
serve as Administrative Agent until such time, if any, as
the Requisite Senior Lenders, with the consent of Southland,
appoint a successor Administrative Agent as provided above.
11.08. THE CO-AGENT. The Co-Agent shall not have,
and the Co-Agent hereby expressly disclaims, any rights or
duties hereunder beyond those of a Senior Lender and, if
applicable, an Issuing Bank. Except with respect to its
rights and duties as a Senior Lender and, if applicable, an
Issuing Bank, neither the Co-Agent nor any of its officers,
directors, employees or agents shall be liable to any Person
for any action taken or omitted by them hereunder or under
any of the Loan Documents.
ARTICLE XII
MISCELLANEOUS
12.01. ASSIGNMENTS AND PARTICIPATIONS. (a) (i)
Each Senior Lender shall have the right at any time, upon
written notice to the Administrative
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Agent of its intent to do so, to sell, assign, transfer or
negotiate all or any part of its Commitments, Term Loans,
Revolving Loans, Term Notes, Revolving Notes or interest in
the Facility Letters of Credit to one or more Senior
Lenders. Each Senior Lender shall have the right at any
time, with the prior written consent of Southland and the
Administrative Agent (which consent shall not be
unreasonably withheld and shall be executed in substantially
the form of EXHIBIT 14), to sell, assign, transfer or
negotiate all or any part of its Commitments, Term Loans,
Revolving Loans, Term Notes, Revolving Notes or interest in
the Facility Letters of Credit to one or more commercial
banks or other financial institutions. In the case of any
sale, assignment, transfer or negotiation of all or part of
such Commitments, Loans, Notes or interest in the Facility
Letters of Credit authorized under this SECTION 12.01(a)(i),
the assignee, transferee or recipient shall have, to the
extent of such sale, assignment, transfer or negotiation,
the same rights, benefits and obligations as it would if it
were a Senior Lender hereunder and a holder of such Notes,
including, without limitation, (A) the right to approve or
disapprove actions which, in accordance with the terms
hereof, require the approval of the Requisite Senior Lenders
and (B) the obligation to fund Loans directly to the
Administrative Agent pursuant to ARTICLE II hereof and to
participate in Facility Letters of Credit pursuant to
ARTICLE III hereof. All sales, assignments, transfers or
negotiations of all or part of such Commitments, Loans,
Notes or interests in the Facility Letters of Credit
authorized under this SECTION 12.01(a)(i) shall be evidenced
by, and made pursuant to, an Assignment and Acceptance.
(ii) Upon its receipt of a fully executed
Assignment and Acceptance, a processing and recordation fee
of $2,500 and, if applicable, the written consent of
Southland and the Administrative Agent, the Administrative
Agent shall (A) accept such Assignment and Acceptance, (B)
record the information contained therein, and (C) in the
case of sales, assignments, transfers or negotiations made
pursuant to the first sentence of SECTION 12.01(a)(i), give
notice thereof to Southland.
(iii) Notwithstanding anything to the contrary
contained in this Agreement, no Senior Lender shall make any
assignment of any of its Commitments, Term Loans, Revolving
Loans, Term Notes, Revolving Notes or interests in Facility
Letters of Credit except in the form of units consisting of
pro rata interests in such Commitments, Loans, Notes or
interests in Facility Letters of Credit.
(b) Each Senior Lender shall have the right at any
time, upon written notice to the Administrative Agent of its
intent to do so, to sell, assign, transfer or negotiate to
one or more banks or other financial institutions any
Competitive Bid Note or Notes held by it.
(c) Each Senior Lender may, with the prior written
consent of Southland and the Administrative Agent (which
consent shall not be unreasonably withheld and shall be
executed in substantially the form of EXHIBIT 14), sell
participations to one or more banks or other financial
institutions in or to all or a portion of its rights and
obligations under this Agreement, the Loans owing to it, the
Facility Letters of Credit and the Note or Notes held by it;
PROVIDED, HOWEVER, that the consent of Southland and
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the Administrative Agent shall not be required for sales of
participations in Competitive Bid Loans and Competitive Bid
Notes held by any Senior Lender; PROVIDED, FURTHER, HOWEVER,
that (i) such Senior Lender's obligations under this
Agreement shall remain unchanged, (ii) such Senior Lender
shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) such Senior
Lender shall remain the holder of any such Note or Notes for
all purposes of this Agreement, (iv) Southland, the
Administrative Agent, the Senior Lenders and the Issuing
Banks shall continue to deal solely and directly with such
Senior Lender in connection with such Senior Lender's rights
and obligations under this Agreement, and the holder of any
such participation shall not be entitled to require such
Senior Lender to take or omit to take any action hereunder
except action directly affecting the extension of the date
fixed for payment of the principal amount of or interest on
a Loan allocated to such participation or a reduction of the
principal amount of or the rate of interest payable on the
Loans, except as otherwise permitted under the Loan
Documents, and (v) all costs and consequences incurred or
sustained by any holder of a participation shall be added to
those incurred or sustained by a Senior Lender for the
purpose of SECTION 2.05(f), 2.09(f), 2.09(h), 2.10, 3.08(c),
12.02 and 12.03, limited in the aggregate to the amounts
that would have been incurred or sustained by the Senior
Lender granting the participation to such holder, had such
participation not been granted.
