EXECUTION COPY
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CREDIT AGREEMENT
dated as of
June 27, 2001,
as amended and restated as of
May 28, 2003
among
RITE AID CORPORATION,
The Lenders Party Hereto,
CITICORP NORTH AMERICA, INC.,
as Administrative Agent and Collateral Processing Co-Agent,
JPMORGAN CHASE BANK,
as Syndication Agent and Collateral Processing Co-Agent,
FLEET RETAIL FINANCE INC., as
Co-Documentation Agent and Collateral Agent,
CIT GROUP/BUSINESS CREDIT, INC., as
Co-Documentation Agent,
and
GENERAL ELECTRIC CAPITAL CORPORATION, as
Co-Documentation Agent
___________________________
CITIGROUP GLOBAL MARKETS INC.
and
X. X. XXXXXX SECURITIES INC., as Joint
Lead Arrangers and
Joint Bookrunners
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ARTICLE I
Definitions
SECTION 1.01. Defined Terms.................................................................2
SECTION 1.02. Classification of Loans and Borrowings.......................................26
SECTION 1.03. Terms Generally..............................................................26
SECTION 1.04. Accounting Terms; GAAP.......................................................27
SECTION 1.05. Terms Defined in Definitions Annex...........................................27
ARTICLE II
The Credits
SECTION 2.01. Commitments..................................................................27
SECTION 2.02. Loans and Borrowings.........................................................27
SECTION 2.03. Requests for Borrowings......................................................28
SECTION 2.04. Swingline Loans..............................................................29
SECTION 2.05. Letters of Credit............................................................30
SECTION 2.06. Funding of Borrowings........................................................36
SECTION 2.07. Interest Elections...........................................................36
SECTION 2.08. Termination and Reduction of Commitments.....................................38
SECTION 2.09. Repayment of Loans; Evidence of Indebtedness.................................38
SECTION 2.10. Amortization of Term Loans...................................................39
SECTION 2.11. Prepayment of Loans; Reductions..............................................40
SECTION 2.12. Fees42
SECTION 2.13. Interest.....................................................................43
SECTION 2.14. Alternate Rate of Interest...................................................44
SECTION 2.15. Increased Costs..............................................................44
SECTION 2.16. Break Funding Payments.......................................................46
SECTION 2.17. Taxes........................................................................46
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Setoffs...................47
SECTION 2.19. Mitigation Obligations; Replacement of Lenders...............................49
SECTION 2.20. Adjustments to Borrowing Base Advance Rates..................................50
SECTION 2.21. Incremental Loans............................................................50
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers.........................................................51
SECTION 3.02. Authorization; Enforceability................................................51
SECTION 3.03. Governmental Approvals; No Conflicts.........................................52
SECTION 3.04. Financial Condition; No Material Adverse Change..............................52
SECTION 3.05. Properties...................................................................52
SECTION 3.06. Litigation and Environmental Matters.........................................53
SECTION 3.07. Compliance with Laws and Agreements..........................................53
SECTION 3.08. Investment and Holding Company Status........................................53
SECTION 3.09. Taxes........................................................................53
SECTION 3.10. ERISA........................................................................54
SECTION 3.11. Disclosure; Accuracy of Information..........................................54
SECTION 3.12. Subsidiaries.................................................................54
SECTION 3.13. Insurance....................................................................54
SECTION 3.14. Labor Matters................................................................55
SECTION 3.15. Solvency.....................................................................55
SECTION 3.16. Federal Reserve Regulations..................................................55
SECTION 3.17. Security Interests...........................................................55
SECTION 3.18. Use of Proceeds..............................................................56
ARTICLE IV
Conditions
SECTION 4.01. Restatement Effective Date...................................................56
SECTION 4.02. Each Credit Event............................................................59
SECTION 4.03. Determinations Under Section 4.01............................................59
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other Information...................................60
SECTION 5.02. Notices of Material Events...................................................62
SECTION 5.03. Information Regarding Collateral.............................................63
SECTION 5.04. Existence; Conduct of Business...............................................63
SECTION 5.05. Payment of Obligations.......................................................63
SECTION 5.06. Maintenance of Properties....................................................64
SECTION 5.07. Insurance....................................................................64
SECTION 5.08. Books and Records; Inspection and Audit Rights; Collateral and
Borrowing Base Reviews.......................................................65
SECTION 5.09. Compliance with Laws.........................................................66
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.................................................................68
SECTION 5.14. Intercompany Transfers.......................................................68
SECTION 5.15. Inventory Purchasing.........................................................68
SECTION 5.16. Cash Management System.......................................................68
SECTION 5.17. Landlord Waivers.............................................................68
SECTION 5.18. Certain Subsidiaries.........................................................69
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..............................................75
SECTION 6.07. Hedging Agreements...........................................................75
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness........................75
SECTION 6.09. Transactions with Affiliates.................................................77
SECTION 6.10. Restrictive Agreements.......................................................78
SECTION 6.11. Amendment of Material Documents..............................................80
SECTION 6.12. Consolidated Interest Expense Coverage Ratio.................................80
SECTION 6.13. Leverage Ratio...............................................................81
SECTION 6.14. Consolidated Fixed Charge Coverage Ratio.....................................81
SECTION 6.15. Capital Expenditures.........................................................82
SECTION 6.16. Restrictions on Asset Holdings by the Borrower...............................82
SECTION 6.17. 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..........................................................88
SECTION 9.03. Expenses; Indemnity; Damage Waiver...........................................90
SECTION 9.04. Successors and Assigns.......................................................92
SECTION 9.05. Survival.....................................................................96
SECTION 9.06. Counterparts; Integration; Effectiveness.....................................96
SECTION 9.07. Severability.................................................................97
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.........................................................98
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
ANNEXES:
Annex 1 - Definitions Annex
Annex 2 - Subordination Terms
SCHEDULES:
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Schedule 1.01 - Subsidiary Loan Parties
Schedule 2.05 - Existing Letters of Credit
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 3.19(b) - Filing Offices
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:
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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 - 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 Xxxxxxx Xxxx, 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 May 28, 2003
(this "Agreement"), among RITE AID CORPORATION, a
Delaware corporation, the LENDERS party hereto,
CITICORP NORTH AMERICA, INC., as Administrative
Agent and Collateral Processing Co-Agent, JPMORGAN
CHASE BANK, as Syndication Agent and Collateral
Processing Co-Agent, FLEET RETAIL FINANCE INC., as
Co-Documentation Agent and Collateral Agent, CIT
GROUP/BUSINESS CREDIT, INC., as Co-Documentation
Agent and GENERAL ELECTRIC CAPITAL CORPORATION, as
Co-Documentation 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 Agents 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 Lenders to extend credit hereunder
in the form of Term Loans to be made on the Restatement Effective Date in an
aggregate principal amount of $1,150,000,000 and Revolving Loans, Letters of
Credit and Swingline Loans to be made or issued at any time and from time to
time on or after the Restatement Effective Date and prior to the Maturity Date
in an aggregate principal amount at any time outstanding not in excess of
$700,000,000 (subject to the limitations set forth herein).
