Exhibit 10.1
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EXECUTION VERSION
AMENDMENT AND RESTATEMENT AGREEMENT dated as
of November 8, 2006 (this "Amendment") relating to
the Credit Agreement dated as of June 27, 2001, as
amended and restated as of September 30, 2005 (the
"Original Credit Agreement"), among Rite Aid
Corporation, a Delaware corporation (the "Borrower"),
the lenders from time to time party thereto (the
"Lenders"), Citicorp North America, Inc., as
administrative agent (in such capacity, the
"Administrative Agent") and collateral processing
agent and Bank of America, N.A., as syndication agent.
RECITALS
A. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Original Credit Agreement or, to
the extent specified herein, in the Original Credit Agreement as amended hereby.
B. The Borrower desires to establish a senior secured term loan
facility under the Original Credit Agreement in an aggregate principal amount of
$145,000,000 (the "Tranche 1 Term Facility", the term loans thereunder, "Tranche
1 Term Loans"), the proceeds of which will be utilized (a) to repay Revolving
Loans in an aggregate principal amount of $142,025,000, the proceeds of which
were used to repay $142,025,000 aggregate principal amount of the Borrower's
12.50% Senior Secured Notes, which matured on September 15, 2006 (the "12.50%
Notes") and (b) for general corporate purposes (including the payment of accrued
interest).
C. The Borrower and The Xxxx Xxxxx Group (PJC) Inc. (the "Seller") have
entered into a Stock Purchase Agreement dated as of August 23, 2006 (the
"Acquisition Agreement"), pursuant to which the Borrower intends to acquire (the
"Acquisition") all the outstanding Equity Interests in The Xxxx Xxxxx Group
(PJC) USA, Inc. ("JCG-USA") or, if the Seller effects the Reorganization (as
defined in the Acquisition Agreement), all the outstanding Equity Interests in
JCG (PJC) USA, LLC ("JCG LLC"), which will acquire all the outstanding Equity
Interests in JCG-USA in such Reorganization. For purposes of this Amendment,
"Holdings" means JCG-USA or, if the Reorganization is effected, JCG LLC. Upon
consummation of the Acquisition, Holdings, together with its subsidiaries, will
own and operate the network of retail drugstores conducting business under the
Eckerd and Xxxxxx tradenames (the "Acquired Business"). On the date on which the
Acquisition in consummated pursuant to the Acquisition Agreement (the
"Acquisition Closing Date"), the Borrower will transfer to the Seller, in
consideration of the Acquisition, (i) $2,300,000,000 in cash, subject to certain
adjustments, including a reduction in the event that the Borrower assumes (the
"Debt Assumption") the Seller's 8.50% Senior Subordinated Notes due 2014 (the
"JC Subordinated Notes") and adjustments in respect to working capital (as
adjusted, the "Cash Consideration") and (ii) 250,000,000 shares of common stock
of the Borrower.
D. On the Acquisition Closing Date, and in order, among other things,
to finance a portion of the Cash Consideration, the Borrower intends (a) to
establish an additional senior secured term loan facility under the First
Restated Credit Agreement (as defined below) in an aggregate principal amount of
$1,105,000,000 (the "Tranche 2 Term Facility", the term loans thereunder,
"Tranche 2 Term Loans"), a portion of which will be available on a delayed draw
basis on (and not before) the Borrowing Base Date (as defined below), and (b) to
(i) issue and sell, in one or more public offerings or Rule 144A/Regulation S or
other private placements, one or more tranches of notes (the "New Notes") in an
aggregate principal amount (the "Notes Amount") equal to $1,720,000,000 minus
the aggregate principal amount, if any, of JC Subordinated Notes assumed in the
Debt Assumption or (ii) to the extent the Borrower does not issue the New Notes
in the Notes Amount on or prior to the Acquisition Closing Date, borrow an
amount equal to the Notes Amount minus the aggregate principal amount of New
Notes that are so issued from one or more lenders under a new bridge loan
facility (the "Bridge Facility"). The first date following the Acquisition
Closing Date on which a consolidated balance sheet of the Borrower including the
assets of the Acquired Business is filed with the Securities and Exchange
Commission, and on which the applicable conditions set forth in the Second
Restated Credit Agreement (as defined below) are satisfied or waived, is
referred to as the "Borrowing Base Date". The proceeds of the Tranche 2 Term
Loans to be made on the Borrowing Base Date will be used, among other things, to
repay any Revolving Borrowings previously made by the Borrower in order (a) to
repay $250,000,000 aggregate principal amount of the Borrower's 4.75%
Convertible Notes due 2006 (the "4.75% Convertible Notes"), (b) to repay
$184,074,000 aggregate principal amount of the Borrower's 7.125% Senior Notes
due 2007 (the "7.125% Notes") and (c) for general corporate purposes (including
the payment of accrued interest).
E. The Borrower has requested that the Original Credit Agreement be
amended and restated (the "First Amendment and Restatement") substantially in
the form of Exhibit A to this Amendment (the Original Credit Agreement, as so
amended and restated, the "First Restated Credit Agreement"), effective as of
the date on which the Tranche 1 Term Loans are made, on the terms and subject to
the conditions set forth herein.
F. The Borrower has further requested that the First Restated Credit
Agreement be further amended and restated (the "Second Amendment and
Restatement") substantially in the form of Exhibit B to this Amendment (the
First Restated Credit Agreement, as so amended and restated, the "Second
Restated Credit Agreement"), effective as of the Acquisition Closing Date, to
permit the Acquisition, to establish the Tranche 2 Term Facility, the New Notes
and/or the Bridge Facility, to forgo taking a security interest in assets of the
Acquired Business until the Borrowing Base Date and to effect other
modifications to the First Restated Credit Agreement as contemplated hereby.
G. The Required Lenders, the Collateral Agent and the Administrative
Agent are willing, on the terms and subject to the conditions hereof, to effect
the First Amendment and Restatement, and the Required Lenders (as defined in the
First Restated Credit Agreement) and the Administrative Agent are willing, on
the terms and subject to the conditions hereof, to effect the Second Amendment
and Restatement.
AGREEMENTS
In consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
First Amendment and Restatement
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SECTION 1.1. First Amendment and Restatement of Credit Agreement. (a)
The Original Credit Agreement and the Definitions Annex is hereby amended and
restated, effective as of the First Restatement Effective Date (as defined
below), substantially in the form of the First Restated Credit Agreement
attached as Exhibit A to this Amendment. The schedules to the Original Credit
Agreement are amended in their entirety to read in the form of Exhibit A-1 to
this Amendment (it being understood that all exhibits to the Original Credit
Agreement, in the forms thereof immediately prior to the First Restatement
Effective Date, shall constitute exhibits to the First Restated Credit
Agreement).
(b) The parties hereto authorize an amendment to the Collateral Trust
and Intercreditor Agreement which conforms the definitions annex in the
Collateral Trust and Intercreditor Agreement to the definitions contained in the
First Restated Credit Agreement.
SECTION 1.2. Tranche 1 Term Loans. (a) Subject to the terms and
conditions set forth herein, each lender under the Tranche 1 Term Facility (the
"Tranche 1 Lenders") agrees to make Tranche 1 Term Loans to the Borrower on the
First Restatement Effective Date in a principal amount equal to such Tranche 1
Lender's Tranche 1 Term Commitment. A Person shall become a Tranche 1 Lender and
a party to the First Restated Credit Agreement by executing and delivering to
the Administrative Agent, on or prior to the First Restatement Effective Date, a
signature page to this Amendment as a "Tranche 1 Lender" setting forth the
amount of Tranche 1 Term Loans that such Person commits to make. The "Tranche 1
Term Commitment" of any Tranche 1 Lender will be the amount of such commitment
set forth in its signature page to this Amendment or such lesser amount as is
allocated to it by Citigroup Global Markets Inc. ("CGMI") and notified to it
prior to the First Restatement Effective Date. The commitments of the Tranche 1
Lenders are several and no Tranche 1 Lender shall be responsible for any other
Tranche 1 Lender's failure to make Tranche 1 Term Loans.
(b) The obligations of each Tranche 1 Lender to make Tranche 1 Term
Loans is subject to the satisfaction of the following conditions:
(i) The conditions set forth in paragraphs (a), (b) and (c) of
Section 4.02 of the First Restated Credit Agreement shall be satisfied on
and as of the First Restatement Effective Date, and the Tranche 1 Lenders
shall have received a certificate of a Financial Officer, dated the First
Restatement Effective Date, to such effect.
(ii) The Collateral and Guarantee Requirement (as defined in the
First Restated Credit Agreement) shall have been satisfied.
(iii) The Administrative Agent shall have received a favorable
legal opinion of each of (i) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
counsel to the Borrower and (ii) Xxxxxx Sari, General Counsel of the
Borrower, in each case addressed to the Administrative Agent and the
Lenders under the First Restated Credit Agreement and dated the First
Restatement Effective Date, in substantially the forms of Exhibits J-1 and
J-2 to the Original Credit Agreement, modified, however, to address the
Tranche 1 Term Loans, this Amendment and the First Restated Credit
Agreement, and covering such other matters relating to the Loan Parties,
the other Senior Loan Documents, the Senior Collateral and the transactions
contemplated hereby to occur on the First Restatement Effective Date as the
Administrative Agent may reasonably request, and otherwise reasonably
satisfactory to the Administrative Agent. The Borrower hereby requests such
counsel to deliver such opinions.
(iv) The Administrative Agent shall have received such documents
and certificates as the Administrative Agent or its counsel may reasonably
request relating to the good standing of the Borrower and the organization
and existence of each Loan Party, the organizational documents of each Loan
Party, the resolutions of each Loan Party that authorize the transactions
contemplated hereby, the incumbency and authority of the Person or Persons
executing and delivering the Amendment and the other documents contemplated
hereby, all in form and substance reasonably satisfactory to the
Administrative Agent.
(v) The Lenders (as defined in the First Restated Credit
Agreement) shall have received all documentation and other information
required by bank regulatory authorities under applicable "know your
customer" and anti-money laundering rules and regulations, including the
U.S.A. Patriot Act.
(vi) To the extent deemed necessary or appropriate by the
Administrative Agent, each Senior Collateral Document shall have been
amended to provide the benefits thereof to the Tranche 1 Term Loans and the
obligations of the Loan Parties in connection therewith on the same basis
as such benefits are provided to the Revolving Exposures.
(vii) Each Loan Party that has not executed and delivered this
Amendment shall have entered into a written instrument reasonably
satisfactory to the Administrative Agent pursuant to which it confirms that
it consents to this Amendment, and that the Senior Collateral Documents to
which it is party will continue to apply in respect of the First Restated
Credit Agreement and the Senior Obligations thereunder.
(viii) The Borrowing Base Amount on the First Restatement
Effective Date shall be no less than the sum of (A) the aggregate Revolving
Exposures on the First Restatement Effective Date and (B) the aggregate
principal amount of Tranche 1 Term Loans to be made on the First
Restatement Effective Date. The Administrative Agent shall have received a
completed Borrowing Base Certificate dated the First Restatement Effective
Date and signed by a Financial Officer.
(ix) The conditions to effectiveness of the First Amendment and
Restatement set forth in Section 1.3 hereof shall have been satisfied.
SECTION 1.3. First Restatement Effectiveness. The First Amendment and
Restatement of the Original Credit Agreement effected hereby shall become
effective as of the first date (the "First Restatement Effective Date") on which
the following conditions have been satisfied:
(a) The Administrative Agent (or its counsel) shall have received duly
executed counterparts hereof that, when taken together, bear the signatures of
(i) the Borrower, (ii) each Tranche 1 Lender, (iii) the Required Lenders, (iv)
the Collateral Agent and (v) the Administrative Agent. The aggregate amount of
Tranche 1 Term Commitments shall not exceed $145,000,000.
(b) The conditions to the making of the Tranche 1 Term Loans set forth
in Section 1.2(b) hereof shall have been satisfied.
(c) To the extent invoiced, the Administrative Agent shall have
received payment or reimbursement of its reasonable out-of-pocket expenses in
connection with this Amendment, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent.
(d) CGMI shall have received payment of all fees owed to them by the
Borrower on the First Restatement Effective Date in connection with this
Amendment and the transactions contemplated hereby.
The Administrative Agent shall notify the Borrower, the Tranche 1
Lenders and the Lenders of the First Restatement Effective Date and such notice
shall be conclusive and binding. Notwithstanding the foregoing, the First
Amendment and Restatement shall not become effective, and the obligations of the
Tranche 1 Lenders hereunder to make Tranche 1 Term Loans will automatically
terminate, if each of the conditions set forth or referred to in Sections 1.2(b)
and 1.3 hereof has not been satisfied at or prior to 5:00 p.m., New York City
time, on November 15, 2006.
ARTICLE II
Second Amendment and Restatement
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SECTION 2.1. Second Amendment and Restatement of Credit Agreement. (a)
The First Restated Credit Agreement and the Definitions Annex is hereby amended
and restated, effective as of the Second Restatement Effective Date (as defined
below), substantially in the form of the Second Restated Credit Agreement
attached as Exhibit B to this Amendment. The schedules to the First Restated
Credit Agreement are amended in their entirety to read in the form of Exhibit
B-1 to this Amendment (it being understood that all exhibits to the First
Restated Credit Agreement, in the forms thereof immediately prior to the Second
Restatement Effective Date, shall constitute exhibits to the Second Restated
Credit Agreement).
(b) The parties hereto authorize an amendment to the Collateral Trust
and Intercreditor Agreement which conforms the definitions annex in the
Collateral Trust and Intercreditor Agreement to the definitions contained in the
Second Restated Credit Agreement.
(c) The parties hereto authorize the Administrative Agent to, and the
Administrative Agent may in its sole discretion, modify the Senior Collateral
Documents and the schedules and the exhibits to the Second Restated Credit
Agreement to correct inaccuracies or omissions in the Senior Collateral
Documents and such schedules and exhibits that result from the consummation of
the Transactions (as defined in the Second Restated Credit Agreement); provided
that no such modification shall be material and adverse to the interests of the
Loan Parties or the Lenders (as defined in the Second Restated Credit
Agreement); and provided further, that, no such modification shall become
effective until the lapse of five Business Days after the Agent has distributed
the modified Senior Collateral Documents, schedules and exhibits to the Lenders
(as defined in the Second Restated Credit Agreement) without the Required
Lenders (as defined in the Second Restated Credit Agreement) having objected to
such modification.
SECTION 2.2. Tranche 2 Term Loans. (a) Subject to the terms and
conditions set forth herein and in the Second Restated Credit Agreement, each
lender under the Tranche 2 Term Facility (the "Tranche 2 Lenders") agrees to
make its pro rata share of the Second Restatement Effective Date Loans (as
defined below) and its pro rata share of the Borrowing Base Date Loans (as
defined below), in each case determined based upon such Tranche 2 Lender's
Tranche 2 Term Commitment. A Person shall become a Tranche 2 Lender and a party
to the Second Restated Credit Agreement by executing and delivering to the
Administrative Agent, on or prior to the Second Restatement Effective Date, a
signature page to this Amendment as a "Tranche 2 Lender" setting forth the
amount of Tranche 2 Term Loans that such Person commits to make. The "Tranche 2
Term Commitment" of any Tranche 2 Lender will be the amount of such commitment
set forth in its signature page to this Amendment or such lesser amount as is
allocated to it by CGMI and notified to it prior to the Second Restatement
Effective Date. The commitments of the Tranche 2 Lenders are several and no
Tranche 2 Lender shall be responsible for any other Tranche 2 Lender's failure
to make Tranche 2 Term Loans.
(b) The obligations of each Tranche 2 Lender to make its pro rata share
of the Second Restatement Effective Date Loans (determined based upon such
Tranche 2 Lender's Tranche 2 Term Commitment) on the Second Restatement
Effective Date is subject to the satisfaction of the following conditions:
(i) The Administrative Agent shall have received a borrowing
request in a form acceptable to the Administrative Agent requesting that
the Tranche 2 Lenders make Tranche 2 Term Loans to the Borrower on the
Second Restatement Effective Date in an aggregate principal amount of up to
$680,000,000 and, in any event, not less than $650,000,000 (such Tranche 2
Term Loans, the "Second Restatement Effective Date Loans").
(ii) The Acquisition shall have been consummated, or shall be
consummated substantially simultaneously with the making of the Tranche 2
Term Loans to be made on the Second Restatement Effective Date, in
accordance in all material respects with applicable law and the Acquisition
Agreement and related documentation (and no provision of the Acquisition
Agreement shall have been waived, amended or otherwise modified in a manner
material and adverse to the Lenders without the consent of CGMI).
(iii) The Borrower shall have received (A) gross cash proceeds
from the issuance of the New Notes in an amount equal to the Notes Amount
or (B) to the extent the Borrower does not issue the New Notes in the Notes
Amount on or prior to the Second Restatement Effective Date, the Notes
Amount minus the aggregate principal amount of the New Notes issued
pursuant to clause (A), in gross cash proceeds from borrowings under the
Bridge Facility.
(iv) The Borrower (A) shall have obtained requisite approval from
the Investor Agents and the Program Agent under the Borrower's receivables
facility under the Receivables Financing Agreement dated as of September
21, 2004 (the "Receivables Facility") for an amendment that will permit the
consummation of the Transactions (as defined in the Second Restated Credit
Agreement) without constituting a Change in Control under the Receivables
Facility, will reduce the requisite availability of Revolving Loans to no
more than $100,000,000 until the Borrowing Base Date and will otherwise
permit the consummation of the Transactions (as defined in the Second
Restated Credit Agreement) or (B) shall have obtained, or substantially
simultaneously with the making of the portion of the Tranche 2 Term Loans
to be made on the Second Restatement Effective Date will obtain, a new
tranche of term loans (the "Receivables Incremental Term Facility") in an
aggregate principal amount of $400,000,000 under the Second Restated Credit
Agreement.
(v) After giving effect to the Transactions (as defined in the
Second Restated Credit Agreement) to occur on the Second Restatement
Effective Date, (A) all amounts owing under the 12.50% Notes, the 4.75%
Convertible Notes and the 7.125% Notes will have been repaid in full, (B)
Holdings will have outstanding no Indebtedness or preferred Equity
Interests other than (1) its Guarantees of (w) the Second Restated Credit
Agreement including, if applicable, the Receivables Incremental Term
Facility, (x) the New Notes and/or the Bridge Facility, (y) if applicable,
the JC Subordinated Notes and (z) the Borrower's 8.125% Senior Secured
Notes due 2010, the Borrower's 9.50% Senior Secured Notes due 2011, the
Borrower's 9.25% Senior Notes due 2013 and the Borrower's 7.50% Senior
Secured Notes due 2015 (collectively, the "Existing Indebtedness to be
Guaranteed") and (2) certain preferred Equity Interests, all of which will
be owned by the Borrower, (C) the subsidiaries of Holdings will have
outstanding no Indebtedness or preferred Equity Interests other than (1)
their Guarantees of (w) the Second Restated Credit Agreement including, if
applicable, the Receivables Incremental Term Facility, (x) the New Notes
and/or the Bridge Facility, (y) if applicable, the JC Subordinated Notes
and (z) the Existing Indebtedness to be Guaranteed, (2) other Indebtedness
permitted by the Second Restated Credit Agreement and (3) solely if the
Reorganization is consummated prior to the Second Restatement Effective
Date, certain preferred Equity Interests in Xxxx Xxxxx Holdings (USA) Inc.,
all of which will be owned by Holdings (both before and after the
consummation of the Reorganization), (D) Holdings will have outstanding no
common Equity Interests other than common Equity Interests owned by the
Borrower and (E) the subsidiaries of Holdings will have outstanding no
common Equity Interests other than common Equity Interests owned by
Holdings or a direct or indirect subsidiary of Holdings.
(vi) Except as expressly contemplated by the Acquisition
Agreement, since March 4, 2006, there shall not have occurred any Purchaser
Material Adverse Effect (as defined in the Acquisition Agreement) or any
fact, occurrence, condition, change, development, effect, circumstance or
event that would, individually or in the aggregate, be reasonably likely to
have or result in a Purchaser Material Adverse Effect (as defined in the
Acquisition Agreement). Since August 23, 2006, there shall not have
occurred or come to exist any event, occurrence, fact, condition, change,
development or effect that, individually or in the aggregate, has had or
resulted in or would reasonably be expected to have or result in a
Purchaser Material Adverse Effect (as defined in the Acquisition
Agreement). Except as expressly contemplated by the Acquisition Agreement
or as set forth in Schedule 2.10 of the Seller Disclosure Schedule (as
defined in the Acquisition Agreement), since May 27, 2006, there shall not
have occurred any Company Material Adverse Effect (as defined in the
Acquisition Agreement) or any fact, occurrence, condition, change,
development, effect, circumstance or event that would, individually or in
the aggregate, be reasonably likely to have or result in a Company Material
Adverse Effect (as defined in the Acquisition Agreement). Since August 23,
2006, there shall not have occurred or come to exist any event, occurrence,
fact, condition, change, development or effect that, individually or in the
aggregate, has had or resulted in or would reasonably be expected to have
or result in a Company Material Adverse Effect (as defined in the
Acquisition Agreement).
(vii) There shall not be any action, suit or proceeding by or
before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or
any of the Subsidiaries (including Holdings or any of its subsidiaries) (A)
as to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected to have a
Purchaser Material Adverse Effect (as defined in the Acquisition
Agreement), (B) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be
expected to have a Company Material Adverse Effect (as defined in the
Acquisition Agreement) or (C) which would reasonably be expected to affect
the legality, validity or enforceability of the Senior Loan Documents.
(viii) The Lenders (as defined in the Second Restated Credit
Agreement) shall have received (A) audited consolidated balance sheets and
related statements of operations, shareholders' equity and cash flows of
each of the Borrower and the Acquired Business for each of the three most
recently completed fiscal years (it being understood that the audit reports
for all such financial statements shall not be subject to any
qualifications or limitations with respect to the scope of the audit),
which financial statements for the most recently completed fiscal year
shall not reflect any material and adverse inaccuracy in the financial
statements previously provided to the Lenders (as defined in the Second
Restated Credit Agreement) and (B) unaudited consolidated balance sheets
and related statements of operations and cash flows of each of the Borrower
and the Acquired Business for (1) each subsequent fiscal quarter ended at
least 45 days before the Second Restatement Effective Date and (2) to the
extent available (and in any event without footnotes), each fiscal month
after the most recent fiscal period for which financial statements were
received by the Lenders (as defined in the Second Restated Credit
Agreement) as described above and ended at least 30 days before the Second
Restatement Effective Date, in each case prepared in accordance with U.S.
generally accepted accounting principles. In addition, the Lenders (as
defined in the Second Restated Credit Agreement) shall have received a pro
forma consolidated balance sheet of the Borrower as of the date of the most
recent balance sheets delivered pursuant to clauses (A) and (B)(1) above,
giving pro forma effect to the Transactions (as defined in the Second
Restated Credit Agreement), which shall not reflect any material and
adverse inaccuracy in the financial statements previously provided to the
Lenders (as defined in the Second Restated Credit Agreement).
(ix) The Lenders (as defined in the Second Restated Credit
Agreement) shall have received financial projections for (A) the Borrower
and its subsidiaries and (B) Holdings and its subsidiaries, in each case
for the five-year period ending December 31, 2011, broken down by fiscal
quarter for each fiscal quarter ending on or prior February 2, 2008, in
form and substance reasonably satisfactory to the Lenders (as defined in
the Second Restated Credit Agreement).
(x) All requisite Governmental Authorities and other third Persons
shall have approved or consented to the transactions contemplated hereby to
the extent required and material, all applicable material waiting or appeal
periods (including any extensions thereof) shall have expired and there
shall be no governmental or judicial action, actual or threatened, that
could reasonably be expected to restrain, prevent or impose materially
burdensome conditions on the transactions contemplated hereby.
(xi) The Collateral and Guarantee Requirement (as defined in the
Second Restated Credit Agreement) and the Interim Collateral and Guarantee
Requirement (as defined in the Second Restated Credit Agreement) shall have
been satisfied and the Administrative Agent shall have received (A) a
completed Perfection Certificate dated the Second Restatement Effective
Date and signed by an executive officer of the Borrower or a Financial
Officer, together with all attachments contemplated thereby, including the
results of a search of the Uniform Commercial Code (or equivalent) filings
made with respect to the Loan Parties and Holdings and its subsidiaries in
the jurisdictions contemplated by the Perfection Certificate and copies of
the financing statements (or similar documents) disclosed by such search
and evidence reasonably satisfactory to the Administrative Agent that the
Liens indicated by such financing statements are permitted by Section 6.02
of the Second Restated Credit Agreement or have been released and (B)
evidence that the concentration account arrangements contemplated by the
Senior Collateral Documents shall be in full force and effect.
(xii) The Interim Intercreditor Agreement (as defined in the
Second Restated Credit Agreement) shall have become effective in accordance
with the terms thereof.
(xiii) The Administrative Agent shall have received reasonably
satisfactory evidence that the insurance required by Section 5.07 of the
Second Restated Credit Agreement is in effect.
(xiv) The Lenders (as defined in the Second Restated Credit
Agreement) shall have received all documentation and other information
required by bank regulatory authorities under applicable "know your
customer" and anti-money laundering rules and regulations, including the
U.S.A. Patriot Act.
(xv) The Administrative Agent shall have received a favorable
legal opinion of each of (A) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
counsel to the Borrower and (B) Xxxxxx Sari, General Counsel of the
Borrower, in each case addressed to the Administrative Agent and the
Lenders under the Second Restated Credit Agreement and dated the Second
Restatement Effective Date, in substantially the forms of Exhibits J-1 and
J-2 to the Original Credit Agreement, modified, however, to address the
Loans (as defined in the Second Restated Credit Agreement), this Amendment
and the Second Restated Credit Agreement, and covering such other matters
relating to the Loan Parties, the other Senior Loan Documents, the Senior
Collateral and the transactions contemplated hereby to occur on the Second
Restatement Effective Date as the Administrative Agent may reasonably
request, and otherwise reasonably satisfactory to the Administrative Agent.
The Borrower hereby requests such counsel to deliver such opinions.
(xvi) The Administrative Agent shall have received such documents
and certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of each
Loan Party, the organizational documents of each Loan Party, the
resolutions of each Loan Party that authorize the transactions contemplated
hereby, the incumbency and authority of the Person or Persons executing and
delivering the Amendment and the other documents contemplated hereby, all
in form and substance reasonably satisfactory to the Administrative Agent.
(xvii) To the extent deemed necessary or appropriate by the
Administrative Agent, each Senior Collateral Document shall have been
amended to provide the benefits thereof to the Tranche 2 Term Loans and the
obligations of the Loan Parties in connection therewith on the same basis
as such benefits are provided to the Revolving Exposures and the Tranche 1
Term Loans.
(xviii) Each Loan Party that has not executed and delivered this
Amendment shall have entered into a written instrument reasonably
satisfactory to the Administrative Agent pursuant to which it confirms that
it consents to this Amendment, and that the Senior Collateral Documents to
which it is party will continue to apply in respect of the Second Restated
Credit Agreement and the Senior Obligations thereunder.
(xix) The Borrowing Base Amount on the Second Restatement
Effective Date shall be no less than the sum of (A) the aggregate principal
amount of Loans (as defined in the First Restated Credit Agreement)
outstanding on the Second Restatement Effective Date and (B) the LC
Exposure on the Second Restatement Effective Date. The Administrative Agent
shall have received a completed Borrowing Base Certificate dated the Second
Restatement Effective Date and signed by a Financial Officer.
(xx) After giving effect to the Acquisition and the borrowing of
the Tranche 2 Term Loans to be made on the Second Restatement Effective
Date, the Estimated Borrowing Base Amount (as defined in the Second
Restated Credit Agreement) on the Second Restatement Effective Date shall
be no less than the sum of (A) the aggregate principal amount of Loans (as
defined in the Second Restated Credit Agreement) outstanding on the Second
Restatement Effective Date and (B) the LC Exposure on the Second
Restatement Effective Date.
(xxi) The Administrative Agent shall have received such valuations
and appraisals of the assets of the Acquired Business that will compose the
Borrowing Base from Hilco Appraisal Services, LLC, Xxxxxxxx & Associates or
any other valuation or appraisal firm reasonably satisfactory to the
Administrative Agent, which valuations and appraisals shall be reasonably
satisfactory to the Administrative Agent.
(xxii) The Administrative Agent shall have completed a field
examination of the assets of the Acquired Business that will compose the
Borrowing Base, the results of which shall be reasonably satisfactory to
the Tranche 2 Term Lenders.
(c) The obligations of each Tranche 2 Lender to make its pro rata
share of the Borrowing Base Date Loans (determined based upon such Tranche
2 Lender's Tranche 2 Term Commitment) on the Borrowing Base Date shall be
subject to the satisfaction of the conditions set forth in the Second
Restated Credit Agreement. The "Borrowing Base Date Loans" will be the
Tranche 2 Term Loans to be made to the Borrower on the Borrowing Base Date
in an aggregate principal amount of $1,105,000,000 minus the aggregate
principal amount of the Second Restatement Effective Date Loans.
SECTION 2.3. Second Restatement Effectiveness. The Second Amendment and
Restatement of the First Restated Credit Agreement effected hereby shall become
effective as of the first date (the "Second Restatement Effective Date") on
which the following conditions have been satisfied:
(a) The Administrative Agent (or its counsel) shall have received duly
executed counterparts hereof that, when taken together, bear the signatures of
(i) the Borrower, (ii) each Tranche 2 Lender, (iii) the Required Lenders (as
defined in the First Restated Credit Agreement) and (iv) the Administrative
Agent. The aggregate amount of Tranche 2 Term Commitments shall not exceed
$1,105,000,000.
(b) The Administrative Agent (or its counsel) shall have received duly
executed counterparts of the Interim Collateral Documents (in each case as
defined in the Second Restated Credit Agreement) that, when taken together, bear
the signatures of each party thereto.
(c) The conditions to the making of the Tranche 2 Term Loans on the
Second Restatement Effective Date set forth in Section 2.2(b) hereof shall have
been satisfied.
(d) To the extent invoiced, the Administrative Agent shall have
received payment or reimbursement of its reasonable out-of-pocket expenses in
connection with this Amendment, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent.
(e) CGMI shall have received payment of all fees owed to them by the
Borrower on the Second Restatement Effective Date in connection with this
Amendment and the transactions contemplated hereby.
The Administrative Agent shall notify the Borrower, the Tranche 2 Lenders and
the Lenders (as defined in the First Restated Credit Agreement) of the Second
Restatement Effective Date and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the Second Amendment and Restatement shall not
become effective, and the obligations of the Tranche 2 Lenders hereunder to make
Tranche 2 Term Loans will automatically terminate, if each of the conditions set
forth or referred to in Sections 2.2(b) and 2.3 hereof has not been satisfied at
or prior to 5:00 p.m., New York City time, on the Outside Date (as defined in
the Acquisition Agreement).
SECTION 2.4. Additional Amendments. (a) clause (i) of the proviso in
the definition of "Borrowing Base Amount" in Section 1.01 of the Second Restated
Credit Agreement is amended to replace the amount "$500,000,000" with the amount
"$800,000,000".
(b) The amendments effected by Section 2.4(a) hereof shall become
effective as of the first date on which the following conditions have been
satisfied:
(i) The Second Restatement Effective Date shall have occurred.
(ii) The Administrative Agent (or its counsel) shall have received
duly executed counterparts hereof that, when taken together, bear the
signatures of each Lender (as defined in the Second Restated Credit
Agreement).
ARTICLE III
Miscellaneous
-------------
SECTION 3.1. Representations and Warranties. (a) To induce the other
parties hereto to enter into this Amendment, the Borrower represents and
warrants to each of the Lenders (as defined in the First Restated Credit
Agreement) and the Administrative Agent that, as of the First Restatement
Effective Date and after giving effect to the transactions and amendments to
occur on the First Restatement Effective Date:
(i) This Amendment has been duly authorized, executed and
delivered by the Borrower and constitutes, and the First Restated Credit
Agreement, as amended and restated hereby on the First Amendment
Restatement Date, will constitute, its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
(ii) The representations and warranties set forth in Article III
of the First Restated Credit Agreement are true and correct in all material
respects on and as of the First Restatement Effective Date, with the same
effect as though made on and as of the First Restatement Effective Date,
except to the extent such representations and warranties expressly relate
to an earlier date (in which case such representations and warranties were
true and correct in all material respects as of such earlier date).
(iii) No Default (as defined in the First Restated Credit
Agreement) or Event of Default (as defined in the First Restated Credit
Agreement) has occurred and is continuing.
(b) To induce the other parties hereto to enter into this Amendment,
the Borrower represents and warrants to each of the Lenders (as defined in the
Second Restated Credit Agreement) and the Administrative Agent that, as of the
Second Restatement Effective Date and after giving effect to the transactions
and amendments to occur on the Second Restatement Effective Date:
(i) This Amendment has been duly authorized, executed and
delivered by the Borrower and constitutes, and the Second Restated Credit
Agreement, as amended and restated hereby on the Second Amendment
Restatement Date and as further amended by Section 2.3(a) hereof on the
date such amendments become effective pursuant to Section 2.3(b) hereof,
will constitute, its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
(ii) The representations and warranties set forth in Sections
3.01, 3.02, 3.08 and 3.16 of the Second Restated Credit Agreement are true
and correct in all material respects on and as of the Second Restatement
Effective Date, with the same effect as though made on and as of the Second
Restatement Effective Date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties were true and correct in all material
respects as of such earlier date). The representations and warranties set
forth in Article III of the Second Restated Credit Agreement (other than
those set forth in Sections 3.01, 3.02, 3.04(c), 3.06(a), 3.08, and 3.16 of
the Second Restated Credit Agreement) are true and correct on and as of the
Second Restatement Effective Date, except where the failure of such
representations and warranties to be true and correct has not resulted in
and is not reasonably likely to result in a Purchaser Material Adverse
Effect (as defined in the Acquisition Agreement) or a Company Material
Adverse Effect (as defined in the Acquisition Agreement).
(iii) No Default (as defined in the Second Restated Credit
Agreement) or Event of Default (as defined in the Second Restated Credit
Agreement) has occurred and is continuing.
SECTION 3.2. Effect of Amendment. (a) Except as expressly set forth
herein, this Amendment shall not by implication or otherwise limit, impair,
constitute a waiver of, or otherwise affect the rights and remedies of, the
Lenders or the Agents under the Original Credit Agreement, the First Restated
Credit Agreement, the Second Restated Credit Agreement or any other Senior Loan
Document, and shall not alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in the
Original Credit Agreement, the First Restated Credit Agreement, the Second
Restated Credit Agreement or any other Senior Loan Document, all of which are
ratified and affirmed in all respects and shall continue in full force and
effect. Nothing herein shall be deemed to entitle any Loan Party to a consent
to, or a waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Original
Credit Agreement, the First Restated Credit Agreement, the Second Restated
Credit Agreement or any other Senior Loan Document in similar or different
circumstances. This Amendment shall apply to and be effective only with respect
to the provisions of the Original Credit Agreement, the First Restated Credit
Agreement, the Second Restated Credit Agreement and the other Senior Loan
Documents specifically referred to herein.
(b) On and after the First Restatement Effective Date and the Second
Restatement Effective Date, each reference in the Original Credit Agreement to
"this Agreement", "hereunder", "hereof", "herein", or words of like import, and
each reference to the Original Credit Agreement, "thereunder", "thereof",
"therein" or words of like import in any other Senior Loan Document shall be
deemed a reference to the First Restated Credit Agreement or the Second Restated
Credit Agreement, as the case may be. This Amendment shall constitute a "Senior
Loan Document" for all purposes of the Original Credit Agreement, the First
Restated Credit Agreement, the Second Restated Credit Agreement and the other
Senior Loan Documents.
SECTION 3.3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 3.4. Costs and Expenses. The Borrower agrees to reimburse the
Administrative Agent for its reasonable out-of-pocket expenses in connection
with this Amendment, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent.
SECTION 3.5. Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument.
Delivery of any executed counterpart of a signature page of this Amendment by
facsimile transmission or other electronic imaging means shall be as effective
as delivery of a manually executed counterpart hereof.
SECTION 3.6. Headings. The headings of this Amendment are for purposes
of reference only and shall not limit or otherwise affect the meaning hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Restatement Agreement to be duly executed by their respective officers as of the
date first above written.
RITE AID CORPORATION,
by
/s/ Xxxxxx X. Sari
-----------------------------------------
Name: Xxxxxx X. Sari
Title: Exec. Vice Pres. And
Gen. Counsel
CITICORP NORTH AMERICA, INC., as
Administrative Agent, Collateral
Processing Agent and a Lender,
by
/s/ Xxxxxxx Xxxx
-----------------------------------------
Name: Xxxxxxx Xxxx
Title: Director
BANK OF AMERICA, N.A,
as Syndication Agent and a Lender,
by
/s/ Xxxxxxxxx Xxxxxxxxxx
-----------------------------------------
Name: Xxxxxxxxx Xxxxxxxxxx
Title: Vice President
Lender signature page to Amendment and
Restatement Agreement relating to the
Rite Aid Credit Agreement
Name of Institution:
/s/ JPMorgan Chase Bank, N.A.
-------------------------------
as a Lender,
by
/s/ Xxxxxxxxx Xxxxxxx
--------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: Vice President
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ General Electric Capital Corporation
-----------------------------------------
as a Lender,
by
/s/ Xxxxxx X. Xxx Xxxxx
--------------------------
Name: Xxxxxx X. Xxx Xxxxx
Title: Duly Authorized Signatory
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ Xxxxx Fargo Foothill, LLC
-------------------------------
as a Lender,
by
/s/ Xxxx Bradford_
--------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ GMAC Commercial Finance
-------------------------------
as a Lender,
by
/s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
_/s/ Xxxxxxx Xxxxx Capital, a division of
------------------------------------------------
Xxxxxxx Xxxxx Business Financial Services Inc.
------------------------------------------------
as a Lender,
by
/s/ Xxxxxxx Xxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ Wachovia
----------------------
as a Lender,
by
/s/ Xxxxx Xxxxxx
--------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ The CIT Group/Business Credit, Inc.
-----------------------------------------
as a Lender,
by
/s/ Xxx Xxxxxx
--------------------------
Name: Xxx Xxxxxx
Title: Vice President
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ National City Business Credit, Inc.
-----------------------------------------
as a Lender,
by
/s/ Xxxxxx Xxxxxx
--------------------------
Name: Xxxxxx Xxxxxx
Title: Director
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ Citizens Bank of Pennsylvania
-----------------------------------
as a Lender,
by
/s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ UBS Loan Finance LLC
--------------------------
as a Lender,
by
/s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Director
For any Lender requiring a second signature
line:
by
/s/ Isja R. Otsa
--------------------------
Name: Isja R. Otsa
Title: Associate Director
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ LaSalle Business Credit, LLC
---------------------------------
as a Lender,
by
/s/ Xxxxxxx Xxxxxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: First Vice President
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ Union Bank of California, N.A.
----------------------------------
as a Lender,
by
/s/ Xxxxxxx Xxxxxx
--------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ HSBC Business Credit (USA) Inc.
-----------------------------------
as a Lender,
by
/s/ Xxxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
For any Lender requiring a second signature
line:
by
/s/ Xxxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ AmSouth Bank
--------------------------
as a Lender,
by
/s/ Xxxxxxx Xxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxx
Title: Attorney-in-fact
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ North Fork Business Capital Corporation
-------------------------------------------
as a Lender,
by
/s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ PNC Bank
--------------------------
as a Lender,
by
/s/ Thanwantie Somar
--------------------------
Name: Thanwantie Somar
Title: Assistant Vice President
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ RZB Finance LLC
--------------------------
as a Lender,
by
/s/ Xxxxxxxxx Xxxxx
--------------------------
Name: Xxxxxxxxx Xxxxx
Title: Group Vice President
For any Lender requiring a second signature
line:
by
/s/ Xxx Xxxxxxxxxxx
--------------------------
Name: Xxx Xxxxxxxxxxx
Title: Vice President
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ Siemens Financial Services, Inc.
-------------------------------------
as a Lender,
by
/s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ US Bank, N.A.
--------------------------
as a Lender,
by
/s/ Xxxxxxx Xxxxxx
--------------------------
Name: Xxxxxxx Xxxxxx
Title: Assistant Vice President
For any Lender requiring a second signature line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ UPS Capital Corporation
----------------------------
as a Lender,
by
/s/ Xxxx X. Xxxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxxx
Title: Director of Portfolio Management
For any Lender requiring a second signature line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ Israel Discount Bank of New York
------------------------------------
as a Lender,
by
/s/ Xxxx Xxxxxx
--------------------------
Name: Xxxx Xxxxxx
Title: First Vice President
For any Lender requiring a second signature line:
by
/s/ Xxxxxx Xxxxxxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: Senior Vice President
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ M&T Bank
----------------------
as a Lender,
by
/s/ Xxxxxx X. Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx Xxxxxxx
Title: Vice President
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ Sumitomo Mitsui Banking Corporation
-----------------------------------------
as a Lender,
by
/s/ Xxxxxx Xxxxx
--------------------------
Name: Xxxxxx Xxxxx
Title: General Manager
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ Xxxxxxx Business Credit Corp.
----------------------------------
as a Lender,
by
/s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Vice President
For any Lender requiring a second signature
line:
by
--------------------------
Name:
Title:
Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution:
/s/ NM Rothschild & Sons Limited
---------------------------------
as a Lender,
by
/s/ Xxxxxxxxxxx Xxxxxxx
----------------------------
Name: Xxxxxxxxxxx Xxxxxxx
Title: Managing Director
For any Lender requiring a second signature
line:
by
/s/ X. Xxxxx
--------------------------
Name: X. Xxxxx
Title: Managing Director
Tranche 1 Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution: Tranche 1 Term Commitment:
/s/ Bank of America, N.A. $21,500,000.00
--------------------------
as a Tranche 1 Lender
by
/s/ Xxxxxxxxx Xxxxxxxxxx
---------------------------
Name: Xxxxxxxxx Xxxxxxxxxx
Title: Vice President
For any Tranche 1 Lender requiring a second
signature line:
by
---------------------------
Name:
Title:
Tranche 1 Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution: Tranche 1 Term Commitment:
/s/ Xxxxx Fargo Foothill, LLC $12,428,571.43
-----------------------------
as a Tranche 1 Lender
by
/s/ Xxxx Xxxxxxxx
--------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
For any Tranche 1 Lender requiring a second
signature line:
by
--------------------------
Name:
Title:
Tranche 1 Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution: Tranche 1 Term Commitment:
_/s/ Xxxxxxx Xxxxx Capital, a division of $20,781,119.47
-----------------------------------------
Xxxxxxx Xxxxx Business Financial Services Inc.
------------------------------------------------
as a Tranche 1 Lender
by
/s/ Xxxxxxx Xxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
For any Tranche 1 Lender requiring a second
signature line:
by
--------------------------
Name:
Title:
Tranche 1 Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution: Tranche 1 Term Commitment:
/s/ Wachovia $20,781,119.47
--------------------------
as a Tranche 1 Lender
by
/s/ Xxxxx Xxxxxx
--------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
For any Tranche 1 Lender requiring a second
signature line:
by
--------------------------
Name:
Title:
Tranche 1 Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution: Tranche 1 Term Commitment:
/s/ The CIT Group/Business Credit, Inc. $10,000,000.00
---------------------------------------
as a Tranche 1 Lender
by
/s/ Xxx Xxxxxx
--------------------------
Name: Xxx Xxxxxx
Title: Vice President
For any Tranche 1 Lender requiring a second signature line:
by
--------------------------
Name:
Title:
Tranche 1 Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution: Tranche 1 Term Commitment:
/s/ National City Business Credit, Inc. $10,390,559.73
----------------------------------------
as a Tranche 1 Lender
by
/s/ Xxxxxx Xxxxxx
--------------------------
Name: Xxxxxx Xxxxxx
Title: Director
For any Tranche 1 Lender requiring a second
signature line:
by
--------------------------
Name:
Title:
Tranche 1 Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution: Tranche 1 Term Commitment:
/s/ Citizens Bank of Pennsylvania $10,000,000.00
---------------------------------
as a Tranche 1 Lender
by
/s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
For any Tranche 1 Lender requiring a second signature line:
by
--------------------------
Name:
Title:
Tranche 1 Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution: Tranche 1 Term Commitment:
/s/ UBS Loan Finance LLC $8,312,447.79
--------------------------
as a Tranche 1 Lender
by
/s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Director
For any Tranche 1 Lender requiring a second
signature line:
by
/s/ Isja R. Otsa
--------------------------
Name: Isja R. Otsa
Title: Associate Director
Tranche 1 Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution: Tranche 1 Term Commitment:
/s/ LaSalle Business Credit, LLC $5,000,000.00
--------------------------------
as a Tranche 1 Lender
by
/s/ Xxxxxxx Xxxxxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: First Vice President
For any Tranche 1 Lender requiring a second
signature line:
by
--------------------------
Name:
Title:
Tranche 1 Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution: Tranche 1 Term Commitment:
/s/ HSBC Business Credit (USA) Inc. $5,610,902.26
-----------------------------------
as a Tranche 1 Lender
by
/s/ Xxxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
For any Tranche 1 Lender requiring a second
signature line:
by
/s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Tranche 1 Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution: Tranche 1 Term Commitment:
/s/ AmSouth Bank $5,195,279.87
--------------------------
as a Tranche 1 Lender
by
/s/ Xxxxxxx Xxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxx
Title: Attorney-in-fact
For any Tranche 1 Lender requiring a second
signature line:
by
--------------------------
Name:
Title:
Tranche 1 Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution: Tranche 1 Term Commitment:
/s/ Israel Discount Bank of New York $2,500,000.00
------------------------------------
as a Tranche 1 Lender
by
/s/ Xxxx Xxxxxx
--------------------------
Name: Xxxx Xxxxxx
Title: First Vice President
For any Tranche 1 Lender requiring a second
signature line:
by
/s/ Xxxxxx Xxxxxxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: Senior Vice President
Tranche 2 Lender signature page to
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement
Name of Institution: Tranche 2 Term Commitment:
$
-------------------------- --------------------------
as a Tranche 2 Lender
by
--------------------------
Name:
Title:
For any Tranche 2 Lender requiring a second
signature line:
by
--------------------------
Name:
Title:
EXHIBIT A
First Restated Credit Agreement
-------------------------------
================================================================================
CREDIT AGREEMENT
dated as of June 27, 2001,
as amended and restated as of November 8, 2006,
among
RITE AID CORPORATION,
The Lenders Party Hereto,
CITICORP NORTH AMERICA, INC.,
as Administrative Agent and Collateral Processing Agent,
BANK OF AMERICA, N.A.,
as Syndication Agent,
JPMORGAN CHASE BANK , N.A.,
as Co-Documentation Agent,
XXXXX FARGO FOOTHILL, LLC,
as Co-Documentation Agent
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Documentation Agent
___________________________
CITIGROUP GLOBAL MARKETS INC.,
as Lead Arranger and Bookrunner
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
SECTION 1.01. Defined Terms................................................................1
SECTION 1.02. Classification of Loans and Borrowings......................................29
SECTION 1.03. Terms Generally.............................................................29
SECTION 1.04. Accounting Terms; GAAP......................................................30
SECTION 1.05. Terms Defined in Definitions Annex..........................................30
ARTICLE II
The Credits
SECTION 2.01. Commitments.................................................................30
SECTION 2.02. Loans and Borrowings........................................................31
SECTION 2.03. Requests for Borrowings.....................................................32
SECTION 2.04. Swingline Loans.............................................................32
SECTION 2.05. Letters of Credit...........................................................34
SECTION 2.06. Funding of Borrowings.......................................................39
SECTION 2.07. Interest Elections..........................................................40
SECTION 2.08. Termination and Reduction of Commitments....................................41
SECTION 2.09. Repayment of Loans; Evidence of Indebtedness................................42
SECTION 2.10. Repayment of Tranche 1 Term Loans...........................................42
SECTION 2.11. Prepayment of Loans.........................................................43
SECTION 2.12. Fees........................................................................44
SECTION 2.13. Interest....................................................................45
SECTION 2.14. Alternate Rate of Interest..................................................46
SECTION 2.15. Increased Costs.............................................................46
SECTION 2.16. Break Funding Payments......................................................47
SECTION 2.17. Taxes.......................................................................48
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Setoffs..................49
SECTION 2.19. Mitigation Obligations; Replacement of Lenders..............................51
SECTION 2.20. Adjustments to Borrowing Base Advance Rates.................................51
SECTION 2.21. Incremental Loans...........................................................52
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers........................................................53
SECTION 3.02. Authorization; Enforceability...............................................53
SECTION 3.03. Governmental Approvals; No Conflicts........................................53
SECTION 3.04. Financial Condition; No Material Adverse Change.............................54
SECTION 3.05. Properties..................................................................54
SECTION 3.06. Litigation and Environmental Matters........................................55
SECTION 3.07. Compliance with Laws and Agreements.........................................55
SECTION 3.08. Investment and Holding Company Status.......................................55
SECTION 3.09. Taxes.......................................................................55
SECTION 3.10. ERISA.......................................................................55
SECTION 3.11. Disclosure; Accuracy of Information.........................................56
SECTION 3.12. Subsidiaries................................................................56
SECTION 3.13. Insurance...................................................................56
SECTION 3.14. Labor Matters...............................................................56
SECTION 3.15. Solvency....................................................................57
SECTION 3.16. Federal Reserve Regulations.................................................57
SECTION 3.17. Security Interests..........................................................57
SECTION 3.18. Use of Proceeds.............................................................57
ARTICLE IV
Conditions
SECTION 4.01. First Restatement Effective Date............................................58
SECTION 4.02. Each Credit Event...........................................................58
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other Information..................................59
SECTION 5.02. Notices of Material Events..................................................61
SECTION 5.03. Information Regarding Collateral............................................62
SECTION 5.04. Existence; Conduct of Business..............................................63
SECTION 5.05. Payment of Obligations......................................................63
SECTION 5.06. Maintenance of Properties...................................................63
SECTION 5.07. Insurance...................................................................63
SECTION 5.08. Books and Records; Inspection and Audit Rights; Collateral and Borrowing
Base Reviews................................................................65
SECTION 5.09. Compliance with Laws........................................................65
SECTION 5.10. Use of Proceeds and Letters of Credit.......................................66
SECTION 5.11. Additional Subsidiaries.....................................................67
SECTION 5.12. Further Assurances..........................................................67
SECTION 5.13. Subsidiaries................................................................67
SECTION 5.14. Intercompany Transfers......................................................67
SECTION 5.15. Inventory Purchasing........................................................67
SECTION 5.16. Cash Management System......................................................68
SECTION 5.17. Termination of Factoring Transactions.......................................68
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness; Certain Equity Securities.....................................69
SECTION 6.02. Liens.......................................................................71
SECTION 6.03. Fundamental Changes.........................................................73
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions...................73
SECTION 6.05. Asset Sales.................................................................74
SECTION 6.06. Sale and Leaseback Transactions.............................................76
SECTION 6.07. Hedging Agreements..........................................................76
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness.......................76
SECTION 6.09. Transactions with Affiliates................................................78
SECTION 6.10. Restrictive Agreements......................................................79
SECTION 6.11. Amendment of Material Documents.............................................81
SECTION 6.12. Consolidated Fixed Charge Coverage Ratio....................................81
SECTION 6.13. Restrictions on Asset Holdings by the Borrower..............................82
SECTION 6.14. Corporate Separateness......................................................82
ARTICLE VII
Events of Default
ARTICLE VIII
The Agents
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices.....................................................................88
SECTION 9.02. Waivers; Amendments.........................................................89
SECTION 9.03. Expenses; Indemnity; Damage Waiver..........................................91
SECTION 9.04. Successors and Assigns......................................................92
SECTION 9.05. Survival....................................................................96
SECTION 9.06. Integration; Effectiveness..................................................96
SECTION 9.07. Severability................................................................96
SECTION 9.08. Right of Setoff.............................................................97
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process..................97
SECTION 9.10. WAIVER OF JURY TRIAL........................................................97
SECTION 9.11. Headings....................................................................98
SECTION 9.12. Confidentiality.............................................................98
SECTION 9.13. Interest Rate Limitation....................................................99
SECTION 9.14. Collateral Trust and Intercreditor Agreement................................99
SECTION 9.15. Cash Sweep..................................................................99
SECTION 9.16. Electronic Communications..................................................100
SECTION 9.17. USA Patriot Act............................................................101
ANNEXES:
-------
Annex 1 - Definitions Annex
Annex 2 - Subordination Terms
SCHEDULES:
---------
Schedule 1.01 - Subsidiary Loan Parties
Schedule 2.01 - Commitments
Schedule 3.04 - Undisclosed Liabilities
Schedule 3.05(c) - Leased Warehouses and Distribution Centers
Schedule 3.06(a) - Litigation
Schedule 3.06(b) - Environmental Matters
Schedule 3.12 - Subsidiaries
Schedule 3.13 - Insurance
Schedule 5.11 - Subsidiaries
Schedule 6.01(a)(x) - Existing Indebtedness
Schedule 6.01(b) - Equity Issuances
Schedule 6.02(x) - Liens
Schedule 6.04 - Investments
Schedule 6.08(a) - Restricted Payments
Schedule 6.09 - Affiliate Transactions
EXHIBITS:
--------
Exhibit A-1 Form of Tranche 1 Term Note
Exhibit A-2 Form of Revolving Credit Note
Exhibit B - Form of Borrowing Base Certificate
Exhibit C - Form of Assignment and Acceptance Agreement
Exhibit D - Form of Senior Subsidiary Guarantee Agreement
Exhibit E - Form of Senior Subsidiary Security Agreement
Exhibit F - Form of Senior Indemnity, Subrogation and
Contribution Agreement
Exhibit G - Form of Second Priority Subsidiary Guarantee Agreement
Exhibit H - Form of Second Priority Subsidiary Security Agreement
Exhibit I - Form of Second Priority Indemnity, Subrogation and
Contribution Agreement
Exhibit J-1 - Form of Opinion of Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP,
Special New York Counsel to the Borrower
Exhibit J-2 - Form of Opinion of Xxxxxx Sari, General Counsel
of the Borrower
CREDIT AGREEMENT dated as of June 27, 2001,
as amended and restated as of November 8, 2006 (this
"Agreement"), among RITE AID CORPORATION, a Delaware
corporation, the LENDERS party hereto, CITICORP NORTH
AMERICA, INC., as Administrative Agent and Collateral
Processing Agent and BANK OF AMERICA, N.A., as
Syndication Agent.
On the Effective Date (such term and each other capitalized
term used but not otherwise defined in this preamble having the meaning assigned
to such term in Article I below or in the Definitions Annex), the Borrower, the
Administrative Agent, the Collateral Agent and certain of the Lenders entered
into this Agreement pursuant to which certain of the Lenders thereunder agreed
to extend credit to the Borrower on a revolving credit basis and to make term
loans to the Borrower. The parties hereto desire to amend this Agreement and to
restate it in its entirety giving effect to such amendment.
The Borrower has requested the Tranche 1 Term Lenders to
extend credit hereunder in the form of Tranche 1 Term Loans to be made on the
First Restatement Effective Date in an aggregate principal amount of
$145,000,000.
The proceeds of the Tranche 1 Term Loans made on the First
Restatement Effective Date will be used to repay Revolving Loans in an aggregate
principal amount of $142,025,000, the proceeds of which were used to repay
$142,025,000 aggregate principal amount of the 12.5% Notes, which matured on
September 15, 2006 and for general corporate purposes (including the payment of
accrued interest). The proceeds of Revolving Loans and Swingline Loans made
after the First Restatement Effective Date will be used for general corporate
purposes, including the financing of Optional Debt Repurchases, permitted
capital expenditures, the repurchase of the Borrower's and/or its Subsidiaries'
(including Rite Aid Lease Management Company's) Preferred Stock and permitted
Restricted Payments, as more fully described herein. Letters of Credit will be
used solely to support payment obligations of the Borrower and the Subsidiaries
incurred in the ordinary course of business.
Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree that this Agreement
shall be amended and restated to read in its entirety as follows:
ARTICLE I
Definitions
-----------
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Account" means any right to payment for goods sold or leased
or for services rendered, whether or not earned by performance.
"Account Debtor" means, with respect to any Account, the
obligor with respect to such Account.
"Accounts Receivable Advance Rate" means the accounts
receivable advance rate determined in accordance with Section 2.20.
"Additional Lender" has the meaning assigned to such term in
Section 2.21.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Adjustment Date" means the first day of each calendar month.
"Administrative Agent" means CNAI, in its capacity as
administrative agent for the Lenders.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Agents" means the Administrative Agent and the Collateral
Agent.
"Agent Parties" has the meaning assigned to such term in
Section 9.16(c).
"Alternate Base Rate" means, for any day, a rate per annum
equal to the greater of (a) the Citibank Base Rate in effect on such day and (b)
the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any
change in the Alternate Base Rate due to a change in the Citibank Base Rate or
the Federal Funds Effective Rate shall be effective from and including the
effective date of such change in the Citibank Base Rate or the Federal Funds
Effective Rate.
"Amendment and Restatement Agreement" means the Amendment and
Restatement Agreement dated November 8, 2006 relating to the Original Agreement.
"Applicable Percentage" means, with respect to any Revolving
Lender, the percentage of the total Revolving Commitments represented by such
Lender's Revolving Commitment. If the Revolving Commitments have been terminated
or expired, the Applicable Percentages shall be determined based upon the
Revolving Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, on any day with respect to any ABR
Loan or Eurodollar Loan, as the case may be, the applicable rate per annum set
forth below (expressed in basis points) under the caption "ABR Spread" or
"Eurodollar Spread", as the case may be, in each case based upon the Average
Revolver Availability determined as of the most recent Adjustment Date; provided
that until the first Adjustment Date occurring after the Original Restatement
Effective Date, the Applicable Rate shall be the applicable rate per annum set
forth below in Category 2:
============================================================================
ABR Spread Eurodollar Spread (bps)
RATING: (bps)
----------------------------------------------------------------------------
Category 1 25 125
Average Revolver
Availability greater than
$1,250,000,000
----------------------------------------------------------------------------
Category 2
Average Revolver
Availability greater than
$500,000,000 but less than
or equal to $1,250,000,000 50 150
----------------------------------------------------------------------------
Category 3
Average Revolver
Availability less than or
equal to $500,000,000 75 175
============================================================================
"Approved Fund" means (a) with respect to any Lender, a CLO
managed by such Lender or by an Affiliate of such Lender or (b) with respect to
any Lender that is a fund which invests in bank loans and similar extensions of
credit, any other fund that invests in bank loans and similar extensions of
credit and is managed or advised by the same investment advisor as such Lender
or by an Affiliate of such investment advisor.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit C or any other form approved by the Administrative Agent.
"Average Revolver Availability" means, as determined on any
Adjustment Date, the average daily Revolver Availability during the calendar
month immediately preceding such Adjustment Date; provided that the Average
Revolver Availability as determined on the first Adjustment Date occurring after
the Original Restatement Effective Date shall be the average daily Revolver
Availability for the period from the Original Restatement Effective Date to the
day immediately prior to such first Adjustment Date.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means Rite Aid Corporation, a Delaware corporation.
"Borrowing" means (a) a Loan of the same Class and Type, made,
converted or continued on the same date and, in the case of a Eurodollar Loan,
as to which a single Interest Period is in effect or (b) a Swingline Loan.
"Borrowing Base Amount" means, with respect to the Borrower,
an amount equal to the sum, without duplication, of the following;
(a) the Accounts Receivable Advance Rate multiplied by the
book value of Eligible Accounts Receivable; plus
(b) the Pharmaceutical Inventory Advance Rate multiplied by
the Eligible Pharmaceutical Inventory Value; plus
(c) the Other Inventory Advance Rate multiplied by the
Eligible Other Inventory Value; plus
(d) the Script Lists Advance Rate multiplied by the Eligible
Script Lists Value; minus
(e) a reserve in an aggregate amount equal to the Borrower's
then-current exposure upon early termination under each of its existing
and future Hedging Agreements; minus
(f) any reserves established by the Collateral Agent in the
exercise of its reasonable judgment to reflect Borrowing Base Factors;
provided, that, for purposes of determining the Borrowing Base Amount at any
date of determination, the amount set forth in clause (d) of this definition
shall not exceed the lesser of (i) $500,000,000 and (ii) 25% of the Borrowing
Base Amount.
The Borrowing Base Amount shall be computed (i) weekly with respect to Eligible
Accounts Receivable and Eligible Inventory stored at any location other than a
distribution center, (ii) monthly with respect to Eligible Inventory stored at a
distribution center and (iii) annually with respect to Eligible Script Lists, in
each case in accordance with Sections 2.20 and 5.01(f). The Borrowing Base
Amount at any time in effect shall be determined by reference to the Borrowing
Base Certificate most recently delivered pursuant to Section 5.01(f).
"Borrowing Base Certificate" means a certificate substantially
in the form of Exhibit B or in such other form as the Agents may approve.
"Borrowing Base Factors" means landlord's liens affecting
Eligible Inventory, factors affecting the saleability or collectability of
Eligible Accounts Receivable and Eligible Inventory at retail or in liquidation,
factors affecting the market value of Eligible Inventory, Eligible Accounts
Receivable or Eligible Script Lists, other impediments to the Collateral Agent's
ability to realize upon the Eligible Accounts Receivable, the Eligible Inventory
or the Eligible Script Lists and other factors affecting the credit value to be
afforded the Eligible Accounts Receivable, the Eligible Inventory and the
Eligible Script Lists.
"Borrowing Request" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
"Business Acquisition" means (i) an Investment by the Borrower
or any of the Subsidiaries in any other Person (including an Investment by way
of acquisition of debt or equity securities of any other Person) pursuant to
which such Person shall become a Subsidiary or shall be merged into or
consolidated with the Borrower or any of the Subsidiaries or (ii) an acquisition
by the Borrower or any of the Subsidiaries of the property and assets of any
Person (other than the Borrower or any of the Subsidiaries) that constitute
substantially all the assets of such Person or any division or other business
unit of such Person; provided that the acquisition of prescription files and
Stores and the acquisition of Persons substantially all of whose assets consist
of fewer than 10 Stores, in each case in the ordinary course of business and not
substantially inconsistent with the business projections of the Borrower and the
Subsidiaries delivered to the Lenders on or about the Original Restatement
Effective Date shall not constitute a Business Acquisition.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any Capital Lease,
which obligations should be classified and accounted for as capital leases on a
balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
"Cash Management System" shall have the meaning assigned to
such term in the Senior Subsidiary Security Agreement.
"Cash Sweep Cash Collateral Account" shall have the meaning
assigned to such term in the Senior Subsidiary Security Agreement.
"Cash Sweep Notice" shall have the meaning assigned to such
term in the Senior Subsidiary Security Agreement.
"Cash Sweep Period" shall have the meaning assigned to such
term in the Senior Subsidiary Security Agreement.
"Change in Control" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934, as amended, and the
rules of the SEC thereunder as in effect on the First Restatement Effective
Date), other than Green Equity Investors III, L.P. and its Affiliates, of 30% or
more of the outstanding shares of common stock of the Borrower; (b) at the end
of any period of 12 consecutive calendar months, the occupation of a majority of
the seats on the board of directors of the Borrower by Persons who were not
members of the board of directors of the Borrower on the first day of such
period; or (c) the occurrence of a "Change of Control", as defined in any
Indenture or other agreement that governs the terms of any Material
Indebtedness.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the Original Restatement Effective Date, (b) any change in any
law, rule or regulation or in the interpretation or application thereof by any
Governmental Authority after the Original Restatement Effective Date or (c)
compliance by any Lender or any Issuing Bank (or, for purposes of Section
2.15(b), by any lending office of such Lender or by such Lender's or such
Issuing Bank's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the Original Restatement Effective Date.
"Charges" has the meaning assigned to such term in Section
9.13.
"Citibank Base Rate" means the rate of interest publicly
announced by Citibank, N.A. in New York City from time to time as the Citibank
Base Rate.
"Citibank Concentration Account" shall have the meaning
assigned to such term in the Senior Subsidiary Security Agreement.