(d) Any Senior Lender may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this SECTION 12.01, disclose to
the assignee or participant or proposed assignee or
participant, any information relating to Southland furnished
to such Senior Lender by the Administrative Agent or by or
on behalf of Southland; PROVIDED that, prior to any such
disclosure, the assignee or participant, or proposed
assignee or participant shall agree to preserve in
accordance with SECTION 12.25 the confidentiality of any
confidential information described therein.
(e) Notwithstanding any other provision of this
Agreement, any Senior Lender may at any time create a
security interest in all or any portion of its rights under
this Agreement (including, without limitation, Obligations
owing to it and Notes held by it) in favor of any Federal
Reserve bank in accordance with Regulation A.
(f) Notwithstanding any other provision of this
Agreement, any Senior Lender may at any time, upon written
notice to the Administrative Agent of its intent to do so,
sell, assign, transfer, participate or negotiate all or any
part of its rights and obligations under this Agreement and
the other Loan Documents to any of its Affiliates without
the consent of Southland or the Administrative Agent.
12.02. EXPENSES. (a) GENERALLY. Southland agrees
upon demand to pay, or reimburse, the Administrative Agent
for all the Administrative Agent's audit, legal (other than,
for so long as no Potential Event of Default or Event of
Default has occurred and is continuing, any allocated cost
of the Administrative Agent's internal legal counsel),
appraisal, valuation and investigation expenses and for all
other out-of-pocket costs and expenses of every type and
nature (including, without limitation, the reasonable fees,
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expenses and disbursements of Sidley & Austin and any other
attorneys retained by the Administrative Agent, auditors,
accountants, appraisers, investment bankers, printers,
insurance and environmental advisers, and other consultants
and agents) incurred by the Administrative Agent in
connection with (A) its own audit and investigation of
Southland and Southland's Subsidiaries; (B) the negotiation,
preparation and execution of this Agreement (including,
without limitation, the satisfaction or attempted
satisfaction of any of the conditions set forth in ARTICLE
IV) and the other Loan Documents and the making of the Loans
hereunder; (C) administration of this Agreement and the
Loans, including consultation with attorneys in connection
therewith; and (D) the protection, collection or enforcement
of any of the Obligations.
(b) AFTER DEFAULT. Southland further agrees to
pay, or reimburse the Administrative Agent, the Issuing
Banks and the Senior Lenders for all out-of-pocket costs and
expenses, including, without limitation, reasonable
attorneys' fees (including allocated costs of internal
counsel, and costs of settlement) incurred by the
Administrative Agent, any Issuing Bank or Senior Lender
after the occurrence of an Event of Default (i) in enforcing
any Obligation or in exercising or enforcing any other right
or remedy available by reason of such Event of Default; (ii)
in connection with any refinancing or restructuring of the
credit arrangements provided under this Agreement in the
nature of a "work-out" or in any insolvency or bankruptcy
proceeding; (iii) in commencing, defending or intervening in
any litigation or in filing a petition, complaint, answer,
motion or other pleadings in any legal proceeding relating
to Southland and related to or arising out of the
transactions contemplated hereby; or (iv) in taking any
other action in or with respect to any suit or proceeding
(bankruptcy or otherwise).
12.03. INDEMNITY. Southland further agrees to
defend, protect, indemnify, and hold harmless the
Administrative Agent, the Co-Agent and each and all of the
Senior Lenders and Issuing Banks and each of their
respective officers, directors, employees, attorneys and
agents (including, without limitation, those retained in
connection with the satisfaction or attempted satisfaction
of any of the conditions set forth in ARTICLE IV)
(collectively called the "Indemnitees") from and against any
and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs,
expenses and disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and
disbursements of counsel for such Indemnitees in connection
with any investigative, administrative or judicial
proceeding, whether or not such Indemnitees shall be
designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees (whether direct, indirect
or consequential and whether based on any federal or state
laws or other statutory regulations, including, without
limitation, Securities, environmental and commercial laws
and regulations, under common law or at equitable cause, or
on contract or otherwise) in any manner relating to or
arising out of this Agreement or the other Loan Documents,
or any act, event or transaction related or attendant
thereto, the Senior Lenders' Commitments, the making of and
participation in the Loans and the issuance of and
participation in Facility Letters of Credit hereunder, the
management of such Loans or Facility Letters of Credit
(including any liabilities or claims
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under Federal, state or local environmental laws or
regulations), or the use or intended use of the proceeds of
the Loans or Facility Letters of Credit hereunder
(collectively, the "Indemnified Matters"); PROVIDED that
Southland shall have no obligation to an Indemnitee
hereunder with respect to (i) matters for which such
Indemnitee has been compensated pursuant to SECTION 2.05(f)
or other provision of the Agreement and (ii) Indemnitee
Matters caused by or resulting from the willful misconduct
or gross negligence of that Indemnitee, as determined by a
court of competent jurisdiction. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in
the preceding sentence may be unenforceable because it is
violative of any law or public policy, Southland shall
contribute the maximum portion which it is permitted to pay
and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the
Indemnities.