The proceeds of the Term Loans and the Revolving Loans made on the
Restatement Effective Date will be used (i) to repay or refinance all amounts
due or outstanding under the Original Agreement on the Restatement Effective
Date, (ii) to repay all amounts due or outstanding under the Existing
Synthetic Lease and (iii) to pay fees and expenses incurred in connection with
the Transactions. The proceeds of Revolving Loans and Swingline Loans made
after the Restatement Effective Date will be used for general corporate
purposes, including the financing of Optional Debt Repurchases and
Consolidated Capital Expenditures, 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.
The Lenders and the Swingline Lenders are willing to extend such
credit, and the Issuing Banks are willing to issue Letters of Credit, on the
terms and subject to the conditions set forth herein. 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, upon
satisfaction (or waiver) of the conditions set forth in Section 4.01, 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 Annual Carryforward Amount" means, in respect of any
fiscal year, the lesser of (i) the Carryforward Amount for such fiscal year,
determined in accordance with Section 6.15, and (ii) an amount equal to the
maximum amount of additional Consolidated Capital Expenditures that could have
been (but were not) made during the period of four consecutive fiscal quarters
ending on the last day of the immediately preceding fiscal year without
resulting in the Consolidated Fixed Charge Coverage Ratio for such period
being less than the minimum ratio specified for such period in Section 6.14.
"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.
"Administrative Agent" means CNAI, in its capacity as
administrative agent and collateral processing co-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 Agents.
"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.
"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, for any day on or after the Restatement
Effective Date, with respect to any ABR Loan or Eurodollar Loan, or with
respect to the commitment fees payable hereunder, as the case may be, the
applicable rate per annum set forth below under the caption "ABR Spread",
"Eurodollar Spread" or "Commitment Fee Rate", as the case may be, based upon
the ratings assigned by S&P and Xxxxx'x to the Indebtedness under this
Agreement (the "Index Debt") as of the most recent date of determination;
provided, that until November 28, 2003, the "Applicable Rate" shall be the
applicable rate per annum set forth below in Category 2:
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ABR Eurodollar Commitment Fee
RATING: Spread Spread Rate
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Category 1 225.0 325.0 50.0
Ratings of BB and
Ba2 or higher
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Category 2 250.0 350.0 50.0
Ratings of BB- and Ba3
or lower
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For purposes of the foregoing, (i) if either S&P or Xxxxx'x shall
not have in effect a rating for the Index Debt (other than by reason of the
circumstances referred to in the last sentence of this paragraph), then such
rating agency shall be deemed to have established a rating in Category 2; (ii)
if the ratings established or deemed to have been established by S&P and
Xxxxx'x for the Index Debt shall fall within different Categories, the
Applicable Rate shall be based on the lower of the two ratings; and (iii) if
the ratings established or deemed to have been established by S&P and Xxxxx'x
for the Index Debt shall be changed, such change shall be effective as of the
date on which such change is first announced by the applicable rating agency.
Each change in the Applicable Rate shall apply during the period commencing on
the effective date of such change and ending on the date immediately preceding
the effective date of the next such change. If either of Xxxxx'x or S&P shall
cease to be in the business of rating corporate debt obligations, the Borrower
and the Lenders shall negotiate in good faith to amend this definition to
reflect the unavailability of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Rate shall be determined
by reference to the rating most recently in effect prior to such cessation.
"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.
"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) Loans of the same Class and Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans,
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 Agents in the
exercise of their 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) $400,000,000 and (ii) 20% 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) semi-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
Agents' 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 ten 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 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.
"Carryforward Amount" shall have the meaning assigned to such term
in Section 6.15.
"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 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 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 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 Restatement Effective Date.
"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, Term Loans or Swingline Loans and, when used in reference to any
Commitment, refers to whether such Commitment is a Revolving Commitment or a
Term Loan 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 Agents" means CNAI and JPMCB, each in its capacity as
collateral processing co-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 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 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 Term Loan
Commitments, or any combination thereof (as the context requires).
"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), but excluding, 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 (including in
connection with the repayment of all amounts outstanding under the Existing
Synthetic 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;
provided that 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.
"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, (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 plus any Quarterly
Carryforward Credits in respect of fiscal quarters included in such period
less Consolidated Capital Expenditures to (ii) Consolidated Interest Charges
plus Consolidated Rent plus scheduled amortization payments made pursuant to
Section 2.10 plus cash dividends paid with respect to Preferred Stock 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 minus non-cash interest expenses during such period
related to (x) litigation reserves, (y) closed store liability reserves and
(z) self-insurance reserves.
"Consolidated Interest Expense Coverage Ratio" means, for any
period, the ratio of Consolidated EBITDA for such period to Consolidated
Interest Charges for such period, in each case determined in accordance with
GAAP.
"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 Net Worth" means, at any date, the consolidated
stockholders' equity of the Borrower and its Consolidated Subsidiaries
determined as of such date. Consolidated Net Worth includes the Series D
Preferred Stock.
"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.
"Current Liquidity" means, at any date of determination, the
amount of Permitted Investments that would be reflected on a consolidated
balance sheet of the Borrower and the Subsidiaries prepared as of such date in
accordance with GAAP.
"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).
"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 Agents in their reasonable judgment to
reflect Borrowing Base Factors. On the 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;
(g) such Account arose in the ordinary course of business of
the applicable Subsidiary Loan Party;
(h) 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;
(i) 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;
(j) payment of such Account is not being disputed by the
Account Debtor thereof;
(k) 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;
(l) 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 Agents in favor of the
applicable Subsidiary Loan Party) and (ii) is not an Affiliate or
Subsidiary of the Borrower or an Affiliate of any of the
Subsidiaries;
(m) such Account is subject to a perfected first priority
security interest in favor of the Collateral Agents 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);
(n) 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, in the Required Lenders' reasonable
judgment, upon the creditworthiness of such Account Debtor);
(o) the representations and warranties contained in the
Senior Loan Documents with respect to such Account are true and
correct in all material respects; and
(p) 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 Agents in their reasonable
judgment to reflect Borrowing Base Factors. On the 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 Agents from time to time in their
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 Agents from time to time in their 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 Agents from time to time in
their 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 Agents determine, in their 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 Agents to
the Borrower) that the Collateral Agents have, in their 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 the Borrower shall have complied with Section 4.01(n) (or
the Collateral Agents shall have granted a waiver to such compliance pursuant
to Section 4.01(n)).