"Class", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans, Tranche 1 Term Loans or Swingline Loans and, when used in
reference to any Commitment, refers to whether such Commitment is a Revolving
Commitment or a Tranche 1 Term Commitment.
"CLO" means any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by a Lender or an Affiliate of a
Lender.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral Agent" means CNAI, in its capacity as collateral
processing agent for the Lenders.
"Collateral and Guarantee Requirement" means the requirement
that:
(a) the Administrative Agent shall have received from each
Subsidiary Loan Party either (i) a counterpart of, or a supplement to,
each Senior Collateral Document duly executed and delivered on behalf
of such Loan Party or (ii) in the case of any Person that becomes a
Subsidiary Loan Party after the First Restatement Effective Date, a
supplement to each applicable Senior Collateral Document, in the form
specified therein, duly executed and delivered on behalf of such
Subsidiary Loan Party;
(b) (i) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably
requested by the Administrative Agent to be filed, registered or
recorded to create the Liens intended to be created by the Senior
Collateral Documents and perfect such Liens to the extent required by,
and with the priority required by, this Agreement and the Senior
Collateral Documents, shall have been filed, registered or recorded or
delivered to the Administrative Agent for filing, registration or
recording or (ii) the Administrative Agent shall have been provided
with all authorizations, consents and approvals from each Loan Party,
Governmental Authority and other Person reasonably requested by it to
file, record or register all documents and instruments referred to in
clause (b)(i) of this definition; and
(c) each Loan Party shall have obtained all consents and
approvals required to be obtained by it in connection with the
execution and delivery of all Senior Collateral Documents to which it
is a party, the performance of its obligations thereunder and the
granting by it of the Liens thereunder.
"Commitment" means the Revolving Commitments and the Tranche 1
Term Commitments, or any combination thereof (as the context requires).
"Communications" has the meaning assigned to such term in
Section 9.16(a).
"Consolidated Capital Expenditures" means, for any period, the
aggregate amount of expenditures by the Borrower and its Consolidated
Subsidiaries for plant, property and equipment and prescription files during
such period (including any such expenditure by way of acquisition of a Person or
by way of assumption of Indebtedness or other obligations of a Person, to the
extent reflected as plant, property and equipment or as prescription file
assets) minus the aggregate amount of Net Cash Proceeds received by the Borrower
and its Consolidated Subsidiaries from the sale of Stores to third parties
pursuant to Sale and Leaseback Transactions; provided that the aggregate amount
of expenditures by the Borrower and its Consolidated Subsidiaries referred to
above shall exclude, without duplication, (i) any such expenditures made for the
replacement or restoration of assets to the extent financed by
Casualty/Condemnation Proceeds relating to the asset or assets being replaced or
restored, (ii) any amounts paid to any party under a lease entered into in
connection with a Sale and Leaseback Transaction with respect to the termination
of such lease and the reacquisition by the Borrower or any of the Subsidiaries
of the property subject to such lease and (iii) any such expenditures made for
the purchase or other acquisition from a third party of Stores, leases and
prescription files, but only to the extent that an equivalent or greater amount
is received from such third party as consideration for the sale or other
disposition to such third party of Stores, leases and/or prescription files of a
substantially equivalent value closed at substantially the same time as, and
entered into as part of a single related transaction with, such purchase or
acquisition (and if a lesser amount is received from such third party as
consideration for such sale or other disposition, then the amount of
Consolidated Capital Expenditures for purposes hereof shall be the expenditures
made net of the consideration received); provided further that Consolidated
Capital Expenditures shall in no case be less than zero.
"Consolidated EBITDA" means, for any period, without
duplication, Consolidated Net Income for such period, plus (a) to the extent
deducted in determining Consolidated Net Income for such period, the aggregate
amount of (i) consolidated interest expenses, whether cash or non-cash, and
charges, commissions, discounts, yield and other similar fees and charges
incurred pursuant to Factoring Transactions or by Securitization Vehicles in
connection with Securitizations which are payable to any Person other than a
Loan Party, and any other amounts comparable to or in the nature of interest
under any Securitization or Factoring Transaction, including losses on the sale
of Securitization Assets in a Securitization accounted for as a "true sale" or
Factoring Assets in a Factoring Transaction accounted for as a "true sale," (ii)
provision for income taxes, (iii) depreciation and amortization, (iv) LIFO
Adjustments which reduced such Consolidated Net Income, (v) store closing and
non-cash impairment expenses, (vi) any other nonrecurring charge to the extent
such nonrecurring charge does not involve any cash expenditure during such
period, (vii) non-cash compensation expenses related to stock option and
restricted stock employee benefit plans, (viii) the non-cash interest component,
as adjusted from time to time, in respect of reserves, (ix) all costs, fees,
charges and expenses incurred in connection with the Transactions, (x) all
charges incurred relating to the investigation of the Borrower by the United
States Attorney's Office and the United States Department of Labor and all
amounts paid in satisfaction of any judgment, fine or settlement resulting
therefrom and (xi) all costs and litigation expenses incurred in connection with
litigation, investigations and other proceedings relating to the business
conduct and practices of the former management of the Borrower, and minus (b) to
the extent not deducted in determining Consolidated Net Income for such period,
the aggregate amount of (i) any cash expenditure during such period in
connection with which a nonrecurring charge was taken and added back to
Consolidated Net Income pursuant to clause (a) above in calculating Consolidated
EBITDA in any prior period and (ii) LIFO Adjustments which increased such
Consolidated Net Income.
"Consolidated Fixed Charge Coverage Ratio" means, for any
period, the ratio of (i) Consolidated EBITDA plus Consolidated Rent less
Consolidated Capital Expenditures to (ii) Consolidated Interest Charges plus
Consolidated Rent plus cash dividends paid pursuant to Section 6.08(a), in each
case for such period and determined in accordance with GAAP.
"Consolidated Interest Charges" means, for any period, the
aggregate amount of interest charges, whether expensed or capitalized, incurred
or accrued during such period by the Borrower and its Consolidated Subsidiaries,
solely to the extent paid or payable (whether during or after such period) in
cash (i) minus non-cash interest expenses during such period related to (x)
litigation reserves, (y) closed store liability reserves, if any, and (z)
self-insurance reserves and (ii) plus, to the extent not otherwise included in
such interest charges, commissions, discounts, yield and other similar fees and
charges incurred pursuant to Factoring Transactions or by Securitization
Vehicles in connection with Securitizations which are payable to any Person
other than a Loan Party, and any other amounts comparable to or in the nature of
interest under any Securitization or Factoring Transaction, including losses on
the sale of Securitization Assets in a Securitization accounted for as a "true
sale" or Factoring Assets in a Factoring Transaction accounted for as a "true
sale".
"Consolidated Net Income" means, for any period, the net
income (or loss) of the Borrower and its Consolidated Subsidiaries (exclusive of
(a) extraordinary items of gain or loss during such period or gains or losses
from Indebtedness modifications during such period, (b) any gain or loss in
connection with any Asset Sale during such period, other than sales of inventory
in the ordinary course of business, but in the case of any loss only to the
extent that such loss does not involve any current or future cash expenditure,
(c) the cumulative effect of accounting changes during such period and (d) net
income or loss attributable to any Investments in Persons other than Affiliates
of the Borrower), determined on a consolidated basis for such period in
accordance with GAAP.
"Consolidated Rent" means, for any period, the consolidated
rental expense of the Borrower and its Consolidated Subsidiaries for such
period, and including in any event rental costs of closed stores for such period
whether or not reflected as an expense in the determination of Consolidated Net
Income for such period.
"Consolidated Subsidiary" means, with respect to any Person,
at any date, any Subsidiary or other entity the accounts of which would, in
accordance with GAAP, be consolidated with those of such Person in its
consolidated financial statements if such statements were prepared as of such
date.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"CNAI" means Citicorp North America, Inc.
"Direct Delivery Vendor" has the meaning assigned to such term
in the Intercompany Inventory Purchase Agreement.
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"Definitions Annex" means the definitions annex attached
hereto as Annex 1 (as the same may be amended, supplemented or otherwise
modified from time to time).
"Deposit Account" shall have the meaning assigned to such term
in the Senior Subsidiary Security Agreement.
"dollars" or "$" refers to lawful money of the United States
of America.
"Eligible Accounts Receivable" means, at any date of
determination, all Accounts that satisfy at the time of creation and continue to
meet the same at the time of such determination the criteria established from
time to time by the Collateral Agent in its reasonable judgment to reflect
Borrowing Base Factors. On the First Restatement Effective Date, those criteria
are:
(a) such Account constitutes an "account" or "chattel paper"
within the meaning of the Uniform Commercial Code of the state in which
the Account is located;
(b) all payments on such Account are by the terms of such
Account due not later than 90 days after the date of service (i.e., the
transaction date) and are otherwise on terms that are normal and
customary in the business of the Borrower and the Subsidiaries;
(c) such Account has been billed and has not remained unpaid
for more than 120 days following the date of service;
(d) such Account is denominated in dollars;
(e) such Account arose from a completed, outright and lawful
sale of goods or the completed performance of services by the
applicable Subsidiary Loan Party and accepted by the applicable Account
Debtor, and the amount of such Account has been properly recognized as
revenue on the books of the applicable Subsidiary Loan Party;
(f) such Account is owned solely by a Subsidiary Guarantor
(and has not been transferred pursuant to a Securitization or a
Factoring Transaction);
(g) the proceeds of such Account are payable solely to a
Deposit Account which (A) is under the control of the Collateral Agent
and (B) has not been released or transferred in accordance with Section
5.16 or otherwise;
(h) such Account arose in the ordinary course of business of
the applicable Subsidiary Loan Party;
(i) not more than 50% of the aggregate amount of Accounts from
the same Account Debtor and any Affiliates thereof remain unpaid for
more than 120 days following the date of service;
(j) to the knowledge of the Borrower and the Subsidiaries, no
event of death, bankruptcy, insolvency or inability to pay creditors
generally of the Account Debtor of such Account has occurred, and no
notice thereof has been received;
(k) payment of such Account is not being disputed by the
Account Debtor thereof;
(l) such Account complies in all material respects with the
requirements of all applicable laws and regulations, whether Federal,
state or local, including the Federal Consumer Credit Protection Act,
the Federal Truth in Lending Act and Regulation Z of the Federal
Reserve Board;
(m) with respect to such Account, the Account Debtor (i) is
organized in the United States (or, if such Account Debtor is not
organized in the United States, such Account is supported by a letter
of credit approved by the Collateral Agent in favor of the applicable
Subsidiary Loan Party) and (ii) is not an Affiliate or Subsidiary or an
Affiliate of any of the Subsidiaries;
(n) such Account is subject to a perfected first priority
security interest in favor of the Collateral Agent for the benefit of
the Lenders pursuant to the Senior Collateral Documents and is not
subject to any other Lien (other than the Second Priority Lien);
(o) with respect to any such Account for an amount greater
than $5,000,000, the Account Debtor has not been disapproved by the
Required Lenders (based, on the Required Lenders' reasonable judgment,
upon the creditworthiness of such Account Debtor);
(p) the representations and warranties contained in the Senior
Loan Documents with respect to such Account are true and correct in all
material respects; and
(q) such Account is in full force and effect and constitutes a
legal, valid and binding obligation of the Account Debtor, enforceable
against such Account Debtor in accordance with its terms.
"Eligible Inventory" means, at any date of determination, all
inventory (as defined in the Uniform Commercial Code) owned by any Subsidiary
Loan Party that satisfies at the time of such determination the criteria
established from time to time by the Collateral Agent in its reasonable judgment
to reflect Borrowing Base Factors. On the First Restatement Effective Date,
Eligible Inventory shall exclude, without duplication, the following:
(a) any such inventory that has been shipped to a customer,
even if on a consignment or "sale or return" basis, or is otherwise not
in the possession or control of or any Subsidiary Loan Party or a
warehouseman or bailee of any Subsidiary Loan Party;
(b) any inventory against which any Subsidiary Loan Party has
taken a reserve, to the extent of such reserve, to the extent specified
by the Collateral Agent from time to time in its reasonable judgment to
reflect Borrowing Base Factors;
(c) any inventory that has been discontinued or is otherwise
of a type (SKU) not currently offered for sale on a regular basis by
the Subsidiary Loan Parties (including any such inventory obtained in
connection with a Business Acquisition) to the extent specified by the
Collateral Agent from time to time in its reasonable judgment to
reflect Borrowing Base Factors;
(d) any inventory not located in the United States or
otherwise not subject to a valid and perfected Lien under the Senior
Collateral Documents, subject to no prior or equal Lien;
(e) any supply, scrap or obsolete inventory or inventory that
is otherwise unsaleable;
(f) any inventory that is past its expiration date, is damaged
or not in good condition, is a sample used for marketing purposes or
does not meet all material standards imposed by any governmental
authority having regulatory authority over such inventory, except in
each case to the extent of its net realizable value as determined by
the Collateral Agent from time to time in its reasonable judgment;
(g) any inventory that is subject to any licensing, patent,
royalty, trademark, trade name or copyright agreement with any third
Person from whom the Borrower or any of its Subsidiaries has received
notice of a dispute in respect of such agreement, to the extent that
the Collateral Agent determines, in its reasonable judgment, that such
dispute could be expected to prevent the sale of such inventory;
(h) any inventory which is subject to a negotiable document of
title which has not been delivered to the Administrative Agent;
(i) any inventory to the extent that such inventory is not
comprised of readily marketable materials of a type manufactured,
consumed or held for resale by the Subsidiary Loan Parties in the
ordinary course of business;
(j) any inventory to the extent that such inventory consists
of raw materials, component parts and/or work-in-progress;
(k) any inventory in respect of which the applicable
representations and warranties in the Senior Loan Documents are not
true and correct in all material respects;
(l) any inventory to which the Subsidiary Loan Parties do not
have good title or any inventory which a Subsidiary Loan Party holds on
consignment or on a "sale or return" basis; and
(m) any inventory (as notified by the Collateral Agent to the
Borrower) that the Collateral Agent has, in its reasonable judgment,
deemed ineligible in order to reflect Borrowing Base Factors;
provided, however, that no inventory which is stored at a distribution center
leased by the Borrower or any other Person shall be considered "Eligible
Inventory" unless each of the waivers obtained pursuant to the Original
Agreement from the lessor of each leased distribution center of the Subsidiary
Loan Parties of any statutory, common law or contractual landlord's lien with
respect to any inventory of any Subsidiary Loan Party (other than with respect
to inventory located at leased warehouses having a value in the aggregate not to
exceed $40,000,000) shall be in full force and effect (or the Collateral Agent
shall have granted a waiver to such compliance).
"Eligible Other Inventory Value" means, at any date of
determination, an amount equal to (i) the cost of Eligible Inventory that is
Other Inventory (less any appropriate reserve for obsolete Other Inventory and
any profits accrued in connection with transfers of Other Inventory between the
Borrower and the Subsidiaries or between Subsidiaries) at such date, in dollars,
determined in accordance with GAAP consistently applied and on a basis
consistent with that used in the preparation of the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Lenders pursuant to Section 5.01(a) multiplied by
(ii) the Net Orderly Liquidation Rate with respect to such Other Inventory.
"Eligible Pharmaceutical Inventory Value" means, at any date
of determination, an amount equal to (i) the cost of Eligible Inventory that is
Pharmaceutical Inventory (less any appropriate reserve for obsolete
Pharmaceutical Inventory and any profits accrued in connection with transfers of
Pharmaceutical Inventory between the Borrower and the Subsidiaries or between
Subsidiaries) at such date, in dollars, determined in accordance with GAAP
consistently applied and on a basis consistent with that used in the preparation
of the most recent audited consolidated financial statements of the Borrower and
its Consolidated Subsidiaries delivered to the Lenders pursuant to Section
5.01(a) multiplied by (ii) the Net Orderly Liquidation Rate with respect to such
Pharmaceutical Inventory.
"Eligible Script Lists" means, at any date of determination,
all lists owned and maintained on such date by the Subsidiary Loan Parties
setting forth Persons (and addresses, telephone numbers or other contact
information therefor) who currently purchase or otherwise obtain, in any Store
owned or operated by any Subsidiary Loan Party, medication required to be
dispensed by a licensed professional.
"Eligible Script Lists Value" means, at any date of
determination, the liquidation value of the Eligible Script Lists in dollars, as
most recently determined in connection with an appraisal performed for purposes
of this Agreement by Xxxxxxxx & Associates or such other appraisal firm
satisfactory to the Collateral Agent.
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means all liabilities, obligations,
damages, losses, claims, actions, suits, judgments, orders, fines, penalties,
fees, expenses and costs, (including administrative oversight costs, natural
resource damages and remediation costs), whether contingent or otherwise,
arising out of or relating to: (a) compliance or non-compliance with any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release of any Hazardous Materials or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed
or imposed with respect to any of the foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA; or (h) the
existence of any event or condition that could reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Plan.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in
Article VII.
"Excluded Taxes" means, with respect to any Agent, any Lender,
any Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction described in clause (a) above and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 2.19(b)), any withholding tax that (i) is in effect and would
apply to amounts payable to such Foreign Lender at the time such Foreign Lender
becomes a party to this Agreement (or designates a new lending office), except
to the extent that such Foreign Lender (or its assignor, if any) was entitled,
at the time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to any withholding tax
pursuant to Section 2.17(a), or (ii) is attributable to such Foreign Lender's
failure to comply with Section 2.17(e).
"Factoring Assets" means any accounts receivable owed to the
Borrower or any Subsidiary (whether now existing or arising or acquired in the
future) arising in the ordinary course of business from the sale of goods or
services, all collateral securing such accounts receivable, all contracts and
contract rights and all guarantees or other obligations in respect of such
accounts receivable, all proceeds of such accounts receivable and other assets
(including contract rights) which are of the type customarily transferred in
connection with the factoring of accounts receivable and which are sold,
transferred or otherwise conveyed by the Borrower or a Subsidiary pursuant to a
Factoring Transaction permitted by this Agreement.
"Factoring Notice" means a written notice delivered by the
Borrower to the Administrative Agent at least 30 days after the termination of
any Securitization program indicating that the Borrower or its Subsidiaries
intend to engage in a Factoring Transaction.
"Factoring Transaction" means any transaction or series of
transactions entered into by the Borrower and any Subsidiaries pursuant to which
the Borrower or such Subsidiaries sells, conveys or otherwise transfers (or
purports to sell, convey or otherwise transfer) Factoring Assets of the Borrower
or such Subsidiaries to a non-related third party factor on market terms as
determined in good faith by the senior management of the Borrower; provided that
(i) no portion of any Indebtedness deemed to exist as a result of such Factoring
Transaction (x) is incurred or Guaranteed by the Borrower or any other
Subsidiary (in each case, other than as permitted pursuant to Section
6.01(a)(xiv)), (y) is recourse to the Borrower or any other Subsidiary (in each
case, other than as permitted pursuant to Section 6.01(a)(xiv)) and (z) is
secured (contingently or otherwise) by any Lien on assets of the Borrower or any
other Subsidiary (other than by the Factoring Assets to be sold, conveyed or
transferred to the third party factor), (ii) such Factoring Transaction is
consummated pursuant to customary contracts, arrangements or agreements entered
into with respect to the sale, purchase and servicing of Factoring Assets on
market terms for similar factoring, and (iii) in connection with such Factoring
Transaction, the third party factor enters into an intercreditor arrangement
reasonably acceptable to the Collateral Agent.
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Covenant Effectiveness Period" means each period on
or after the First Restatement Effective Date commencing on and including any
date on which Revolver Availability is less than $100,000,000 and ending on and
excluding the first day thereafter, if any, which is the 30th consecutive
calendar day on which Revolver Availability is equal to or greater than
$100,000,000.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer, vice president of financial accounting
or controller of the Borrower.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Government Lockbox Account" shall have the meaning assigned
to such term in the Senior Subsidiary Security Agreement.
"Government Lockbox Account Agreement" shall have the meaning
assigned to such term in the Senior Subsidiary Security Agreement.
"Government Lockbox Account Bank" shall have the meaning
assigned to such term in the Senior Subsidiary Security Agreement.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Grantor" shall have the meaning assigned to such term in the
Senior Subsidiary Security Agreement.
"Hazardous Materials" means (a) petroleum products and
byproducts, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, radon gas, chlorofluorocarbons and all other ozone-depleting
substances, or (b) any chemical, material, substance, waste, pollutant or
contaminant that is prohibited, limited or regulated by or pursuant to any
Environmental Law.
"Hedging Agreement" means any rate swap transaction, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transaction (including any option with
respect to any of the foregoing transactions) or any combination of the
foregoing transactions.
"HIPAA" has the meaning assigned to such term in Section 3.07.
"Incremental Commitment" has the meaning assigned to such term
in Section 2.21.
"Incremental Facility" has the meaning assigned to such term
in Section 2.21.
"Incremental Facility Amendment" has the meaning assigned to
such term in Section 2.21.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Inside Indebtedness" means Indebtedness of the Borrower or
any Subsidiary (other than intercompany Indebtedness permitted by Section
6.01(a)(iii)) which matures on or before the Maturity Date and any portion of
any other Indebtedness subject to scheduled amortization on or before the
Maturity Date.
"Interest Election Request" means a request by the Borrower to
convert or continue a Revolving Borrowing or a Tranche 1 Term Borrowing in
accordance with Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.
"Interest Period" means, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending (x) on
the numerically corresponding day in the calendar month that is one, two, three
or six and, if agreed to by all Lenders in the applicable Class, nine or 12
months thereafter, (y) in the case of Revolving Loans, seven days thereafter or
(z) in the case of Revolving Loans, six weeks thereafter if, at the time of the
relevant Borrowing, all Lenders participating therein agree to make an interest
period of such duration available, in each case as the Borrower may elect;
provided that (i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day (unless, in the case of Interest Periods of one, two, three or six
months, such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business
Day), (ii) any Interest Period of one, two, three or six months that commences
on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period and (iii) there shall be no more than two Revolving Loans with a
seven day Interest Period at any time outstanding. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Inventory" has the meaning assigned to such term in the
Intercompany Inventory Purchase Agreement.
"Investment" by any Person in any other Person means (i) any
direct or indirect loan, advance or other extension of credit or capital
contribution to or for the account of such other Person (by means of any
transfer of cash or other property to any Person or any payment for property or
services for the account or use of any Person, or otherwise), (ii) any direct or
indirect purchase or other acquisition of any Equity Interests, bond, note,
debenture or other debt or equity security or evidence of Indebtedness, or any
other ownership interest (including, any option, warrant or any other right to
acquire any of the foregoing), issued by such other Person, whether or not such
acquisition is from such or any other Person, (iii) any direct or indirect
payment by such Person on a Guarantee of any obligation of or for the account of
such other Person or any direct or indirect issuance by such Person of such a
Guarantee (provided, however, that for purposes of Section 6.04, payments under
Guarantees not exceeding the amount of the Investment attributable to the
issuance of such Guarantee will not be deemed to result in an increase in the
amount of such Investment) or (iv) any other investment of cash or other
property by such Person in or for the account of such other Person. Any
repurchase by the Borrower of its own Equity Interests or Indebtedness shall not
constitute an Investment for purposes of this Agreement. The amount of any
Investment shall be the original principal or capital amount thereof less all
returns of principal or equity thereon (and without adjustment by reason of the
financial condition of such other Person) and shall, if made by the transfer or
exchange of property other than cash, be deemed to have been made in an original
principal or capital amount equal to the fair market value of such property at
the time of such transfer or exchange.
"Issuing Bank Agreement" has the meaning assigned to such term
in Section 2.05(i).
"Issuing Banks" means CNAI, JPMorgan Chase Bank, N.A., Bank of
America, N.A. and any other Lender designated as an Issuing Bank in accordance
with the provisions of Section 2.05(k), in each case in its capacity as an
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.05(i). An Issuing Bank may, in its discretion, arrange for
one or more Letters of Credit to be issued by Affiliates of such Issuing Bank,
in which case the term "Issuing Banks" shall include any such Affiliate with
respect to Letters of Credit issued by such Affiliate.
"Joint Venture" means, with respect to any Person, at any
date, any other Person in whom such Person directly or indirectly holds an
Investment consisting of an Equity Interest, and whose financial results would
not be consolidated under GAAP with the financial results of such Person on the
consolidated financial statements of such Person, if such statements were
prepared in accordance with GAAP as of such date.
"LC Commitment" means, with respect to each Issuing Bank, the
commitment of such Issuing Bank to issue Letters of Credit pursuant to Section
2.05. The initial amount of each Issuing Bank's LC Commitment is set forth on
Schedule 2.01 or in such Issuing Bank's Issuing Bank Agreement.
"LC Disbursement" means a payment made by an Issuing Bank
pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Revolving Lender
at any time shall be its Applicable Percentage of the total LC Exposure at such
time.
"Lenders" means the Persons listed on Schedule 2.01 as having
a Revolving Commitment or a Tranche 1 Term Commitment and any other Person that
shall have become a party hereto pursuant to an Assignment and Acceptance, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Acceptance. Unless the context otherwise requires, the term "Lenders"
includes the Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant
to this Agreement.
"LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate rounded upwards,
if necessary, to the next 1/100 of 1% at which dollar deposits of $5,000,000 and
for a maturity comparable to such Interest Period are offered by the principal
London office of the Administrative Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
"LIFO Adjustments" means, for any period, the net adjustment
to costs of goods sold for such period required by the Borrower's LIFO inventory
method, determined in accordance with GAAP.
"Loan Parties" means the Borrower and the Subsidiary Loan
Parties.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"Lockbox Account" shall have the meaning assigned to such term
in the Senior Subsidiary Security Agreement.
"Margin Stock" means "margin stock", as such term is defined
in Regulation U of the Board.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, properties, condition (financial or
otherwise), or prospects of the Borrower and the Subsidiaries, taken as a whole,
(b) the ability of any Loan Party to perform any of its material obligations
under any Senior Loan Document to which it is a party or (c) the legality,
validity or enforceability of the Senior Loan Documents (including, without
limitation, the validity, enforceability or priority of security interests
granted thereunder) or the rights of or benefits available to the Lenders under
any Senior Loan Document.
"Material Indebtedness" means Indebtedness (other than the
Loans and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Borrower and the Subsidiaries in an
aggregate principal amount exceeding $50,000,000. For purposes of this
definition, the "principal amount" of the obligations of the Borrower or any
Subsidiary in respect of any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower or
such Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.
"Maturity Date" means September 30, 2010.
"Maximum Rate" has the meaning assigned to such term in
Section 9.13.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Orderly Liquidation Rate" means, with respect to any type
of inventory, at any date of determination, the net orderly liquidation rate
with respect to such type of inventory, expressed as a percentage of carrying
cost after giving effect to reserves, as determined by Hilco Appraisal Services,
LLC (or another appraisal firm chosen by the Collateral Agent) in connection
with the most recent appraisal of inventory of the Borrower and the
Subsidiaries.
"Offer Period" has the meaning assigned to such term in
Section 2.21.
"Operating Subsidiary" has the meaning assigned to such term
in the Intercompany Inventory Purchase Agreement.
"Optional Debt Repurchase" means any optional or voluntary
repurchase, redemption, retirement or defeasance for cash by the Borrower or any
Subsidiary of any publicly-traded Indebtedness of the Borrower.
"Original Agreement" means this Agreement, including all
amendments hereto and waivers hereof effective prior to the First Restatement
Effective Date, as in effect immediately prior to the First Restatement
Effective Date.
"Other Inventory" means all inventory other than
Pharmaceutical Inventory.
"Other Inventory Advance Rate" means the other inventory
advance rate determined in accordance with Section 2.20.
"Other Taxes" means any and all present or future recording,
stamp, documentary, excise, transfer, sales, property or similar taxes, charges
or levies arising from any payment made under any Senior Loan Document or from
the execution, delivery or enforcement of, or otherwise with respect to, any
Senior Loan Document.
"Outside Indebtedness" means Indebtedness of the Borrower or
any Subsidiary (other than intercompany Indebtedness permitted by Section
6.01(a)(iii)) that matures after the Maturity Date, including the amount of any
scheduled amortization after the Maturity Date.
"Parent Undertaking" means an agreement by the Borrower to
cause a Subsidiary other than a Securitization Vehicle to perform its
obligations under the instruments governing a Securitization which agreement (a)
contains terms that are customarily included in securitizations of accounts
receivable involving comparable companies and (b) does not provide for any
Guarantee of payment or other credit support in respect of Securitization Assets
or Third Party Interests.
"Participant" has the meaning assigned to such term in Section
9.04(c)(i).
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of
Schedule 8 to the Senior Subsidiary Security Agreement or any other form
approved by the Agents.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 60 days or are being contested in compliance with
Section 5.05;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Borrower or any
Subsidiary;
(g) licenses, sublicenses, leases or subleases granted in the
ordinary course of business with respect to real property; and
(h) landlord Liens arising by law securing obligations not
overdue by more than 60 days or being contested in good faith;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Pharmaceutical Inventory" means all inventory consisting of
products that can be dispensed only on order of a licensed professional.
"Pharmaceutical Inventory Advance Rate" means the
pharmaceutical inventory advance rate determined in accordance with Section
2.20.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate has any liability or is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Platform" has the meaning assigned to such term in Section
9.16(b).
"Preferred Stock" means, with respect to any corporation,
capital stock issued by such corporation that is entitled to a preference or
priority, in respect of dividends or distributions upon liquidation, over some
other class of capital stock issued by such corporation.
"Qualified Preferred Stock" means Preferred Stock of the
Borrower that does not require any cash payment (including in respect of
redemptions or repurchases), other than in respect of cash dividends, before the
date that is six months after the Maturity Date.
"Refinancing Indebtedness" means Indebtedness (which shall be
deemed to include Attributable Debt solely for the purposes of this definition)
issued or incurred (including by means of the extension or renewal of existing
Indebtedness) to extend, renew or refinance existing Indebtedness or
Attributable Debt ("Refinanced Debt"); provided that (i) the terms of any such
Indebtedness, and of any agreement entered into and of any instrument issued in
connection therewith, are otherwise permitted by the Senior Loan Documents, (ii)
such extending, renewing or refinancing Indebtedness is in an original aggregate
principal amount not greater than the aggregate principal amount of, and unpaid
interest on, the Refinanced Debt plus the amount of any premiums paid thereon
and fees and expenses associated therewith, (iii) such Indebtedness (x) does not
mature or require scheduled payments of principal prior to December 31, 2010 and
(y) has a later maturity and a longer weighted average life than the Refinanced
Debt, (iv) such Indebtedness bears an interest rate not in excess of the market
interest rate with respect to such type of Indebtedness as of the time of its
issuance or incurrence, (v) at the option of the Borrower, such Indebtedness may
contain market call and make-whole provisions as of the time of its issuance or
incurrence, (vi) if the Refinanced Debt or any Guarantees thereof are
subordinated to the Senior Obligations, such Indebtedness shall be subordinated
to the Senior Obligations on terms no less favorable, taken as a whole, to the
holders of the Senior Obligations than the subordination terms of such
Refinanced Debt or Guarantees thereof (and no Loan Party that has not guaranteed
such Refinanced Debt guarantees such Indebtedness), (vii) the senior management
of the Borrower determines in good faith that such Indebtedness contains
covenants (including with respect to amortization and convertibility) and events
of default on market terms, (viii) such Indebtedness is benefited by Guarantees
(if any) which, taken as a whole, are not materially less favorable to the
Lenders than the Guarantees (if any) in respect of such Refinanced Debt, (ix) if
such Refinanced Debt or any Guarantees thereof are secured, such Indebtedness
and any Guarantees thereof are either unsecured or secured only by such property
or assets as secured the Refinanced Debt and Guarantees thereof and not any
additional property or assets of the Borrower or any Subsidiary (other than (A)
property or assets acquired after the issuance or incurrence of such Refinancing
Indebtedness that would have been subject to the Lien securing refinanced
Indebtedness if such Indebtedness had not been refinanced, (B) additions to the
property or assets subject to the Lien and (C) the proceeds of the property or
assets subject to the Lien), (x) if such Refinanced Debt and any Guarantees
thereof are unsecured, such Indebtedness and Guarantees thereof are also
unsecured and (xi) any Net Cash Proceeds of such Indebtedness are used no later
than 45 days following receipt thereof to repay the Refinanced Debt and pay any
accrued interest, fees, premiums (if any) and expenses in connection therewith.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the directors, officers, employees, agents,
trustees and advisors of such Person and such Person's Affiliates.
"Repurchase Expenditures" means, with respect to any Optional
Debt Repurchase, the aggregate amount of expenditures made or required to be
made to effect such Optional Debt Repurchase, including without limitation
payments on account of principal, premium and fees payable to holders of the
Indebtedness purchased or reacquired in connection with such Optional Debt
Repurchase, but excluding payments representing accrued interest to the date of
such Optional Debt Repurchase and excluding fees and expenses paid to third
parties in connection therewith.
"Required Lenders" means, at any time, Lenders having
Revolving Exposures, outstanding Tranche 1 Term Loans and unused Commitments
representing more than 50% of the sum of the total Revolving Exposures,
outstanding Tranche 1 Term Loans and unused Commitments at such time.
"Requirement of Law" means, with respect to any Person, the
charter and by-laws or other organizational or governing documents of such
Person, and any law, rule or regulation (including Environmental Laws, the Code
and ERISA) or order, decree or other determination of an arbitrator or a court
or other Governmental Authority applicable to or binding upon such Person or any
of its property or assets or to which such Person or any of its property or
assets is subject.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property, except dividends payable solely
in shares of the Borrower's common stock or Qualified Preferred Stock) with
respect to any Equity Interests in the Borrower or any Subsidiary, or any
payment (whether in cash, securities or other property, except payments made
solely with common equity), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancelation or
termination of any Equity Interests in the Borrower or any Subsidiary or any
option, warrant or other right to acquire any such Equity Interests in the
Borrower or any Subsidiary; provided that in no event shall any exchange of
Qualified Preferred Stock with other Qualified Preferred Stock be deemed a
Restricted Payment.
"Revolver Availability" means, on any date of determination,
the maximum amount of Revolving Loans that could be made to the Borrower on such
date pursuant to Section 2.01(b) pursuant to the use of unused Commitments on
such date.
"Revolving Availability Period" means the period from and
including the First Restatement Effective Date to but excluding the earlier of
the Maturity Date and the date of termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender's Revolving
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The initial amount
of each Lender's Revolving Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Revolving Commitment, as applicable. The aggregate amount of the Lenders'
Revolving Commitments on the First Restatement Effective Date is $1,750,000,000.
"Revolving Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans and its LC Exposure and Swingline Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment
or, if the Revolving Commitments have terminated or expired, a Lender with a
Revolving Exposure.
"Revolving Loan" means a Loan made pursuant to clause (b) of
Section 2.01.
"Script Lists Advance Rate" means the Script Lists advance
rate determined in accordance with Section 2.20.
"Second Priority Debt" means any Indebtedness (including the
9.5% Notes, 8.125% Notes and 7.5% Notes) incurred by Rite Aid and Guaranteed by
the Subsidiary Guarantors on or after the Effective Date pursuant to the Second
Priority Subsidiary Guarantee Agreement (i) which is secured by the Second
Priority Collateral on a pari passu basis (other than as provided by the terms
of the applicable Second Priority Debt Documents) with the other Second Priority
Debt Obligations and (ii) if issued on or after the First Restatement Effective
Date, matures after December 31, 2010; provided, however, that (A) such
Indebtedness is permitted to be incurred, secured and Guaranteed on such basis
by each Senior Loan Document and each Second Priority Debt Document and (B) the
Representative for the holders of such Second Priority Debt shall have become
party to the Collateral Trust and Intercreditor Agreement pursuant to, and by
satisfying the conditions set forth in, Section 8.12 thereof. Second Priority
Debt shall include any Registered Equivalent Notes issued in exchange thereof.
"Securitization" means any transaction or series of
transactions entered into by the Borrower and any Subsidiaries pursuant to which
the Borrower or such Subsidiaries sell, convey or otherwise transfer (or purport
to sell, convey or otherwise transfer) Securitization Assets to a Securitization
Vehicle or another Subsidiary which sells, conveys or otherwise transfers (or
purports to sell, convey or otherwise transfer) Securitization Assets to a
Securitization Vehicle, and such Securitization Vehicle finances the acquisition
of such Securitization Assets (i) with proceeds from the issuance of Third Party
Interests, (ii) with Sellers' Retained Interests, (iii) with proceeds from the
sale or collection of Securitization Assets previously purchased by such
Securitization Vehicle or (iv) with proceeds from the sale of Securitization
Assets to another Securitization Vehicle. For purposes of this Agreement, the
"amount" or "principal amount" of any Securitization shall be deemed at any time
to be (1) the aggregate principal or stated amount of the Third Party Interests
(which stated amount may be described as a "net investment", "capital",
"invested amount" or similar term reflecting the amount invested in any
beneficial interest constituting a Third Party Interest) incurred or issued
pursuant to such Securitization, in each case outstanding at such time, or (2)
in the case of any Securitization in respect of which no such principal or
stated amount is determinable, the cash purchase price paid by the buyer in
connection with its purchase of Third Party Interests less the amount of
collections received in respect of such Third Party Interests and paid to such
buyer, excluding any amounts applied to purchase fees or discount or in the
nature of interest.
"Securitization Assets" means any accounts receivable owed to
the Borrower or any Subsidiary (whether now existing or arising or acquired in
the future) arising in the ordinary course of business from the sale of goods or
services, all collateral securing such accounts receivable, all contracts and
contract rights and all guarantees or other obligations in respect of such
accounts receivable, all proceeds of such accounts receivable and other assets
(including contract rights) which are the type customarily transferred in
connection with securitizations of accounts receivable and which are sold,
transferred or otherwise conveyed (or purported to be sold, transferred or
otherwise conveyed) by the Borrower or a Subsidiary to a Securitization Vehicle
in connection with a Securitization permitted by Sections 6.01 and 6.05.
"Securitization Vehicle" means a Person that is a direct or
indirect wholly owned Subsidiary used solely for the purpose of effecting one or
more Securitizations to which the Borrower and/or Subsidiaries and/or another
Securitization Vehicle transfer Securitization Assets and which, in connection
with such Securitization either issues Third Party Interests or transfers such
Securitization Assets to another Securitization Vehicle that issues Third Party
Interests; provided, in each case, that (i) each such Person shall engage in no
business other than the purchase of Securitization Assets pursuant to
Securitizations permitted by Sections 6.01 and 6.05, the issuance of Third Party
Interests and any activities reasonably related thereto, (ii) no portion of the
Indebtedness or other obligations (contingent or otherwise) of such Person (x)
is Guaranteed by the Borrower or any other Subsidiary, other than any Guarantee
of obligations (other than of principal of, or interest on, Indebtedness) that
may be deemed to exist solely by virtue of Standard Securitization Undertakings,
(y) is recourse to the Borrower or any other Subsidiary other than by virtue of
Standard Securitization Undertakings and (z) is secured (contingently or
otherwise) by any Lien on assets of the Borrower or any other Subsidiary other
than by virtue of Standard Securitization Undertakings, (iii) such Person has no
contract, agreement, arrangement or understanding with the Borrower or any other
Subsidiary other than (A) customary contracts, arrangements or agreements
entered into with respect to the sale, purchase and servicing of Securitization
Assets on market terms for similar securitization transactions and (B)
Guarantees and pledges of security as required by the Senior Loan Documents and
the Second Priority Debt Documents and (iv) neither the Borrower nor any
Subsidiary has any obligations to maintain or preserve such Person's financial
condition or cause it to achieve certain levels of operating results other than
pursuant to Standard Securitization Undertakings.
"Sellers' Retained Interests" means the debt or equity
interests held by the Borrower or any Subsidiary in a Securitization Vehicle to
which Securitization Assets have been transferred (or purported to have been
transferred) in a Securitization permitted by Sections 6.01 and 6.05, including
any such debt or equity received in consideration for the Securitization Assets
transferred.
"Series E Preferred Stock" means the Borrower's 7% Series E
mandatory convertible preferred stock issued prior to the First Restatement
Effective Date.
"Series G Preferred Stock" means the Borrower's 7% Series G
cumulative, convertible pay-in-kind preferred stock held by Green Equity
Investors III, L.P. or one of its Affiliates on the First Restatement Effective
Date.
"Series H Preferred Stock" means the Borrower's 6% Series H
cumulative, convertible pay-in-kind preferred stock held by Green Equity
Investors III, L.P. or one of its Affiliates on the First Restatement Effective
Date.
"Series I Preferred Stock" means the Borrower's 5.5% Series I
mandatory convertible preferred stock issued prior to the First Restatement
Effective Date.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities made by the Borrower or a Subsidiary in
connection with Securitizations permitted by Sections 6.01 and 6.05 which
representations, warranties, covenants and indemnities are customarily included
in securitizations of accounts receivable involving comparable companies.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
expressed as a decimal (including any marginal, special, emergency or
supplemental reserves) established by the Board to which the Administrative
Agent is subject with respect to eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Store" means any retail store (which may include any real
property, fixtures, equipment, inventory and script files related thereto)
operated, or to be operated, by any Subsidiary Loan Party.
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity of which securities or other ownership interests
representing more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Loan Party" means each Subsidiary set forth on
Schedule 1.01 hereto and any wholly-owned Domestic Subsidiary, including any
Securitization Vehicle that is a Domestic Subsidiary, that owns any assets
consisting of inventory, accounts receivable, intellectual property, or script
lists; provided that no Subsidiary that engages solely in the Borrower's
pharmacy benefits management business shall be deemed a Subsidiary Loan Party.
"Supermajority Lenders" means, at any time, Lenders having
Revolving Exposures, outstanding Tranche 1 Term Loans and unused Commitments
representing more than 66-2/3% of the aggregate Revolving Exposures, outstanding
Tranche 1 Term Loans and unused Commitments of all Lenders at such time.
"Swingline Exposure" means, at any time, the aggregate
principal amount of all Swingline Loans outstanding at such time. The Swingline
Exposure of any Lender at any time shall be its Applicable Percentage of the
total Swingline Exposure at such time.
"Swingline Lender" means CNAI, in its capacity as the lender
of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.04.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Third Party Interests" means, with respect to any
Securitization, notes, bonds or other debt instruments, beneficial interests in
a trust, ownership interests (including any fractional undivided interests) in a
pool or pools of accounts receivable or other interests or securities issued or
sold for cash consideration by a Securitization Vehicle to banks, investors or
other financing sources (other than the Borrower or its Subsidiaries) the
proceeds of which are used to finance, in whole or in part, the purchase by such
Securitization Vehicle of accounts receivables or other Securitization Assets in
a Securitization.
"Total Indebtedness" means, as of any date, the sum of the
aggregate principal amount of Indebtedness of the Borrower and its Consolidated
Subsidiaries outstanding as of such date, in the amount that would be reflected
on a balance sheet prepared as of such date on a consolidated basis in
accordance with GAAP plus, without duplication, the aggregate outstanding amount
of Third Party Interests (which amount may be described as a "net investment",
"capital", "invested amount", "principal amount" or similar term reflecting the
aggregate amount invested in beneficial interests constituting Third Party
Interests).
"Tranche 1 Term Lender" means a Lender with a Tranche 1 Term
Commitment or an outstanding Tranche 1 Term Loan.
"Tranche 1 Term Loans" means Loans made or deemed made under
clause (a) of Section 2.01.
"Tranche 1 Term Commitment" means, with respect to each
Lender, the commitment, if any, of such Lender to make a Tranche 1 Term Loan
hereunder on the First Restatement Effective Date, expressed as an amount
representing the maximum principal amount of the Tranche 1 Term Loans to be made
by such Lender hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.08 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04. The
initial amount of each Lender's Tranche 1 Term Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
shall have assumed its Tranche 1 Term Commitment, as applicable. The aggregate
amount of the Lenders' Tranche 1 Term Commitments on the First Restatement
Effective Date is $145,000,000.
"Transactions" means the execution, delivery and performance
by the Borrower and the Subsidiary Loan Parties, as applicable, of the Amendment
and Restatement Agreement and each other document contemplated thereby to be
executed on the First Restatement Effective Date to which it is a party, the
borrowing of Tranche 1 Term Loans, the use of proceeds thereof and the other
transactions to be effected on the First Restatement Effective Date.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"USA Patriot Act" means the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class
and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Revolving Borrowing") or by Type
(e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar
Revolving Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein);
provided, however, that amendments to the Indentures and the Second Priority
Debt Documents after the First Restatement Effective Date shall be effective for
purposes of references thereto in this Agreement and the other Senior Loan
Documents only if such amendments are permitted hereunder or are consented to in
writing for such purpose by the Required Lenders (or such other percentage of
the Lenders as may be specified herein), (b) any reference herein to any Person
shall be construed to include such Person's successors and assigns, (c) the
words "herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the First Restatement Effective Date in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.
SECTION 1.05. Terms Defined in Definitions Annex. Capitalized
terms used in this Agreement that are not defined in Section 1.01 shall have the
meanings assigned to such terms in the Definitions Annex (but any definition of
such a term in the Definitions Annex shall be disregarded for purposes hereof if
such term is also defined in Section 1.01).
ARTICLE II
The Credits
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SECTION 2.01. Commitments. (a) Subject to the terms and
conditions set forth herein, each Lender agrees to make a Tranche 1 Term Loan to
the Borrower on the First Restatement Effective Date in an aggregate principal
amount not exceeding its Tranche 1 Term Commitment. Amounts repaid or prepayed
in respect of Tranche 1 Term Loans may not be reborrowed.
(b) Subject to the terms and conditions set forth herein, each
Lender agrees to make Revolving Loans to the Borrower from time to time during
the Revolving Availability Period in an aggregate principal amount that will not
result in such Lender's Revolving Exposure exceeding the lesser of (i) such
Lender's Revolving Commitment and (ii) such Lender's Applicable Percentage of an
amount equal to (A) the Borrowing Base Amount in effect at such time minus (B)
the outstanding Tranche 1 Term Loans at such time. Within the foregoing limits
and subject to the terms and conditions set forth herein, the Borrower may
borrow, prepay and reborrow Revolving Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than
a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of
the same Class and Type made by the Lenders ratably in accordance with the
amounts of their Commitments of the applicable Class. The failure of any Lender
to make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; provided that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
(b) Subject to Section 2.14, each Revolving Borrowing and
Tranche 1 Term Borrowing shall be comprised entirely of ABR Loans or Eurodollar
Loans as the Borrower may request in accordance herewith. Each Swingline Loan
shall be an ABR Loan. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000. At the time that
each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $1,000,000 and not less than $5,000,000; provided
that an ABR Revolving Borrowing may be in an aggregate amount that is equal to
the entire unused balance of the total Revolving Commitments or that is required
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.05(e). Each Swingline Loan shall be in an amount that is an integral multiple
of $1,000,000. Borrowings of more than one Class and Type may be outstanding at
the same time; provided that there shall not at any time be more than a total of
10 Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Revolving Borrowing or Tranche 1 Term Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.
SECTION 2.03. Requests for Borrowings. To request a Borrowing,
the Borrower shall notify the Administrative Agent of such request by telephone
(a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of the proposed Borrowing or (b)
in the case of an ABR Borrowing, not later than (1) 10:30 a.m., New York City
time, on the Business Day of the proposed Borrowing, in the case of Borrowings
to be made on the same day as such notice is given or (2) 12:00 noon, New York
City time, on the Business Day before the proposed Borrowing, in the case of all
other Borrowings. Each such telephonic Borrowing Request shall be irrevocable
and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving
Borrowing or a Tranche 1 Term Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business
Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.06.
If no election as to the Type of Borrowing is specified, then
the requested Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Borrowing, then the Borrower
shall be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender may, in its sole discretion,
make Swingline Loans to the Borrower from time to time during the Revolving
Availability Period in an aggregate principal amount at any time outstanding
that will not result in (i) the aggregate principal amount of outstanding
Swingline Loans exceeding $100,000,000 or (ii) the sum of the total Revolving
Exposures exceeding the lesser of (A) the total Revolving Commitments at such
time and (B) the Borrowing Base Amount in effect at such time minus the
outstanding Tranche 1 Term Loans at such time; provided that (i) the Swingline
Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan and (ii) the Swingline Lender shall not have any
obligation, under this Agreement or otherwise, to make any Swingline Loan
requested by the Borrower hereunder and may, in its sole discretion, decline to
make a requested Swingline Loan. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 1:00 p.m., New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Borrower. The Swingline Lender shall make each
Swingline Loan available to the Borrower by means of a wire transfer to an
account designated by the Borrower (or, in the case of a Swingline Loan made to
finance the reimbursement of an LC Disbursement as provided in Section 2.05(e),
by remittance to the relevant Issuing Bank) by 3:00 p.m., New York City time, on
the requested date of such Swingline Loan.
(c) Interest on each Swingline Loan shall be payable on the
Interest Payment Date with respect thereto.
(d) The Administrative Agent shall (i) at any time when
Swingline Loans in an aggregate principal amount of $10,000,000 or more are
outstanding, at the request of the Swingline Lender in its sole discretion, or
(ii) on the date that is seven days after the date on which a Swingline Loan was
made, deliver on behalf of the Borrower a Borrowing Request pursuant to Section
2.03 for an ABR Revolving Borrowing in the amount of such Swingline Loans;
provided, however, that the obligations of the Lenders to fund such Borrowing
shall not be subject to the conditions set forth in Section 4.02.
(e) The Swingline Lender may by written notice given to the
Administrative Agent not later than 12:00 noon, New York City time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such notice
shall specify the aggregate amount of Swingline Loans in which Revolving Lenders
will participate. Promptly upon receipt of such notice (but no later than 2:00
p.m., New York City time, on such Business Day), the Administrative Agent will
give notice thereof to each Revolving Lender, specifying in such notice such
Lender's Applicable Percentage of such Swingline Loan or Loans. Each Revolving
Lender hereby absolutely and unconditionally agrees, upon timely receipt of
notice as provided above, to pay to the Administrative Agent, for the account of
the Swingline Lender, such Lender's Applicable Percentage of such Swingline Loan
or Loans. Each Revolving Lender acknowledges and agrees that its obligation to
acquire participations in Swingline Loans pursuant to this paragraph is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Each Revolving
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Revolving Lenders. The Administrative Agent shall notify
the Borrower of any participations in any Swingline Loan acquired pursuant to
this paragraph, and thereafter payments in respect of such Swingline Loan shall
be made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other Person on behalf of
the Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent, and any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear. The
purchase of participations in a Swingline Loan pursuant to this paragraph shall
not relieve the Borrower of any default in the payment thereof.
SECTION 2.05. Letters of Credit. (a) General. Subject to the
terms and conditions set forth herein, the Borrower may request the issuance of
(and the applicable Issuing Bank, as specified by the Borrower, will issue)
Letters of Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the relevant Issuing Bank, at any time and from time to
time during the Revolving Availability Period. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, an Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the applicable Issuing Bank) to
the relevant Issuing Bank and the Administrative Agent (reasonably in advance of
the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
of this Section), the amount of such Letter of Credit, the name and address of
the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by an
Issuing Bank, the Borrower also shall submit a letter of credit application on
such Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the total LC Exposure shall
not exceed $300,000,000, (ii) the amount of the LC Exposure attributable to
Letters of Credit issued by the applicable Issuing Bank will not exceed the LC
Commitment of such Issuing Bank and (iii) the total Revolving Exposures shall
not exceed the lesser of (A) the total Revolving Commitments at such time and
(B) the Borrowing Base Amount in effect at such time minus the outstanding
Tranche 1 Term Loans at such time.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date that is one year
after the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension) and (ii)
the date that is five Business Days prior to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the applicable Issuing Bank or the Lenders,
such Issuing Bank hereby grants to each Revolving Lender, and each Revolving
Lender hereby acquires from such Issuing Bank, a participation in such Letter of
Credit in an amount equal to such Lender's Applicable Percentage of the
aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the applicable Issuing Bank, such Lender's Applicable Percentage
of each LC Disbursement made by such Issuing Bank and not reimbursed by the
Borrower on the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the Borrower for any reason.
Each Revolving Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If any Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 3:30 p.m., New York City time, on the date that such
LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 1:00 p.m., New York City time, on the Business Day
immediately following the day that the Borrower receives such notice; provided
that, if such LC Disbursement is not less than $5,000,000, the Borrower may,
subject to the conditions to borrowing set forth herein, request in accordance
with Section 2.03 or 2.04 that such payment be financed with an ABR Revolving
Borrowing or Swingline Loan in an equivalent amount and, to the extent so
financed, the Borrower's obligation to make such payment shall be discharged and
replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the
Borrower fails to make such payment when due, the Administrative Agent shall
notify each Revolving Lender of the applicable LC Disbursement, the payment then
due from the Borrower in respect thereof and such Lender's Applicable Percentage
thereof. Promptly following receipt of such notice, each Revolving Lender shall
pay to the Administrative Agent its Applicable Percentage of the payment then
due from the Borrower, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the relevant Issuing Bank the amounts
so received by it from the Revolving Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to such
Issuing Bank or, to the extent that Revolving Lenders have made payments
pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders
and such Issuing Bank as their interests may appear. Any payment made by a
Revolving Lender pursuant to this paragraph to reimburse an Issuing Bank for any
LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline
Loan as contemplated above) shall not constitute a Loan and shall not relieve
the Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein or herein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by any Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. None of
the Administrative Agent, any Lender or any Issuing Bank, or any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
relevant Issuing Bank; provided that the foregoing shall not be construed to
excuse such Issuing Bank from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Borrower to the fullest extent permitted by applicable
law) suffered by the Borrower that are caused by such Issuing Bank's gross
negligence or wilful misconduct (as determined by a court of competent
jurisdiction by a final and non-appealable judgment) in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that, in the absence of gross
negligence or wilful misconduct on the part of an Issuing Bank (as determined by
a court of competent jurisdiction by a final and non-appealable judgment), such
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, an
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) Disbursement Procedures. The applicable Issuing Bank
shall, promptly following its receipt thereof, examine all documents purporting
to represent a demand for payment under a Letter of Credit. The applicable
Issuing Bank shall promptly notify the Administrative Agent and the Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether such
Issuing Bank has made or will make an LC Disbursement thereunder; provided that
any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Issuing Bank and the Revolving
Lenders with respect to any such LC Disbursement.
(h) Interim Interest. If an Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
applicable Issuing Bank, except that interest accrued on and after the date of
payment by any Revolving Lender pursuant to paragraph (e) of this Section to
reimburse such Issuing Bank shall be for the account of such Lender to the
extent of such payment.
(i) Resignation or Replacement of the Issuing Bank. An Issuing
Bank may resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Borrower and the Lenders, and an Issuing Bank may be
replaced at any time by written agreement (an "Issuing Bank Agreement") among
the Borrower, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank, which shall set forth the LC Commitment of such Issuing
Bank. The Administrative Agent shall notify the Lenders of any such replacement
of an Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of an Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall (or shall cause
Subsidiary Loan Parties to) deposit in an account with the Administrative Agent,
in the name of the Administrative Agent and for the benefit of the Lenders, an
amount in cash equal to the total LC Exposure as of such date plus any accrued
and unpaid interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower or any
Subsidiary Loan Party described in clause (h) or (i) of Article VII. The
Borrower also shall (or shall cause Subsidiary Loan Parties to) deposit cash
collateral pursuant to this paragraph as and to the extent required by Section
2.11(b), and any such cash collateral so deposited and held by the
Administrative Agent hereunder shall constitute part of the Borrowing Base
Amount for purposes of determining compliance with Section 2.11(b). Each such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. The Administrative Agent
shall, at the Borrower's risk and expense, invest all such deposits in Permitted
Investments chosen in the sole discretion of the Administrative Agent after
consultation with the Borrower, provided that no consultation shall be required
if a Default has occurred and is continuing. Other than any interest earned in
respect of the investment of such deposits, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in
such account. Moneys in such account shall be applied by the Administrative
Agent to reimburse each Issuing Bank for LC Disbursements for which it has not
been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated (but
subject to the consent of Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure), be applied to satisfy the Senior
Obligations. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default have been cured or waived (or,
during a Cash Sweep Period, paid into the Citibank Concentration Account). If
the Borrower is required to provide an amount of cash collateral hereunder
pursuant to Section 2.11(b), such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower as and to the extent that, after
giving effect to such return, the Borrower would remain in compliance with
Section 2.11(b) and no Default shall have occurred and be continuing. Unless and
except to the extent that the deposit of cash collateral directly by the
Borrower would not result in an obligation to grant a security interest in such
cash collateral to the holders of other outstanding Indebtedness of the
Borrower, the Borrower will cause Subsidiary Loan Parties to deposit all cash
collateral required to be deposited pursuant to this Section 2.05(j) or Section
2.11(b).
(k) Additional Issuing Banks The Borrower may, at any time and
from time to time with the consent of the Administrative Agent (which consent
shall not be unreasonably withheld) and such Lender, designate one or more
additional Lenders to act as an issuing bank under the terms of this Agreement.
Any Lender designated as an issuing bank pursuant to this clause (k) shall be
deemed to be an "Issuing Bank" (in addition to being a Lender) in respect of
Letters of Credit issued or to be issued by such Lender, and, with respect to
such Letters of Credit, such term shall thereafter apply to the other Issuing
Banks and such Lender in its capacity as an Issuing Bank.
(l) Reporting by Issuing Banks to the Administrative Agent. At
the end of each week and otherwise upon request of the Administrative Agent,
each Issuing Bank shall provide the Administrative Agent with a certificate
identifying the Letters of Credit issued by such Issuing Bank and outstanding on
such date, the amount and expiration date of each such Letter of Credit, the
beneficiary thereof, the amount, if any, drawn under each such Letter of Credit
and any other information reasonably requested by the Administrative Agent with
respect to such Letters of Credit. The Administrative Agent shall promptly enter
all such information received by it pursuant to this Section 2.05(l) in the
Register.
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall
make each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York City time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders; provided that Swingline Loans shall be made as
provided in Section 2.04. The Administrative Agent will make such Loans
available to the Borrower by wire transfer, in like funds, to an account
designated by the Borrower in the applicable Borrowing Request. Wire transfers
to the Borrower of all Loans (other than Swingline Loans and same-day ABR
Revolving Borrowings) shall be made no later than 1:00 p.m., New York City time.
Wire transfers to the Borrower of Swingline Loans and same-day ABR Revolving
Borrowings shall be made no later than 4:00 p.m., New York City time.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to ABR Revolving Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections. (a) Each Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Borrower may elect to
convert such Borrowing to a different Type or to continue such Borrowing and, in
the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as
provided in this Section. The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. This Section shall not apply to Swingline Borrowings, which
may not be converted or continued.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the
time that a Borrowing Request would be required to be made under Section
2.03 if the Borrower were requesting a Revolving Borrowing of the Type
resulting from such election to be made on the effective date of such
election. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to
the Administrative Agent of a written Interest Election Request in a form
approved by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02 and
paragraph (f) of this Section:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified pursuant
to clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
(f) A Revolving Borrowing or Tranche 1 Term Borrowing may not
be converted to or continued as a Eurodollar Borrowing if after giving effect
thereto the Interest Period therefor would end after the Maturity Date.
SECTION 2.08. Termination and Reduction of Commitments. (a)
Unless previously terminated in accordance with the terms of this Agreement, (i)
the Tranche 1 Term Commitments shall terminate at 5:00 p.m., New York City time
on the First Restatement Effective Date and (ii) the Revolving Commitments shall
terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to
time reduce, the Commitments of any Class; provided that (i) each reduction of
the Commitments of any Class shall be in an amount that is an integral multiple
of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.11,
the total Revolving Exposures would exceed the total Revolving Commitments.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least one Business Day prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any such notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of voluntary termination of the Revolving Commitments delivered by the Borrower
may state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments of
any Class shall be permanent. Each reduction of the Commitments of any Class
shall be made ratably among the Lenders in accordance with their Commitments of
such Class.
SECTION 2.09. Repayment of Loans; Evidence of Indebtedness.
(a) The Borrower hereby unconditionally promises to pay (i) to the
Administrative Agent for the account of each Tranche 1 Term Lender the then
unpaid principal amount of the Tranche 1 Term Loan of such Lender as provided in
Section 2.10, (ii) to the Administrative Agent for the account of each Revolving
Lender the then unpaid principal amount of each Revolving Loan of such Lender on
the Maturity Date and (iii) to the Swingline Lender the then unpaid principal
amount of each Swingline Loan on the earlier of (A) the Maturity Date and (B)
the date that is seven days after the date on which such Swingline Loan was
made; provided that on each date that a Revolving Borrowing is made, the
Borrower shall repay all Swingline Loans that were outstanding on the date such
Borrowing was requested.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period, if any, applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it
be evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in the form attached hereto as Exhibit A-1 or A-2, as applicable,
or in such other form approved by the Administrative Agent and the Borrower.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 9.04) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
SECTION 2.10. Repayment of Tranche 1 Term Loans. (a) To the
extent not previously paid, all Tranche 1 Term Loans shall be due and payable on
the Maturity Date.
(b) Prior to any repayment of any Tranche 1 Term Borrowing
hereunder, the Borrower shall select the Borrowing or Borrowings to be repaid
and shall notify the Administrative Agent by telephone (confirmed by telecopy)
of such selection not later than 11:00 a.m., New York City time, three Business
Days before the scheduled date of such repayment. Each repayment of a Borrowing
shall be applied ratably to the Loans included in the repaid Borrowing.
Repayments of Tranche 1 Term Borrowings shall be accompanied by accrued interest
on the amount repaid.
SECTION 2.11. Prepayment of Loans. (a) The Borrower shall have
the right, at any time and from time to time, to prepay any Borrowing in whole
or in part, subject to the requirements of this Section; provided, however, that
any partial prepayment made pursuant to this Section 2.11(a) shall be in a
principal amount that is a multiple of $1,000,000 and not less than $5,000,000.
(b) (i) In the event and on each date that the sum of (A) the
total Revolving Exposures on such date and (B) the outstanding Tranche 1 Term
Loans on such date exceed the then-current Borrowing Base Amount, the Borrower
shall on each such date apply an amount equal to such excess as follows: first,
to prepay Revolving Borrowings or Swingline Loans, second, to the extent of any
remaining excess, or if no Revolving Borrowings or Swingline Loans are
outstanding, to make a deposit in a cash collateral account maintained by the
Administrative Agent pursuant to Section 2.05(j) to be held as security for the
Borrower's obligations in respect of Letters of Credit and third, to the extent
of any remaining excess, to prepay Tranche 1 Term Borrowings.
(ii) In the event and on each date that the total Revolving
Exposures exceed the total Revolving Commitments, the Borrower shall on such
date apply an amount equal to such excess first, to prepay Revolving Borrowings
or Swingline Borrowings, and second, to the extent of any remaining excess, or
if no Revolving Borrowings or Swingline Loans are outstanding, to a cash
collateral account maintained by the Administrative Agent pursuant to Section
2.05(j) to be held as security for the Borrower's obligations in respect of
Letters of Credit.
(c) Prior to any optional or mandatory prepayment of
Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to
be prepaid and shall specify such selection in the notice of such prepayment
pursuant to paragraph (d) of this Section.
(d) The Borrower shall notify the Administrative Agent (and,
in the case of prepayment of a Swingline Loan, the Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, New York City time,
on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the Borrowings to be prepaid and the principal
amount of each Borrowing or portion thereof to be prepaid and, in the case of a
mandatory prepayment, a reasonably detailed calculation of the amount of such
prepayment; provided that, if a notice of optional prepayment is given in
connection with a conditional notice of termination of the Revolving Commitments
as contemplated by Section 2.08, then such notice of prepayment may be revoked
if such notice of termination is revoked in accordance with Section 2.08.
Promptly following receipt of any such notice (other than a notice relating
solely to Swingline Loans), the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing shall be in an
amount that would be permitted in the case of an advance of a Borrowing of the
same Type as provided in Section 2.02, except as necessary to apply fully the
required amount of a mandatory prepayment. Each prepayment of a Borrowing shall
be applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.13.
SECTION 2.12. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee,
which shall accrue at the rate of 0.25% per annum on the daily unused amount of
the Revolving Commitment of such Lender during the period from and including the
Original Restatement Effective Date to but excluding the date on which such
Commitment terminates. Accrued commitment fees shall be payable in arrears on
the last day of March, June, September and December of each year and on the date
on which the Revolving Commitments terminate, commencing on the first such date
to occur after the Original Restatement Effective Date. All commitment fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day). For purposes of computing commitment fees pursuant to this Section
2.12(a), a Revolving Commitment of a Lender shall be deemed to be used to the
extent of the outstanding Revolving Loans and LC Exposure of such Lender (and
the Swingline Exposure of such Lender shall be disregarded for such purpose).