12.04. CHANGE IN ACCOUNTING PRINCIPLES. Except as
otherwise provided herein, if any changes in accounting
principles from those used in the preparation of the most
recent financial statements referred to in SECTION
5.01(viii) are hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial
Accounting Standards Board or the American Institute of
Certified Public Accountants (or successors thereto or
agencies with similar functions) and are adopted by
Southland with the agreement of its independent certified
public accountants and such changes result in a change in
the method of calculation of any of the financial covenants,
standards or terms found in ARTICLE VIII and ARTICLE IX
hereof, the parties hereto agree to enter into negotiations
in order to amend such provisions so as to equitably reflect
such changes with the desired result that the criteria for
evaluating Southland's financial condition shall be the same
after such changes as if such changes had not been made,
PROVIDED, HOWEVER, that no change in generally accepted
accounting principles that would affect the method of
calculation of any of the financial covenants, standards or
terms shall be given effect in such calculations until such
provisions are amended, in a manner satisfactory to the
Requisite Senior Lenders, to so reflect such change in
accounting principles.
12.05. SET-OFF. In addition to any Liens granted to
the Administrative Agent, any Senior Lender or any Issuing
Bank and any rights now or hereafter granted under
applicable law and not by way of limitation of any such Lien
or rights, upon the occurrence and during the continuance of
any Event of Default, each Senior Lender and each Issuing
Bank are hereby authorized by Southland at any time or from
time to time, without notice to Southland, or to any other
Person (any such notice being hereby expressly waived) to
set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether
matured or unmatured but not including trust accounts) and
any other Indebtedness at any time held or owing by the
Senior Lender or that Issuing Bank (or any Affiliate
thereof, and Southland hereby authorizes any such Affiliate
to comply with the directions of the applicable Senior
Lender or Issuing Bank with respect to such deposits or
Indebtedness) to or for the credit or the account of
Southland against and on account of the Obligations of
Southland to that Senior Lender or the Issuing Bank
including, but not limited to, all Loans and Facility
Letters of Credit and all claims of
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any nature or description arising out of or connected with
this Agreement or the Notes, irrespective of whether or not
(i) that Senior Lender or that Issuing Bank shall have made
any demand hereunder or (ii) the Requisite Senior Lenders
shall have declared the principal of and interest on the
Loans and Notes and other amounts due hereunder to be due
and payable as permitted by ARTICLE X and although said
obligations and liabilities, or any of them, may be
contingent or unmatured. Each Senior Lender and each
Issuing Bank agrees, and each other Holder shall be entitled
to any rights conferred upon it under this Agreement only on
the condition and understanding, that it shall not, without
the express consent of the Requisite Senior Lenders, and
that it shall, to the extent it is lawfully entitled to do
so, upon the request of the Requisite Senior Lenders,
exercise its set-off rights hereunder against any accounts
of Southland now or hereafter maintained with such Senior
Lender or Issuing Bank or other Holder.
12.06. RATABLE SHARING. (a) Subject to SECTION
2.08(b) and SECTION 3.06(b)(ii), the Senior Lenders agree
among themselves that (i) with respect to all amounts
received by them which are applicable to the payment of the
Obligations (excluding amounts paid with respect to
Competitive Bid Loans, the fees described in SECTION 2.06
and the amounts described in SECTIONS 2.05(f), 2.09(f),
2.09(h), 2.10 and 3.05), equitable adjustment will be made
so that, in effect, all such amounts will be shared among
them ratably in accordance with their Pro Rata Shares,
whether received by voluntary payment, by the exercise of
the right of set-off or banker's lien, by counterclaim or
cross action or by the enforcement of any or all of the
Obligations (excluding amounts paid with respect to
Competitive Bid Loans, the fees described in SECTION 2.06
and the amounts described in SECTIONS 2.05(f), 2.09(f),
2.09(h), 2.10 and 3.05) and (ii) if any of them shall by
voluntary payment or by the exercise of any right of
counterclaim, set-off, banker's lien or otherwise, receive
payment of a proportion of the aggregate amount of the
Obligations held by it, which is greater than its Pro Rata
Share of the payments on account of the Obligations
(excluding amounts paid with respect to Competitive Bid
Loans, the fees described in Section 2.06 and the amounts
described in SECTIONS 2.05(f), 2.09(f), 2.09(h) and 2.10),
the one receiving such excess payment shall purchase,
without recourse or warranty, an undivided interest and
participation (which it shall be deemed to have done
simultaneously upon the receipt of such payment) in such
Obligations owed to the others so that all such recoveries
with respect to such Obligations shall be applied ratably in
accordance with their Pro Rata Shares.