"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 Nations Business Consulting Group or such other appraisal
firm satisfactory to the Collateral Agents.
"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).
"Existing Letters of Credit" means each letter of credit issued or
deemed to have been issued under the Original Agreement that is outstanding on
the Restatement Effective Date. The Existing Letters of Credit are listed on
Schedule 2.05.
"Existing Synthetic Lease" means the Synthetic Lease Facility
dated as of June 27, 2001, as amended from time to time prior to the
Restatement Effective Date, between Rite Aid Realty Corp. and RAC Distribution
Statutory Trust.
"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 Officer" means the chief financial officer, principal
accounting officer, treasurer 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.
"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.
"Incremental Commitment" 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.
"Incremental Loans" has the meaning assigned to such term in
Section 2.21.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Information Memorandum" means the Confidential Information
Memorandum dated April 2003 relating to the Borrower, the Subsidiaries and the
Transactions.
"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 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 months thereafter, (y) in the case of Revolving Loans or Interest Periods
for Term Loans commencing at any time during the period from the Restatement
Effective Date to the date that is 30 days after the Restatement Effective
Date, 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, (iii) there shall be no more than one Term Loan with a seven
day Interest Period at any time outstanding and (iv) 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.
"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 Banks" means (a) CNAI, JPMCB 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)
and (b) solely in respect of each Existing Letter of Credit, the issuer
thereof. 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.
"JPMCB" means JPMorgan Chase Bank.
"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 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 and any Existing Letter of Credit.
"Leverage Ratio" means, at any date, the ratio of (i) Total
Indebtedness as of such date to (ii) Consolidated EBITDA for the four fiscal
quarter period most recently ended 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.
"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 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 $25,000,000. 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 April 30, 2008.
"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 Agents) 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.
"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 Restatement
Effective Date, as in effect immediately prior to the 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.
"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.
"Predecessor Collateral Documents" means the "Senior Collateral
Documents", as such term is defined herein immediately prior to the amendment
and restatement hereof.
"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 dividends,
redemptions or repurchases) before the date that is six months after the
Maturity Date.
"Quarterly Carryforward Credit" means, with respect to any fiscal
quarter in any fiscal year, such portion of the Adjusted Annual Carryforward
Amount for such fiscal year as may be designated in writing by the Borrower at
the time of delivery of the first financial statements covering such fiscal
quarter pursuant to Section 5.01(a) or (b); provided, however, that (i) such
Quarterly Carryforward Credit cannot exceed the amount of Consolidated Capital
Expenditures made in such fiscal quarter and (ii) such Quarterly Carryforward
Credit may not exceed an amount equal to (x) the Adjusted Annual Carryforward
Amount for such fiscal year minus (y) the sum of (I) the aggregate amount of
Quarterly Carryforward Credits, if any, for all preceding fiscal quarters, if
any, in such fiscal year, plus (II) the amount of such Adjusted Annual
Carryforward Amount utilized to make Business Acquisitions pursuant to Section
6.04(xii) that were consummated at any time during such fiscal year on or
prior to the last day of such fiscal quarter.
"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 April 30, 2008 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) such Indebtedness contains covenants
(including with respect to amortization and convertibility) and events of
default and is benefited by Guarantees (if any) which, taken as a whole, are
not materially less favorable to the Lenders than the covenants and events of
default of or Guarantees (if any) in respect of such Refinanced Debt, (viii)
if such Refinanced Debt or any Guarantees thereof are secured, such
Indebtedness and any Guarantees thereof are either unsecured or secured only
by such assets as secured the Refinanced Debt and Guarantees thereof, (ix) if
such Refinanced Debt and any Guarantees thereof are unsecured, (A) such
Indebtedness and Guarantees thereof are also unsecured and (B) such
Indebtedness shall have terms and provisions (other than those relating to the
interest rate, scheduled maturity and call and make-whole provisions) which,
taken as a whole, are not materially less favorable to the Borrower and the
Subsidiaries than those contained in the 9.25% Note Indenture (as in effect on
the Restatement Effective Date) and (x) 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) with respect to any Equity
Interests in the Borrower or any Subsidiary, or any payment (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 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.
"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 Revolving
Commitments on such date.
"Revolving Availability Period" means the period from and
including the 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 initial
aggregate amount of the Lenders' Revolving Commitments is $700,000,000.
"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
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.
"Series D Preferred Stock" means the Borrower's 8% Series D
cumulative, convertible pay-in-kind preferred stock held by Green Equity
Investors III, L.P. or one of its Affiliates on the Restatement Effective
Date.
"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 (a) 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-owed Domestic Subsidiary that becomes a
party to the Senior Collateral Documents.
"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 Loans made pursuant to clause (a) of
Section 2.01.
"Term Loan Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make a Term Loan hereunder on the
Restatement Effective Date, expressed as an amount representing the maximum
principal amount of the Term Loan 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 Term
Loan Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as
applicable. The initial aggregate amount of the Term Loan Lenders' Term Loan
Commitments is $1,150,000,000.
"Term Loan Lender" means a Lender with a Term Loan Commitment or
an outstanding Term Loan.
"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.
"Transactions" means the execution, delivery and performance by
the Borrower and the Subsidiary Loan Parties of each Senior Loan Document, the
borrowing of Loans, the use of proceeds thereof and the other transactions to
be effected on the 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.
"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 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, (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 and (f)
references to "the date hereof" or "the date of this Agreement" shall refer to
June 27, 2001.
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 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.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees (a) to make a Term Loan to the Borrower on
the Restatement Effective Date in a principal amount not exceeding its Term
Loan Commitment and (b) 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 aggregate amount of Term Loans outstanding 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.
Amounts repaid in respect of 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
Revolving 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 Type and Class
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 Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03. Requests for Borrowings. To request a Revolving
Borrowing or Term 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 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 Revolving 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) an amount equal to the Borrowing Base Amount in effect at such
time minus the aggregate amount of Term Loans outstanding 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 Bank 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 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, 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 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. On the Restatement
Effective Date, the Existing Letters of Credit will automatically, without any
action on the part of any Person, be deemed to be Letters of Credit issued
hereunder for the account of the Borrower for all purposes of this Agreement
and the other Senior Loan Documents. In addition, 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 $200,000,000 and (ii) the
total Revolving Exposures shall not exceed the lesser of (A) the total
Revolving Commitments at such time and (B) an amount equal to the Borrowing
Base Amount then in effect minus the aggregate amount of Term Loans
outstanding at such time. Notwithstanding anything to the contrary contained
in this Agreement, no Existing Letter of Credit may be amended, renewed or
extended.