(b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate as in effect from time to time for interest on Eurodollar Revolving Loans
on the daily amount of such Lender's LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Original Restatement Effective Date to but excluding the later of
the date on which such Lender's Revolving Commitment terminates and the date on
which such Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank
a fronting fee, which shall accrue at the rate of 0.25% per annum on the daily
outstanding amount of such Issuing Bank's Letters of Credit during the period
from and including the Original Restatement Effective Date to but excluding the
later of the date of termination of the Revolving Commitments and the date on
which there ceases to be any LC Exposure, as well as such Issuing Bank's
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Original Restatement Effective Date; provided that all such fees shall be
payable on the date on which the Revolving Commitments terminate and any such
fees accruing after the date on which the Revolving Commitments terminate shall
be payable on demand. Any other fees payable to an Issuing Bank pursuant to this
paragraph shall be payable within 10 days after demand. All participation fees
and fronting fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent and
the Collateral Agent, for their own accounts, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative
Agent or the Collateral Agent, as the case may be.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the relevant
Issuing Bank, in the case of fees payable to it) for distribution, in the case
of commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR
Borrowing (including each Swingline Loan) shall bear interest at the Alternate
Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, upon the occurrence and
during the continuation of an Event of Default, at the option of the
Administrative Agent or at the request of the Required Lenders, the Borrower
shall pay interest on all of the Senior Obligations to but excluding the date of
actual payment, after as well as before judgment, (i) in the case of principal,
at a rate per annum equal to 2% plus the rate otherwise applicable to such Loan
as provided in the preceding paragraphs of this Section and (ii) in the case of
any other amount, at a rate per annum equal to 2% plus the rate applicable to
ABR Revolving Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and (i) in the case of Tranche 1
Term Loans, on the Maturity Date and (ii) in the case of Revolving Loans, the
earlier of the Maturity Date and the date on which all Revolving Commitments
hereunder are terminated; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Revolving Availability Period), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion, together with any amounts due and payable pursuant to Section 2.16.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Citibank Base
Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(b) the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest
Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or any Issuing Bank; or
(ii) impose on any Lender or any Issuing Bank or the London
interbank market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or such
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender or any Issuing Bank determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or such Issuing Bank's capital or
on the capital of such Lender's or such Issuing Bank's holding company, if any,
as a consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by such
Issuing Bank, to a level below that which such Lender or such Issuing Bank or
such Lender's or such Issuing Bank's holding company could have achieved but for
such Change in Law (taking into consideration such Lender's or such Issuing
Bank's policies and the policies of such Lender's or such Issuing Bank's holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing Bank
or such Lender's or such Issuing Bank's holding company for any such reduction
suffered. Each Lender will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge that will entitle such Lender to
compensation pursuant to this Section 2.15; provided that the failure to provide
such notification will not affect such Lender's rights to compensation
hereunder.
(c) A certificate of a Lender or an Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or such Issuing Bank
or its holding company, as the case may be, as specified in paragraph (a) or (b)
of this Section shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender or such Issuing Bank,
as the case may be, the amount shown as due on any such certificate within 10
days after receipt thereof.
(d) Failure or delay on the part of any Lender or any Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or such Issuing Bank's right to demand such
compensation; provided that the Borrower shall not be required to compensate a
Lender or an Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that such Lender or
such Issuing Bank, as the case may be, notifies the Borrower of the Change in
Law giving rise to such increased costs or reductions and of such Lender's or
such Issuing Bank's intention to claim compensation therefor; provided further
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 270-day period referred to above shall be extended to
include the period of retroactive effect thereof.
SECTION 2.16. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.11(d) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
consist of an amount determined by such Lender to be the excess, if any, of (i)
the amount of interest which would have accrued on the principal amount of such
Loan had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on account
of any obligation of the Borrower hereunder or under any other Senior Loan
Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Agent, Lender or Issuing Bank (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent,
each Lender and each Issuing Bank, within 10 days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or such Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of the
Borrower hereunder or under any other Senior Loan Document (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender or an Issuing Bank,
or by the Administrative Agent on its own behalf or on behalf of a Lender or an
Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate, provided that such Foreign Lender
has received written notice from the Borrower advising it of the availability of
such exemption or reduction and supplying all applicable documentation.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing
of Setoffs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Senior Loan Document (whether of principal,
interest, fees or reimbursement of LC Disbursements, or of amounts payable under
Section 2.15, 2.16 or 2.17, or otherwise) prior to the time expressly required
hereunder or under such other Senior Loan Document for such payment (or, if no
such time is expressly required, prior to 2:00 p.m., New York City time), on the
date when due, in immediately available funds, without setoff or counterclaim.
Any amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, except payments to be made directly to an Issuing
Bank or Swingline Lender as expressly provided herein and except that payments
pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the
Persons entitled thereto and payments pursuant to other Senior Loan Documents
shall be made to the Persons specified therein. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
under any Senior Loan Document shall be due on a day that is not a Business Day,
the date for payment shall be extended to the next succeeding Business Day, and,
in the case of any payment accruing interest, interest thereon shall be payable
for the period of such extension. All payments under each Senior Loan Document
shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements or Swingline
Loans resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in LC Disbursements and
Swingline Loans and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate relative amounts of principal of and accrued
interest on their Loans and participations in LC Disbursements and Swingline
Loans; provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of setoff and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
an Issuing Bank, as the case may be, the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or such
Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or such Issuing Bank with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or
9.03(c), then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.15, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If (i) any Lender requests compensation under Section
2.15, (ii) the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section
2.17, (iii) any Lender defaults in its obligation to fund Loans hereunder or
(iv) any Lender refuses to consent to any amendment or waiver of any Senior Loan
Document requested by the Borrower that requires the consent of all Lenders, and
such amendment or waiver is consented to by the Supermajority Lenders, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, the Issuing Banks and the Swingline
Lender), which consent shall not unreasonably be withheld, (ii) such Lender
shall have received payment of an amount equal to the outstanding principal of
its Loans and participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17, such
assignment will result in a material reduction in such compensation or payments.
A Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
SECTION 2.20. Adjustments to Borrowing Base Advance Rates. (a)
As of the First Restatement Effective Date, the Accounts Receivable Advance Rate
will be 85%, the Pharmaceutical Inventory Advance Rate will be 85%, the Other
Inventory Advance Rate will be 80% and the Scripts List Advance Rate will be
30%.
(b) Any increase in the Pharmaceutical Inventory Advance Rate,
the Other Inventory Advance Rate, the Accounts Receivable Advance Rate or the
Script Lists Advance Rate above that would result in any rate in excess of the
initially applicable rate set forth in Section 2.20(a) will in each case require
the consent of all the Lenders.
(c) The Collateral Agent, in the exercise of its reasonable
judgment to reflect Borrowing Base Factors, may (i) reduce the Accounts
Receivable Advance Rate, the Pharmaceutical Inventory Advance Rate, the Other
Inventory Advance Rate and the Script Lists Advance Rate from time to time and
(ii) thereafter increase such rate to a rate not in excess of the applicable
rate set forth in Section 2.20(a).
(d) The Administrative Agent will give prompt written notice
to the Borrower and the Lenders of any adjustments effected pursuant to this
Section 2.20.
SECTION 2.21. Incremental Loans. At any time after the First
Restatement Effective Date prior to the Maturity Date, the Borrower may, by
notice to the Administrative Agent (which shall promptly deliver a copy to each
of the Lenders), request the addition to this Agreement of a new tranche of term
loans, or an incremental revolving credit facility or any combination thereof
(the "Incremental Facilities"); provided, however, that both (x) at the time of
any such request and (y) upon the effectiveness of any such Incremental
Facility, no Default shall exist and the Borrower shall, if a Financial Covenant
Effectiveness Period is then occurring, be in compliance with Section 6.12
(calculated, in the case of clause (y), on a pro forma basis to give effect to
any borrowing under the Incremental Facility and any substantially simultaneous
repayments of Revolving Loans). The Incremental Facilities shall (i) be in an
aggregate principal amount not in excess of $350,000,000, (ii) rank pari passu
in right of payment and of security with the other Loans, (iii) if such
Incremental Facility is a term loan facility, amortize in a manner, and be
subject to mandatory prepayments (if any) on terms, acceptable to the Agents,
and mature no earlier than the Maturity Date, (iv) bear interest at the market
interest rate, as determined at the time such Incremental Facility becomes
effective, (v) have such other pricing as may be agreed by the Borrower and the
Administrative Agent and (vi) otherwise be treated hereunder no more favorably
than the Revolving Loans; provided, that the terms and provisions applicable to
the Incremental Facilities may provide for additional or different financial or
other covenants applicable only during periods after the Maturity Date. At no
time shall the sum of (i) the aggregate amount of loans outstanding under the
Incremental Facilities at such time, (ii) the total Revolving Exposure at such
time and (iii) the outstanding Tranche 1 Term Loans at such time exceed the
Borrowing Base Amount in effect at such time, and the proceeds of the
Incremental Facilities shall be used solely for the purposes set forth in
Section 5.10. Such notice shall set forth the requested amount and class of
Incremental Facilities, and shall offer each Lender the opportunity to offer a
commitment (the "Incremental Commitment") to provide a portion of the
Incremental Facility by giving written notice of such offered commitment to the
Administrative Agent and the Borrower within a time period (the "Offer Period")
to be specified in the Borrower's notice; provided, however, that no existing
Lender will be obligated to subscribe for any portion of such commitments. In
the event that, at the expiration of the Offer Period, Lenders shall have
provided commitments in an aggregate amount less than the total amount of the
Incremental Facility initially requested by the Borrower, the Borrower may
request that Incremental Facility commitments be made in a lesser amount equal
to such commitments and/or shall have the right to arrange for one or more banks
or other financial institutions (any such bank or other financial institution
being called an "Additional Lender") to extend commitments to provide a portion
of the Incremental Facility in an aggregate amount equal to the unsubscribed
amount of the initial request; provided that each Additional Lender shall be
subject to the approval of the Administrative Agent (such consent not to be
unreasonably withheld); and provided further that the Additional Lenders shall
be offered the opportunity to provide the Incremental Facility only on terms
previously offered to the existing Lenders pursuant to the immediately preceding
sentence. Commitments in respect of Incremental Facilities will become
Commitments under this Agreement pursuant to an amendment to this Agreement
(such an amendment, an "Incremental Facility Amendment") executed by each of the
Borrower and each Subsidiary Loan Party, each Lender agreeing to provide such
Commitment, if any, each Additional Lender, if any, and the Administrative
Agent. The effectiveness of any Incremental Facility Amendment shall be subject
to the satisfaction on the date thereof of each of the conditions set forth in
Section 4.02 of the Original Agreement as in effect immediately prior to the
First Restatement Effective Date.
ARTICLE III
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and
the Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization; Enforceability. The Transactions
to be entered into by each Loan Party are within such Loan Party's corporate
powers and have been duly authorized by all necessary corporate and, if
required, stockholder action. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Senior Loan Document
to which any Loan Party is to be a party, when executed and delivered by such
Loan Party, will constitute, a legal, valid and binding obligation of the
Borrower or such Loan Party (as the case may be), enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect and except filings
necessary to perfect Liens created under the Senior Loan Documents, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of the Subsidiaries or any order
of any Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument evidencing or governing
Indebtedness or any other material agreement binding upon the Borrower or any
Subsidiary or its assets, or give rise to a right thereunder to require any
payment to be made by the Borrower or any Subsidiary, and (d) will not result in
the creation or imposition of any Lien on any asset of the Borrower or any
Subsidiary, except Liens created under the Senior Loan Documents and the Second
Priority Collateral Documents.
SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders equity and cash flows as of
and for the fiscal year ended March 4, 2006, reported on by Deloitte & Touche
LLP. Such financial statements present fairly the financial position and results
of operations and cash flows of the Borrower and its Consolidated Subsidiaries
as of such dates and for such periods in accordance with GAAP.
(b) Except as disclosed (i) in the financial statements
referred to in paragraph (a) above or the notes thereto, (ii) in the Borrower's
report or Form 10-K for the fiscal year ended March 4, 2006 or (iii) on Schedule
3.04, after giving effect to the Transactions, none of the Borrower or the
Subsidiaries has, as of the First Restatement Effective Date, any material
contingent liabilities, unusual long-term loan commitments or unrealized losses.
(c) Since March 4, 2006, there has been no material adverse
change in the business, assets, operations, properties, condition (financial or
otherwise), or prospects of the Borrower and the Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Borrower and the
Subsidiaries has good and marketable title to, or valid leasehold interests in,
all its real and personal property material to its business, except for minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to utilize such properties for their intended
purposes. All such real and personal property are free and clear of all Liens,
other than Liens permitted by Section 6.02.
(b) Each of the Borrower and the Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrower and the Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(c) Schedule 3.05(c) sets forth the address of every leased
warehouse or distribution center in which inventory owned by the Borrower or any
Subsidiary is located as of the First Restatement Effective Date.
SECTION 3.06. Litigation and Environmental Matters. (a) Except
as set forth on Schedule 3.06(a), there are no actions, suits or proceedings by
or before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
of the Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect or (ii) that involve any of the Senior Loan Documents or the
Transactions.
(b) Except as set forth on Schedule 3.06(b) and except with
respect to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the
Borrower nor any of the Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
SECTION 3.07. Compliance with Laws and Agreements. Each of the
Borrower and the Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property
(including, without limitation, the Health Insurance Portability and
Accountability Act of 1996 ("HIPAA")and all other material healthcare laws and
regulations) and all indentures, agreements and other instruments binding upon
it or its property or assets, except where the failure to be so, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect. No Default has occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. Neither
the Borrower nor any of the Subsidiaries is an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940.
SECTION 3.09. Taxes. Each of the Borrower and the Subsidiaries
has timely filed or caused to be filed all United States Federal income tax
returns and reports and all other material tax returns and reports required to
have been filed and has paid or caused to be paid all material Taxes due
pursuant to such returns or pursuant to any assessment received by the Borrower
or any Subsidiary, except where the payment of any such Taxes is being contested
in good faith by appropriate proceedings and for which the Borrower or such
Subsidiary, as applicable, has set aside on its books adequate reserves. The
charges, accruals and reserves on the books of the Borrower and its Consolidated
Subsidiaries in respect of Taxes or charges imposed by a Governmental Authority
are, in the opinion of the Borrower, adequate.
SECTION 3.10. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other ERISA
Events for which liability is reasonably expected to result, could reasonably be
expected to result in liability exceeding $50,000,000. The minimum funding
standards of ERISA and the Code with respect to each Plan have been satisfied.
The present value of all accumulated benefit obligations under each Plan (based
on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $50,000,000 the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed by more than $50,000,000 the fair market value of the
assets of all such underfunded Plans.
SECTION 3.11. Disclosure; Accuracy of Information. (a) As of
the First Restatement Effective Date, none of the reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party to
any Agent or any Lender in connection with the negotiation of this Agreement or
any other Senior Loan Document or delivered hereunder or thereunder (as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
(b) Each Borrowing Base Certificate that has been or will be
delivered to the Collateral Agent, the Administrative Agent or any Lender is and
will be complete and correct in all material respects.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth the name
of, and the ownership interest of the Borrower in, each Subsidiary and
identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of
the First Restatement Effective Date. As of the First Restatement Effective
Date, each of the Subsidiaries is an "Unrestricted Subsidiary" as defined in,
and for all purposes of, the Effective Date Indentures.
SECTION 3.13. Insurance. Schedule 3.13 sets forth a
description of all liability, property and casualty insurance maintained by or
on behalf of the Borrower and the Subsidiaries as of the First Restatement
Effective Date. As of the First Restatement Effective Date, all premiums in
respect of such insurance have been paid. The Borrower and the Subsidiaries have
insurance in such amounts and covering such risks and liabilities as are in
accordance with normal industry practice and as required by the Senior Loan
Documents. The Borrower reasonably believes that the insurance maintained by or
on behalf of the Borrower and the Subsidiaries is adequate.
SECTION 3.14. Labor Matters. As of the First Restatement
Effective Date, there are no strikes, lockouts or slowdowns against the Borrower
or any Subsidiary pending or, to the knowledge of the Borrower, threatened which
could reasonably be expected to result in a Material Adverse Effect. The hours
worked by and payments made to employees of the Borrower and the Subsidiaries
have not been in violation in any material respect of the Fair Labor Standards
Act or any other applicable Federal, state, local or foreign law dealing with
such matters. All payments due from the Borrower or any Subsidiary, or for which
any claim may be made against the Borrower or any Subsidiary, on account of
wages and employee health and welfare insurance and other benefits, have been
paid or accrued as a liability on the books of the Borrower or such Subsidiary.
The consummation of the Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Borrower or any Subsidiary is
bound.
SECTION 3.15. Solvency. Immediately after the consummation of
the Transactions to occur on the First Restatement Effective Date, immediately
following the making of each Loan made on the First Restatement Effective Date,
and after giving effect to the application of the proceeds of such Loans, (a)
the fair value of the assets of the Borrower and the other Loan Parties, taken
as a whole, at a fair valuation, will exceed their debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of the Borrower and the other Loan Parties, taken as a whole, will
be greater than the amount that will be required to pay the probable liability
of their debts and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured; (c) the Borrower
and the other Loan Parties taken as a whole, will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) the Borrower and the other Loan
Parties will not have unreasonably small capital with which to conduct the
business in which they are engaged as such business is now conducted and is
proposed to be conducted following the First Restatement Effective Date.
SECTION 3.16. Federal Reserve Regulations. (a) Neither the
Borrower nor any Subsidiary is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of buying or
carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of
Credit will be used by the Borrower or any Subsidiary, whether directly or
indirectly, and whether immediately, incidentally or ultimately, for any purpose
that entails a violation of, or that is inconsistent with, the provisions of
Regulation T, U or X of the Board.
SECTION 3.17. Security Interests. The Senior Subsidiary
Security Agreement is effective to create in favor of the Collateral Agent, for
the ratable benefit of the Senior Secured Parties, a legal, valid and
enforceable security interest in the Senior Collateral subject to such agreement
and, when financing statements in appropriate form are filed in the offices
specified on Schedule 6 to the Perfection Certificate, such security interest
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the grantors thereunder in the Senior Collateral, to the
extent perfection can be obtained by filing Uniform Commercial Code financing
statements, in each case prior and superior in right to any other Person to the
extent perfection can be obtained by filing Uniform Commercial Code financing
statements, other than with respect to the rights of Persons pursuant to Liens
expressly permitted by Section 6.02.
SECTION 3.18. Use of Proceeds. The Borrower will use the
proceeds of the Loans and will request the issuance of Letters of Credit only
for the purposes specified in the preamble to this Agreement and set forth in
Section 5.10.
ARTICLE IV
Conditions
----------
SECTION 4.01. First Restatement Effective Date. Without
affecting the rights of the Borrower or any Subsidiary hereunder at all times
prior to the First Restatement Effective Date, the amendment and restatement in
the form hereof of the Original Agreement and the obligations of the Lenders to
make Loans and acquire participations in Letters of Credit and Swingline Loans
and of the Issuing Banks to issue Letters of Credit hereunder shall not become
effective until the date on which the conditions set forth in Sections 1.2(b)
and 1.3 of the Amendment and Restatement Agreement shall have been satisfied.
It is understood and agreed that no term of the amendment and
restatement contemplated hereby shall be effective until the First Restatement
Effective Date occurs, and that the Original Agreement shall continue in full
force and effect without regard to the amendment and restatement contemplated
hereby until the First Restatement Effective Date.
SECTION 4.02. Each Credit Event. The obligation of each
Revolving Lender to make a Revolving Loan on the occasion of any Revolving
Borrowing after the First Restatement Effective Date, and of each Issuing Bank
to issue, amend, renew or extend any Letter of Credit after the First
Restatement Effective Date, is subject to receipt of the request therefore in
accordance herewith and to the satisfaction of the following conditions (each
Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit (for purposes of this Section, an "issuance") shall be deemed to
constitute a representation and warranty by Borrower on the date thereof as to
the matters specified in paragraphs (a), (b) and (c) of this Section):
(a) the representations and warranties of the Loan Parties
contained in each Senior Loan Document are true and correct in all material
respects on and as of the date of such Borrowing or issuance, before and
after giving effect to such Borrowing or issuance and to the application of
the proceeds therefrom, as though made on and as of such date (except to
the extent any such representation or warranty expressly relates to an
earlier date, in which case such representation and warranty shall have
been true and correct in all material respects as of such earlier date);
(b) no event has occurred and is continuing, or would result
from such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default or an Event of Default and such
Borrowing or issuance would not result in a violation of the amount of
secured Indebtedness permitted under the Second Priority Debt Documents;
and
(c) after giving effect to such Borrowing or issuance, the
Borrowing Base Amount shall be equal to or greater than the sum of (i) the
total Revolving Exposures and (ii) the outstanding Tranche 1 Term Loans.
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired, terminated or
been cash collateralized and all LC Disbursements shall have been reimbursed,
the Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) as soon as available and in any event within 105 days (or
such earlier date that is 10 days after the then-current filing deadline
for the Borrower's Annual Report on Form 10-K) after the end of each fiscal
year of the Borrower, its audited consolidated balance sheet and related
statements of income and cash flows as of the end of and for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by Deloitte & Touche LLP or another registered
independent public accounting firm of recognized national standing (without
a "going concern" or like qualification or exception and without any
material qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial position, results of operations and cash
flows of the Borrower and its Consolidated Subsidiaries on a consolidated
basis in accordance with GAAP;
(b) as soon as available and in any event within 50 days (or
such earlier date that is five days after the then-current filing deadline
for the Borrower's Quarterly Report on Form 10-Q) after the end of each of
the first three fiscal quarters of each fiscal year of the Borrower, its
consolidated balance sheet as of the end of such fiscal quarter and related
statements of income for such fiscal quarter and of income and cash flows
for the then elapsed portion of such fiscal year, setting forth in each
case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year;
(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer (i)
certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed
to be taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating (x) compliance with Section 6.08(c) and (y) the
Borrower's ratio under Section 6.12, (iii) stating whether any change in
GAAP or in the application thereof has occurred since the date of the
Borrower's audited financial statements referred to in Section 3.04 and, if
any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate, (iv) identifying any
Subsidiary formed or acquired since the end of the fiscal quarter
immediately preceding the most recent fiscal quarter covered by such
financial statements, (v) identifying any change in a Subsidiary Loan
Party's name, form of organization or jurisdiction of organization,
including as a result of any merger transaction, since the end of the
fiscal quarter immediately preceding the most recent fiscal quarter covered
by such financial statements, (vi) setting forth the aggregate amount of
Optional Debt Repurchases made by the Borrower during the most recent
fiscal quarter covered by such financial statements, identifying the
Indebtedness repurchased, redeemed, retired or defeased and specifying the
provisions of Section 6.08(b) or (c) pursuant to which each such Optional
Debt Repurchase was effected and quantifying the amounts effected under
each such provision, (vii) setting forth the amount and type of
Indebtedness issued or incurred and Securitizations (or increases in the
amounts thereof) and Factoring Transactions consummated during the most
recent fiscal quarter covered by such financial statements, (viii)
identifying, with respect to all Indebtedness of the Borrower and the
Subsidiaries outstanding on the date of the most recent balance sheet
included in such financial statements, the clause of Section 6.01(a)
pursuant to which such Indebtedness is then permitted to be outstanding,
(ix) setting forth the amount of Restricted Payments made during the most
recent fiscal quarter covered by such financial statements and the
provision of Section 6.08(a) pursuant to which such Restricted Payments
were made, and (x) setting forth the aggregate sale price of Eligible
Script Lists sold since the most recent date on which the Eligible Script
Lists Value was provided to the Lenders in the event aggregate sale price
for all Eligible Script Lists sold since such date of determination exceeds
5% of the most recently determined Eligible Script Lists Value;
(d) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that reported
on such financial statements (i) stating whether they obtained knowledge
during the course of their examination of such financial statements of any
Default and (ii) confirming the calculations set forth in the officer's
certificate delivered simultaneously therewith pursuant to clause (c)(ii)
above (which certificate may be limited to the extent required by
accounting rules or guidelines);
(e) within three Business Days after the end of each fiscal
month of the Borrower, a certificate of a Financial Officer setting forth
in reasonable detail a description of each disposition of assets not in the
ordinary course of business for which the book value or fair market value
of the assets of the Borrower or the Subsidiaries disposed or the
consideration received therefor was greater than $10,000,000;
(f) (i) within 14 Business Days after the end of each fiscal
month of the Borrower, a Borrowing Base Certificate showing the Borrowing
Base Amount as of the close of business on the last day of such fiscal
month, certified as complete and correct by a Financial Officer; provided
that a Borrowing Base Certificate shall be delivered by the Borrower to the
Administrative Agent and each Lender within four Business Days after the
end of a fiscal week of the Borrower if at any time during such fiscal week
the Revolver Availability is less than or equal to $200,000,000 (with the
amount with respect to Eligible Inventory stored at distribution centers
included in the Borrowing Base Amount shown on such Borrowing Base
Certificate delivered under this proviso being the amount computed as of
the close of business on the last day of the Borrower's most recent fiscal
month for which such amount is available, which computation shall be
completed within 14 Business Days after the end of each fiscal month of the
Borrower);
(g) no later than 60 days following the end of each fiscal
year of the Borrower (or, in the reasonable discretion of the
Administrative Agent, no later than 30 days thereafter), forecasts for the
Borrower and its Consolidated Subsidiaries of (i) quarterly consolidated
balance sheet data and related consolidated statements of income and cash
flows for each quarter in the next succeeding fiscal year and (ii)
consolidated balance sheet data and related consolidated statements of
income and cash flows for each of the five fiscal years immediately
following such fiscal year (but excluding any fiscal year ending after
2011);
(h) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by the Borrower or any Subsidiary with the SEC, or with any national
securities exchange, or distributed by the Borrower to its shareholders
generally, as the case may be; and
(i) promptly following any request therefor, such other
information regarding the financial condition, business or identity of the
Borrower or any Subsidiary, or compliance with the terms of any Senior Loan
Document, as any Agent, at the request of any Lender, may reasonably
request, including any information to be provided pursuant to Section 9.17.
Information required to be delivered pursuant to clauses (a), (b) and (h) shall
be deemed to have been delivered on the date on which the Borrower provides
notice to the Lenders that such information has been posted on the Borrower's
website on the Internet at xxx.xxxxxxx.xxx, at xxx.xxx.xxx/xxxxx/xxxxxxxxxxx/
webusers.htm or at another website identified in such notice and accessible by\
the Lenders without charge; provided that (i) such notice may be included in a
certificate delivered pursuant to clause (c) and (ii) the Borrower shall deliver
paper copies of the information referred to in clauses (a), (b) and (h) to any
Lender which requests such delivery.
SECTION 5.02. Notices of Material Events. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice after
any officer of the Borrower obtains knowledge of any of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any Affiliate thereof that could reasonably be
expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event;
(d) any Lien (other than security interests created under any
Senior Loan Document or Second Priority Debt Document or Permitted
Encumbrances) on any material portion of the Senior Collateral;
(e) the occurrence of any other event which could reasonably
be expected to have a material adverse effect on the security interests
created by the Senior Loan Documents or on the aggregate value of the
Senior Collateral; and
(f) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) The
Borrower will furnish to the Administrative Agent prompt written notice of any
change (i) in any Loan Party's corporate name, (ii) in the location of any Loan
Party's jurisdiction of incorporation or organization, (iii) in any Loan Party's
form of organization or (iv) in any Loan Party's Federal Taxpayer Identification
Number or other identification number assigned by such Loan Party's jurisdiction
of incorporation or formation. The Borrower agrees not to effect or permit any
change referred to in the preceding sentence unless all filings have been made
under the Uniform Commercial Code or otherwise that are required in order for
the Administrative Agent to continue at all times following such change to have
a valid, legal and perfected security interest in all the Senior Collateral. The
Borrower also agrees promptly to notify the Agents if any material portion of
the Senior Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause (a) of
Section 5.01, the Borrower shall deliver to the Agents a certificate of the
chief legal officer of the Borrower (i) setting forth the information required
pursuant to Section 1 of the Perfection Certificate or confirming that there has
been no change in such information since the date of the Perfection Certificate
delivered on the First Restatement Effective Date or the date of the most recent
certificate delivered pursuant to this Section and (ii) certifying that all
Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations, including
all refilings, rerecordings and reregistrations, containing a description of the
Senior Collateral have been filed of record in each governmental, municipal or
other appropriate office in each jurisdiction identified pursuant to clause (i)
above to the extent necessary to protect and perfect the security interests
under the Senior Subsidiary Security Agreement for a period of not less than 18
months after the date of such certificate (except as noted therein with respect
to any continuation statements to be filed within such period).
SECTION 5.04. Existence; Conduct of Business. Except as
otherwise permitted by this Agreement, the Borrower will continue, and will
cause each Subsidiary to continue, to engage in business of the same general
type as now conducted by the Borrower and the Subsidiaries. The Borrower will,
and will cause each of the Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names, in each case material to the conduct of
its business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation, dissolution or sale of assets permitted under
Section 6.03.
SECTION 5.05. Payment of Obligations. The Borrower will, and
will cause each of the Subsidiaries to, pay its Indebtedness and other
obligations, including Tax liabilities, which, if unpaid, could result in a
material Lien on any of their properties or assets, before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.06. Maintenance of Properties. The Borrower will,
and will cause each of the Subsidiaries to, keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted.
SECTION 5.07. Insurance. (a) The Borrower will, and will cause
each of the Subsidiaries to, maintain (either in the name of the Borrower or in
such Subsidiary's own name), with financially sound and reputable insurance
companies insurance in such amounts (with no greater risk retention) and against
such risks as are customarily maintained by companies of established repute
engaged in the same or similar businesses operating in the same or similar
locations. The Borrower will furnish to the Lenders, upon request of the Agents,
information in reasonable detail as to the insurance so maintained.
(b) The Borrower will, and will cause each of the Subsidiaries
to, maintain such insurance in a coverage amount of not less than 90% of the
coverage amount as of the Original Restatement Effective Date, with deductibles,
risks covered and other provisions (other than the amount of premiums) not
materially less favorable to the Borrower and the Subsidiaries as of the
Original Restatement Effective Date.
(c) The Borrower will, and will cause each of the Subsidiary
Loan Parties to, (i) cause all such policies to be endorsed or otherwise amended
to include a "standard" or "New York" lender's loss payable endorsement, in form
and substance satisfactory to the Agents, which endorsement shall provide that,
from and after the Original Restatement Effective Date if the insurance carrier
shall have received written notice from the Administrative Agent of the
occurrence of an Event of Default, the insurance carrier shall pay all proceeds
otherwise payable to the Borrower and any other Loan Party under such policies
directly to the Collateral Agent for application pursuant to the Collateral
Trust and Intercreditor Agreement; (ii) cause all such policies to provide that
neither the Borrower, the Administrative Agent, either Collateral Agent nor any
other party shall be a coinsurer thereunder and to contain a "Replacement Cost
Endorsement", without any deduction for depreciation, and such other provisions
as the Agents may reasonably require from time to time to protect their
interests; (iii) deliver broker's certificates to the Collateral Agent; (iv)
cause each such policy to provide that it shall not be canceled or not renewed
by reason of nonpayment of premium upon not less than 10 days' prior written
notice thereof by the insurer to the Administrative Agent (giving the
Administrative Agent the right to cure defaults in the payment of premiums) or
for any other reason upon not less than 30 days' prior written notice thereof by
the insurer to the Administrative Agent; and (v) deliver to the Administrative
Agent, before the cancellation or nonrenewal of any such policy of insurance, a
copy of a renewal or replacement policy (or other evidence of renewal of a
policy previously delivered to the Administrative Agent), together with evidence
reasonably satisfactory to the Agents of payment of the premium therefor.
(d) In connection with the covenants set forth in this
Section, it is agreed that:
(i) none of the Agents, the Lenders, or their agents or
employees shall be liable for any loss or damage insured by the insurance
policies required to be maintained under this Section, and (A) the Borrower
and each Subsidiary Loan Party shall look solely to their insurance
companies or any other parties other than the aforesaid parties for the
recovery of such loss or damage and (B) such insurance companies shall have
no rights of subrogation against the Agents, the Lenders or their agents or
employees. If, however, the insurance policies do not provide waiver of
subrogation rights against such parties, as required above, then the
Borrower hereby agrees, to the extent permitted by law, to waive its right
of recovery, if any, against the Agents, the Lenders and their agents and
employees; and
(ii) the designation of any form, type or amount of insurance
coverage by the Agents or the Required Lenders under this Section shall in
no event be deemed a representation, warranty or advice by the Agents or
the Lenders that such insurance is adequate for the purposes of the
business of the Borrower and the Subsidiaries or the protection of their
properties.
(e) The Borrower will, and will cause each of the Subsidiaries
to, permit any representatives that are designated by a Collateral Agent to
inspect the insurance policies maintained by or on behalf of the Borrower and
the Subsidiaries and inspect books and records related thereto and any
properties covered thereby. The Borrower shall pay the reasonable fees and
expenses of any representatives retained by a Collateral Agent to conduct any
such inspection.
SECTION 5.08. Books and Records; Inspection and Audit Rights;
Collateral and Borrowing Base Reviews. (a) The Borrower will, and will cause
each of the Subsidiaries to, keep proper books of record and account in which
full, true and correct entries are made of all dealings and transactions in
relation to its business and activities. The Borrower will, and will cause each
of the Subsidiaries to, permit any representatives designated by any Lender (at
such Lender's expense, unless a Default has occurred and is continuing, in which
case at the Borrower's expense), and after such Lender has consulted the
Administrative Agent with respect thereto, to visit and inspect its properties,
to examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants,
all at such reasonable times and as often as reasonably requested.
(b) The Borrower will, and will cause each of the Subsidiaries
to, permit any representatives designated by any Collateral Agent (including any
consultants, field examiners, accountants, lawyers and appraisers retained by
such Collateral Agent) to conduct (i) a field examination of the Senior
Collateral at or about the end of each fiscal quarter of the Borrower, (ii) an
appraisal of the Borrower's computation of the assets included in the Borrowing
Base Amount at or about the end of each fiscal year of the Borrower, (iii) an
appraisal of the Eligible Script Lists at or about the end of the fiscal quarter
ending August 31 of each fiscal year of the Borrower and (iv) other evaluations
and appraisals of the Borrower's computation of the Borrowing Base Amount and
the assets included in the Borrowing Base Amount, all at such reasonable times
and as often as reasonably requested. The Borrower shall pay the reasonable fees
and expenses of any representatives retained by any Collateral Agent to conduct
any such evaluation or appraisal. The Administrative Agent shall promptly
deliver to the Lenders copies of all such appraisals and other information
provided to the Borrower in connection with such evaluations and appraisals.
(c) The Borrower will, and will cause each of the Subsidiaries
to, in connection with any evaluation and appraisal relating to the computation
of the Borrowing Base Amount, maintain such additional reserves (for purposes of
computing the Borrowing Base Amount) in respect of Eligible Accounts Receivable
and Eligible Inventory and make such other adjustments to its parameters for
including Eligible Accounts Receivable, Eligible Inventory and Eligible Script
Lists in the Borrowing Base Amount as the Collateral Agent shall require based
upon the results of such evaluation and appraisal in its reasonable judgment to
reflect Borrowing Base Factors.
SECTION 5.09. Compliance with Laws. The Borrower will, and
will cause each of the Subsidiaries to, comply in all material respects with all
laws, rules, regulations and orders of any Governmental Authority applicable to
it or its property, including all Environmental Laws, HIPAA and all other
material healthcare laws and regulations, except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings or to
the extent that any failures so to comply, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.10. Use of Proceeds and Letters of Credit. (a) The
proceeds of the Tranche 1 Term Loans will be used by the Borrower for the
purposes set forth in the preamble hereto.
(b) The proceeds of the Revolving Loans, Swingline Loans and
loans under the Incremental Facilities made after the First Restatement
Effective Date will be used by the Borrower as set forth in the preamble and for
general corporate purposes, including:
(i) loans or other transfers to Rite Aid Hdqtrs. Corp. for
purposes of financing inventory purchases pursuant to the Intercompany
Inventory Purchase Agreement and advancing funds to Subsidiary Loan Parties
for their general corporate purposes, including working capital,
Consolidated Capital Expenditures and Business Acquisitions permitted
pursuant to Section 6.04;
(ii) transfers to an operating account for the payment of
operating expenses (including rent, utilities, taxes, wages, repair and
similar expenses) of, and intercompany Investments permitted under Section
6.04 in, the Borrower or any Subsidiary Loan Party;
(iii) payment by the Borrower of principal, interest, fees and
expenses with respect to its Indebtedness when due (including associated
costs, fees and expenses) and payment of the Borrower's taxes,
administrative, operating and other expenses;
(iv) dividends permitted to be made in respect of the Equity
Interests listed on Schedule 6.08(a) or described in Section 6.08(a);
(v) repurchase shares of the Borrower's Preferred Stock
pursuant to Section 6.08(a);
(vi) payment of principal, interest, fees and expenses with
respect to Third Party Interests in accordance with the terms thereof; and
(vii) the financing of Optional Debt Repurchases, permitted
capital expenditures, the repurchase of the Borrower's and/or its
Subsidiaries' (including Rite Aid Lease Management Company's) Preferred
Stock and permitted Restricted Payments.
(c) Letters of Credit will be used solely to support payment
obligations of the Borrower and the Subsidiaries incurred in the ordinary course
of business.
(d) No proceeds of Loans will be used to prepay commercial
paper prior to the maturity thereof and no such proceeds will be used, directly
or indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any Margin Stock. The Borrower will ensure that no such use
of Loan proceeds and no issuance of Letters of Credit will entail any violation
of Regulation T, U or X of the Board.
SECTION 5.11. Additional Subsidiaries. If any additional
wholly-owned Domestic Subsidiary is formed or acquired after the First
Restatement Effective Date, and if such Subsidiary is required to become a
Subsidiary Loan Party hereunder, the Borrower will, within three Business Days
after such Subsidiary is formed or acquired, notify the Administrative Agent and
the Lenders thereof and cause the Collateral and Guarantee Requirement to be
satisfied with respect to such Subsidiary, including each Securitization Vehicle
which is a Domestic Subsidiary, but excluding any Subsidiary that engages solely
in the pharmacy benefits management business. In addition, the Borrower will,
within three Business Days after the First Restatement Effective Date, cause the
Collateral and Guarantee Requirement to be satisfied with respect to each
Subsidiary Loan Party in existence on the First Restatement Effective Date.
Notwithstanding any other provision of this Agreement, (i) no Domestic
Subsidiary listed on Schedule 5.11 shall be required to become a Subsidiary Loan
Party (it being understood and agreed that Schedule 5.11 shall not include any
Securitization Vehicle that is a Domestic Subsidiary) and (ii) no Domestic
Subsidiary shall be required to become a Subsidiary Loan Party unless and until
such time as such Subsidiary has assets in excess of $1,000,000 or acquires
assets in excess of $1,000,000 or has revenue in excess of $500,000 per annum.
SECTION 5.12. Further Assurances. The Borrower will, and will
cause each Subsidiary Loan Party to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, deeds of trust and other documents), which may be required under any
applicable law, or which any Collateral Agent or the Required Lenders may
reasonably request, to cause the Collateral and Guarantee Requirement to be and
remain satisfied, all at the expense of the Loan Parties. The Borrower also
agrees to provide to the Collateral Agent, from time to time upon request,
evidence reasonably satisfactory to the Collateral Agent as to the perfection
and priority of the Liens created or intended to be created by the Senior
Collateral Documents.
SECTION 5.13. Subsidiaries. The Borrower will cause all of the
Subsidiaries that own Eligible Accounts Receivable, Eligible Inventory or
Eligible Script Lists to be and at all times remain "Unrestricted Subsidiaries"
as defined in, and for all purposes of, each of the Effective Date Indentures
and will deliver such documents to the trustees under each such Indenture and
take such actions thereunder as may be necessary to effect the foregoing.
SECTION 5.14. Intercompany Transfers. The Borrower shall
maintain accounting systems capable of tracing intercompany transfers of funds
and other assets.
SECTION 5.15. Inventory Purchasing. (a) The Borrower shall,
and shall cause each Subsidiary party to the Intercompany Inventory Purchase
Agreement to, at all times maintain in all material respects the vendor
inventory purchasing system and the intercompany inventory purchasing system in
accordance with the terms of the Intercompany Inventory Purchase Agreement. The
Borrower shall cause each Subsidiary which owns or acquires any Senior
Collateral consisting of inventory to be party to the Intercompany Inventory
Purchase Agreement.
(b) The Borrower shall not permit any Operating Subsidiary to
purchase any Inventory from any Direct Delivery Vendor other than (i) the
acquisition of inventory from McKesson Corporation (or any Persons that replace
McKesson Corporation, in whole or in part, and sell or otherwise provide
inventory substantially similar to inventory sold or otherwise provided by
McKesson Corporation) consistent with past practice and (ii) food-stuffs,
beverages, periodicals, greeting cards and similar items which are either paid
for in cash substantially concurrently with the time of delivery or otherwise
consistent with past practice.
SECTION 5.16. Cash Management System. (a) The Borrower will
cause each Subsidiary Loan Party to at all times maintain a Cash Management
System that complies with Schedule 3 of the Senior Subsidiary Security
Agreement. The Borrower will cause each Subsidiary Loan Party to comply with
each obligation thereof under the Cash Management System. The Borrower will
cause each Subsidiary Loan Party to comply with each of its obligations under
the Cash Management System, and shall cause each Subsidiary Loan Party to use
its best efforts to cause any applicable third party to effectuate the Cash
Management System.
(b) Each party hereto authorizes the Administrative Agent and
the Collateral Agent to (i) permit the creation by the Grantors of accounts that
receive payments in respect of the Securitization Assets and/or Factoring Assets
(but not other payments) and (ii) release the security interest of the
Collateral Agent for the ratable benefit of the Senior Secured Parties in the
Lockbox Account, the Governmental Lockbox Account and/or any accounts created
pursuant to clause (i) of this paragraph from the Cash Management System and
transfer control of the Lockbox Account, the Governmental Lockbox Account and/or
any accounts created pursuant to clause (i) of this paragraph to (A) any Person
in connection with a Factoring Transaction permitted by this Agreement for so
long as a Factoring Transaction is ongoing or (B) any Person for the benefit of
holders of Third Party Interests in respect of a Securitization permitted by
this Agreement for as long as any Third Party Interests are outstanding.
SECTION 5.17. Termination of Factoring Transactions. If an
Event of Default has occurred and the Collateral Agent has elected to exercise
any remedies under the Senior Collateral Documents as a result thereof, the
Borrower shall, and shall cause each of its Subsidiaries to, terminate all
existing Factoring Transactions and cease to engage in any further Factoring
Transactions; provided, however, that neither the Borrower nor any such
Subsidiary shall be required hereby to repurchase any Factoring Assets
previously sold, transferred or otherwise conveyed pursuant to any such
Factoring Transaction.
ARTICLE VI
Negative Covenants
------------------
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired, terminated or been cash
collateralized and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:
SECTION 6.01. Indebtedness; Certain Equity Securities. (a) The
Borrower will not, and will not permit any Subsidiary to, create, incur, assume
or permit to exist any Indebtedness, any Attributable Debt in respect of any
Sale and Leaseback Transaction or any Third Party Interests except:
(i) Indebtedness under the Senior Loan Documents;
(ii) unsecured Indebtedness of the Borrower, including the
4.75% Convertible Notes and the 9.25% Notes, that is not Guaranteed by any
Subsidiary, that does not mature or require scheduled payments of principal
prior to December 31, 2010, and that has covenants and events of default
which are determined in good faith by the senior management of the Borrower
to be on market terms, and Refinancing Indebtedness issued in respect of
such Indebtedness;
(iii) Indebtedness of the Borrower and the Subsidiaries in
respect of intercompany Investments permitted under Section 6.04; provided
that such Indebtedness is subordinated to the Senior Obligations pursuant
to terms substantially the same as those forth on Annex 2 hereto;
(iv) Indebtedness (other than Second Priority Debt, the 9.25%
Notes and the 4.75% Convertible Notes) outstanding on the First Restatement
Effective Date under the Effective Date Indentures; provided that no
Subsidiary Loan Party will have any liability with respect thereto except
under and pursuant to the Second Priority Collateral Documents;
(v) Second Priority Debt in an aggregate principal amount,
together with the aggregate principal amount of Indebtedness incurred
pursuant to clause (vi)(B) of this Section 6.01(a), not in excess of
$1,800,000,000 at any time outstanding;
(vi) unsecured Indebtedness of the Borrower (A) outstanding on
the Original Restatement Effective Date (and any Refinancing Indebtedness
in respect thereof) or (B) incurred after the Original Restatement
Effective Date that is (1) not in excess of $750,000,000 at any time
outstanding, and (2) together with the aggregate principal amount of
Indebtedness incurred pursuant to clause (v) of this Section 6.01(a), not
in excess of $1,800,000,000 at any time outstanding;
(vii) Indebtedness secured by Liens on real property or
Attributable Debt incurred in connection with Sale and Leaseback
Transactions involving real property; provided that any such Indebtedness,
or any such lease entered into in connection with the Sale and Leaseback
Transaction giving rise to such Attributable Debt, shall have a maturity
date or termination date, as the case may be, after December 31, 2010; and
provided further that the aggregate principal amount of Indebtedness and
Attributable Debt incurred pursuant to this clause (vii) shall not exceed
$400,000,000 at any time outstanding;
(viii) Refinancing Indebtedness issued in respect of
Indebtedness or Attributable Debt permitted under clauses (iv) and (xiii);
(ix) endorsements of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(x) Indebtedness for borrowed money and Capital Lease
Obligations existing on the First Restatement Effective Date (other than
Second Priority Debt and Indebtedness referred to in clauses (ii) and (iv)
above) and set forth on Schedule 6.01(a)(x), but not any extensions,
renewals, refinancings or replacements of such Indebtedness;
(xi) Capital Lease Obligations with respect to leases existing
on the First Restatement Effective Date that were accounted for as
operating leases on the Original Restatement Effective Date and thereafter
reclassified as Capital Lease Obligations;
(xii) Indebtedness (including Capital Lease Obligations) and
Attributable Debt in respect of Sale and Leaseback Transactions in respect
of equipment financing or leasing in the ordinary course of business of the
Borrower and the Subsidiaries consistent with past practices;
(xiii) purchase money Indebtedness (including Capital Lease
Obligations) and Attributable Debt in respect of Sale and Leaseback
Transactions in each case incurred to finance the acquisition, development,
construction or opening of any Store after the First Restatement Effective
Date; provided that such Indebtedness or Attributable Debt (A) is incurred
not later than 24 months following the completion of the acquisition,
development, construction or opening of such Store, (B) any Lien securing
such Indebtedness or Attributable Debt is limited to the Store financed
with the proceeds thereof, and (C) is incurred in connection with a
transaction that is substantially consistent with the business plan of the
Borrower provided to the Lenders prior to the First Restatement Effective
Date;
(xiv) (A) Third Party Interests issued by Securitization
Vehicles in Securitizations permitted by Section 6.05, and Indebtedness
represented by such Third Party Interests and (B) Indebtedness of the
Borrower or its Subsidiaries that may be deemed to exist solely by virtue
of a Factoring Transaction permitted by this Agreement; provided that the
aggregate amount of all Securitizations plus the aggregate amount of
Indebtedness permitted by clause (B) shall not exceed $650,000,000 at any
time outstanding; and
(xv) Indebtedness of Subsidiaries other than Securitization
Vehicles that may be deemed to exist solely by virtue of Standard
Securitization Undertakings entered into by such Subsidiaries as sellers of
Securitization Assets in Securitizations permitted by paragraph (xiv)
above.
(b) The Borrower will not, nor will it permit any Subsidiary
to, issue any Preferred Stock or other preferred Equity Interests, other than
Qualified Preferred Stock of the Borrower, Third Party Interests issued by
Securitization Vehicles, and other preferred Equity Interests issued and
outstanding on the First Restatement Effective Date and set forth on Schedule
6.01(b).
SECTION 6.02. Liens. (a) The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:
(i) Liens created under the Senior Loan Documents;
(ii) Permitted Encumbrances;
(iii) any Lien created or permitted by the Second Priority
Collateral Documents with respect to the Second Priority Debt Obligations
in favor of the Second Priority Debt Parties; provided that (A) such Lien
is created simultaneously with or after an equivalent Lien under the Senior
Collateral Documents on the applicable Senior Collateral, (B) such Lien is
subject to the Collateral Trust and Intercreditor Agreement, (C) any Lien
on the proceeds of such Senior Collateral is permitted by the Collateral
Trust and Intercreditor Agreement and (D) such Second Priority Debt
Obligations are permitted to be incurred under Section 6.01(a);
(iv) any Lien securing Indebtedness of a Subsidiary owing to a
Subsidiary Loan Party;
(v) any Lien securing Attributable Debt and other payment
obligations under leases incurred in connection with a Sale and Leaseback
Transaction permitted pursuant to Section 6.01(a)(xii) or (xiii) and
Section 6.06; provided that such Liens attach only to the equipment, real
property or other assets subject to such Sale and Leaseback Transaction;
(vi) any Lien on real property securing Indebtedness permitted
and incurred under Section 6.01(a)(vii);
(vii) any Lien securing Capital Lease Obligations permitted
and incurred under Section 6.01(a)(xi), provided that such Lien is limited
to the equipment or other property subject to leases existing on the
Original Restatement Effective Date that were subsequently reclassified as
Capital Lease Obligations;
(viii) any Lien on equipment securing Indebtedness incurred to
finance such equipment pursuant to Section 6.01(a)(xii);
(ix) Liens securing Indebtedness permitted and incurred under
Section 6.01(a)(xiii), provided that such Liens apply only to the property
or other assets acquired, developed or constructed, as the case may be,
with the proceeds of such Indebtedness;
(x) Liens existing on the First Restatement Effective Date and
identified on Schedule 6.02(x); provided, that such Liens do not attach to
any property other than the property identified on such Schedule and secure
only the obligations they secured on the First Restatement Effective Date;
(xi) any Lien (A) on Net Cash Proceeds that are required to be
applied to the repayment of Second Priority Debt Obligations in accordance
with the Collateral Trust and Intercreditor Agreement or (B) that arises
pursuant to any provisions in any Second Priority Debt Document equivalent
to Section 10.14 of the 12.5% Note Indenture;
(xii) Liens securing Refinancing Indebtedness permitted under
Section 6.01(a), to the extent that the Indebtedness being refinanced was
originally secured in accordance with this Section 6.02; provided that such
Lien does not apply to any additional property or assets of the Borrower or
any Subsidiary (other than (i) property or assets acquired after the
issuance or incurrence of such Refinancing Indebtedness that would have
been subject to the Lien securing refinanced Indebtedness if such
Indebtedness had not been refinanced, (ii) additions to the property or
assets subject to the Lien and (iii) the proceeds of the property or assets
subject to the Lien);
(xiii) Liens on property or assets acquired pursuant to
Section 6.04(vi), (ix) or (xii); provided that (A) such Liens apply only to
the property or other assets subject to such Liens at the time of such
acquisition and (B) such Liens existed at the time of such acquisition and
were not created in contemplation thereof;
(xiv) put and call agreements with respect to Equity Interests
acquired or created in connection with Joint Ventures permitted pursuant to
Section 6.04(ix) or (xii); provided that neither the Borrower nor any
Subsidiary shall be permitted to enter into any such agreement that
requires or, upon the occurrence of any event or condition, contingent or
otherwise, may require the Borrower or any Subsidiary Loan Party to
repurchase Equity Interests, Indebtedness or otherwise expend any amounts
on or prior to the Maturity Date (other than as permitted under Section
6.04(ix) or (xii));
(xv) (A) Liens on Securitization Assets transferred or
purported to be transferred to Securitization Vehicles securing Third Party
Interests issued in Securitizations permitted by Sections 6.01 and 6.05,
(B) Liens on account receivables not purchased by a Securitization Vehicle,
which Liens (i) are granted in connection with Securitizations permitted by
Sections 6.01 and 6.05, (ii) are granted pursuant to Standard
Securitization Undertakings, (iii) are perfected prior to an Event of
Default and (iv) secure Third Party Interests issued in Securitizations
permitted by Sections 6.01 and 6.05 and (C) Liens on Factoring Assets
transferred or purported to be transferred in Factoring Transactions
permitted by this Agreement; and
(xvi) Liens (other than Liens securing Indebtedness) that are
not otherwise permitted under any other provision of this Section 6.02(a);
provided, that the fair market value of the property and assets with
respect to which such Liens are granted shall not at any time exceed
$25,000,000.
(b) Notwithstanding anything in clause (a) of this Section
6.02, the Borrower may not grant or otherwise permit to exist Liens on any cash
or cash equivalents that secure the Senior Obligations or are otherwise held by
the Lenders or the Administrative Agent pursuant to Section 2.05(k) or 9.15.
SECTION 6.03. Fundamental Changes. Without limiting the
restrictions on Business Acquisitions set forth in Section 6.04, the Borrower
will not, and will not permit any Subsidiary Loan Party to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Person may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, provided, that
if such other Person is a Subsidiary Loan Party, it shall have no assets that
constitute Senior Collateral, (ii) any Person may merge into a Subsidiary Loan
Party in a transaction in which such Subsidiary Loan Party is the surviving
corporation and (iii) any Subsidiary Loan Party may liquidate or dissolve if
such liquidation or dissolution is not materially disadvantageous to the
Lenders; provided that (A) any such merger involving a Person that is not a
wholly-owned Subsidiary immediately prior to such merger shall not be permitted
to engage in such merger unless also permitted by Section 6.04 and (B) the
Borrower and the applicable Subsidiary Loan Party shall comply with the
provisions of Section 5.11 with respect to any Subsidiary acquired pursuant to
this Section 6.03.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any of the Subsidiaries
to, make any Investment in, or Guarantee any obligations of, any other Person,
or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person constituting a business unit,
except:
(i) Permitted Investments;
(ii) Investments of the Borrower and the Subsidiary Loan
Parties set forth on Schedule 6.04;
(iii) Guarantees consisting of Indebtedness permitted by
Section 6.01;
(iv) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(v) Investments by the Borrower or any Subsidiary Loan Party
in Subsidiary Loan Parties; provided that the Borrower and such Subsidiary
Loan Party shall comply with the applicable provisions of Section 5.11 with
respect to any newly formed Subsidiary;
(vi) Investments consisting of non-cash consideration received
in connection with any Asset Sale permitted by Section 6.05;
(vii) Investments by the Subsidiaries in the Borrower;
provided that the proceeds of such Investments are used for a purpose set
forth in Section 5.10(b);
(viii) usual and customary loans and advances to employees, officers and
directors of the Borrower and the Subsidiaries;
(ix) Investments by the Borrower or any of the Subsidiaries in
Joint Ventures in an amount not to exceed $10,000,000 in the aggregate in
any fiscal year of the Borrower;
(x) Investments in charitable foundations organized under
Section 501(c) of the Code in an amount not to exceed $5,000,000 in the
aggregate in any calendar year;
(xi) any Investment consisting of a Hedging Agreement
permitted by Section 6.07;
(xii) Business Acquisitions and Investments that are not
otherwise permitted under any other provision of this Section 6.04;
provided that (A) at the time of such Business Acquisition or Investment no
Default has occurred and is continuing or would result therefrom and (B)
immediately after giving effect to any such Business Acquisition or
Investment, the Revolver Availability is greater than $100,000,000;
(xiii) Investments consisting of Sellers' Retained Interests
in Securitizations permitted by Sections 6.01 and 6.05; and
(xiv) (A) Investments by the Borrower or a Subsidiary in
connection with a Securitization permitted pursuant to this Agreement and
(B) any Investment or other Guarantee that may be deemed made by the
Borrower due to the fact that a Parent Undertaking has been entered into in
respect of a Securitization permitted pursuant to the Agreement.
SECTION 6.05. Asset Sales. The Borrower will not, and will not
permit any of the Subsidiary Loan Parties to, conduct any Asset Sale, including
any sale of any Equity Interest owned by it and any sale of Securitization
Assets in connection with a Securitization, nor will the Borrower permit any of
the Subsidiary Loan Parties to issue any additional Equity Interest in such
Subsidiary, except:
(i) Permitted Dispositions;
(ii) any Asset Sale (other than a Sale and Leaseback
Transaction, the issuance of Equity Interests, sales or contributions of
Securitization Assets in a Securitization or sales of Factoring Assets in
Factoring Transactions) for fair value not in the ordinary course of
business;
(iii) any sale, transfer or disposition to a third party of
Stores, leases and prescription files closed at substantially the same time
as, and entered into as part of a single related transaction with, the
purchase or other acquisition from such third party of Stores, leases and
prescription files of a substantially equivalent value;
(iv) any issuance of Equity Interests of any Subsidiary Loan
Party by such Subsidiary Loan Party to the Borrower or any other Subsidiary
Loan Party;
(v) any Sale and Leaseback Transaction permitted pursuant to
Section 6.01(a)(vii), (xii) or (xiii) and Section 6.06;
(vi) sales or contributions of Securitization Assets to
Securitization Vehicles in connection with Securitizations, provided that
(a) each such Securitization is effected on market terms as determined in
good faith by the senior management of the Borrower, (b) the aggregate
amount of all such Securitizations plus the aggregate amount of
Indebtedness permitted by Section 6.01(a)(xiv)(B) does not exceed
$650,000,000 at any time outstanding, (c) the aggregate amount of the
Sellers' Retained Interests in such Securitizations does not exceed an
amount at any time outstanding that is customary for similar transactions
and (d) the proceeds to each such Securitization Vehicle from the issuance
of Third Party Interests are applied substantially simultaneously with
receipt thereof to the purchase from Subsidiary Loan Parties of
Securitization Assets; provided that, in the case of clause (d), the
Securitization Vehicle may use a portion of such proceeds to pay a
customary collection agent fee in connection with such Securitization to
the extent such fee is permitted pursuant to Section 6.09(f); and
(vii) unless otherwise restricted by Section 5.17, sales of
Factoring Assets in connection with Factoring Transactions; provided that
(i) a Factoring Notice with respect to such Factoring Transaction has been
delivered by the Borrower to the Administrative Agent and (ii) each such
Factoring Transaction is effected on market terms as determined in good
faith by the senior management of the Borrower.
provided that, with respect to sales, transfers or dispositions under clause
(ii) or (v), and with respect to any net consideration received from any
transaction described in clause (iii), (1) at least 75% of the consideration
therefor shall consist of cash and (2) the aggregate fair market value of all
assets sold, transferred or disposed of in reliance upon clauses (ii) and (v)
shall not exceed $125,000,000 in any fiscal year of the Borrower; provided
further that subject to the condition set forth in clause (1) above, additional
assets with an aggregate fair market value not in excess of $300,000,000 may be
sold, transferred or disposed of in any fiscal year of the Borrower in reliance
upon clauses (ii) and (v) if the Borrower reinvests, or causes the applicable
Subsidiary Loan Party to reinvest, Net Cash Proceeds received in connection
therewith in Business Acquisitions or the purchase of Stores or prescription
files within 365 days after the receipt thereof.
SECTION 6.06. Sale and Leaseback Transactions. The Borrower
will not, and will not permit any of the Subsidiaries to, enter into any Sale
and Leaseback Transaction, except for Sale and Leaseback Transactions permitted
by and effected pursuant to Section 6.01(a)(vii), (xii) or (xiii) which do not
result in Liens other than Liens permitted pursuant to Section 6.02(a).
SECTION 6.07. Hedging Agreements. The Borrower will not, and
will not permit any of the Subsidiaries to, incur or at any time be liable with
respect to any monetary liability under any Hedging Agreements, unless such
Hedging Agreements (i) are entered into for bona fide hedging purposes of the
Borrower or any Subsidiary Loan Party (as determined in good faith by the senior
management of the Borrower), (ii) correspond in terms of notional amount,
duration, currencies and interest rates, as applicable, to Indebtedness of the
Borrower or any Subsidiary Loan Party permitted to be incurred under Section
6.01(a) or to business transactions of the Borrower and the Subsidiary Loan
Parties on customary terms entered into in the ordinary course of business and
(iii) do not exceed an amount equal to the aggregate principal amount of the
Senior Obligations and the Second Priority Debt Obligations.
SECTION 6.08. Restricted Payments; Certain Payments of
Indebtedness. (a) The Borrower will not, nor will it permit any Subsidiary to,
declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, or incur any obligation (contingent or otherwise) to do so, except (i)
the Borrower may declare and pay dividends with respect to its common stock or
Qualified Preferred Stock payable solely in additional shares of its common
stock or Qualified Preferred Stock, (ii) Subsidiaries (other than those directly
owned, in whole or part, by the Borrower) may declare and pay dividends ratably
with respect to their common stock, (iii) the Borrower may declare and pay cash
dividends with respect to its common stock and effect repurchases, redemptions
or other Restricted Payments with respect to its common stock, together in an
aggregate amount in any fiscal year of the Borrower not to exceed 50% of
Consolidated Net Income (if positive) for the immediately preceding fiscal year
of the Borrower; provided that immediately prior and after giving effect to any
such payment no Default or Event of Default shall have occurred and be
continuing and, immediately after giving effect to any such payment, the
Borrower shall have Revolver Availability of more than $100,000,000, (iv) the
Borrower may pay cash dividends in an amount not to exceed $60,000,000 in any
fiscal year of the Borrower with respect to the Series E Preferred Stock, Series
I Preferred Stock or any other Qualified Preferred Stock; provided that (x)
immediately prior and after giving effect to any such payment, no Default or
Event of Default shall have occurred and be continuing and (y) only so long as a
Financial Covenant Effectiveness Period is then occurring, the Consolidated
Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters
most recently ended on or prior to the date of such payment, calculated on a pro
forma basis as if such payment were made on the last day of such period (and
excluding any such payments previously made pursuant to this clause during such
four quarter period but attributed for purposes of this calculation to the last
day of a prior period which day does not occur in such four quarter period) is
not less than the ratio applicable to such period of four fiscal quarters under
Section 6.12, (v) the Borrower and the Subsidiaries may make Restricted Payments
consisting of the repurchase or other acquisition of shares of, or options to
purchase shares of, capital stock of the Borrower or any of its Subsidiaries
from employees, former employees, directors or former directors of the Borrower
or any Subsidiary (or their permitted transferees), in each case pursuant to
stock option plans, stock plans, employment agreements or other employee benefit
plans approved by the board of directors of the Borrower; provided that no
Default has occurred and is continuing; and provided further that the aggregate
amount of such Restricted Payments made after the Original Restatement Effective
Date shall not exceed $10,000,000, (vi) the Subsidiaries may declare and pay
cash dividends to the Borrower; provided that the Borrower shall, within a
reasonable time following receipt of any such payment, use all of the proceeds
thereof for a purpose set forth in Section 5.10(b) (including the payment of
dividends required or permitted pursuant to this Section 6.08(a)), (vii) the
Borrower and the Subsidiaries may declare and pay cash dividends with respect to
the Equity Interests set forth on Schedule 6.08(a) to the extent, and only to
the extent, required pursuant to the terms of such Equity Interests or any other
agreement in effect on the Effective Date and (viii) so long as no Default or
Event of Default has occurred and is continuing or would result therefrom, the
Borrower may redeem or repurchase shares of the Borrower's and/or its
Subsidiaries' (including Rite Aid Lease Management Company's) Preferred Stock or
the 4.75% Convertible Notes (A) solely with Net Cash Proceeds received by the
Borrower from issuances of its common stock after the Original Restatement
Effective Date, provided that any such repurchase or redemption is effected
within 150 days after the receipt of such proceeds or (B) with other funds
available to the Borrower if, immediately after giving effect to any such
redemption or repurchase, the Borrower shall have Revolver Availability of more
than $100,000,000.
(b) The Borrower will not, nor will it permit any Subsidiary
to, make or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) of or in respect of
principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any Indebtedness, except:
(i) payments or prepayments of Indebtedness created under the
Senior Loan Documents;
(ii) payments of regularly scheduled interest and principal
payments as and when due in respect of any Indebtedness permitted pursuant
to Section 6.01(a);
(iii) (A) prepayments of Indebtedness permitted pursuant to
Section 6.01(a)(v) or (vi) with the proceeds of Indebtedness permitted
pursuant to Section 6.01(a)(v) or (vi) and (B) prepayments of Indebtedness
permitted pursuant to Section 6.01(a)(vii) with the proceeds of
Indebtedness permitted pursuant to Section 6.01(a)(vii);
(iv) payments of secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets securing
such Indebtedness;
(v) provided no Default has occurred and is continuing or
would result therefrom, Optional Debt Repurchases of Inside Indebtedness
and, to the extent permitted by paragraph (c) of this Section, Optional
Debt Repurchases of Outside Indebtedness;
(vi) repurchases, exchanges or redemptions of Indebtedness for
consideration consisting solely of common stock of the Borrower or
Qualified Preferred Stock;
(vii) prepayments of Capital Lease Obligations in connection
with the sale, closing or relocation of Stores;
(viii) prepayments of Indebtedness in connection with the
incurrence of Refinancing Indebtedness permitted pursuant to Section
6.01(a)(ii) or (viii); and
(ix) prepayments of Indebtedness permitted pursuant to Section
6.01(a)(iii), if permitted by the subordination provisions applicable to
such Indebtedness.
(c) The Borrower and the Subsidiaries will not effect Optional
Debt Repurchases of Outside Indebtedness unless immediately prior and after
giving effect to any such Optional Debt Repurchases, (x) no Default or
Event of Default shall have occurred and be continuing and (y) the Borrower
shall have Revolver Availability of more than $100,000,000.
SECTION 6.09. Transactions with Affiliates. The Borrower will
not, and will not permit any Subsidiary to, directly or indirectly, sell, lease
or otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except:
(a) payment of compensation to directors, officers, and
employees of the Borrower and the Subsidiaries in the ordinary course
of business;
(b) payments in respect of transactions required to be made
pursuant to agreements or arrangements in effect on the First
Restatement Effective Date and set forth on Schedule 6.09;
(c) transactions involving the acquisition of inventory in the
ordinary course of business; provided that (i) the terms of such
transaction are (A) set forth in writing, (B) in the best interests of
the Borrower or such Subsidiary, as the case may be, and (C) no less
favorable to the Borrower or such Subsidiary, as the case may be, than
those that could be obtained in a comparable arm's length transaction
with a Person that is not an Affiliate of the Borrower or a Subsidiary
and, (ii) if such transaction involves aggregate payments or value in
excess of $50,000,000, the board of directors of the Borrower
(including a majority of the disinterested members of the board of
directors) approves such transaction and, in its good faith judgment,
believes that such transaction complies with clauses (i)(B) and (C) of
this paragraph;
(d) (i) transactions between or among the Borrower and/or one
or more Subsidiary Loan Parties and (ii) sales of Securitization
Assets to Securitization Vehicles in Securitizations permitted by
Sections 6.01 and 6.05;
(e) issuances of Preferred Stock of the Borrower (and
transactions that are necessary to effect such issuances) in respect
of pay-in-kind obligations of the Borrower relating to Series G
Preferred Stock or Series H Preferred Stock; and
(f) any other Affiliate transaction not otherwise permitted
pursuant to this Section 6.09; provided that (i) the terms of such
transaction are (A) set forth in writing, (B) in the best interests of
the Borrower or such Subsidiary, as the case may be, and (C) no less
favorable to the Borrower or such Subsidiary, as the case may be, than
those that could be obtained in a comparable arm's length transaction
with a Person that is not an Affiliate of the Borrower or a
Subsidiary, (ii) if such transaction involves aggregate payments or
value in excess of $25,000,000 in any consecutive 12-month period, the
board of directors of the Borrower (including a majority of the
disinterested members of the board of directors) approves such
transaction and, in its good faith judgment, believes that such
transaction complies with clauses (i)(B) and (C) of this paragraph and
(iii) if such transaction (other than any transaction necessary for
the redemption or exchange of the Borrower's Series G Preferred Stock
or Series H Preferred Stock) involves aggregate payments or value in
excess of $50,000,000 in any consecutive 12-month period, the Borrower
obtains a written opinion from an independent investment banking firm
or appraiser of national prominence, as appropriate, to the effect
that such transaction is fair to the Borrower or such Subsidiary, as
the case may be, from a financial point of view.
SECTION 6.10. Restrictive Agreements. (a) The Borrower will
not, and will not permit any Subsidiary to, enter into any agreement which
imposes a limitation on the incurrence by the Borrower and the Subsidiaries of
Liens that (i) would restrict any Subsidiary from granting Liens on any of its
assets (including assets in addition to the then-existing Senior Collateral to
secure the Senior Obligations and the Second Priority Obligations) or (ii) is
more restrictive, taken as a whole, than the limitation on Liens set forth in
this Agreement except, in each case, (A)(w) the Senior Loan Documents, (x)
agreements with respect to Indebtedness secured by Liens permitted by Section
6.02(a) restricting the ability to transfer or grant Liens on the assets
securing such Indebtedness, (y) agreements with respect to Second Priority Debt
(1) containing provisions described in clauses (i) and/or (ii) above that are
not materially more restrictive, taken as a whole, than those of the 9.5% Note
Indenture as in effect on the First Restatement Effective Date or (2) requiring
that such Indebtedness be secured by assets in respect of which Liens are
granted to secure other Indebtedness (provided that in the case of any such
assets subject to a Senior Lien, such Indebtedness will be required to be
secured only with a Second Priority Lien); provided, however, that the Second
Priority Debt Documents relating to any such Indebtedness may not contain terms
requiring any Liens be granted with respect to Senior Collateral consisting of
cash or Permitted Investments pledged pursuant to Section 2.05(j) of this
Agreement or Section 5 of the Senior Subsidiary Guarantee Agreement or otherwise
required to be provided upon the occurrence of a default under any bank credit
facility to secure obligations in respect of letters of credit issued thereunder
and (z) agreements with respect to unsecured Indebtedness governed by indentures
or by credit agreements or note purchase agreements with institutional investors
permitted by this Agreement containing terms that are not materially more
restrictive, taken as a whole, than those of the 9.25% Note Indenture as in
effect on the First Restatement Effective Date, (B) customary restrictions
contained in purchase and sale agreements limiting the transfer of the subject
assets pending closing, (C) customary non-assignment provisions in leases and
other contracts entered into in the ordinary course of business, (D) pursuant to
applicable law, (E) agreements in effect as of the First Restatement Effective
Date and not entered into in contemplation of the transactions effected in
connection with the closing of the Original Agreement, (F) the Indentures, in
each case when originally entered into, (G) any restriction existing under
agreements relating to assets acquired by the Borrower or a Subsidiary in a
transaction permitted hereby; provided that such agreements existed at the time
of such acquisition, were not put into place in anticipation of such acquisition
and are not applicable to any assets other than assets so acquired, (H) any
restriction existing under any agreement of a Person acquired as a Subsidiary
pursuant to Section 6.03 or Section 6.04(a)(xii); provided that any such
agreement existed at the time of such acquisition, was not put into place in
anticipation of such acquisition and was not applicable to any Person or assets
other than the Person or assets so acquired and (I) customary restrictions and
conditions contained in agreements relating to Securitizations permitted
hereunder, provided that such restrictions and conditions apply only to
Securitization Vehicles and to the Securitization Assets that are subject to
such Securitizations.
(b) The Borrower will not, and will not permit any Subsidiary
to, enter into or suffer to exist or become effective any consensual encumbrance
or restriction on the ability of any Subsidiary to (i) make Restricted Payments
in respect of any Equity Interests of such Subsidiary held by, or pay any
Indebtedness owed to, the Borrower or any other Subsidiary, (ii) make any
Investment in the Borrower or any other Subsidiary, or (iii) transfer any of its
assets to the Borrower or any other Subsidiary, except for (A) any restriction
existing under (1) the Senior Loan Documents or existing on the First
Restatement Effective Date under the Indentures, (2) the indenture or agreement
governing any Refinancing Indebtedness in respect of Indebtedness set forth in
clause (1) above or (3) agreements with respect to Indebtedness permitted by
this Agreement containing provisions described in clauses (i), (ii) and (iii)
above that are not materially more restrictive, taken as a whole, than those of
the 9.5% Note Indenture or, alternatively, the 9.25% Note Indenture, in each
case as in effect on the First Restatement Effective Date, (B) customary
non-assignment provisions in leases and other contracts entered into in the
ordinary course of business, (C) as required by applicable law, (D) customary
restrictions contained in purchase and sale agreements limiting the transfer of
the subject assets pending closing, (E) any restriction existing under
agreements relating to assets acquired by the Borrower or a Subsidiary in a
transaction permitted hereby; provided that such agreements existed at the time
of such acquisition, were not put into place in anticipation of such acquisition
and are not applicable to any assets other than assets so acquired, (F) any
restriction existing under any agreement of a Person acquired as a Subsidiary
pursuant to Section 6.03 or Section 6.04(a)(xii); provided any such agreement
existed at the time of such acquisition, was not put into place in anticipation
of such acquisition and was not applicable to any Person or assets other than
the Person or assets so acquired, (G) agreements with respect to Indebtedness
secured by Liens permitted by Section 6.02 that restrict the ability to transfer
the assets securing such Indebtedness and (H) customary restrictions and
conditions contained in agreements relating to Securitizations permitted
hereunder, provided that such restrictions and conditions apply only to
Securitization Vehicles and to the Securitization Assets that are subject to
such Securitizations.
SECTION 6.11. Amendment of Material Documents. (a) The
Borrower will not, nor will it permit any Subsidiary to, amend, modify or waive
any Second Priority Security Document or any of its rights thereunder without
the consent of the Collateral Agent, other than modifications to such agreements
in connection with (i) the joinder of additional Subsidiary Loan Parties
effected by the execution of supplements to such agreements and (ii) the
inclusion of additional Second Priority Debt permitted pursuant to Section
6.01(a)(v) constituting Secured Obligations (as defined in the Second Priority
Security Agreement) under such agreements.
(b) The Borrower will not, and will not permit any Subsidiary
party to the Intercompany Inventory Purchase Agreement to, amend, terminate, or
otherwise modify the Intercompany Inventory Purchase Agreement in any manner
materially adverse to the Lenders or their interests under the Senior Loan
Documents without the prior written approval of the Collateral Agent; provided,
however, that the foregoing shall not limit the Borrower's responsibilities
pursuant to Section 3.2 of the Intercompany Inventory Purchase Agreement.
SECTION 6.12. Consolidated Fixed Charge Coverage Ratio. The
Borrower will not permit the Consolidated Fixed Charge Coverage Ratio for the
period of four consecutive fiscal quarters most recently ended on or prior to
any day during a Financial Covenant Effectiveness Period to be less than the
ratio set forth below opposite the period that includes the last day of such
four quarter period:
Four Fiscal Quarter Period Ending Ratio
--------------------------------- -----
September 3, 2006 through December 2, 2006 1.10 to 1.00
December 3, 2006 through March 3, 2007 1.15 to 1.00
March 4, 2007 through June 2, 2007 1.15 to 1.00
June 3, 2007 through September 1, 2007 1.15 to 1.00
September 2, 2007 through December 1, 2007 1.15 to 1.00
December 2, 2007 through March 1, 2008 1.15 to 1.00
March 2, 2008 through May 31, 2008 1.20 to 1.00
June 1, 2008 through August 30, 2008 1.20 to 1.00
August 31, 2008 through November 29, 2008 1.20 to 1.00
November 30, 2008 through February 28, 2009 1.20 to 1.00
March 1, 2009 through May 30, 2009 1.25 to 1.00
May 31, 2009 through August 29, 2009 1.25 to 1.00
August 30, 2009 through November 28, 2009 1.25 to 1.00
November 29, 2009 through February 27, 2010 1.25 to 1.00
February 28, 2010 through May 29, 2010 1.25 to 1.00
May 30, 2010 through August 28, 2010 1.25 to 1.00
August 29, 2010 through the Maturity Date 1.25 to 1.00
SECTION 6.13. Restrictions on Asset Holdings by the Borrower.
The Borrower will not at any time:
(i) make or hold any Investments other than investments in the
Equity Interests of the Subsidiaries (including any distributions or
other assets received in respect thereto), intercompany advances to
Subsidiaries and Investments permitted by clause (iii) below;
(ii) acquire or hold any Stores, other capital assets,
inventory or accounts receivable, other than any real estate which the
Borrower holds only as lessor and which is leased and operated by
another Person; or
(iii) acquire or hold cash, cash equivalents, Permitted
Investments or balances in bank accounts, other than such amounts as are
reasonably anticipated (at the time so acquired or held) to be utilized
within five Business Days to pay costs, expenses and other obligations
of the Borrower referred to in Section 5.10(b).
SECTION 6.14. Corporate Separateness. The Borrower will, and
will cause each Subsidiary to, take all necessary steps to maintain its identity
as a separate legal entity from other Persons and to make it manifest to third
parties that it is an entity with assets and liabilities distinct from those of
each of other Person.
ARTICLE VII
Events of Default
-----------------
If any of the following events ("Events of Default") shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement or any other Senior
Loan Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or
on behalf of the Borrower or any Subsidiary in or in connection with any
Senior Loan Document or any amendment or modification thereof or waiver
thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Senior Loan
Document or any amendment or modification thereof or waiver thereunder,
shall prove to have been incorrect in any material respect when made or
deemed made;
(d) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02(a), 5.10,
5.11, 5.15 or 5.16 or in Article VI;
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Senior Loan Document
(other than those specified in clause (a), (b) or (d) of this Article),
and such failure shall continue unremedied (i) in the case of covenants
contained in Section 5.08, for five days, (ii) in the case of covenants
contained in Sections 5.01 and 5.02(b), (c) and (f), for 10 days and
(iii) in the case of any other covenant, for a period of 20 days after
notice thereof has been delivered by the Administrative Agent to the
Borrower (which notice shall be given promptly at the request of any
Lender);
(f) the Borrower or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, including any obligation to
reimburse letter of credit obligations or to post cash collateral with
respect thereto, when and as the same shall become due and payable or
within any applicable grace period;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the
property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any
Subsidiary or its Indebtedness, or of a substantial part of its assets,
under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any Subsidiary or for a substantial part of
its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in
clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for the Borrower or any Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the
foregoing;
(j) the Borrower or any Subsidiary shall become unable to, or
admits in writing its inability or fails to, generally pay its debts as
they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $50,000,000 shall be rendered against the
Borrower, any Subsidiary or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to attach or levy upon any assets
of the Borrower or any Subsidiary to enforce any such judgment;
(l) (i) the Borrower or any ERISA Affiliate shall fail to pay
when due an amount or amounts aggregating in excess of $10,000,000 which
it shall have become liable to pay under Section 302 or Title IV of
ERISA; or notice of intent to terminate a Plan shall be filed under
Title IV of ERISA by the Borrower or any ERISA Affiliate, any plan
administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer, any
Plan; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Plan must be
terminated; or there shall occur a complete or partial withdrawal from,
or a default, within the meaning of Section 4219(c)(5) of ERISA, with
respect to, one or more Multiemployer Plans which could cause the
Borrower and/or one or more ERISA Affiliates to incur a current payment
obligation in excess of $50,000,000; or (ii) any other ERISA Event shall
have occurred that, in the opinion of the Required Lenders, when taken
together with all other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrower, the ERISA
Affiliates and the Subsidiaries in an aggregate amount exceeding
$50,000,000;
(m) (i) any Lien purported to be created under any Senior
Collateral Document shall cease to be a valid and perfected Lien on any
material portion of the Senior Collateral, with the priority required by
the Senior Loan Documents, except as a result of the sale or other
disposition of the applicable Senior Collateral in a transaction
permitted under the Senior Loan Documents, or the Borrower or any
Subsidiary shall so assert in writing, or (ii) any Senior Loan Document
shall become invalid, or the Borrower or any Subsidiary shall so assert
in writing;
(n) a Change in Control shall occur; or
(o) any Subsidiary Loan Party shall amend or revoke any
instruction in the Government Lockbox Account Agreement to any
Government Lockbox Account Bank in respect of a Government Lockbox
Account unless (i) the Administrative Agent shall have given its prior
written consent or (ii) the Government Lockbox Account is then under the
control of any other Person pursuant to Section 5.16;
then, and in every such event (other than an event with respect to the Borrower
or any Subsidiary Loan Party described in clause (h) or (i) of this Article),
and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by
notice to the Borrower, take either or both of the following actions, at the
same or different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in case of any event with
respect to the Borrower or any Subsidiary Loan Party described in clause (h) or
(i) of this Article, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
The Agents
----------
Each of the Lenders and each Issuing Bank hereby irrevocably
appoints (i) the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms of the Senior
Loan Documents, together with such actions and powers as are reasonably
incidental thereto and (ii) the Collateral Agent as its agent and authorizes the
Collateral Agent to take such actions on its behalf and to exercise such powers
as are delegated to the Collateral Agent by the terms of the Senior Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.
The financial institutions serving as the Agents hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not an Agent, and such
financial institutions and their Affiliates may accept deposits from, lend money
to and generally engage in any kind of business with the Borrower or any
Subsidiary or any Affiliate of any of the foregoing as if they were not Agents
hereunder.
No Agent shall have any duties or obligations except those
expressly set forth in the Senior Loan Documents. Without limiting the
generality of the foregoing, (a) no Agent shall be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) no Agent shall have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Senior Loan Documents that such Agent is required
to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 2.20 or 9.02) and (c) except as expressly set forth in the
Senior Loan Documents, no Agent shall have any duty to disclose, and no Agent
shall be liable for the failure to disclose, any information relating to the
Borrower or any of the Subsidiaries that is communicated to or obtained by the
financial institution serving as such Agent or any of its Affiliates in any
capacity. No Agent shall be liable for any action taken or not taken by it with
the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 2.20 or 9.02) or in the absence of its own gross negligence
or wilful misconduct (as determined by a court of competent jurisdiction by
final and non-appealable judgment). No Agent shall be deemed to have knowledge
of any Default unless and until written notice thereof is given to such Agent by
the Borrower or a Lender, as applicable, and no Agent shall be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Senior Loan Document, (ii) the
contents of any certificate, report or other document delivered thereunder or in
connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Senior Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Senior Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Senior
Loan Document, other than to confirm receipt of items expressly required to be
delivered to such Agent.
Each Agent shall be entitled to rely upon, and shall not incur
any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. Each Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. Any Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
Each Agent may perform any and all of its duties and exercise
any and all of its rights and powers by or through any one or more sub-agents
appointed by such Agent. Any Agent and any such sub-agent may perform any and
all of its duties and exercise any and all of its rights and powers through
their Related Parties. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Related Parties of any Agent and
any such sub-agent, and shall apply to their activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as an Agent.
Subject to the appointment and acceptance of a successor Agent
as provided in this paragraph, any Agent may resign at any time by notifying the
Lenders, the Issuing Banks and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent may,
on behalf of the Lenders and the Issuing Banks, appoint a successor Agent (which
shall be a financial institution with an office in New York, New York, or an
Affiliate of any such financial institution). Upon the acceptance of its
appointment as an Agent hereunder by a successor, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After an Agent's resignation hereunder,
the provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Agent.
Each Lender acknowledges that it has, independently and
without reliance upon any Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Senior Loan Document or related
agreement or any document furnished hereunder or thereunder.
Each party hereto authorizes the Administrative Agent to enter
into customary intercreditor agreements in connection with Securitizations and
Factoring Transactions permitted under this Agreement.
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) Rite Aid Corporation, 00 Xxxxxx Xxxx Xxxx Xxxx, XX 00000,
Attention of General Counsel (Telecopy No. 000-000-0000; email address:
xxxxx@xxxxxxx.xxx);
(b) if to the Administrative Agent, (i) in respect of matters
of an operational nature, to Citicorp North America, Inc., 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attention of Xxxx Xxxxx Xxxxx (Telecopy No.
000-000-0000; email address: xxxx.x.xxxxxxxxxx@xxxxxxxxx.xxx, with a
copy to xxxxxxxxxxxxxxx@xxxxxxxxx.xxx) and (ii) in respect of all other
matters, to Citicorp North America, Inc., 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, XX 00000, Attention of Xxxxxxx Xxxx (Telecopy No. 000-000-0000;
email address: xxxxxxx.xxxx@xxxxxxxxx.xxx, with a copy to
xxxxxxxxxxxxxxx@xxxxxxxxx.xxx);
(c) if to the Syndication Agent, to Bank of America, N.A.,
Bank of America Retail Group, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000,
Attention of Xxxxxxxxx Xxxxxxxxxx (Telecopy No. 000-000-0000; email
address: xxxxxxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx);
(d) if to the Issuing Banks, to (i) Citicorp North America,
Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention of Xxxxxxx
Xxxx (Telecopy No. 000-000-0000; email address:
xxxxxxx.xxxx@xxxxxxxxx.xxx) and (ii) JPMorgan Chase Bank, N.A., 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attention of Xxxx Xxxxxxxxx (Telecopy No.
000-000-0000; email address: xxxx.xxxxxxxxx@xxxxxxxx.xxx);
(e) if to the Swingline Lender, to it at Citicorp North
America, Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention of
Xxxxxxx Xxxx (Telecopy No: 000-000-0000; email address:
xxxxxxx.xxxx@xxxxxxxxx.xxx); and
(f) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by
any Agent, any Issuing Bank or any Lender in exercising any right or power
hereunder or under any other Senior Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Agents, the Issuing Banks and the
Lenders hereunder and under the other Senior Loan Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Senior Loan Document or consent to any departure
by any Loan Party therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) of this Section, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. Without limiting the generality of the foregoing, the making of a
Loan or issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether any Agent, any Lender or any Issuing Bank may
have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Senior Loan Document
nor any provision hereof or thereof may be waived, amended or modified except,
in the case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Senior Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent and the Loan Party or Loan Parties that
are parties thereto, in each case with the consent of the Required Lenders;
provided that (i) no such agreement shall change any provision of any Senior
Loan Document in a manner that by its terms adversely affects the rights of
Lenders holding Loans of any Class differently than those holding Loans of any
other Class, without the written consent of Lenders holding a
majority-in-interest of the outstanding Loans and unused Commitments of each
affected Class and (ii) any waiver, amendment or modification of this Agreement
that by its terms affects the rights or duties under this Agreement of the
Revolving Lenders (but not the Tranche 1 Term Lenders) or the Tranche 1 Term
Lenders (but not the Revolving Lenders) may be effected by an agreement or
agreements in writing entered into by the Borrower and requisite percentage in
interest of the affected Class of Lenders that would be required to consent
thereto under this Section if such Class of Lenders were the only Class of
Lenders hereunder at the time; and provided further that no such agreement shall
(i) increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce or forgive the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby, (iii)
postpone the maturity of any Loan, or any scheduled date of payment of the
principal amount of any Tranche 1 Term Loan under Section 2.10, or the required
date of reimbursement of any LC Disbursement, or any date for the payment of any
interest or fees payable hereunder, or reduce the amount of, waive or excuse any
such payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender affected thereby, (iv) amend Section
2.18(b) or (c) in a manner that would alter the pro rata sharing of payments
required thereby, without the written consent of each Lender, (v) amend the
proviso of the definition of "Borrowing Base Amount" or the definition of
"Account Receivable Advance Rate", "Pharmaceutical Inventory Advance Rate",
"Other Inventory Advance Rate" or "Script Lists Advance Rate" without the
written consent of each Lender, (vi) subordinate the priority of the Lien
granted to the Collateral Agent pursuant to the Senior Loan Documents without
the written consent of each Lender, (vii) change any of the provisions of this
Section or the percentage set forth in the definition of "Required Lenders",
"Supermajority Lenders" or any other provision of any Senior Loan Document
specifying the number or percentage of Lenders (or Lenders of any Class)
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (viii) release
the Borrower or any Subsidiary Loan Party from its Guarantee under the Senior
Subsidiary Guarantee Agreement (except as expressly provided in the Senior
Subsidiary Guarantee Agreement), or limit its liability in respect of such
Guarantee, without the written consent of each Lender, (ix) release all or
substantially all of the Senior Collateral from the Liens under the Senior
Collateral Documents, without the written consent of each Lender or (x) amend
Section 2.21 to increase the permitted Incremental Facilities to in excess of
$350,000,000, without the written consent of the Supermajority Lenders; and
provided further, that no such agreement shall amend, modify or otherwise affect
the rights or duties of any Agent, the Issuing Banks or the Swingline Lender
without the prior written consent of such Agent, the Issuing Banks or the
Swingline Lender, as the case may be. Notwithstanding the foregoing, any
provision of this Agreement may be amended by an agreement in writing entered
into by the Borrower, the Required Lenders and the Administrative Agent (and, if
their rights or obligations are affected thereby, the Issuing Banks and the
Swingline Lender) if (i) by the terms of such agreement the Commitment of each
Lender not consenting to the amendment provided for therein shall terminate upon
the effectiveness of such amendment and (ii) at the time such amendment becomes
effective, each Lender not consenting thereto receives payment in full of the
principal of and interest accrued on each Loan made by it and all other amounts
owing to it or accrued for its account under this Agreement.
(c) Notwithstanding the foregoing, (i) Senior Collateral shall
be released from the Lien under the Senior Collateral Documents from time to
time as necessary to effect any sale of Senior Collateral permitted by the
Senior Loan Documents, and the Administrative Agent shall execute and deliver
all release documents reasonably requested to evidence such release; provided
that arrangements satisfactory to the Administrative Agent shall have been made
for application of the cash proceeds thereof in accordance with Section 2.11, if
required, and for the pledge of any non-cash proceeds thereof pursuant to the
Senior Collateral Documents, (ii) the accounts created pursuant to clause (i) of
Section 5.16(b), the Lockbox Account and/or the Governmental Lockbox Account may
be released by the Administrative Agent and transferred in accordance with
Section 5.16 and (iii) if a Subsidiary Loan Party ceases to be a Subsidiary in
accordance with this Agreement, or ceases to own any property that constitutes
Senior Collateral, at the request of and at the expense of the Borrower, such
Subsidiary Loan Party shall be released from the Senior Subsidiary Guarantee
Agreement, the Senior Subsidiary Security Agreement and each other Senior Loan
Document to which it is a party.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Agents and their Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Agents, in connection with the syndication of
the credit facilities provided for herein, the preparation and administration of
the Senior Loan Documents or any amendments, modifications or waivers of the
provisions thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by any Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket expenses incurred by any Agent, any Issuing Bank or any
Lender, including the fees, charges and disbursements of counsel for any Agent,
any Issuing Bank or any Lender, in connection with the enforcement or protection
of its rights under or in connection with the Senior Loan Documents, including
its rights under this Section, or in connection with the Loans made or Letters
of Credit issued hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.
(b) The Borrower shall indemnify each Agent, each Issuing Bank
and each Lender, and each Related Party of any of the foregoing Persons (each
such Person being called an "Indemnitee") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of any Senior
Loan Document, the performance by the parties to the Senior Loan Documents of
their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by an Issuing Bank
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property currently or formerly owned or
operated by the Borrower or any of the Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of the Subsidiaries, or (iv)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to any Agent, any Issuing Bank or any Lender under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to
such Agent, such Issuing Bank or such Lender, as the case may be, such Lender's
pro rata share (determined as of the time that the applicable unreimbursed
expense or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against such Agent,
such Issuing Bank or such Lender in its capacity as such. For purposes hereof, a
Lender's "pro rata share" shall be determined based upon its share of the sum of
the total Revolving Exposures, outstanding Tranche 1 Term Loans and unused
Commitments at the time.
(d) To the extent permitted by applicable law, the Borrower
shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement, any other Senior Loan Document or any other
agreement or instrument contemplated hereby or thereby, the Transactions, any
Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not
later than 10 Business Days after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby (including
any Affiliate of any Issuing Bank that issues any Letter of Credit), except that
the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
successors and assigns permitted hereby (including any Affiliate of any Issuing
Bank that issues any Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Agents, the Issuing Banks and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) (i) Subject to the conditions set forth in paragraph
(b)(ii) below, any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitments and the Loans at the time owing to it), with the prior
written consent (such consent not to be unreasonably withheld or delayed) of:
(A) the Borrower; provided that no consent of the Borrower
shall be required for an assignment to a Lender, an Affiliate of a
Lender, an Approved Fund or, if an Event of Default under clause (a),
(b), (h), or (i) of Article VII has occurred and is continuing, any
other assignee; and
(B) the Administrative Agent; provided that no consent of the
Administrative Agent shall be required for an assignment to an assignee
that is a Lender, an Affiliate of a Lender or an Approved Fund.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender, an
Affiliate of a Lender or an Approved Fund, the amount of the Commitment or
Loans of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
(1) with respect to Revolving Commitments and Revolving Loans, $5,000,000
and (2) with respect to Tranche 1 Term Loan Commitments and Tranche 1 Term
Loans, $1,000,000 or, in each case, if smaller, the entire remaining amount
of the assigning Lender's Commitment or Loans, unless each of the Borrower
and the Administrative Agent shall otherwise consent; provided that (i) no
such consent of the Borrower shall be required if an Event of Default has
occurred and is continuing and (ii) in the event of concurrent assignments
to two or more assignees that are Affiliates of one another, or to two or
more Approved Funds managed by the same investment advisor or by affiliated
investment advisors, all such concurrent assignments shall be aggregated in
determining compliance with this subsection;
(B) each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender's rights and
obligations under this Agreement;
(C) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500; provided that, in the event
of concurrent assignments to two or more assignees that are Affiliates
of one another, or by or to two or more Approved Funds managed by the
same investment advisor or by affiliated investment advisors, only one
such fee shall be payable; and
(D) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date
specified in each Assignment and Acceptance the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.15,
2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section
9.04 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and LC Disbursements owing to, each
Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the Agents,
the Issuing Banks and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of this Agreement, notwithstanding notice to the contrary.
The Register shall be available for inspection by the Borrower, any other
Agent, any Issuing Bank and any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already
be a Lender hereunder), the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall
accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in
this paragraph.
(vi) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder shall be deemed
to confirm to and agree with each other and the other parties hereto as
follows: (A) such assigning Lender warrants that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of
any adverse claim and that its Commitment and the outstanding balances of
its Loans, in each case without giving effect to assignments thereof that
have not become effective, are as set forth in such Assignment and
Acceptance; (B) except as set forth in clause (A) above, such assigning
Lender makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with this Agreement or any other Senior Loan Document or any
other instrument or document furnished pursuant hereto or thereto, or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of any of the foregoing, or the financial condition of the Loan
Parties or the performance or observance by the Loan Parties of any of
their obligations under this Agreement or under any other Senior Loan
Document or any other instrument or document furnished pursuant hereto or
thereto; (C) each of the assignee and the assignor represents and warrants
that it is legally authorized to enter into such Assignment and Acceptance;
(D) such assignee confirms that it has received a copy of this Agreement,
together with copies of any amendments or consents entered into prior to
the date of such Assignment and Acceptance and copies of the most recent
financial statements delivered pursuant to Section 5.01 and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(E) such assignee will independently and without reliance upon the Agents,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement;
(F) such assignee appoints and authorizes the Agents to take such action as
agents on its behalf and to exercise such powers under this Agreement and
the other Senior Loan Documents as are delegated to them by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto; and (G) such assignee agrees that it will perform in accordance
with their terms all the obligations that by the terms of this Agreement
are required to be performed by it as a Lender.
(c) (i) Any Lender may, without the consent of or notice to
the Borrower, the Agents, the Issuing Banks or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in
all or a portion of such Lender's rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided that (A) such Lender's obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations and (C)
the Borrower, the Agents, the Issuing Banks and the other Lenders shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver described in the first
proviso to Section 9.02(b)(i), (ii) or (iii) that affects such Participant.
Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and
2.17 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the
extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.18(c) as though it were a
Lender.
(ii) A Participant shall not be entitled to receive any
greater payment under Section 2.15 or 2.17 than the applicable Lender would
have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant
is made with the Borrower's prior written consent. A Participant that would
be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.17 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.17(e) as though it were a
Lender.
(d) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including, without limitation, any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this
Section shall not apply to any such pledge or assignment of a security
interest; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute
any such pledgee or assignee for such Lender as a party hereto.
(e) In the case of any Lender that is a fund that invests in
bank loans, such Lender may, without the consent of the Borrower or the
Administrative Agent, assign or pledge all or any portion of its rights
under the Senior Loan Documents, including the Loans and promissory notes
or any other instrument evidencing its rights as a Lender under the Senior
Loan Documents, to any holder of, trustee for, or any other representative
of holders of obligations owed or securities issued by such fund, as
security for such obligations or securities; provided that any foreclosure
or similar action by such trustee or representative shall be subject to the
provisions of this Section 9.04 concerning assignments.
SECTION 9.05. Survival. All covenants, agreements,
representations and warranties made by the Loan Parties in the Senior Loan
Documents and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement or any other Senior Loan Document shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Senior Loan Documents and the making
of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent, any Issuing Bank or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and unpaid
or any Letter of Credit is outstanding and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. Integration; Effectiveness. This Agreement, the
other Senior Loan Documents and any separate letter agreements with respect to
fees payable to the Administrative Agent constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof. This Agreement shall become effective as provided in Section
4.01.
SECTION 9.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of the Borrower against any of and all the obligations of the Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to any Senior Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Senior Loan Document shall affect any
right that any Agent, the Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Senior Loan
Document against the Borrower or its properties in the courts of any
jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Senior Loan Document in any court referred to in paragraph (b) of this Section.
Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Senior Loan Document will affect the right of any
party to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER SENIOR LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Agents, the Issuing
Banks and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, trustees, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Senior Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Borrower, (h) to any pledgee referred to in Section 9.04(d) or any direct or
indirect contractual counterparty in any Hedging Agreement (or to any such
contractual counterparty's professional advisor), so long as such pledgee or
contractual counterparty (or such professional advisor) agrees to be bound by
the provisions of this Section 9.12, or (i) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to any Agent, any Issuing Bank or any Lender on a
nonconfidential basis from a source other than the Borrower. For the purposes of
this Section, "Information" means all information received from the Borrower
relating to the Borrower or its business, other than any such information that
is available to any Agent, any Issuing Bank or any Lender on a nonconfidential
basis prior to disclosure by the Borrower. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information. Notwithstanding
anything in this Agreement or in any other Senior Loan Document to the contrary,
the Borrower and each Lender (and each employee, representative or other agent
of the Borrower) may disclose to any and all persons, without limitation of any
kind, the U.S. tax treatment and U.S. tax structure of the Transactions and all
materials of any kind (including opinions or other tax analyses) that are
provided to the Borrower relating to such U.S. tax treatment and U.S. tax
structure.
SECTION 9.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
SECTION 9.14. Collateral Trust and Intercreditor Agreement.
Each Lender, each Issuing Bank and each Agent hereby authorizes each Agent to
enter into the Collateral Trust and Intercreditor Agreement and each other
Senior Collateral Document on its behalf, and agrees that the Administrative
Agent and the Collateral Agent may enforce the rights and remedies of the
Lenders under each Senior Loan Document to the extent provided in the Collateral
Trust and Intercreditor Agreement and each other Senior Collateral Document.
SECTION 9.15. Cash Sweep. (a) On any day on which (i) an Event
of Default exists or (ii) the lesser of (x) the average Revolving Commitments
(after deducting the average total Revolving Exposure) over any 30-day period
and (y) the average Borrowing Base Amount (after deducting the sum of (1) the
average total Revolving Exposure and (2) the average outstanding Tranche 1 Term
Loans) over any 30-day period, in each case, together with all amounts then on
deposit in the Cash Sweep Cash Collateral Account, is less than $75,000,000,
then the Administrative Agent, upon its determination or upon request by the
Required Lenders, shall immediately be entitled to deliver Cash Sweep Notices.
(b) During a Cash Sweep Period, if (i) there is no Event of
Default and (ii) the lesser of (x) the average Revolving Commitments (after
deducting the average total Revolving Exposure) over any 30-day period and (y)
the average Borrowing Base Amount (after deducting the sum of (1) the average
total Revolving Exposure and (2) the average outstanding Tranche 1 Term Loans)
over any 30-day period, in each case, together with all amounts then on deposit
in the Cash Sweep Cash Collateral Account, is greater than $100,000,000, then
the Administrative Agent shall automatically rescind any Cash Sweep Notice and
shall be prohibited from delivering any other Cash Sweep Notice (unless and
until the occurrence of the events set forth in paragraph (a) of this Section).
(c) The Administrative Agent reserves the right to send a Cash
Sweep Notice on each occasion of the occurrence of the events set forth in
Section 9.15(a).
SECTION 9.16. Electronic Communications. (a) Notwithstanding
anything in any Senior Loan Document to the contrary, the Borrower hereby agrees
that it will use its reasonable best efforts to provide to the Administrative
Agent all information, documents and other materials that it is obligated to
furnish to the Administrative Agent pursuant to the Senior Loan Documents,
including, without limitation, all notices, requests, financial statements,
financial and other reports, certificates and other information materials, but
excluding any such communication that (i) relates to a request for a new, or a
conversion of an existing, Borrowing or other extension of credit (including any
election of an interest rate or Interest Period relating thereto), (ii) relates
to the payment of any principal or other amount due under any Senior Loan
Document prior to the scheduled date therefor, (iii) provides notice of any
Default or Event of Default under any Senior Loan Document or (iv) is required
to be delivered to satisfy any condition set forth in Section 4.01 and/or 4.02
(all such non-excluded communications being referred to herein collectively as
the "Communications"), by transmitting the Communications in an electronic/soft
medium in a format acceptable to the Administrative Agent to
xxxxxxxxxxxxxxx@xxxxxxxxx.xxx, with a copy to xxxxxxx.xxxx@xxxxxxxxx.xxx. In
addition, the Borrower agrees to continue to provide the Communications to the
Administrative Agent in the manner specified in the Senior Loan Documents, but
only to the extent requested by the Administrative Agent.
(b) The Borrower further agrees that the Administrative Agent
may make the Communications available to the Lenders by posting the
Communications on Intralinks, Fixed Income Direct or a substantially similar
electronic transmission system (each such system, a "Platform"). The Borrower
acknowledges that the distribution of material through an electronic medium is
not necessarily secure and that there are confidentiality and other risks
associated with such distribution.
(c) EACH PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE". THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
THE COMMUNICATIONS, OR THE ADEQUACY OF ANY PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT
PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR ANY PLATFORM. IN NO EVENT SHALL
THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (COLLECTIVELY, THE
"AGENT PARTIES") HAVE ANY LIABILITY TO THE BORROWER, ANY OTHER LOAN PARTY, ANY
LENDER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT
LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE
BORROWER'S OR THE ADMINISTRATIVE AGENT'S TRANSMISSION OF COMMUNICATIONS THROUGH
THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN
A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED PRIMARILY FROM SUCH AGENT PARTY'S GROSS NEGLIGENCE OR WILFUL
MISCONDUCT.
(d) The Administrative Agent agrees that the receipt of the
Communications by it at its e-mail address set forth in Section 9.01 shall
constitute effective delivery of the Communications to the Administrative Agent
for purposes of this Section. Each Lender agrees that notice to it (as provided
in the next sentence) specifying that the Communications have been posted to a
Platform shall constitute effective delivery of the Communications to such
Lender for purposes of this Section. Each Lender agrees (i) to notify the
Administrative Agent in writing (including by electronic communication) from
time to time of such Lender's e-mail address to which the foregoing notice may
be sent by electronic transmission and (ii) that the foregoing notice may be
sent to such e-mail address.
(e) Nothing in this Section 9.16 shall prejudice the right of
the Administrative Agent or any Lender to give any notice or other communication
pursuant to any Senior Loan Document in any other manner specified in such
Senior Loan Document.
SECTION 9.17. USA Patriot Act. Each Lender and each Issuing
Bank hereby notifies the Borrower that pursuant to the requirements of the USA
Patriot Act, it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or Issuing Bank to
identify the Borrower in accordance with its requirements. The Borrower shall
promptly, following a request by the Administrative Agent, any Lender or any
Issuing Bank, provide all documentation and other information that the
Administrative Agent, such Lender or such Issuing Bank reasonably requests in
order to comply with its ongoing obligations under applicable "know your
customer" and anti-money laundering rules and regulations, including the USA
Patriot Act.
ANNEX 1
to First Restated Credit Agreement
DEFINITIONS ANNEX
This is the Definitions Annex referred to in the Senior Loan Documents
and the Second Priority Debt Documents. Each capitalized term used herein shall
have the meaning assigned to it below or, if not defined herein, the meaning
assigned to it in the applicable Senior Loan Document or Second Priority Debt
Document. The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
References to any agreement are to such agreement as amended, modified
or supplemented from time to time in accordance with the terms thereof and of
each Senior Loan Document and Second Priority Debt Document containing
restrictions or imposing conditions on the amendment, modification or
supplementing of such agreement.
"Affiliate" means, when used with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
"Asset Sale" means any sale, lease, assignment, transfer or other
disposition (including pursuant to a Sale and Leaseback Transaction) of any
property or asset (whether now owned or hereafter acquired, whether in one
transaction or a series of transactions and whether by way of merger or
otherwise) of the Borrower or any Subsidiary (including of any Equity Interest
in a Subsidiary).
"Attributable Debt" means, as to any particular Capital Lease or Sale
and Leaseback Transaction under which the Borrower or any Subsidiary is at the
time liable, as of any date as of which the amount thereof is to be determined
(a) in the case of a transaction involving a Capital Lease, the amount as of
such date of Capital Lease Obligations with respect thereto and (b) in the case
of a Sale and Leaseback Transaction not involving a Capital Lease, the then
present value of the minimum rental obligations under such Sale and Leaseback
Transaction during the remaining term thereof (after giving effect to any
extensions at the option of the lessor) computed by discounting the rental
payments at the actual interest factor included in such payments or, if such
interest factor cannot be readily determined, at the rate per annum that would
be applicable to a Capital Lease of the Borrower having similar payment terms.
The amount of any rental payment required to be made under any such Sale and
Leaseback Transaction not involving a Capital Lease may exclude amounts required
to be paid by the lessee on account of maintenance and repairs, insurance,
taxes, assessments, utilities, operating and labor costs and similar charges,
whether or not characterized as rent. Any determination of any rate implicit in
the terms of a Capital Lease or a lease in a Sale and Leaseback Transaction not
involving a Capital Lease made in accordance with generally accepted financial
practices by the Borrower shall be binding and conclusive absent manifest error.
"Bankruptcy Proceeding" means any proceeding under Title 11 of the U.S.
Code or any other Federal, state or foreign bankruptcy, insolvency,
reorganization, receivership or similar law.
"Basket Asset Sale" means any sale, transfer or disposition (including
a Sale and Leaseback Transaction not involving any Mortgaged Property) of office
locations, Stores or other personal or real property (including any improvements
thereon), whether or not constituting Mortgaged Property, or leasehold interest
therein for fair value in the ordinary course of business consistent with past
practice and not inconsistent with the business plan delivered to the Senior
Lenders prior to the Original Restatement Effective Date; provided, however,
that (a) the aggregate consideration received therefor (including the fair
market value of any non-cash consideration) shall not exceed $125,000,000 in any
fiscal year of Rite Aid (calculated without regard to Sale and Leaseback
Transactions permitted by Section 6.01(vii), (xii) and (xiii) of the Senior
Credit Agreement) and (b) except with respect to any net consideration received
from any sale, transfer or disposition to a third Person of Stores, leases and
prescription files closed at substantially the same time as, and entered into as
part of a single related transaction with, the purchase or other acquisition
from such third Person of Stores, leases and prescription files of a
substantially equivalent value, at least 75% of such consideration shall consist
of cash.
"Borrower" means Rite Aid.
"Business Day" means any day other than a Saturday, Sunday or day on
which commercial banks in New York City or Chicago, Illinois are authorized or
required by law to close; provided, however, that when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Capital Lease" means any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which, in
accordance with GAAP, should be capitalized on the lessee's balance sheet.
"Casualty/Condemnation" means any event that gives rise to Casualty/
Condemnation Proceeds.
"Casualty/Condemnation Proceeds" means
(a) any insurance proceeds under any insurance policies or
otherwise with respect to any casualty or other insured damage to any
properties or assets of the Borrower or the Subsidiaries; and
(b) any proceeds received by the Borrower or any Subsidiary in
connection with any action or proceeding for the taking of any
properties or assets of the Borrower or the Subsidiaries, or any part
thereof or interest therein, for public or quasi-public use under the
power of eminent domain, by reason of any similar public improvement
or condemnation proceeding;
minus, in each case (i) any fees, commissions and expenses (including the costs
of adjustment and condemnation proceedings) and other costs paid or incurred by
the Borrower or any Subsidiary in connection therewith, (ii) the amount of
income taxes reasonably estimated to be payable as a result of any gain
recognized in connection with the receipt of such payment or proceeds and (iii)
the amount of any Indebtedness (or Attributable Debt), other than the Senior
Obligations, together with premium or penalty, if any, and interest thereon (or
comparable obligations in respect of Attributable Debt), that is secured by a
Lien on (or if Attributable Debt, the lease of) the properties or assets in
question and that has priority over both the Senior Lien and the Second Priority
Lien, that is required to be repaid as a result of the receipt by the Borrower
or a Subsidiary of such payments or proceeds; provided, however, that no such
proceeds shall constitute Casualty/Condemnation Proceeds to the extent that such
proceeds are (A) reinvested in other like fixed or capital assets within 270
days of the Casualty/Condemnation that gave rise to such proceeds or (B)
committed to be reinvested in other like fixed or capital assets within 270 days
of such Casualty/Condemnation, with diligent pursuit of such reinvestment, and
reinvested in such assets within 365 days of such Casualty/ Condemnation.
"Citibank" means Citibank, N.A.
"Collateral" means the Senior Collateral and the Second Priority
Collateral.
"Collateral Documents" means the Senior Collateral Documents and the
Second Priority Collateral Documents.
"Collateral Trust and Intercreditor Agreement" means the Amended and
Restated Collateral Trust and Intercreditor Agreement, dated as of June 27,
2001, as amended and restated as of May 28, 2003, among Rite Aid, the Subsidiary
Guarantors, the Second Priority Collateral Trustee, the Senior Collateral Agent
and each other Representative.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Debt Facility" means the Senior Credit Agreement and any Second
Priority Debt Facility, or any combination thereof (as the context requires).
"Default Rate" means a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be) equal to the sum of (a) the rate of interest publicly announced by Citibank
in New York, New York, from time to time as its "base rate" plus (b) 2.00%.
"Domestic Subsidiary" means any Subsidiary incorporated or organized
under the laws of the United States of America, any State thereof or the
District of Columbia.
"Effective Date" means June 27, 2001.
"Effective Date Indentures" mean, collectively, (a) the Indenture dated
as of December 21, 1998, between Rite Aid and Xxxxxx Trust and Savings Bank, as
trustee and (b) the Indenture dated as of August 1, 1993, between Rite Aid and
Xxxxxx Guaranty Trust Company of New York, as trustee.
"8.125% Note Indenture" means the Indenture dated as of April 22, 2003,
among Rite Aid, the Subsidiary Guarantors and BNY Midwest Trust Company, as
trustee, relating to the 8.125% Notes.
"8.125% Notes" means the 8.125% Senior Secured Notes of the Borrower
due 2010 issued pursuant to the 8.125% Note Indenture and any Registered
Equivalent Notes issued in exchange therefor.
"4.75% Convertible Notes" means the 4.75% Convertible Notes of the
Borrower due 2006 issued pursuant to the 4.75% Note Indenture and any Registered
Equivalent Notes issued on exchange thereof.
"4.75% Note Indenture" means the Indenture dated as of November 19,
2001, between Rite Aid and BNY Midwest Trust Company, as trustee, relating to
the 4.75% Convertible Notes.
"First Restatement Effective Date" means the date on which the Senior
Credit Agreement becomes effective pursuant to its terms.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (f) all Guarantees by such Person of Indebtedness of others, (g)
all Capital Lease Obligations of such Person, (h) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty and (i) all obligations, contingent or otherwise, of
such Person in respect of bankers' acceptances. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indentures" mean, collectively, the Effective Date Indentures and the
Restatement Date Indentures.
"Instructing Group" means, until the Senior Obligation Payment Date,
the Required Lenders and, thereafter, the Second Priority Instructing Group.
"Intercompany Inventory Purchase Agreement" means the Intercompany
Inventory Purchase Agreement dated as of June 12, 2000 (as amended), among the
Borrower, Rite Aid Hdqtrs. Corp., the Distribution Subsidiaries named therein
and the Operating Subsidiaries named therein.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, Capital Lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Majority Senior Parties" means the Required Lenders (as defined in the
Senior Credit Agreement), or with respect to any waiver, amendment or request,
Senior Lenders having such amount of unused Commitments, Revolving Exposures and
outstanding Tranche 1 Term Loans as may be required under the Senior Credit
Agreement to approve the same.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor to
its business of rating debt securities.
"Net Cash Proceeds" means:
(a) with respect to any Asset Sale, an amount equal to the
cash proceeds received by the Borrower or any of the Subsidiaries from
or in respect of such Asset Sale (including, when received, any cash
proceeds received in respect of any noncash proceeds of any Asset
Sale), less the sum of
(i) reasonable costs and expenses paid or incurred in
connection with such transaction, including, without
limitation, any underwriting brokerage or other customary
selling commissions and reasonable legal, advisory and other
fees and expenses (including title and recording expenses,
associated therewith), payments of unassumed liabilities
relating to the assets sold and any severance and termination
costs;
(ii) the amount of any Indebtedness (or Attributable
Debt), together with premium or penalty, if any, and accrued
interest thereon (or comparable obligations in respect of
Attributable Debt) secured by a Lien on (or if Attributable
Debt, the lease of) any asset disposed of in such Asset Sale
and discharged from the proceeds thereof, but only to the
extent such Lien has priority over the Senior Lien and the
Second Priority Lien;
(iii) any taxes actually paid or to be payable by
such Person (as estimated by a senior financial or accounting
officer of the Borrower, giving effect to the overall tax
position of the Borrower) in respect of such Asset Sale; and
(iv) the portion of such cash proceeds which the
Borrower determines in good faith and reasonably should be
reserved for post-closing adjustments, including, without
limitation, indemnification payments and purchase price
adjustments, provided, that on the date that all such
post-closing adjustments have been determined, the amount (if
any) by which the reserved amount in respect of such Asset
Sale exceeds the actual post-closing adjustments payable by
the Borrower or any of the Subsidiary Loan Parties shall
constitute Net Cash Proceeds on such date;
(b) with respect to the proceeds received by the Borrower or a
Subsidiary from or in respect of an issuance in the public or private
capital markets of long-term debt securities, of equity securities or
of equity-linked (e.g., trust preferred) securities, an amount equal to
the cash proceeds received by the Borrower or any of the Subsidiaries
from or in respect of such issuance, less any reasonable transaction
costs, including investment banking and underwriting fees, discounts
and commissions and any other expenses (including legal fees and
expenses) reasonably incurred by such Person in respect of such
issuance;
(c) with respect to any Securitization, an amount equal to the
cash proceeds received by the Borrower or any of the Subsidiary from or
in respect of such Securitization, less any reasonable transaction
costs, including investment banking and underwriting fees, discounts
and commissions and any other expenses (including legal fees and
expenses) reasonably incurred by such Person in respect of such
Securitization; and
(d) with respect to a Casualty/Condemnation, the amount of
Casualty/Condemnation Proceeds.
"9.5% Note Indenture" means the Indenture dated as of February 12,
2003, among Rite Aid, the Subsidiary Guarantors named therein and BNY Midwest
Trust Company, as trustee, relating to the 9.5% Notes.
"9.5% Notes" means the 9.5% Senior Secured Notes of Rite Aid due 2011
issued pursuant to the 9.5% Note Indenture and any Registered Equivalent Notes
issued in exchange therefor.
"9.25% Note Indenture" means the Indenture dated as of May 20, 2003,
between Rite Aid and BNY Midwest Trust Company, as trustee, relating to the
9.25% Notes.
"9.25% Notes" means the 9.25% Senior Unsecured Notes of Rite Aid due
2013 issued pursuant to the 9.25% Note Indenture and any Registered Equivalent
Notes issued in exchange therefor.
"Obligors" means Rite Aid, the Subsidiary Guarantors, the Subsidiary
Loan Parties and any other Person who is liable for any of the Secured
Obligations.
"Original Restatement Effective Date" means September 30, 2005.
"Permitted Disposition" means any of the following, other than sales of
Securitization Assets in a Securitization:
(a) dispositions of inventory at retail, cash, cash
equivalents and other cash management investments and obsolete, unused,
uneconomic or unnecessary equipment or inventory, in each case in the
ordinary course of business;
(b) a disposition to a Subsidiary Loan Party, provided that if
the property subject to such disposition constitutes Collateral
immediately before giving effect to such disposition, such property
continues to constitute Collateral subject to the Senior Lien and the
Second Priority Lien;
(c) a sale or discount, in each case without recourse and in
the ordinary course of business, of overdue Accounts (as defined in the
Senior Credit Agreement) arising in the ordinary course of business,
but only to the extent such Accounts are no longer Eligible Accounts
Receivable (as defined in the Senior Credit Agreement) and such sale or
discount is in connection with the compromise or collection thereof
consistent with customary industry practice (and not as part of any
bulk sale);
(d) Basket Asset Sales; and
(e) sales of Accounts Receivable (as defined in the Senior
Subsidiary Security Agreement) relating to worker's compensation claims
to collection agencies pursuant to the Borrower's customary cash
management procedures.
"Permitted Investments" means any investment by any Person in (a)
direct obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (b) commercial paper
rated at least A-1 by S&P and P-1 by Moody's, (c) time deposits with, including
certificates of deposit issued by, any office located in the United States of
any bank or trust company which is organized or licensed under the laws of the
United States or any state thereof and has capital, surplus and undivided
profits aggregating at least $500,000,000, (d) repurchase agreements with
respect to securities described in clause (a) above entered into with an office
of a bank or trust company meeting the criteria specified in clause (c) above,
provided in each case that such investment matures within one year from the date
of acquisition thereof by such Person or (e) money market mutual funds at least
80% the assets of which are held in investments referred to in clauses (a)
through (d) above (except that the maturities of certain investments held by any
such money market funds may exceed one year so long as the dollar-weighted
average life of the investments of such money market mutual fund is less than
one year).
"Reduction" means, when applied to any Debt Facility, (a) the permanent
repayment of outstanding loans (or obligations in respect of Attributable Debt)
under such Debt Facility, (b) the permanent reduction of outstanding lending
commitments under such Debt Facility or (c) the permanent cash collateralization
of outstanding letters of credit under such facility (together with the
termination of any lending commitments utilized by such letters of credit).
"Refinance" means, with respect to any issuance of Indebtedness, to
replace, renew, extend, refinance, repay, refund, repurchase, redeem, defease or
retire, or to issue Indebtedness in exchange or as a replacement therefor.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Registered Equivalent Notes" means, with respect to any notes
originally issued in a Rule 144A or other private placement transaction under
the Securities Act of 1933, substantially identical notes issued in a dollar for
dollar exchange therefor pursuant to an exchange offer registered with the SEC.
"Representatives" means the Senior Collateral Agent and the Second
Priority Representatives.
"Restatement Date Indentures" mean, collectively, (a) the 9.5% Note
Indenture, (b) the 8.125% Note Indenture, (c) the 9.25% Note Indenture and (d)
the 4.75% Note Indenture.
"Rite Aid" means Rite Aid Corporation, a Delaware corporation, and its
successors.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor to its business of rating debt
securities.
"Sale and Leaseback Transaction" means any arrangement whereby the
Borrower or a Subsidiary shall sell or transfer any office building (including
its headquarters), distribution center, manufacturing plant, warehouse, Store,
equipment or other property, real or personal, now or hereafter owned by the
Borrower or a Subsidiary with the intention that the Borrower or any Subsidiary
rent or lease the property sold or transferred (or other property of the buyer
or transferee substantially similar thereto).
"SEC" means the United States Securities and Exchange Commission and
any successor agency thereto.
"Second Priority Collateral" means all the "Second Priority Collateral"
as defined in any Second Priority Collateral Document.
"Second Priority Collateral Documents" means the Second Priority
Subsidiary Security Agreement, the Second Priority Subsidiary Guarantee
Agreement, the Second Priority Indemnity, Subrogation and Contribution
Agreement, the Collateral Trust and Intercreditor Agreement and each of the
security agreements and other instruments and documents executed and delivered
by any Subsidiary Guarantor pursuant to any of the foregoing for purposes of
providing collateral security or credit support for any Second Priority Debt
Obligation or obligation under the Second Priority Subsidiary Guarantee
Agreement.
"Second Priority Collateral Trustee" means Wilmington Trust Company, in
its capacity as collateral trustee under the Collateral Trust and Intercreditor
Agreement and the Second Priority Collateral Documents, and its successors.
"Second Priority Debt" means any Indebtedness (including the 9.5%
Notes, the 8.125% Notes and the 7.5% Notes) incurred by Rite Aid and Guaranteed
by the Subsidiary Guarantors on or after the Effective Date pursuant to the
Second Priority Subsidiary Guarantee Agreement (i) which is secured by the
Second Priority Collateral on a pari passu basis (other than as provided by the
terms of the applicable Second Priority Debt Documents) with the other Second
Priority Debt Obligations and (ii) if issued on or after the Original
Restatement Effective Date, matures after December 31, 2010; provided, however,
that (A) such Indebtedness is permitted to be incurred, secured and Guaranteed
on such basis by each Senior Loan Document and each Second Priority Debt
Document and (B) the Representative for the holders of such Second Priority Debt
shall have become party to the Collateral Trust and Intercreditor Agreement
pursuant to, and by satisfying the conditions set forth in, Section 10.12
thereof. Second Priority Debt shall include any Registered Equivalent Notes
issued in exchange thereof.
"Second Priority Debt Documents" means, with respect to any series,
issue or class of Second Priority Debt, the promissory notes, indentures and
other operative agreements or instruments evidencing or governing such Debt,
including the Second Priority Collateral Documents.
"Second Priority Debt Facility" means the indenture or other governing
agreement or instrument with respect to any Second Priority Debt.
"Second Priority Debt Obligations" means with respect to any series,
issue or class of Second Priority Debt, (a) all principal of, and interest
(including without limitation, any interest which accrues after the commencement
of any Bankruptcy Proceeding, whether or not allowed or allowable as a claim in
any such proceeding) payable with respect to such Second Priority Debt, (b) all
other amounts payable to the related Second Priority Debt Parties under the
related Second Priority Debt Documents and (c) any renewals or extensions of the
foregoing.
"Second Priority Debt Parties" means with respect to any series, issue
or class of Second Priority Debt, the holders of such Debt, any trustee or agent
therefor under any related Second Priority Debt Documents and the beneficiaries
of each indemnification obligation undertaken by Rite Aid or any Obligor under
any related Second Priority Debt Documents, but shall not include the Loan
Parties or any Controlled Affiliates thereof (unless such Loan Party or
Controlled Affiliate is a holder of such Debt, a trustee or agent therefore or
beneficiary of such an indemnification obligation named as such in a Second
Priority Debt Document).
"Second Priority Indemnity, Subrogation and Contribution Agreement"
means the Amended and Restated Second Priority Indemnity, Subrogation and
Contribution Agreement, dated as of June 27, 2001, as amended and restated as of
May 28, 2003 among Rite Aid, the Subsidiary Guarantors and the Second Priority
Collateral Trustee.
"Second Priority Instructing Group" means Second Priority
Representatives with respect to Second Priority Debt Facilities under which at
least a majority of the then aggregate amount of Second Priority Debt
Obligations are outstanding.
"Second Priority Lien" means the Liens on the Second Priority
Collateral in favor of the Second Priority Debt Parties under the Second
Priority Collateral Documents.
"Second Priority Representative" means, in respect of a Second Priority
Debt Facility, the trustee, administrative agent, security agent or similar
agent under each Second Priority Debt Facility, as the case may be, and each of
their successors in such capacities.
"Second Priority Subsidiary Guarantee Agreement" means the Amended and
Restated Second Priority Subsidiary Guarantee Agreement, dated as of June 27,
2001, as amended and restated as of May 28, 2003, made by the Subsidiary
Guarantors (including any additional Subsidiary Guarantor becoming party thereto
after the Original Restatement Effective Date) in favor of the Second Priority
Collateral Trustee for the benefit of the Second Priority Debt Parties.
"Second Priority Subsidiary Security Agreement" means the Amended and
Restated Second Priority Subsidiary Security Agreement, dated as of June 27,
2001, as amended and restated as of May 28, 2003, made by the Subsidiary
Guarantors (including any additional Subsidiary Guarantor becoming party thereto
after the Original Restatement Effective Date) in favor of the Second Priority
Collateral Trustee for the benefit of the Second Priority Debt Parties.
"Secured Obligations" means the Senior Obligations and the Second
Priority Debt Obligations.
"Secured Parties" means the Senior Secured Parties and the Second
Priority Debt Parties.
"Senior Collateral" means all the "Collateral" as defined in any Senior
Collateral Document.
"Senior Collateral Agent" means Citicorp North America, Inc., in its
capacity as the senior collateral processing agent under the Senior Collateral
Documents, and their successors.
"Senior Collateral Disposition" means (a) any sale, transfer or other
disposition of Senior Collateral (including any property or assets that would
constitute Senior Collateral but for the release of the Senior Lien with respect
thereto in connection with such sale, transfer or other disposition), other than
a Permitted Disposition or (b) a Casualty/Condemnation with respect to Senior
Collateral.
"Senior Collateral Documents" means the Senior Subsidiary Security
Agreement, the Senior Subsidiary Guarantee Agreement, the Senior Indemnity,
Subrogation and Contribution Agreement, the Collateral Trust and Intercreditor
Agreement and each of the security agreements and other instruments and
documents executed and delivered by any Subsidiary Guarantor pursuant to any of
the foregoing or pursuant to the Senior Credit Agreement or for purposes of
providing collateral security or credit support for any Senior Obligation or
obligation under the Senior Subsidiary Guarantee Agreement.
"Senior Credit Agreement" means the Amended and Restated Senior Credit
Agreement, dated as of June 27, 2001, as amended and restated as of November 8,
2006 and as may be further amended, restated or otherwise modified from time to
time, among Rite Aid, the Senior Lenders, Citicorp North America, Inc., as
administrative agent and as Senior Collateral Agent and Bank of America, N.A.,
as syndication agent for the Senior Lenders.
"Senior Hedging Agreement" means any Hedging Agreement entered into
with Rite Aid or any Subsidiary, if the applicable counterparty was a Senior
Lender or an Affiliate thereof (a) on the Original Restatement Effective Date,
in the case of any Hedging Agreement entered into prior to the Original
Restatement Effective Date or (b) at the time the Hedging Agreement was entered
into, in the case of any Hedging Agreement entered into on or after the Original
Restatement Effective Date.
"Senior Indemnity, Subrogation and Contribution Agreement" means the
Amended and Restated Senior Indemnity, Subrogation and Contribution Agreement,
dated as of June 27, 2001, as amended and restated as of May 28, 2003, among
Rite Aid, the Subsidiary Guarantors (including Subsidiary Guarantors becoming
party thereto after the Original Restatement Effective Date) and the Senior
Collateral Agent.
"Senior Lender" means a "Lender" as defined in the Senior Credit
Agreement.
"Senior Lien" means the Liens on the Senior Collateral in favor of the
Senior Secured Parties under the Senior Collateral Documents.
"Senior Loan Documents" means the Senior Credit Agreement, the Notes
referred to in the Senior Credit Agreement, each Senior Hedging Agreement and
the Senior Collateral Documents.
"Senior Obligation Payment Date" means the date on which (a) the Senior
Obligations have been paid in full, (b) all lending commitments under the Senior
Credit Agreement have been terminated and (c) there are no outstanding letters
of credit issued under the Senior Credit Agreement other than such as have been
fully cash collateralized under documents and arrangements satisfactory to the
issuer of such letters of credit.
"Senior Obligations" means (a) the principal of each loan made under
the Senior Credit Agreement, (b) all reimbursement and cash collateralization
obligations in respect of letters of credit issued under the Senior Credit
Agreement, (c) all monetary obligations of the Borrower or any Subsidiary under
each Senior Hedging Agreement entered into (i) prior to the Original Restatement
Effective Date with any counterparty that was a Senior Lender (or an Affiliate
thereof) on the Original Restatement Effective Date or (ii) on or after the
Original Restatement Effective Date with any counterparty that was a Senior
Lender (or an Affiliate thereof) at the time such Senior Hedging Agreement was
entered into, (d) all interest on the loans, letter of credit reimbursement,
fees and other obligations under the Senior Credit Agreement or such Senior
Hedging Agreements (including, without limitation any interest which accrues
after the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower or any Subsidiary Loan
Party, whether or not allowed or allowable as a claim in such proceeding), (e)
all other amounts payable by the Borrower or any Subsidiary under the Senior
Loan Documents and (f) all increases, renewals, extensions and Refinancings of
the foregoing.
"Senior Secured Parties" means each party to the Senior Credit
Agreement other than any Loan Party, each counterparty to a Senior Hedging
Agreement, the beneficiaries of each indemnification obligation undertaken by
Rite Aid or any other Loan Party under any Senior Loan Document, and the
successors and permitted assigns of each of the foregoing.
"Senior Subsidiary Guarantee Agreement" means the Amended and Restated
Senior Subsidiary Guarantee Agreement, made by the Subsidiary Guarantors
(including Subsidiary Guarantors that become parties thereto after the Original
Restatement Effective Date) in favor of the Senior Collateral Agent for the
benefit of the Senior Secured Parties, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"Senior Subsidiary Security Agreement" means the Amended and Restated
Senior Subsidiary Security Agreement, made by the Subsidiary Guarantors
(including Subsidiary Guarantors that become parties thereto after the Original
Restatement Effective Date) in favor of the Senior Collateral Agent for the
benefit of the Senior Secured Parties, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"7.5% Notes" means the 7.5% Senior Secured Notes of the Borrower due
2015 issued pursuant to the 7.5% Note Indenture and any Registered Equivalent
Notes issued in exchange therefor.
"7.5% Note Indenture" means the Indenture dated as of January 11, 2005,
among Rite Aid, the Subsidiary Guarantors and BNY Midwest Trust Company, as
trustee, relating to the 7.5% Notes.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Guarantor" means each Subsidiary that is party to any
Second Priority Collateral Document.
"Subsidiary Loan Party" means each Subsidiary set forth on Schedule
1.01 to the Senior Credit Agreement and any wholly-owned Domestic Subsidiary,
including any Securitization Vehicle that is a Domestic Subsidiary, that owns
any assets consisting of inventory, accounts receivable, intellectual property,
or script lists; provided that no Subsidiary that engages solely in the
Borrower's pharmacy benefits management business shall be deemed a Subsidiary
Loan Party.
"Triggering Event" shall have the meaning assigned to such term in the
Collateral Trust and Intercreditor Agreement.
"12.5% Note Indenture" means the Indenture dated as of June 27, 2001,
among Rite Aid, the Subsidiary Guarantors and U.S. Bank and Trust, as trustee,
relating to the 12.5% Notes.
"12.5% Notes" means the 12.5% Senior Secured Notes due 2006 of Rite Aid
issued on the Effective Date pursuant to the 12.5% Note Indenture.
"Uniform Commercial Code" or "UCC" means, unless otherwise specified,
the Uniform Commercial Code as from time to time in effect in the State of New
York.
EXHIBIT B
Second Restated Credit Agreement
--------------------------------
================================================================================
CREDIT AGREEMENT
dated as of June 27, 2001,
as amended and restated as of [o], 2006,
among
RITE AID CORPORATION,
The Lenders Party Hereto,
CITICORP NORTH AMERICA, INC.,
as Administrative Agent and Collateral Processing Agent,
BANK OF AMERICA, N.A.,
as Syndication Agent,
JPMORGAN CHASE BANK , N.A.,
as Co-Documentation Agent,
XXXXX FARGO FOOTHILL, LLC,
as Co-Documentation Agent
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Documentation Agent
___________________________
CITIGROUP GLOBAL MARKETS INC.,
as Lead Arranger and Joint Bookrunner
and
BANC OF AMERICA SECURITIES LLC,
as Joint Bookrunner
================================================================================
TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
SECTION 1.01. Defined Terms................................................................2
SECTION 1.02. Classification of Loans and Borrowings......................................35
SECTION 1.03. Terms Generally.............................................................35
SECTION 1.04. Accounting Terms; GAAP......................................................35
SECTION 1.05. Terms Defined in Definitions Annex..........................................36
ARTICLE II
The Credits
SECTION 2.01. Commitments.................................................................36
SECTION 2.02. Loans and Borrowings........................................................36
SECTION 2.03. Requests for Borrowings.....................................................37
SECTION 2.04. Swingline Loans.............................................................38
SECTION 2.05. Letters of Credit...........................................................40
SECTION 2.06. Funding of Borrowings.......................................................45
SECTION 2.07. Interest Elections..........................................................45
SECTION 2.08. Termination and Reduction of Commitments....................................47
SECTION 2.09. Repayment of Loans; Evidence of Indebtedness................................47
SECTION 2.10. Amortization and Repayment of Term Loans....................................48
SECTION 2.11. Prepayment of Loans.........................................................49
SECTION 2.12. Fees........................................................................51
SECTION 2.13. Interest....................................................................53
SECTION 2.14. Alternate Rate of Interest..................................................53
SECTION 2.15. Increased Costs.............................................................54
SECTION 2.16. Break Funding Payments......................................................55
SECTION 2.17. Taxes.......................................................................56
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Setoffs..................57
SECTION 2.19. Mitigation Obligations; Replacement of Lenders..............................58
SECTION 2.20. Adjustments to Borrowing Base Advance Rates.................................59
SECTION 2.21. Incremental Loans...........................................................60
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers........................................................61
SECTION 3.02. Authorization; Enforceability...............................................61
SECTION 3.03. Governmental Approvals; No Conflicts........................................61
SECTION 3.04. Financial Condition; No Material Adverse Change.............................62
SECTION 3.05. Properties..................................................................62
SECTION 3.06. Litigation and Environmental Matters........................................62
SECTION 3.07. Compliance with Laws and Agreements.........................................63
SECTION 3.08. Investment and Holding Company Status.......................................63
SECTION 3.09. Taxes.......................................................................63
SECTION 3.10. ERISA.......................................................................63
SECTION 3.11. Disclosure; Accuracy of Information.........................................64
SECTION 3.12. Subsidiaries................................................................64
SECTION 3.13. Insurance...................................................................64
SECTION 3.14. Labor Matters...............................................................64
SECTION 3.15. Solvency....................................................................65
SECTION 3.16. Federal Reserve Regulations.................................................65
SECTION 3.17. Security Interests..........................................................65
SECTION 3.18. Use of Proceeds.............................................................66
ARTICLE IV
Conditions
SECTION 4.01. Second Restatement Effective Date...........................................66
SECTION 4.02. Each Credit Event...........................................................66
SECTION 4.03. Borrowing Base Date.........................................................67
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other Information..................................68
SECTION 5.02. Notices of Material Events..................................................71
SECTION 5.03. Information Regarding Collateral............................................71
SECTION 5.04. Existence; Conduct of Business..............................................72
SECTION 5.05. Payment of Obligations......................................................72
SECTION 5.06. Maintenance of Properties...................................................73
SECTION 5.07. Insurance...................................................................73
SECTION 5.08. Books and Records; Inspection and Audit Rights; Collateral and Borrowing Base
Reviews.....................................................................74
SECTION 5.09. Compliance with Laws........................................................75
SECTION 5.10. Use of Proceeds and Letters of Credit.......................................75
SECTION 5.11. Additional Subsidiaries.....................................................76
SECTION 5.12. Further Assurances..........................................................77
SECTION 5.13. Subsidiaries................................................................77
SECTION 5.14. Intercompany Transfers......................................................77
SECTION 5.15. Inventory Purchasing........................................................77
SECTION 5.16. Cash Management System......................................................78
SECTION 5.17. Termination of Factoring Transactions.......................................78
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness; Certain Equity Securities.....................................79
SECTION 6.02. Liens.......................................................................81
SECTION 6.03. Fundamental Changes.........................................................83
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions...................84
SECTION 6.05. Asset Sales.................................................................85
SECTION 6.06. Sale and Leaseback Transactions.............................................86
SECTION 6.07. Hedging Agreements..........................................................87
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness.......................87
SECTION 6.09. Transactions with Affiliates................................................89
SECTION 6.10. Restrictive Agreements......................................................91
SECTION 6.11. Amendment of Material Documents.............................................92
SECTION 6.12. Consolidated Fixed Charge Coverage Ratio....................................93
SECTION 6.13. Restrictions on Asset Holdings by the Borrower..............................94
SECTION 6.14. Corporate Separateness......................................................94
ARTICLE VII
Events of Default
ARTICLE VIII
The Agents
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices.....................................................................99
SECTION 9.02. Waivers; Amendments........................................................100
SECTION 9.03. Expenses; Indemnity; Damage Waiver.........................................103
SECTION 9.04. Successors and Assigns.....................................................104
SECTION 9.05. Survival...................................................................108
SECTION 9.06. Integration; Effectiveness.................................................108
SECTION 9.07. Severability...............................................................108
SECTION 9.08. Right of Setoff............................................................108
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.................109
SECTION 9.10. WAIVER OF JURY TRIAL.......................................................109
SECTION 9.11. Headings...................................................................110
SECTION 9.12. Confidentiality............................................................110
SECTION 9.13. Interest Rate Limitation...................................................110
SECTION 9.14. Collateral Trust and Intercreditor Agreement; Interim Intercreditor
Agreement..................................................................111
SECTION 9.15. Cash Sweep.................................................................111
SECTION 9.16. Electronic Communications..................................................112
SECTION 9.17. USA Patriot Act............................................................113
SECTION 9.18. Release of Interim Collateral..............................................113
ANNEXES:
-------
Annex 1 - Definitions Annex
Annex 2 - Subordination Terms
SCHEDULES:
---------
Schedule 1.01 - Subsidiary Loan Parties
Schedule 2.01 - Commitments
Schedule 3.04 - Undisclosed Liabilities
Schedule 3.05 (a) - Properties
Schedule 3.05(c) - Leased Warehouses and Distribution Centers
Schedule 3.06(a) - Litigation
Schedule 3.06(b) - Environmental Matters
Schedule 3.07 - Compliance with Laws
Schedule 3.09 - Taxes
Schedule 3.12 - Subsidiaries
Schedule 3.13 - Insurance
Schedule 3.14 - Labor
Schedule 5.11 - Subsidiaries
Schedule 6.01(a)(x) - Existing Indebtedness
Schedule 6.01(b) - Equity Issuances
Schedule 6.02(xi) - Liens
Schedule 6.04 - Investments
Schedule 6.08(a) - Restricted Payments
Schedule 6.09 - Affiliate Transactions
EXHIBITS:
--------
Exhibit A-1 - Form of Term Note
Exhibit A-2 - Form of Revolving Credit Note
Exhibit B - Form of Borrowing Base Certificate
Exhibit C - Form of Assignment and Acceptance Agreement
Exhibit D-1 - Form of Senior Subsidiary Guarantee Agreement
Exhibit D-2 - Form of Interim Collateral and Guarantee Agreement
Exhibit E - Form of Senior Subsidiary Security Agreement
Exhibit F-1 - Form of Senior Indemnity, Subrogation and
Contribution Agreement
Exhibit F-2 - Form of Interim Indemnity, Subrogation and
Contribution Agreement
Exhibit G - Form of Second Priority Subsidiary Guarantee Agreement
Exhibit H - Form of Second Priority Subsidiary Security Agreement
Exhibit I - Form of Second Priority Indemnity, Subrogation and
Contribution Agreement
Exhibit J-1 - Form of Opinion of Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, Special New
York Counsel to the Borrower
Exhibit J-2 - Form of Opinion of Xxxxxx Sari, General Counsel of
the Borrower
CREDIT AGREEMENT dated as of June 27, 2001,
as amended and restated as of [o], 2006 (this
"Agreement"), among RITE AID CORPORATION, a Delaware
corporation, the LENDERS party hereto, CITICORP NORTH
AMERICA, INC., as Administrative Agent and Collateral
Processing Agent and BANK OF AMERICA, N.A., as
Syndication Agent.
On the Effective Date (such term and each other capitalized
term used but not otherwise defined in this preamble having the meaning assigned
to such term in Article I below or in the Definitions Annex), the Borrower, the
Administrative Agent, the Collateral Agent and certain of the Lenders entered
into this Agreement pursuant to which certain of the Lenders thereunder agreed
to extend credit to the Borrower on a revolving credit basis and to make term
loans to the Borrower.
On the First Restatement Effective Date, the Tranche 1 Term
Lenders made Tranche 1 Term Loans in an aggregate principal amount of
$145,000,000. The parties hereto desire to amend this Agreement and to restate
it in its entirety giving effect to such amendment.
The Borrower has requested the Tranche 2 Term Lenders to
extend credit hereunder in the form of Tranche 2 Term Loans in an aggregate
principal amount of $1,105,000,000, approximately $680,000,000 of which will be
drawn on the Second Restatement Effective Date and the remainder of which will
be drawn on the Borrowing Base Date.
The proceeds of the Tranche 2 Term Loans made on the Second
Restatement Effective Date will be used to (i) pay part of the consideration due
to the Seller in connection with the Acquisition and (ii) pay fees and expenses
(including any premiums and amendment fees) incurred in connection with the
Transactions. The proceeds of the Tranche 2 Term Loans made on the Borrowing
Base Date will be used (i) to repay Revolving Loans, the proceeds of which were
used to repay (a) $250,000,000 aggregate principal amount of the Borrower's
4.75% Convertible Notes due 2006 and (b) $184,074,000 aggregate principal amount
of the Borrower's 7.125% Senior Notes due 2007 and (ii) for general corporate
purposes (including the payment of accrued interest). The proceeds of Revolving
Loans and Swingline Loans made after the Second Restatement Effective Date will
be used for general corporate purposes, including the financing of Optional Debt
Repurchases, permitted capital expenditures, the repurchase of the Borrower's
and/or its Subsidiaries' (including Rite Aid Lease Management Company's)
Preferred Stock and permitted Restricted Payments, as more fully described
herein. Letters of Credit will be used solely to support payment obligations of
the Borrower and the Subsidiaries incurred in the ordinary course of business.
Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree that this Agreement
shall be amended and restated to read in its entirety as follows:
ARTICLE I
Definitions
-----------
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Account" means any right to payment for goods sold or leased
or for services rendered, whether or not earned by performance.
"Account Debtor" means, with respect to any Account, the
obligor with respect to such Account.
"Accounts Receivable Advance Rate" means the accounts
receivable advance rate determined in accordance with Section 2.20.
"Acquisition" means the acquisition by the Borrower of all the
Equity Interests in Holdings.
"Additional Lender" has the meaning assigned to such term in
Section 2.21.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Adjustment Date" means the first day of each calendar month.
"Administrative Agent" means CNAI, in its capacity as
administrative agent for the Lenders.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Agents" means the Administrative Agent and the Collateral
Agent.
"Agent Parties" has the meaning assigned to such term in
Section 9.16(c).
"Alternate Base Rate" means, for any day, a rate per annum
equal to the greater of (a) the Citibank Base Rate in effect on such day and (b)
the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any
change in the Alternate Base Rate due to a change in the Citibank Base Rate or
the Federal Funds Effective Rate shall be effective from and including the
effective date of such change in the Citibank Base Rate or the Federal Funds
Effective Rate.
"Amendment and Restatement Agreement" means the Amendment and
Restatement Agreement dated November 8, 2006 relating to the Original Agreement.
"Applicable Percentage" means, with respect to any Revolving
Lender, the percentage of the total Revolving Commitments represented by such
Lender's Revolving Commitment. If the Revolving Commitments have been terminated
or expired, the Applicable Percentages shall be determined based upon the
Revolving Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, on any day, (a) with respect to any
ABR Tranche 2 Term Loan, a rate per annum of [o]%(1) and, with respect to any
Eurodollar Tranche 2 Term Loan, a rate per annum of [o]%(2) and (b) with respect
to any ABR Loan (other than a Tranche 2 Term Loan) or Eurodollar Loan (other
than a Tranche 2 Term Loan), as the case may be, the applicable rate per annum
set forth below (expressed in basis points) under the caption "ABR Spread" or
"Eurodollar Spread", as the case may be, in each case based upon the Average
Revolver Availability determined as of the most recent Adjustment Date; provided
that until the first Adjustment Date occurring after the Original Restatement
Effective Date, the Applicable Rate shall be the applicable rate per annum set
forth below in Category 2; and provided further, that during any period after
the date that is 120 days after the Second Restatement Effective Date but prior
to the Borrowing Base Date, the "Applicable Rate" shall mean (i) with respect to
ABR Tranche 2 Term Loans, a rate per annum of [o]%(3) and (ii) with respect to
Eurodollar Tranche 2 Term Loans, a rate per annum of [o]%(4):
=============================================================================
ABR Spread Eurodollar Spread
RATING: (bps) (bps)
-----------------------------------------------------------------------------
Category 1 25 125
Average Revolver
Availability greater than
$1,250,000,000
-----------------------------------------------------------------------------
Category 2
Average Revolver
Availability greater than
$500,000,000 but less than
or equal to $1,250,000,000 50 150
-----------------------------------------------------------------------------
Category 3
Average Revolver
Availability less than or
equal to $500,000,000 75 175
=============================================================================
________________________________-
(1) The Applicable Rate for Tranche 2 Term Loans will be determined prior to the
Second Restatement Effective Date.
(2) The Applicable Rate for Tranche 2 Term Loans will be determined prior to the
Second Restatement Effective Date.
(3) The Applicable Rate for Tranche 2 Term Loans will be increased by 0.50% if
the Borrowing Base Date does not occur within 120 days after the Second
Restatement Effective Date.
(4) The Applicable Rate for Tranche 2 Term Loans will be increased by 0.50% if
the Borrowing Base Date does not occur within 120 days after the Second
Restatement Effective Date.
"Approved Fund" means (a) with respect to any Lender, a CLO
managed by such Lender or by an Affiliate of such Lender or (b) with respect to
any Lender that is a fund which invests in bank loans and similar extensions of
credit, any other fund that invests in bank loans and similar extensions of
credit and is managed or advised by the same investment advisor as such Lender
or by an Affiliate of such investment advisor.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit C or any other form approved by the Administrative Agent.
"Average Revolver Availability" means, as determined on any
Adjustment Date, the average daily Revolver Availability during the calendar
month immediately preceding such Adjustment Date; provided that the Average
Revolver Availability as determined on the first Adjustment Date occurring after
the Original Restatement Effective Date shall be the average daily Revolver
Availability for the period from the Original Restatement Effective Date to the
day immediately prior to such first Adjustment Date.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means Rite Aid Corporation, a Delaware corporation.
"Borrowing" means (a) a Loan of the same Class and Type, made,
converted or continued on the same date and, in the case of a Eurodollar Loan,
as to which a single Interest Period is in effect or (b) a Swingline Loan.
"Borrowing Base Amount" means, with respect to the Borrower,
an amount equal to the sum, without duplication, of the following;
(a) the Accounts Receivable Advance Rate multiplied by the
book value of Eligible Accounts Receivable; plus
(b) the Pharmaceutical Inventory Advance Rate multiplied by
the Eligible Pharmaceutical Inventory Value; plus
(c) the Other Inventory Advance Rate multiplied by the
Eligible Other Inventory Value; plus
(d) the Script Lists Advance Rate multiplied by the Eligible
Script Lists Value; minus
(e) a reserve in an aggregate amount equal to the Borrower's
then-current exposure upon early termination under each of its existing
and future Hedging Agreements; minus
(f) any reserves established by the Collateral Agent in the
exercise of its reasonable judgment to reflect Borrowing Base Factors;
provided, that, for purposes of determining the Borrowing Base Amount at any
date of determination, the amount set forth in clause (d) of this definition
shall not exceed the lesser of (i) $500,000,000(5) and (ii) 25% of the Borrowing
Base Amount.
The Borrowing Base Amount shall be computed (i) weekly with respect to Eligible
Accounts Receivable and Eligible Inventory stored at any location other than a
distribution center, (ii) monthly with respect to Eligible Inventory stored at a
distribution center and (iii) annually with respect to Eligible Script Lists, in
each case in accordance with Sections 2.20 and 5.01(f). The Borrowing Base
Amount at any time in effect shall be determined by reference to the Borrowing
Base Certificate most recently delivered pursuant to Section 5.01(f).
"Borrowing Base Certificate" means a certificate substantially
in the form of Exhibit B or in such other form as the Agents may approve.
"Borrowing Base Date" means the first date after the Second
Restatement Effective Date on which the conditions set forth in Section 4.03
have been satisfied.
"Borrowing Base Factors" means landlord's liens affecting
Eligible Inventory, factors affecting the saleability or collectability of
Eligible Accounts Receivable and Eligible Inventory at retail or in liquidation,
factors affecting the market value of Eligible Inventory, Eligible Accounts
Receivable or Eligible Script Lists, other impediments to the Collateral Agent's
ability to realize upon the Eligible Accounts Receivable, the Eligible Inventory
or the Eligible Script Lists and other factors affecting the credit value to be
afforded the Eligible Accounts Receivable, the Eligible Inventory and the
Eligible Script Lists.
"Borrowing Request" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
"Bridge Facility" means the bank credit facility, if any,
under which loans are made to the Borrower on the Second Restatement Effective
Date in an aggregate principal amount equal to $1,720,000,000 minus the
aggregate principal amount, if any, of Xxxx Xxxxx Subordinated Notes assumed by
the Borrower on the Second Restatement Effective Date minus the aggregate
principal amount, if any, of New Notes issued on or prior to the Second
Restatement Effective Date.
________________________
(5) The reference to "$500,000,000" will be replaced with a reference to
"$800,000,000" if 100% of the Lenders execute the Amendment and Restatement
Agreement prior to the Second Restatement Effective Date.
"Business Acquisition" means (i) an Investment by the Borrower
or any of the Subsidiaries in any other Person (including an Investment by way
of acquisition of debt or equity securities of any other Person) pursuant to
which such Person shall become a Subsidiary or shall be merged into or
consolidated with the Borrower or any of the Subsidiaries or (ii) an acquisition
by the Borrower or any of the Subsidiaries of the property and assets of any
Person (other than the Borrower or any of the Subsidiaries) that constitute
substantially all the assets of such Person or any division or other business
unit of such Person; provided that the acquisition of prescription files and
Stores and the acquisition of Persons substantially all of whose assets consist
of fewer than 10 Stores, in each case in the ordinary course of business and not
substantially inconsistent with the business projections of the Borrower and the
Subsidiaries delivered to the Lenders on or about the Original Restatement
Effective Date shall not constitute a Business Acquisition.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any Capital Lease,
which obligations should be classified and accounted for as capital leases on a
balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
"Cash Management System" shall have the meaning assigned to
such term in the Senior Subsidiary Security Agreement.
"Cash Sweep Cash Collateral Account" shall have the meaning
assigned to such term in the Senior Subsidiary Security Agreement.
"Cash Sweep Notice" shall have the meaning assigned to such
term in the Senior Subsidiary Security Agreement.
"Cash Sweep Period" shall have the meaning assigned to such
term in the Senior Subsidiary Security Agreement.
"Change in Control" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934, as amended, and the
rules of the SEC thereunder as in effect on the Second Restatement Effective
Date) (other than (i) Green Equity Investors III, L.P. and its Affiliates or
(ii) the Seller and its Affiliates as a result of the Acquisition), of 30% or
more of the outstanding shares of common stock of the Borrower; (b) at the end
of any period of 12 consecutive calendar months, the occupation of a majority of
the seats on the board of directors of the Borrower by Persons who were not
members of the board of directors of the Borrower on the first day of such
period; or (c) the occurrence of a "Change of Control", as defined in any
Indenture or other agreement that governs the terms of any Material
Indebtedness.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the Original Restatement Effective Date, (b) any change in any
law, rule or regulation or in the interpretation or application thereof by any
Governmental Authority after the Original Restatement Effective Date or (c)
compliance by any Lender or any Issuing Bank (or, for purposes of Section
2.15(b), by any lending office of such Lender or by such Lender's or such
Issuing Bank's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the Original Restatement Effective Date.
"Charges" has the meaning assigned to such term in Section
9.13.
"Citibank Base Rate" means the rate of interest publicly
announced by Citibank, N.A. in New York City from time to time as the Citibank
Base Rate.
"Citibank Concentration Account" shall have the meaning
assigned to such term in the Senior Subsidiary Security Agreement.
"Class", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans, Tranche 1 Term Loans, Tranche 2 Term Loans, or Swingline Loans
and, when used in reference to any Commitment, refers to whether such Commitment
is a Revolving Commitment, a Tranche 1 Term Commitment or a Tranche 2 Term
Commitment.
"CLO" means any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
of its business and is administered or managed by a Lender or an Affiliate of a
Lender.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral Agent" means CNAI, in its capacity as collateral
processing agent for the Lenders.
"Collateral and Guarantee Requirement" means the requirement
that:
(a) the Administrative Agent shall have received from each
Subsidiary Loan Party either (i) a counterpart of, or a supplement to, each
Senior Collateral Document duly executed and delivered on behalf of such
Loan Party or (ii) in the case of any Person that becomes a Subsidiary Loan
Party after the Second Restatement Effective Date, a supplement to each
applicable Senior Collateral Document, in the form specified therein, duly
executed and delivered on behalf of such Subsidiary Loan Party;
(b) (i) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably
requested by the Administrative Agent to be filed, registered or recorded
to create the Liens intended to be created by the Senior Collateral
Documents and perfect such Liens to the extent required by, and with the
priority required by, this Agreement and the Senior Collateral Documents,
shall have been filed, registered or recorded or delivered to the
Administrative Agent for filing, registration or recording or (ii) the
Administrative Agent shall have been provided with all authorizations,
consents and approvals from each Loan Party, Governmental Authority and
other Person reasonably requested by it to file, record or register all
documents and instruments referred to in clause (b)(i) of this definition;
and
(c) each Loan Party shall have obtained all consents and
approvals required to be obtained by it in connection with the execution
and delivery of all Senior Collateral Documents to which it is a party, the
performance of its obligations thereunder and the granting by it of the
Liens thereunder.
"Commitment" means the Revolving Commitments, the Tranche 1
Term Commitments and the Tranche 2 Term Commitments, or any combination thereof
(as the context requires).
"Communications" has the meaning assigned to such term in
Section 9.16(a).
"Consolidated Capital Expenditures" means, for any period, the
aggregate amount of expenditures by the Borrower and its Consolidated
Subsidiaries for plant, property and equipment and prescription files during
such period (including any such expenditure by way of acquisition of a Person or
by way of assumption of Indebtedness or other obligations of a Person, to the
extent reflected as plant, property and equipment or as prescription file
assets) minus the aggregate amount of Net Cash Proceeds received by the Borrower
and its Consolidated Subsidiaries from the sale of Stores to third parties
pursuant to Sale and Leaseback Transactions; provided that the aggregate amount
of expenditures by the Borrower and its Consolidated Subsidiaries referred to
above shall exclude, without duplication, (i) any such expenditures made for the
replacement or restoration of assets to the extent financed by
Casualty/Condemnation Proceeds relating to the asset or assets being replaced or
restored, (ii) any amounts paid to any party under a lease entered into in
connection with a Sale and Leaseback Transaction with respect to the termination
of such lease and the reacquisition by the Borrower or any of the Subsidiaries
of the property subject to such lease and (iii) any such expenditures made for
the purchase or other acquisition from a third party of Stores, leases and
prescription files, but only to the extent that an equivalent or greater amount
is received from such third party as consideration for the sale or other
disposition to such third party of Stores, leases and/or prescription files of a
substantially equivalent value closed at substantially the same time as, and
entered into as part of a single related transaction with, such purchase or
acquisition (and if a lesser amount is received from such third party as
consideration for such sale or other disposition, then the amount of
Consolidated Capital Expenditures for purposes hereof shall be the expenditures
made net of the consideration received); provided further that Consolidated
Capital Expenditures shall in no case be less than zero.
"Consolidated EBITDA" means, for any period, without
duplication, Consolidated Net Income for such period, plus (a) to the extent
deducted in determining Consolidated Net Income for such period, the aggregate
amount of (i) consolidated interest expenses, whether cash or non-cash, and
charges, commissions, discounts, yield and other similar fees and charges
incurred pursuant to Factoring Transactions or by Securitization Vehicles in
connection with Securitizations which are payable to any Person other than a
Loan Party, and any other amounts comparable to or in the nature of interest
under any Securitization or Factoring Transaction, including losses on the sale
of Securitization Assets in a Securitization accounted for as a "true sale" or
Factoring Assets in a Factoring Transaction accounted for as a "true sale," (ii)
provision for income taxes, (iii) depreciation and amortization, (iv) LIFO
Adjustments which reduced such Consolidated Net Income, (v) store closing and
non-cash impairment expenses, (vi) any other nonrecurring charge to the extent
such nonrecurring charge does not involve any cash expenditure during such
period, (vii) non-cash compensation expenses related to stock option and
restricted stock employee benefit plans, (viii) the non-cash interest component,
as adjusted from time to time, in respect of reserves, (ix) all costs, fees,
charges and expenses incurred in connection with the Transactions, (x) all
charges incurred relating to the investigation of the Borrower by the United
States Attorney's Office and the United States Department of Labor and all
amounts paid in satisfaction of any judgment, fine or settlement resulting
therefrom, (xi) all costs and litigation expenses incurred in connection with
litigation, investigations and other proceedings relating to the business
conduct and practices of the former management of the Borrower and (xii) all
Integration Expenses, and minus (b) to the extent not deducted in determining
Consolidated Net Income for such period, the aggregate amount of (i) any cash
expenditure during such period in connection with which a nonrecurring charge
was taken and added back to Consolidated Net Income pursuant to clause (a) above
in calculating Consolidated EBITDA in any prior period and (ii) LIFO Adjustments
which increased such Consolidated Net Income.
"Consolidated Fixed Charge Coverage Ratio" means, for any
period, the ratio of (i) Consolidated EBITDA plus Consolidated Rent less
Consolidated Capital Expenditures plus Integration Capital Expenditures to (ii)
Consolidated Interest Charges plus Consolidated Rent plus cash dividends paid
pursuant to Section 6.08(a), in each case for such period and determined in
accordance with GAAP.
"Consolidated Interest Charges" means, for any period, the
aggregate amount of interest charges, whether expensed or capitalized, incurred
or accrued during such period by the Borrower and its Consolidated Subsidiaries,
solely to the extent paid or payable (whether during or after such period) in
cash (i) minus non-cash interest expenses during such period related to (x)
litigation reserves, (y) closed store liability reserves, if any, and (z)
self-insurance reserves and (ii) plus, to the extent not otherwise included in
such interest charges, commissions, discounts, yield and other similar fees and
charges incurred pursuant to Factoring Transactions or by Securitization
Vehicles in connection with Securitizations which are payable to any Person
other than a Loan Party, and any other amounts comparable to or in the nature of
interest under any Securitization or Factoring Transaction, including losses on
the sale of Securitization Assets in a Securitization accounted for as a "true
sale" or Factoring Assets in a Factoring Transaction accounted for as a "true
sale".
"Consolidated Net Income" means, for any period, the net
income (or loss) of the Borrower and its Consolidated Subsidiaries (exclusive of
(a) extraordinary items of gain or loss during such period or gains or losses
from Indebtedness modifications during such period, (b) any gain or loss in
connection with any Asset Sale during such period, other than sales of inventory
in the ordinary course of business, but in the case of any loss only to the
extent that such loss does not involve any current or future cash expenditure,
(c) the cumulative effect of accounting changes during such period and (d) net
income or loss attributable to any Investments in Persons other than Affiliates
of the Borrower), determined on a consolidated basis for such period in
accordance with GAAP.
"Consolidated Rent" means, for any period, the consolidated
rental expense of the Borrower and its Consolidated Subsidiaries for such
period, and including in any event rental costs of closed stores for such period
whether or not reflected as an expense in the determination of Consolidated Net
Income for such period.
"Consolidated Subsidiary" means, with respect to any Person,
at any date, any Subsidiary or other entity the accounts of which would, in
accordance with GAAP, be consolidated with those of such Person in its
consolidated financial statements if such statements were prepared as of such
date.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"CNAI" means Citicorp North America, Inc.
"Direct Delivery Vendor" has the meaning assigned to such term
in the Intercompany Inventory Purchase Agreement.
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"Definitions Annex" means the definitions annex attached
hereto as Annex 1 (as the same may be amended, supplemented or otherwise
modified from time to time).
"Deposit Account" shall have the meaning assigned to such term
in the Senior Subsidiary Security Agreement.
"dollars" or "$" refers to lawful money of the United States
of America.
"Eligible Accounts Receivable" means, at any date of
determination, all Accounts that satisfy at the time of creation and continue to
meet the same at the time of such determination the criteria established from
time to time by the Collateral Agent in its reasonable judgment to reflect
Borrowing Base Factors. On the Second Restatement Effective Date, those criteria
are:
(a) such Account constitutes an "account" or "chattel paper"
within the meaning of the Uniform Commercial Code of the state in which the
Account is located;
(b) all payments on such Account are by the terms of such
Account due not later than 90 days after the date of service (i.e., the
transaction date) and are otherwise on terms that are normal and customary
in the business of the Borrower and the Subsidiaries;
(c) such Account has been billed and has not remained unpaid
for more than 120 days following the date of service;
(d) such Account is denominated in dollars;
(e) such Account arose from a completed, outright and lawful
sale of goods or the completed performance of services by the applicable
Subsidiary Loan Party and accepted by the applicable Account Debtor, and
the amount of such Account has been properly recognized as revenue on the
books of the applicable Subsidiary Loan Party;
(f) such Account is owned solely by a Subsidiary Guarantor
(and has not been transferred pursuant to a Securitization or a Factoring
Transaction);
(g) the proceeds of such Account are payable solely to a
Deposit Account which (A) is under the control of the Collateral Agent and
(B) has not been released or transferred in accordance with Section 5.16 or
otherwise;
(h) such Account arose in the ordinary course of business of
the applicable Subsidiary Loan Party;
(i) not more than 50% of the aggregate amount of Accounts from
the same Account Debtor and any Affiliates thereof remain unpaid for more
than 120 days following the date of service;
(j) to the knowledge of the Borrower and the Subsidiaries, no
event of death, bankruptcy, insolvency or inability to pay creditors
generally of the Account Debtor of such Account has occurred, and no notice
thereof has been received;
(k) payment of such Account is not being disputed by the
Account Debtor thereof;
(l) such Account complies in all material respects with the
requirements of all applicable laws and regulations, whether Federal, state
or local, including the Federal Consumer Credit Protection Act, the Federal
Truth in Lending Act and Regulation Z of the Federal Reserve Board;
(m) with respect to such Account, the Account Debtor (i) is
organized in the United States (or, if such Account Debtor is not organized
in the United States, such Account is supported by a letter of credit
approved by the Collateral Agent in favor of the applicable Subsidiary Loan
Party) and (ii) is not an Affiliate or Subsidiary or an Affiliate of any of
the Subsidiaries;
(n) such Account is subject to a perfected first priority
security interest in favor of the Collateral Agent for the benefit of the
Lenders pursuant to the Senior Collateral Documents and is not subject to
any other Lien (other than the Second Priority Lien);
(o) with respect to any such Account for an amount greater
than $5,000,000, the Account Debtor has not been disapproved by the
Required Lenders (based, on the Required Lenders' reasonable judgment, upon
the creditworthiness of such Account Debtor);
(p) the representations and warranties contained in the Senior
Loan Documents with respect to such Account are true and correct in all
material respects; and
(q) such Account is in full force and effect and constitutes a
legal, valid and binding obligation of the Account Debtor, enforceable
against such Account Debtor in accordance with its terms.
"Eligible Inventory" means, at any date of determination, all
inventory (as defined in the Uniform Commercial Code) owned by any Subsidiary
Loan Party that satisfies at the time of such determination the criteria
established from time to time by the Collateral Agent in its reasonable judgment
to reflect Borrowing Base Factors. On the Second Restatement Effective Date,
Eligible Inventory shall exclude, without duplication, the following:
(a) any such inventory that has been shipped to a customer,
even if on a consignment or "sale or return" basis, or is otherwise not in
the possession or control of or any Subsidiary Loan Party or a warehouseman
or bailee of any Subsidiary Loan Party;
(b) any inventory against which any Subsidiary Loan Party has
taken a reserve, to the extent of such reserve, to the extent specified by
the Collateral Agent from time to time in its reasonable judgment to
reflect Borrowing Base Factors;
(c) any inventory that has been discontinued or is otherwise
of a type (SKU) not currently offered for sale on a regular basis by the
Subsidiary Loan Parties (including any such inventory obtained in
connection with a Business Acquisition) to the extent specified by the
Collateral Agent from time to time in its reasonable judgment to reflect
Borrowing Base Factors;
(d) any inventory not located in the United States or
otherwise not subject to a valid and perfected Lien under the Senior
Collateral Documents, subject to no prior or equal Lien;
(e) any supply, scrap or obsolete inventory or inventory that
is otherwise unsaleable;
(f) any inventory that is past its expiration date, is damaged
or not in good condition, is a sample used for marketing purposes or does
not meet all material standards imposed by any governmental authority
having regulatory authority over such inventory, except in each case to the
extent of its net realizable value as determined by the Collateral Agent
from time to time in its reasonable judgment;
(g) any inventory that is subject to any licensing, patent,
royalty, trademark, trade name or copyright agreement with any third Person
from whom the Borrower or any of its Subsidiaries has received notice of a
dispute in respect of such agreement, to the extent that the Collateral
Agent determines, in its reasonable judgment, that such dispute could be
expected to prevent the sale of such inventory;
(h) any inventory which is subject to a negotiable document of
title which has not been delivered to the Administrative Agent;
(i) any inventory to the extent that such inventory is not
comprised of readily marketable materials of a type manufactured, consumed
or held for resale by the Subsidiary Loan Parties in the ordinary course of
business;
(j) any inventory to the extent that such inventory consists
of raw materials, component parts and/or work-in-progress;
(k) any inventory in respect of which the applicable
representations and warranties in the Senior Loan Documents are not true
and correct in all material respects;
(l) any inventory to which the Subsidiary Loan Parties do not
have good title or any inventory which a Subsidiary Loan Party holds on
consignment or on a "sale or return" basis; and
(m) any inventory (as notified by the Collateral Agent to the
Borrower) that the Collateral Agent has, in its reasonable judgment, deemed
ineligible in order to reflect Borrowing Base Factors;
provided, however, that no inventory which is stored at a distribution center
leased by the Borrower or any other Person shall be considered "Eligible
Inventory" unless each of the waivers obtained pursuant to the Original
Agreement from the lessor of each leased distribution center of the Subsidiary
Loan Parties of any statutory, common law or contractual landlord's lien with
respect to any inventory of any Subsidiary Loan Party (other than with respect
to inventory located at leased warehouses having a value in the aggregate not to
exceed $40,000,000) shall be in full force and effect (or the Collateral Agent
shall have granted a waiver to such compliance).
"Eligible Other Inventory Value" means, at any date of
determination, an amount equal to (i) the cost of Eligible Inventory that is
Other Inventory (less any appropriate reserve for obsolete Other Inventory and
any profits accrued in connection with transfers of Other Inventory between the
Borrower and the Subsidiaries or between Subsidiaries) at such date, in dollars,
determined in accordance with GAAP consistently applied and on a basis
consistent with that used in the preparation of the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Lenders pursuant to Section 5.01(a) multiplied by
(ii) the Net Orderly Liquidation Rate with respect to such Other Inventory.
"Eligible Pharmaceutical Inventory Value" means, at any date
of determination, an amount equal to (i) the cost of Eligible Inventory that is
Pharmaceutical Inventory (less any appropriate reserve for obsolete
Pharmaceutical Inventory and any profits accrued in connection with transfers of
Pharmaceutical Inventory between the Borrower and the Subsidiaries or between
Subsidiaries) at such date, in dollars, determined in accordance with GAAP
consistently applied and on a basis consistent with that used in the preparation
of the most recent audited consolidated financial statements of the Borrower and
its Consolidated Subsidiaries delivered to the Lenders pursuant to Section
5.01(a) multiplied by (ii) the Net Orderly Liquidation Rate with respect to such
Pharmaceutical Inventory.
"Eligible Script Lists" means, at any date of determination,
all lists owned and maintained on such date by the Subsidiary Loan Parties
setting forth Persons (and addresses, telephone numbers or other contact
information therefor) who currently purchase or otherwise obtain, in any Store
owned or operated by any Subsidiary Loan Party, medication required to be
dispensed by a licensed professional.
"Eligible Script Lists Value" means, at any date of
determination, the liquidation value of the Eligible Script Lists in dollars, as
most recently determined in connection with an appraisal performed for purposes
of this Agreement by Xxxxxxxx & Associates or such other appraisal firm
satisfactory to the Collateral Agent.
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means all liabilities, obligations,
damages, losses, claims, actions, suits, judgments, orders, fines, penalties,
fees, expenses and costs, (including administrative oversight costs, natural
resource damages and remediation costs), whether contingent or otherwise,
arising out of or relating to: (a) compliance or non-compliance with any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release of any Hazardous Materials or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed
or imposed with respect to any of the foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA; or (h) the
existence of any event or condition that could reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Plan.
"Estimated Borrowing Base Amount" means the Borrowing Base
Amount; provided that for this purpose the assets and properties of Holdings and
its subsidiaries shall be deemed to have been pledged, on a first priority
basis, to the Collateral Agent for the benefit of the Lenders pursuant to the
Senior Collateral Documents.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in
Article VII.
"Excess Cash Flow" means, for any fiscal year, without
duplication, of:
(a) net cash proceeds from operating activities adjusted by
net (repayments to) proceeds from accounts receivable securitization as
reflected in the statement of cash flows to the financial statements of the
Borrower filed with the SEC for the applicable fiscal year; minus
(b) the sum of (i) Consolidated Capital Expenditures for such
fiscal year (except to the extent attributable to the incurrence of Capital
Lease Obligations or synthetic lease obligations or otherwise financed by
incurring Long-Term Indebtedness (exclusive of Revolving Loans), by issuing
Equity Interests (exclusive of any issuance of Equity Interests to the
Borrower or any of the Subsidiaries and any amounts prepaid pursuant to
Section 2.11(c)(ii)), through the receipt of capital contributions (other
than capital contributions made by the Borrower or any of the Subsidiaries)
or using the proceeds of any disposition of assets outside the ordinary
course of business or other proceeds not included in Consolidated Net
Income) plus (ii) cash consideration paid during such fiscal year to make
acquisitions or other capital investments (except to the extent financed by
incurring Long-Term Indebtedness (exclusive of Revolving Loans), by issuing
Equity Interests (other than to the Borrower or any of the Subsidiaries),
through the receipt of capital contributions (other than capital
contributions made by the Borrower or any of the Subsidiaries) or using the
proceeds of any disposition of assets outside the ordinary course of
business or other proceeds not included in Consolidated Net Income); minus
(c) the aggregate principal amount of Long-Term Indebtedness
repaid or prepaid (other than Refinancing Indebtedness) by the Borrower and
its Consolidated Subsidiaries during such fiscal year, excluding
Indebtedness in respect of Revolving Loans (except to the extent
accompanied by a corresponding reduction in Revolving Commitments pursuant
to Section 2.08) and Letters of Credit.
"Excluded Taxes" means, with respect to any Agent, any Lender,
any Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction described in clause (a) above and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 2.19(b)), any withholding tax that (i) is in effect and would
apply to amounts payable to such Foreign Lender at the time such Foreign Lender
becomes a party to this Agreement (or designates a new lending office), except
to the extent that such Foreign Lender (or its assignor, if any) was entitled,
at the time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to any withholding tax
pursuant to Section 2.17(a), or (ii) is attributable to such Foreign Lender's
failure to comply with Section 2.17(e).
"Factoring Assets" means any accounts receivable owed to the
Borrower or any Subsidiary (whether now existing or arising or acquired in the
future) arising in the ordinary course of business from the sale of goods or
services, all collateral securing such accounts receivable, all contracts and
contract rights and all guarantees or other obligations in respect of such
accounts receivable, all proceeds of such accounts receivable and other assets
(including contract rights) which are of the type customarily transferred in
connection with the factoring of accounts receivable and which are sold,
transferred or otherwise conveyed by the Borrower or a Subsidiary pursuant to a
Factoring Transaction permitted by this Agreement.
"Factoring Notice" means a written notice delivered by the
Borrower to the Administrative Agent at least 30 days after the termination of
any Securitization program indicating that the Borrower or its Subsidiaries
intend to engage in a Factoring Transaction.
"Factoring Transaction" means any transaction or series of
transactions entered into by the Borrower and any Subsidiaries pursuant to which
the Borrower or such Subsidiaries sells, conveys or otherwise transfers (or
purports to sell, convey or otherwise transfer) Factoring Assets of the Borrower
or such Subsidiaries to a non-related third party factor on market terms as
determined in good faith by the senior management of the Borrower; provided that
(i) no portion of any Indebtedness deemed to exist as a result of such Factoring
Transaction (x) is incurred or Guaranteed by the Borrower or any other
Subsidiary (in each case, other than as permitted pursuant to Section
6.01(a)(xiv)), (y) is recourse to the Borrower or any other Subsidiary (in each
case, other than as permitted pursuant to Section 6.01(a)(xiv)) and (z) is
secured (contingently or otherwise) by any Lien on assets of the Borrower or any
other Subsidiary (other than by the Factoring Assets to be sold, conveyed or
transferred to the third party factor), (ii) such Factoring Transaction is
consummated pursuant to customary contracts, arrangements or agreements entered
into with respect to the sale, purchase and servicing of Factoring Assets on
market terms for similar factoring, and (iii) in connection with such Factoring
Transaction, the third party factor enters into an intercreditor arrangement
reasonably acceptable to the Collateral Agent.
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Covenant Effectiveness Period" means each period on
or after the Second Restatement Effective Date commencing on and including any
date on which Revolver Availability is less than $100,000,000 and ending on and
excluding the first day thereafter, if any, which is the 30th consecutive
calendar day on which Revolver Availability is equal to or greater than
$100,000,000.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer, vice president of financial accounting
or controller of the Borrower.
"Financial Statement Delivery Date" means the first date after
the Second Restatement Effective Date on which a consolidated balance sheet of
the Borrower including the assets of Holdings and its subsidiaries is filed with
the SEC.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Government Lockbox Account" shall have the meaning assigned
to such term in the Senior Subsidiary Security Agreement.
"Government Lockbox Account Agreement" shall have the meaning
assigned to such term in the Senior Subsidiary Security Agreement.
"Government Lockbox Account Bank" shall have the meaning
assigned to such term in the Senior Subsidiary Security Agreement.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Grantor" shall have the meaning assigned to such term in the
Senior Subsidiary Security Agreement.
"Hazardous Materials" means (a) petroleum products and
byproducts, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, radon gas, chlorofluorocarbons and all other ozone-depleting
substances, or (b) any chemical, material, substance, waste, pollutant or
contaminant that is prohibited, limited or regulated by or pursuant to any
Environmental Law.
"Hedging Agreement" means any rate swap transaction, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transaction (including any option with
respect to any of the foregoing transactions) or any combination of the
foregoing transactions.
"Holdings" means The Xxxx Xxxxx Group (PJC) USA, Inc., a
corporation organized under the laws of the State of Delaware or, if the
Reorganization (as defined in the Stock Purchase Agreement dated as of August
23, 2006, pursuant to which the Borrower intends to acquire all the outstanding
Equity Interests in Holdings) is consummated prior to the Second Restatement
Effective Date, JCG (PJC) USA, LLC, a limited liability company organized under
the laws of the State of Delaware.
"HIPAA" has the meaning assigned to such term in Section 3.07.
"Incremental Commitment" has the meaning assigned to such term
in Section 2.21.
"Incremental Facility" has the meaning assigned to such term
in Section 2.21.
"Incremental Facility Amendment" has the meaning assigned to
such term in Section 2.21.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Inside Indebtedness" means Indebtedness of the Borrower or
any Subsidiary (other than intercompany Indebtedness permitted by Section
6.01(a)(iii)) which matures on or before the Xxxxxxx 0 Xxxx Xxxxxxxx Date and
any portion of any other Indebtedness subject to scheduled amortization on or
before the Xxxxxxx 0 Xxxx Xxxxxxxx Date.
"Integration Capital Expenditures" means, for any period, all
capital expenditures that (a) are directly attributable to the integration of
the acquisition of Holdings and its subsidiaries and (b) will not recur once the
integration of such acquisition of Holdings and its subsidiaries is complete.
"Integration Expenses" means, for any period, all expenses
that (a) are directly attributable to the integration of the acquisition of
Holdings and its subsidiaries and (b) will not recur once the integration of
such acquisition of Holdings and its subsidiaries is complete.
"Interest Election Request" means a request by the Borrower to
convert or continue a Revolving Borrowing or a Term Borrowing in accordance with
Section 2.07.
"Interest Payment Date" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.
"Interest Period" means, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending (x) on
the numerically corresponding day in the calendar month that is one, two, three
or six and, if agreed to by all Lenders in the applicable Class, nine or 12
months thereafter, (y) in the case of Revolving Loans, seven days thereafter or
(z) in the case of Revolving Loans, six weeks thereafter if, at the time of the
relevant Borrowing, all Lenders participating therein agree to make an interest
period of such duration available, in each case as the Borrower may elect;
provided that (i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day (unless, in the case of Interest Periods of one, two, three or six
months, such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business
Day), (ii) any Interest Period of one, two, three or six months that commences
on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period and (iii) there shall be no more than two Revolving Loans with a
seven day Interest Period at any time outstanding. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Interim Collateral and Guarantee Requirement" means the
requirement that:
(a) the Administrative Agent shall have received from each of
Holdings and its domestic subsidiaries either (i) a counterpart of, or
a supplement to, each Interim Collateral Document duly executed and
delivered on behalf of such party or (ii) in the case of any Person
that becomes a domestic subsidiary of Holdings after the Second
Restatement Effective Date, a supplement to each applicable Interim
Collateral Document, in the form specified therein, duly executed and
delivered on behalf of such party;
(b) all outstanding Equity Interests in Holdings and its
domestic subsidiaries shall have been pledged pursuant to the Interim
Collateral and Guarantee Agreement and the Collateral Agent shall have
received certificates or other instruments representing all such Equity
Interests (to the extent certificated), together with undated stock
powers or other instruments of transfer with respect thereto endorsed
in blank;
(c) (i) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably
requested by the Administrative Agent to be filed, registered or
recorded to create the Liens intended to be created by the Interim
Collateral Documents and perfect such Liens to the extent required by,
and with the priority required by, this Agreement and the Interim
Collateral Documents, shall have been filed, registered or recorded or
delivered to the Administrative Agent for filing, registration or
recording or (ii) the Administrative Agent shall have been provided
with all authorizations, consents and approvals from each of Holdings
and its subsidiaries, Governmental Authority and other Person
reasonably requested by it to file, record or register all documents
and instruments referred to in clause (b)(i) of this definition; and
(d) each of Holdings and its domestic subsidiaries shall have
obtained all consents and approvals required to be obtained by it in
connection with the execution and delivery of all Interim Collateral
Documents to which it is a party, the performance of its obligations
thereunder and the granting by it of the Liens thereunder.
"Inventory" has the meaning assigned to such term in the
Intercompany Inventory Purchase Agreement.
"Investment" by any Person in any other Person means (i) any
direct or indirect loan, advance or other extension of credit or capital
contribution to or for the account of such other Person (by means of any
transfer of cash or other property to any Person or any payment for property or
services for the account or use of any Person, or otherwise), (ii) any direct or
indirect purchase or other acquisition of any Equity Interests, bond, note,
debenture or other debt or equity security or evidence of Indebtedness, or any
other ownership interest (including, any option, warrant or any other right to
acquire any of the foregoing), issued by such other Person, whether or not such
acquisition is from such or any other Person, (iii) any direct or indirect
payment by such Person on a Guarantee of any obligation of or for the account of
such other Person or any direct or indirect issuance by such Person of such a
Guarantee (provided, however, that for purposes of Section 6.04, payments under
Guarantees not exceeding the amount of the Investment attributable to the
issuance of such Guarantee will not be deemed to result in an increase in the
amount of such Investment) or (iv) any other investment of cash or other
property by such Person in or for the account of such other Person. Any
repurchase by the Borrower of its own Equity Interests or Indebtedness shall not
constitute an Investment for purposes of this Agreement. The amount of any
Investment shall be the original principal or capital amount thereof less all
returns of principal or equity thereon (and without adjustment by reason of the
financial condition of such other Person) and shall, if made by the transfer or
exchange of property other than cash, be deemed to have been made in an original
principal or capital amount equal to the fair market value of such property at
the time of such transfer or exchange.
"Issuing Bank Agreement" has the meaning assigned to such term
in Section 2.05(i).
"Issuing Banks" means CNAI, JPMorgan Chase Bank, N.A., Bank of
America, N.A. and any other Lender designated as an Issuing Bank in accordance
with the provisions of Section 2.05(k), in each case in its capacity as an
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.05(i). An Issuing Bank may, in its discretion, arrange for
one or more Letters of Credit to be issued by Affiliates of such Issuing Bank,
in which case the term "Issuing Banks" shall include any such Affiliate with
respect to Letters of Credit issued by such Affiliate.
"Xxxx Xxxxx Subordinated Notes" means up to $850,000,000
aggregate principal amount of unsecured senior subordinated notes of the Seller.
"Joint Venture" means, with respect to any Person, at any
date, any other Person in whom such Person directly or indirectly holds an
Investment consisting of an Equity Interest, and whose financial results would
not be consolidated under GAAP with the financial results of such Person on the
consolidated financial statements of such Person, if such statements were
prepared in accordance with GAAP as of such date.
"LC Commitment" means, with respect to each Issuing Bank, the
commitment of such Issuing Bank to issue Letters of Credit pursuant to Section
2.05. The initial amount of each Issuing Bank's LC Commitment is set forth on
Schedule 2.01 or in such Issuing Bank's Issuing Bank Agreement.
"LC Disbursement" means a payment made by an Issuing Bank
pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Revolving Lender
at any time shall be its Applicable Percentage of the total LC Exposure at such
time.
"Lenders" means the Persons listed on Schedule 2.01 as having
a Revolving Commitment, a Tranche 1 Term Commitment or a Tranche 2 Term
Commitment and any other Person that shall have become a party hereto pursuant
to an Assignment and Acceptance, other than any such Person that ceases to be a
party hereto pursuant to an Assignment and Acceptance. Unless the context
otherwise requires, the term "Lenders" includes the Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant
to this Agreement.
"Leverage Ratio" means, on any date, the ratio of (a) Total
Indebtedness as of such date to (b) Consolidated EBITDA for the period of the
four fiscal quarters most recently completed on or prior to such date.
"LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate rounded upwards,
if necessary, to the next 1/100 of 1% at which dollar deposits of $5,000,000 and
for a maturity comparable to such Interest Period are offered by the principal
London office of the Administrative Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
"LIFO Adjustments" means, for any period, the net adjustment
to costs of goods sold for such period required by the Borrower's LIFO inventory
method, determined in accordance with GAAP.
"Loan Parties" means the Borrower and the Subsidiary Loan
Parties.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"Lockbox Account" shall have the meaning assigned to such term
in the Senior Subsidiary Security Agreement.
"Long-Term Indebtedness" means any Indebtedness that, in
accordance with GAAP, constitutes (or, when incurred, constituted) a long-term
liability.
"Margin Stock" means "margin stock", as such term is defined
in Regulation U of the Board.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, properties, condition (financial or
otherwise), or prospects of the Borrower and the Subsidiaries, taken as a whole,
(b) the ability of any Loan Party to perform any of its material obligations
under any Senior Loan Document to which it is a party or (c) the legality,
validity or enforceability of the Senior Loan Documents (including, without
limitation, the validity, enforceability or priority of security interests
granted thereunder) or the rights of or benefits available to the Lenders under
any Senior Loan Document.
"Material Indebtedness" means Indebtedness (other than the
Loans and Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Borrower and the Subsidiaries in an
aggregate principal amount exceeding $50,000,000. For purposes of this
definition, the "principal amount" of the obligations of the Borrower or any
Subsidiary in respect of any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower or
such Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.
"Maximum Rate" has the meaning assigned to such term in
Section 9.13.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash
proceeds received in respect of such event including (i) any cash received in
respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty, insurance proceeds and (iii) in the case of a condemnation
or similar event, condemnation awards and similar payments, net of (b) the sum
of (i) all reasonable fees and out-of-pocket expenses paid by the Borrower and
the Subsidiaries to third parties (other than Affiliates) in connection with
such event, (ii) in the case of a sale, transfer or other disposition of an
asset (including pursuant to a sale and leaseback transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments required to be
made by the Borrower and the Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) secured by such asset and (iii) the amount of
all taxes paid (or reasonably estimated to be payable) by the Borrower and the
Subsidiaries, and the amount of any reserves established by the Borrower and the
Subsidiaries to fund contingent liabilities reasonably estimated to be payable,
in each case during the year that such event occurred or the next succeeding
year and that are directly attributable to such event (as determined reasonably
and in good faith by a Financial Officer).
"Net Orderly Liquidation Rate" means, with respect to any type
of inventory, at any date of determination, the net orderly liquidation rate
with respect to such type of inventory, expressed as a percentage of carrying
cost after giving effect to reserves, as determined by Hilco Appraisal Services,
LLC (or another appraisal firm chosen by the Collateral Agent) in connection
with the most recent appraisal of inventory of the Borrower and the
Subsidiaries.
"New Notes" means one or more tranches of the Borrower's notes
to be issued or sold in one or more public offerings or Rule 144A/Regulation S
offerings or other private placements in an aggregate principal amount equal to
$1,720,000,000 minus the aggregate principal amount, if any, of Xxxx Xxxxx
Subordinated Notes (and accrued interest thereon) assumed by the Borrower on the
Second Restatement Effective Date.
"Offer Period" has the meaning assigned to such term in
Section 2.21.
"Operating Subsidiary" has the meaning assigned to such term
in the Intercompany Inventory Purchase Agreement.
"Optional Debt Repurchase" means any optional or voluntary
repurchase, redemption, retirement or defeasance for cash by the Borrower or any
Subsidiary of any publicly-traded Indebtedness of the Borrower.
"Original Agreement" means this Agreement, including all
amendments hereto and waivers hereof effective prior to the Second Restatement
Effective Date, as in effect immediately prior to the Second Restatement
Effective Date.
"Other Inventory" means all inventory other than
Pharmaceutical Inventory.
"Other Inventory Advance Rate" means the other inventory
advance rate determined in accordance with Section 2.20.
"Other Taxes" means any and all present or future recording,
stamp, documentary, excise, transfer, sales, property or similar taxes, charges
or levies arising from any payment made under any Senior Loan Document or from
the execution, delivery or enforcement of, or otherwise with respect to, any
Senior Loan Document.
"Outside Indebtedness" means Indebtedness of the Borrower or
any Subsidiary (other than intercompany Indebtedness permitted by Section
6.01(a)(iii)) that matures after the Tranche 2 Term Maturity Date, including the
amount of any scheduled amortization after the Tranche 2 Term Maturity Date.
"Parent Undertaking" means an agreement by the Borrower to
cause a Subsidiary other than a Securitization Vehicle to perform its
obligations under the instruments governing a Securitization which agreement (a)
contains terms that are customarily included in securitizations of accounts
receivable involving comparable companies and (b) does not provide for any
Guarantee of payment or other credit support in respect of Securitization Assets
or Third Party Interests.
"Participant" has the meaning assigned to such term in Section
9.04(c)(i).
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of
Schedule 8 to the Senior Subsidiary Security Agreement or any other form
approved by the Agents.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 60 days or are being contested in compliance with Section 5.05;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment insurance
and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in
the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Borrower or any Subsidiary;
(g) licenses, sublicenses, leases or subleases granted in the
ordinary course of business with respect to real property; and
(h) landlord Liens arising by law securing obligations not
overdue by more than 60 days or being contested in good faith;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Pharmaceutical Inventory" means all inventory consisting of
products that can be dispensed only on order of a licensed professional.
"Pharmaceutical Inventory Advance Rate" means the
pharmaceutical inventory advance rate determined in accordance with Section
2.20.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate has any liability or is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Platform" has the meaning assigned to such term in Section
9.16(b).
"Preferred Stock" means, with respect to any corporation,
capital stock issued by such corporation that is entitled to a preference or
priority, in respect of dividends or distributions upon liquidation, over some
other class of capital stock issued by such corporation.
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including
pursuant to a sale and leaseback transaction) of any property or asset of
the Borrower or any Subsidiary, other than (i) sales, transfers or other
dispositions described in clauses (i), (iii), (iv), (vi) and (vii) of
Section 6.05, (ii) sales, transfers or other dispositions described in
clause (v) of Section 6.05 to the extent the resulting aggregate Net
Proceeds from all such sales, transfers or other dispositions do not exceed
$50,000,000 and (iii) other sales, transfers or dispositions resulting in
aggregate Net Proceeds not exceeding $10,000,000 during any fiscal year of
the Borrower; or
(b) any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding of,
any property or asset of the Borrower or any Subsidiary; or
(c) the issuance by the Borrower or any Subsidiary of any
Equity Interests, or the receipt by the Borrower or any Subsidiary of any
capital contribution, other than (i) any such issuance of Equity Interests
to, or receipt of any such capital contribution from, the Borrower or a
Subsidiary or (ii) any such issuance of Equity Interests to the extent the
proceeds of such issuance are used to fund a Business Acquisition; or
(d) the incurrence by the Borrower or any Subsidiary of any
Indebtedness, other than (i) Indebtedness described in clauses (i), (ii),
(iii), (iv), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv) and
(xvi) of Section 6.01(a), (ii) extensions, renewals, refinancings or
replacements of Indebtedness described in clause (v) of Section 6.01(a) and
(iii) Indebtedness described in clauses (v) and (vi) of Section 6.01(a) to
the extent the proceeds of such Indebtedness are used to fund a Business
Acquisition.
"Qualified Preferred Stock" means Preferred Stock of the
Borrower that does not require any cash payment (including in respect of
redemptions or repurchases), other than in respect of cash dividends, before the
date that is six months after the Xxxxxxx 0 Xxxx Xxxxxxxx Date.
"Refinancing Indebtedness" means Indebtedness (which shall be
deemed to include Attributable Debt solely for the purposes of this definition)
issued or incurred (including by means of the extension or renewal of existing
Indebtedness) to extend, renew or refinance existing Indebtedness or
Attributable Debt ("Refinanced Debt"); provided that (i) the terms of any such
Indebtedness, and of any agreement entered into and of any instrument issued in
connection therewith, are otherwise permitted by the Senior Loan Documents, (ii)
such extending, renewing or refinancing Indebtedness is in an original aggregate
principal amount not greater than the aggregate principal amount of, and unpaid
interest on, the Refinanced Debt plus the amount of any premiums paid thereon
and fees and expenses associated therewith, (iii) such Indebtedness (x) does not
mature or require scheduled payments of principal prior to the date that is
three months after the Xxxxxxx 0 Xxxx Xxxxxxxx Date and (y) has a later maturity
and a longer weighted average life than the Refinanced Debt, (iv) such
Indebtedness bears an interest rate not in excess of the market interest rate
with respect to such type of Indebtedness as of the time of its issuance or
incurrence, (v) at the option of the Borrower, such Indebtedness may contain
market call and make-whole provisions as of the time of its issuance or
incurrence, (vi) if the Refinanced Debt or any Guarantees thereof are
subordinated to the Senior Obligations (or prior to the Borrowing Base Date the
Interim Obligations), such Indebtedness shall be subordinated to the Senior
Obligations or the Interim Obligations, as the case may be, on terms no less
favorable, taken as a whole, to the holders of the Senior Obligations or the
Interim Obligations, as the case may be, than the subordination terms of such
Refinanced Debt or Guarantees thereof (and no Loan Party, Holdings, nor any of
its subsidiaries that has not guaranteed such Refinanced Debt guarantees such
Indebtedness), (vii) the senior management of the Borrower determines in good
faith that such Indebtedness contains covenants (including with respect to
amortization and convertibility) and events of default on market terms, (viii)
such Indebtedness is benefited by Guarantees (if any) which, taken as a whole,
are not materially less favorable to the Lenders than the Guarantees (if any) in
respect of such Refinanced Debt, (ix) if such Refinanced Debt or any Guarantees
thereof are secured, such Indebtedness and any Guarantees thereof are either
unsecured or secured only by such property or assets as secured the Refinanced
Debt and Guarantees thereof and not any additional property or assets of the
Borrower or any Subsidiary (other than (A) property or assets acquired after the
issuance or incurrence of such Refinancing Indebtedness that would have been
subject to the Lien securing refinanced Indebtedness if such Indebtedness had
not been refinanced, (B) additions to the property or assets subject to the Lien
and (C) the proceeds of the property or assets subject to the Lien), (x) if such
Refinanced Debt and any Guarantees thereof are unsecured, such Indebtedness and
Guarantees thereof are also unsecured and (xi) any Net Cash Proceeds of such
Indebtedness are used no later than 45 days following receipt thereof to repay
the Refinanced Debt and pay any accrued interest, fees, premiums (if any) and
expenses in connection therewith.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the directors, officers, employees, agents,
trustees and advisors of such Person and such Person's Affiliates.
"Repurchase Expenditures" means, with respect to any Optional
Debt Repurchase, the aggregate amount of expenditures made or required to be
made to effect such Optional Debt Repurchase, including without limitation
payments on account of principal, premium and fees payable to holders of the
Indebtedness purchased or reacquired in connection with such Optional Debt
Repurchase, but excluding payments representing accrued interest to the date of
such Optional Debt Repurchase and excluding fees and expenses paid to third
parties in connection therewith.
"Required Lenders" means, at any time, Lenders having
Revolving Exposures, outstanding Term Loans and unused Commitments representing
more than 50% of the sum of the total Revolving Exposures, outstanding Term
Loans and unused Commitments at such time.
"Requirement of Law" means, with respect to any Person, the
charter and by-laws or other organizational or governing documents of such
Person, and any law, rule or regulation (including Environmental Laws, the Code
and ERISA) or order, decree or other determination of an arbitrator or a court
or other Governmental Authority applicable to or binding upon such Person or any
of its property or assets or to which such Person or any of its property or
assets is subject.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property, except dividends payable solely
in shares of the Borrower's common stock or Qualified Preferred Stock) with
respect to any Equity Interests in the Borrower or any Subsidiary, or any
payment (whether in cash, securities or other property, except payments made
solely with common equity), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancelation or
termination of any Equity Interests in the Borrower or any Subsidiary or any
option, warrant or other right to acquire any such Equity Interests in the
Borrower or any Subsidiary; provided that in no event shall any exchange of
Qualified Preferred Stock with other Qualified Preferred Stock be deemed a
Restricted Payment.
"Revolver Availability" means, on any date of determination,
the maximum amount of Revolving Loans that could be made to the Borrower on such
date pursuant to Section 2.01(b) pursuant to the use of unused Commitments on
such date.
"Revolving Availability Period" means the period from and
including the Second Restatement Effective Date to but excluding the earlier of
the Xxxxxxxxx/Xxxxxxx 0 Xxxx Xxxxxxxx Date and the date of termination of the
Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender's Revolving
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The initial amount
of each Lender's Revolving Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Revolving Commitment, as applicable. The aggregate amount of the Lenders'
Revolving Commitments on the Second Restatement Effective Date is
$1,750,000,000.
"Revolving Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans and its LC Exposure and Swingline Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment
or, if the Revolving Commitments have terminated or expired, a Lender with a
Revolving Exposure.
"Revolving Loan" means a Loan made pursuant to clause (b) of
Section 2.01.
"Revolving/Tranche 1 Term Maturity Date" means September 30,
2010.
"Script Lists Advance Rate" means the Script Lists advance
rate determined in accordance with Section 2.20.
"Second Priority Debt" means any Indebtedness (including the
9.5% Notes, 8.125% Notes and 7.5% Notes) incurred by Rite Aid and Guaranteed by
the Subsidiary Guarantors on or after the Effective Date pursuant to the Second
Priority Subsidiary Guarantee Agreement (i) which is secured by the Second
Priority Collateral on a pari passu basis (other than as provided by the terms
of the applicable Second Priority Debt Documents) with the other Second Priority
Debt Obligations and (ii) if issued on or after the Second Restatement Effective
Date, matures after the date that is three months after the Xxxxxxx 0 Xxxx
Xxxxxxxx Date; provided, however, that (A) such Indebtedness is permitted to be
incurred, secured and Guaranteed on such basis by each Senior Loan Document and
each Second Priority Debt Document and (B) the Representative for the holders of
such Second Priority Debt shall have become party to the Collateral Trust and
Intercreditor Agreement pursuant to, and by satisfying the conditions set forth
in, Section 8.12 thereof. Second Priority Debt shall include any Registered
Equivalent Notes issued in exchange thereof.
"Securitization" means any transaction or series of
transactions entered into by the Borrower and any Subsidiaries pursuant to which
the Borrower or such Subsidiaries sell, convey or otherwise transfer (or purport
to sell, convey or otherwise transfer) Securitization Assets to a Securitization
Vehicle or another Subsidiary which sells, conveys or otherwise transfers (or
purports to sell, convey or otherwise transfer) Securitization Assets to a
Securitization Vehicle, and such Securitization Vehicle finances the acquisition
of such Securitization Assets (i) with proceeds from the issuance of Third Party
Interests, (ii) with Sellers' Retained Interests, (iii) with proceeds from the
sale or collection of Securitization Assets previously purchased by such
Securitization Vehicle or (iv) with proceeds from the sale of Securitization
Assets to another Securitization Vehicle. For purposes of this Agreement, the
"amount" or "principal amount" of any Securitization shall be deemed at any time
to be (1) the aggregate principal or stated amount of the Third Party Interests
(which stated amount may be described as a "net investment", "capital",
"invested amount" or similar term reflecting the amount invested in any
beneficial interest constituting a Third Party Interest) incurred or issued
pursuant to such Securitization, in each case outstanding at such time, or (2)
in the case of any Securitization in respect of which no such principal or
stated amount is determinable, the cash purchase price paid by the buyer in
connection with its purchase of Third Party Interests less the amount of
collections received in respect of such Third Party Interests and paid to such
buyer, excluding any amounts applied to purchase fees or discount or in the
nature of interest.
"Securitization Assets" means any accounts receivable owed to
the Borrower or any Subsidiary (whether now existing or arising or acquired in
the future) arising in the ordinary course of business from the sale of goods or
services, all collateral securing such accounts receivable, all contracts and
contract rights and all guarantees or other obligations in respect of such
accounts receivable, all proceeds of such accounts receivable and other assets
(including contract rights) which are the type customarily transferred in
connection with securitizations of accounts receivable and which are sold,
transferred or otherwise conveyed (or purported to be sold, transferred or
otherwise conveyed) by the Borrower or a Subsidiary to a Securitization Vehicle
in connection with a Securitization permitted by Sections 6.01 and 6.05.
"Securitization Vehicle" means a Person that is a direct or
indirect wholly owned Subsidiary used solely for the purpose of effecting one or
more Securitizations to which the Borrower and/or Subsidiaries and/or another
Securitization Vehicle transfer Securitization Assets and which, in connection
with such Securitization either issues Third Party Interests or transfers such
Securitization Assets to another Securitization Vehicle that issues Third Party
Interests; provided, in each case, that (i) each such Person shall engage in no
business other than the purchase of Securitization Assets pursuant to
Securitizations permitted by Sections 6.01 and 6.05, the issuance of Third Party
Interests and any activities reasonably related thereto, (ii) no portion of the
Indebtedness or other obligations (contingent or otherwise) of such Person (x)
is Guaranteed by the Borrower or any other Subsidiary, other than any Guarantee
of obligations (other than of principal of, or interest on, Indebtedness) that
may be deemed to exist solely by virtue of Standard Securitization Undertakings,
(y) is recourse to the Borrower or any other Subsidiary other than by virtue of
Standard Securitization Undertakings and (z) is secured (contingently or
otherwise) by any Lien on assets of the Borrower or any other Subsidiary other
than by virtue of Standard Securitization Undertakings, (iii) such Person has no
contract, agreement, arrangement or understanding with the Borrower or any other
Subsidiary other than (A) customary contracts, arrangements or agreements
entered into with respect to the sale, purchase and servicing of Securitization
Assets on market terms for similar securitization transactions and (B)
Guarantees and pledges of security as required by the Senior Loan Documents and
the Second Priority Debt Documents and (iv) neither the Borrower nor any
Subsidiary has any obligations to maintain or preserve such Person's financial
condition or cause it to achieve certain levels of operating results other than
pursuant to Standard Securitization Undertakings.
"Seller" means The Xxxx Xxxxx Group (PJC) Inc., a corporation
organized under the laws of Quebec.
"Sellers' Retained Interests" means the debt or equity
interests held by the Borrower or any Subsidiary in a Securitization Vehicle to
which Securitization Assets have been transferred (or purported to have been
transferred) in a Securitization permitted by Sections 6.01 and 6.05, including
any such debt or equity received in consideration for the Securitization Assets
transferred.
"Series E Preferred Stock" means the Borrower's 7% Series E
mandatory convertible preferred stock issued prior to the Second Restatement
Effective Date.
"Series G Preferred Stock" means the Borrower's 7% Series G
cumulative, convertible pay-in-kind preferred stock held by Green Equity
Investors III, L.P. or one of its Affiliates on the Second Restatement Effective
Date.
"Series H Preferred Stock" means the Borrower's 6% Series H
cumulative, convertible pay-in-kind preferred stock held by Green Equity
Investors III, L.P. or one of its Affiliates on the Second Restatement Effective
Date.
"Series I Preferred Stock" means the Borrower's 5.5% Series I
mandatory convertible preferred stock issued prior to the Second Restatement
Effective Date.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities made by the Borrower or a Subsidiary in
connection with Securitizations permitted by Sections 6.01 and 6.05 which
representations, warranties, covenants and indemnities are customarily included
in securitizations of accounts receivable involving comparable companies.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
expressed as a decimal (including any marginal, special, emergency or
supplemental reserves) established by the Board to which the Administrative
Agent is subject with respect to eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Store" means any retail store (which may include any real
property, fixtures, equipment, inventory and script files related thereto)
operated, or to be operated, by any Subsidiary Loan Party (and, prior to the
Borrowing Base Date, Holdings or any of its subsidiaries).
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity of which securities or other ownership interests
representing more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Loan Party" means each Subsidiary set forth on
Schedule 1.01 hereto and any wholly-owned Domestic Subsidiary, including any
Securitization Vehicle that is a Domestic Subsidiary, that owns any assets
consisting of inventory, accounts receivable, intellectual property, or script
lists; provided that (a) no Subsidiary that engages solely in the Borrower's
pharmacy benefits management business shall be deemed a Subsidiary Loan Party
and (b) Holdings and its subsidiaries shall not be Subsidiary Loan Parties prior
to the Borrowing Base Date.
"Supermajority Lenders" means, at any time, Lenders having
Revolving Exposures, outstanding Term Loans and unused Commitments representing
more than 66-2/3% of the aggregate Revolving Exposures, outstanding Term Loans
and unused Commitments of all Lenders at such time.
"Swingline Exposure" means, at any time, the aggregate
principal amount of all Swingline Loans outstanding at such time. The Swingline
Exposure of any Lender at any time shall be its Applicable Percentage of the
total Swingline Exposure at such time.
"Swingline Lender" means CNAI, in its capacity as the lender
of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.04.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Loans" means the Tranche 1 Term Loans and the Tranche 2
Term Loans, or any combination thereof (as the context requires).
"Third Party Interests" means, with respect to any
Securitization, notes, bonds or other debt instruments, beneficial interests in
a trust, ownership interests (including any fractional undivided interests) in a
pool or pools of accounts receivable or other interests or securities issued or
sold for cash consideration by a Securitization Vehicle to banks, investors or
other financing sources (other than the Borrower or its Subsidiaries) the
proceeds of which are used to finance, in whole or in part, the purchase by such
Securitization Vehicle of accounts receivables or other Securitization Assets in
a Securitization.
"Total Indebtedness" means, as of any date, the sum of the
aggregate principal amount of Indebtedness of the Borrower and its Consolidated
Subsidiaries outstanding as of such date, in the amount that would be reflected
on a balance sheet prepared as of such date on a consolidated basis in
accordance with GAAP plus, without duplication, the aggregate outstanding amount
of Third Party Interests (which amount may be described as a "net investment",
"capital", "invested amount", "principal amount" or similar term reflecting the
aggregate amount invested in beneficial interests constituting Third Party
Interests).
"Tranche 1 Term Lender" means a Lender with a Tranche 1 Term
Commitment or an outstanding Tranche 1 Term Loan.
"Tranche 2 Term Lender" means a Lender with a Tranche 2 Term
Commitment or an outstanding Tranche 2 Term Loan.
"Tranche 1 Term Loans" means Loans made or deemed made under
clause (a) of Section 2.01.
"Tranche 2 Term Loans" means Loans made or deemed made under
clause (c) of Section 2.01 and, from and after the Borrowing Base Date, Loans
made or deemed made under clause (d) of Section 2.01.
"Tranche 1 Term Commitment" means, with respect to each
Lender, the commitment, if any, of such Lender to make a Tranche 1 Term Loan
hereunder on the First Restatement Effective Date, expressed as an amount
representing the maximum principal amount of the Tranche 1 Term Loans to be made
by such Lender hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.08 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04. The
initial amount of each Lender's Tranche 1 Term Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
shall have assumed its Tranche 1 Term Commitment, as applicable. The aggregate
amount of the Lenders' Tranche 1 Term Commitments on the First Restatement
Effective Date is $145,000,000.
"Tranche 2 Term Commitment" means, with respect to each
Lender, the commitment, if any, of such Lender to make a Tranche 2 Term Loan
hereunder on the Second Restatement Effective Date and the Borrowing Base Date,
expressed as an amount representing the maximum principal amount of the Tranche
2 Term Loans to be made by such Lender hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.08 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04. The initial amount of each Lender's Tranche 2 Term Commitment is
set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to
which such Lender shall have assumed its Tranche 2 Term Commitment, as
applicable. The aggregate amount of the Lenders' Tranche 2 Term Commitments on
the Second Restatement Effective Date is $1,105,000,000.
"Tranche 2 Term Maturity Date" means [o], 2013.(6)
"Transactions" means the execution, delivery and performance
by the Borrower, the Subsidiary Loan Parties and Holdings and its subsidiaries,
as applicable, of the Amendment and Restatement Agreement and each other
document contemplated thereby to be executed on the Second Restatement Effective
Date or the Borrowing Base Date to which it is a party, the borrowing of Tranche
2 Term Loans, the use of proceeds thereof and the other transactions to be
effected on the Second Restatement Effective Date (including the Acquisition) or
on the Borrowing Base Date.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
______________________
(6) The Tranche 2 Term Maturity Date will be the seventh anniversary of the
Second Restatement Effective Date.
"USA Patriot Act" means the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class
and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Revolving Borrowing") or by Type
(e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar
Revolving Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein);
provided, however, that amendments to the Indentures and the Second Priority
Debt Documents after the Second Restatement Effective Date shall be effective
for purposes of references thereto in this Agreement and the other Senior Loan
Documents only if such amendments are permitted hereunder or are consented to in
writing for such purpose by the Required Lenders (or such other percentage of
the Lenders as may be specified herein), (b) any reference herein to any Person
shall be construed to include such Person's successors and assigns, (c) the
words "herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the Second Restatement Effective Date in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.
SECTION 1.05. Terms Defined in Definitions Annex. Capitalized
terms used in this Agreement that are not defined in Section 1.01 shall have the
meanings assigned to such terms in the Definitions Annex (but any definition of
such a term in the Definitions Annex shall be disregarded for purposes hereof if
such term is also defined in Section 1.01).
ARTICLE II
The Credits
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SECTION 2.01. Commitments. (a) Subject to the terms and
conditions set forth herein, each Lender agrees to make a Tranche 1 Term Loan to
the Borrower on the First Restatement Effective Date in an aggregate principal
amount not exceeding its Tranche 1 Term Commitment. Amounts repaid or prepayed
in respect of Tranche 1 Term Loans may not be reborrowed.
(b) Subject to the terms and conditions set forth herein, each
Lender agrees to make Revolving Loans to the Borrower from time to time during
the Revolving Availability Period in an aggregate principal amount that will not
result in such Lender's Revolving Exposure exceeding the lesser of (i) such
Lender's Revolving Commitment and (ii) such Lender's Applicable Percentage of an
amount equal to (A) the Borrowing Base Amount in effect at such time minus (B)
the sum of (1) the outstanding Tranche 1 Term Loans at such time and (2) prior
to the Borrowing Base Date, zero and from and after the Borrowing Base Date, the
outstanding Tranche 2 Term Loans at such time. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Revolving Loans.
(c) Subject to the terms and conditions set forth herein, each
Lender agrees to make its pro rata share of the Tranche 2 Term Loans to be made
to the Borrower on the Second Restatement Effective Date (determined based upon
such Tranche 2 Lender's Tranche 2 Term Commitment).
(d) Subject to the terms and conditions set forth herein, each
Lender agrees to make its pro rata share of the Tranche 2 Term Loans to be made
to the Borrower on the Borrowing Base Date (determined based upon such Tranche 2
Lender's Tranche 2 Term Commitment). The aggregate principal amount of Tranche 2
Term Loans to be made on the Second Restatement Effective Date and the Borrowing
Base Date by any Lender shall not exceed such Lender's Tranche 2 Term
Commitment. Amounts repaid or prepayed in respect of Tranche 2 Term Loans may
not be reborrowed.
SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than
a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of
the same Class and Type made by the Lenders ratably in accordance with the
amounts of their Commitments of the applicable Class. The failure of any Lender
to make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; provided that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
(b) Subject to Section 2.14, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. Each Swingline Loan shall be an ABR
Loan. Each Lender at its option may make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000. At the time that
each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $1,000,000 and not less than $5,000,000; provided
that an ABR Revolving Borrowing may be in an aggregate amount that is equal to
the entire unused balance of the total Revolving Commitments or that is required
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.05(e). Each Swingline Loan shall be in an amount that is an integral multiple
of $1,000,000. Borrowings of more than one Class and Type may be outstanding at
the same time; provided that there shall not at any time be more than a total of
10 Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Revolving Borrowing, Tranche 1 Term Borrowing or Tranche 2 Term Borrowing if
the Interest Period requested with respect thereto would end after the
Xxxxxxxxx/Xxxxxxx 0 Xxxx Xxxxxxxx Date or the Xxxxxxx 0 Xxxx Xxxxxxxx Date, as
the case may be.
SECTION 2.03. Requests for Borrowings. To request a Borrowing,
the Borrower shall notify the Administrative Agent of such request by telephone
(a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of the proposed Borrowing or (b)
in the case of an ABR Borrowing, not later than (1) 10:30 a.m., New York City
time, on the Business Day of the proposed Borrowing, in the case of Borrowings
to be made on the same day as such notice is given or (2) 12:00 noon, New York
City time, on the Business Day before the proposed Borrowing, in the case of all
other Borrowings. Each such telephonic Borrowing Request shall be irrevocable
and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving
Borrowing, a Tranche 1 Term Borrowing or a Tranche 2 Term Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business
Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.06.
If no election as to the Type of Borrowing is specified, then
the requested Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Borrowing, then the Borrower
shall be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender may, in its sole discretion,
make Swingline Loans to the Borrower from time to time during the Revolving
Availability Period in an aggregate principal amount at any time outstanding
that will not result in (i) the aggregate principal amount of outstanding
Swingline Loans exceeding $100,000,000 or (ii) the sum of the total Revolving
Exposures exceeding the lesser of (A) the total Revolving Commitments at such
time and (B) the Borrowing Base Amount in effect at such time minus the sum of
(1) the outstanding Tranche 1 Term Loans at such time and (2) prior to the
Borrowing Base Date, zero and from and after the Borrowing Base Date, the
outstanding Tranche 2 Term Loans at such time; provided that (i) the Swingline
Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan and (ii) the Swingline Lender shall not have any
obligation, under this Agreement or otherwise, to make any Swingline Loan
requested by the Borrower hereunder and may, in its sole discretion, decline to
make a requested Swingline Loan. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 1:00 p.m., New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Borrower. The Swingline Lender shall make each
Swingline Loan available to the Borrower by means of a wire transfer to an
account designated by the Borrower (or, in the case of a Swingline Loan made to
finance the reimbursement of an LC Disbursement as provided in Section 2.05(e),
by remittance to the relevant Issuing Bank) by 3:00 p.m., New York City time, on
the requested date of such Swingline Loan.
(c) Interest on each Swingline Loan shall be payable on the
Interest Payment Date with respect thereto.
(d) The Administrative Agent shall (i) at any time when
Swingline Loans in an aggregate principal amount of $10,000,000 or more are
outstanding, at the request of the Swingline Lender in its sole discretion, or
(ii) on the date that is seven days after the date on which a Swingline Loan was
made, deliver on behalf of the Borrower a Borrowing Request pursuant to Section
2.03 for an ABR Revolving Borrowing in the amount of such Swingline Loans;
provided, however, that the obligations of the Lenders to fund such Borrowing
shall not be subject to the conditions set forth in Section 4.02.
(e) The Swingline Lender may by written notice given to the
Administrative Agent not later than 12:00 noon, New York City time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such notice
shall specify the aggregate amount of Swingline Loans in which Revolving Lenders
will participate. Promptly upon receipt of such notice (but no later than 2:00
p.m., New York City time, on such Business Day), the Administrative Agent will
give notice thereof to each Revolving Lender, specifying in such notice such
Lender's Applicable Percentage of such Swingline Loan or Loans. Each Revolving
Lender hereby absolutely and unconditionally agrees, upon timely receipt of
notice as provided above, to pay to the Administrative Agent, for the account of
the Swingline Lender, such Lender's Applicable Percentage of such Swingline Loan
or Loans. Each Revolving Lender acknowledges and agrees that its obligation to
acquire participations in Swingline Loans pursuant to this paragraph is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Each Revolving
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Revolving Lenders. The Administrative Agent shall notify
the Borrower of any participations in any Swingline Loan acquired pursuant to
this paragraph, and thereafter payments in respect of such Swingline Loan shall
be made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other Person on behalf of
the Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent, and any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear. The
purchase of participations in a Swingline Loan pursuant to this paragraph shall
not relieve the Borrower of any default in the payment thereof.
SECTION 2.05. Letters of Credit. (a) General. Subject to the
terms and conditions set forth herein, the Borrower may request the issuance of
(and the applicable Issuing Bank, as specified by the Borrower, will issue)
Letters of Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the relevant Issuing Bank, at any time and from time to
time during the Revolving Availability Period. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, an Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the applicable Issuing Bank) to
the relevant Issuing Bank and the Administrative Agent (reasonably in advance of
the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
of this Section), the amount of such Letter of Credit, the name and address of
the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by an
Issuing Bank, the Borrower also shall submit a letter of credit application on
such Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the total LC Exposure shall
not exceed $450,000,000, (ii) the amount of the LC Exposure attributable to
Letters of Credit issued by the applicable Issuing Bank will not exceed the LC
Commitment of such Issuing Bank and (iii) the total Revolving Exposures shall
not exceed the lesser of (A) the total Revolving Commitments at such time and
(B) the Borrowing Base Amount in effect at such time minus the sum of (1) the
outstanding Tranche 1 Term Loans at such time and (2) prior to the Borrowing
Base Date, zero and from and after the Borrowing Base Date, the outstanding
Tranche 2 Term Loans at such time.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date that is one year
after the date of the issuance of such Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension) and (ii)
the date that is five Business Days prior to the Revolving/Tranche 1 Term
Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the applicable Issuing Bank or the Lenders,
such Issuing Bank hereby grants to each Revolving Lender, and each Revolving
Lender hereby acquires from such Issuing Bank, a participation in such Letter of
Credit in an amount equal to such Lender's Applicable Percentage of the
aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the applicable Issuing Bank, such Lender's Applicable Percentage
of each LC Disbursement made by such Issuing Bank and not reimbursed by the
Borrower on the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the Borrower for any reason.
Each Revolving Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If any Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 3:30 p.m., New York City time, on the date that such
LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 1:00 p.m., New York City time, on the Business Day
immediately following the day that the Borrower receives such notice; provided
that, if such LC Disbursement is not less than $5,000,000, the Borrower may,
subject to the conditions to borrowing set forth herein, request in accordance
with Section 2.03 or 2.04 that such payment be financed with an ABR Revolving
Borrowing or Swingline Loan in an equivalent amount and, to the extent so
financed, the Borrower's obligation to make such payment shall be discharged and
replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the
Borrower fails to make such payment when due, the Administrative Agent shall
notify each Revolving Lender of the applicable LC Disbursement, the payment then
due from the Borrower in respect thereof and such Lender's Applicable Percentage
thereof. Promptly following receipt of such notice, each Revolving Lender shall
pay to the Administrative Agent its Applicable Percentage of the payment then
due from the Borrower, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the relevant Issuing Bank the amounts
so received by it from the Revolving Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to such
Issuing Bank or, to the extent that Revolving Lenders have made payments
pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders
and such Issuing Bank as their interests may appear. Any payment made by a
Revolving Lender pursuant to this paragraph to reimburse an Issuing Bank for any
LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline
Loan as contemplated above) shall not constitute a Loan and shall not relieve
the Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein or herein,
(ii) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by any Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower's obligations
hereunder. None of the Administrative Agent, any Lender or any Issuing Bank, or
any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the relevant Issuing Bank; provided that the foregoing shall not
be construed to excuse such Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the fullest extent
permitted by applicable law) suffered by the Borrower that are caused by such
Issuing Bank's gross negligence or wilful misconduct (as determined by a court
of competent jurisdiction by a final and non-appealable judgment) in determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or wilful misconduct on the part of an Issuing Bank (as
determined by a court of competent jurisdiction by a final and non-appealable
judgment), such Issuing Bank shall be deemed to have exercised care in each such
determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, an Issuing Bank may, in its sole discretion, either accept and
make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures. The applicable Issuing Bank
shall, promptly following its receipt thereof, examine all documents purporting
to represent a demand for payment under a Letter of Credit. The applicable
Issuing Bank shall promptly notify the Administrative Agent and the Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether such
Issuing Bank has made or will make an LC Disbursement thereunder; provided that
any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Issuing Bank and the Revolving
Lenders with respect to any such LC Disbursement.
(h) Interim Interest. If an Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
provided that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
applicable Issuing Bank, except that interest accrued on and after the date of
payment by any Revolving Lender pursuant to paragraph (e) of this Section to
reimburse such Issuing Bank shall be for the account of such Lender to the
extent of such payment.
(i) Resignation or Replacement of the Issuing Bank. An Issuing
Bank may resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Borrower and the Lenders, and an Issuing Bank may be
replaced at any time by written agreement (an "Issuing Bank Agreement") among
the Borrower, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank, which shall set forth the LC Commitment of such Issuing
Bank. The Administrative Agent shall notify the Lenders of any such replacement
of an Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of an Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall (or shall cause
Subsidiary Loan Parties to) deposit in an account with the Administrative Agent,
in the name of the Administrative Agent and for the benefit of the Lenders, an
amount in cash equal to the total LC Exposure as of such date plus any accrued
and unpaid interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower or any
Subsidiary Loan Party described in clause (h) or (i) of Article VII. The
Borrower also shall (or shall cause Subsidiary Loan Parties and, prior to the
Borrowing Base Date, Holdings and its subsidiaries to) deposit cash collateral
pursuant to this paragraph as and to the extent required by Section 2.11(b), and
any such cash collateral so deposited and held by the Administrative Agent
hereunder shall constitute part of the Borrowing Base Amount for purposes of
determining compliance with Section 2.11(b). Each such deposit shall be held by
the Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower under this Agreement. The Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. The Administrative Agent shall, at the Borrower's
risk and expense, invest all such deposits in Permitted Investments chosen in
the sole discretion of the Administrative Agent after consultation with the
Borrower, provided that no consultation shall be required if a Default has
occurred and is continuing. Other than any interest earned in respect of the
investment of such deposits, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in
such account shall be applied by the Administrative Agent to reimburse each
Issuing Bank for LC Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent of
Revolving Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy the Senior Obligations. If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived (or, during a Cash Sweep Period,
paid into the Citibank Concentration Account). If the Borrower is required to
provide an amount of cash collateral hereunder pursuant to Section 2.11(b), such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower as and to the extent that, after giving effect to such return, the
Borrower would remain in compliance with Section 2.11(b) and no Default shall
have occurred and be continuing. Unless and except to the extent that the
deposit of cash collateral directly by the Borrower would not result in an
obligation to grant a security interest in such cash collateral to the holders
of other outstanding Indebtedness of the Borrower, the Borrower will cause
Subsidiary Loan Parties (and, prior to the Borrowing Base Date, Holdings and its
subsidiaries) to deposit all cash collateral required to be deposited pursuant
to this Section 2.05(j) or Section 2.11(b).
(k) Additional Issuing Banks The Borrower may, at any time and
from time to time with the consent of the Administrative Agent (which consent
shall not be unreasonably withheld) and such Lender, designate one or more
additional Lenders to act as an issuing bank under the terms of this Agreement.
Any Lender designated as an issuing bank pursuant to this clause (k) shall be
deemed to be an "Issuing Bank" (in addition to being a Lender) in respect of
Letters of Credit issued or to be issued by such Lender, and, with respect to
such Letters of Credit, such term shall thereafter apply to the other Issuing
Banks and such Lender in its capacity as an Issuing Bank.
(l) Reporting by Issuing Banks to the Administrative Agent. At
the end of each week and otherwise upon request of the Administrative Agent,
each Issuing Bank shall provide the Administrative Agent with a certificate
identifying the Letters of Credit issued by such Issuing Bank and outstanding on
such date, the amount and expiration date of each such Letter of Credit, the
beneficiary thereof, the amount, if any, drawn under each such Letter of Credit
and any other information reasonably requested by the Administrative Agent with
respect to such Letters of Credit. The Administrative Agent shall promptly enter
all such information received by it pursuant to this Section 2.05(l) in the
Register.
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall
make each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York City time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders; provided that Swingline Loans shall be made as
provided in Section 2.04. The Administrative Agent will make such Loans
available to the Borrower by wire transfer, in like funds, to an account
designated by the Borrower in the applicable Borrowing Request. Wire transfers
to the Borrower of all Loans (other than Swingline Loans and same-day ABR
Revolving Borrowings) shall be made no later than 1:00 p.m., New York City time.
Wire transfers to the Borrower of Swingline Loans and same-day ABR Revolving
Borrowings shall be made no later than 4:00 p.m., New York City time.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to ABR Revolving Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections. (a) Each Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Borrower may elect to
convert such Borrowing to a different Type or to continue such Borrowing and, in
the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as
provided in this Section. The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. This Section shall not apply to Swingline Borrowings, which
may not be converted or continued.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required to be made under Section 2.03 if the
Borrower were requesting a Revolving Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery or telecopy to the Administrative Agent of a written Interest
Election Request in a form approved by the Administrative Agent and signed by
the Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02 and
paragraph (f) of this Section:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified pursuant
to clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
(f) A Revolving Borrowing, Tranche 1 Term Borrowing or Tranche
2 Term Borrowing may not be converted to or continued as a Eurodollar Borrowing
if after giving effect thereto the Interest Period therefor would end after the
Xxxxxxxxx/Xxxxxxx 0 Xxxx Xxxxxxxx Date or the Xxxxxxx 0 Xxxx Xxxxxxxx Date, as
the case may be.
SECTION 2.08. Termination and Reduction of Commitments.
(a) Unless previously terminated in accordance with the terms
of this Agreement, (i) the Tranche 1 Term Commitments shall terminate at 5:00
p.m., New York City time on the First Restatement Effective Date, (ii) the
Revolving Commitments shall terminate on the Xxxxxxxxx/Xxxxxxx 0 Xxxx Xxxxxxxx
Date and (iii) the Tranche 2 Term Commitments shall terminate at 5:00 p.m., New
York City time on the date that is 240 days after the Second Restatement
Effective Date.
(b) The Borrower may at any time terminate, or from time to
time reduce, the Commitments of any Class; provided that (i) each reduction of
the Commitments of any Class shall be in an amount that is an integral multiple
of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.11,
the total Revolving Exposures would exceed the total Revolving Commitments.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least one Business Day prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any such notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of voluntary termination of the Revolving Commitments delivered by the Borrower
may state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments of
any Class shall be permanent. Each reduction of the Commitments of any Class
shall be made ratably among the Lenders in accordance with their Commitments of
such Class.
SECTION 2.09. Repayment of Loans; Evidence of Indebtedness.
(a) The Borrower hereby unconditionally promises to pay (i) to
the Administrative Agent for the account of each Tranche 1 Term Lender the then
unpaid principal amount of the Tranche 1 Term Loan of such Lender as provided in
Section 2.10, (ii) to the Administrative Agent for the account of each Revolving
Lender the then unpaid principal amount of each Revolving Loan of such Lender on
the Xxxxxxxxx/Xxxxxxx 0 Xxxx Xxxxxxxx Date, (iii) to the Swingline Lender the
then unpaid principal amount of each Swingline Loan on the earlier of (A) the
Xxxxxxxxx/Xxxxxxx 0 Xxxx Xxxxxxxx Date and (B) the date that is seven days after
the date on which such Swingline Loan was made; provided that on each date that
a Revolving Borrowing is made, the Borrower shall repay all Swingline Loans that
were outstanding on the date such Borrowing was requested and (iv) to the
Administrative Agent for the account of each Tranche 2 Term Lender the then
unpaid principal amount of the Tranche 2 Term Loan of such Lender as provided in
Section 2.10.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period, if any, applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it
be evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in the form attached hereto as Exhibit A-1 or A-2, as applicable,
or in such other form approved by the Administrative Agent and the Borrower.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 9.04) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
SECTION 2.10. Amortization and Repayment of Term Loans. (a)
The Borrower shall repay to the Administrative Agent for the ratable account of
the Tranche 2 Term Lenders (i) 0.25% of the initial aggregate principal amount
of the Tranche 2 Term Loans made on the Second Restatement Effective Date on the
last Business Day of each March, June, September and December, commencing on the
first such date to occur on or after the first anniversary of the Second
Restatement Effective Date (which installments shall be reduced as a result of
the application of prepayments in accordance with the order of priority set
forth in paragraph (c) of this Section) plus (ii) from and after the Borrowing
Base Date, 0.25% of the initial aggregate principal amount of the Tranche 2 Term
Loans made on the Borrowing Base Date on the last Business Day of each March,
June, September and December, commencing the first such date to occur on or
after the first anniversary of the Second Restatement Effective Date (which
installments shall be reduced as a result of the application of prepayments in
accordance with the order of priority set forth in paragraph (c) of this
Section).
(b) To the extent not previously paid, all Tranche 1 Term
Loans shall be due and payable on the Xxxxxxxxx/Xxxxxxx 0 Xxxx Xxxxxxxx Date. To
the extent not previously paid, all Tranche 2 Term Loans shall be due and
payable on the Tranche 2 Term Maturity Date.
(c) Any prepayment of a Tranche 2 Term Borrowing pursuant to
Section 2.11(b), (c) or (d) shall be applied to reduce the subsequent scheduled
repayments of such Borrowings to be made pursuant to this Section as follows:
first, in order of their maturity for the next fiscal year after such prepayment
and second, to the extent of any excess, on a pro rata basis to the remaining
scheduled repayments.
(d) Prior to any repayment of any Term Borrowing hereunder,
the Borrower shall select the Borrowing or Borrowings to be repaid and shall
notify the Administrative Agent by telephone (confirmed by telecopy) of such
selection not later than 11:00 a.m., New York City time, three Business Days
before the scheduled date of such repayment. Each repayment of a Borrowing shall
be applied ratably to the Loans included in the repaid Borrowing. Repayments of
Term Borrowings shall be accompanied by accrued interest on the amount repaid.
SECTION 2.11. Prepayment of Loans. (a) The Borrower shall have
the right, at any time and from time to time, to prepay any Borrowing in whole
or in part, subject to the requirements of this Section; provided, however, that
any partial prepayment made pursuant to this Section 2.11(a) shall be in a
principal amount that is a multiple of $1,000,000 and not less than $5,000,000.
(b) (i) In the event and on each date that the sum of (A) the
total Revolving Exposures on such date, (B) the outstanding Tranche 1 Term Loans
on such date and (C) if such date is prior to the Borrowing Base Date, zero and,
if such date is on or after the Borrowing Base Date, the outstanding Tranche 2
Term Loans at such date exceed the then-current Borrowing Base Amount, the
Borrower shall on each such date apply an amount equal to such excess as
follows: first, to prepay Revolving Borrowings or Swingline Loans, second, to
the extent of any remaining excess, or if no Revolving Borrowings or Swingline
Loans are outstanding, to make a deposit in a cash collateral account maintained
by the Administrative Agent pursuant to Section 2.05(j) to be held as security
for the Borrower's obligations in respect of Letters of Credit and third, to the
extent of any remaining excess, to prepay Term Borrowings on a pro rata basis
(determined based upon the sum of the outstanding Term Loans at such time).
(ii) In the event and on each date that the total
Revolving Exposures exceed the total Revolving Commitments, the Borrower shall
on such date apply an amount equal to such excess first, to prepay Revolving
Borrowings or Swingline Borrowings, and second, to the extent of any remaining
excess, or if no Revolving Borrowings or Swingline Loans are outstanding, to a
cash collateral account maintained by the Administrative Agent pursuant to
Section 2.05(j) to be held as security for the Borrower's obligations in respect
of Letters of Credit.
(c) In the event and on each occasion that any Net Proceeds
are received by or on behalf of the Borrower or any Subsidiary in respect of any
Prepayment Event, the Borrower shall, within three Business Days after such Net
Proceeds are received, prepay Tranche 2 Term Borrowings in an aggregate amount
equal to (i) 100% of the Net Proceeds resulting from prepayment events described
in clauses (a), (b) and (d) of the definition of "Prepayment Event" and (ii) 50%
of the Net Proceeds resulting from prepayment events described in clause (c) of
the definition of "Prepayment Event"; provided that if at the time any (x) Net
Proceeds resulting from prepayment events described in clause (a) of the
definition of "Prepayment Events" are received and the Revolver Availability is
less than $900,000,000 (or, if such time is prior to the Borrowing Base Date,
$475,000,000) or (y) Net Proceeds resulting from any Prepayment Event are
received during a Cash Sweep Period, such Net Proceeds will be applied as
follows: first, to prepay Revolving Borrowings or Swingline Loans and second, to
the extent of any remaining excess, to prepay Tranche 2 Term Borrowings;
provided further that, in the case of any event described in clause (a) or (b)
of the definition of "Prepayment Event", if the Borrower shall elect to apply
the Net Proceeds from such event (or a portion thereof specified in such
certificate), within 365 days after receipt of such Net Proceeds, to acquire
real property, equipment or other tangible assets to be used in the business of
the Borrower and the Subsidiaries, and certifying that no Default has occurred
and is continuing, then no prepayment shall be required pursuant to this
paragraph in respect of the Net Proceeds in respect of such event (or the
portion of such Net Proceeds specified in such certificate, if applicable),
except to the extent of any such Net Proceeds therefrom that have not been so
applied by the end of such 365 day period, at which time a prepayment shall be
required in an amount equal to such Net Proceeds that have not been so applied;
provided further that at any time that any amount is outstanding under the
Bridge Facility, the provisions of this paragraph (c) shall not require the
prepayment of any Tranche 2 Term Borrowing with (A) the proceeds of the sale,
transfer or other disposition of assets and properties of Holdings and its
subsidiaries not constituting Senior Collateral under the Senior Loan Documents,
(B) insurance proceeds and condemnation awards in respect of any assets or
properties of Holdings and its subsidiaries not constituting Senior Collateral
under the Senior Loan Documents or (C) the proceeds resulting from any
Prepayment Event described in clause (c) or (d) of the definition thereof, in
each case to the extent applied to repay amounts outstanding under the Bridge
Facility.
(d) Following the end of each fiscal year of the Borrower,
commencing with the fiscal year ending February 29, 2008, the Borrower shall
prepay Tranche 2 Term Borrowings in an aggregate amount equal to (i) if on the
last day of such fiscal year the Leverage Ratio is greater than or equal to 4.50
to 1.00, 50% of the Excess Cash Flow for such fiscal year, (ii) if on the last
day of such fiscal year the Leverage Ratio is greater than or equal to 4.00 to
1.00 but less than 4.50 to 1.00, 25% of the Excess Cash Flow for such fiscal
year and (iii) if on the last day of such fiscal year the Leverage Ratio is less
than 4.00 to 1.00, 0% of the Excess Cash Flow for such fiscal year. Each
prepayment pursuant to this paragraph shall be made on or before the date on
which financial statements are delivered pursuant to Section 5.01 with respect
to the fiscal year for which Excess Cash Flow is being calculated (and in any
event within 90 days after the end of such fiscal year).
(e) Prior to any optional or mandatory prepayment of
Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to
be prepaid and shall specify such selection in the notice of such prepayment
pursuant to paragraph (f) of this Section.
(f) The Borrower shall notify the Administrative Agent (and,
in the case of prepayment of a Swingline Loan, the Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, New York City time,
on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the Borrowings to be prepaid and the principal
amount of each Borrowing or portion thereof to be prepaid and, in the case of a
mandatory prepayment, a reasonably detailed calculation of the amount of such
prepayment; provided that, if a notice of optional prepayment is given in
connection with a conditional notice of termination of the Revolving Commitments
as contemplated by Section 2.08, then such notice of prepayment may be revoked
if such notice of termination is revoked in accordance with Section 2.08.
Promptly following receipt of any such notice (other than a notice relating
solely to Swingline Loans), the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing shall be in an
amount that would be permitted in the case of an advance of a Borrowing of the
same Type as provided in Section 2.02, except as necessary to apply fully the
required amount of a mandatory prepayment. Each prepayment of a Borrowing shall
be applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.13.
SECTION 2.12. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee,
which shall accrue at the rate of 0.25% per annum on the daily unused amount of
the Revolving Commitment of such Lender during the period from and including the
Original Restatement Effective Date to but excluding the date on which such
Commitment terminates. Accrued commitment fees shall be payable in arrears on
the last day of March, June, September and December of each year and on the date
on which the Revolving Commitments terminate, commencing on the first such date
to occur after the Original Restatement Effective Date. All commitment fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day). For purposes of computing commitment fees pursuant to this Section
2.12(a), a Revolving Commitment of a Lender shall be deemed to be used to the
extent of the outstanding Revolving Loans and LC Exposure of such Lender (and
the Swingline Exposure of such Lender shall be disregarded for such purpose).
(b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate as in effect from time to time for interest on Eurodollar Revolving Loans
on the daily amount of such Lender's LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Original Restatement Effective Date to but excluding the later of
the date on which such Lender's Revolving Commitment terminates and the date on
which such Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank
a fronting fee, which shall accrue at the rate of 0.25% per annum on the daily
outstanding amount of such Issuing Bank's Letters of Credit during the period
from and including the Original Restatement Effective Date to but excluding the
later of the date of termination of the Revolving Commitments and the date on
which there ceases to be any LC Exposure, as well as such Issuing Bank's
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Original Restatement Effective Date; provided that all such fees shall be
payable on the date on which the Revolving Commitments terminate and any such
fees accruing after the date on which the Revolving Commitments terminate shall
be payable on demand. Any other fees payable to an Issuing Bank pursuant to this
paragraph shall be payable within 10 days after demand. All participation fees
and fronting fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent for
the account of each Tranche 2 Lender a commitment fee, which shall accrue at the
rate of 0.50% per annum on the daily unused amount of the Tranche 2 Term
Commitment of such Lender during the period from and including the Second
Restatement Effective Date to but excluding the earlier of (i) the Borrowing
Base Date and (ii) the date on which such Commitment terminates. Accrued
commitment fees shall be payable in arrears on the last day of March, June,
September and December of each year, on the Borrowing Base Date and on the date
on which the Tranche 2 Term Commitments terminate, commencing on the first such
date to occur after the Second Restatement Effective Date. All commitment fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(d) The Borrower agrees to pay to the Administrative Agent and
the Collateral Agent, for their own accounts, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative
Agent or the Collateral Agent, as the case may be.
(e) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the relevant
Issuing Bank, in the case of fees payable to it) for distribution, in the case
of commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR
Borrowing (including each Swingline Loan) shall bear interest at the Alternate
Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, upon the occurrence and
during the continuation of an Event of Default, at the option of the
Administrative Agent or at the request of the Required Lenders, the Borrower
shall pay interest on all of the Senior Obligations (and, prior to the Borrowing
Base Date, the Interim Obligations) to but excluding the date of actual payment,
after as well as before judgment, (i) in the case of principal, at a rate per
annum equal to 2% plus the rate otherwise applicable to such Loan as provided in
the preceding paragraphs of this Section and (ii) in the case of any other
amount, at a rate per annum equal to 2% plus the rate applicable to ABR
Revolving Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and (i) in the case of Tranche 1
Term Loans, on the Xxxxxxxxx/Xxxxxxx 0 Xxxx Xxxxxxxx Date, (ii) in the case of
Revolving Loans, the earlier of the Xxxxxxxxx/Xxxxxxx 0 Xxxx Xxxxxxxx Date and
the date on which all Revolving Commitments hereunder are terminated and (iii)
in the case of Tranche 2 Term Loans, on the Tranche 2 Term Maturity Date;
provided that (i) interest accrued pursuant to paragraph (c) of this Section
shall be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of
the Revolving Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment
and (iii) in the event of any conversion of any Eurodollar Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion, together with any amounts due
and payable pursuant to Section 2.16.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Citibank Base
Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(b) the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest
Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or any Issuing Bank; or
(ii) impose on any Lender or any Issuing Bank or the London
interbank market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or such
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender or any Issuing Bank determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or such Issuing Bank's capital or
on the capital of such Lender's or such Issuing Bank's holding company, if any,
as a consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by such
Issuing Bank, to a level below that which such Lender or such Issuing Bank or
such Lender's or such Issuing Bank's holding company could have achieved but for
such Change in Law (taking into consideration such Lender's or such Issuing
Bank's policies and the policies of such Lender's or such Issuing Bank's holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing Bank
or such Lender's or such Issuing Bank's holding company for any such reduction
suffered. Each Lender will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge that will entitle such Lender to
compensation pursuant to this Section 2.15; provided that the failure to provide
such notification will not affect such Lender's rights to compensation
hereunder.
(c) A certificate of a Lender or an Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or such Issuing Bank
or its holding company, as the case may be, as specified in paragraph (a) or (b)
of this Section shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender or such Issuing Bank,
as the case may be, the amount shown as due on any such certificate within 10
days after receipt thereof.
(d) Failure or delay on the part of any Lender or any Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or such Issuing Bank's right to demand such
compensation; provided that the Borrower shall not be required to compensate a
Lender or an Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that such Lender or
such Issuing Bank, as the case may be, notifies the Borrower of the Change in
Law giving rise to such increased costs or reductions and of such Lender's or
such Issuing Bank's intention to claim compensation therefor; provided further
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 270-day period referred to above shall be extended to
include the period of retroactive effect thereof.
SECTION 2.16. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.11(f) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
consist of an amount determined by such Lender to be the excess, if any, of (i)
the amount of interest which would have accrued on the principal amount of such
Loan had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on account
of any obligation of the Borrower hereunder or under any other Senior Loan
Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Agent, Lender or Issuing Bank (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent,
each Lender and each Issuing Bank, within 10 days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or such Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of the
Borrower hereunder or under any other Senior Loan Document (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender or an Issuing Bank,
or by the Administrative Agent on its own behalf or on behalf of a Lender or an
Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate, provided that such Foreign Lender
has received written notice from the Borrower advising it of the availability of
such exemption or reduction and supplying all applicable documentation.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing
of Setoffs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Senior Loan Document (whether of principal,
interest, fees or reimbursement of LC Disbursements, or of amounts payable under
Section 2.15, 2.16 or 2.17, or otherwise) prior to the time expressly required
hereunder or under such other Senior Loan Document for such payment (or, if no
such time is expressly required, prior to 2:00 p.m., New York City time), on the
date when due, in immediately available funds, without setoff or counterclaim.
Any amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, except payments to be made directly to an Issuing
Bank or Swingline Lender as expressly provided herein and except that payments
pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the
Persons entitled thereto and payments pursuant to other Senior Loan Documents
shall be made to the Persons specified therein. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
under any Senior Loan Document shall be due on a day that is not a Business Day,
the date for payment shall be extended to the next succeeding Business Day, and,
in the case of any payment accruing interest, interest thereon shall be payable
for the period of such extension. All payments under each Senior Loan Document
shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements or Swingline
Loans resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in LC Disbursements and
Swingline Loans and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate relative amounts of principal of and accrued
interest on their Loans and participations in LC Disbursements and Swingline
Loans; provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of setoff and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
an Issuing Bank, as the case may be, the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or such
Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or such Issuing Bank with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or
9.03(c), then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.15, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If (i) any Lender requests compensation under Section
2.15, (ii) the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section
2.17, (iii) any Lender defaults in its obligation to fund Loans hereunder or
(iv) any Lender refuses to consent to any amendment or waiver of any Senior Loan
Document requested by the Borrower that requires the consent of all Lenders, and
such amendment or waiver is consented to by the Supermajority Lenders, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, the Issuing Banks and the Swingline
Lender), which consent shall not unreasonably be withheld, (ii) such Lender
shall have received payment of an amount equal to the outstanding principal of
its Loans and participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17, such
assignment will result in a material reduction in such compensation or payments.
A Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
SECTION 2.20. Adjustments to Borrowing Base Advance Rates. (a)
As of the Second Restatement Effective Date, the Accounts Receivable Advance
Rate will be 85%, the Pharmaceutical Inventory Advance Rate will be 85%, the
Other Inventory Advance Rate will be 80% and the Scripts List Advance Rate will
be 30%.
(b) Any increase in the Pharmaceutical Inventory Advance Rate,
the Other Inventory Advance Rate, the Accounts Receivable Advance Rate or the
Script Lists Advance Rate above that would result in any rate in excess of the
initially applicable rate set forth in Section 2.20(a) will in each case require
the consent of all the Lenders.
(c) The Collateral Agent, in the exercise of its reasonable
judgment to reflect Borrowing Base Factors, may (i) reduce the Accounts
Receivable Advance Rate, the Pharmaceutical Inventory Advance Rate, the Other
Inventory Advance Rate and the Script Lists Advance Rate from time to time and
(ii) thereafter increase such rate to a rate not in excess of the applicable
rate set forth in Section 2.20(a).
(d) The Administrative Agent will give prompt written notice
to the Borrower and the Lenders of any adjustments effected pursuant to this
Section 2.20.
SECTION 2.21. Incremental Loans. At any time after the Second
Restatement Effective Date prior to the Xxxxxxx 0 Xxxx Xxxxxxxx Date, the
Borrower may, by notice to the Administrative Agent (which shall promptly
deliver a copy to each of the Lenders), request the addition to this Agreement
of a new tranche of term loans, or an incremental revolving credit facility or
any combination thereof (the "Incremental Facilities"); provided, however, that
both (x) at the time of any such request and (y) upon the effectiveness of any
such Incremental Facility, no Default shall exist and the Borrower shall, if a
Financial Covenant Effectiveness Period is then occurring, be in compliance with
Section 6.12 (calculated, in the case of clause (y), on a pro forma basis to
give effect to any borrowing under the Incremental Facility and any
substantially simultaneous repayments of Revolving Loans). The Incremental
Facilities shall (i) be in an aggregate principal amount not in excess of
$350,000,000, (ii) rank pari passu in right of payment and of security with the
other Loans, (iii) if such Incremental Facility is a term loan facility,
amortize in a manner, and be subject to mandatory prepayments (if any) on terms,
acceptable to the Agents, and mature no earlier than the Xxxxxxx 0 Xxxx Xxxxxxxx
Date, (iv) bear interest at the market interest rate, as determined at the time
such Incremental Facility becomes effective, (v) have such other pricing as may
be agreed by the Borrower and the Administrative Agent and (vi) otherwise be
treated hereunder no more favorably than the Revolving Loans (or, after the
Revolving/Tranche 1 Term Maturity Date, the Tranche 2 Term Loans); provided,
that the terms and provisions applicable to the Incremental Facilities may
provide for additional or different financial or other covenants applicable only
during periods after the Xxxxxxx 0 Xxxx Xxxxxxxx Date. At no time shall the sum
of (i) the aggregate amount of loans outstanding under the Incremental
Facilities at such time, (ii) the total Revolving Exposure at such time, (iii)
the outstanding Tranche 1 Term Loans at such time and (iv) the outstanding
Tranche 2 Term Loans at such time exceed the Borrowing Base Amount (or, if prior
to the Borrowing Base Date, the Estimated Borrowing Base Amount) in effect at
such time, and the proceeds of the Incremental Facilities shall be used solely
for the purposes set forth in Section 5.10. Such notice shall set forth the
requested amount and class of Incremental Facilities, and shall offer each
Lender the opportunity to offer a commitment (the "Incremental Commitment") to
provide a portion of the Incremental Facility by giving written notice of such
offered commitment to the Administrative Agent and the Borrower within a time
period (the "Offer Period") to be specified in the Borrower's notice; provided,
however, that no existing Lender will be obligated to subscribe for any portion
of such commitments. In the event that, at the expiration of the Offer Period,
Lenders shall have provided commitments in an aggregate amount less than the
total amount of the Incremental Facility initially requested by the Borrower,
the Borrower may request that Incremental Facility commitments be made in a
lesser amount equal to such commitments and/or shall have the right to arrange
for one or more banks or other financial institutions (any such bank or other
financial institution being called an "Additional Lender") to extend commitments
to provide a portion of the Incremental Facility in an aggregate amount equal to
the unsubscribed amount of the initial request; provided that each Additional
Lender shall be subject to the approval of the Administrative Agent (such
consent not to be unreasonably withheld); and provided further that the
Additional Lenders shall be offered the opportunity to provide the Incremental
Facility only on terms previously offered to the existing Lenders pursuant to
the immediately preceding sentence. Commitments in respect of Incremental
Facilities will become Commitments under this Agreement pursuant to an amendment
to this Agreement (such an amendment, an "Incremental Facility Amendment")
executed by each of the Borrower and each Subsidiary Loan Party (and, prior to
the Borrowing Base Date, Holdings and each of its subsidiaries), each Lender
agreeing to provide such Commitment, if any, each Additional Lender, if any, and
the Administrative Agent. The effectiveness of any Incremental Facility
Amendment shall be subject to the satisfaction on the date thereof of each of
the conditions set forth in Section 4.02 of the Original Agreement as in effect
immediately prior to the First Restatement Effective Date.
ARTICLE III
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and
the Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization; Enforceability. The Transactions
to be entered into by each Loan Party are within such Loan Party's corporate
powers and have been duly authorized by all necessary corporate and, if
required, stockholder action. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Senior Loan Document
to which any Loan Party is to be a party, when executed and delivered by such
Loan Party, will constitute, a legal, valid and binding obligation of the
Borrower or such Loan Party (as the case may be), enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect and except filings
necessary to perfect Liens created under the Senior Loan Documents, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of the Subsidiaries or any order
of any Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument evidencing or governing
Indebtedness or any other material agreement binding upon the Borrower or any
Subsidiary or its assets, or give rise to a right thereunder to require any
payment to be made by the Borrower or any Subsidiary, and (d) will not result in
the creation or imposition of any Lien on any asset of the Borrower or any
Subsidiary, except Liens created under the Senior Loan Documents and the Second
Priority Collateral Documents.
SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Lenders its
consolidated balance sheet and statements of income, stockholders equity and
cash flows as of and for the fiscal year ended March 4, 2006, reported on by
Deloitte & Touche LLP. Such financial statements present fairly the financial
position and results of operations and cash flows of the Borrower and its
Consolidated Subsidiaries as of such dates and for such periods in accordance
with GAAP.
(b) Except as disclosed (i) in the financial statements
referred to in paragraph (a) above or the notes thereto, (ii) in the Borrower's
report or Form 10-K for the fiscal year ended March 4, 2006 or (iii) on Schedule
3.04, after giving effect to the Transactions, none of the Borrower or the
Subsidiaries has, as of the Second Restatement Effective Date, any material
contingent liabilities, unusual long-term loan commitments or unrealized losses.
(c) Since March 4, 2006, there has been no material adverse
change in the business, assets, operations, properties, condition (financial or
otherwise), or prospects of the Borrower and the Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Borrower and the
Subsidiaries has good and marketable title to, or valid leasehold interests in,
all its real and personal property material to its business, except (i) for
minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties for their intended
purposes and (ii) as set forth on Schedule 3.05(a). All such real and personal
property are free and clear of all Liens, other than Liens permitted by Section
6.02.
(b) Each of the Borrower and the Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrower and the Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(c) Schedule 3.05(c) sets forth the address of every leased
warehouse or distribution center in which inventory owned by the Borrower or any
Subsidiary is located as of the Second Restatement Effective Date.
SECTION 3.06. Litigation and Environmental Matters. (a) Except
as set forth on Schedule 3.06(a), there are no actions, suits or proceedings by
or before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
of the Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect or (ii) that involve any of the Senior Loan Documents or the
Transactions.
(b) Except as set forth on Schedule 3.06(b) and except with
respect to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the
Borrower nor any of the Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
SECTION 3.07. Compliance with Laws and Agreements. Except as
set forth on Schedule 3.07, each of the Borrower and the Subsidiaries is in
compliance with all laws, regulations and orders of any Governmental Authority
applicable to it or its property (including, without limitation, the Health
Insurance Portability and Accountability Act of 1996 ("HIPAA")and all other
material healthcare laws and regulations) and all indentures, agreements and
other instruments binding upon it or its property or assets, except where the
failure to be so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 3.08. Investment and Holding Company Status. Neither
the Borrower nor any of the Subsidiaries is an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940.
SECTION 3.09. Taxes. Each of the Borrower and the Subsidiaries
has timely filed or caused to be filed all United States Federal income tax
returns and reports and all other material tax returns and reports required to
have been filed and has paid or caused to be paid all material Taxes due
pursuant to such returns or pursuant to any assessment received by the Borrower
or any Subsidiary, except (i) where the payment of any such Taxes is being
contested in good faith by appropriate proceedings and for which the Borrower or
such Subsidiary, as applicable, has set aside on its books adequate reserves and
(ii) as set forth on Schedule 3.09. The charges, accruals and reserves on the
books of the Borrower and its Consolidated Subsidiaries in respect of Taxes or
charges imposed by a Governmental Authority are, in the opinion of the Borrower,
adequate.
SECTION 3.10. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other ERISA
Events for which liability is reasonably expected to result, could reasonably be
expected to result in liability exceeding $50,000,000. The minimum funding
standards of ERISA and the Code with respect to each Plan have been satisfied.
The present value of all accumulated benefit obligations under each Plan (based
on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $50,000,000 the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed by more than $50,000,000 the fair market value of the
assets of all such underfunded Plans.
SECTION 3.11. Disclosure; Accuracy of Information. (a) As of
the Second Restatement Effective Date, none of the reports, financial
statements, certificates or other information furnished by or on behalf of any
Loan Party to any Agent or any Lender in connection with the negotiation of this
Agreement or any other Senior Loan Document or delivered hereunder or thereunder
(as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
(b) Each Borrowing Base Certificate that has been or will be
delivered to the Collateral Agent, the Administrative Agent or any Lender is and
will be complete and correct in all material respects.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth the name
of, and the ownership interest of the Borrower in, each Subsidiary and
identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of
the Second Restatement Effective Date. As of the Second Restatement Effective
Date, each of the Subsidiaries is an "Unrestricted Subsidiary" as defined in,
and for all purposes of, the Effective Date Indentures.
SECTION 3.13. Insurance. Schedule 3.13 sets forth a
description of all liability, property and casualty insurance maintained by or
on behalf of the Borrower and the Subsidiaries as of the Second Restatement
Effective Date. As of the Second Restatement Effective Date, all premiums in
respect of such insurance have been paid. The Borrower and the Subsidiaries have
insurance in such amounts and covering such risks and liabilities as are in
accordance with normal industry practice and as required by the Senior Loan
Documents. The Borrower reasonably believes that the insurance maintained by or
on behalf of the Borrower and the Subsidiaries is adequate.
SECTION 3.14. Labor Matters. Except as set forth on Schedule
3.14, as of the Second Restatement Effective Date, there are no strikes,
lockouts or slowdowns against the Borrower or any Subsidiary pending or, to the
knowledge of the Borrower, threatened which could reasonably be expected to
result in a Material Adverse Effect. Except as set forth on Schedule 3.14, the
hours worked by and payments made to employees of the Borrower and the
Subsidiaries have not been in violation in any material respect of the Fair
Labor Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters. Except as set forth on Schedule 3.14, all payments
due from the Borrower or any Subsidiary, or for which any claim may be made
against the Borrower or any Subsidiary, on account of wages and employee health
and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of the Borrower or such Subsidiary. Except as set forth
on Schedule 3.14, the consummation of the Transactions will not give rise to any
right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which the Borrower or any Subsidiary is
bound.
SECTION 3.15. Solvency. Immediately after the consummation of
the Transactions to occur on the Second Restatement Effective Date and the
Borrowing Base Date, as the case may be, immediately following the making of
each Loan made on the Second Restatement Effective Date and the Borrowing Base
Date, as the case may be, and after giving effect to the application of the
proceeds of such Loans, (a) the fair value of the assets of the Borrower and the
other Loan Parties, taken as a whole, at a fair valuation, will exceed their
debts and liabilities, subordinated, contingent or otherwise; (b) the present
fair saleable value of the property of the Borrower and the other Loan Parties,
taken as a whole, will be greater than the amount that will be required to pay
the probable liability of their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) the Borrower and the other Loan Parties taken as a whole, will be
able to pay their debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and (d) the Borrower
and the other Loan Parties will not have unreasonably small capital with which
to conduct the business in which they are engaged as such business is now
conducted and is proposed to be conducted following the Second Restatement
Effective Date. Prior to the Borrowing Base Date, the Borrower's representations
under this Section 3.15 will not include the Transactions to occur or the Loans
to be made on the Borrowing Base Date.
SECTION 3.16. Federal Reserve Regulations. (a) Neither the
Borrower nor any Subsidiary is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of buying or
carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of
Credit will be used by the Borrower or any Subsidiary, whether directly or
indirectly, and whether immediately, incidentally or ultimately, for any purpose
that entails a violation of, or that is inconsistent with, the provisions of
Regulation T, U or X of the Board.
SECTION 3.17. Security Interests. (a) The Senior Subsidiary
Security Agreement is effective to create in favor of the Collateral Agent, for
the ratable benefit of the Senior Secured Parties, a legal, valid and
enforceable security interest in the Senior Collateral subject to such agreement
and, when financing statements in appropriate form are filed in the offices
specified on Schedule 6 to the Perfection Certificate, such security interest
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the grantors thereunder in the Senior Collateral, to the
extent perfection can be obtained by filing Uniform Commercial Code financing
statements, in each case prior and superior in right to any other Person to the
extent perfection can be obtained by filing Uniform Commercial Code financing
statements, other than with respect to the rights of Persons pursuant to Liens
expressly permitted by Section 6.02.