(b) If all or part of such excess payment received
by a purchasing party under this SECTION 12.06 is thereafter
recovered from such party, such party's purchases shall be
rescinded and the purchase prices paid for such
participation shall be returned to such party to the extent
necessary to adjust for such recovery, but without interest
except to the extent the purchasing party is required to pay
interest in connection with such recovery. Southland agrees
that any Senior Lender so purchasing a participation from
another Senior Lender pursuant to this SECTION 12.06 may, to
the fullest extent permitted by law, exercise all its rights
of payment (including, subject to SECTION 12.05, the right
of set-off) with respect to such
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participation as fully as if such Senior Lender were the
direct creditor of Southland in the amount of such
participation.
12.07. AMENDMENTS AND WAIVERS. No amendment or
modification of any provision of this Agreement, the Term
Notes or the Revolving Notes shall be effective without the
written agreement of the Requisite Senior Lenders and
Southland, and no termination or waiver of any provision of
this Agreement, the Term Notes or the Revolving Notes, or
consent to any departure by Southland therefrom, shall in
any event be effective without the written concurrence of
the Requisite Senior Lenders, which the Requisite Senior
Lenders shall have the right to grant or withhold at their
sole discretion; EXCEPT that any amendment, modification, or
waiver of any provision of ARTICLE I, II or III relating to
(i) the Commitments, (ii) the principal amount and the
extension of the final maturity of the Term Loans, the
Revolving Loans and Facility Letters of Credit, (iii) the
reduction of interest rates applicable to the Term Loans or
the Revolving Loans, (iv) the amount of the fees payable
pursuant hereto, (v) the definitions of "Requisite Senior
Lenders", "Pro Rata Share" and "Revolving Credit Termination
Date", and (vi) the provisions contained in SECTION 2.07(d)
and in this SECTION 12.07, shall be effective only if
evidenced by a writing signed by or on behalf of all Senior
Lenders. No amendment, modification, termination or waiver
of any provision of any Note shall be effective without the
written concurrence of the holder of that Note. No
amendment, modification, termination or waiver of any
provision of any Facility Letter of Credit shall be
effective without the written concurrence of the Issuing
Bank which issued such Facility Letter of Credit. No
amendment, modification, termination, or waiver of any
provision of ARTICLE XI hereof or any other provision
referring to the Administrative Agent or the Co-Agent shall
be effective without the written concurrence of the
Administrative Agent or the Co-Agent, as applicable. The
Administrative Agent may, but shall have no obligation to,
with the concurrence of any Senior Lender, execute
amendments, modifications, waivers or consents on behalf of
that Senior Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on
Southland in any case shall entitle Southland to any other
or further notice or demand in similar or other
circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this
SECTION 12.07 shall be binding on each holder of any Note at
the time outstanding, each future holder of any Note, and,
if signed by Southland, on Southland.
12.08. INDEPENDENCE OF COVENANTS. All covenants
hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of,
another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is
taken or condition exists.
12.09. NOTICES. Unless otherwise specifically
provided herein, any notice or other communication herein
required or permitted to be given shall be in writing and
may be personally served, telecopied, telexed or sent by
courier service or United States mail and shall be deemed to
have been given
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when delivered in person or by courier service, upon receipt
of a telecopy or telex or four (4) Business Days after
deposit in the United States mail (registered or certified,
with postage prepaid and properly addressed). Notices to
the Administrative Agent pursuant to ARTICLE II shall not be
effective until received by the Administrative Agent. For
the purposes hereof, the addresses of the parties hereto
(until notice of a change thereof is delivered as provided
in this SECTION 12.09) shall be (a) with respect to
Southland, as set forth below Southland's name on the
signature pages of this Agreement, (b) with respect to the
Senior Lenders and Issuing Banks, as set forth below each
party's name on the signature pages of this Agreement or of
the Assignment and Acceptance by which such Person became a
Senior Lender or Issuing Bank hereunder or (c) as to each
party, at such other address as may be designated by such
party in a written notice to all of the other parties.