(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 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 among the Borrower, the
Administrative Agent, the replaced Issuing Bank and the successor 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 Revolving Borrowing and
Term 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 Borrowing of any Class may not be converted to or continued
as a Eurodollar Borrowing if after giving effect thereto (i) the Interest
Period therefore would end after a date on which any principal of the Loans of
such Class is scheduled to be repaid and (ii) the sum of the aggregate
principal amount of outstanding Eurodollar Borrowings of such Class with
Interest Periods ending on or prior to such scheduled repayment date plus the
aggregate principal amount of outstanding ABR Borrowings of such Class would
be less than the aggregate principal amount of Loans of such Class required to
be repaid on such scheduled repayment date.
SECTION 2.08. Termination and Reduction of Commitments. (a) Unless
previously terminated in accordance with the terms of this Agreement, (i) the
Term Loan Commitments shall terminate at 5:00 p.m., New York City time, on the
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) If any Reduction of the Revolving Facility is required
pursuant to Section 2.11, then, on the date that such Reduction is made, the
Revolving Commitments shall be reduced by an aggregate amount equal to the
amount of the required Reduction.
(d) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section, or any required Reduction of the Revolving Commitments under
paragraph (c) 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 Revolving Lender the then unpaid principal
amount of each Revolving Loan of such Lender on the Maturity Date, (ii) to the
Administrative Agent for the account of each Term Loan Lender the then unpaid
principal amount of the Term Loan of such Lender as provided in Section 2.10
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. Amortization of Term Loans. (a) Subject to
adjustment pursuant to paragraph (d) of this Section, the Borrower shall repay
Term Borrowings on each date set forth below in the aggregate principal amount
set forth opposite such date:
Date Amount
---- ------
May 31, 2004 $2,875,000
August 31, 2004 $2,875,000
November 30, 2004 $2,875,000
February 28, 2005 $2,875,000
May 31, 2005 $2,875,000
August 31, 2005 $2,875,000
November 30, 2005 $2,875,000
February 28, 2006 $2,875,000
May 31, 2006 $2,875,000
August 31, 2006 $2,875,000
November 30, 2006 $2,875,000
February 28, 2007 $2,875,000
May 31, 2007 $2,875,000
August 31, 2007 $2,875,000
November 30, 2007 $2,875,000
February 28, 2008 $2,875,000
April 30, 2008 $1,104,000,000
(b) To the extent not previously paid, all Term Loans shall be due
and payable on the Maturity Date.
(c) Any mandatory prepayment of a Term Borrowing shall be applied
to reduce the subsequent scheduled repayments of the Term Borrowings to be
made pursuant to this Section in inverse order of maturity. Any prepayment of
a Term Borrowing made pursuant to Section 2.11(a) shall be applied to reduce
scheduled repayments of the Term Borrowings to be made pursuant to this
Section in the manner selected by the Borrower.
(d) If the initial aggregate amount of the Lenders' Term Loan
Commitments exceeds the aggregate principal amount of Term Loans that are made
on the Restatement Effective Date, then the scheduled repayments of Term
Borrowings to be made pursuant to paragraph (a) of this Section shall be
reduced ratably by an aggregate amount equal to such excess. Prior to any
repayment of any Term Borrowings 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; Reductions. (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 the total
Revolving Exposures and the aggregate amount of Term Loans outstanding exceeds
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.
(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 Cash Proceeds
are received by or on behalf of the Borrower or any Subsidiary in respect of a
Reduction Event consisting of a Senior Collateral Disposition, an Asset Sale
or a Casualty/Condemnation, the Borrower shall, within two Business Days after
such Net Cash Proceeds are received, effect Reductions to the Revolving
Facility and the Term Loans, in the manner set forth in paragraph (e) below,
in an aggregate amount equal to such Net Cash Proceeds; provided, however,
that the Borrower and the Subsidiaries shall not be required to effect any
Reductions pursuant to this Section 2.11(c) with respect to the initial
$50,000,000 of such Net Cash Proceeds received on or after the Restatement
Effective Date.
(d) In the event and on each occasion that any Net Cash Proceeds
are received by or on behalf of the Borrower or any Subsidiary in respect of a
Reduction Event consisting of a Capital Markets Transaction, the Borrower
shall (i) if on the date of receipt of such Net Cash Proceeds the sum of the
total Revolving Exposures and the outstanding Term Loans exceeds the Borrowing
Base, apply, not later than the Business Day immediately after the day such
Net Cash Proceeds are received, an amount equal to the lesser of the amount of
such excess and the amount of such Net Cash Proceeds to Reductions to the
Revolving Facility and the Term Loans, in the manner set forth in paragraph
(e) below, and (ii) within two Business Days after such Net Cash Proceeds are
received, effect Reductions to the Revolving Facility and the Term Loans (in
addition to any Reductions under clause (i) above), in the manner set forth in
paragraph (e) below, in an aggregate amount equal to 50% of an amount equal to
(x) the amount of such Net Cash Proceeds minus (y) the amount, if any, of
Reductions effected pursuant to clause (i) above as a result of receipt of
such Net Cash Proceeds.
(e) Reductions to the Revolving Facility and the Term Loans
required to be made pursuant to paragraph (c) or (d) of this Section shall be
allocated between the Revolving Facility and the Term Loans pro rata based on
the relative amounts of the Term Loans and of the Revolving Commitments, used
and unused (or if the Revolving Commitments have terminated, the amount of the
total Revolving Exposures), on the date of receipt of the Net Cash Proceeds
giving rise to such Reductions. Any such Reduction in the Revolving Facility
will be effected pursuant to (i) the permanent reduction of Revolving
Commitments in the amount of such Reduction and (ii) the simultaneous
repayment of Revolving Loans and Swingline Loans, and to the extent no
Revolving Loans or Swingline Loans remain outstanding, the cash
collateralization of obligations in respect of Letters of Credit, in an
aggregate amount equal to such Reduction.
(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 Lender a commitment fee, which
shall accrue at the Applicable Rate on the daily unused amount of the
Revolving Commitment of such Lender during the period from and including the
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 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 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 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
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 Agents, 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 Agents, 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 a 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 on the Maturity Date and, in the
case of Revolving Loans, upon termination of the Revolving Commitments;
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 Revolving Loans, Term 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 Revolving Loans, Term
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 Revolving Loans, Term 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 Revolving Loans, Term 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 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,
or if any Lender defaults in its obligation to fund Loans hereunder, 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 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
25%.
(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 Agents, in the exercise of their 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 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 be in compliance with Sections 6.12, 6.13 and 6.14 (calculated,
in the case of clause (y), on a pro forma basis to give effect to any
borrowing of term loans under the Incremental Facility). The Incremental
Facilities shall (i) be in an aggregate principal amount not in excess of
$150,000,000, (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 acceptable to the Agents, and in any event have an
average weighted life equal to or longer than the Term Loans 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 Term Loans, in the case of an Incremental Facility involving term
loans, or the Revolving Loans, in the case of an Incremental Facility
involving 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. 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.