(b) The Interim Collateral and Guarantee Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Interim Secured Parties, a legal, valid and enforceable security interest in
the Interim Collateral subject to such agreement and (i) when the Interim
Collateral constituting certificated securities (as defined in the Uniform
Commercial Code) is delivered to the Collateral Agent thereunder together with
instruments of transfer duly endorsed in blank, the security interest of the
Collateral Agent therein will constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the pledgors in such Interim
Collateral, prior and superior in right to any other Person subject only to
Permitted Encumbrances and (ii) when financing statements in appropriate form
are filed in the offices specified in the Perfection Certificate delivered on
the Second Restatement Effective Date, the security interest of the Collateral
Agent will constitute a fully perfected Lien on and security in all right, title
and interest of the Grantors (as defined in the Interim Collateral Agreement) in
the remaining Interim Collateral to the extent perfection can be obtained by
filing Uniform Commercial Code financing statements, prior and superior in right
to any other Person subject only to Permitted Encumbrances.
SECTION 3.18. Use of Proceeds. The Borrower will use the
proceeds of the Loans and will request the issuance of Letters of Credit only
for the purposes specified in the preamble to this Agreement and set forth in
Section 5.10.
ARTICLE IV
Conditions
----------
SECTION 4.01. Second Restatement Effective Date. Without
affecting the rights of the Borrower or any Subsidiary hereunder at all times
prior to the Second Restatement Effective Date, the amendment and restatement in
the form hereof of the Original Agreement and the obligations of the Lenders to
make Loans and acquire participations in Letters of Credit and Swingline Loans
and of the Issuing Banks to issue Letters of Credit hereunder shall not become
effective until the date on which the conditions set forth in Sections 2.2(b)
and 2.3 of the Amendment and Restatement Agreement shall have been satisfied.
It is understood and agreed that no term of the amendment and
restatement contemplated hereby shall be effective until the Second Restatement
Effective Date occurs, and that the Original Agreement shall continue in full
force and effect without regard to the amendment and restatement contemplated
hereby until the Second Restatement Effective Date.
SECTION 4.02. Each Credit Event. The obligation of each
Revolving Lender to make a Revolving Loan on the occasion of any Revolving
Borrowing after the Second Restatement Effective Date, and of each Issuing Bank
to issue, amend, renew or extend any Letter of Credit after the Second
Restatement Effective Date, is subject to receipt of the request therefore in
accordance herewith and to the satisfaction of the following conditions (each
Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit (for purposes of this Section, an "issuance") shall be deemed to
constitute a representation and warranty by Borrower on the date thereof as to
the matters specified in paragraphs (a), (b) and (c) of this Section):
(a) the representations and warranties of the Loan Parties
contained in each Senior Loan Document are true and correct in all material
respects on and as of the date of such Borrowing or issuance, before and
after giving effect to such Borrowing or issuance and to the application of
the proceeds therefrom, as though made on and as of such date (except to
the extent any such representation or warranty expressly relates to an
earlier date, in which case such representation and warranty shall have
been true and correct in all material respects as of such earlier date);
(b) no event has occurred and is continuing, or would result
from such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default or an Event of Default and such
Borrowing or issuance would not result in a violation of the amount of
secured Indebtedness permitted under the Second Priority Debt Documents;
and
(c) after giving effect to such Borrowing or issuance the
Borrowing Base Amount shall be equal to or greater than the sum of (i) the
total Revolving Exposures, (ii) the outstanding Tranche 1 Term Loans and
(iii) if prior to the Borrowing Base Date, zero and, if on or after the
Borrowing Base Date, the outstanding Tranche 2 Term Loans.
SECTION 4.03. Borrowing Base Date. The "Borrowing Base Date"
will occur on the first date on which the following conditions have been
satisfied:
(a) The Financial Statement Delivery Date shall have occurred.
(b) The Administrative Agent shall have received a favorable
legal opinion of each of (i) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
counsel to the Borrower and (ii) Xxxxxx Sari, General Counsel of the
Borrower, in each case addressed to the Administrative Agent and the
Lenders and dated as of such date, covering such matters relating to the
Loan Parties, this Agreement, the other Senior Loan Documents and the
Senior Collateral as the Administrative Agent may reasonably request, and
otherwise reasonably satisfactory to the Administrative Agent. The Borrower
hereby requests such counsel to deliver such opinions.
(c) The Collateral and Guarantee Requirement shall have been
satisfied in respect of Holdings and its subsidiaries and the
Administrative Agent shall have received (i) a completed Perfection
Certificate dated as of such date and signed by an executive officer or
Financial Officer together with all attachments contemplated thereby,
including the results of a search of the Uniform Commercial Code (or
equivalent) filings made with respect to Holdings and its subsidiaries in
the jurisdictions contemplated by the Perfection Certificate and copies of
the financing statements (or similar documents) disclosed by such search
and (ii) evidence reasonably satisfactory to the Administrative Agent that
the Liens disclosed by such search are permitted by Section 6.02 or have
been released.
(d) Each Subsidiary Loan Party shall have entered into a
written instrument reasonably satisfactory to the Administrative Agent
pursuant to which it confirms that the Senior Collateral Documents to which
it is party will continue to apply in respect of this Agreement and the
Senior Obligations (as such term is defined in respect of the period after
the Borrowing Base Date).
(e) After giving effect to the borrowing of Tranche 2 Term
Loans on the Borrowing Base Date and the satisfaction of the Collateral and
Guarantee Requirement in respect of Holdings and its subsidiaries, the
Borrowing Base Amount on such date shall be no less than the sum of (i) the
total Revolving Exposures on such date, (ii) the outstanding Tranche 1 Term
Loans on such date and (iii) the outstanding Tranche 2 Term Loans on such
date. The Administrative Agent shall have received a completed Borrowing
Base Certificate dated as of such date and signed by a Financial Officer.
(f) To the extent invoiced, the Administrative Agent shall
have received payment or reimbursement of its reasonable out-of-pocket
expenses, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent.
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired, terminated or
been cash collateralized and all LC Disbursements shall have been reimbursed,
the Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) as soon as available and in any event within 105 days (or
such earlier date that is 10 days after the then-current filing deadline
for the Borrower's Annual Report on Form 10-K) after the end of each fiscal
year of the Borrower, its audited consolidated balance sheet and related
statements of income and cash flows as of the end of and for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by Deloitte & Touche LLP or another registered
independent public accounting firm of recognized national standing (without
a "going concern" or like qualification or exception and without any
material qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial position, results of operations and cash
flows of the Borrower and its Consolidated Subsidiaries on a consolidated
basis in accordance with GAAP;
(b) as soon as available and in any event within 50 days (or
such earlier date that is five days after the then-current filing deadline
for the Borrower's Quarterly Report on Form 10-Q) after the end of each of
the first three fiscal quarters of each fiscal year of the Borrower, its
consolidated balance sheet as of the end of such fiscal quarter and related
statements of income for such fiscal quarter and of income and cash flows
for the then elapsed portion of such fiscal year, setting forth in each
case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year;
(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer (i)
certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed
to be taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating (x) compliance with Section 6.08(c) and (y) the
Borrower's ratio under Section 6.12, (iii) stating whether any change in
GAAP or in the application thereof has occurred since the date of the
Borrower's audited financial statements referred to in Section 3.04 and, if
any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate, (iv) identifying any
Subsidiary formed or acquired since the end of the fiscal quarter
immediately preceding the most recent fiscal quarter covered by such
financial statements, (v) identifying any change in a Subsidiary Loan
Party's (and, prior to the Borrowing Base Date, Holding's and any of its
subsidiaries') name, form of organization or jurisdiction of organization,
including as a result of any merger transaction, since the end of the
fiscal quarter immediately preceding the most recent fiscal quarter covered
by such financial statements, (vi) setting forth the aggregate amount of
Optional Debt Repurchases made by the Borrower during the most recent
fiscal quarter covered by such financial statements, identifying the
Indebtedness repurchased, redeemed, retired or defeased and specifying the
provisions of Section 6.08(b) or (c) pursuant to which each such Optional
Debt Repurchase was effected and quantifying the amounts effected under
each such provision, (vii) setting forth the amount and type of
Indebtedness issued or incurred and Securitizations (or increases in the
amounts thereof) and Factoring Transactions consummated during the most
recent fiscal quarter covered by such financial statements, (viii)
identifying, with respect to all Indebtedness of the Borrower and the
Subsidiaries outstanding on the date of the most recent balance sheet
included in such financial statements, the clause of Section 6.01(a)
pursuant to which such Indebtedness is then permitted to be outstanding,
(ix) setting forth the amount of Restricted Payments made during the most
recent fiscal quarter covered by such financial statements and the
provision of Section 6.08(a) pursuant to which such Restricted Payments
were made, and (x) setting forth the aggregate sale price of Eligible
Script Lists sold since the most recent date on which the Eligible Script
Lists Value was provided to the Lenders in the event aggregate sale price
for all Eligible Script Lists sold since such date of determination exceeds
5% of the most recently determined Eligible Script Lists Value;
(d) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that reported
on such financial statements (i) stating whether they obtained knowledge
during the course of their examination of such financial statements of any
Default and (ii) confirming the calculations set forth in the officer's
certificate delivered simultaneously therewith pursuant to clause (c)(ii)
above (which certificate may be limited to the extent required by
accounting rules or guidelines);
(e) within three Business Days after the end of each fiscal
month of the Borrower, a certificate of a Financial Officer setting forth
in reasonable detail a description of each disposition of assets not in the
ordinary course of business for which the book value or fair market value
of the assets of the Borrower or the Subsidiaries disposed or the
consideration received therefor was greater than $10,000,000;
(f) (i) within 14 Business Days after the end of each fiscal
month of the Borrower, a Borrowing Base Certificate showing the Borrowing
Base Amount as of the close of business on the last day of such fiscal
month, certified as complete and correct by a Financial Officer; provided
that a Borrowing Base Certificate shall be delivered by the Borrower to the
Administrative Agent and each Lender within four Business Days after the
end of a fiscal week of the Borrower if at any time during such fiscal week
the Revolver Availability is less than or equal to $200,000,000 (with the
amount with respect to Eligible Inventory stored at distribution centers
included in the Borrowing Base Amount shown on such Borrowing Base
Certificate delivered under this proviso being the amount computed as of
the close of business on the last day of the Borrower's most recent fiscal
month for which such amount is available, which computation shall be
completed within 14 Business Days after the end of each fiscal month of the
Borrower);
(g) no later than 60 days following the end of each fiscal
year of the Borrower (or, in the reasonable discretion of the
Administrative Agent, no later than 30 days thereafter), forecasts for the
Borrower and its Consolidated Subsidiaries of (i) quarterly consolidated
balance sheet data and related consolidated statements of income and cash
flows for each quarter in the next succeeding fiscal year and (ii)
consolidated balance sheet data and related consolidated statements of
income and cash flows for each of the five fiscal years immediately
following such fiscal year (but excluding any fiscal year ending after
2013);
(h) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by the Borrower or any Subsidiary with the SEC, or with any national
securities exchange, or distributed by the Borrower to its shareholders
generally, as the case may be; and
(i) promptly following any request therefor, such other
information regarding the financial condition, business or identity of the
Borrower or any Subsidiary, or compliance with the terms of any Senior Loan
Document, as any Agent, at the request of any Lender, may reasonably
request, including any information to be provided pursuant to Section 9.17.
Information required to be delivered pursuant to clauses (a), (b) and (h) shall
be deemed to have been delivered on the date on which the Borrower provides
notice to the Lenders that such information has been posted on the Borrower's
website on the Internet at xxx.xxxxxxx.xxx, at
xxx.xxx.xxx/xxxxx/xxxxxxxxxxx/xxxxxxxx.xxx or at another website identified in
such notice and accessible by the Lenders without charge; provided that (i) such
notice may be included in a certificate delivered pursuant to clause (c) and
(ii) the Borrower shall deliver paper copies of the information referred to in
clauses (a), (b) and (h) to any Lender which requests such delivery.
SECTION 5.02. Notices of Material Events. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice after
any officer of the Borrower obtains knowledge of any of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any Affiliate thereof that could reasonably be
expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event;
(d) any Lien (other than security interests created under any
Senior Loan Document or Second Priority Debt Document or Permitted
Encumbrances) on any material portion of the Senior Collateral (or, prior
to the Borrowing Base Date, the Interim Collateral);
(e) the occurrence of any other event which could reasonably
be expected to have a material adverse effect on the security interests
created by the Senior Loan Documents or on the aggregate value of the
Senior Collateral (or, prior to the Borrowing Base Date, the Interim
Collateral); and
(f) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) The
Borrower will furnish to the Administrative Agent prompt written notice of any
change (i) in any Loan Party's corporate name, (ii) in the location of any Loan
Party's jurisdiction of incorporation or organization, (iii) in any Loan Party's
form of organization or (iv) in any Loan Party's Federal Taxpayer Identification
Number or other identification number assigned by such Loan Party's jurisdiction
of incorporation or formation. The Borrower agrees not to effect or permit any
change referred to in the preceding sentence unless all filings have been made
under the Uniform Commercial Code or otherwise that are required in order for
the Administrative Agent to continue at all times following such change to have
a valid, legal and perfected security interest in all the Senior Collateral
(and, prior to the Borrowing Base Date, the Interim Collateral). The Borrower
also agrees promptly to notify the Agents if any material portion of the Senior
Collateral is damaged or destroyed.
(b) Each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause (a) of
Section 5.01, the Borrower shall deliver to the Agents a certificate of the
chief legal officer of the Borrower (i) setting forth the information required
pursuant to Section 1 of the Perfection Certificate or confirming that there has
been no change in such information since the date of the Perfection Certificate
delivered on the Second Restatement Effective Date or the date of the most
recent certificate delivered pursuant to this Section and (ii) certifying that
all Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations, including
all refilings, rerecordings and reregistrations, containing a description of the
Senior Collateral have been filed of record in each governmental, municipal or
other appropriate office in each jurisdiction identified pursuant to clause (i)
above to the extent necessary to protect and perfect the security interests
under the Senior Subsidiary Security Agreement for a period of not less than 18
months after the date of such certificate (except as noted therein with respect
to any continuation statements to be filed within such period).
SECTION 5.04. Existence; Conduct of Business. Except as
otherwise permitted by this Agreement, the Borrower will continue, and will
cause each Subsidiary to continue, to engage in business of the same general
type as now conducted by the Borrower and the Subsidiaries. The Borrower will,
and will cause each of the Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names, in each case material to the conduct of
its business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation, dissolution or sale of assets permitted under
Section 6.03.
SECTION 5.05. Payment of Obligations. The Borrower will, and
will cause each of the Subsidiaries to, pay its Indebtedness and other
obligations, including Tax liabilities, which, if unpaid, could result in a
material Lien on any of their properties or assets, before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.06. Maintenance of Properties. The Borrower will,
and will cause each of the Subsidiaries to, keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted.
SECTION 5.07. Insurance. (a) The Borrower will, and will cause
each of the Subsidiaries to, maintain (either in the name of the Borrower or in
such Subsidiary's own name), with financially sound and reputable insurance
companies insurance in such amounts (with no greater risk retention) and against
such risks as are customarily maintained by companies of established repute
engaged in the same or similar businesses operating in the same or similar
locations. The Borrower will furnish to the Lenders, upon request of the Agents,
information in reasonable detail as to the insurance so maintained.
(b) The Borrower will, and will cause each of the Subsidiaries
to, maintain such insurance in a coverage amount of not less than 90% of the
coverage amount as of the Original Restatement Effective Date, with deductibles,
risks covered and other provisions (other than the amount of premiums) not
materially less favorable to the Borrower and the Subsidiaries as of the
Original Restatement Effective Date.
(c) The Borrower will, and will cause each of the Subsidiary
Loan Parties (and, prior to or on the Borrowing Base Date, Holdings and its
subsidiaries) to, (i) cause all such policies to be endorsed or otherwise
amended to include a "standard" or "New York" lender's loss payable endorsement,
in form and substance satisfactory to the Agents, which endorsement shall
provide that, from and after the Original Restatement Effective Date if the
insurance carrier shall have received written notice from the Administrative
Agent of the occurrence of an Event of Default, the insurance carrier shall pay
all proceeds otherwise payable to the Borrower and any other Loan Party under
such policies directly to the Collateral Agent for application pursuant to the
Collateral Trust and Intercreditor Agreement or the Interim Intercreditor
Agreement, as the case may be; (ii) cause all such policies to provide that
neither the Borrower, the Administrative Agent, either Collateral Agent nor any
other party shall be a coinsurer thereunder and to contain a "Replacement Cost
Endorsement", without any deduction for depreciation, and such other provisions
as the Agents may reasonably require from time to time to protect their
interests; (iii) deliver broker's certificates to the Collateral Agent; (iv)
cause each such policy to provide that it shall not be canceled or not renewed
by reason of nonpayment of premium upon not less than 10 days' prior written
notice thereof by the insurer to the Administrative Agent (giving the
Administrative Agent the right to cure defaults in the payment of premiums) or
for any other reason upon not less than 30 days' prior written notice thereof by
the insurer to the Administrative Agent; and (v) deliver to the Administrative
Agent, before the cancellation or nonrenewal of any such policy of insurance, a
copy of a renewal or replacement policy (or other evidence of renewal of a
policy previously delivered to the Administrative Agent), together with evidence
reasonably satisfactory to the Agents of payment of the premium therefor.
(d) In connection with the covenants set forth in this
Section, it is agreed that:
(i) none of the Agents, the Lenders, or their agents or
employees shall be liable for any loss or damage insured by the insurance
policies required to be maintained under this Section, and (A) the Borrower
and each Subsidiary Loan Party (and, prior to the Borrowing Base Date,
Holdings and each of its subsidiaries) shall look solely to their insurance
companies or any other parties other than the aforesaid parties for the
recovery of such loss or damage and (B) such insurance companies shall have
no rights of subrogation against the Agents, the Lenders or their agents or
employees. If, however, the insurance policies do not provide waiver of
subrogation rights against such parties, as required above, then the
Borrower hereby agrees, to the extent permitted by law, to waive its right
of recovery, if any, against the Agents, the Lenders and their agents and
employees; and
(ii) the designation of any form, type or amount of insurance
coverage by the Agents or the Required Lenders under this Section shall in
no event be deemed a representation, warranty or advice by the Agents or
the Lenders that such insurance is adequate for the purposes of the
business of the Borrower and the Subsidiaries or the protection of their
properties.
(e) The Borrower will, and will cause each of the Subsidiaries
to, permit any representatives that are designated by a Collateral Agent to
inspect the insurance policies maintained by or on behalf of the Borrower and
the Subsidiaries and inspect books and records related thereto and any
properties covered thereby. The Borrower shall pay the reasonable fees and
expenses of any representatives retained by a Collateral Agent to conduct any
such inspection.
SECTION 5.08. Books and Records; Inspection and Audit Rights;
Collateral and Borrowing Base Reviews. (a) The Borrower will, and will cause
each of the Subsidiaries to, keep proper books of record and account in which
full, true and correct entries are made of all dealings and transactions in
relation to its business and activities. The Borrower will, and will cause each
of the Subsidiaries to, permit any representatives designated by any Lender (at
such Lender's expense, unless a Default has occurred and is continuing, in which
case at the Borrower's expense), and after such Lender has consulted the
Administrative Agent with respect thereto, to visit and inspect its properties,
to examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants,
all at such reasonable times and as often as reasonably requested.
(b) The Borrower will, and will cause each of the Subsidiaries
to, permit any representatives designated by any Collateral Agent (including any
consultants, field examiners, accountants, lawyers and appraisers retained by
such Collateral Agent) to conduct (i) a field examination of the Senior
Collateral at or about the end of each fiscal quarter of the Borrower, (ii) an
appraisal of the Borrower's computation of the assets included in the Borrowing
Base Amount and the Estimated Borrowing Base at or about the end of each fiscal
year of the Borrower, (iii) an appraisal of the Eligible Script Lists at or
about the end of the fiscal quarter ending August 31 of each fiscal year of the
Borrower and (iv) other evaluations and appraisals of the Borrower's computation
of the Borrowing Base Amount and the Estimated Borrowing Base Amount and the
assets included in therein, all at such reasonable times and as often as
reasonably requested. The Borrower shall pay the reasonable fees and expenses of
any representatives retained by any Collateral Agent to conduct any such
evaluation or appraisal. The Administrative Agent shall promptly deliver to the
Lenders copies of all such appraisals and other information provided to the
Borrower in connection with such evaluations and appraisals.
(c) The Borrower will, and will cause each of the Subsidiaries
to, in connection with any evaluation and appraisal relating to the computation
of the Borrowing Base Amount or the Estimated Borrowing Base Amount, maintain
such additional reserves (for purposes of computing the Borrowing Base Amount or
the Estimated Borrowing Base Amount) in respect of Eligible Accounts Receivable
and Eligible Inventory and make such other adjustments to its parameters for
including Eligible Accounts Receivable, Eligible Inventory and Eligible Script
Lists in the Borrowing Base Amount and the Estimated Borrowing Base Amount as
the Collateral Agent shall require based upon the results of such evaluation and
appraisal in its reasonable judgment to reflect Borrowing Base Factors.
SECTION 5.09. Compliance with Laws. The Borrower will, and
will cause each of the Subsidiaries to, comply in all material respects with all
laws, rules, regulations and orders of any Governmental Authority applicable to
it or its property, including all Environmental Laws, HIPAA and all other
material healthcare laws and regulations, except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings or to
the extent that any failures so to comply, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.10. Use of Proceeds and Letters of Credit. (a) The
proceeds of the Tranche 2 Term Loans will be used by the Borrower for the
purposes set forth in the preamble hereto.
(b) The proceeds of the Revolving Loans, Swingline Loans and
loans under the Incremental Facilities made after the Second Restatement
Effective Date will be used by the Borrower as set forth in the preamble and for
general corporate purposes, including:
(i) loans or other transfers to Rite Aid Hdqtrs. Corp. for
purposes of financing inventory purchases pursuant to the Intercompany
Inventory Purchase Agreement and advancing funds to Subsidiary Loan Parties
for their general corporate purposes, including working capital,
Consolidated Capital Expenditures and Business Acquisitions permitted
pursuant to Section 6.04;
(ii) transfers to an operating account for the payment of
operating expenses (including rent, utilities, taxes, wages, repair and
similar expenses) of, and intercompany Investments permitted under Section
6.04 in, the Borrower or any Subsidiary Loan Party;
(iii) payment by the Borrower of principal, interest, fees and
expenses with respect to its Indebtedness when due (including associated
costs, fees and expenses) and payment of the Borrower's taxes,
administrative, operating and other expenses;
(iv) dividends permitted to be made in respect of the Equity
Interests listed on Schedule 6.08(a) or described in Section 6.08(a);
(v) repurchase shares of the Borrower's Preferred Stock
pursuant to Section 6.08(a);
(vi) payment of principal, interest, fees and expenses with
respect to Third Party Interests in accordance with the terms thereof; and
(vii) the financing of Optional Debt Repurchases, permitted
capital expenditures, the repurchase of the Borrower's and/or its
Subsidiaries' (including Rite Aid Lease Management Company's) Preferred
Stock and permitted Restricted Payments.
(c) Letters of Credit will be used solely to support payment
obligations of the Borrower and the Subsidiaries incurred in the ordinary course
of business.
(d) No proceeds of Loans will be used to prepay commercial
paper prior to the maturity thereof and no such proceeds will be used, directly
or indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any Margin Stock. The Borrower will ensure that no such use
of Loan proceeds and no issuance of Letters of Credit will entail any violation
of Regulation T, U or X of the Board.
SECTION 5.11. Additional Subsidiaries. If any additional
wholly-owned Domestic Subsidiary is formed or acquired after the Second
Restatement Effective Date, and (i) if such Subsidiary is required to become a
Subsidiary Loan Party hereunder, the Borrower will, within three Business Days
after such Subsidiary is formed or acquired, notify the Administrative Agent and
the Lenders thereof and cause the Collateral and Guarantee Requirement to be
satisfied with respect to such Subsidiary, including each Securitization Vehicle
which is a Domestic Subsidiary, but excluding any Subsidiary that engages solely
in the pharmacy benefits management business, and (ii) if such Subsidiary is a
subsidiary of Holdings and such Subsidiary is formed or acquired prior to the
Borrowing Base Date, the Borrower will, within three Business Days after such
Subsidiary is formed or acquired, notify the Administrative Agent and the
Lenders thereof and cause the Interim Collateral and Guarantee Requirement to be
satisfied with respect to such Subsidiary, including each Securitization Vehicle
which is a Domestic Subsidiary, but excluding any Subsidiary that engages solely
in the pharmacy benefits management business. Notwithstanding any other
provision of this Agreement, (i) no Domestic Subsidiary listed on Schedule 5.11
shall be required to become a Subsidiary Loan Party (it being understood and
agreed that Schedule 5.11 shall not include any Securitization Vehicle that is a
Domestic Subsidiary) and (ii) no Domestic Subsidiary shall be required to become
a Subsidiary Loan Party unless and until such time as such Subsidiary has assets
in excess of $1,000,000 or acquires assets in excess of $1,000,000 or has
revenue in excess of $500,000 per annum.
SECTION 5.12. Further Assurances. (a) The Borrower will, and
will cause each Subsidiary Loan Party to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, deeds of trust and other documents), which may be required under any
applicable law, or which any Collateral Agent or the Required Lenders may
reasonably request, to cause the Collateral and Guarantee Requirement to be and
remain satisfied, all at the expense of the Loan Parties. The Borrower also
agrees to provide to the Collateral Agent, from time to time upon request,
evidence reasonably satisfactory to the Collateral Agent as to the perfection
and priority of the Liens created or intended to be created by the Senior
Collateral Documents.
(b) The Borrower will, and will cause each of Holdings and its
subsidiaries to, execute any and all further documents, agreements and
instruments, and take all such further actions, which may be required under any
applicable law, or which any Collateral Agent or the Required Lenders may
reasonably request, to cause the Interim Collateral and Guarantee Requirement to
be and remain satisfied, all at the expense of the Borrower. The Borrower also
agrees to provide to the Collateral Agent, from time to time upon request,
evidence reasonably satisfactory to the Collateral Agent as to the perfection
and priority of the Liens created or intended to be created by the Interim
Collateral Documents.
SECTION 5.13. Subsidiaries. The Borrower will cause all of the
Subsidiaries that own Eligible Accounts Receivable, Eligible Inventory or
Eligible Script Lists (and, prior to the Borrowing Base Date, Holdings and its
subsidiaries) to be and at all times remain "Unrestricted Subsidiaries" as
defined in, and for all purposes of, each of the Effective Date Indentures and
will deliver such documents to the trustees under each such Indenture and take
such actions thereunder as may be necessary to effect the foregoing.
SECTION 5.14. Intercompany Transfers. The Borrower shall
maintain accounting systems capable of tracing intercompany transfers of funds
and other assets.
SECTION 5.15. Inventory Purchasing. (a) The Borrower shall,
and shall cause each Subsidiary party to the Intercompany Inventory Purchase
Agreement to, at all times maintain in all material respects the vendor
inventory purchasing system and the intercompany inventory purchasing system in
accordance with the terms of the Intercompany Inventory Purchase Agreement. The
Borrower shall cause each Subsidiary which owns or acquires any Senior
Collateral consisting of inventory to be party to the Intercompany Inventory
Purchase Agreement. Notwithstanding the foregoing, the Borrower shall only be
required to cause Holdings and its subsidiaries to comply with the foregoing as
soon as reasonably practicable after the Second Restatement Effective Date (but
in any event by the Borrowing Base Date).
(b) The Borrower shall not permit any Operating Subsidiary to
purchase any Inventory from any Direct Delivery Vendor other than (i) the
acquisition of inventory from McKesson Corporation (or any Persons that replace
McKesson Corporation, in whole or in part, and sell or otherwise provide
inventory substantially similar to inventory sold or otherwise provided by
McKesson Corporation) consistent with past practice and (ii) food-stuffs,
beverages, periodicals, greeting cards and similar items which are either paid
for in cash substantially concurrently with the time of delivery or otherwise
consistent with past practice.
SECTION 5.16. Cash Management System. (a) The Borrower will
cause each Subsidiary Loan Party to at all times maintain a Cash Management
System that complies with Schedule 3 of the Senior Subsidiary Security
Agreement. The Borrower will cause each Subsidiary Loan Party to comply with
each obligation thereof under the Cash Management System. The Borrower will
cause each Subsidiary Loan Party to comply with each of its obligations under
the Cash Management System, and shall cause each Subsidiary Loan Party to use
its best efforts to cause any applicable third party to effectuate the Cash
Management System. Notwithstanding the foregoing, the Borrower shall only be
required to cause Holdings and its subsidiaries to comply with the foregoing as
soon as reasonably practicable after the Second Restatement Effective Date (but
in any event by the Borrowing Base Date).
(b) Each party hereto authorizes the Administrative Agent and
the Collateral Agent to (i) permit the creation by the Grantors of accounts that
receive payments in respect of the Securitization Assets and/or Factoring Assets
(but not other payments) and (ii) release the security interest of the
Collateral Agent for the ratable benefit of the Senior Secured Parties in the
Lockbox Account, the Governmental Lockbox Account and/or any accounts created
pursuant to clause (i) of this paragraph from the Cash Management System and
transfer control of the Lockbox Account, the Governmental Lockbox Account and/or
any accounts created pursuant to clause (i) of this paragraph to (A) any Person
in connection with a Factoring Transaction permitted by this Agreement for so
long as a Factoring Transaction is ongoing or (B) any Person for the benefit of
holders of Third Party Interests in respect of a Securitization permitted by
this Agreement for as long as any Third Party Interests are outstanding.
SECTION 5.17. Termination of Factoring Transactions. If an
Event of Default has occurred and the Collateral Agent has elected to exercise
any remedies under the Senior Collateral Documents as a result thereof, the
Borrower shall, and shall cause each of its Subsidiaries to, terminate all
existing Factoring Transactions and cease to engage in any further Factoring
Transactions; provided, however, that neither the Borrower nor any such
Subsidiary shall be required hereby to repurchase any Factoring Assets
previously sold, transferred or otherwise conveyed pursuant to any such
Factoring Transaction.
ARTICLE VI
Negative Covenants
------------------
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit have expired, terminated or been cash
collateralized and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:
SECTION 6.01. Indebtedness; Certain Equity Securities. (a) The
Borrower will not, and will not permit any Subsidiary to, create, incur, assume
or permit to exist any Indebtedness, any Attributable Debt in respect of any
Sale and Leaseback Transaction or any Third Party Interests except:
(i) Indebtedness under the Senior Loan Documents;
(ii) unsecured Indebtedness of the Borrower, including the
9.25% Notes, that is not Guaranteed by any Subsidiary, that does not mature
or require scheduled payments of principal prior to the date that is three
months after the Tranche 2 Term Maturity Date, and that has covenants and
events of default which are determined in good faith by the senior
management of the Borrower to be on market terms, and Refinancing
Indebtedness issued in respect of such Indebtedness;
(iii) Indebtedness of the Borrower and the Subsidiaries in
respect of intercompany Investments permitted under Section 6.04; provided
that such Indebtedness is subordinated to the Senior Obligations (and,
prior to the Borrowing Base Date, the Interim Obligations) pursuant to
terms substantially the same as those forth on Annex 2 hereto;
(iv) Indebtedness (other than Second Priority Debt and the
9.25% Notes) outstanding on the Second Restatement Effective Date under the
Effective Date Indentures; provided that no Subsidiary Loan Party will have
any liability with respect thereto except under and pursuant to the Second
Priority Collateral Documents;
(v) Second Priority Debt in an aggregate principal amount,
together with the aggregate principal amount of Indebtedness incurred
pursuant to clause (vi)(B) of this Section 6.01(a), not in excess of
$1,800,000,000 at any time outstanding;
(vi) unsecured Indebtedness of the Borrower (A) outstanding on
the Original Restatement Effective Date (and any Refinancing Indebtedness
in respect thereof) or (B) incurred after the Original Restatement
Effective Date that is (1) not in excess of $750,000,000 at any time
outstanding, and (2) together with the aggregate principal amount of
Indebtedness incurred pursuant to clause (v) of this Section 6.01(a), not
in excess of $1,800,000,000 at any time outstanding;
(vii) Indebtedness secured by Liens on real property or
Attributable Debt incurred in connection with Sale and Leaseback
Transactions involving real property; provided that any such Indebtedness,
or any such lease entered into in connection with the Sale and Leaseback
Transaction giving rise to such Attributable Debt, shall have a maturity
date or termination date, as the case may be, after the date that is three
months after the Xxxxxxx 0 Xxxx Xxxxxxxx Date; and provided further that
the aggregate principal amount of Indebtedness and Attributable Debt
incurred pursuant to this clause (vii) shall not exceed $600,000,000 at any
time outstanding;
(viii) Refinancing Indebtedness issued in respect of
Indebtedness or Attributable Debt permitted under clauses (iv), (xiii) and
(xvi);
(ix) endorsements of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(x) Indebtedness for borrowed money and Capital Lease
Obligations existing on the Second Restatement Effective Date (other than
Second Priority Debt and Indebtedness referred to in clauses (ii) and (iv)
above) and set forth on Schedule 6.01(a)(x), but not any extensions,
renewals, refinancings or replacements of such Indebtedness;
(xi) Capital Lease Obligations with respect to leases existing
on the Second Restatement Effective Date that were accounted for as
operating leases on the Original Restatement Effective Date and thereafter
reclassified as Capital Lease Obligations;
(xii) Indebtedness (including Capital Lease Obligations) and
Attributable Debt in respect of Sale and Leaseback Transactions in respect
of equipment financing or leasing in the ordinary course of business of the
Borrower and the Subsidiaries consistent with past practices;
(xiii) purchase money Indebtedness (including Capital Lease
Obligations) and Attributable Debt in respect of Sale and Leaseback
Transactions in each case incurred to finance the acquisition, development,
construction or opening of any Store after the Second Restatement Effective
Date; provided that such Indebtedness or Attributable Debt (A) is incurred
not later than 24 months following the completion of the acquisition,
development, construction or opening of such Store, (B) any Lien securing
such Indebtedness or Attributable Debt is limited to the Store financed
with the proceeds thereof, and (C) is incurred in connection with a
transaction that is substantially consistent with the business plan of the
Borrower provided to the Lenders prior to the Second Restatement Effective
Date;
(xiv) (A) Third Party Interests issued by Securitization
Vehicles in Securitizations permitted by Section 6.05, and Indebtedness
represented by such Third Party Interests and (B) Indebtedness of the
Borrower or its Subsidiaries that may be deemed to exist solely by virtue
of a Factoring Transaction permitted by this Agreement; provided that the
aggregate amount of all Securitizations plus the aggregate amount of
Indebtedness permitted by clause (B) shall not exceed $950,000,000 at any
time outstanding;
(xv) Indebtedness of Subsidiaries other than Securitization
Vehicles that may be deemed to exist solely by virtue of Standard
Securitization Undertakings entered into by such Subsidiaries as sellers of
Securitization Assets in Securitizations permitted by paragraph (xiv)
above;
(xvi) Indebtedness under the New Notes, the Xxxx Xxxxx
Subordinated Notes and/or the Bridge Facility, in an aggregate principal
amount not in excess of $1,720,000,000; and
(xvii) Guarantees of Subsidiaries of the 9.25% Notes.
(b) The Borrower will not, nor will it permit any Subsidiary
to, issue any Preferred Stock or other preferred Equity Interests, other than
Qualified Preferred Stock of the Borrower, Third Party Interests issued by
Securitization Vehicles, and other preferred Equity Interests issued and
outstanding on the Second Restatement Effective Date and set forth on Schedule
6.01(b).
SECTION 6.02. Liens. (a) The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:
(i) Liens created under the Senior Loan Documents;
(ii) Permitted Encumbrances;
(iii) any Lien created or permitted by the Second Priority
Collateral Documents with respect to the Second Priority Debt Obligations
in favor of the Second Priority Debt Parties; provided that (A) such Lien
is created simultaneously with or after an equivalent Lien under the Senior
Collateral Documents on the applicable Senior Collateral, (B) such Lien is
subject to the Collateral Trust and Intercreditor Agreement, (C) any Lien
on the proceeds of such Senior Collateral is permitted by the Collateral
Trust and Intercreditor Agreement and (D) such Second Priority Debt
Obligations are permitted to be incurred under Section 6.01(a);
(iv) Liens on the Interim Collateral securing the New Notes
and/or the Bridge Facility; provided that (A) such liens are created
simultaneously with or after an equivalent Lien under the Interim
Collateral Documents on such Interim Collateral and (B) such Liens are
subject to the Interim Intercreditor Agreement;
(v) any Lien securing Indebtedness of a Subsidiary owing to a
Subsidiary Loan Party;
(vi) any Lien securing Attributable Debt and other payment
obligations under leases incurred in connection with a Sale and Leaseback
Transaction permitted pursuant to Section 6.01(a)(xii) or (xiii) and
Section 6.06; provided that such Liens attach only to the equipment, real
property or other assets subject to such Sale and Leaseback Transaction;
(vii) any Lien on real property securing Indebtedness
permitted and incurred under Section 6.01(a)(vii);
(viii) any Lien securing Capital Lease Obligations permitted
and incurred under Section 6.01(a)(xi), provided that such Lien is limited
to the equipment or other property subject to leases existing on the
Original Restatement Effective Date that were subsequently reclassified as
Capital Lease Obligations;
(ix) any Lien on equipment securing Indebtedness incurred to
finance such equipment pursuant to Section 6.01(a)(xii);
(x) Liens securing Indebtedness permitted and incurred under
Section 6.01(a)(xiii), provided that such Liens apply only to the property
or other assets acquired, developed or constructed, as the case may be,
with the proceeds of such Indebtedness;
(xi) Liens existing on the Second Restatement Effective Date
and identified on Schedule 6.02(xi); provided, that such Liens do not
attach to any property other than the property identified on such Schedule
and secure only the obligations they secured on the Second Restatement
Effective Date;
(xii) any Lien (A) on Net Cash Proceeds that are required to
be applied to the repayment of Second Priority Debt Obligations in
accordance with the Collateral Trust and Intercreditor Agreement or (B)
that arises pursuant to any provisions in any Second Priority Debt Document
equivalent to Section 10.14 of the 12.5% Note Indenture;
(xiii) Liens securing Refinancing Indebtedness permitted under
Section 6.01(a), to the extent that the Indebtedness being refinanced was
originally secured in accordance with this Section 6.02; provided that such
Lien does not apply to any additional property or assets of the Borrower or
any Subsidiary (other than (i) property or assets acquired after the
issuance or incurrence of such Refinancing Indebtedness that would have
been subject to the Lien securing refinanced Indebtedness if such
Indebtedness had not been refinanced, (ii) additions to the property or
assets subject to the Lien and (iii) the proceeds of the property or assets
subject to the Lien);
(xiv) Liens on property or assets acquired pursuant to Section
6.04(vi), (x) or (xiii); provided that (A) such Liens apply only to the
property or other assets subject to such Liens at the time of such
acquisition and (B) such Liens existed at the time of such acquisition and
were not created in contemplation thereof;
(xv) put and call agreements with respect to Equity Interests
acquired or created in connection with Joint Ventures permitted pursuant to
Section 6.04(x) or (xiii); provided that neither the Borrower nor any
Subsidiary shall be permitted to enter into any such agreement that
requires or, upon the occurrence of any event or condition, contingent or
otherwise, may require the Borrower or any Subsidiary Loan Party (or, prior
to the Borrowing Base Date, Holdings or any of its subsidiaries) to
repurchase Equity Interests, Indebtedness or otherwise expend any amounts
on or prior to the Xxxxxxx 0 Xxxx Xxxxxxxx Date (other than as permitted
under Section 6.04(x) or (xiii));
(xvi) (A) Liens on Securitization Assets transferred or
purported to be transferred to Securitization Vehicles securing Third Party
Interests issued in Securitizations permitted by Sections 6.01 and 6.05,
(B) Liens on account receivables not purchased by a Securitization Vehicle,
which Liens (i) are granted in connection with Securitizations permitted by
Sections 6.01 and 6.05, (ii) are granted pursuant to Standard
Securitization Undertakings, (iii) are perfected prior to an Event of
Default and (iv) secure Third Party Interests issued in Securitizations
permitted by Sections 6.01 and 6.05 and (C) Liens on Factoring Assets
transferred or purported to be transferred in Factoring Transactions
permitted by this Agreement; and
(xvii) Liens (other than Liens securing Indebtedness) that are
not otherwise permitted under any other provision of this Section 6.02(a);
provided, that the fair market value of the property and assets with
respect to which such Liens are granted shall not at any time exceed
$40,000,000.
(b) Notwithstanding anything in clause (a) of this Section
6.02, the Borrower may not grant or otherwise permit to exist Liens on any cash
or cash equivalents that secure the Senior Obligations or are otherwise held by
the Lenders or the Administrative Agent pursuant to Section 2.05(k) or 9.15.
SECTION 6.03. Fundamental Changes. Without limiting the
restrictions on Business Acquisitions set forth in Section 6.04, the Borrower
will not, and will not permit any Subsidiary Loan Party (or, prior to the
Borrowing Base Date, Holdings or any of its subsidiaries) to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Person may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, provided, that
if such other Person is a Subsidiary Loan Party, it shall have no assets that
constitute Senior Collateral, (ii) any Person may merge into a Subsidiary Loan
Party in a transaction in which such Subsidiary Loan Party is the surviving
corporation and (iii) any Subsidiary Loan Party may liquidate or dissolve if
such liquidation or dissolution is not materially disadvantageous to the
Lenders; provided that (A) any such merger involving a Person that is not a
wholly-owned Subsidiary immediately prior to such merger shall not be permitted
to engage in such merger unless also permitted by Section 6.04 and (B) the
Borrower and the applicable Subsidiary Loan Party shall comply with the
provisions of Section 5.11 with respect to any Subsidiary acquired pursuant to
this Section 6.03.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. The Borrower will not, and will not permit any of the Subsidiaries
to, make any Investment in, or Guarantee any obligations of, any other Person,
or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person constituting a business unit,
except:
(i) Permitted Investments;
(ii) Investments of the Borrower, the Subsidiary Loan Parties
and Holdings and its subsidiaries set forth on Schedule 6.04;
(iii) Guarantees consisting of Indebtedness permitted by
Section 6.01;
(iv) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(v) Investments by (A) the Borrower or any Subsidiary Loan
Party in Subsidiary Loan Parties and (B) prior to the Borrowing Base Date,
Holdings in its subsidiaries and subsidiaries of Holdings in Holdings or
any other subsidiary of Holdings; provided that the Borrower and such
Subsidiary Loan Party or Holdings and such subsidiary of Holdings, as the
case may be, shall comply with the applicable provisions of Section 5.11
with respect to any newly formed Subsidiary;
(vi) Investments consisting of non-cash consideration received
in connection with any Asset Sale permitted by Section 6.05;
(vii) Investments by the Subsidiaries in the Borrower;
provided that the proceeds of such Investments are used for a purpose set
forth in Section 5.10(b);
(viii) prior to the Borrowing Base Date, Investments by the
Borrower or any Subsidiary Loan Party in Holdings and its subsidiaries
(including the assumption of the Xxxx Xxxxx Subordinated Notes);
(ix) usual and customary loans and advances to employees,
officers and directors of the Borrower and the Subsidiaries;
(x) Investments by the Borrower or any of the Subsidiaries in
Joint Ventures in an amount not to exceed $15,000,000 in the aggregate in any
fiscal year of the Borrower;
(xi) Investments in charitable foundations organized under
Section 501(c) of the Code in an amount not to exceed $7,500,000 in the
aggregate in any calendar year;
(xii) any Investment consisting of a Hedging Agreement
permitted by Section 6.07;
(xiii) Business Acquisitions and Investments that are not
otherwise permitted under any other provision of this Section 6.04;
provided that (A) at the time of such Business Acquisition or Investment no
Default has occurred and is continuing or would result therefrom and (B)
immediately after giving effect to any such Business Acquisition or
Investment, the Revolver Availability is greater than $100,000,000;
(xiv) Investments consisting of Sellers' Retained Interests in
Securitizations permitted by Sections 6.01 and 6.05; and
(xv) (A) Investments by the Borrower or a Subsidiary in
connection with a Securitization permitted pursuant to this Agreement and
(B) any Investment or other Guarantee that may be deemed made by the
Borrower due to the fact that a Parent Undertaking has been entered into in
respect of a Securitization permitted pursuant to the Agreement.
SECTION 6.05. Asset Sales. The Borrower will not, and will not
permit any of the Subsidiary Loan Parties (and, prior to the Borrowing Base
Date, Holdings or any of its subsidiaries) to, conduct any Asset Sale, including
any sale of any Equity Interest owned by it and any sale of Securitization
Assets in connection with a Securitization, nor will the Borrower permit any of
the Subsidiary Loan Parties (and, prior to the Borrowing Base Date, Holdings or
any of its subsidiaries) to issue any additional Equity Interest in such
Subsidiary, except:
(i) Permitted Dispositions;
(ii) any Asset Sale (other than a Sale and Leaseback
Transaction, the issuance of Equity Interests, sales or contributions of
Securitization Assets in a Securitization or sales of Factoring Assets in
Factoring Transactions) for fair value not in the ordinary course of
business;
(iii) any sale, transfer or disposition to a third party of
Stores, leases and prescription files closed at substantially the same time
as, and entered into as part of a single related transaction with, the
purchase or other acquisition from such third party of Stores, leases and
prescription files of a substantially equivalent value;
(iv) any issuance of (A) Equity Interests of any Subsidiary
Loan Party by such Subsidiary Loan Party to the Borrower or any other
Subsidiary Loan Party and (B) prior to the Borrowing Base Date, any
issuance of Equity Interests of Holdings by Holdings to the Borrower and
any issuance of Equity Interests of any subsidiary of Holdings by such
subsidiary to Holdings or any other subsidiary of Holdings;
(v) any Sale and Leaseback Transaction permitted pursuant to
Section 6.01(a)(vii), (xii) or (xiii) and Section 6.06;
(vi) sales or contributions of Securitization Assets to
Securitization Vehicles in connection with Securitizations, provided that
(a) each such Securitization is effected on market terms as determined in
good faith by the senior management of the Borrower, (b) the aggregate
amount of all such Securitizations plus the aggregate amount of
Indebtedness permitted by Section 6.01(a)(xiv)(B) does not exceed
$950,000,000 at any time outstanding, (c) the aggregate amount of the
Sellers' Retained Interests in such Securitizations does not exceed an
amount at any time outstanding that is customary for similar transactions
and (d) the proceeds to each such Securitization Vehicle from the issuance
of Third Party Interests are applied substantially simultaneously with
receipt thereof to the purchase from Subsidiary Loan Parties of
Securitization Assets; provided that, in the case of clause (d), the
Securitization Vehicle may use a portion of such proceeds to pay a
customary collection agent fee in connection with such Securitization to
the extent such fee is permitted pursuant to Section 6.09(f);
(vii) unless otherwise restricted by Section 5.17, sales of
Factoring Assets in connection with Factoring Transactions; provided that
(i) a Factoring Notice with respect to such Factoring Transaction has been
delivered by the Borrower to the Administrative Agent and (ii) each such
Factoring Transaction is effected on market terms as determined in good
faith by the senior management of the Borrower; and
(viii) the sale, transfer or other disposition of assets or
properties of Holdings and its subsidiaries required by any Governmental
Authority as a condition to its consent or forbearance from opposing the
consummation of the Transactions.
provided that, with respect to sales, transfers or dispositions under clause
(ii), (v) or (viii), and with respect to any net consideration received from any
transaction described in clause (iii), (1) at least 75% of the consideration
therefor shall consist of cash and (2) the aggregate fair market value of all
assets sold, transferred or disposed of in reliance upon clauses (ii) and (v)
shall not exceed $200,000,000 in any fiscal year of the Borrower; provided
further that subject to the condition set forth in clause (1) above, additional
assets with an aggregate fair market value not in excess of $450,000,000 may be
sold, transferred or disposed of in any fiscal year of the Borrower in reliance
upon clauses (ii) and (v) if the Borrower reinvests, or causes the applicable
Subsidiary Loan Party (or, prior to the Borrowing Base Date, if applicable,
Holdings or any of its subsidiaries) to reinvest, Net Cash Proceeds received in
connection therewith in Business Acquisitions or the purchase of Stores or
prescription files within 365 days after the receipt thereof.
SECTION 6.06. Sale and Leaseback Transactions. The Borrower
will not, and will not permit any of the Subsidiaries to, enter into any Sale
and Leaseback Transaction, except for Sale and Leaseback Transactions permitted
by and effected pursuant to Section 6.01(a)(vii), (xii) or (xiii) which do not
result in Liens other than Liens permitted pursuant to Section 6.02(a).
SECTION 6.07. Hedging Agreements. The Borrower will not, and
will not permit any of the Subsidiaries to, incur or at any time be liable with
respect to any monetary liability under any Hedging Agreements, unless such
Hedging Agreements (i) are entered into for bona fide hedging purposes of the
Borrower, any Subsidiary Loan Party or, prior to the Borrowing Base Date,
Holdings or any of its subsidiaries (as determined in good faith by the senior
management of the Borrower), (ii) correspond in terms of notional amount,
duration, currencies and interest rates, as applicable, to Indebtedness of the
Borrower or any Subsidiary Loan Party (or, prior to the Borrowing Base Date,
Holdings or any of its subsidiaries) permitted to be incurred under Section
6.01(a) or to business transactions of the Borrower and the Subsidiary Loan
Parties (and, prior to the Borrowing Base Date, Holdings and its subsidiaries)
on customary terms entered into in the ordinary course of business and (iii) do
not exceed an amount equal to the aggregate principal amount of the Senior
Obligations and the Second Priority Debt Obligations (and, prior to the
Borrowing Base Date, the Interim Obligations).
SECTION 6.08. Restricted Payments; Certain Payments of
Indebtedness. (a) The Borrower will not, nor will it permit any Subsidiary to,
declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, or incur any obligation (contingent or otherwise) to do so, except (i)
the Borrower may declare and pay dividends with respect to its common stock or
Qualified Preferred Stock payable solely in additional shares of its common
stock or Qualified Preferred Stock, (ii) Subsidiaries (other than those directly
owned, in whole or part, by the Borrower) may declare and pay dividends ratably
with respect to their common stock, (iii) the Borrower may declare and pay cash
dividends with respect to its common stock and effect repurchases, redemptions
or other Restricted Payments with respect to its common stock, together in an
aggregate amount in any fiscal year of the Borrower not to exceed 50% of
Consolidated Net Income (if positive) for the immediately preceding fiscal year
of the Borrower; provided that immediately prior and after giving effect to any
such payment no Default or Event of Default shall have occurred and be
continuing and, immediately after giving effect to any such payment, the
Borrower shall have Revolver Availability of more than $100,000,000, (iv) the
Borrower may pay cash dividends in an amount not to exceed $60,000,000 in any
fiscal year of the Borrower with respect to the Series E Preferred Stock, Series
I Preferred Stock or any other Qualified Preferred Stock; provided that (x)
immediately prior and after giving effect to any such payment, no Default or
Event of Default shall have occurred and be continuing and (y) only so long as a
Financial Covenant Effectiveness Period is then occurring, the Consolidated
Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters
most recently ended on or prior to the date of such payment, calculated on a pro
forma basis as if such payment were made on the last day of such period (and
excluding any such payments previously made pursuant to this clause during such
four quarter period but attributed for purposes of this calculation to the last
day of a prior period which day does not occur in such four quarter period) is
not less than the ratio applicable to such period of four fiscal quarters under
Section 6.12, (v) the Borrower and the Subsidiaries may make Restricted Payments
consisting of the repurchase or other acquisition of shares of, or options to
purchase shares of, capital stock of the Borrower or any of its Subsidiaries
from employees, former employees, directors or former directors of the Borrower
or any Subsidiary (or their permitted transferees), in each case pursuant to
stock option plans, stock plans, employment agreements or other employee benefit
plans approved by the board of directors of the Borrower; provided that no
Default has occurred and is continuing; and provided further that the aggregate
amount of such Restricted Payments made after the Original Restatement Effective
Date shall not exceed $10,000,000, (vi) the Subsidiaries may declare and pay
cash dividends to the Borrower; provided that the Borrower shall, within a
reasonable time following receipt of any such payment, use all of the proceeds
thereof for a purpose set forth in Section 5.10(b) (including the payment of
dividends required or permitted pursuant to this Section 6.08(a)), (vii) the
Borrower and the Subsidiaries may declare and pay cash dividends with respect to
the Equity Interests set forth on Schedule 6.08(a) to the extent, and only to
the extent, required pursuant to the terms of such Equity Interests or any other
agreement in effect on the Effective Date and (viii) so long as no Default or
Event of Default has occurred and is continuing or would result therefrom, the
Borrower may redeem or repurchase shares of the Borrower's and/or its
Subsidiaries' (including Rite Aid Lease Management Company's) Preferred Stock
(A) solely with Net Cash Proceeds received by the Borrower from issuances of its
common stock after the Original Restatement Effective Date, provided that any
such repurchase or redemption is effected within 150 days after the receipt of
such proceeds or (B) with other funds available to the Borrower if, immediately
after giving effect to any such redemption or repurchase, the Borrower shall
have Revolver Availability of more than $100,000,000.
(b) The Borrower will not, nor will it permit any Subsidiary
to, make or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) of or in respect of
principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any Indebtedness, except:
(i) payments or prepayments of Indebtedness created under the
Senior Loan Documents;
(ii) payments of regularly scheduled interest and principal
payments as and when due in respect of any Indebtedness permitted pursuant
to Section 6.01(a);
(iii) (A) prepayments of Indebtedness permitted pursuant to
Section 6.01(a)(v) or (vi) with the proceeds of Indebtedness permitted
pursuant to Section 6.01(a)(v) or (vi) and (B) prepayments of Indebtedness
permitted pursuant to Section 6.01(a)(vii) with the proceeds of
Indebtedness permitted pursuant to Section 6.01(a)(vii);
(iv) payments of secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets securing
such Indebtedness;
(v) provided no Default has occurred and is continuing or
would result therefrom, Optional Debt Repurchases of Inside Indebtedness
and, to the extent permitted by paragraph (c) of this Section, Optional
Debt Repurchases of Outside Indebtedness;
(vi) repurchases, exchanges or redemptions of Indebtedness for
consideration consisting solely of common stock of the Borrower or
Qualified Preferred Stock;
(vii) prepayments of Capital Lease Obligations in connection
with the sale, closing or relocation of Stores;
(viii) prepayments of Indebtedness in connection with the
incurrence of Refinancing Indebtedness permitted pursuant to Section
6.01(a)(ii) or (viii); and
(ix) prepayments of Indebtedness permitted pursuant to Section
6.01(a)(iii), if permitted by the subordination provisions applicable to
such Indebtedness; and
(x) unless an Event of Default shall have occurred and be
continuing, mandatory prepayments of Indebtedness and interest under the
Xxxx Xxxxx Subordinated Notes (if required by the terms thereof as in
effect on the Second Restatement Effective Date), the New Notes and/or the
Bridge Facility.
(c) The Borrower and the Subsidiaries will not effect Optional
Debt Repurchases of Outside Indebtedness unless immediately prior and after
giving effect to any such Optional Debt Repurchases, (x) no Default or Event of
Default shall have occurred and be continuing and (y) the Borrower shall have
Revolver Availability of more than $100,000,000.
SECTION 6.09. Transactions with Affiliates. The Borrower will
not, and will not permit any Subsidiary to, directly or indirectly, sell, lease
or otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except:
(a) payment of compensation to directors, officers, and
employees of the Borrower and the Subsidiaries in the ordinary course of
business;
(b) payments in respect of transactions required to be made
pursuant to agreements or arrangements in effect on the Second Restatement
Effective Date and set forth on Schedule 6.09;
(c) transactions involving the acquisition of inventory in the
ordinary course of business; provided that (i) the terms of such
transaction are (A) set forth in writing, (B) in the best interests of the
Borrower or such Subsidiary, as the case may be, and (C) no less favorable
to the Borrower or such Subsidiary, as the case may be, than those that
could be obtained in a comparable arm's length transaction with a Person
that is not an Affiliate of the Borrower or a Subsidiary and, (ii) if such
transaction involves aggregate payments or value in excess of $75,000,000,
the board of directors of the Borrower (including a majority of the
disinterested members of the board of directors) approves such transaction
and, in its good faith judgment, believes that such transaction complies
with clauses (i)(B) and (C) of this paragraph;
(d) (i) transactions between or among the Borrower and/or one
or more Subsidiary Loan Parties, (ii) sales of Securitization Assets to
Securitization Vehicles in Securitizations permitted by Sections 6.01 and
6.05, (iii) prior to the Borrowing Base Date, transactions between or among
(A) the Borrower or any Subsidiary Loan Party, on one hand, and Holdings or
any of its subsidiaries, on the other hand, (B) Holdings, on one hand, and
any subsidiary of Holdings, on the other hand, and (C) any subsidiary of
Holdings, on one hand, and any other subsidiary of Holdings, on the other
hand and (iv) transactions under, involving, related to and/or in
connection with the Acquisition and documents related thereto including,
(A) the Stock Purchase Agreement, dated as of August 23, 2006, by and
between the Borrower and The Xxxx Xxxxx Group (PJC) Inc., (B) the
Stockholder Agreement, dated as of August 23, 2006, between the Borrower,
The Xxxx Xxxxx Group (PJC) Inc., Xxxx Xxxxx, Xxxxxxxx Xxxxx, Xxxxxxxx X.
Xxxxx, Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxx Xxxxx and Xxxxx-Xxxxx Xxxxx and
(C) the Registration Rights Agreement, dated as of August 23, 2006, by and
between the Borrower and The Xxxx Xxxxx Group (PJC) Inc.; provided that the
terms of the transactions referred to in clauses (iii) and (iv) above are
in the best interest of the Borrower, such Subsidiary Loan Party or
Holdings or any such subsidiary of Holdings which is a party thereto, as
the case may be;
(e) issuances of Preferred Stock of the Borrower (and
transactions that are necessary to effect such issuances) in respect of
pay-in-kind obligations of the Borrower relating to Series G Preferred
Stock or Series H Preferred Stock; and
(f) any other Affiliate transaction not otherwise permitted
pursuant to this Section 6.09; provided that (i) the terms of such
transaction are (A) set forth in writing, (B) in the best interests of the
Borrower or such Subsidiary, as the case may be, and (C) no less favorable
to the Borrower or such Subsidiary, as the case may be, than those that
could be obtained in a comparable arm's length transaction with a Person
that is not an Affiliate of the Borrower or a Subsidiary, (ii) if such
transaction involves aggregate payments or value in excess of $25,000,000
in any consecutive 12-month period, the board of directors of the Borrower
(including a majority of the disinterested members of the board of
directors) approves such transaction and, in its good faith judgment,
believes that such transaction complies with clauses (i)(B) and (C) of this
paragraph and (iii) if such transaction (other than any transaction
necessary for the redemption or exchange of the Borrower's Series G
Preferred Stock or Series H Preferred Stock) involves aggregate payments or
value in excess of $50,000,000 in any consecutive 12-month period, the
Borrower obtains a written opinion from an independent investment banking
firm or appraiser of national prominence, as appropriate, to the effect
that such transaction is fair to the Borrower or such Subsidiary, as the
case may be, from a financial point of view.
SECTION 6.10. Restrictive Agreements. (a) The Borrower will
not, and will not permit any Subsidiary to, enter into any agreement which
imposes a limitation on the incurrence by the Borrower and the Subsidiaries of
Liens that (i) would restrict any Subsidiary from granting Liens on any of its
assets (including assets in addition to the then-existing Senior Collateral and,
prior to the Borrowing Base Date, the then-existing Interim Collateral, to
secure the Senior Obligations, the Second Priority Obligations and, prior to the
Borrowing Base Date, the Interim Obligations) or (ii) is more restrictive, taken
as a whole, than the limitation on Liens set forth in this Agreement except, in
each case, (A)(u) the Senior Loan Documents, (w) agreements with respect to
Indebtedness secured by Liens permitted by Section 6.02(a) restricting the
ability to transfer or grant Liens on the assets securing such Indebtedness, (x)
agreements with respect to Second Priority Debt (1) containing provisions
described in clauses (i) and/or (ii) above that are not materially more
restrictive, taken as a whole, than those of the 9.5% Note Indenture as in
effect on the Second Restatement Effective Date or (2) requiring that such
Indebtedness be secured by assets in respect of which Liens are granted to
secure other Indebtedness (provided that in the case of any such assets subject
to a Senior Lien, such Indebtedness will be required to be secured only with a
Second Priority Lien); provided, however, that the Second Priority Debt
Documents relating to any such Indebtedness may not contain terms requiring any
Liens be granted with respect to Senior Collateral consisting of cash or
Permitted Investments pledged pursuant to Section 2.05(j) of this Agreement or
Section 5 of the Senior Subsidiary Guarantee Agreement or otherwise required to
be provided upon the occurrence of a default under any bank credit facility to
secure obligations in respect of letters of credit issued thereunder, (y)
agreements with respect to unsecured Indebtedness governed by indentures or by
credit agreements or note purchase agreements with institutional investors
permitted by this Agreement containing terms that are not materially more
restrictive, taken as a whole, than those of the 9.25% Note Indenture as in
effect on the Second Restatement Effective Date and (z) the Xxxx Xxxxx
Subordinated Notes, the New Notes and/or the Bridge Facility, (B) customary
restrictions contained in purchase and sale agreements limiting the transfer of
the subject assets pending closing, (C) customary non-assignment provisions in
leases and other contracts entered into in the ordinary course of business, (D)
pursuant to applicable law, (E) agreements in effect as of the Second
Restatement Effective Date and not entered into in contemplation of the
transactions effected in connection with the closing of the Original Agreement,
(F) the Indentures, in each case when originally entered into, (G) any
restriction existing under agreements relating to assets acquired by the
Borrower or a Subsidiary in a transaction permitted hereby; provided that such
agreements existed at the time of such acquisition, were not put into place in
anticipation of such acquisition and are not applicable to any assets other than
assets so acquired, (H) any restriction existing under any agreement of a Person
acquired as a Subsidiary pursuant to Section 6.03 or Section 6.04(a)(xiii);
provided that any such agreement existed at the time of such acquisition, was
not put into place in anticipation of such acquisition and was not applicable to
any Person or assets other than the Person or assets so acquired and (I)
customary restrictions and conditions contained in agreements relating to
Securitizations permitted hereunder, provided that such restrictions and
conditions apply only to Securitization Vehicles and to the Securitization
Assets that are subject to such Securitizations.
(b) The Borrower will not, and will not permit any Subsidiary
to, enter into or suffer to exist or become effective any consensual encumbrance
or restriction on the ability of any Subsidiary to (i) make Restricted Payments
in respect of any Equity Interests of such Subsidiary held by, or pay any
Indebtedness owed to, the Borrower or any other Subsidiary, (ii) make any
Investment in the Borrower or any other Subsidiary, or (iii) transfer any of its
assets to the Borrower or any other Subsidiary, except for (A) any restriction
existing under (1) the Senior Loan Documents or existing on the Second
Restatement Effective Date under the Indentures, (2) the indenture or agreement
governing any Refinancing Indebtedness in respect of Indebtedness set forth in
clause (1) above or (3) agreements with respect to Indebtedness permitted by
this Agreement containing provisions described in clauses (i), (ii) and (iii)
above that are not materially more restrictive, taken as a whole, than those of
the 9.5% Note Indenture or, alternatively, the 9.25% Note Indenture, in each
case as in effect on the Second Restatement Effective Date, (B) customary
non-assignment provisions in leases and other contracts entered into in the
ordinary course of business, (C) as required by applicable law, (D) customary
restrictions contained in purchase and sale agreements limiting the transfer of
the subject assets pending closing, (E) any restriction existing under
agreements relating to assets acquired by the Borrower or a Subsidiary in a
transaction permitted hereby; provided that such agreements existed at the time
of such acquisition, were not put into place in anticipation of such acquisition
and are not applicable to any assets other than assets so acquired, (F) any
restriction existing under any agreement of a Person acquired as a Subsidiary
pursuant to Section 6.03 or Section 6.04(a)(xiii); provided any such agreement
existed at the time of such acquisition, was not put into place in anticipation
of such acquisition and was not applicable to any Person or assets other than
the Person or assets so acquired, (G) agreements with respect to Indebtedness
secured by Liens permitted by Section 6.02 that restrict the ability to transfer
the assets securing such Indebtedness, (H) customary restrictions and conditions
contained in agreements relating to Securitizations permitted hereunder,
provided that such restrictions and conditions apply only to Securitization
Vehicles and to the Securitization Assets that are subject to such
Securitizations and (I) any restriction existing under the Xxxx Xxxxx
Subordinated Notes, the New Notes and/or the Bridge Facility.
SECTION 6.11. Amendment of Material Documents. (a) The
Borrower will not, nor will it permit any Subsidiary to, amend, modify or waive
any Second Priority Security Document or any of its rights thereunder without
the consent of the Collateral Agent, other than modifications to such agreements
in connection with (i) the joinder of additional Subsidiary Loan Parties
effected by the execution of supplements to such agreements and (ii) the
inclusion of additional Second Priority Debt permitted pursuant to Section
6.01(a)(v) constituting Secured Obligations (as defined in the Second Priority
Security Agreement) under such agreements. The Borrower will not, nor will it
permit any Subsidiary to, amend, modify or waive any instrument governing the
New Notes, the Bridge Facility or the Xxxx Xxxxx Subordinated Notes and any
related security documents, or any of its rights under any of the foregoing
without the consent of the Collateral Agent, other than amendments,
modifications and waivers that are not material and adverse to the interests of
the Lenders.
(b) The Borrower will not, and will not permit any Subsidiary
party to the Intercompany Inventory Purchase Agreement to, amend, terminate, or
otherwise modify the Intercompany Inventory Purchase Agreement in any manner
materially adverse to the Lenders or their interests under the Senior Loan
Documents without the prior written approval of the Collateral Agent; provided,
however, that the foregoing shall not limit the Borrower's responsibilities
pursuant to Section 3.2 of the Intercompany Inventory Purchase Agreement.
SECTION 6.12. Consolidated Fixed Charge Coverage Ratio. The
Borrower will not permit the Consolidated Fixed Charge Coverage Ratio for the
period of four consecutive fiscal quarters most recently ended on or prior to
any day during a Financial Covenant Effectiveness Period to be less than the
ratio set forth below opposite the period that includes the last day of such
four quarter period:
Four Fiscal Quarter Period Ending Ratio
--------------------------------- -----
December 3, 2006 through March 3, 2007 1.00 to 1.00
March 4, 2007 through June 2, 2007 1.00 to 1.00
June 3, 2007 through September 1, 2007 1.00 to 1.00
September 2, 2007 through December 1, 2007 1.00 to 1.00
December 2, 2007 through March 1, 2008 1.00 to 1.00
March 2, 2008 through May 31, 2008 1.00 to 1.00
June 1, 2008 through August 30, 2008 1.00 to 1.00
August 31, 2008 through November 29, 2008 1.05 to 1.00
November 30, 2008 through February 28, 2009 1.05 to 1.00
March 1, 2009 through May 30, 2009 1.05 to 1.00
May 31, 2009 through August 29, 2009 1.05 to 1.00
August 30, 2009 through November 28, 2009 1.05 to 1.00
November 29, 2009 through February 27, 2010 1.15 to 1.00
February 28, 2010 through May 29, 2010 1.15 to 1.00
May 30, 2010 through August 28, 2010 1.15 to 1.00
August 29, 2010 through November 27, 2010 1.15 to 1.00
November 28, 2010 through February 26, 2011 1.15 to 1.00
February 27, 2011 through May 28, 2011 1.15 to 1.00
May 29, 2011 through the Xxxxxxx 0 Xxxx Xxxxxxxx Date 1.25 to 1.00
SECTION 6.13. Restrictions on Asset Holdings by the Borrower.
The Borrower will not at any time:
(i) make or hold any Investments other than investments in the
Equity Interests of the Subsidiaries (including any distributions or other
assets received in respect thereto), intercompany advances to Subsidiaries
and Investments permitted by clause (iii) below;
(ii) acquire or hold any Stores, other capital assets,
inventory or accounts receivable, other than any real estate which the
Borrower holds only as lessor and which is leased and operated by another
Person; or
(iii) acquire or hold cash, cash equivalents, Permitted
Investments or balances in bank accounts, other than such amounts as are
reasonably anticipated (at the time so acquired or held) to be utilized
within five Business Days to pay costs, expenses and other obligations of
the Borrower referred to in Section 5.10(b).
SECTION 6.14. Corporate Separateness. The Borrower will, and
will cause each Subsidiary to, take all necessary steps to maintain its identity
as a separate legal entity from other Persons and to make it manifest to third
parties that it is an entity with assets and liabilities distinct from those of
each of other Person.
ARTICLE VII
Events of Default
-----------------
If any of the following events ("Events of Default") shall
occur:
(a) the Borrower shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement when and
as the same shall become due and payable, whether at the due date thereof
or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause (a)
of this Article) payable under this Agreement or any other Senior Loan
Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or
on behalf of the Borrower or any Subsidiary in or in connection with any
Senior Loan Document or any amendment or modification thereof or waiver
thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Senior Loan
Document or any amendment or modification thereof or waiver thereunder,
shall prove to have been incorrect in any material respect when made or
deemed made;
(d) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02(a), 5.10, 5.11,
5.15 or 5.16 or in Article VI;
(e) any Loan Party (and, prior to the Borrowing Base Date,
Holdings or any of its subsidiaries) shall fail to observe or perform any
covenant, condition or agreement contained in any Senior Loan Document
(other than those specified in clause (a), (b) or (d) of this Article), and
such failure shall continue unremedied (i) in the case of covenants
contained in Section 5.08, for five days, (ii) in the case of covenants
contained in Sections 5.01 and 5.02(b), (c) and (f), for 10 days and (iii)
in the case of any other covenant, for a period of 20 days after notice
thereof has been delivered by the Administrative Agent to the Borrower
(which notice shall be given promptly at the request of any Lender);
(f) the Borrower or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, including any obligation to reimburse
letter of credit obligations or to post cash collateral with respect
thereto, when and as the same shall become due and payable or within any
applicable grace period;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; provided that this clause (g)
shall not apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such
Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization
or other relief in respect of the Borrower or any Subsidiary or its
Indebtedness, or of a substantial part of its assets, under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower
or any Subsidiary or for a substantial part of its assets, and, in any such
case, such proceeding or petition shall continue undismissed for 60 days or
an order or decree approving or ordering any of the foregoing shall be
entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or petition described in clause (h)
of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting
any of the foregoing;
(j) the Borrower or any Subsidiary shall become unable to, or
admits in writing its inability or fails to, generally pay its debts as
they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $75,000,000 shall be rendered against the
Borrower, any Subsidiary or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to attach or levy upon any assets of the
Borrower or any Subsidiary to enforce any such judgment;
(l) (i) the Borrower or any ERISA Affiliate shall fail to pay
when due an amount or amounts aggregating in excess of $15,000,000 which it
shall have become liable to pay under Section 302 or Title IV of ERISA; or
notice of intent to terminate a Plan shall be filed under Title IV of ERISA
by the Borrower or any ERISA Affiliate, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate, to impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or to cause a trustee
to be appointed to administer, any Plan; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating
that any Plan must be terminated; or there shall occur a complete or
partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which
could cause the Borrower and/or one or more ERISA Affiliates to incur a
current payment obligation in excess of $75,000,000; or (ii) any other
ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of the
Borrower, the ERISA Affiliates and the Subsidiaries in an aggregate amount
exceeding $75,000,000;
(m) (i) any Lien purported to be created under any Senior
Collateral Document or Interim Collateral Document shall cease to be a
valid and perfected Lien on any material portion of the Senior Collateral
or, prior to the Borrowing Base Date, the Interim Collateral, as the case
may be, with the priority required by the Senior Loan Documents, except as
a result of the sale or other disposition of the applicable Collateral in a
transaction permitted under the Senior Loan Documents, or the Borrower or
any Subsidiary shall so assert in writing, or (ii) any Senior Loan Document
shall become invalid, or the Borrower or any Subsidiary shall so assert in
writing;
(n) a Change in Control shall occur; or
(o) any Subsidiary Loan Party shall amend or revoke any
instruction in the Government Lockbox Account Agreement to any Government
Lockbox Account Bank in respect of a Government Lockbox Account unless (i)
the Administrative Agent shall have given its prior written consent or (ii)
the Government Lockbox Account is then under the control of any other
Person pursuant to Section 5.16;
then, and in every such event (other than an event with respect to the Borrower
or any Subsidiary Loan Party (or, prior to the Borrowing Base Date, Holdings or
any of its subsidiaries) described in clause (h) or (i) of this Article), and at
any time thereafter during the continuance of such event, the Administrative
Agent may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and (ii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrower
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; and in case of any event with respect to the
Borrower or any Subsidiary Loan Party (and, prior to the Borrowing Base Date,
Holdings or any of its subsidiaries) described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
The Agents
----------
Each of the Lenders and each Issuing Bank hereby irrevocably
appoints (i) the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms of the Senior
Loan Documents, together with such actions and powers as are reasonably
incidental thereto and (ii) the Collateral Agent as its agent and authorizes the
Collateral Agent to take such actions on its behalf and to exercise such powers
as are delegated to the Collateral Agent by the terms of the Senior Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.
The financial institutions serving as the Agents hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not an Agent, and such
financial institutions and their Affiliates may accept deposits from, lend money
to and generally engage in any kind of business with the Borrower or any
Subsidiary or any Affiliate of any of the foregoing as if they were not Agents
hereunder.
No Agent shall have any duties or obligations except those
expressly set forth in the Senior Loan Documents. Without limiting the
generality of the foregoing, (a) no Agent shall be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) no Agent shall have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Senior Loan Documents that such Agent is required
to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 2.20 or 9.02) and (c) except as expressly set forth in the
Senior Loan Documents, no Agent shall have any duty to disclose, and no Agent
shall be liable for the failure to disclose, any information relating to the
Borrower or any of the Subsidiaries that is communicated to or obtained by the
financial institution serving as such Agent or any of its Affiliates in any
capacity. No Agent shall be liable for any action taken or not taken by it with
the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 2.20 or 9.02) or in the absence of its own gross negligence
or wilful misconduct (as determined by a court of competent jurisdiction by
final and non-appealable judgment). No Agent shall be deemed to have knowledge
of any Default unless and until written notice thereof is given to such Agent by
the Borrower or a Lender, as applicable, and no Agent shall be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Senior Loan Document, (ii) the
contents of any certificate, report or other document delivered thereunder or in
connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Senior Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Senior Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Senior
Loan Document, other than to confirm receipt of items expressly required to be
delivered to such Agent.
Each Agent shall be entitled to rely upon, and shall not incur
any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. Each Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. Any Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
Each Agent may perform any and all of its duties and exercise
any and all of its rights and powers by or through any one or more sub-agents
appointed by such Agent. Any Agent and any such sub-agent may perform any and
all of its duties and exercise any and all of its rights and powers through
their Related Parties. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Related Parties of any Agent and
any such sub-agent, and shall apply to their activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as an Agent.
Subject to the appointment and acceptance of a successor Agent
as provided in this paragraph, any Agent may resign at any time by notifying the
Lenders, the Issuing Banks and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent may,
on behalf of the Lenders and the Issuing Banks, appoint a successor Agent (which
shall be a financial institution with an office in New York, New York, or an
Affiliate of any such financial institution). Upon the acceptance of its
appointment as an Agent hereunder by a successor, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After an Agent's resignation hereunder,
the provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Agent.
Each Lender acknowledges that it has, independently and
without reliance upon any Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Senior Loan Document or related
agreement or any document furnished hereunder or thereunder.
Each party hereto authorizes the Administrative Agent to enter
into customary intercreditor agreements in connection with Securitizations and
Factoring Transactions permitted under this Agreement.
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) Rite Aid Corporation, 00 Xxxxxx Xxxx Xxxx Xxxx, XX 00000,
Attention of General Counsel (Telecopy No. 000-000-0000; email address:
xxxxx@xxxxxxx.xxx);
(b) if to the Administrative Agent, (i) in respect of matters
of an operational nature, to Citicorp North America, Inc., 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attention of Xxxx Xxxxx Xxxxx (Telecopy No.
000-000-0000; email address: xxxx.x.xxxxxxxxxx@xxxxxxxxx.xxx, with a copy
to xxxxxxxxxxxxxxx@xxxxxxxxx.xxx) and (ii) in respect of all other matters,
to Citicorp North America, Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000,
Attention of Xxxxxxx Xxxx (Telecopy No. 000-000-0000; email address:
xxxxxxx.xxxx@xxxxxxxxx.xxx, with a copy to xxxxxxxxxxxxxxx@xxxxxxxxx.xxx);
(c) if to the Syndication Agent, to Bank of America, N.A.,
Bank of America Retail Group, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000, Attention
of Xxxxxxxxx Xxxxxxxxxx (Telecopy No. 000-000-0000; email address:
xxxxxxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx);
(d) if to the Issuing Banks, to (i) Citicorp North America,
Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention of Xxxxxxx Xxxx
(Telecopy No. 000- 000-0000; email address: xxxxxxx.xxxx@xxxxxxxxx.xxx) and
(ii) JPMorgan Chase Bank, N.A., 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000,
Attention of Xxxx Xxxxxxxxx (Telecopy No. 000-000-0000; email address:
xxxx.xxxxxxxxx@xxxxxxxx.xxx);
(e) if to the Swingline Lender, to it at Citicorp North
America, Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention of
Xxxxxxx Xxxx (Telecopy No: 000-000-0000; email address:
xxxxxxx.xxxx@xxxxxxxxx.xxx); and
(f) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by
any Agent, any Issuing Bank or any Lender in exercising any right or power
hereunder or under any other Senior Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Agents, the Issuing Banks and the
Lenders hereunder and under the other Senior Loan Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Senior Loan Document or consent to any departure
by any Loan Party therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) of this Section, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. Without limiting the generality of the foregoing, the making of a
Loan or issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether any Agent, any Lender or any Issuing Bank may
have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Senior Loan Document
nor any provision hereof or thereof may be waived, amended or modified except,
in the case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Senior Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent and the Loan Party or Loan Parties that
are parties thereto, in each case with the consent of the Required Lenders;
provided that (i) no such agreement shall change any provision of any Senior
Loan Document in a manner that by its terms adversely affects the rights of
Lenders holding Loans of any Class differently than those holding Loans of any
other Class, without the written consent of Lenders holding a majority in
interest of the outstanding Loans and unused Commitments of each affected Class
and (ii) any waiver, amendment or modification of this Agreement that by its
terms affects the rights or duties under this Agreement of one or more Classes
of Lenders (but not the other Class or Classes of Lenders) may be effected by an
agreement or agreements in writing entered into by the Borrower and requisite
percentage in interest of the affected Class or Classes of Lenders that would be
required to consent thereto under this Section if such Class or Classes of
Lenders were the only Class or Classes of Lenders hereunder at the time; and
provided further that no such agreement shall (i) increase the Commitment of any
Lender without the written consent of such Lender, (ii) reduce or forgive the
principal amount of any Loan or LC Disbursement or reduce the rate of interest
thereon, or reduce any fees payable hereunder, without the written consent of
each Lender affected thereby, (iii) postpone the maturity of any Loan, or any
scheduled date of payment of the principal amount of any Term Loan under Section
2.10, or the required date of reimbursement of any LC Disbursement, or any date
for the payment of any interest or fees payable hereunder, or reduce the amount
of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) amend Section 2.18(b) or (c) in a manner that would alter
the pro rata sharing of payments required thereby, without the written consent
of each Lender, (v) amend the proviso of the definition of "Borrowing Base
Amount" or the definition of "Account Receivable Advance Rate", "Pharmaceutical
Inventory Advance Rate", "Other Inventory Advance Rate" or "Script Lists Advance
Rate" without the written consent of each Lender, (vi) subordinate the priority
of the Lien granted to the Collateral Agent pursuant to the Senior Loan
Documents without the written consent of each Lender, (vii) change any of the
provisions of this Section or the percentage set forth in the definition of
"Required Lenders", "Supermajority Lenders" or any other provision of any Senior
Loan Document specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (viii) release
the Borrower or any Subsidiary Loan Party from its Guarantee under the Senior
Subsidiary Guarantee Agreement (except as expressly provided in the Senior
Subsidiary Guarantee Agreement or in Section 9.18), or limit its liability in
respect of such Guarantee, without the written consent of each Lender, (ix)
prior to the Borrowing Base Date, release the Borrower, Holdings or any of its
subsidiaries from its Guarantee under the Interim Collateral and Guarantee
Agreement (except as expressly provided in the Interim Collateral and Guarantee
Agreement), or limit its liability in respect of such Guarantee, without the
written consent of each Lender (x) release all or substantially all of the
Senior Collateral from the Liens under the Senior Collateral Documents, without
the written consent of each Lender, (xi) prior to the Borrowing Base Date
release all or substantially all of the Interim Collateral from the Liens under
the Interim Collateral Documents, without the written consent of each Lender or
(xii) amend Section 2.21 to increase the permitted Incremental Facilities to in
excess of $350,000,000, without the written consent of the Supermajority
Lenders; and provided further, that no such agreement shall amend, modify or
otherwise affect the rights or duties of any Agent, the Issuing Banks or the
Swingline Lender without the prior written consent of such Agent, the Issuing
Banks or the Swingline Lender, as the case may be. Notwithstanding the
foregoing, any provision of this Agreement may be amended by an agreement in
writing entered into by the Borrower, the Required Lenders and the
Administrative Agent (and, if their rights or obligations are affected thereby,
the Issuing Banks and the Swingline Lender) if (i) by the terms of such
agreement the Commitment of each Lender not consenting to the amendment provided
for therein shall terminate upon the effectiveness of such amendment and (ii) at
the time such amendment becomes effective, each Lender not consenting thereto
receives payment in full of the principal of and interest accrued on each Loan
made by it and all other amounts owing to it or accrued for its account under
this Agreement.
(c) Notwithstanding the foregoing, (i) Senior Collateral shall
be released from the Lien under the Senior Collateral Documents from time to
time as necessary to effect any sale of Senior Collateral permitted by the
Senior Loan Documents, and the Administrative Agent shall execute and deliver
all release documents reasonably requested to evidence such release; provided
that arrangements satisfactory to the Administrative Agent shall have been made
for application of the cash proceeds thereof in accordance with Section 2.11, if
required, and for the pledge of any non-cash proceeds thereof pursuant to the
Senior Collateral Documents, (ii) the accounts created pursuant to clause (i) of
Section 5.16(b), the Lockbox Account and/or the Governmental Lockbox Account may
be released by the Administrative Agent and transferred in accordance with
Section 5.16, (iii) if a Subsidiary Loan Party ceases to be a Subsidiary in
accordance with this Agreement, or ceases to own any property that constitutes
Senior Collateral, at the request of and at the expense of the Borrower, such
Subsidiary Loan Party shall be released from the Senior Subsidiary Guarantee
Agreement, the Senior Subsidiary Security Agreement and each other Senior Loan
Document to which it is a party and (iv) prior to the Borrowing Base Date, if
Holdings or any of its subsidiaries ceases to be a Subsidiary in accordance with
this Agreement or ceases to own any property that constitutes Interim
Collateral, at the request of and at the expense of the Borrower, such party
shall be released from the Interim Collateral Documents and the Senior Loan
Documents to which it is a party.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Agents and their Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Agents, in connection with the syndication of
the credit facilities provided for herein, the preparation and administration of
the Senior Loan Documents or any amendments, modifications or waivers of the
provisions thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by any Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket expenses incurred by any Agent, any Issuing Bank or any
Lender, including the fees, charges and disbursements of counsel for any Agent,
any Issuing Bank or any Lender, in connection with the enforcement or protection
of its rights under or in connection with the Senior Loan Documents, including
its rights under this Section, or in connection with the Loans made or Letters
of Credit issued hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.
(b) The Borrower shall indemnify each Agent, each Issuing Bank
and each Lender, and each Related Party of any of the foregoing Persons (each
such Person being called an "Indemnitee") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of any Senior
Loan Document, the performance by the parties to the Senior Loan Documents of
their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by an Issuing Bank
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property currently or formerly owned or
operated by the Borrower or any of the Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of the Subsidiaries, or (iv)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to any Agent, any Issuing Bank or any Lender under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to
such Agent, such Issuing Bank or such Lender, as the case may be, such Lender's
pro rata share (determined as of the time that the applicable unreimbursed
expense or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against such Agent,
such Issuing Bank or such Lender in its capacity as such. For purposes hereof, a
Lender's "pro rata share" shall be determined based upon its share of the sum of
the total Revolving Exposures, outstanding Term Loans and unused Commitments at
the time.
(d) To the extent permitted by applicable law, the Borrower
shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement, any other Senior Loan Document or any other
agreement or instrument contemplated hereby or thereby, the Transactions, any
Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not
later than 10 Business Days after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby (including
any Affiliate of any Issuing Bank that issues any Letter of Credit), except that
the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
successors and assigns permitted hereby (including any Affiliate of any Issuing
Bank that issues any Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Agents, the Issuing Banks and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) (i) Subject to the conditions set forth in paragraph
(b)(ii) below, any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitments and the Loans at the time owing to it), with the prior
written consent (such consent not to be unreasonably withheld or delayed) of:
(A) the Borrower; provided that no consent of the Borrower
shall be required for an assignment to a Lender, an Affiliate of a
Lender, an Approved Fund or, if an Event of Default under clause (a),
(b), (h), or (i) of Article VII has occurred and is continuing, any
other assignee; and
(B) the Administrative Agent; provided that no consent of the
Administrative Agent shall be required for an assignment to an assignee
that is a Lender, an Affiliate of a Lender or an Approved Fund.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender, an
Affiliate of a Lender or an Approved Fund, the amount of the Commitment
or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to
such assignment is delivered to the Administrative Agent) shall not be
less than (1) with respect to Revolving Commitments and Revolving Loans,
$5,000,000 and (2) with respect to Tranche 1 Term Loan Commitments,
Tranche 2 Term Commitments, Tranche 1 Term Loans and Tranche 2 Term
Loans, $1,000,000 or, in each case, if smaller, the entire remaining
amount of the assigning Lender's Commitment or Loans, unless each of the
Borrower and the Administrative Agent shall otherwise consent; provided
that (i) no such consent of the Borrower shall be required if an Event
of Default has occurred and is continuing and (ii) in the event of
concurrent assignments to two or more assignees that are Affiliates of
one another, or to two or more Approved Funds managed by the same
investment advisor or by affiliated investment advisors, all such
concurrent assignments shall be aggregated in determining compliance
with this subsection;
(B) each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender's rights and
obligations under this Agreement;
(C) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500; provided that, in the event
of concurrent assignments to two or more assignees that are Affiliates
of one another, or by or to two or more Approved Funds managed by the
same investment advisor or by affiliated investment advisors, only one
such fee shall be payable; and
(D) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date
specified in each Assignment and Acceptance the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.15,
2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section
9.04 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and LC Disbursements owing to, each
Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the Agents,
the Issuing Banks and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of this Agreement, notwithstanding notice to the contrary.
The Register shall be available for inspection by the Borrower, any other
Agent, any Issuing Bank and any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already
be a Lender hereunder), the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall
accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of
this Agreement unless it has been recorded in the Register as provided in
this paragraph.
(vi) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder shall be deemed
to confirm to and agree with each other and the other parties hereto as
follows: (A) such assigning Lender warrants that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of
any adverse claim and that its Commitment and the outstanding balances of
its Loans, in each case without giving effect to assignments thereof that
have not become effective, are as set forth in such Assignment and
Acceptance; (B) except as set forth in clause (A) above, such assigning
Lender makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with this Agreement or any other Senior Loan Document or any
other instrument or document furnished pursuant hereto or thereto, or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of any of the foregoing, or the financial condition of the Loan
Parties or the performance or observance by the Loan Parties of any of
their obligations under this Agreement or under any other Senior Loan
Document or any other instrument or document furnished pursuant hereto or
thereto; (C) each of the assignee and the assignor represents and warrants
that it is legally authorized to enter into such Assignment and Acceptance;
(D) such assignee confirms that it has received a copy of this Agreement,
together with copies of any amendments or consents entered into prior to
the date of such Assignment and Acceptance and copies of the most recent
financial statements delivered pursuant to Section 5.01 and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(E) such assignee will independently and without reliance upon the Agents,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement;
(F) such assignee appoints and authorizes the Agents to take such action as
agents on its behalf and to exercise such powers under this Agreement and
the other Senior Loan Documents as are delegated to them by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto; and (G) such assignee agrees that it will perform in accordance
with their terms all the obligations that by the terms of this Agreement
are required to be performed by it as a Lender.
(c) (i) Any Lender may, without the consent of or notice to
the Borrower, the Agents, the Issuing Banks or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender's obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) the Borrower, the Agents,
the Issuing Banks and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b)(i), (ii) or (iii) that affects
such Participant. Subject to paragraph (c)(ii) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.15,
2.16 and 2.17 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.18(c) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any
greater payment under Section 2.15 or 2.17 than the applicable Lender would
have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant
is made with the Borrower's prior written consent. A Participant that would
be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.17 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.17(e) as though it were a
Lender.
(d) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including, without limitation, any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section
shall not apply to any such pledge or assignment of a security interest;
provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
(e) In the case of any Lender that is a fund that invests in
bank loans, such Lender may, without the consent of the Borrower or the
Administrative Agent, assign or pledge all or any portion of its rights under
the Senior Loan Documents, including the Loans and promissory notes or any other
instrument evidencing its rights as a Lender under the Senior Loan Documents, to
any holder of, trustee for, or any other representative of holders of
obligations owed or securities issued by such fund, as security for such
obligations or securities; provided that any foreclosure or similar action by
such trustee or representative shall be subject to the provisions of this
Section 9.04 concerning assignments.
SECTION 9.05. Survival. All covenants, agreements,
representations and warranties made by the Loan Parties in the Senior Loan
Documents and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement or any other Senior Loan Document shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Senior Loan Documents and the making
of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent, any Issuing Bank or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and unpaid
or any Letter of Credit is outstanding and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. Integration; Effectiveness. This Agreement, the
other Senior Loan Documents and any separate letter agreements with respect to
fees payable to the Administrative Agent constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof. This Agreement shall become effective as provided in Section
4.01.
SECTION 9.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of the Borrower against any of and all the obligations of the Borrower now or
hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to any Senior Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Senior Loan Document shall affect any
right that any Agent, the Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Senior Loan
Document against the Borrower or its properties in the courts of any
jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Senior Loan Document in any court referred to in paragraph (b) of this Section.
Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Senior Loan Document will affect the right of any
party to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER SENIOR LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Agents, the Issuing
Banks and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, trustees, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Senior Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Borrower, (h) to any pledgee referred to in Section 9.04(d) or any direct or
indirect contractual counterparty in any Hedging Agreement (or to any such
contractual counterparty's professional advisor), so long as such pledgee or
contractual counterparty (or such professional advisor) agrees to be bound by
the provisions of this Section 9.12, or (i) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to any Agent, any Issuing Bank or any Lender on a
nonconfidential basis from a source other than the Borrower. For the purposes of
this Section, "Information" means all information received from the Borrower
relating to the Borrower or its business, other than any such information that
is available to any Agent, any Issuing Bank or any Lender on a nonconfidential
basis prior to disclosure by the Borrower. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information. Notwithstanding
anything in this Agreement or in any other Senior Loan Document to the contrary,
the Borrower and each Lender (and each employee, representative or other agent
of the Borrower) may disclose to any and all persons, without limitation of any
kind, the U.S. tax treatment and U.S. tax structure of the Transactions and all
materials of any kind (including opinions or other tax analyses) that are
provided to the Borrower relating to such U.S. tax treatment and U.S. tax
structure.
SECTION 9.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
SECTION 9.14. Collateral Trust and Intercreditor Agreement;
Interim Intercreditor Agreement. Each Lender, each Issuing Bank and each Agent
hereby authorizes each Agent to enter into the Collateral Trust and
Intercreditor Agreement, each other Senior Collateral Document, the Interim
Intercreditor Agreement and each other Interim Collateral Document on its
behalf, and agrees that the Administrative Agent and the Collateral Agent may
enforce the rights and remedies of the Lenders under each Senior Loan Document
to the extent provided in the Collateral Trust and Intercreditor Agreement, each
other Senior Collateral Document, the Interim Intercreditor Agreement and each
other Interim Collateral Document.
SECTION 9.15. Cash Sweep. (a) On any day on which (i) an Event
of Default exists or (ii) the lesser of (x) the average Revolving Commitments
(after deducting the average total Revolving Exposure) over any 30-day period
and (y) the average Borrowing Base Amount (after deducting the sum of (1) the
average total Revolving Exposure, (2) the average outstanding Tranche 1 Term
Loans and (3) if prior to the Borrowing Base Date, zero or if on or after the
Borrowing Base Date, the average outstanding Tranche 2 Term Loans) over any
30-day period, in each case, together with all amounts then on deposit in the
Cash Sweep Cash Collateral Account, is less than $75,000,000, then the
Administrative Agent, upon its determination or upon request by the Required
Lenders, shall immediately be entitled to deliver Cash Sweep Notices.
(b) During a Cash Sweep Period, if (i) there is no Event of
Default and (ii) the lesser of (x) the average Revolving Commitments (after
deducting the average total Revolving Exposure) over any 30-day period and (y)
the average Borrowing Base Amount (after deducting the sum of (1) the average
total Revolving Exposure, (2) the average outstanding Tranche 1 Term Loans and
(3) if prior to the Borrowing Base Date, zero or if on or after the Borrowing
Base Date, the average outstanding Tranche 2 Term Loans) over any 30-day period,
in each case, together with all amounts then on deposit in the Cash Sweep Cash
Collateral Account, is greater than $100,000,000, then the Administrative Agent
shall automatically rescind any Cash Sweep Notice and shall be prohibited from
delivering any other Cash Sweep Notice (unless and until the occurrence of the
events set forth in paragraph (a) of this Section).
(c) The Administrative Agent reserves the right to send a Cash
Sweep Notice on each occasion of the occurrence of the events set forth in
Section 9.15(a).
SECTION 9.16. Electronic Communications. (a) Notwithstanding
anything in any Senior Loan Document to the contrary, the Borrower hereby agrees
that it will use its reasonable best efforts to provide to the Administrative
Agent all information, documents and other materials that it is obligated to
furnish to the Administrative Agent pursuant to the Senior Loan Documents,
including, without limitation, all notices, requests, financial statements,
financial and other reports, certificates and other information materials, but
excluding any such communication that (i) relates to a request for a new, or a
conversion of an existing, Borrowing or other extension of credit (including any
election of an interest rate or Interest Period relating thereto), (ii) relates
to the payment of any principal or other amount due under any Senior Loan
Document prior to the scheduled date therefor, (iii) provides notice of any
Default or Event of Default under any Senior Loan Document or (iv) is required
to be delivered to satisfy any condition set forth in Section 4.01 and/or 4.02
(all such non-excluded communications being referred to herein collectively as
the "Communications"), by transmitting the Communications in an electronic/soft
medium in a format acceptable to the Administrative Agent to
xxxxxxxxxxxxxxx@xxxxxxxxx.xxx, with a copy to xxxxxxx.xxxx@xxxxxxxxx.xxx. In
addition, the Borrower agrees to continue to provide the Communications to the
Administrative Agent in the manner specified in the Senior Loan Documents, but
only to the extent requested by the Administrative Agent.
(b) The Borrower further agrees that the Administrative Agent
may make the Communications available to the Lenders by posting the
Communications on Intralinks, Fixed Income Direct or a substantially similar
electronic transmission system (each such system, a "Platform"). The Borrower
acknowledges that the distribution of material through an electronic medium is
not necessarily secure and that there are confidentiality and other risks
associated with such distribution.
(c) EACH PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE". THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
THE COMMUNICATIONS, OR THE ADEQUACY OF ANY PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT
PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR ANY PLATFORM. IN NO EVENT SHALL
THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (COLLECTIVELY, THE
"AGENT PARTIES") HAVE ANY LIABILITY TO THE BORROWER, ANY OTHER LOAN PARTY, ANY
LENDER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT
LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE
BORROWER'S OR THE ADMINISTRATIVE AGENT'S TRANSMISSION OF COMMUNICATIONS THROUGH
THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN
A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED PRIMARILY FROM SUCH AGENT PARTY'S GROSS NEGLIGENCE OR WILFUL
MISCONDUCT.
(d) The Administrative Agent agrees that the receipt of the
Communications by it at its e-mail address set forth in Section 9.01 shall
constitute effective delivery of the Communications to the Administrative Agent
for purposes of this Section. Each Lender agrees that notice to it (as provided
in the next sentence) specifying that the Communications have been posted to a
Platform shall constitute effective delivery of the Communications to such
Lender for purposes of this Section. Each Lender agrees (i) to notify the
Administrative Agent in writing (including by electronic communication) from
time to time of such Lender's e-mail address to which the foregoing notice may
be sent by electronic transmission and (ii) that the foregoing notice may be
sent to such e-mail address.
(e) Nothing in this Section 9.16 shall prejudice the right of
the Administrative Agent or any Lender to give any notice or other communication
pursuant to any Senior Loan Document in any other manner specified in such
Senior Loan Document.
SECTION 9.17. USA Patriot Act. Each Lender and each Issuing
Bank hereby notifies the Borrower that pursuant to the requirements of the USA
Patriot Act, it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or Issuing Bank to
identify the Borrower in accordance with its requirements. The Borrower shall
promptly, following a request by the Administrative Agent, any Lender or any
Issuing Bank, provide all documentation and other information that the
Administrative Agent, such Lender or such Issuing Bank reasonably requests in
order to comply with its ongoing obligations under applicable "know your
customer" and anti-money laundering rules and regulations, including the USA
Patriot Act.
SECTION 9.18. Release of Interim Collateral. Upon the
occurrence of the Borrowing Base Date, the security interests granted in the
Interim Collateral under the Interim Collateral Documents shall be automatically
released. In connection with the release of security interests granted in the
Interim Collateral under the Interim Collateral Documents, the Tranche 2 Lenders
hereby authorize the Borrower (or its counsel) to file, register or record all
documents and instruments, including amendments to Uniform Commercial Code
financing statements, required by law, advisable or reasonably requested by the
Borrower, and agree to execute and deliver all further instruments and documents
and take all further action that may be necessary or that the Borrower may
reasonably request in order to effectuate such release, all at the expense of
the Borrower. For the avoidance of doubt, the foregoing does not authorize the
Borrower to take any action that would result in the release of the security
interests granted in the Interim Collateral under the Interim Collateral
Documents prior to the Borrowing Base Date.
ANNEX 1
to Second Restated Credit Agreement
DEFINITIONS ANNEX
This is the Definitions Annex referred to in the Senior Loan Documents
and the Second Priority Debt Documents. Each capitalized term used herein shall
have the meaning assigned to it below or, if not defined herein, the meaning
assigned to it in the applicable Senior Loan Document or Second Priority Debt
Document. The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
References to any agreement are to such agreement as amended, modified
or supplemented from time to time in accordance with the terms thereof and of
each Senior Loan Document and Second Priority Debt Document containing
restrictions or imposing conditions on the amendment, modification or
supplementing of such agreement.
"Affiliate" means, when used with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
"Asset Sale" means any sale, lease, assignment, transfer or other
disposition (including pursuant to a Sale and Leaseback Transaction) of any
property or asset (whether now owned or hereafter acquired, whether in one
transaction or a series of transactions and whether by way of merger or
otherwise) of the Borrower or any Subsidiary (including of any Equity Interest
in a Subsidiary).
"Attributable Debt" means, as to any particular Capital Lease or Sale
and Leaseback Transaction under which the Borrower or any Subsidiary is at the
time liable, as of any date as of which the amount thereof is to be determined
(a) in the case of a transaction involving a Capital Lease, the amount as of
such date of Capital Lease Obligations with respect thereto and (b) in the case
of a Sale and Leaseback Transaction not involving a Capital Lease, the then
present value of the minimum rental obligations under such Sale and Leaseback
Transaction during the remaining term thereof (after giving effect to any
extensions at the option of the lessor) computed by discounting the rental
payments at the actual interest factor included in such payments or, if such
interest factor cannot be readily determined, at the rate per annum that would
be applicable to a Capital Lease of the Borrower having similar payment terms.
The amount of any rental payment required to be made under any such Sale and
Leaseback Transaction not involving a Capital Lease may exclude amounts required
to be paid by the lessee on account of maintenance and repairs, insurance,
taxes, assessments, utilities, operating and labor costs and similar charges,
whether or not characterized as rent. Any determination of any rate implicit in
the terms of a Capital Lease or a lease in a Sale and Leaseback Transaction not
involving a Capital Lease made in accordance with generally accepted financial
practices by the Borrower shall be binding and conclusive absent manifest error.
"Bankruptcy Proceeding" means any proceeding under Title 11 of the U.S.
Code or any other Federal, state or foreign bankruptcy, insolvency,
reorganization, receivership or similar law.
"Basket Asset Sale" means any sale, transfer or disposition (including
a Sale and Leaseback Transaction not involving any Mortgaged Property) of office
locations, Stores or other personal or real property (including any improvements
thereon), whether or not constituting Mortgaged Property, or leasehold interest
therein for fair value in the ordinary course of business consistent with past
practice and not inconsistent with the business plan delivered to the Senior
Lenders prior to the Original Restatement Effective Date; provided, however,
that (a) the aggregate consideration received therefor (including the fair
market value of any non-cash consideration) shall not exceed $200,000,000 in any
fiscal year of Rite Aid (calculated without regard to Sale and Leaseback
Transactions permitted by Section 6.01(vii), (xii) and (xiii) of the Senior
Credit Agreement) and (b) except with respect to any net consideration received
from any sale, transfer or disposition to a third Person of Stores, leases and
prescription files closed at substantially the same time as, and entered into as
part of a single related transaction with, the purchase or other acquisition
from such third Person of Stores, leases and prescription files of a
substantially equivalent value, at least 75% of such consideration shall consist
of cash.
"Borrower" means Rite Aid.
"Business Day" means any day other than a Saturday, Sunday or day on
which commercial banks in New York City or Chicago, Illinois are authorized or
required by law to close; provided, however, that when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Capital Lease" means any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which, in
accordance with GAAP, should be capitalized on the lessee's balance sheet.
"Casualty/Condemnation" means any event that gives rise to Casualty/
Condemnation Proceeds.
"Casualty/Condemnation Proceeds" means
(a) any insurance proceeds under any insurance policies or
otherwise with respect to any casualty or other insured damage to any
properties or assets of the Borrower or the Subsidiaries; and
(b) any proceeds received by the Borrower or any Subsidiary in
connection with any action or proceeding for the taking of any
properties or assets of the Borrower or the Subsidiaries, or any part
thereof or interest therein, for public or quasi-public use under the
power of eminent domain, by reason of any similar public improvement or
condemnation proceeding;
minus, in each case (i) any fees, commissions and expenses (including the costs
of adjustment and condemnation proceedings) and other costs paid or incurred by
the Borrower or any Subsidiary in connection therewith, (ii) the amount of
income taxes reasonably estimated to be payable as a result of any gain
recognized in connection with the receipt of such payment or proceeds and (iii)
the amount of any Indebtedness (or Attributable Debt), other than the Senior
Obligations, together with premium or penalty, if any, and interest thereon (or
comparable obligations in respect of Attributable Debt), that is secured by a
Lien on (or if Attributable Debt, the lease of) the properties or assets in
question and that has priority over both the Senior Lien and the Second Priority
Lien, that is required to be repaid as a result of the receipt by the Borrower
or a Subsidiary of such payments or proceeds; provided, however, that no such
proceeds shall constitute Casualty/Condemnation Proceeds to the extent that such
proceeds are (A) reinvested in other like fixed or capital assets within 270
days of the Casualty/Condemnation that gave rise to such proceeds or (B)
committed to be reinvested in other like fixed or capital assets within 270 days
of such Casualty/Condemnation, with diligent pursuit of such reinvestment, and
reinvested in such assets within 365 days of such Casualty/ Condemnation.
"Citibank" means Citibank, N.A.
"Collateral" means the Senior Collateral and the Second Priority
Collateral.
"Collateral Documents" means the Senior Collateral Documents and the
Second Priority Collateral Documents.
"Collateral Trust and Intercreditor Agreement" means the Amended and
Restated Collateral Trust and Intercreditor Agreement, dated as of June 27,
2001, as amended and restated as of May 28, 2003, among Rite Aid, the Subsidiary
Guarantors, the Second Priority Collateral Trustee, the Senior Collateral Agent
and each other Representative.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Debt Facility" means the Senior Credit Agreement and any Second
Priority Debt Facility, or any combination thereof (as the context requires).
"Default Rate" means a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be) equal to the sum of (a) the rate of interest publicly announced by Citibank
in New York, New York, from time to time as its "base rate" plus (b) 2.00%.
"Domestic Subsidiary" means any Subsidiary incorporated or organized
under the laws of the United States of America, any State thereof or the
District of Columbia.
"Effective Date" means June 27, 2001.
"Effective Date Indentures" mean, collectively, (a) the Indenture dated
as of December 21, 1998, between Rite Aid and Xxxxxx Trust and Savings Bank, as
trustee and (b) the Indenture dated as of August 1, 1993, between Rite Aid and
Xxxxxx Guaranty Trust Company of New York, as trustee.
"8.125% Note Indenture" means the Indenture dated as of April 22, 2003,
among Rite Aid, the Subsidiary Guarantors and BNY Midwest Trust Company, as
trustee, relating to the 8.125% Notes.
"8.125% Notes" means the 8.125% Senior Secured Notes of the Borrower
due 2010 issued pursuant to the 8.125% Note Indenture and any Registered
Equivalent Notes issued in exchange therefor.
"4.75% Convertible Notes" means the 4.75% Convertible Notes of the
Borrower due 2006 issued pursuant to the 4.75% Note Indenture and any Registered
Equivalent Notes issued on exchange thereof.
"4.75% Note Indenture" means the Indenture dated as of November 19,
2001, between Rite Aid and BNY Midwest Trust Company, as trustee, relating to
the 4.75% Convertible Notes.
"First Restatement Effective Date" means November 8, 2006.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (f) all Guarantees by such Person of Indebtedness of others, (g)
all Capital Lease Obligations of such Person, (h) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty and (i) all obligations, contingent or otherwise, of
such Person in respect of bankers' acceptances. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indentures" mean, collectively, the Effective Date Indentures and the
Restatement Date Indentures.
"Instructing Group" means, until the Senior Obligation Payment Date,
the Required Lenders and, thereafter, the Second Priority Instructing Group.
"Intercompany Inventory Purchase Agreement" means the Intercompany
Inventory Purchase Agreement dated as of June 12, 2000 (as amended), among the
Borrower, Rite Aid Hdqtrs. Corp., the Distribution Subsidiaries named therein
and the Operating Subsidiaries named therein.
"Interim Collateral" means "Collateral", as defined in any Interim
Collateral Document.
"Interim Collateral and Guarantee Agreement" means the Interim
Collateral and Guarantee Agreement dated as of [?], 2006, among Holdings and its
subsidiaries (including subsidiaries that become parties thereto after the
Second Restatement Effective Date) and the Senior Collateral Agent.
"Interim Collateral Documents" means the Interim Collateral and
Guarantee Agreement, the Interim Intercreditor Agreement and each of the
security agreements and other instruments and documents executed and delivered
by Holdings or any of its subsidiaries pursuant to any of the foregoing or
pursuant to the Senior Credit Agreement or for purposes of providing collateral
security or credit support for any Interim Obligation.
"Interim Intercreditor Agreement" means the Interim Intercreditor
Agreement dated as of [?], 2006, among Rite Aid, Holdings and its subsidiaries,
the Senior Collateral Agent and the Second Lien Collateral Agent named therein.
"Interim Obligations" means (a) the aggregate principal amount of the
Tranche 2 Term Loans outstanding as a result of the borrowings made on the
Second Restatement Effective Date, (b) all interest on such outstanding Tranche
2 Term Loans (including, without limitation any interest which accrues after the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of the Borrower, any Subsidiary Loan Party,
Holdings or any of its subsidiaries, whether or not allowed or allowable as a
claim in such proceeding), (c) all other amounts payable by the Borrower or any
Subsidiary under the Senior Loan Documents in respect of such Tranche 2 Term
Loans and (d) all increases, renewals, extensions and Refinancings of the
foregoing.
"Interim Secured Parties" means the Tranche 2 Lenders and the
beneficiaries of each indemnification obligation undertaken by Rite Aid, any
other Loan Party or Holdings or any of its subsidiaries under any Senior Loan
Document in respect of the Tranche 2 Term Loans, and the successors and
permitted assigns of each of the foregoing.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, Capital Lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Majority Senior Parties" means the Required Lenders (as defined in the
Senior Credit Agreement), or with respect to any waiver, amendment or request,
Senior Lenders having such amount of unused Commitments, Revolving Exposures and
outstanding Term Loans as may be required under the Senior Credit Agreement to
approve the same.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor to
its business of rating debt securities.
"Net Cash Proceeds" means:
(a) with respect to any Asset Sale, an amount equal to the
cash proceeds received by the Borrower or any of the Subsidiaries from
or in respect of such Asset Sale (including, when received, any cash
proceeds received in respect of any noncash proceeds of any Asset
Sale), less the sum of
(i) reasonable costs and expenses paid or incurred in
connection with such transaction, including, without
limitation, any underwriting brokerage or other customary
selling commissions and reasonable legal, advisory and other
fees and expenses (including title and recording expenses,
associated therewith), payments of unassumed liabilities
relating to the assets sold and any severance and termination
costs;
(ii) the amount of any Indebtedness (or Attributable
Debt), together with premium or penalty, if any, and accrued
interest thereon (or comparable obligations in respect of
Attributable Debt) secured by a Lien on (or if Attributable
Debt, the lease of) any asset disposed of in such Asset Sale
and discharged from the proceeds thereof, but only to the
extent such Lien has priority over the Senior Lien and the
Second Priority Lien;
(iii) any taxes actually paid or to be payable by
such Person (as estimated by a senior financial or accounting
officer of the Borrower, giving effect to the overall tax
position of the Borrower) in respect of such Asset Sale; and
(iv) the portion of such cash proceeds which the
Borrower determines in good faith and reasonably should be
reserved for post-closing adjustments, including, without
limitation, indemnification payments and purchase price
adjustments, provided, that on the date that all such
post-closing adjustments have been determined, the amount (if
any) by which the reserved amount in respect of such Asset
Sale exceeds the actual post-closing adjustments payable by
the Borrower or any of the Subsidiary Loan Parties shall
constitute Net Cash Proceeds on such date;
(b) with respect to the proceeds received by the Borrower or a
Subsidiary from or in respect of an issuance in the public or private
capital markets of long-term debt securities, of equity securities or
of equity-linked (e.g., trust preferred) securities, an amount equal to
the cash proceeds received by the Borrower or any of the Subsidiaries
from or in respect of such issuance, less any reasonable transaction
costs, including investment banking and underwriting fees, discounts
and commissions and any other expenses (including legal fees and
expenses) reasonably incurred by such Person in respect of such
issuance;
(c) with respect to any Securitization, an amount equal to the
cash proceeds received by the Borrower or any of the Subsidiary from or
in respect of such Securitization, less any reasonable transaction
costs, including investment banking and underwriting fees, discounts
and commissions and any other expenses (including legal fees and
expenses) reasonably incurred by such Person in respect of such
Securitization; and
(d) with respect to a Casualty/Condemnation, the amount of
Casualty/Condemnation Proceeds.
"9.5% Note Indenture" means the Indenture dated as of February 12,
2003, among Rite Aid, the Subsidiary Guarantors named therein and BNY Midwest
Trust Company, as trustee, relating to the 9.5% Notes.
"9.5% Notes" means the 9.5% Senior Secured Notes of Rite Aid due 2011
issued pursuant to the 9.5% Note Indenture and any Registered Equivalent Notes
issued in exchange therefor.
"9.25% Note Indenture" means the Indenture dated as of May 20, 2003,
between Rite Aid and BNY Midwest Trust Company, as trustee, relating to the
9.25% Notes.
"9.25% Notes" means the 9.25% Senior Unsecured Notes of Rite Aid due
2013 issued pursuant to the 9.25% Note Indenture and any Registered Equivalent
Notes issued in exchange therefor.
"Obligors" means Rite Aid, the Subsidiary Guarantors, the Subsidiary
Loan Parties and any other Person who is liable for any of the Secured
Obligations.
"Original Restatement Effective Date" means September 30, 2005.
"Permitted Disposition" means any of the following, other than sales of
Securitization Assets in a Securitization:
(a) dispositions of inventory at retail, cash, cash
equivalents and other cash management investments and obsolete, unused,
uneconomic or unnecessary equipment or inventory, in each case in the
ordinary course of business;
(b) a disposition to a Subsidiary Loan Party, provided that if
the property subject to such disposition constitutes Collateral
immediately before giving effect to such disposition, such property
continues to constitute Collateral subject to the Senior Lien and the
Second Priority Lien;
(c) a sale or discount, in each case without recourse and in
the ordinary course of business, of overdue Accounts (as defined in the
Senior Credit Agreement) arising in the ordinary course of business,
but only to the extent such Accounts are no longer Eligible Accounts
Receivable (as defined in the Senior Credit Agreement) and such sale or
discount is in connection with the compromise or collection thereof
consistent with customary industry practice (and not as part of any
bulk sale);
(d) Basket Asset Sales; and
(e) sales of Accounts Receivable (as defined in the Senior
Subsidiary Security Agreement) re8 lating to worker's compensation
claims to collection agencies pursuant to the Borrower's customary cash
management procedures.
"Permitted Investments" means any investment by any Person in (a)
direct obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (b) commercial paper
rated at least A-1 by S&P and P-1 by Moody's, (c) time deposits with, including
certificates of deposit issued by, any office located in the United States of
any bank or trust company which is organized or licensed under the laws of the
United States or any state thereof and has capital, surplus and undivided
profits aggregating at least $500,000,000, (d) repurchase agreements with
respect to securities described in clause (a) above entered into with an office
of a bank or trust company meeting the criteria specified in clause (c) above,
provided in each case that such investment matures within one year from the date
of acquisition thereof by such Person or (e) money market mutual funds at least
80% the assets of which are held in investments referred to in clauses (a)
through (d) above (except that the maturities of certain investments held by any
such money market funds may exceed one year so long as the dollar-weighted
average life of the investments of such money market mutual fund is less than
one year).
"Reduction" means, when applied to any Debt Facility, (a) the permanent
repayment of outstanding loans (or obligations in respect of Attributable Debt)
under such Debt Facility, (b) the permanent reduction of outstanding lending
commitments under such Debt Facility or (c) the permanent cash collateralization
of outstanding letters of credit under such facility (together with the
termination of any lending commitments utilized by such letters of credit).
"Refinance" means, with respect to any issuance of Indebtedness, to
replace, renew, extend, refinance, repay, refund, repurchase, redeem, defease or
retire, or to issue Indebtedness in exchange or as a replacement therefor.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Registered Equivalent Notes" means, with respect to any notes
originally issued in a Rule 144A or other private placement transaction under
the Securities Act of 1933, substantially identical notes issued in a dollar for
dollar exchange therefor pursuant to an exchange offer registered with the SEC.
"Representatives" means the Senior Collateral Agent and the Second
Priority Representatives.
"Restatement Date Indentures" mean, collectively, (a) the 9.5% Note
Indenture, (b) the 8.125% Note Indenture and (c) the 9.25% Note Indenture.
"Rite Aid" means Rite Aid Corporation, a Delaware corporation, and its
successors.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor to its business of rating debt
securities.
"Sale and Leaseback Transaction" means any arrangement whereby the
Borrower or a Subsidiary shall sell or transfer any office building (including
its headquarters), distribution center, manufacturing plant, warehouse, Store,
equipment or other property, real or personal, now or hereafter owned by the
Borrower or a Subsidiary with the intention that the Borrower or any Subsidiary
rent or lease the property sold or transferred (or other property of the buyer
or transferee substantially similar thereto).
"SEC" means the United States Securities and Exchange Commission and
any successor agency thereto.
"Second Priority Collateral" means all the "Second Priority Collateral"
as defined in any Second Priority Collateral Document.
"Second Priority Collateral Documents" means the Second Priority
Subsidiary Security Agreement, the Second Priority Subsidiary Guarantee
Agreement, the Second Priority Indemnity, Subrogation and Contribution
Agreement, the Collateral Trust and Intercreditor Agreement and each of the
security agreements and other instruments and documents executed and delivered
by any Subsidiary Guarantor pursuant to any of the foregoing for purposes of
providing collateral security or credit support for any Second Priority Debt
Obligation or obligation under the Second Priority Subsidiary Guarantee
Agreement.
"Second Priority Collateral Trustee" means Wilmington Trust Company, in
its capacity as collateral trustee under the Collateral Trust and Intercreditor
Agreement and the Second Priority Collateral Documents, and its successors.
"Second Priority Debt" means any Indebtedness (including the 9.5%
Notes, the 8.125% Notes and the 7.5% Notes) incurred by Rite Aid and Guaranteed
by the Subsidiary Guarantors on or after the Effective Date pursuant to the
Second Priority Subsidiary Guarantee Agreement (i) which is secured by the
Second Priority Collateral on a pari passu basis (other than as provided by the
terms of the applicable Second Priority Debt Documents) with the other Second
Priority Debt Obligations and (ii) if issued on or after the Original
Restatement Effective Date, matures the date that is three months after the
Xxxxxxx 0 Xxxx Xxxxxxxx Date; provided, however, that (A) such Indebtedness is
permitted to be incurred, secured and Guaranteed on such basis by each Senior
Loan Document and each Second Priority Debt Document and (B) the Representative
for the holders of such Second Priority Debt shall have become party to the
Collateral Trust and Intercreditor Agreement pursuant to, and by satisfying the
conditions set forth in, Section 10.12 thereof. Second Priority Debt shall
include any Registered Equivalent Notes issued in exchange thereof.
"Second Priority Debt Documents" means, with respect to any series,
issue or class of Second Priority Debt, the promissory notes, indentures and
other operative agreements or instruments evidencing or governing such Debt,
including the Second Priority Collateral Documents.
"Second Priority Debt Facility" means the indenture or other governing
agreement or instrument with respect to any Second Priority Debt.
"Second Priority Debt Obligations" means with respect to any series,
issue or class of Second Priority Debt, (a) all principal of, and interest
(including without limitation, any interest which accrues after the commencement
of any Bankruptcy Proceeding, whether or not allowed or allowable as a claim in
any such proceeding) payable with respect to such Second Priority Debt, (b) all
other amounts payable to the related Second Priority Debt Parties under the
related Second Priority Debt Documents and (c) any renewals or extensions of the
foregoing.
"Second Priority Debt Parties" means with respect to any series, issue
or class of Second Priority Debt, the holders of such Debt, any trustee or agent
therefor under any related Second Priority Debt Documents and the beneficiaries
of each indemnification obligation undertaken by Rite Aid or any Obligor under
any related Second Priority Debt Documents, but shall not include the Loan
Parties or any Controlled Affiliates thereof (unless such Loan Party or
Controlled Affiliate is a holder of such Debt, a trustee or agent therefore or
beneficiary of such an indemnification obligation named as such in a Second
Priority Debt Document).
"Second Priority Indemnity, Subrogation and Contribution Agreement"
means the Amended and Restated Second Priority Indemnity, Subrogation and
Contribution Agreement, dated as of June 27, 2001, as amended and restated as of
May 28, 2003 among Rite Aid, the Subsidiary Guarantors and the Second Priority
Collateral Trustee.
"Second Priority Instructing Group" means Second Priority
Representatives with respect to Second Priority Debt Facilities under which at
least a majority of the then aggregate amount of Second Priority Debt
Obligations are outstanding.
"Second Priority Lien" means the Liens on the Second Priority
Collateral in favor of the Second Priority Debt Parties under the Second
Priority Collateral Documents.
"Second Priority Representative" means, in respect of a Second Priority
Debt Facility, the trustee, administrative agent, security agent or similar
agent under each Second Priority Debt Facility, as the case may be, and each of
their successors in such capacities.
"Second Priority Subsidiary Guarantee Agreement" means the Amended and
Restated Second Priority Subsidiary Guarantee Agreement, dated as of June 27,
2001, as amended and restated as of May 28, 2003, made by the Subsidiary
Guarantors (including any additional Subsidiary Guarantor becoming party thereto
after the Original Restatement Effective Date) in favor of the Second Priority
Collateral Trustee for the benefit of the Second Priority Debt Parties.
"Second Priority Subsidiary Security Agreement" means the Amended and
Restated Second Priority Subsidiary Security Agreement, dated as of June 27,
2001, as amended and restated as of May 28, 2003, made by the Subsidiary
Guarantors (including any additional Subsidiary Guarantor becoming party thereto
after the Original Restatement Effective Date) in favor of the Second Priority
Collateral Trustee for the benefit of the Second Priority Debt Parties.
"Second Restatement Effective Date" means the date on which the Senior
Credit Agreement becomes effective pursuant to its terms.
"Secured Obligations" means the Senior Obligations and the Second
Priority Debt Obligations.
"Secured Parties" means the Senior Secured Parties and the Second
Priority Debt Parties.
"Senior Collateral" means all the "Collateral" as defined in any Senior
Collateral Document.
"Senior Collateral Agent" means Citicorp North America, Inc., in its
capacity as the senior collateral processing agent under the Senior Collateral
Documents and the Interim Collateral Documents, as the case may be, and its
successors.
"Senior Collateral Disposition" means (a) any sale, transfer or other
disposition of Senior Collateral (including any property or assets that would
constitute Senior Collateral but for the release of the Senior Lien with respect
thereto in connection with such sale, transfer or other disposition), other than
a Permitted Disposition or (b) a Casualty/Condemnation with respect to Senior
Collateral.
"Senior Collateral Documents" means the Senior Subsidiary Security
Agreement, the Senior Subsidiary Guarantee Agreement, the Senior Indemnity,
Subrogation and Contribution Agreement, the Collateral Trust and Intercreditor
Agreement and each of the security agreements and other instruments and
documents executed and delivered by any Subsidiary Guarantor pursuant to any of
the foregoing or pursuant to the Senior Credit Agreement or for purposes of
providing collateral security or credit support for any Senior Obligation or
obligation under the Senior Subsidiary Guarantee Agreement.
"Senior Credit Agreement" means the Amended and Restated Senior Credit
Agreement, dated as of June 27, 2001, as amended and restated as of [?], 2006
and as may be further amended, restated or otherwise modified from time to time,
among Rite Aid, the Senior Lenders, the Tranche 2 Lenders, Citicorp North
America, Inc., as administrative agent and as Senior Collateral Agent and Bank
of America, N.A., as syndication agent for the Senior Lenders and the Tranche 2
Lenders.
"Senior Hedging Agreement" means any Hedging Agreement entered into
with Rite Aid or any Subsidiary, if the applicable counterparty was a Senior
Lender, a Tranche 2 Lender or an Affiliate thereof (a) on the Original
Restatement Effective Date, in the case of any Hedging Agreement entered into
prior to the Original Restatement Effective Date or (b) at the time the Hedging
Agreement was entered into, in the case of any Hedging Agreement entered into on
or after the Original Restatement Effective Date.
"Senior Indemnity, Subrogation and Contribution Agreement" means the
Amended and Restated Senior Indemnity, Subrogation and Contribution Agreement,
dated as of June 27, 2001, as amended and restated as of May 28, 2003, among
Rite Aid, the Subsidiary Guarantors (including Subsidiary Guarantors becoming
party thereto after the Original Restatement Effective Date) and the Senior
Collateral Agent.
"Senior Lender" means a "Lender" as defined in the Senior Credit
Agreement; provided that, prior to the Borrowing Base Date, the term Senior
Lender shall not include any such "Lender" in its capacity as a Tranche 2
Lender.
"Senior Lien" means the Liens on the Senior Collateral in favor of the
Senior Secured Parties under the Senior Collateral Documents.
"Senior Loan Documents" means the Senior Credit Agreement, the Notes
referred to in the Senior Credit Agreement, each Senior Hedging Agreement, the
Senior Collateral Documents and, prior to the Borrowing Base Date, the Interim
Collateral Documents.
"Senior Obligation Payment Date" means the date on which (a) the Senior
Obligations have been paid in full, (b) all lending commitments under the Senior
Credit Agreement have been terminated and (c) there are no outstanding letters
of credit issued under the Senior Credit Agreement other than such as have been
fully cash collateralized under documents and arrangements satisfactory to the
issuer of such letters of credit.
"Senior Obligations" means (a) the principal of each loan made under
the Senior Credit Agreement, (b) all reimbursement and cash collateralization
obligations in respect of letters of credit issued under the Senior Credit
Agreement, (c) all monetary obligations of the Borrower or any Subsidiary under
each Senior Hedging Agreement entered into (i) prior to the Original Restatement
Effective Date with any counterparty that was a Senior Lender (or an Affiliate
thereof) on the Original Restatement Effective Date or (ii) on or after the
Original Restatement Effective Date with any counterparty that was a Senior
Lender (or an Affiliate thereof) at the time such Senior Hedging Agreement was
entered into, (d) all interest on the loans, letter of credit reimbursement,
fees and other obligations under the Senior Credit Agreement or such Senior
Hedging Agreements (including, without limitation any interest which accrues
after the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, any Subsidiary Loan
Party, Holdings or any of its subsidiaries, whether or not allowed or allowable
as a claim in such proceeding), (e) all other amounts payable by the Borrower or
any Subsidiary under the Senior Loan Documents and (f) all increases, renewals,
extensions and Refinancings of the foregoing; provided that, prior to the
Borrowing Base Date, the term Senior Obligations shall not include any amount
included in the definition of the term Interim Obligations.
"Senior Secured Parties" means each party to the Senior Credit
Agreement other than any Loan Party, each counterparty to a Senior Hedging
Agreement, the beneficiaries of each indemnification obligation undertaken by
Rite Aid or any other Loan Party under any Senior Loan Document, and the
successors and permitted assigns of each of the foregoing; provided that, prior
to the Borrowing Base Date, the term Senior Secured Parties shall not include
any Interim Secured Parties.
"Senior Subsidiary Guarantee Agreement" means the Amended and Restated
Senior Subsidiary Guarantee Agreement, made by the Subsidiary Guarantors
(including Subsidiary Guarantors that become parties thereto after the Original
Restatement Effective Date) in favor of the Senior Collateral Agent for the
benefit of the Senior Secured Parties, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"Senior Subsidiary Security Agreement" means the Amended and Restated
Senior Subsidiary Security Agreement, made by the Subsidiary Guarantors
(including Subsidiary Guarantors that become parties thereto after the Original
Restatement Effective Date) in favor of the Senior Collateral Agent for the
benefit of the Senior Secured Parties, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"7.5% Notes" means the 7.5% Senior Secured Notes of the Borrower due
2015 issued pursuant to the 7.5% Note Indenture and any Registered Equivalent
Notes issued in exchange therefor.
"7.5% Note Indenture" means the Indenture dated as of January 11, 2005,
among Rite Aid, the Subsidiary Guarantors and BNY Midwest Trust Company, as
trustee, relating to the 7.5% Notes.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Guarantor" means each Subsidiary that is party to any
Second Priority Collateral Document.
"Subsidiary Loan Party" means each Subsidiary set forth on Schedule
1.01 to the Senior Credit Agreement and any wholly-owned Domestic Subsidiary,
including any Securitization Vehicle that is a Domestic Subsidiary, that owns
any assets consisting of inventory, accounts receivable, intellectual property,
or script lists; provided that (a) no Subsidiary that engages solely in the
Borrower's pharmacy benefits management business shall be deemed a Subsidiary
Loan Party and (b) Holdings and its subsidiaries shall not be Subsidiary Loan
Parties prior to the Borrowing Base Date.
"Triggering Event" shall have the meaning assigned to such term in the
Collateral Trust and Intercreditor Agreement.
"12.5% Note Indenture" means the Indenture dated as of June 27, 2001,
among Rite Aid, the Subsidiary Guarantors and U.S. Bank and Trust, as trustee,
relating to the 12.5% Notes.
"12.5% Notes" means the 12.5% Senior Secured Notes due 2006 of Rite Aid
issued on the Effective Date pursuant to the 12.5% Note Indenture.
"Uniform Commercial Code" or "UCC" means, unless otherwise specified,
the Uniform Commercial Code as from time to time in effect in the State of New
York.