12.10. SURVIVAL OF WARRANTIES AND AGREEMENTS. All
agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement, the
Notes and the other Loan Documents, the making and repayment
of the Loans and issuance and discharge of Facility Letters
of Credit hereunder.
12.11. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of the
Administrative Agent, any Senior Lender, any holder of a
Note or any Issuing Bank in the exercise of any power, right
or privilege under any of the Loan Documents shall impair
such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or
privilege preclude other or further exercises thereof or of
any other right, power or privilege. All rights and
remedies existing under the Loan Documents are cumulative to
and not exclusive of any rights or remedies otherwise
available.
12.12. ADVICE OF COUNSEL. Southland and each
Senior Lender and Issuing Bank understand that the
Administrative Agent's counsel represents only the interests
of the Administrative Agent and its Affiliates and that
Southland, other Senior Lenders and other Issuing Banks are
advised to obtain their own counsel. Southland represents
and warrants to the Administrative Agent and the other
Holders that it has discussed this Agreement with its
counsel.
12.13. MARSHALING; PAYMENTS SET ASIDE. Neither any
Senior Lender, any Issuing Bank, nor the Administrative
Agent shall be under any obligation to ▇▇▇▇▇▇▇▇ any assets
in favor of Southland or any other party or against or in
payment of any or all of the Obligations. To the extent
that Southland makes a payment or payments to the
Administrative Agent or the Senior Lenders or the
Administrative Agent, the Senior Lenders exercise their
rights of setoff, and such payment or payments or the
proceeds of such setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set
aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then to the extent of
such recovery, the obligation or part
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thereof originally intended to be satisfied, and all rights
and remedies therefor, shall be revived and continued in
full force and effect as if such payment had not been made
or such set-off had not occurred.
12.14. SEVERABILITY. In case any provision in or
obligation under this Agreement or the Notes or the other
Loan Documents shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not
in any way be affected or impaired thereby.
12.15. HEADINGS. Section headings in this Agreement
are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.
12.16. GOVERNING LAW. THIS AGREEMENT AND THE LOAN
DOCUMENTS, AND ALL ISSUES RELATING TO THIS AGREEMENT AND THE
LOAN DOCUMENTS, INCLUDING THE VALIDITY, ENFORCEABILITY,
INTERPRETATION OR CONSTRUCTION OF THIS AGREEMENT, ANY LOAN
DOCUMENT OR ANY PROVISION OF ANY OF THEM, SHALL BE GOVERNED
BY, AND SHALL BE DETERMINED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
12.17. LIMITATION OF LIABILITY. No claim may be
made by Southland, any Senior Lender or other Person against
the Administrative Agent, the Co-Agent, any other Senior
Lender, any Issuing Bank or the Affiliates, directors,
officers, employees, attorneys or agents of any of them for
any special, indirect, consequential or punitive damages in
respect of any claim for breach of contract or any other
theory of liability arising out of or related to the
transactions contemplated by this Agreement, or any act,
omission or event occurring in connection therewith; and
Southland and each Senior Lender hereby waives, releases and
agrees not to ▇▇▇ upon any claim for any such damages,
whether or not accrued and whether or not known or suspected
to exist in its favor.
12.18. SUCCESSORS AND ASSIGNS; SUBSEQUENT HOLDERS
OF NOTES. This Agreement and the other Loan Documents shall
be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the
parties hereto and the successors and permitted assigns of
the Senior Lenders. The terms and provisions of this
Agreement shall inure to the benefit of any assignee or
transferee of the Notes, and in the event of such transfer
or assignment, the rights and privileges herein conferred
upon Senior Lenders shall automatically extend to and be
vested in such transferee or assignee, all subject to the
terms and conditions hereof. Southland's rights or any
interest therein hereunder may not be assigned without the
written consent of all Senior Lenders.
12.19. CONSENT TO JURISDICTION AND SERVICE OF
PROCESS; WAIVER OF JURY TRIAL. ALL JUDICIAL PROCEEDINGS
BROUGHT AGAINST SOUTHLAND WITH RESPECT
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TO THIS AGREEMENT OR ANY NOTE OR ANY OTHER LOAN DOCUMENTS
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, SOUTHLAND ACCEPTS, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY
FINAL JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT OR ANY NOTE OR ANY OF THE OTHER LOAN DOCUMENTS
FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS AVAILABLE.
SOUTHLAND IRREVOCABLY DESIGNATES AND APPOINTS CT CORPORATION
SYSTEM AS ITS AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH
SERVICE BEING HEREBY ACKNOWLEDGED BY SUCH PERSONS TO BE
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. SOUTHLAND
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO THE NOTICE ADDRESS SPECIFIED IN
ACCORDANCE WITH SECTION 12.09, SUCH SERVICE TO BECOME
EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. EACH OF
SOUTHLAND, THE ADMINISTRATIVE AGENT, THE ISSUING BANKS AND
THE SENIOR LENDERS IRREVOCABLY WAIVES TRIAL BY JURY AND ANY
OBJECTION, INCLUDING WITHOUT LIMITATION, ANY OBJECTION OF
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH
JURISDICTION. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT OF ANY SENIOR LENDER TO BRING PROCEEDINGS
AGAINST SOUTHLAND IN THE COURTS OF ANY OTHER JURISDICTION.