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 1, 2003, 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 Information
Memorandum, (iii) in the Borrower's report or Form 10-K for the fiscal year
ended March 1, 2003 or (iv) on Schedule 3.04, after giving effect to the
Transactions, none of the Borrower or the Subsidiaries has, as of the
Restatement Effective Date, any material contingent liabilities, unusual
long-term loan commitments or unrealized losses.
(c) Since March 2, 2003, 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 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 ("HIPPA") 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 (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b)
a "holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
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
Restatement Effective Date, neither the Information Memorandum nor any of the
other 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 Agents, 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 of the Borrower
and identifies each Subsidiary that is a Subsidiary Loan Party, in each case
as of the Restatement Effective Date. As of the Restatement Effective Date,
each of the Subsidiaries is an "Unrestricted Subsidiary" as defined in, and
for all purposes of, the Effective Date Indentures and the 12.5% Note Indenture.
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 Restatement Effective Date. As of
the 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 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 Restatement Effective Date and immediately
following the making of each Loan made on the 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 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 Regulations 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 Agents, 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. Restatement Effective Date. Without affecting the
rights of the Borrower or any Subsidiary hereunder at all times prior to the
Restatement Effective Date, the amendment and restatement of the Original
Agreement in the form hereof 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 each of the following conditions is satisfied (or
waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto a counterpart of this Agreement signed on behalf of
such party.
(b) The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the Lenders and
dated the Restatement Effective Date) of each of (i) Xxxxxxx Xxxx, Slate,
Xxxxxxx & Xxxx LLP, counsel for the Borrower, substantially in the form of
Exhibit J-1 and (ii) Xxxxxx Sari, General Counsel of the Borrower,
substantially in the form of Exhibit J-2, and, in the case of each such
opinion required by this paragraph, covering such other matters relating to
the Loan Parties, the Senior Loan Documents, the Intercompany Inventory
Purchase Agreement, the Senior Collateral or the Transactions as the Agents
shall reasonably request. The Borrower hereby requests such counsel to deliver
such opinions.
(c) The Administrative Agent shall have received such documents
and certificates as the Agents or their counsel may reasonably request
relating to the organization, existence and good standing of each Loan Party,
the authorization of the Transactions and any other legal matters relating to
the Loan Parties, the Senior Loan Documents, the Intercompany Inventory
Purchase Agreement, the Senior Collateral or the Transactions, all in form and
substance satisfactory to the Agents and their counsel.
(d) The Agents shall have received a certificate, dated the
Restatement Effective Date and signed by the President, a Vice President or a
Financial Officer of the Borrower, confirming compliance with the conditions
set forth in paragraphs (a), (b) and (c) of Section 4.02.
(e) The Agents shall have received all fees and other amounts due
and payable on or prior to the Restatement Effective Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses
(including fees, charges and disbursements of counsel) required to be
reimbursed or paid by any Loan Party hereunder (including under the Original
Agreement) or under any other Senior Loan Document.
(f) The Administrative Agent shall have received evidence that the
Borrower shall have repaid (or is repaying from the proceeds of Borrowings on
the Restatement Effective Date) all Loans or other amounts outstanding under
the Original Agreement on the Restatement Effective Date (other than Existing
Letters of Credit), that any breakage or indemnity payments in connection with
such repayment, to the extent invoiced pursuant to the terms of the Original
Agreement, have been (or are simultaneously being) paid.
(g) The Administrative Agent shall have received evidence that the
Borrower shall have repaid (or is repaying with the proceeds of Borrowings on
the Restatement Effective Date), all amounts outstanding under the Existing
Synthetic Lease on the Restatement Effective Date, that the Existing Synthetic
Lease (and all documents entered into in connection therewith) shall have been
(or simultaneously shall be) terminated and be of no further force and effect
(except with respect to surviving indemnities), that all Liens securing the
obligations under the Existing Synthetic Lease shall have been (or
simultaneously shall be) released and that the Borrower shall have been (or
simultaneously shall be) released from its guarantee thereunder.
(h) The Collateral and Guarantee Requirement shall have been
satisfied and the Administrative Agent shall have received a completed
Perfection Certificate dated the Restatement Effective Date and signed by an
executive officer or Financial Officer of the Borrower, together with all
attachments contemplated thereby, including the results of a Lien search in
scope satisfactory to the Collateral Agents made with respect to the Loan
Parties 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 (or similar documents) are
permitted by Section 6.02 or have been released; provided, however, that in
the case of Loan Parties in respect of which Lien searches were performed in
connection with the closing of the Original Agreement, such Lien searches
shall be limited to updates of the Lien searches previously performed. Each
Subsidiary owning any Senior Collateral shall be party to the Intercompany
Inventory Purchase Agreement, which shall be in full force and effect.
(i) All requisite Governmental Authorities shall have approved or
consented to the Transactions and there shall be no governmental or judicial
action, actual or threatened, that has or could have a reasonable likelihood
of restraining, preventing or imposing burdensome conditions that could,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.
(j) There shall be no material litigation against or involving the
Borrower or any Subsidiary or any of its property or defaults or breaches
under any provision of any security issued by the Borrower or any Subsidiary
or of any agreement, undertaking, contract, indenture, deed of trust or other
instrument, document or agreement to which the Borrower or any Subsidiary is a
party or by which it or any of its properties or assets are or may be bound,
which could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.
(k) The Administrative Agent shall have received a Borrowing Base
Certificate, dated the Restatement Effective Date and executed by a Financial
Officer of the Borrower, containing information as of a date not more than
eight Business Days (or, in the case of information with respect to Eligible
Inventory stored at a distribution center, 30 days) before the Restatement
Effective Date. The Borrowing Base Amount shall be sufficient to support the
Borrowings to be effected on the Restatement Effective Date.
(l) The Administrative Agent shall have received a copy of, or a
certificate as to coverage under, the insurance policies required by Section
5.07 and the applicable provisions of the Senior Collateral Documents, each of
which shall be endorsed or otherwise amended to include a "standard" or "New
York" lender's loss payable endorsement and to name the Collateral Agents as
additional insureds, in form and substance satisfactory to the Agents.
(m) Each of the Second Priority Subsidiary Security Agreement, the
Second Priority Subsidiary Guarantee and the Second Priority Indemnity,
Subrogation and Contribution Agreement shall be in form and substance
satisfactory to the Agents, shall have been duly executed by each Subsidiary
party thereto and by or on behalf of the Second Priority Indebtedness Parties,
and shall be in full force and effect, and copies of such documents shall have
been delivered to the Agents.
(n) Each of the waivers (except those waivers from lessors of the
distribution centers set forth on Schedule 5.17) 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.
The Administrative Agent shall notify the Borrower and the Lenders
of the Restatement Effective Date and such notice shall be conclusive and
binding. Notwithstanding the foregoing, 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 unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 5:00 p.m., New York City time, on
June 30, 2003 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time). It is understood and
agreed that no term of the amendment and restatement contemplated hereby shall
be effective until the Restatement Effective Date occurs, and that the
Original Agreement and the Predecessor Security Documents shall continue in
full force and effect without regard to the amendment and restatement
contemplated hereby until the 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 Restatement Effective Date, and of each Issuing Bank to issue,
amend, renew or extend any Letter of Credit after the 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
(c) after giving effect to such Borrowing or issuance, the
Borrowing Base Amount shall be equal to or greater than the sum of the
total Revolving Exposure and the outstanding Term Loans.
SECTION 4.03. Determinations Under Section 4.01. For purposes of
determining compliance with the conditions specified in Section 4.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lenders
unless an officer of the Administrative Agent responsible for the transactions
contemplated by the Senior Loan Documents shall have received written notice
from such Lender prior to the Restatement Effective Date specifying its
objection thereto and such Lender shall not have made available to the
Administrative Agent such Lender's ratable portion of the Borrowings made on
the Restatement Effective Date.
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 other independent public accountants
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 5 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 of the Borrower
(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 compliance with Sections 6.08(c), 6.12, 6.13, 6.14
and 6.15 (including a specification of any Quarterly Carryforward Credit and
calculations demonstrating compliance thereof with the definition of such
term), (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 of any Adjusted Annual Carryforward
Amount that was applied pursuant to Section 6.04(xii) to permit Business
Acquisitions effected during the most recent fiscal quarter covered by such
financial statements, (viii) setting forth the amount and type of Indebtedness
issued or incurred during the most recent fiscal quarter covered by such
financial statements, (ix) 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, (x) 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 (xi) 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 of the Borrower 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 four Business Days after the end of each fiscal
week 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 week,
certified as complete and correct by a Financial Officer of the Borrower;
provided that the amount with respect to Eligible Inventory stored at
distribution centers included in such Borrowing Base Amount shall be the
amount certified in the Borrowing Base Certificate most recently delivered
pursuant to clause (ii) of this paragraph (f), and (ii) within 14 days after
the end of each fiscal month of the Borrower, a Borrowing Base Certificate
showing the Borrowing Base Amount with respect to Eligible Inventory stored at
distribution centers as of the close of business on the last day of such
fiscal month, certified as complete and correct by a Financial Officer 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 fiscal year
ending on or prior to the 2008 fiscal year;
(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 or business of the Borrower or
any Subsidiary, or compliance with the terms of any Senior Loan Document, as
either Agent, at the request of any Lender, may reasonably request.
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 Liens) 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 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 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
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 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 Agents 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
Agents 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 Agents; (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; (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 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 Script Lists at or about the end of the fiscal quarter ending August 31
and February 28 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 Agents
shall require based upon the results of such evaluation and appraisal in their
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 Term Loans and the Revolving Loans made on the Restatement
Effective Date will be used only for (i) the payment of fees and expenses
payable in connection with the Transactions, (ii) the refinancing of amounts
outstanding and other obligations under the Original Agreement and (iii) the
repayment of all amounts due or outstanding under the Existing Synthetic
Lease.
(b) The proceeds of the Revolving Loans and Swingline Loans made
after the Restatement Effective Date will be used by the Borrower solely for
the following purposes:
(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 permitted pursuant to
Section 6.15 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 required to be made in respect of the Equity
Interests listed on Schedule 6.08(a) or described in Section 6.08(a);
and
(v) Optional Debt Repurchases made pursuant to Section 6.08(c).
(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.
SECTION 5.11. Additional Subsidiaries. If any additional
wholly-owned Domestic Subsidiary is formed or acquired after the Restatement
Effective 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 Collateral and Guarantee Requirement to be
satisfied with respect to such Subsidiary. 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 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 agree to provide to the Collateral Agents, from time to time upon
request, evidence reasonably satisfactory to the Collateral Agents 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 the 12.5% Note Indenture 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 (as
defined in the Intercompany Inventory Purchase Agreement) to purchase any
Inventory (as defined in the Intercompany Inventory Purchase Agreement) from
any Direct Delivery Vendor (as defined in the Intercompany Inventory Purchase
Agreement) 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. 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.
SECTION 5.17. Landlord Waivers. The Borrower shall deliver to the
Administrative Agent a waiver in form and substance reasonably acceptable to
the Administrative Agent from the lessor of each leased distribution center
set forth on Schedule 5.17 of any statutory, common law or contractual
landlord's lien with respect to any inventory of any Subsidiary Loan Party no
later than the date that is 30 days following the Restatement Effective Date
(or such later date as the Administrative Agent, in its sole discretion, may
determine).
SECTION 5.18. Certain Subsidiaries. The Borrower will use
commercially reasonable efforts to cause each of Rite Aid of Vermont, Inc. and
Rite Aid of Washington, D.C., Inc. to become Subsidiary Loan Parties and cause
the Collateral and Guarantee Requirement to be satisfied with respect to such
Subsidiary Loan Parties no later than the date that is 30 days following the
Restatement Effective Date (or such later date as the Administrative Agent, in
its sole discretion, may determine).
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 or any Attributable Debt in respect
of any Sale and Leaseback Transaction, except:
(i) Indebtedness under the Senior Loan Documents;
(ii) unsecured Indebtedness of the Borrower, including the 11.25%
Senior Notes , the 4.75% Convertible Notes and the 9.25% Notes, that is
not Guaranteed by any Subsidiary and matures no earlier than, has a
weighted average life no earlier than, and has covenants and events of
default that, taken as a whole, are not materially less favorable to
the Borrower and the Subsidiaries than those of, the 9.25% Notes, and
Refinancing Indebtedness issued in respect of such Indebtedness,
provided that such Indebtedness is permitted to be incurred under
Section 6.13 and any Reductions required under Section 2.11 as a result
of the issuance of such Indebtedness are effected as required thereby;
(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 11.25%
Senior Notes, the 9.25% Notes and the 4.75% Convertible Notes)
outstanding on the 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) of this Section 6.01(a), not in excess of
$1,000,000,000 at any time outstanding;
(vi) unsecured Indebtedness of the Borrower and the Subsidiaries
in an aggregate principal amount, together with the aggregate principal
amount of Indebtedness incurred pursuant to clause (v) of this Section
6.01(a), not in excess of $1,000,000,000 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, 2008; and provided further that the aggregate
principal amount of Indebtedness and Attributable Debt incurred
pursuant to this clause (vii) shall not exceed $200,000,000 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 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 Restatement Effective Date that were accounted for as operating
leases on the 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; and
(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 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
a connection with a transaction that is substantially consistent with
the business plan of the Borrower provided to the Lenders prior to the
Restatement Effective Date.