12.20. COUNTERPARTS; EFFECTIVENESS;
Inconsistencies. This Agreement and any amendments,
waivers, consents, or supplements may be executed in
counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
This Agreement shall become effective against each party
hereto as of the date when all of the conditions set forth
in SECTION 4.01 have been satisfied or duly waived in
accordance with SECTION 12.07 (the "Effective Date").
Subject to the provisions of this Agreement (including,
without limitation, the premises hereto), this Agreement and
each of the other Loan Documents shall be construed to the
extent reasonable to be consistent with the other, but to
the extent that the terms and conditions of this Agreement
are actually inconsistent with the terms and conditions of
any other Loan Document, this Agreement shall govern.
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12.21. FOREIGN BANK CERTIFICATIONS. Each Senior
Lender that is not created or organized under the laws of
the United States of America or a political subdivision
thereof has delivered to Southland and the Administrative
Agent, or in the case of a Senior Lender which becomes a
party to this Agreement after the date hereof, will deliver
to Southland and the Administrative Agent within fifteen
(15) days after the date on which such Senior Lender becomes
a Senior Lender pursuant to SECTION 12.01, a true and
accurate certificate executed in duplicate by a duly
authorized officer of such Senior Lender in the form set out
in EXHIBIT 15-A or 15-B, as applicable, to the effect that
such Senior Lender is capable under the provisions of an
applicable tax treaty concluded by the United States of
America (in which case the certificate shall be accompanied
by two executed copies of Form 1001 of the Internal Revenue
Service of the United States of America, the "IRS") or under
Section 1442 of the Internal Revenue Code (in which case the
certificate shall be accompanied by two copies of Form 4224
of the IRS) of receiving payments of interest hereunder
without deduction or withholding of United States federal
income tax. Each Senior Lender further agrees to deliver to
Southland and the Administrative Agent from time to time a
true and accurate certificate executed in duplicate by a
duly authorized officer of such Senior Lender substantially
in the form set out in EXHIBIT 15-A or 15-B, as applicable,
before or promptly upon the occurrence of any event
requiring a change in the most recent certificate previously
delivered by it to Southland and the Administrative Agent
pursuant to this SECTION 12.21. Further, each Senior Lender
which delivers EXHIBIT 15-A covenants and agrees to deliver
to Southland and the Administrative Agent within fifteen
(15) days prior to every third anniversary of the Effective
Date, on which this Agreement is still in effect, two
accurate and complete original signed copies of Form 1001
(or any successor form or forms required under the Internal
Revenue Code or the applicable regulations promulgated
thereunder) and EXHIBIT 15-A, and each Senior Lender that
delivers EXHIBIT 15-B covenants and agrees to deliver to
Southland and the Administrative Agent within fifteen (15)
days prior to the beginning of each subsequent taxable year
of such Senior Lender during which this agreement is still
in effect, two accurate and complete original signed copies
of IRS Form 4224 (or any successor form or forms required
under the Internal Revenue Code or the applicable
regulations promulgated thereunder) and EXHIBIT 15-B. Each
such certificate shall certify as to one of the following:
(i) that such Senior Lender is capable of
receiving payments of interest hereunder without
deduction or withholding of United States of America
federal income tax;
(ii) that such Senior Lender is not
capable of receiving payments of interest hereunder
without deduction or withholding of United States of
America federal income tax as specified therein but
is capable of recovering the full amount of any such
deduction or withholding from a source other than
Southland; or
(iii) that such Senior Lender is not
capable of receiving payments of interest hereunder
without deduction or withholding of
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United States of America federal income tax as
specified therein and that it is not capable of
recovering the full amount of the same from a source
other than Southland.
Each Senior Lender shall promptly furnish to
Southland and the Administrative Agent such additional
documents as may be reasonably required by Southland or the
Administrative Agent to establish any exemption from or
reduction of any taxes required to be deducted or withheld
and which may be obtained without undue expense to such
Senior Lender.
12.22. PERFORMANCE OF OBLIGATIONS. Southland agrees
that the Administrative Agent, upon direction of the
Requisite Senior Lenders, may, but shall have no obligation
to, make any payment or perform any act required of
Southland under any of the Loan Documents.
12.23. LIMITATION ON AGREEMENTS. All agreements
between Southland and the Administrative Agent, any Senior
Lender or any Issuing Bank, whether now existing or
hereafter arising and whether written or oral, are hereby
expressly limited so that in no contingency or event
whatsoever, whether by reason of demand being made on the
Notes or otherwise, shall the amount paid, or agreed to be
paid, to the Administrative Agent, any Senior Lender or any
Issuing Bank for the use, forbearance, or detention of the
money to be loaned under this Agreement or otherwise or for
the payment or performance of any covenant or obligation
contained herein or in any other Loan Document exceed the
maximum amount permissible under applicable law. If, as a
result of any circumstances whatsoever, fulfillment of any
provision hereof or of any of such documents, at the time
performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by applicable
usury law, then, IPSO FACTO, the obligation to be fulfilled
shall be reduced to the limit of such validity, and if, from
any such circumstance, the Administrative Agent, any Senior
Lender or any Issuing Bank shall ever receive interest or
anything which might be deemed interest under applicable law
which would exceed the highest lawful rate, such amount
which would be excessive interest shall be applied to the
reduction of the principal amount owing on account of the
Notes or the amounts owing on other obligations of Southland
to the Administrative Agent, any Senior Lender or any
Issuing Bank under the Loan Documents and not to the payment
of interest, or if such excessive interest exceeds the
unpaid balance of principal of the Notes and the amounts
owing on other obligations of Southland to the
Administrative Agent, any Senior Lender or any Issuing Bank
under the Loan Documents, as the case may be, such excess
shall be refunded to Southland. All sums paid or agreed to
be paid to the Administrative Agent, any Senior Lender or
any Issuing Bank for the use, forbearance or detention of
the indebtedness of Southland to the Administrative Agent,
any Senior Lender or any Issuing Bank shall, to the extent
permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such
indebtedness until payment in full of the principal
(including the period of any renewal or extension thereof)
so that the interest on account of such indebtedness shall
not exceed the maximum
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amount permitted by applicable law. The terms and
provisions of this SECTION 12.23 shall control and supersede
every other provision of all agreements between Southland
and the Lender.
12.24. CONSTRUCTION. The parties acknowledge that
each party and its counsel have reviewed and revised this
Agreement and that the normal rule of construction to the
effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation
of this Agreement or any amendments or exhibits hereto.
12.25. CONFIDENTIALITY. Subject to
SECTION 12.01(d), the Senior Lenders shall hold all non-
public information obtained pursuant to the requirements of
this Agreement which has been identified as such by
Southland in accordance with its customary procedures for
handling confidential information of this nature and in
accordance with safe and sound banking practices and in any
event may make disclosure reasonably required by a bona fide
transferee or participant in connection with the
contemplated transfer of any Note or participation therein
or as required or requested by any Governmental Authority or
representative thereof or pursuant to legal process;
PROVIDED, that unless specifically prohibited by applicable
law or court order, each Senior Lender shall notify
Southland of any request by any Governmental Authority or
representative thereof (other than any such request in
connection with an examination of the financial condition of
such Senior Lender by such Governmental Authority) for
disclosure of any such non-public information prior to
disclosure of such information; and FURTHER provided, that
in no event shall any Senior Lender be obligated or required
to return any materials furnished by Southland.
IN WITNESS WHEREOF, this Agreement has been duly
executed as of the date first above written.
BORROWER: THE SOUTHLAND CORPORATION
By ---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
Notice Address:
Southland Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Vice President and Treasurer
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
The Southland Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Legal Department
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
-109-
ADMINISTRATIVE AGENT,
SENIOR LENDER AND
ISSUING BANK: CITIBANK, N.A., as the Administrative
Agent, as a Senior Lender and as an
Issuing Bank
By
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-Fact
Notice Address and
Domestic Lending Office:
Citibank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Sidley & Austin
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, III
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Eurodollar Lending Office or
Eurodollar Affiliate:
Citibank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Pro Rata Share: 17.06915477%
Term Loan Commitment: $38,405,598.24
Revolving Credit Commitment:
$68,276,619.10
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CO-AGENT,
SENIOR LENDER
AND ISSUING BANK: THE SAKURA BANK, LIMITED, NEW YORK
BRANCH
By: -----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
Notice Address and
Domestic Lending Office:
The Sakura Bank, Limited, New York
Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Eurodollar Lending Office or
Eurodollar Affiliate:
The Sakura Bank, Limited, New York
Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Pro Rata Share 17.06915477%
Term Loan Commitment: $38,405,598.24
Revolving Credit Commitment:
$68,276,619.10
-111-
SENIOR LENDER
AND ISSUING BANK: THE ASAHI BANK, LTD., NEW YORK BRANCH
By: -------------------------------
Name: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Deputy General
Manager
Notice Address and
Domestic Lending Office:
The Asahi Bank, Ltd., New York
Branch
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(Credit Matters)
▇▇▇▇▇▇ ▇▇▇▇▇▇
(Administrative Matters)
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Eurodollar Lending Office or
Eurodollar Affiliate:
The Asahi Bank, Ltd., New York
Branch
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Pro Rata Share: 11.80021954%
Term Loan Commitment: $26,550,493.96
Revolving Credit Commitment:
$47,200,878.16
-112-
SENIOR LENDER
AND ISSUING BANK: BANK OF TOKYO MITSUBISHI TRUST COMPANY
By: -----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
Notice Address and
Domestic Lending Office:
Bank of Tokyo Mitsubishi Trust
Company
1251 Avenue of the Americas, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: H. Kinumatsu/Japanese
Corporate Banking Dept.
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Bank of Tokyo Mitsubishi Trust
Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: ▇. ▇▇▇▇▇▇▇▇▇/Legal Dept.
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Eurodollar Lending Office or
Eurodollar Affiliate:
Bank of Tokyo Mitsubishi Trust
Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: H. Kinumatsu/Japanese
Corporate Banking Dept.
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Pro Rata Share: 11.80021954%
Term Loan Commitment: $26,550,493.96
Revolving Credit Commitment:
$47,200,878.16
-113-
SENIOR LENDER
AND ISSUING BANK: THE FUJI BANK, LIMITED, HOUSTON AGENCY
By: --------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
Title: Vice President and Joint
Manager
Notice Address and
Domestic Lending Office:
The Fuji Bank, Limited, Houston
Agency
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
(Credit Matters)
▇▇▇▇▇ ▇▇▇
(Administrative Matters)
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Eurodollar Lending Office or
Eurodollar Affiliate:
The Fuji Bank, Limited, Houston
Agency
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Pro Rata Share: 11.80021954%
Term Loan Commitment: $26,550,493.96
Revolving Credit Commitment:
$47,200,878.16
-114-
SENIOR LENDER
AND ISSUING BANK: THE MITSUI TRUST AND BANKING COMPANY,
LIMITED, NEW YORK BRANCH
By: -------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President & Manager
Notice Address and Domestic Lending
Office:
The Mitsui Trust and Banking
Company, Limited, New York Branch
1251 Avenue of the Americas, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Eurodollar Lending Office or
Eurodollar Affiliate:
The Mitsui Trust and Banking
Company, Limited, New York Branch
1251 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Pro Rata Share: 11.80021954%
Term Loan Commitment: $26,550,493.96
Revolving Credit Commitment:
$47,200,878.16
-115-
SENIOR LENDER
AND ISSUING BANK: THE INDUSTRIAL BANK OF JAPAN TRUST
COMPANY
By: THE INDUSTRIAL BANK OF JAPAN,
LIMITED, HOUSTON OFFICE, Authorized
Representative
By: -------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President
Notice Address and
Domestic Lending Office:
The Industrial Bank of Japan
Trust Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Eurodollar Lending Office or
Eurodollar Affiliate:
The Industrial Bank of Japan
Trust Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Pro Rata Share: 5.90010977%
Term Loan Commitment: $13,275,246.98
Revolving Credit Commitment:
$23,600,439.08
-116-
SENIOR LENDER
AND ISSUING BANK: NATIONSBANK OF TEXAS, N.A.
By: --------------------------------
Name: Bianca Nemmen
Title: Senior Vice President
Notice Address and
Domestic Lending Office:
NationsBank of Texas, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
NationsBank of Texas, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Eurodollar Lending Office or
Eurodollar Affiliate:
NationsBank of Texas, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Pro Rata Share: 5.90010977%
Term Loan Commitment: $13,275,246.98
Revolving Credit Commitment:
$23,600,439.08
SENIOR LENDER
AND ISSUING BANK: BANKERS TRUST COMPANY
By: ------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Notice Address and
Domestic Lending Office:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Eurodollar Lending Office or
Eurodollar Affiliate:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Pro Rata Share: 3.43029638%
Term Loan Commitment: $7,718,166.85
Revolving Credit Commitment:
$13,721,185.51
-118-
SENIOR LENDER: CIBC, INC.
By: CIBC WOOD GUNDY SECURITIES CORP.,
as Agent
By: --------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Director
Notice Address and
Domestic Lending Office:
CIBC, Inc.
Two Paces West
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Eurodollar Lending Office or
Eurodollar Affiliate:
CIBC, Inc.
Two Paces West
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Pro Rata Share: 3.43029638%
Term Loan Commitment: $7,718,166.85
Revolving Credit Commitment:
$13,721,185.51
-119-
ISSUING BANK: CANADIAN IMPERIAL BANK OF COMMERCE
By: CIBC WOOD GUNDY SECURITIES
CORP., as Agent
By:---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Director
Notice Address:
Canadian Imperial Bank of Commerce
Two Paces West
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
-120-