(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, the Series D Preferred Stock and
other preferred Equity Interests issued and outstanding on the 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 Agreements 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
Collateral, (B) such Lien is subject to the Collateral Trust and
Intercreditor Agreement, (C) any Lien on the proceeds of such
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
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 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 Restatement Effective
Date;
(xi) any Lien on Net Cash Proceeds that (A) is received in
connection with Reduction Events allocated to the Second Priority Debt
Obligations in accordance with the Collateral Trust and Intercreditor
Agreement and (B) arises pursuant to Section 10.14 of the 12.5% Note
Indenture or equivalent provisions in any other Second Priority Debt
Document;
(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), (xii) 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;
(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 (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 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 (xiii)); and
(xv) 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
existing on the Effective Date and 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, provided that the aggregate
cumulative consideration paid or payable by the Borrower or any
Subsidiary (including any Indebtedness assumed or acquired in
connection with such Business Acquisition on or after the Restatement
Effective Date) for such Business Acquisitions does not exceed
$50,000,000, and provided further, that the Borrower may effect
Business Acquisitions in any fiscal year (which will not be taken into
account for purposes of the foregoing limitation) in an aggregate
amount not in excess of (x) the Adjusted Annual Carryforward Amount for
such fiscal year minus (y) the aggregate amount of Quarterly
Carryforward Credits for fiscal quarters in such fiscal year;
(xiii) Investments by Subsidiary Loan Parties that are not
otherwise permitted under any other provision of this Section 6.04;
provided that (A) the aggregate net book value of all Investments
permitted by this clause (xiii) may not at any time exceed the greater
of (1) $200,000,000 and (2) 10% of Consolidated Net Worth 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 clause (xiii).
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, 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
and the issuance of Equity Interests) 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; and
(v) any Sale and Leaseback Transaction permitted pursuant to
Section 6.01(a)(vii), (xii) or (xiii) and Section 6.06;
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 Net Cash Proceeds of such sale,
transfer or disposition or consideration are applied as provided in Section
2.11(c).
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 pay cash dividends in an amount not to exceed $40,000,000 in any fiscal
year of the Borrower with respect to the Series D Preferred Stock or any other
Qualified Preferred Stock issued in exchange therefor; 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) 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 6.14, (iv) 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 Restatement Effective Date shall not exceed
$10,000,000 or (v) 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)) and (vi) 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.
(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 except for the following (provided in
each case that no Default exists at the time of or would result from such
Optional Debt Repurchase):
(i) Optional Debt Repurchases made on or after the Restatement
Effective Date involving Repurchase Expenditures in a cumulative
aggregate amount not in excess of $200,000,000; and
(ii) Optional Debt Repurchases made when no additional Optional
Debt Repurchases are permitted under clause (i) above; provided that,
on the date of such Optional Debt Repurchase and after giving effect
thereto and to the payment of all Repurchase Expenditures required to
be made in connection therewith (including after giving pro forma
effect to reductions in Current Liquidity resulting from any such
payments to be made in the future), (x) the sum of (I) Current
Liquidity and (II) Revolver Availability exceeds (y) the aggregate
amount of Inside Indebtedness outstanding on such date.
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 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) transactions between or among the Borrower and/or one or more
Subsidiary Loan Parties; and
(e) 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
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 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 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 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 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
and (H) any restriction existing under any agreement of a Person acquired as a
Subsidiary pursuant to Section 6.03, Section 6.04(a)(xii), 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.
(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
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 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, Section 6.04(a)(xii) 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 and (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.
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 Agents, 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 Agents;
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 Interest Expense Coverage Ratio. The
Borrower will not permit the Consolidated Interest Expense Coverage Ratio for
any period of four consecutive fiscal quarters ending during a period set
forth below to be less than the ratio set forth below opposite such period:
Four Fiscal Quarter Period Ending Ratio
--------------------------------- -----
March 2, 2003 through February 28, 2004 1.90 to 1.00
February 29, 2004 through August 28, 2004 1.95 to 1.00
August 29, 2004 through November 27, 2004 2.00 to 1.00
November 28, 2004 through February 26, 2005 2.05 to 1.00
February 27, 2005 through May 28, 2005 2.10 to 1.00
May 29, 2005 through August 27, 2005 2.15 to 1.00
August 28, 2005 through November 26, 2005 2.20 to 1.00
November 27, 2005 through March 4, 2006 2.25 to 1.00
March 5, 2006 through June 3, 2006 2.35 to 1.00
June 4, 2006 through September 2, 2006 2.40 to 1.00
September 3, 2006 through December 2, 2006 2.50 to 1.00
December 3, 2006 through March 3, 2007 2.60 to 1.00
March 4,2007 through June 2, 2007 2.75 to 1.00
June 3, 2007 through September 1, 2007 2.90 to 1.00
September 2, 2007 through December 1, 2007 3.00 to 1.00
December 2, 2007 through March 1, 2008 3.25 to 1.00
SECTION 6.13. Leverage Ratio. The Borrower will not permit the
Leverage Ratio as of any date during any period set forth below to exceed the
ratio set forth opposite such period:
Period Ratio
------ -----
March 2, 2003 through February 28, 2004 6.65 to 1.00
February 29, 2004 through May 29, 2004 6.45 to 1.00
May 30, 2004 through August 28, 2004 6.35 to 1.00
August 29, 2004 through November 27, 2004 6.20 to 1.00
November 28, 2004 through February 26, 2005 6.05 to 1.00
February 27, 2005 through May 28, 2005 5.60 to 1.00
May 29, 2005 through August 27, 2005 5.50 to 1.00
August 28, 2005 through November 26, 2005 5.30 to 1.00
November 27, 2005 through March 4, 2006 5.10 to 1.00
March 5, 2006 through June 3, 2006 4.95 to 1.00
June 4, 2006 through September 2, 2006 4.85 to 1.00
September 3, 2006 through December 2, 2006 4.50 to 1.00
December 3, 2006 through March 3, 2007 4.20 to 1.00
March 4, 2007 through September 1, 2007 4.00 to 1.00
September 2, 2007 through March 1, 2008 3.80 to 1.00
SECTION 6.14. Consolidated Fixed Charge Coverage Ratio. The
Borrower will not permit the Consolidated Fixed Charge Coverage Ratio for any
period of four consecutive fiscal quarters ending during a period set forth
below to be less than the ratio set forth below opposite such period:
Four Fiscal Quarter Period Ending Ratio
--------------------------------- -----
March 2, 2003 through February 28, 2004 1.05 to 1.00
February 29, 2004 through November 26, 2005 1.10 to 1.00
November 27, 2005 through December 2, 2006 1.15 to 1.00
December 3, 2006 through June 2, 2007 1.20 to 1.00
June 3, 2007 through March 1, 2008 1.25 to 1.00
SECTION 6.15. Capital Expenditures. The Borrower will not permit
the aggregate amount of Consolidated Capital Expenditures for any fiscal year
set forth below to exceed (a) the amount set forth below opposite such fiscal
year plus (b) any amount (the "Carryforward Amount") by which the amount set
forth below opposite the immediately preceding fiscal year, if any, exceeds
the aggregate amount of Consolidated Capital Expenditures during such
immediately preceding fiscal year minus (c) the amount of the Adjusted Annual
Carryforward Amount for such fiscal year utilized pursuant to Section
6.04(xii) to permit Business Acquisitions to be consummated during such fiscal
year.
Fiscal Year Ending Amount
------------------ ------
February 28, 2004..................................... $250,000,000
February 26, 2005..................................... $300,000,000
March 4, 2006......................................... $325,000,000
March 3, 2007......................................... $350,000,000
March 1, 2008......................................... $375,000,000
For purposes of the foregoing and the calculation of the Carryforward Amount
generated in any fiscal year, Consolidated Capital Expenditures made during
any fiscal year will be deemed to utilize the amount set forth in the table
above in respect of such fiscal year until such amount is fully utilized and
then to utilize any available Carryforward Amount.
SECTION 6.16. 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 6.17. 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 5 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 $25,000,000 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 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 the
Administrative Agent shall have given its prior written consent;
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) each Collateral Agent as its agent and authorizes
the Collateral Agents to take such actions on its behalf and to exercise such
powers as are delegated to the Collateral Agents 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.
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, to Citicorp North
America, Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention of
Sebastien Delasnerie (Telecopy No. 000-000-0000; email address:
xxxxxxxxx.xxxxxxxxxx@xxxxxxxxx.xxx; email address:
xxxxxxxxx.xxxxxxxxxx@xxxxxxxxx.xxx, with a copy to
xxxxxxxxxxxxxxx@xxxxxxxxx.xxx);
(c) if to the Syndication Agent, to JPMorgan Chase Bank, 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attention of Xxxx Xxxxxxxxx (Telecopy No. 212-
270-6637; email address: xxxx.xxxxxxxxx@xxxxxxxx.xxx);
(d) if to the Issuing Banks, to (i) Citicorp North America, Inc.,
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention of Sebastien Delasnerie
(Telecopy No. 000- 000-0000; email address: xxxxxxxxx.xxxxxxxxxx@xxxxxxxxx.xxx)
and (ii) JPMorgan Chase Bank, 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 Sebastien
Delasnerie (Telecopy No: 000-000-0000; email
address:xxxxxxxxx.xxxxxxxxxx@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 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 of the Lenders, (vi) subordinate the priority of the Lien
granted to the Senior Collateral Agents 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" 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, (x) change any provision of any
Senior Loan Document in a manner that by its terms adversely affects the
rights in respect of payments due to 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 or (xi) waive any condition to
effectiveness set forth in Section 4.01, without the written consent of each
Lender; and provided further, that (A) 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, and (B) 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
Term Loan Lenders) or the Term Loan 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 change the allocation of amounts applied
to the permanent reduction of Revolving Commitments and the prepayment of
outstanding Term Loans in connection with any such reduction and prepayment
required by Section 2.11(b), (c) or (d) without the written consent of
Revolving Lenders having more than 50% of the total LC Exposure and unused
Revolving Commitments at such time and Term Loan Lenders holding more than 50%
of the outstanding Term Loans at such time. 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 and
for the pledge of any non-cash proceeds thereof pursuant to the Senior
Collateral Documents, and (ii) if a Subsidiary Loan Party ceases to be a
Subsidiary of the Borrower 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 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 Assumption
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
Term Loan Commitments and 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 to two or more Approved Funds managed
by the same investment advisor or by affiliated investment advisors,
only one such fee shall be payable;
(D) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire; and
(E) in the case of an assignment by a Lender to a CLO
managed by such Lender or by an Affiliate of such Lender, unless such
assignment (or an assignment to a CLO managed by the same manager or
an Affiliate of such manager) shall have been approved by the
Borrower (the Borrower hereby agreeing that such approval, if
requested, will not be unreasonably withheld or delayed), the
assigning Lender shall retain the sole right to approve any
amendment, modification or waiver of any provision of this Agreement,
except that the Assignment and Acceptance between such Lender and
such CLO may provide that such Lender will not, without the consent
of such CLO, agree to any amendment, modification or waiver described
in the first proviso to Section 9.02(b) that affects such CLO.
(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 Assumption
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 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. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. 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. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
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.
(a) 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 the Administrative 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.
(b) 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.
(c) 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 (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 Administrative Agent,
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 direct or indirect
contractual counterparty in any Hedging Agreement (or to any such contractual
counterparty's professional advisor), so long as such 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 the Administrative 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 the Administrative 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 the Agent to enter
into the Collateral Trust Agreement and each other Senior Collateral Document
on its behalf, and agrees that the Administrative Agent and the Collateral
Agents may enforce the rights and remedies of the Lenders under each Senior
Loan Document to the extent provided in the Senior Collateral Documents and
the Collateral Trust and Intercreditor Agreement.
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 average total
Revolving Exposure and the average outstanding 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 Collateral
Agents, upon its determination or upon request by the Required Lenders, shall
be 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 average total Revolving
Exposure and the average outstanding Term Loans) over any 30-day period, in
each case, together with all amounts then on deposit in the Cash Sweep Cash
Account, is greater than $100,000,000, then the Collateral Agents 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 Collateral Agents 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
xxxxxxxxx.xxxxxxxxxx@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 WILLFUL 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
RITE AID CORPORATION,
by
_________________________
Name:
Title:
CITICORP NORTH AMERICA, INC., individually and
as Administrative Agent and Collateral
Processing Co-Agent,
by
_________________________
Name:
Title:
JPMORGAN CHASE BANK, individually and as
Syndication Agent and Collateral Processing
Co-Agent,
by
_________________________
Name:
Title:
FLEET RETAIL FINANCE INC.,
individually and as Collateral Agent and
Co-Documentation Agent,
by
_________________________
Name:
Title:
CIT GROUP/BUSINESS CREDIT, INC., individually
and as Co-Documentation Agent,
by
_________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
individually and as Co-Documentation Agent,
by
_________________________
Name:
Title:
SIGNATURE PAGE TO THE RITE AID
AMENDED AND RESTATED CREDIT
AGREEMENT DATED AS OF MAY 28, 2003
Name of Institution:_______________
by
_________________________________
Name:
Title:
