Exhibit 10.1
EXECUTION COPY
SENIOR CREDIT AGREEMENT
dated as of June 12, 2000
among
RITE AID CORPORATION,
The Banks Party Hereto,
CITICORP USA, INC.,
as Senior Administrative Agent,
CITICORP USA, INC.,
as Senior Collateral Agent,
and
XXXXXX FINANCIAL, INC. and FLEET RETAIL FINANCE INC.
as Syndication Agents,
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TABLE OF CONTENTS
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PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS.................................................1
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS........................29
SECTION 1.03. CLASSES AND TYPES OF LOANS.................................29
SECTION 1.04. TERMS DEFINED IN DEFINITIONS ANNEX.........................29
SECTION 1.05. OTHER DEFINITIONAL PROVISIONS..............................30
ARTICLE 2
THE CREDITS
SECTION 2.01. COMMITMENTS................................................30
SECTION 2.02. LOANS ..................................................31
SECTION 2.03. BORROWING PROCEDURE........................................33
SECTION 2.04. NOTES AND RECORDS..........................................34
SECTION 2.05. SENIOR FEES................................................35
SECTION 2.06. INTEREST ON LOANS..........................................36
SECTION 2.07. DEFAULT INTEREST...........................................37
SECTION 2.08. TERMINATION AND REDUCTION OF COMMITMENTS...................37
SECTION 2.09. CONVERSION AND CONTINUATION OF BORROWINGS..................38
SECTION 2.10. REPAYMENT OF BORROWINGS....................................40
SECTION 2.11. OPTIONAL PREPAYMENT........................................40
SECTION 2.12. MANDATORY PREPAYMENTS......................................41
SECTION 2.13. BREAKAGE ..................................................43
SECTION 2.14. PRO RATA TREATMENT.........................................44
SECTION 2.15. PAYMENTS ..................................................45
SECTION 2.16. SWINGLINE LOANS............................................45
SECTION 2.17. LETTERS OF CREDIT..........................................48
SECTION 2.18. ADJUSTMENTS TO BORROWING BASE ADVANCE RATES................53
ARTICLE 3
CONDITIONS
SECTION 3.01. FIRST CREDIT EVENT.........................................54
SECTION 3.02. ALL CREDIT EVENTS..........................................60
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. CORPORATE EXISTENCE AND POWER..............................61
SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION.61
SECTION 4.03. BINDING EFFECT.............................................62
SECTION 4.04. FINANCIAL AND OTHER INFORMATION............................62
SECTION 4.05. ACCURACY OF INFORMATION....................................63
SECTION 4.06. LITIGATION.................................................63
SECTION 4.07. COMPLIANCE WITH ERISA......................................64
SECTION 4.08. TAXES ..................................................64
SECTION 4.09. SUBSIDIARIES...............................................64
SECTION 4.10. ENVIRONMENTAL MATTERS......................................65
SECTION 4.11. YEAR 2000 COMPLIANCE.......................................65
SECTION 4.12. OTHER REPRESENTATIONS......................................65
SECTION 4.13. EXISTING AND INDEPENDENT LETTERS OF CREDIT.................65
SECTION 4.14. INSURANCE..................................................66
SECTION 4.15. SOLVENCY ..................................................66
SECTION 4.16. TITLE TO PROPERTIES........................................66
SECTION 4.17. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.67
SECTION 4.18. LABOR MATTERS..............................................67
ARTICLE 5
COVENANTS
SECTION 5.01. INFORMATION................................................67
SECTION 5.02. PAYMENT OF OBLIGATIONS.....................................71
SECTION 5.03. MAINTENANCE OF PROPERTY; INSURANCE.........................72
SECTION 5.04. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE...........74
SECTION 5.05. COMPLIANCE WITH LAWS.......................................74
SECTION 5.06. INSPECTION OF PROPERTY, BOOKS AND RECORDS..................74
SECTION 5.07. RESTRICTION ON OTHER AGREEMENTS, PAYMENT LIMITATIONS, DEBT
PREPAYMENTS, AMENDMENTS TO OTHER AGREEMENTS................74
SECTION 5.08. FURTHER ASSURANCES.........................................76
SECTION 5.09. BORROWING BASE REVIEWS.....................................76
SECTION 5.10. SUBSIDIARIES...............................................77
SECTION 5.11. INTERCOMPANY TRANSFERS.....................................77
SECTION 5.12. INVENTORY PURCHASING.......................................77
SECTION 5.13. CASH MANAGEMENT SYSTEM.....................................78
SECTION 5.14. RESTRICTION ON SALE AND LEASEBACK TRANSACTIONS.............78
SECTION 5.15. RESTRICTION ON LIENS.......................................79
SECTION 5.16. CAPITAL EXPENDITURES.......................................80
SECTION 5.17. MINIMUM EBITDA.............................................81
SECTION 5.18. MINIMUM INTEREST COVERAGE RATIO............................82
SECTION 5.19. MINIMUM FIXED CHARGE COVERAGE RATIO........................83
SECTION 5.20. RESTRICTION ON DEBT........................................84
SECTION 5.21. LIMITATION ON INVESTMENTS AND ACQUISITIONS.................86
SECTION 5.22. CONSOLIDATIONS AND MERGERS.................................88
SECTION 5.23. DISPOSITIONS OF ASSETS.....................................88
SECTION 5.24. USE OF PROCEEDS............................................89
SECTION 5.25. RESTRICTIONS ON ASSET HOLDINGS BY THE BORROWER.............90
SECTION 5.26. RESTRICTED PAYMENTS........................................91
SECTION 5.27. BUSINESS OF BORROWER AND SUBSIDIARIES......................91
SECTION 5.28. TRANSACTIONS WITH AFFILIATES...............................91
SECTION 5.29. NEW SYNTHETIC LEASES.......................................92
SECTION 5.30. CORPORATE SEPARATENESS.....................................93
SECTION 5.31. LIMITATION ON DERIVATIVE OBLIGATIONS.......................93
ARTICLE 6
DEFAULTS
SECTION 6.01. EVENTS OF DEFAULT..........................................93
SECTION 6.02. NOTICE OF DEFAULT..........................................96
ARTICLE 7
THE AGENTS
SECTION 7.01. APPOINTMENT AND AUTHORIZATION..............................96
SECTION 7.02. SENIOR ADMINISTRATIVE AGENT AND AFFILIATES.................97
SECTION 7.03. ACTION BY AGENTS...........................................97
SECTION 7.04. CONSULTATION WITH EXPERTS..................................97
SECTION 7.05. LIABILITY OF SENIOR ADMINISTRATIVE AGENT...................97
SECTION 7.06. INDEMNIFICATION............................................98
SECTION 7.07. CREDIT DECISION............................................98
SECTION 7.08. RESIGNATION OF AGENTS......................................98
SECTION 7.09. REMOVAL OF SENIOR ADMINISTRATIVE AGENT.....................99
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR...100
SECTION 8.02. ILLEGALITY.................................................100
SECTION 8.03. INCREASED COST AND REDUCED RETURN..........................101
SECTION 8.04. TAXES ..................................................102
SECTION 8.05. BASE RATE LOANS SUBSTITUTED FOR AFFECTED EURO-DOLLAR LOANS.104
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. NOTICES ..................................................105
SECTION 9.02. NO WAIVERS.................................................105
SECTION 9.03. EXPENSES; INDEMNIFICATION..................................105
SECTION 9.04. SETOFF; SHARING OF SETOFFS.................................106
SECTION 9.05. AMENDMENTS AND WAIVERS; RELEASE OF SENIOR COLLATERAL AND
SUBSIDIARY GUARANTORS......................................107
SECTION 9.06. SUCCESSORS AND ASSIGNS.....................................108
SECTION 9.07. GOVERNING LAW; SUBMISSION TO JURISDICTION..................109
SECTION 9.08. COUNTERPARTS; INTEGRATION..................................110
SECTION 9.09. WAIVER OF JURY TRIAL.......................................110
SECTION 9.10. COLLATERAL TRUST AND INTERCREDITOR AGREEMENT...............110
SECTION 9.11. CASH SWEEP.................................................110
ANNEXES
Annex 1 - Initial Revolving Credit Commitments and
Term Loan Commitments
Annex 2 - Administrative Information
Annex 3 - Description of the Transactions
Annex 4 - Definitions Annex
SCHEDULES
Schedule 1.01(a) - Existing Litigation
Schedule 1.01(b) - Mortgaged Properties
Schedule 1.01(c) - Subsidiary Guarantors
Schedule 4.13(a) - Independent Standby Letters of Credit
Schedule 4.13(b) - Existing Trade Letters of Credit
Schedule 4.14 - Insurance
Schedule 4.16(b)(i) - Leases on Mortgaged Properties
Schedule 4.16(b)(ii) - Permitted Liens on Mortgaged Properties
Schedule 4.16(c) - Leased Warehouses and Distribution Centers
Schedule 5.14(a) - Permitted Sale and Leaseback Transactions
Schedule 5.15(i) - Permitted Liens
Schedule 5.20(f) - Permitted Debt
Schedule 5.24(b)(iv) - Permitted Dividends Payable on Capital Stock
Schedule 5.28 - Permitted Affiliate Transactions
EXHIBITS
Exhibit A-1 - Form of Term Note
Exhibit A-2 - Form of Revolving Credit Note
Exhibit A-3 - Form of Swingline Note
Exhibit B - Form of Borrowing Request
Exhibit C - Form of Continuation/Conversion Request
Exhibit D - Form of Issuance Request
Exhibit E - Form of Borrowing Base Certificate
Exhibit F - Form of Assignment and Assumption Agreement
Exhibit G - Form of Senior Subsidiary Guarantee
Agreement
Exhibit H - Form of Senior Subsidiary Security
Agreement
Exhibit I - Form of Senior Indemnity, Subrogation and
Contribution Agreement
Exhibit J - Form of Senior Mortgage
Exhibit K - Form of Second Priority Subsidiary
Guarantee Agreement
Exhibit L - Form of Second Priority Subsidiary
Security Agreement
Exhibit M - Form of Second Priority Indemnity,
Subrogation and Contribution Agreement
Exhibit N - Form of Second Priority Mortgage
Exhibit O-1 - Form of Opinion of Skadden, Arps, Slate,
Xxxxxxx & Xxxx, Special New York Counsel
to the Borrower
Exhibit O-2 - Form of Opinion of General Counsel of the
Borrower
Exhibit P - Form of Administrative Questionnaire
Exhibit Q - Form of Intercompany Inventory Purchase
Agreement
SENIOR CREDIT AGREEMENT dated as of
June 12, 2000, among RITE AID CORPORATION, a
Delaware corporation ("Rite Aid" or the
"Borrower"), the Banks (as defined in Article
1), CITICORP USA, INC. ("Citicorp USA"), as a
Swingline Bank, as an Issuing Bank, and as
administrative agent for the Banks (in such
capacity, the "Senior Administrative Agent"),
CITICORP USA, INC., as collateral agent for the
Banks (in such capacity, the "Senior Collateral
Agent") and XXXXXX FINANCIAL, INC. and FLEET
RETAIL FINANCE INC., as syndication agents (in
such capacity, the "Syndication Agents").
The Borrower has requested the Banks to extend credit in the form
of (a) Term Loans on the Initial Borrowing Date in an aggregate principal
amount not in excess of $500,000,000, and (b) Revolving Loans at any time
and from time to time before the Maturity Date, in an aggregate principal
amount at any time outstanding not in excess of $500,000,000. The Borrower
has requested the Swingline Banks to extend credit, on an uncommitted
basis, at any time and from time to time before the Maturity Date in the
form of Swingline Loans, in an aggregate principal amount at any time
outstanding not in excess of $100,000,000. The Borrower has requested the
Issuing Banks to issue letters of credit, in an aggregate face amount at
any time outstanding not in excess of $100,000,000, to support payment
obligations incurred in the ordinary course of business by the Borrower on
behalf of its Subsidiaries and by the Borrower's Subsidiaries.
The Banks and the Swingline Banks are willing to extend such
credit to the Borrower and the Issuing Banks are willing to issue letters
of credit for the account of the Borrower on the terms and subject to the
conditions set forth herein. Accordingly, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS. The following terms, as used herein,
have the following meanings:
"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 amount determined in
accordance with Section 2.18.
"Adjusted London Interbank Offered Rate" means, with respect to
any Euro-Dollar Borrowing for any Interest Period, an interest rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
product of (a) the London Interbank Offered Rate in effect for such
Interest Period and (b) Statutory Reserves.
"Adjusted Working Capital" means, for any date, current assets
(other than cash and cash equivalents) less current liabilities (other than
Debt permitted hereunder).
"Administrative Questionnaire" means, with respect to each Bank,
an Administrative Questionnaire in the form of Exhibit P, duly completed by
such Bank and submitted to the Senior Administrative Agent (with a copy to
the Borrower).
"Affiliate Transaction" is defined in Section 5.28.
"Agents" means the Senior Administrative Agent, the Senior
Collateral Agent and the Syndication Agents.
"Aggregate Revolving Credit Exposure" means the aggregate amount
of the Banks' Revolving Credit Exposures.
"Agreement" means this Agreement as the same may be amended from
time to time in accordance with the terms hereof.
"Applicable Date" is defined in Section 8.04(d).
"Applicable Lending Office" means, with respect to any Bank, (i)
in the case of its Base Rate Loans, its Domestic Lending Office and (ii) in
the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"Assessment Rate" means for any date the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently estimated by
the Senior Administrative Agent as the then current net annual assessment
rate that will be employed in determining amounts payable by any Bank to
the Federal Deposit Insurance Corporation (or any successor thereto) for
insurance by such Corporation (or such successor) of time deposits made in
dollars at the Senior Administrative Agent's domestic offices.
"Assignee" has the meaning set forth in Section 9.06(c).
"Assignment and Acceptance Agreement" means an assignment and
acceptance agreement in the form of Exhibit F or such other form as may be
approved by the Senior Administrative Agent.
"Bank" means each bank or other institution listed on the
signature pages hereof, each Assignee which becomes a Bank pursuant to
Section 9.06(c), and their respective successors. Unless the context
clearly indicates otherwise, the term "Bank" shall include the Swingline
Banks.
"Base CD Rate" means the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the
Assessment Rate.
"Base Rate" means, for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greatest of (a) Citibank
Base Rate, (b) the Base CD Rate in effect on such day plus 1/2 of 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%.
If for any reason the Senior Administrative Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Base CD Rate or the Federal Funds Effective Rate or
both for any reason, including the inability or failure of the Senior
Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition thereof, the Base Rate shall be determined without
regard to clause (b) or (c), or both, of the preceding sentence, as
appropriate, until the circumstances giving rise to such inability no
longer exist. Any change in the Base Rate due to a change in the Citibank
Base Rate, the Base CD Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Citibank Base Rate,
the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Base Rate Borrowing" means a Borrowing comprised of Base Rate Loans.
"Base Rate Loan" means any Base Rate Term Loan or Base Rate
Revolving Loan.
"Base Rate Revolving Loan" means any Revolving Loan bearing
interest at a rate determined by reference to the Base Rate in accordance
with the provisions of Article 2.
"Base Rate Term Borrowing" means a Borrowing comprised of Base
Rate Term Loans.
"Base Rate Term Loan" means any Term Loan bearing interest at a
rate determined by reference to the Base Rate in accordance with the
provisions of Article 2.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by
any member of the ERISA Group.
"Borrowing" means a group of Loans of a single Type made by the
Banks on a single date and as to which a single Interest Period is in
effect.
"Borrowing Base Amount" means, with respect to the Borrower, an
amount in dollars equal to the sum of, without duplication,
(a) the Accounts Receivable Advance Rate multiplied by
the book value of Eligible Accounts Receivable;
(b) plus the Pharmaceutical Inventory Advance Rate
multiplied by the Eligible Inventory Value of Eligible Inventory
consisting of products that can be dispensed only on order of a
licensed professional;
(c) plus the Other Inventory Advance Rate multiplied by
the Eligible Inventory Value of all other Eligible Inventory;
(d) minus any reserves established by the Senior
Administrative Agent in the exercise of its reasonable judgment to
reflect Borrowing Base Factors.
The Borrowing Base Amount shall be computed weekly in accordance with
Section 5.01(g). The Borrowing Base at any time in effect shall be
determined by reference to the Borrowing Base Amount Certificate most
recently delivered hereunder.
"Borrowing Base Certificate" means a certificate substantially in
the form of Exhibit E or such other form as the Senior Administrative Agent
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 or Eligible
Accounts Receivable, other impediments to the Senior Collateral Agent's
ability to realize upon the Eligible Accounts Receivable or the Eligible
Inventory and other factors affecting the credit value to be afforded the
Eligible Accounts Receivable and the Eligible Inventory.
"Borrowing Request" means a request by the Borrower in accordance
with the terms of Section 2.03 (or in the case of Swingline Loans, Section
2.16) and substantially in the form of Exhibit B.
"Business Acquisition" means (i) an Investment by the Borrower or
any of its Subsidiaries in any other Person (including an Investment by way
of acquisition of 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 its Subsidiaries or (ii) an acquisition by the
Borrower or any of its Subsidiaries of the property and assets of any
Person (other than the Borrower or any of its 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, Stores and Persons substantially all of whose assets
consist of fewer than ten Stores, in each case, in the ordinary course of
business and not inconsistent with the Borrower's business plan delivered
pursuant to Section 3.01(l), shall not be a Business Acquisition.
"Capital Lease" means any lease of property which, in accordance
with generally accepted accounting principles, should be capitalized on the
lessee's balance sheet.
"Cash Management System" is defined in the Senior Subsidiary
Security Agreement.
"Cash Sweep Cash Collateral Account" is defined in the Senior
Subsidiary Security Agreement.
"Cash Sweep Notice" is defined in the Senior Subsidiary Security
Agreement.
"Cash Sweep Period" is defined in the Senior Subsidiary Security
Agreement.
"Citibank Base Rate" means the rate of interest publicly announced
by Citibank, N.A., in New York City from time to time as its Citibank Base
Rate.
"Citibank Concentration Account" is defined in the Senior
Subsidiary Security Agreement.
"Citicorp USA" is defined in the preamble.
"Class" has the meaning set forth in Section 1.03.
"Commitment" means, with respect to any Bank, such Bank's
Revolving Credit Commitment or Term Loan Commitment.
"Concentration Account" is defined in the Senior Subsidiary
Security Agreement.
"Consolidated Capital Expenditures" means, for any period, the
aggregate amount of expenditures by the Borrower and its Consolidated
Subsidiaries for plant, property and equipment 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), but excluding 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.
"Consolidated Debt" means at any date the Debt of the Borrower and
its Consolidated Subsidiaries, determined on a consolidated basis as of
such date.
"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
expenses and (vi) any other nonrecurring charge to the extent such
nonrecurring charge does not involve any cash expenditure during such
period, (vii) all fees, costs, charges and expenses in connection with the
Transactions, (viii) all fees, costs, charges and expenses in connection
with the restatement of the consolidated financial statements of the
Borrower and its Consolidated Subsidiaries for periods before February 26,
2000 and litigation expenses (exclusive of damages or amounts paid in
settlement of claims) incurred in connection with litigation, investigation
(including internal review) or other proceedings relating to such
restatement, (ix) any advisory or other fees payable by the Borrower
pursuant to the one-year financial services advisory contract as described
in the Borrower's quarterly report on Form 10-Q for the fiscal quarter
ended as of August 28, 1999, (x) non-cash compensation expenses related to
stock option and restricted stock employee benefit plans, and (xi) the
non-cash interest component, as adjusted from time to time, in respect of
reserves, less (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 to (ii)
Consolidated Interest Charges plus Consolidated Rent, in each case for such
period.
"Consolidated Interest Charges" means, for any period, the
aggregate amount of interest charges, whether expensed or capitalized,
incurred or accrued by the Borrower and its Consolidated Subsidiaries,
solely to the extent paid or payable in cash, during such period.
"Consolidated Interest Coverage Ratio" means, with respect to any
period, the ratio of Consolidated EBITDA for such period to Consolidated
Interest Charges for such period.
"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, (b) any gain or loss in connection
with any sale of assets other than sales of inventory in the ordinary
course of business, but in the case of loss only to the extent that such
loss does not involve any cash expenditure during such period and (c) the
Borrower's share of the net income (or loss) of Xxxxxxxxx.xxx), determined
on a consolidated basis for such period.
"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 Borrower's
8% Convertible Pay-In-Kind 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 and including base or basic rent payments under
Synthetic Leases.
"Consolidated Subsidiary" means, with respect to any Person, at
any date any Subsidiary or other entity the accounts of which would be
consolidated with those of such Person in its consolidated financial
statements if such statements were prepared as of such date.
"Continuation/Conversion Request" means a continuation/conversion
request delivered by the Borrower to the Senior Administrative Agent, in
the form of Exhibit C or such other form as shall be approved by the Senior
Administrative Agent.
"Credit Event" is defined in Section 3.02.
"Credit Exposure" means, with respect to any Bank, the sum of its
Revolving Credit Exposure and its Term Exposure.
"Default" means any condition or event which constitutes an Event
of Default or which with the giving of notice or 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 4.
"Derivatives Obligations" of any Person means all obligations of
such Person in respect of 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.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized by law
to close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending
Office) or such other office as such Bank may hereafter designate as its
Domestic Lending Office by notice to the Borrower and the Senior
Administrative Agent.
"Xxxxxxxxx.xxx" means Xxxxxxxxx.xxx, Inc., a Delaware corporation,
and its successors.
"Eligible Accounts Receivable" means at the time of any
determination thereof 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 Agents in their reasonable judgment to
reflect Borrowing Base Factors. Initially, 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 stated in the
original related invoice and are otherwise on terms that are
normal and customary in the business of the Borrower and its
Subsidiaries;
(c) such Account has been invoiced and is not more than
90 days past due;
(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 Guarantor 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
Guarantor;
(f) (i) such Account is owned solely by a Subsidiary
Guarantor other than PCS, and (ii) so long as PCS is a Subsidiary
Guarantor, if such Account is owned by PCS, such Account is a PCS
Linked Account;
(g) such Account arose in the ordinary course of business
of the applicable Subsidiary Guarantor;
(h) not more than 50% of the aggregate amount of Accounts
from the same Account Debtor and any Affiliates thereof are more
than 90 days past due;
(i) to the knowledge of the Borrower and its
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 Senior Administrative Agent in
favor of the applicable Subsidiary Guarantor), (ii) is not an
Affiliate or Subsidiary of the Borrower or an Affiliate of any of
the Borrower's Subsidiaries (other than with respect to PCS Linked
Accounts);
(m) such Account is subject to a perfected first priority
security interest in favor of the Senior Collateral Agent for the
benefit of the Senior Bank Parties pursuant to the Senior
Collateral Documents and is not subject to any other Lien (other
than the Second Priority Lien);
(n) with respect to such Account (if such Account is for
an amount greater than $5,000,000), the Account Debtor has not
been disapproved by the Majority Banks (based, in such Banks'
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 in accordance with its terms.
"Eligible Inventory" means, at any date of determination thereof,
all inventory (as defined in the Uniform Commercial Code) owned by any
Subsidiary Guarantor that satisfies at the time of such determination the
criteria established from time to time by the Agents in their reasonable
judgment to reflect Borrowing Base Factors. Initially, Eligible Inventory
shall exclude, without duplication:
(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
Guarantor or a warehouseman or bailee of any Subsidiary Guarantor;
(b) any inventory against which Subsidiary Guarantor has
taken a reserve, to the extent of such reserve;
(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 Guarantors (including any such
inventory obtained in connection with a Business Acquisition) to
the extent specified by the Senior Collateral Agent from time to
time in its reasonable judgment to reflect Borrowing Base Factors;
(d) any inventory not located in the United States or
located in a jurisdiction as to which a UCC-1 financing statement
has not been filed 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;
(g) any inventory that is subject to any licensing,
patent, royalty, trademark, trade name or copyright agreement with
any third party from whom any of its Subsidiaries has received
notice of a dispute in respect of such agreement to the extent
that such dispute could reasonably be expected to prevent the sale
of such inventory;
(h) any inventory which is subject to a negotiable
document of title and such document of title has not been
delivered to the Senior Collateral 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
Guarantors 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 to which the representations and
warranties of the Senior Loan Documents are not true and correct
in all material respects;
(l) any inventory to which the Subsidiary Guarantors do
not have good title or any inventory which a Subsidiary Guarantor
holds on consignment or on a "sale or return" basis;
(m) any inventory which is owned by PCS; and
(n) any inventory (as notified by the Senior
Administrative Agent to the Borrower) that the Senior
Administrative Agent has deemed is ineligible in its reasonable
judgment 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
3.01(cc) (or the Senior Collateral Agent shall have granted a waiver to
such compliance pursuant to Section 3.01(cc)).
"Eligible Inventory Value" means at the time of any determination
thereof the lower of cost (less any appropriate reserve for obsolete
inventory and any profits accrued in connection with transfers of inventory
between the Borrower and its Subsidiaries or between Subsidiaries of the
Borrower) and fair market value of the Eligible Inventory at such time, in
dollars, determined in accordance with generally accepted accounting
principles consistently applied, and effective upon delivery of the Initial
Financial Statements, on a basis consistent with that used in the
preparation of the Initial Financial Statements.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
other governmental restrictions relating to the environment or to
emissions, discharges or releases of pollutants, contaminants, petroleum or
petroleum products, chemicals or industrial, toxic or hazardous substances
or wastes into the environment including, without limitation, ambient air,
surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes
or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members
of a controlled group of corporations and all trades or businesses (whether
or not incorporated) under common control which, together with the Borrower
or any Subsidiary, are treated as a single employer under Section 414 of
the Internal Revenue Code.
"Euro-Dollar Borrowing" means a Borrowing comprised of Euro-Dollar
Loans.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including
dealings in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Euro-Dollar Lending Office
by notice to the Borrower and the Senior Administrative Agent.
"Euro-Dollar Loan" means any Euro-Dollar Revolving Loan or
Euro-Dollar Term Loan.
"Euro-Dollar Revolving Credit Borrowing" means a Borrowing
comprised of Euro-Dollar Revolving Loans.
"Euro-Dollar Revolving Loan" means any Revolving Loan bearing
interest at a rate determined by reference to the Adjusted London Interbank
Offered Rate in accordance with the provisions of Article 2.
"Euro-Dollar Term Borrowing" means a Borrowing comprised of
Euro-Dollar Term Loans.
"Euro-Dollar Term Loan" means any Term Loan bearing interest at a
rate determined by reference to the Adjusted London Interbank Offered Rate
in accordance with the provisions of Article 2.
"Event of Default" has the meaning set forth in Section 6.01.
"Excess Cash Flow" means, for any period, the sum (without
duplication) of Consolidated EBITDA for such period,
plus
(a) to the extent not included in Consolidated Net Income
in calculating Consolidated EBITDA, the sum of (1) any
Casualty/Condemnation Proceeds previously received by the Borrower
or any Subsidiary in respect of which the time for reinvestment
thereof (in accordance with the proviso to the definition of
Casualty/Condemnation in respect of Proceeds) has elapsed during
such period without such reinvestment having been effected, and
(2) any Net Cash Proceeds received during such period by the
Borrower or any Subsidiary in respect of Asset Sales;
plus
(b) decreases in Adjusted Working Capital for such period
(other than any portion of such decrease resulting solely from the
reclassification of assets or liabilities as short-term or
long-term);
plus
(c) refunds of Taxes paid in prior periods; and
minus
(d) Taxes to the extent paid during such period in cash;
minus
(e) Consolidated Interest Charges to the extent paid
during such period in cash;
minus
(f) increases in Adjusted Working Capital for such period
(other than any portion of such increase resulting solely from the
reclassification of assets or liabilities as short-term or
long-term);
minus
(g) to the extent paid in cash during such period, costs
and expenses referred to in clauses (v), (vii), (viii) and (ix) of
the definition of "Consolidated EBITDA" which were added back to
Consolidated Net Income to calculate Consolidated EBITDA for such
period;
minus
(h) Consolidated Capital Expenditures for such period
(except to the extent attributable to the incurrence of Debt under
Capital Leases, Attributable Debt under Synthetic Leases or
otherwise financed by the incurrence of Debt and except to the
extent made with Casualty/Condemnation Proceeds or Net Cash
Proceeds from Basket Asset Sales);
minus
(i) cash consideration paid by the Borrower or its
Subsidiaries for permitted Business Acquisitions or other capital
acquisitions (except to the extent financed by the incurrence of
Debt and except to the extent made with Casualty/Condemnation
Proceeds or Net Cash Proceeds from Basket Asset Sales);
minus
(j) cash expenditures made during such period in respect
of long-term liabilities (other than Debt) or long-term assets to
the extent such expenditures were not deducted in determining
Consolidated Net Income for such period;
minus
(k) the aggregate principal amount of Debt (including
Attributable Debt in respect of Synthetic Leases) paid or prepaid
in cash by the Borrower or its Subsidiaries during such period (or
immediately after such period in the case of mandatory prepayment
of Debt required to be made with Net Cash Proceeds from Asset
Sales received during such period), in each case to the extent
permitted or required by this Agreement, but excluding (i) Debt in
respect of Revolving Credit Loans and Letters of Credit that can
be reborrowed or otherwise incurred again, (ii) repayments of Debt
made with Net Cash Proceeds from Basket Asset Sales, and (iii)
repayments or prepayments of Debt financed by incurring other
Debt.
"Existing Litigation" means the bondholders' class actions and
shareholders' class actions pending as of April 10, 2000 in the Eastern
District of Pennsylvania, identified in Schedule 1.01(a) and the related
pending investigation by the SEC.
"Existing Trade Letters of Credit" means each trade letter of
credit previously issued for the account of the Borrower that is
outstanding on the Initial Borrowing Date.
"Federal Funds Effective Rate" means, for any day, the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published 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 of the quotations for the day for such
transactions received by the Senior Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System of the United States of America (or any successor
thereto).
"Financial Officer" of any person means the chief financial
officer, principal accounting officer, Treasurer or senior vice president
finance of such person.
"Fleet National Bank" means Fleet National Bank and its
successors.
"Government Lockbox Account" is defined in the Senior Subsidiary
Security Agreement.
"Government Lockbox Account Agreement" is defined in the Senior
Subsidiary Security Agreement.
"Government Lockbox Account Bank" is defined in the Senior
Subsidiary Security Agreement.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Hazardous Materials" means all explosive or radioactive
substances or wastes, hazardous or toxic substances or wastes, pollutants,
solid, liquid or gaseous wastes, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls ("PCBs") or PCB-containing materials or equipment, radon gas,
infectious or medical wastes and all other substances or wastes of any
nature regulated pursuant to any Environmental Law.
"Indemnitee" has the meaning set forth in Section 9.03(b).
"Initial Borrowing Date" means the date of the first Credit Event.
"Initial Financial Statements" means the consolidated financial
statements of the Borrower and its Consolidated Subsidiaries for the fiscal
year ended February 26, 2000, and for the fiscal quarter ended May 27,
2000.
"Intercompany Inventory Purchase Agreement" means the Intercompany
Inventory Purchase Agreement, dated as of June 12, 2000, among the
Borrower, Rite Aid Hdqtrs. Corp., each of the Distribution Subsidiaries and
each of the Operating Subsidiaries named therein, substantially in the form
of Exhibit Q hereto.
Interest Payment Date" means, the last day of the Interest Period
applicable to any Loan and, in the case of a Euro-Dollar Borrowing with an
Interest Period of more than three months duration, each day that would
have been an Interest Payment Date had successive Interest Periods of three
months duration been applicable to such Loan, and, in addition, the date of
any prepayment of such Loan or continuation or conversion of such Loan as
or to a Loan of a different Type.
"Interest Period" means
(a) as to any Euro-Dollar Loan, the period commencing on
the date of any Borrowing and ending on the seventh day thereafter
or on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar
month that is 1, 1-1/2, 2, 3 or 6 months thereafter, in each case
as the Borrower may elect;
(b) as to any Base Rate Borrowing of a Term Loan or a
Revolving Loan, the period commencing on the date of such
Borrowing and extending through the earliest of (i) the next
succeeding March 31, June 30, September 30 or December 31, (ii)
the Maturity Date, and (iii) the date such Borrowing is converted
to a Borrowing of a different Type in accordance with Section 2.09
or repaid or prepaid in accordance with Section 2.11 or 2.12; and
(c) as to any Swingline Loan, a period of one week;
provided, however, that 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 a Euro-Dollar Borrowing
having an interest period of one month or longer, 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.
"Interest Rate Agreement" means, for any person, any interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement designed to protect against fluctuations in
interest rates.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended, or any successor statute.
"Investment" means any investment in any Person, whether by means
of share purchase, capital contribution, loan, time deposit or otherwise.
Any repurchase by the Borrower of its own capital stock 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.
"Issuance Request" means a letter of credit issuance request
delivered by the Borrower to the Senior Administrative Agent, in the form
of Exhibit D or such other form as shall be approved by the Senior
Administrative Agent and the applicable Issuing Bank.
"Issuing Bank" is defined in Section 2.17(k), and shall include
Citicorp USA, Fleet National Bank, and with respect to the Existing Trade
Letters of Credit that become Letters of Credit under this Agreement
pursuant to Section 2.17, Mellon Bank.
"Issuing Bank Fees" is defined in Section 2.05(d).
"L/C Cash Collateral Account" means the collateral account with
Citibank, N.A.,, A/C 00000000, at its office at 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, in the name of the Senior Collateral Agent and under the
sole control and dominion of the Senior Collateral Agent.
"L/C Commitment" means the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.17.
"L/C Disbursement" means a payment or disbursement made by an
Issuing Bank pursuant to a Letter of Credit.
"L/C 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 principal amount of all L/C Disbursements that have not yet
been reimbursed at such time. The L/C Exposure of any Revolving Credit Bank
at any time means its Revolving Percentage of the aggregate L/C Exposure at
such time.
"L/C Participation Fee" is defined in Section 2.05(d).
"Letter of Credit" means any letter of credit issued pursuant to
Section 2.17 and includes any Existing Trade Letter of Credit that is
deemed to be a Letter of Credit hereunder.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset. For the purposes of this Agreement, the Borrower or any
Subsidiary shall be deemed to own subject to a Lien any asset which it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, Capital Lease or other title retention
agreement relating to such asset.
"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 generally accepted
accounting principles.
"Loans" means the Revolving Loans, the Swingline Loans and the
Term Loans.
"London Interbank Offered Rate" means, with respect to any
Euro-Dollar Borrowing, the rate (rounded upwards, if necessary, to the next
1/16 of 1%) at which dollar deposits approximately equal in principal
amount to the Senior Administrative Agent's portion of such Euro-Dollar
Borrowing, and for a maturity comparable to such Interest Period are
offered to the principal London office of the Senior Administrative Agent
in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days before the
commencement of such Interest Period.
"Majority Banks" means, at any time, Banks having unused Revolving
Credit Commitments, Revolving Credit Exposure, unused Term Loan Commitments
and outstanding Term Loans representing greater than 50% of the sum of all
unused Revolving Credit Commitments, Revolving Credit Exposures, unused
Term Loan Commitments and outstanding Term Loans at such time.
"Majority Revolving Credit Banks" means, at any time, Revolving
Credit Banks having unused Revolving Credit Commitments and Revolving
Credit Exposures representing greater than 50% of the sum of all unused
Revolving Credit Commitments and Revolving Credit Exposures.
"Material Adverse Effect" means (i) any material adverse effect on
the business, financial position, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole, (ii) any
material impairment of the legality, validity and enforceability of the
Senior Loan Documents (including without limitation, the validity,
enforceability or priority of security interests to be granted), or the
rights and remedies of the Senior Secured Parties, or (iii) any material
impairment of the Borrower's or the Subsidiary Guarantors' ability to
perform its or their obligations under the Senior Loan Documents.
"Material Financial Obligations" means, without duplication,
(a) the Second Priority Debt Obligations,
(b) the Independent Standby L/C Obligations, and
(c) (i) a principal or face amount of Debt (except Debt
outstanding hereunder) and/or (ii) payment or collateralization
obligations in respect of Derivatives Obligations and/or (iii)
payment or collateralization obligations in respect of leases
(other than Capital Leases, which are Debt) of the Borrower and/or
one or more of its Subsidiaries, arising in one or more related or
unrelated transactions, exceeding in the aggregate $25,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $25,000,000.
"Maturity Date" means August 1, 2002.
"Mortgaged Properties" means the owned real properties of the
Subsidiary Guarantors specified on Schedule 1.01(b), together with real
properties that are mortgaged pursuant to Section 5.08. Each Mortgaged
Property shall include any owned fixtures used in connection with the
operation of such Mortgaged Property.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member
of the ERISA Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be a
member of the ERISA Group during such five year period.
"Notes" means any Revolving Credit Notes, Swingline Notes or Term
Notes.
"Other Inventory Advance Rate" means the amount determined in
accordance with Section 2.18.
"Parent" means, with respect to any Bank, any Person controlling
such Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"PCS EBITDA" means, for any period, Consolidated EBITDA for such
period less Retail EBITDA for such period.
"Perfection Certificate" means the Perfection Certificate
substantially in the form of Annex 2 to the Senior Subsidiary Security
Agreement.
"Pharmaceutical Inventory Advance Rate" means the amount
determined in accordance with Section 2.18.
"Plan" means at any time an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject
to the minimum funding standards under Section 412 of the Internal Revenue
Code and either (i) is maintained, or contributed to, by any member of the
ERISA Group for employees of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained, or contributed
to, by any Person which was at such time a member of the ERISA Group for
employees of any Person which was at such time a member of the ERISA Group.
"Qualified Preferred Stock" means preferred stock of the Borrower
that requires no cash payment before the date that is six months after the
Maturity Date.
"Refunding Borrowing" means a Borrowing which, after application
of the proceeds thereof, results in no net increase in the outstanding
principal amount of Loans of any Class made by any Bank.
"Regulation T, U, or X" means Regulation T, U or X of the Federal
Reserve Board, as in effect from time to time.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material
in, into, onto or through the environment.
"Remedial Action" means (a) "remedial action" as such term is
defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions
required by any Governmental Authority or voluntarily undertaken to: (i)
cleanup, remove, treat, xxxxx or in any other way address any Hazardous
Material in the environment; (ii) prevent the Release or threat of Release,
or minimize the further Release of any Hazardous Material so it does not
migrate or endanger or threaten to endanger public health, welfare or the
environment; or (iii) perform studies and investigations in connection
with, or as a precondition to, clause (i) or (ii).
"Required Prepayment Amount" means, on any date when a mandatory
prepayment is to be made pursuant to Section 2.12(c), the amount computed
according to the following formula (and after giving effect to any
transaction giving rise to a Required Repayment Amount):
RPA = CCEMPD -- (CCECD x VMPD)
----------------------------
VCD
RPA = Required Prepayment Amount
CCECD = Aggregate unused Revolving Credit
Commitments, Revolving Credit Exposure
and Term Exposure of all Banks on the
Initial Borrowing Date
CCEMPD = Aggregate unused Revolving Credit
Commitments, Revolving Credit Exposure
and Term Exposure of all Banks on the
date of such mandatory prepayment
VCD = Aggregate amount of Eligible Inventory
Value and Eligible Accounts Receivable
on the Initial Borrowing Date
VMPD = Aggregate amount of Eligible Inventory
Value and Eligible Accounts Receivable
on the date of such mandatory
prepayment
; provided, that (i) notwithstanding the eligibility criteria in effect for
other purposes hereunder from time to time, the eligibility criteria used
in calculating VMPD shall be the same as those used in calculating VCD, and
(ii) if calculation of the Required Prepayment Amount pursuant to the
foregoing formula results in a negative number, the Required Prepayment
Amount shall be zero.
"Restricted Payment" means
(a) any dividend or other distribution on any shares of
the Borrower's or any Subsidiary's capital stock (except dividends
payable solely in shares of the Borrower's capital stock); or
(b) any payment on account of the purchase, redemption,
retirement or acquisition of (i) any shares of the Borrower's or
any Subsidiary's capital stock or (ii) any option, warrant or
other right to acquire shares of the Borrower's or any
Subsidiary's capital stock (other than such payment in connection
with employee benefit plans in the ordinary course of business).
"Retail Capital Expenditures" means, for any period, Consolidated
Capital Expenditures for such period, but computed as though neither PCS
nor any of PCS's Consolidated Subsidiaries were Consolidated Subsidiaries
of the Borrower.
"Retail EBITDA" means, for any period, Consolidated EBITDA for
such period, but computed as though neither PCS nor any of PCS's
Consolidated Subsidiaries were Consolidated Subsidiaries of the Borrower.
"Retail Fixed Charge Coverage Ratio" means, for any period, the
ratio of (i) Retail EBITDA plus Retail Rent to (ii) Retail Interest Charges
plus Retail Rent, in each case for such period.
"Retail Interest Coverage Ratio" means, with respect to any
period, the ratio of Retail EBITDA for such period to Retail Interest
Charges for such periods.
"Retail Interest Charges" means, for any period, the aggregate
amount of interest charges, whether expensed or capitalized, incurred or
accrued by the Borrower and its Consolidated Subsidiaries, solely to the
extent paid or payable in cash, during such period; provided, however, that
for such period, such interest charges relating to the PCS Facility for
such period will be computed as though the aggregate principal amount on
which such interest charges are calculated at all times during such period
were the lesser of (a) $300,000,000 and (b) the actual principal amount of
the PCS Facility from time to time after giving effect to any repayment of
the PCS Facility after the consummation of a PCS Disposition.
"Retail Rent" means, for any period, Consolidated Rent for such
period, but computed as though neither PCS nor any of PCS's Consolidated
Subsidiaries were Consolidated Subsidiaries of the Borrower.
"Revolving Credit Bank" means a Bank with a Revolving Credit
Commitment.
"Revolving Credit Borrowing" means a Borrowing comprised of
Revolving Loans.
"Revolving Credit Commitment" means, with respect to each Bank,
the commitment of such Bank to make Revolving Loans hereunder (or to
participate in Letters of Credit) as set forth in Annex 1, or in the
Assignment and Acceptance pursuant to which such Bank assumed its Revolving
Credit Commitment, as applicable, as the same 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 Bank pursuant to Section 9.06.
"Revolving Credit Exposure" means, with respect to any Bank at any
time, the aggregate principal amount at such time of all outstanding
Revolving Loans of such Bank, plus the aggregate amount at such time of
such Bank's L/C Exposure, plus the aggregate amount at such time of such
Bank's Swingline Exposure.
"Revolving Credit Note" means a promissory note of the Borrower,
substantially in the form of Exhibit A-2, evidencing Revolving Loans.
"Revolving Loans" means the revolving loans made by the Banks to
the Borrower pursuant to Section 2.01(b).
"Revolving Percentage" of any Revolving Credit Bank at any time
means the percentage of the total Revolving Credit Commitments of all
Revolving Credit Banks represented by such Bank's Revolving Credit
Commitment, or if the Revolving Credit Commitments shall have expired or
terminated, the percentage of the aggregate Revolving Credit Exposures of
all Banks represented by such Bank's Revolving Credit Exposure.
"SEC" means the Securities and Exchange Commission, or any Person
succeeding to its functions under the Securities Exchange Act of 1934, as
amended.
"Secured Debt" means Debt which is secured by a Lien on property
of the Borrower or any Subsidiary, but shall not include guarantees arising
in connection with the sale, discount, guarantee or pledge of notes,
chattel mortgages, leases, accounts receivable, trade acceptances and other
papers arising, in the ordinary course of business, out of installment or
conditional sales to or by, or transactions involving title retention with,
distributors, dealers or other customers, of merchandise, equipment or
services.
"Securitization Facility" is defined in Annex 3.
"Senior Administrative Agent" means Citicorp USA, in its capacity
as agent for the Banks under the Senior Loan Documents, and its successors
in such capacity.
"Senior Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with Citicorp
Industrial Credit at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Account No.
00000000, ABA 000000000, Attention: Xxx Xxxx, or such other account as the
Administrative Agent shall specify in writing to the Banks.
"Senior Administrative Agent's Fees" is defined in Section 2.05(b).
"Senior Commitment Fee" is defined in Section 2.05(a).
"Senior Fee Letter" means the Fee Letter dated April 10, 2000,
between the Borrower and the Senior Administrative Agent, relating to this
Agreement.
"Senior Fees" means the L/C Participation Fees, the Issuing Bank
Fees, the Senior Commitment Fees, the fees described in Section 2.05(c),
and the Senior Administrative Agent's Fees.
"Statutory Reserves" 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
(including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Federal Reserve Board and any
other banking authority, domestic or foreign, to which the Senior
Administrative Agent or any Bank (including any branch, Affiliate, or other
fronting office making or holding a Loan) is subject (a) with respect to
the Base CD Rate, for new negotiable nonpersonal time deposits in dollars
of over $100,000 with maturities approximately equal to three months, in
the case of the Base CD Rate (as such term is used in the definition of
"Base Rate"), and (b) with respect to the Adjusted London Interbank Offered
Rate, for Euro-Dollar Liabilities (as defined in Regulation D of the
Federal Reserve Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. Euro-Dollar Loans shall be deemed to
constitute Euro-Dollar Liabilities 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 Bank under such
Regulation D. Statutory Reserves 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 Guarantor.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by the
Borrower.
"Subsidiary Guarantor" means, initially, each Subsidiary listed on
Schedule 1.01(c), and each other Subsidiary that is or becomes a party to a
Senior Subsidiary Guarantee Agreement.
"Supermajority Banks" means, at any time, Banks having unused
Revolving Credit Commitments, Revolving Credit Exposure, unused Term Loan
Commitments and outstanding Term Loans representing at least 66-2/3% of the
sum of all unused Revolving Credit Commitments, Revolving Credit Exposures,
unused Term Loan Commitments and outstanding Term Loans at such time.
"Swingline Bank" means, subject to Section 2.16(g) either Citicorp
USA, or Fleet National Bank.
"Swingline Exposure" means at any time the aggregate principal
amount at such time of all outstanding Swingline Loans. The Swingline
Exposure of any Revolving Credit Bank at any time shall equal its Revolving
Percentage of the aggregate Swingline Exposure at such time.
"Swingline Loan" means any loan made by a Swingline Bank pursuant
to Section 2.16.
"Swingline Note" means a promissory note evidencing Swingline
Loans, executed and delivered as provided in Section 2.16 in substantially
the form of Exhibit A-3.
"Syndication Agents" is defined in the preamble.
"Synthetic Lease" means a lease which is treated as an operating
lease under generally accepted accounting principles but as ownership of
the leased asset by the lessee for purposes of the Internal Revenue Code.
"Taxes" is defined in Section 8.04(a).
"Term Borrowing" means a Borrowing comprised of Term Loans.
"Term Exposure" means, with respect to any Bank at any time, the
aggregate principal amount at such time of all outstanding Term Loans of
such Bank.
"Term Loan Commitments" means with respect to each Bank, the
commitment of such Bank to make Term Loans hereunder as set forth on Annex
1, or in the Assignment and Acceptance pursuant to which such Bank assumed
its Term Loan Commitment, as applicable, as the same 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 Bank pursuant to
Section 9.06
"Term Loans" means the term loans made by the Banks to the
Borrower pursuant Section 2.01(a).
"Term Note" means a promissory note of the Borrower, substantially
in the form of Exhibit A-1, evidencing Term Loans.
"Three-Month Secondary CD Rate" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in
effect on such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Federal Reserve Board through the public
information telephone line of the Federal Reserve Bank of New York (which
rate will, under the current practices of the Federal Reserve Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day), or, if such rate shall not be so reported on such day
or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 a.m., New York City
time, on such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Senior Administrative Agent from three New
York City negotiable certificate of deposit dealers of recognized standing
selected by it.
"Transactions" is defined in Annex 3.
"Transaction Costs" is defined in Annex 3.
"Transaction Documents" means the agreements evidencing the
Transactions.
"Type" has the meaning set forth in Section 1.03.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the value of all benefit liabilities
under such Plan, determined on a plan termination basis using the
assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA,
exceeds (ii) the fair market value of all Plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions), all determined as of the then most recent valuation date
for such Plan, but only to the extent that such excess represents a
potential liability of a member of the ERISA Group to the PBGC or any other
Person under Title IV of ERISA.
"United States" means the United States of America, including the
States, the District of Columbia and Puerto Rico but excluding its other
territories and possessions.
"Wholly-Owned Consolidated Subsidiary" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests
of which (except directors' qualifying shares) are at the time directly or
indirectly (through Wholly-Owned Consolidated Subsidiaries) owned by the
Borrower.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared
in accordance with generally accepted accounting principles as in effect
from time to time, applied (effective after delivery of the Initial
Financial Statements) on a basis consistent (except for changes concurred
in by the Borrower's independent public accountants) the most recent
audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries delivered to the Banks; provided that, if the
Borrower notifies the Senior Administrative Agent that the Borrower wishes
to amend any covenant in Article 5 to eliminate the effect of any change in
generally accepted accounting principles on the operation of such covenant
(or if the Senior Administrative Agent notifies the Borrower that the
Majority Banks wish to amend Article 5 for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis
of generally accepted accounting principles in effect immediately before
the relevant change in generally accepted accounting principles became
effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Borrower and the Majority Banks.
SECTION 1.03. CLASSES AND TYPES OF LOANS. Loans hereunder are
distinguished by "Class" and by "Type". The "Class" of a Loan (or of a
Commitment to make such a Loan or of a Borrowing comprised of such Loans)
refers to the determination whether such Loan is a Revolving Loan or a Term
Loan, each of which constitutes a Class. The "Type" of a Loan refers to the
determination whether such Loan is a Euro-Dollar Loan or a Base Rate Loan.
Identification of a Loan (or a Borrowing) by both Class and Type (e.g., a
"Term Euro-Dollar Loan") indicates that such Loan is both a Term Loan and a
Euro-Dollar Loan (or that such Borrowing is comprised of such Loans).
SECTION 1.04. TERMS DEFINED IN DEFINITIONS ANNEX. Capitalized
terms used in this agreement that are not defined in Section 1.01 have the
meanings provided in the Definitions Annex.
SECTION 1.05. OTHER DEFINITIONAL PROVISIONS. References in this
Agreement to "Articles", "Sections", "Annexes", "Schedules" or "Exhibits"
shall be to Articles, Annexes, Sections, Schedules or Exhibits of or to
this Agreement unless otherwise specifically provided. Any of the terms
defined in Article 1 may, unless the context otherwise requires, be used in
the singular or plural depending on the reference. "Include" or "includes"
and "including" shall be deemed to be followed by "without limitation"
whether or not they are in fact followed by such words or words of like
import. "Writing", "written" and comparable terms refer to printing, typing
and other means of reproducing words in a durable visible form, including
telecopy. References to any agreement or contract are to such agreement or
contract as amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof; provided that amendments to
the Indentures, the Existing Facilities Documents, the Second Priority Lien
Documents and the other Transaction Documents after the Closing 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 Majority Banks (or
such other percentage of the Banks as may be specified hereunder).
References to any Person include the successors and assigns of such Person.
References "from" or "through" any date mean, unless otherwise specified,
"from and including" or "through and including", respectively.
ARTICLE 2
THE CREDITS
SECTION 2.01. COMMITMENTS. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Bank
agrees, severally and not jointly,
(a) to make Term Loans to the Borrower on the Initial
Borrowing Date in an aggregate principal amount not to exceed its
Term Loan Commitment,
(b) to make Revolving Loans to the Borrower, at any time
and from time to time on or after the date hereof, and until the
earlier of the Maturity Date or the termination of the Revolving
Credit Commitment of such Bank in accordance with the terms hereof
in an aggregate principal amount at any time outstanding that will
not result in such Bank's Revolving Credit Exposure exceeding the
lesser of
(i) such Bank's Revolving Credit Commitment, and
(ii) such Bank's Revolving Percentage of (A) the
Borrowing Base Amount in effect at such time less (B) the
aggregate Term Exposures of the Banks at such time.
Within the limits set forth above and subject to the terms, conditions and
limitations set forth herein, the Borrower may borrow, pay or prepay and
reborrow Revolving Loans. Amounts paid or prepaid in respect of Term Loans
may not be reborrowed.
SECTION 2.02. LOANS. (a) Each Loan (other than Swingline Loans)
shall be made as part of a Borrowing consisting of Loans made by the Banks
ratably in accordance with their applicable Revolving Credit Commitments or
Term Loan Commitments, as the case may be; provided, however, that the
failure of any Bank to make any Loan shall not in itself relieve any other
Bank of its obligation to lend hereunder, and no Bank shall be responsible
for the failure of any other Bank to make any Loan required to be made by
such other Bank. Except for Loans deemed made pursuant to Section 2.02(e)
and Swingline Loans, the Loans comprising any Borrowing shall be in an
aggregate principal amount that is
(i) a multiple of $1,000,000 and not less than
$5,000,000, or
(ii) equal to the remaining available balance of the
applicable Commitments.
(b) Subject to Sections 8.01 and 8.02, each Borrowing of Revolving
Loans and Term Loans shall be comprised entirely of Base Rate Loans or
Euro-Dollar Loans as the Borrower may request pursuant to Section 2.03 or
Section 2.09. Each Bank may at its option make any Euro-Dollar Loan by
causing any domestic or foreign branch or Affiliate of such Bank 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 and the applicable Note. Borrowings of more than one Type
may be outstanding at the same time; provided, that the Borrower shall not
be entitled to request any Borrowing that, if made, would result in more
than 10 Euro-Dollar Borrowings outstanding hereunder at any time. For
purposes of the foregoing, Borrowings having different Interest Periods,
regardless of whether they commence on the same date, shall be considered
separate Borrowings.
(c) (i) Except with respect to Loans made pursuant to Section
2.02(e) and Section 2.03(b)(1), each Bank shall make each Loan to be made
by it hereunder on the proposed date thereof by wire transfer of
immediately available funds to such account as the Senior Administrative
Agent may designate not later than 12:00 noon, New York City time, and the
Senior Administrative Agent shall by 1:00 p.m., New York City time, credit
the amounts so received to an account in the name of the Borrower and
designated by the Borrower in the applicable Borrowing Request or, if a
Borrowing shall not occur on such date because any condition precedent
herein specified shall not have been met, return the amounts so received to
the respective Banks. (ii) With respect to Loans made pursuant to Section
2.03(b)(1), each Bank shall make each Loan to be made by it hereunder on
the proposed date thereof by wire transfer of immediately available funds
to such account as the Senior Administrative Agent may designate not later
than 3:00 p.m., New York City time, and the Senior Administrative Agent
shall by 4:00 p.m., New York City time, credit the amounts so received to
an account in the name of the Borrower and designated by the Borrower in
the applicable Borrowing Request or, if a Borrowing shall not occur on such
date because any condition precedent herein specified shall not have been
met, return the amounts so received to the respective Banks.
(d) Unless the Senior Administrative Agent shall have received
notice from a Bank before the date of any Borrowing that such Bank will not
make available to the Senior Administrative Agent such Bank's portion of
such Borrowing, the Senior Administrative Agent may assume that such Bank
has made such portion available to the Senior Administrative Agent on the
date of such Borrowing in accordance with clause (c) and the Senior
Administrative Agent may, in reliance upon such assumption, make available
to the Borrower on such date a corresponding amount. If the Senior
Administrative Agent shall have so made funds available then, to the extent
that such Bank shall not have made such portion available to the Senior
Administrative Agent, such Bank and the Borrower severally agree to repay
to the Senior Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such
amount is made available to the Borrower until the date such amount is
repaid to the Senior Administrative Agent at (a) in the case of the
Borrower, the interest rate applicable at the time to the Loans comprising
such Borrowing and (b) in the case of such Bank, a rate determined by the
Senior Administrative Agent to represent its cost of overnight or
short-term funds in dollars (which determination shall be conclusive absent
manifest error). If such Bank shall repay to the Senior Administrative
Agent such corresponding amount, such amount shall constitute such Bank's
Loan as part of such Borrowing for purposes of this Agreement.
(e) If an Issuing Bank shall not have received from the Borrower
the payment required to be made by Section 2.17(e) within the time
specified in such Section, such Issuing Bank will promptly notify the
Senior Administrative Agent of the L/C Disbursement and the Senior
Administrative Agent will promptly notify each Revolving Credit Bank of
such L/C Disbursement and its Revolving Percentage thereof. Each Revolving
Credit Bank shall pay by wire transfer of immediately available funds to
the Senior Administrative Agent not later than 2:00 p.m., New York City
time, on such date (or, if such Revolving Credit Bank shall have received
such notice later than 12:00 (noon), New York City time, on any day, not
later than 10:00 a.m., New York City time, on the immediately following
Business Day), an amount equal to such Bank's Revolving Percentage of such
L/C Disbursement (and such amount shall be deemed to constitute a Base Rate
Revolving Loan of such Bank and such payment shall be deemed to have
reduced the L/C Exposure), and the Senior Administrative Agent will
promptly pay to the applicable Issuing Bank amounts so received by it from
the Revolving Credit Banks. The Senior Administrative Agent will promptly
pay to the applicable Issuing Bank any amounts received by it from the
Borrower pursuant to Section 2.17(e) before the time that any Revolving
Credit Bank makes any payment pursuant to this clause; any such amounts
received by the Senior Administrative Agent thereafter will be promptly
remitted by the Senior Administrative Agent to the Revolving Credit Banks
that shall have made such payments and to such Issuing Bank, as their
interests may appear. If any Revolving Credit Bank shall not have made its
Revolving Percentage of such L/C Disbursement available to the Senior
Administrative Agent as provided above, such Bank and the Borrower
severally agree to pay interest on such amount, for each day from and
including the date such amount is required to be paid in accordance with
this clause to but excluding the date such amount is paid, to the Senior
Administrative Agent for the account of the applicable Issuing Bank at:
(i) in the case of the Borrower, a rate per annum equal
to the interest rate applicable to Revolving Loans pursuant to
Section 2.06(a); and
(ii) in the case of such Bank, for the first such day,
the Federal Funds Effective Rate, and for each day thereafter, the
Base Rate.
SECTION 2.03. BORROWING PROCEDURE. In order to request a Borrowing
(other than a Swingline Loan or a deemed Borrowing pursuant to Section
2.02(e), as to which this Section shall not apply), the Borrower shall hand
deliver or telecopy to the Senior Administrative Agent a duly completed
Borrowing Request (a) in the case of a Euro-Dollar Borrowing, not later
than 11:00 a.m., New York City time, three Business Days before a proposed
Borrowing, and (b) in the case of a Base Rate 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) otherwise, 12:00 noon, New York City time, on the
Business Day before the proposed Borrowing. Each Borrowing Request shall be
irrevocable, shall be signed by or on behalf of the Borrower and shall
specify the following information:
(i) whether the Borrowing then being requested is to be a
Term Borrowing or a Revolving Credit Borrowing, and whether such
Borrowing is to be a Euro-Dollar Borrowing or a Base Rate
Borrowing;
(ii) the date of such Borrowing (which shall be a
Business Day);
(iii) the number and location of the account to which
funds are to be disbursed;
(iv) the amount of such Borrowing; and
(v) if such Borrowing is to be a Euro-Dollar Borrowing,
the Interest Period with respect thereto;
provided, however, that, notwithstanding any contrary specification in any
Borrowing Request, each requested Borrowing shall comply with the
requirements set forth in Section 2.02. The Senior Administrative Agent
shall promptly advise the applicable Banks of any notice given pursuant to
this Section, and of each Bank's portion of the requested Borrowing.
SECTION 2.04. NOTES AND RECORDS. (a) If any Bank so requests, the
Revolving Loans made by such Bank shall be evidenced by a Revolving Credit
Note duly executed on behalf of the Borrower, dated the Initial Borrowing
Date, in the amount of such Bank's Revolving Credit Commitment. If any Bank
so requests, the Term Loans made by such Bank shall be evidenced by a Term
Note duly executed on behalf of the Borrower, dated the Initial Borrowing
Date, in the amount of such Bank's Term Loan Commitment. If a Swingline
Bank so requests, the Swingline Loans shall be evidenced by a Swingline
Note duly executed on behalf of the Borrower, dated the Initial Borrowing
Date, in the amount of $100,000,000.
(b) Each Bank shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Bank resulting from each Loan made by such Bank from time to time,
including the amounts of principal and interest payable and paid such Bank
from time to time under this Agreement. Each Bank shall, and is hereby
authorized by the Borrower to, endorse on the schedule attached to each
Note delivered to such Bank (or on a continuation of such schedule attached
to such Note and made a part thereof), or otherwise to record in such
Bank's internal records, an appropriate notation evidencing the date and
amount of each Loan from such Bank, each payment and prepayment of
principal of any such Loan, each payment of interest on any such Loan and
the other information provided for on such schedule; provided, however,
that the failure of any Bank to make such a notation or any error therein
shall not in any manner affect the obligation of the Borrower to repay the
Loans made by such Bank in accordance with the terms of this Agreement and
the applicable Note.
(c) The Senior Administrative Agent shall maintain accounts in
which it will record the amount of each Loan made hereunder, the Type
thereof and the Interest Period applicable thereto, the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Bank hereunder and the amount of any sum received by the
Senior Administrative Agent hereunder from the Borrower or any other
Obligor and each Bank's share thereof.
(d) The entries made in the accounts maintained pursuant to
clauses (b) and (c) shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided, however, that the
failure of any Bank or the Senior Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the
obligations of the Borrower to repay the Loans in accordance with their
terms.
(e) Not less often than once per week, the Senior Administrative
Agent will distribute to each Bank its share of the net amount of payments
received by the Senior Administrative Agent.
SECTION 2.05. SENIOR FEES. (a) The Borrower agrees to pay to each
Bank, through the Senior Administrative Agent, on January 1, April 1, July
1 and October 1 in each year and on each date on which any Commitment of
such Bank shall expire or be terminated as provided herein, a commitment
fee (a "Senior Commitment Fee") equal to 0.50% per annum on the daily
unused amount of the Commitments of such Bank during the preceding quarter
(or other period commencing with the date hereof or ending with the
Maturity Date or the date on which the Commitments of such Bank shall
expire or be terminated). All Senior Commitment Fees shall be computed on
the basis of the actual number of days elapsed in a year of 360 days. The
Senior Commitment Fee due to each Bank shall commence to accrue on the date
hereof and shall cease to accrue on the date on which the Commitment of
such Bank shall expire or be terminated as provided herein. For purposes of
calculating Senior Commitment Fees only, no portion of the Revolving Credit
Commitments shall be deemed used as a result of outstanding Swingline
Loans.
(b) The Borrower agrees to pay to the Senior Administrative Agent,
for its own account, the administrative fees set forth in the Senior Fee
Letter at the times and in the amounts specified therein (the "Senior
Administrative Agent's Fee").
(c) The Borrower agrees to pay to the Senior Administrative Agent,
for payment to the other Banks (to the extent applicable), on the Initial
Borrowing Date, the other fees specified in the Senior Fee Letter, and the
Senior Administrative Agent shall pay to each Bank on the Initial Borrowing
Date that portion of such fees that shall be owing to such Bank.
(d) The Borrower agrees to pay (i) to each Revolving Credit Bank,
through the Senior Administrative Agent, on January 1, April 1, July 1, and
October 1 of each year and on the date on which the Revolving Credit
Commitment of such Bank shall be terminated as provided herein, a fee (an
"L/C Participation Fee") calculated on such Bank's Revolving Percentage of
the daily aggregate L/C Exposure (excluding the portion thereof
attributable to unreimbursed L/C Disbursements) during the preceding
quarter (or shorter period commencing with the date hereof or ending with
the Maturity Date or the date on which all Letters of Credit have been
canceled or have expired and the Revolving Credit Commitments of all Banks
shall have been terminated) at a rate equal to 3.00% per annum, and (ii) to
each Issuing Bank with respect to each Letter of Credit a fronting fee of
1/4% and customary issuance and drawing fees specified from time to time by
such Issuing Bank (the "Issuing Bank Fees"). All L/C Participation Fees and
Issuing Bank Fees shall be computed on the basis of the actual number of
days elapsed in a year of 360 days.
All Senior Fees shall be paid on the dates due, in immediately
available funds, to the Senior Administrative Agent for distribution, if
and as appropriate, among the Banks, except that the Issuing Bank Fees
shall be paid directly to the applicable Issuing Bank. Once paid, none of
the Senior Fees shall be refundable under any circumstances.
SECTION 2.06. INTEREST ON LOANS. (a) The Loans comprising each
Base Rate Borrowing, including each Swingline Loan, shall bear interest
(computed on the basis of the actual number of days elapsed over a year of
365 or 366 days, as the case may be, when the Base Rate is determined by
reference to the Citibank Base Rate and over a year of 360 days at all
other times) at a rate per annum equal to the Base Rate plus 2.00%.
(b) Subject to the provisions of Section 8.01, the Loans
comprising each Euro-Dollar Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 360 days) at a
rate per annum equal to the Adjusted London Interbank Offered Rate for the
Interest Period in effect for such Borrowing plus 3.00%.
(c) Interest shall accrue from and including the first day of an
Interest Period to but excluding the last day of such Interest Period, and
shall be payable on outstanding amounts from and including the date such
amount is borrowed to but excluding the day such amount is repaid. Interest
on each Loan shall be payable on the Interest Payment Dates applicable to
such Loan except as otherwise provided in this Agreement. The applicable
Base Rate or Adjusted London Interbank Offered Rate for each Interest
Period or day within an Interest Period, as the case may be, shall be
determined by the Senior Administrative Agent, and such determination shall
be conclusive absent manifest error.
SECTION 2.07. DEFAULT INTEREST. Upon the occurrence and during the
continuation of an Event of Default, at the option of the Administrative
Agent or at the request of the Majority Banks, the Borrower shall on demand
from time to time pay interest, to the extent permitted by law, on the
Senior Bank Obligations to but excluding the date of actual payment (after
as well as before judgment) in the case of principal, at the rate otherwise
applicable to such Loan pursuant to Section 2.06 plus 2.00% per annum, and
in all other cases, at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case
may be, when determined by reference to the Citibank Base Rate and over a
year of 360 days at all other times) equal to the sum of the Base Rate plus
2.00%.
SECTION 2.08. TERMINATION AND REDUCTION OF COMMITMENTS. (a) The
Term Loan Commitments hereunder shall terminate on the earliest of (i) the
date on which the Borrower informs the Banks that it has decided not to
proceed with the Transactions, or (ii) 5:00 p.m., New York City time, on
the earlier of the Initial Borrowing Date or June 30, 2000, if the initial
Credit Event is not made on or before such date. The L/C Commitment and the
Revolving Credit Commitments shall automatically terminate on the earliest
of (i) the Maturity Date, (ii) the date on which the Borrower informs the
Banks that it has decided not to proceed with the Transactions, or (iii)
5:00 p.m., New York City time, June 30, 2000, if the initial Credit Event
shall not have occurred by such time.
(b) The Revolving Credit Commitments, subject to Section 2.12(a),
shall be permanently reduced by the amount of any amount allocated to the
Revolving Loans pursuant to Section 2.12(c).
(c) Upon at least one Business Day prior irrevocable written or
telecopy notice to the Senior Administrative Agent, the Borrower may at any
time in whole permanently terminate, or from time to time in part
permanently reduce, the Term Loan Commitments or the Revolving Credit
Commitments; provided, however, that (i) each partial reduction of the Term
Loan Commitments or the Revolving Credit Commitments shall be in (1) a
multiple of $1,000,000 and in a minimum amount of $5,000,000 or (2) in the
full remaining amount of the Term Loan Commitments or the Revolving Credit
Commitments, as the case may be, and (ii) the Total Revolving Credit
Commitment shall not be reduced to an amount that is less than the sum of
the Aggregate Revolving Credit Exposure. If no Term Loans are outstanding,
the Revolving Credit Commitments shall automatically be reduced by the
amount of any mandatory prepayment that would otherwise have been applied
to the prepayment of Term Loans pursuant to Section 2.08(b).
(d) Each reduction in the Term Loan Commitments or the Revolving
Credit Commitments hereunder shall be made ratably among the Banks in
accordance with their respective applicable Commitments. The Borrower shall
pay to the Senior Administrative Agent for the account of the applicable
Banks, on the date of each termination or reduction, the Senior Commitment
Fees on the amount of the Commitments so terminated or reduced accrued to
but excluding the date of such termination or reduction.
SECTION 2.09. CONVERSION AND CONTINUATION OF BORROWINGS. The
Borrower shall have the right at any time by delivery of a
Continuation/Conversion Request to the Senior Administrative Agent (a) not
later than 12:00 (noon), New York City time, one Business Day before
conversion, to convert any Euro-Dollar Borrowing into a Base Rate
Borrowing, (b) not later than 10:00 a.m., New York City time, three
Business Days before conversion or continuation, to convert any Base Rate
Borrowing into a Euro-Dollar Borrowing or to continue any Euro-Dollar
Borrowing as a Euro-Dollar Borrowing for an additional Interest Period, and
(c) not later than 10:00 a.m., New York City time, three Business Days
before conversion, to convert the Interest Period with respect to any
Euro-Dollar Borrowing to another permissible Interest Period, subject in
each case to the following:
(i) each conversion or continuation shall be made pro
rata among the Banks in accordance with the respective principal
amounts of the Loans comprising the converted or continued
Borrowing;
(ii) if less than all the outstanding principal amount of
any Borrowing shall be converted or continued, then each resulting
Borrowing shall satisfy the limitations specified in Sections
2.02(a) and 2.02(b) regarding the principal amount and maximum
number of Borrowings of the relevant Type;
(iii) each conversion shall be effected by each Bank and
the Senior Administrative Agent by recording for the account of
such Bank the new Loan of such Bank resulting from such conversion
and reducing the Loan (or portion thereof) of such Bank being
converted by an equivalent principal amount; accrued interest on
any Euro-Dollar Loan (or portion thereof) being converted shall
be paid by the Borrower at the time of conversion;
(iv) if any Euro-Dollar Borrowing is converted at a time
other than the end of the Interest Period applicable thereto, the
Borrower shall pay, upon demand, any amounts due to the Banks
pursuant to Section 2.13;
(v) any portion of a Borrowing maturing or required to be
repaid in less than seven days may not be converted into or
continued as a Euro-Dollar Borrowing;
(vi) any portion of a Euro-Dollar Borrowing that cannot
be converted into or continued as a Euro-Dollar Borrowing by
reason of the two immediately preceding clauses shall be
automatically converted at the end of the Interest Period in
effect for such Borrowing into a Base Rate Borrowing;
(vii) no Interest Period may end later than the Maturity
Date; and
(viii) upon notice to the Borrower from the Senior
Administrative Agent given at the request of the Majority Banks,
after the occurrence and during the continuance of a Default or
Event of Default, no outstanding Loan may be converted into, or
continued after the expiration of an Interest Period as, a
Euro-Dollar Loan.
Each notice pursuant to this Section shall be irrevocable and
shall refer to this Agreement and specify
(i) the identity and amount of the Borrowing that the
Borrower requests be converted or continued,
(ii) whether such Borrowing is to be converted to or
continued as a Euro-Dollar Borrowing or a Base Rate Borrowing,
(iii) if such notice requests a conversion, the date of
such conversion (which shall be a Business Day), and
(iv) if such Borrowing is to be converted to or continued
as a Euro-Dollar Borrowing, the Interest Period with respect
thereto.
If no election as to the Type of Borrowing is specified in any such notice,
then the requested Borrowing shall be a Base Rate Borrowing. If no Interest
Period is specified in any such notice with respect to any conversion to or
continuation as a Euro-Dollar Borrowing, the Borrower shall be deemed to
have given notice for an Interest Period of one month's duration. The
Senior Administrative Agent shall advise the Banks of any notice given
pursuant to this Section and of each Bank's portion of any converted or
continued Borrowing. If the Borrower shall not have given notice in
accordance with this Section to continue any Borrowing into a subsequent
Interest Period (and shall not otherwise have given notice in accordance
with this Section to convert such Borrowing), such Borrowing shall, at the
end of the Interest Period applicable thereto (unless repaid pursuant to
the terms hereof), automatically be continued into a new Interest Period as
a Base Rate Borrowing.
SECTION 2.10. REPAYMENT OF BORROWINGS. (a) To the extent not
previously paid, all Term Loans shall be due and payable on the Maturity
Date,
(b) To the extent not previously paid, all Revolving Loans shall
be due and payable on the Maturity Date.
(c) To the extent not previously paid, all Swingline Loans shall
be due and payable the earlier of (i) on the last day of the Interest
Period applicable to such Loan, and (ii) the Maturity Date.
(d) All repayments pursuant to this Section shall be subject to
Section 2.13, but shall otherwise be without premium or penalty.
SECTION 2.11. OPTIONAL PREPAYMENT. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing, in whole
or in part, upon at least one Business Day prior written or telecopy notice
(or telephone notice promptly confirmed by written or telecopy notice) to
the Senior Administrative Agent before 11:00 a.m., New York City time;
provided, however, that each partial prepayment shall be in an amount that
is a multiple of $1,000,000 and not less than $5,000,000.
(b) Each notice of prepayment shall specify the prepayment date
and the principal amount of each Borrowing (or portion thereof) to be
prepaid, shall be irrevocable and shall commit the Borrower to prepay such
Borrowing by the amount stated therein on the date stated therein. All
prepayments under this Section shall be subject to Section 2.13 but
otherwise without premium or penalty. All prepayments under this Section
shall be accompanied by accrued interest on the principal amount being
prepaid to the date of payment.
SECTION 2.12. MANDATORY PREPAYMENTS. (a) In the event of any
termination of all the Revolving Credit Commitments, the Borrower shall
repay or prepay all its outstanding Revolving Credit Borrowings and all
outstanding Swingline Loans on the date of such termination. In the event
of any partial reduction of the Revolving Credit Commitments, then (i) at
or before the effective date of such reduction, the Senior Administrative
Agent shall notify the Borrower and the Revolving Credit Banks of the
Aggregate Revolving Credit Exposure after giving effect thereto and (ii) if
the Aggregate Revolving Credit Exposure at the time would exceed the Total
Revolving Credit Commitment after giving effect to such reduction or
termination, then the Borrower shall, on the date of such reduction or
termination, repay or prepay Revolving Credit Borrowings or Swingline Loans
(or a combination thereof), or cash collateralize Letters of Credit in a
dollar amount sufficient to eliminate such excess.
(b) If on any date the Aggregate Revolving Credit Exposure and the
aggregate Term Exposures of the Banks shall exceed the Borrowing Base
Amount, the Borrower shall on such date apply an amount equal to such
excess first, to prepay the then outstanding Revolving Loans (if any) and
Swingline Loans (if any), second, to the extent of any remaining excess
(after the prepayment of Revolving Loans and Swingline Loans), to replace
outstanding Letters of Credit and/or deposit an amount in cash in a cash
collateral account (to the extent such cash collateralization would not
result in an obligation to grant a security interest in such cash
collateral to the holders of notes under any Indenture) established with
the Senior Collateral Agent for the benefit of the Senior Bank Parties, and
third to prepay the then outstanding Term Loans (if any).
(c) Not later than two Business Days following the receipt of Net
Cash Proceeds from any Reduction Event, the Borrower shall apply to the
prepayment of the Loans and the permanent reduction of the Revolving Credit
Commitments the amounts required to be so applied by the Collateral Trust
and Intercreditor Agreement. If the Senior Administrative Agent receives
any payments in respect of such Reductions, the Senior Administrative Agent
shall promptly apply such payments between Term Loans and Revolving Credit
Commitments pro rata based on the Term Exposure and the Revolving Credit
Commitments on the date the applicable amounts are paid to the Senior
Administrative Agent. Amounts allocated to the Revolving Credit Loans shall
be applied pursuant to Section 2.08(b), and if applicable, Section 2.12(a).
Amounts allocated to the Term Exposure shall be applied to prepay the Term
Loans.
(d) On each Business Day during a Cash Sweep Period, the Senior
Collateral Agent will use funds on deposit in any Citibank Concentration
Account as follows:
(i) after the occurrence of a Triggering Event (as
defined in the Collateral Trust and Intercreditor Agreement) in
accordance with the provisions of Section 4.01(b) or (c) of the
Collateral Trust and Intercreditor Agreement, as applicable; and
(ii) at any other time, first to repay the Revolving
Credit Borrowings (without any reduction of the Commitments) and
second, to be deposited into the Cash Sweep Cash Collateral
Account in accordance with the provisions of Section 2(c) (ii) of
Schedule 5 of the Senior Subsidiary Security Agreement. Upon
termination of any Cash Sweep Period, funds in the Cash Sweep Cash
Collateral Account shall be released to the Concentration Account
within three Business Days after the end of such Cash Sweep
Period.
(e) Not later than the earlier of (i) 120 days after the end of
each fiscal year of the Borrower, beginning with the fiscal year ending on
or about March 3, 2001, and (ii) the date on which the financial statements
for such fiscal year are delivered pursuant to Section 5.01(a), the
Borrower shall make a prepayment of the Loans and a permanent reduction of
the Revolving Credit Commitments in an amount equal to 50% of:
(a) for the fiscal year
ending on March 3, 2001,
the Excess Cash Flow for the sum of the principal amount
the three fiscal quarters of the Term Loans and Revolving Credit Commitments
ending on March 3, 2001, x ------------------------------------------------------------------
and (b) for the fiscal year the sum of the principal + the aggregate amount of
ending on March 2, 2002, amount of the Term Loans and the Second Priority Debt
Excess Cash Flow for the Revolving Credit Obligations constituting
four fiscal quarters ending Commitments principal (or Attributable
on March 2, 2002 Debt)
to be applied as follows:
(i) at any time when the Loans have been accelerated
pursuant to Section 6.01, to pay Senior Obligations pro rata based
on the amounts of such obligations; and
(ii) at any other time, to be allocated between Term
Loans and Revolving Credit Commitments pro rata based on the Term
Exposure and the Revolving Credit Commitments on the date the
applicable amounts are paid to the Senior Administrative Agent.
Amounts allocated to the Revolving Credit Loans shall be applied
pursuant to Section 2.08(b), and if applicable, Section 2.12(a).
Amounts allocated to the Term Exposure shall be applied to prepay
the Term Loans.
(f) The Borrower shall deliver to the Senior Administrative Agent,
at the time of each Loan prepayment or Revolving Credit Commitment
reduction required under this Section, (i) a certificate signed by a
Financial Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) to the extent
practicable, at least three days prior written notice of such prepayment.
Each notice of prepayment shall specify the prepayment date, the Type of
each Loan being prepaid and the principal amount of each Loan (or portion
thereof) to be prepaid. All prepayments of Borrowings under this Section
shall be subject to Section 2.13, but shall otherwise be without premium or
penalty.
SECTION 2.13. BREAKAGE. The Borrower shall indemnify each Bank
against any loss or expense that such Bank may sustain or incur as a
consequence of any event, other than a default by such Bank in the
performance of its obligations hereunder, which results in such Bank
receiving or being deemed to receive any amount on account of the principal
of any Euro-Dollar Loan before the end of the Interest Period in effect
therefor (including as a result of acceleration of a Loan), the conversion
of any Euro-Dollar Loan to a Loan of another Type, or the conversion of the
Interest Period with respect to any Euro-Dollar Loan other than on the last
day of the Interest Period in effect therefor, or any Euro-Dollar Loan to
be made by such Bank (including any Euro-Dollar Loan to be made pursuant to
a conversion or continuation under Section 2.09) not being made after
notice of such Loan shall have been given (or deemed given pursuant to
Section 2.09) by the Borrower hereunder (any of the events referred to in
this clause (a) being called a "Breakage Event") or (b) any default in the
making of any payment or prepayment required to be made hereunder. In the
case of any Breakage Event, such loss shall include an amount equal to the
excess, as reasonably determined by such Bank, of (i) its cost of obtaining
funds for Euro-Dollar Loans that is the subject of such Breakage Event for
the period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan
over (ii) the amount of interest likely to be realized by such Bank in
redeploying the funds released or not utilized by reason of such Breakage
Event for such period. A certificate of any Bank setting forth any amount
or amounts which such Bank is entitled to receive pursuant to this Section
shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower may determine, in consultation with the Senior
Administrative Agent, which Loans will be repaid with amounts to be applied
to the repayment of Loans pursuant to Section 2.11 or 2.12, subject to
Section 2.12(c) and Section 2.14. Any amount payable by the Borrower
pursuant to this Section will be payable to the Senior Administrative Agent
for the account of each applicable Bank.
SECTION 2.14. PRO RATA TREATMENT. (a) Except as provided in this
Section with respect to Swingline Loans and as provided in clause (b), each
Borrowing, each payment or prepayment of principal of any Borrowing of a
Class, each payment of interest on the Loans of a Borrowing, each payment
of the Senior Commitment Fees, each reduction of the Term Loan Commitments
or the Revolving Credit Commitments and each conversion of any Borrowing to
or continuation of any Borrowing as a Borrowing of any Type within a Class
shall be allocated pro rata among the Banks in accordance with their
respective applicable Commitments (or, if such Commitments shall have
expired or been terminated, in accordance with the respective principal
amounts of their applicable Loans). For purposes of determining the
available Revolving Credit Commitments of the Banks at any time, each
outstanding Swingline Loan shall be deemed to have utilized the Revolving
Credit Commitments of the Banks (including those Banks which shall not have
made Swingline Loans) pro rata in accordance with such respective Revolving
Credit Commitments. Each Bank agrees that in computing such Bank's portion
of any Borrowing to be made hereunder, the Senior Administrative Agent may,
in its discretion, round each Bank's percentage of such Borrowing to the
next higher or lower whole dollar amount.
(b) If any Bank shall obtain any payment of or recovery with
respect to any Senior Bank Obligations with proceeds of any sale of or
other realization on any Collateral (including any Mortgaged Property) in
which the Banks as a whole do not have a pro rata Lien, and such payment or
recovery is in excess of its pro rata share of payments or recovery with
respect to all Senior Bank Obligations then outstanding, such Bank shall
purchase from the other Banks such participations in Senior Bank
Obligations made by such other Banks as shall be necessary to cause such
purchasing Bank to share the excess payment or other recovery ratably with
each of such other Banks; provided, however, that if all or any portion of
the excess payment or other recovery is thereafter recovered from such
purchasing Bank, the purchase shall be rescinded and each Bank which has
sold a participation to the purchasing Bank shall repay to the purchasing
Bank the purchase price to the ratable extent of such recovery together
with an amount equal to such selling Bank's ratable share (according to the
proportion of (a) the amount of such selling Bank's required repayment to
the purchasing Bank to (b) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Borrower
agrees that any Bank so purchasing a participation from another Bank
pursuant to this Section may, to the fullest extent permitted by law,
exercise all its rights of payment with respect to such participation as
fully as if such Bank were the direct creditor of the Borrower in the
amount of such participation. If under any applicable bankruptcy,
insolvency or other similar law, any Bank receives a secured claim in lieu
of a setoff to which this Section applies, such Bank shall, to the extent
practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Banks entitled under this Section
to share in the benefits of any recovery on such secured claim.
SECTION 2.15. PAYMENTS. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any L/C
Disbursement or any Senior Fees or other amounts) hereunder and under any
other Senior Loan Document not later than 12:00 (noon), New York City time,
on the date when due in immediately available funds, without setoff,
defense or counterclaim. Each such payment (other than Issuing Bank Fees,
which shall be paid directly to the applicable Issuing Bank, and principal
of and interest on Swingline Loans, which shall be paid directly to the
applicable Swingline Bank except as otherwise provided in Section 2.16(e))
shall be made to the Senior Administrative Agent's Account. Each such
payment shall be made in dollars.
(b) Whenever any payment (including principal of or interest on
any Borrowing or any Senior Fees or other amounts) hereunder or under any
other Senior Loan Document shall become due, or otherwise would occur, on a
day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or Senior Fees, if applicable.
SECTION 2.16. SWINGLINE LOANS. (a) Uncommitted Loans. Each
Swingline Bank may, in its sole discretion, from time to time make
Swingline Loans on an uncommitted basis. The Borrower acknowledges that
neither Swingline Bank has any obligation to make any Swingline Loan, and
that the Swingline Banks may decline to make any Swingline Loan at any time
for any reason or no reason. The Swingline Banks are prohibited from making
any Swingline Loan:
(i) to refinance any outstanding Swingline Loan;
(ii) on or after the Maturity Date or the termination of
the Revolving Credit Commitments in accordance with the terms
hereof;
(iii) if at the time of the Borrowing of such Swingline
Loans, the Borrower, in the Swingline Banks' reasonable judgment,
would be unable to satisfy the conditions set forth in Section
3.02;
(iv) if after giving effect thereto, the aggregate
principal amount of all Swingline Loans would exceed $100,000,000;
or
(v) if after giving effect thereto, the Aggregate
Revolving Credit Exposure would exceed the lesser of
(A) the Total Revolving Credit Commitment; and
(B) the Borrowing Base Amount in effect at such
time less the aggregate Term Exposures of the Banks at
such time.
Each Swingline Loan shall be in a principal amount that is a multiple of
$1,000,000. Within the foregoing limits, the Borrower may request, pay or
prepay Swingline Loans hereunder, subject to the terms, conditions and
limitations set forth herein.
(b) Borrowing Procedure. The Borrower shall notify the Senior
Administrative Agent by telecopy, or by telephone (confirmed by telecopy),
not later than 1:00 p.m., New York City time, on the day of a proposed
Swingline Loan. Such notice shall be delivered on a Business Day, shall be
irrevocable and shall refer to this Agreement and shall specify the
requested date (which shall be a Business Day) and amount of such Swingline
Loan. The Senior Administrative Agent will promptly advise the Swingline
Banks of any notice received from the Borrower pursuant to this clause (b).
If a Swingline Bank determines in its sole discretion to make a Swingline
Loan, such Swingline Bank shall make such Swingline Loan available to the
Borrower by means of a credit or wire transfer to the account of the
Borrower referred to in Section 2.02(c) by 3:00 p.m. on the date such
Swingline Loan is so requested.
(c) Denomination and Prepayment. Each Swingline Loan shall be
denominated in dollars. The Borrower shall have the right at any time and
from time to time to prepay any Swingline Loan, in whole or in part,
without premium or penalty upon giving written or telecopy notice (or
telephone notice promptly confirmed by written or telecopy notice) to the
applicable Swingline Bank and to the Senior Administrative Agent before
12:00 (noon), local time on the date of prepayment at such Swingline Bank's
address for notices specified on Annex 2.
(d) Interest. Each Swingline Loan denominated in dollars shall be
a Base Rate Loan and, subject to the provisions of Section 2.07, shall bear
interest as provided in Section 2.06(a). Interest on each Swingline Loan
shall be payable on the Interest Payment Date with respect thereto.
(e) Conversion to Revolving Loans. The Senior 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 either Swingline
Bank that has made outstanding Swingline Loans in its sole discretion, or
(ii) on the last day of the Interest Period of such Swingline Loan, deliver
on behalf of the Borrower a Borrowing Request pursuant to Section 2.03 for
a Base Rate Borrowing in the amount of such Swingline Loans; provided,
however, that the obligations of the Banks to fund such Borrowing shall not
be subject to Section 3.02.
(f) Participations. If the Borrower does not fully repay a
Swingline Loan on or before the last day of the Interest Period with
respect thereto, the applicable Swingline Bank shall promptly notify the
Senior Administrative Agent thereof (by telecopy or by telephone, confirmed
in writing), and the Senior Administrative Agent shall promptly notify each
Revolving Credit Bank thereof (by telecopy or by telephone, confirmed in
writing) and of its Revolving Percentage of such Swingline Loan. Upon such
notice but without any further action, such Swingline Bank hereby agrees to
grant to each Bank, and each Bank hereby agrees to acquire from such
Swingline Bank, a participation in such defaulted Swingline Loan equal to
such Bank's Revolving Percentage of the aggregate principal amount of such
defaulted Swingline Loan. In furtherance of the foregoing, each Revolving
Credit Bank hereby absolutely and unconditionally agrees, upon receipt of
notice as provided above, to pay to the Senior Administrative Agent, for
the account of such Swingline Bank, such Bank's Revolving Percentage of
each Swingline Loan that is not repaid on the last day of the Interest
Period with respect thereto. Each Bank agrees that its obligation to
acquire participations in Swingline Loans pursuant to this clause is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or an
Event of Default, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever. Each Bank shall
comply with its obligation under this clause by wire transfer of
immediately available funds, in the same manner as provided in Section
2.02(c) with respect to Loans made by such Bank (and Section 2.02(c) shall
apply, mutatis mutandis, to the payment obligations of the Banks) and the
Senior Administrative Agent shall promptly pay to such Swingline Bank the
amounts so received by it from the Banks. The Senior Administrative Agent
shall notify the Borrower of any participations in any Swingline Loan
acquired pursuant to this clause and thereafter payments in respect of such
Swingline Loan shall be made to the Senior Administrative Agent and not to
such Swingline Bank. Any amounts received by such Swingline Bank from the
Borrower (or other party on behalf of the Borrower) in respect of a
Swingline Loan after receipt by such Swingline Bank of the proceeds of a
sale of participations therein shall be promptly remitted to the Senior
Administrative Agent; any such amounts received by the Senior
Administrative Agent shall be promptly remitted by the Senior
Administrative Agent to the Banks that shall have made their payments
pursuant to this clause and to such Swingline Bank, as their interests may
appear. The purchase of participations in a Swingline Loan pursuant to this
clause shall not relieve the Borrower (or other party liable for
obligations of the Borrower) of any default in the payment thereof.
(g) Swingline Banks. As between themselves, Citicorp USA and Fleet
National Bank agree that (i) Citicorp USA shall have the option of first
refusal with respect to any request for a Swingline Loan, to the extent
that after giving effect to the making of such Swingline Loan and all other
Swingline Loans of Citicorp USA will not exceed $50,000,000, and (ii) Fleet
National Bank shall have the option of first refusal with respect to any
other request for a Swingline Loan.
SECTION 2.17. LETTERS OF CREDIT. (a) General. The Borrower may
request the issuance of a Letter of Credit for its own account, by
delivering an Issuance Request, at any time and from time to time while the
Revolving Credit Commitments remain in effect. This Section shall not be
construed to impose an obligation upon any Issuing Bank to issue any Letter
of Credit that is inconsistent with the terms and conditions of this
Agreement. Subject to clauses (b) and (c), and effective at the time of the
initial Credit Event, the Existing Trade Letters of Credit will be deemed
to be Letters of Credit outstanding under this Agreement, issued by Mellon
Bank as Issuing Bank.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to
amend, renew or extend an existing Letter of Credit, or to cause an
Existing Trade Letter of Credit to become a Letter of Credit under this
Agreement), the Borrower shall hand deliver, electronically transmit or
telecopy to the applicable Issuing Bank and the Senior Administrative Agent
(reasonably in advance of the requested date of issuance, amendment,
renewal or extension) an Issuance Request 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, the date on which such Letter of Credit is to expire
(which shall comply with clause (c)), the amount of such Letter of Credit,
the name and address of the beneficiary thereof, the applicable Issuing
Bank (if other than Citicorp USA) and such other information as shall be
necessary to prepare such Letter of Credit. By requesting the initial
Credit Event, the Borrower will be deemed to have requested that each
Existing Trade Letter of Credit be deemed to be issued under this
Agreement. A Letter of Credit shall be issued, amended, renewed or extended
or deemed to be issued under this Agreement only if, and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall
be deemed to represent and warrant that, and it shall be the case that,
after giving effect to such issuance, amendment, renewal or extension (and
the making or repayment of any other Credit Events to be made at or before
such time):
(i) the L/C Exposure shall not exceed $100,000,000; and
(ii) the Aggregate Revolving Credit Exposure shall not
exceed the lesser of
(A) the Total Revolving Credit Commitment; and
(B) the Borrowing Base Amount in effect at such
time less the aggregate Term Exposures of the Banks at
such time.
(c) Expiration Date. Each Letter of Credit shall expire at the
close of business on the earlier of the date one year after the date of the
issuance of such Letter of Credit (subject to customary automatic renewal
provisions) and the date that is five Business Days before the Maturity
Date, unless such Letter of Credit expires by its terms on an earlier date.
(d) Participations. By the issuance of a Letter of Credit and
without any further action on the part of the applicable Issuing Bank or
the Banks, the applicable Issuing Bank hereby grants to each Revolving
Credit Bank, and each such Bank hereby acquires from the applicable Issuing
Bank, a participation in such Letter of Credit equal to such Bank's
Revolving Percentage of the aggregate amount available to be drawn under
such Letter of Credit, effective upon the issuance of such Letter of
Credit. In consideration and in furtherance of the foregoing, each
Revolving Credit Bank hereby absolutely and unconditionally agrees to pay
to the Senior Administrative Agent, for the account of such Issuing Bank,
such Bank's Revolving Percentage of each L/C Disbursement made by such
Issuing Bank and not reimbursed by the Borrower (or, if applicable, another
party pursuant to its obligations under any other Senior Loan Document)
forthwith on the date due as provided in Section 2.02(e), in dollars. Each
Revolving Credit Bank agrees that its obligation to acquire participations
pursuant to this clause in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default, and that each such
payment shall be made without any offset, abatement, withholding or
reduction whatsoever.
(e) Reimbursement. If an Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the Borrower shall pay to
such Issuing Bank an amount equal to such L/C Disbursement not later than
3:30 p.m., New York City time, on the date that the Borrower shall have
received notice from such Issuing Bank that payment of such draft will be
made, or, if the Borrower shall have received such notice later than 10:00
a.m., New York City time, on any Business Day, not later than 1:00 p.m.,
New York City time, on the immediately following Business Day.
(f) Obligations Absolute. The Borrower's obligations to reimburse
L/C Disbursements as provided in clause (e) 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 any Senior Loan Document, or any term or provision
therein;
(ii) any amendment or waiver of or any consent to
departure from all or any of the provisions of any Letter of
Credit or any Senior Loan Document;
(iii) the existence of any claim, setoff, defense or
other right that the Borrower, any other party guaranteeing, or
otherwise obligated with, the Borrower, any Subsidiary or other
Affiliate thereof or any other Person may at any time have against
the beneficiary under any Letter of Credit, the applicable Issuing
Bank, the Senior Administrative Agent or any Bank or any other
Person, whether in connection with this Agreement, any other
Senior Loan Document or any other related or unrelated agreement
or transaction;
(iv) any draft or other document presented under a Letter
of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(v) payment by the applicable 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; and
(vi) any other act or omission to act or delay of any
kind of any Issuing Bank, the Banks, the Senior Administrative
Agent or any other Person or 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 the Borrower's obligations hereunder.
Without limiting the generality of the foregoing, the absolute and
unconditional obligation of the Borrower hereunder to reimburse L/C
Disbursements will not be excused by the gross negligence or wilful
misconduct of any Issuing Bank. However, the foregoing shall not be
construed to excuse the applicable 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 extent permitted by applicable law) suffered by the Borrower that are
caused by applicable Issuing Bank's gross negligence or wilful misconduct
in determining whether drafts and other documents presented under a Letter
of Credit comply with the terms thereof. The applicable Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit (i) the applicable Issuing Bank's exclusive reliance on the
documents presented to it under such Letter of Credit as to any and all
matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not
any document presented pursuant to such Letter of Credit proves to be
insufficient in any respect, if such document on its face appears to be in
order, and whether or not any other statement or any other document
presented pursuant to such Letter of Credit proves to be forged or invalid
or any statement therein proves to be inaccurate or untrue in any respect
whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof
shall, in each case, be deemed not to constitute wilful misconduct or gross
negligence of the applicable Issuing Bank. Without limiting any other
provision of this Agreement, the Senior Administrative Agent and any
Issuing Bank and any of their correspondents may rely upon any oral,
telephonic, telegraphic, facsimile, electronic, written or other
communication believed in good faith to have been authorized by the
Borrower, whether or not given or signed by an authorized person.
(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 as promptly as possible give telephonic notification,
confirmed by telecopy or electronic transmission, to the Senior
Administrative Agent and the Borrower of such demand for payment and
whether such Issuing Bank has made or will make an L/C Disbursement
thereunder; provided that any failure to give or delay in giving such
notice shall not relieve the Borrower of its obligation to reimburse such
Issuing Bank and the Revolving Credit Banks with respect to any such L/C
Disbursement. The Senior Administrative Agent shall promptly give each
Revolving Credit Bank notice thereof.
(h) Interim Interest. If the applicable Issuing Bank shall make
any L/C Disbursement in respect of a Letter of Credit, then, unless the
Borrower shall reimburse such L/C Disbursement in full on such date, the
unpaid amount thereof shall bear interest for the account of such Issuing
Bank, for each day from and including the date of such L/C Disbursement, to
but excluding the earlier of the date of payment by the Borrower or the
date on which interest shall commence to accrue thereon as provided in
Section 2.02(e), at the rate per annum that would apply to such amount if
such amount were a Base Rate Loan.
(i) Resignation or Removal of an Issuing Bank. Any Issuing Bank
may resign at any time by giving 180 days prior written notice to the
Senior Administrative Agent, the Banks and the Borrower, and may be removed
at any time by the Borrower by notice to the applicable Issuing Bank, the
Senior Administrative Agent and the Banks, to be effective only upon the
appointment of a successor Issuing Bank pursuant to the following sentence.
Subject to the next succeeding clause, upon the acceptance of any
appointment as a successor Issuing Bank hereunder by a Bank that shall
agree to serve as successor Issuing Bank, such successor shall succeed to
and become vested with all the interests, rights and obligations of the
retiring Issuing Bank and the retiring Issuing Bank shall be discharged
from its obligations to issue additional Letters of Credit hereunder. At
the time such removal or resignation shall become effective, the Borrower
shall pay all accrued and unpaid fees pursuant to Section 2.05(d)(ii). The
acceptance of any appointment as an Issuing Bank hereunder by a successor
Bank shall be evidenced by an agreement entered into by such successor, in
a form satisfactory to the Borrower and the Senior Administrative Agent,
and, from and after the effective date of such agreement, such successor
Bank shall have all the rights and obligations of the previous Issuing Bank
under this Agreement and the other Senior Loan Documents and references
herein and in the other Senior Loan Documents 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 resignation or removal of an Issuing Bank hereunder, the
retiring Issuing Bank shall remain a party hereto and shall continue to
have all the rights and obligations of an Issuing Bank under this Agreement
and the other Senior Loan Documents with respect to Letters of Credit
issued by it before such resignation or removal, but shall not be required
to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur
and be continuing, and to the extent any such cash collateralization will
not result in an obligation to grant a security interest in such cash
collateral to holders of notes under any Indenture, the Borrower shall, on
the Business Day it receives notice from the Senior Administrative Agent or
the Majority Revolving Credit Banks (or, if the maturity of the Loans has
been accelerated, Revolving Credit Banks holding participations in
outstanding Letters of Credit representing greater than 50% of the
aggregate undrawn amount of all outstanding Letters of Credit) thereof and
of the amount to be deposited, deposit in the L/C Cash Collateral Account,
for the benefit of the Revolving Credit Banks, an amount in cash equal to
the L/C Exposure as of such date. Such deposits shall be held by the Senior
Collateral Agent as collateral for the payment and performance of the
Senior Obligations. The Senior Collateral Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over
such account. Such deposits shall be invested in Temporary Cash
Investments, to be selected by the Senior Collateral Agent in its sole
discretion, and interest earned on such deposits shall be deposited in such
account as additional collateral for the payment and performance of the
Senior Obligations. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall (i) automatically
be applied by the Senior Administrative Agent to reimburse the applicable
Issuing Bank for L/C Disbursements for which it has not been reimbursed,
(ii) be held for the satisfaction of the reimbursement obligations of the
Borrower for the L/C Exposure at such time and (iii) if the maturity of the
Loans has been accelerated, 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).
(k) Additional Issuing Banks. The Borrower may, at any time and
from time to time with the consent of the Senior Administrative Agent
(which consent shall not be unreasonably withheld) and such Bank, designate
one or more additional Banks to act as an issuing bank under the terms of
the Agreement. Any Bank designated as an issuing bank pursuant to this
clause (k) shall be deemed to be an "Issuing Bank" (in addition to being a
Bank) in respect of Letters of Credit issued or to be issued by such Bank,
and, with respect to such Letters of Credit, such term shall thereafter
apply to the other Issuing Bank and such Bank.
SECTION 2.18. ADJUSTMENTS TO BORROWING BASE ADVANCE RATES. (a) As
of the Initial Borrowing Date, the Accounts Receivable Advance Rate will be
85%, the Pharmaceutical Inventory Advance Rate will be 57%, and the Other
Inventory Advance Rate will be 50%.
(b) Subject to clauses (c) and (d), the Senior Collateral Agent
may, in the exercise of its reasonable judgment, increase the
Pharmaceutical Inventory Advance Rate up to a level of 62%, and increase
the Other Inventory Advance Rate up to a level of 55%.
(c) Subject to clause (d), any increase in the Pharmaceutical
Inventory Advance Rate above 62% and any increase in the Other Inventory
Advance Rate above 55% will require the consent of the Supermajority Banks.
(d) Any increase in the Pharmaceutical Inventory Advance Rate or
the Other Inventory Advance Rate above 80% of orderly liquidation value
thereof, as determined by periodic appraisals, or the Accounts Receivable
Advance Rate above 85%, will require the consent of all of the Banks.
(e) The Senior Collateral Agent, in the exercise of its reasonable
judgment to reflect Borrowing Base Factors, may reduce the Accounts
Receivable Advance Rate, the Pharmaceutical Inventory Advance Rate and the
Other Inventory Advance Rate from time to time.
(f) The Senior Collateral Agent will give prompt written notice to
the Borrower and the Banks of any adjustments effected pursuant to this
Section 2.18.
ARTICLE 3
CONDITIONS
The obligations of the Banks to make Loans (other than a Borrowing
pursuant to Section 2.02(e) or Section 2.16(e)) and of the Issuing Banks to
issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions:
SECTION 3.01. FIRST CREDIT EVENT. On the Initial Borrowing Date,
each of the following conditions shall have been satisfied (or waived in
accordance with Section 9.05):
(a) Counterparts of this Agreement. The Senior Administrative
Agent shall have received counterparts of this Agreement signed by each of
the Borrower, the Agents and the Banks (or, in the case of any party as to
which an executed counterpart shall not have been received, receipt by the
Senior Administrative Agent in form satisfactory to it of telegraphic,
telex or other written confirmation from such party of execution of a
counterpart hereof by such party).
(b) Notes. The Senior Administrative Agent shall have received for
the account of each Bank which so requests pursuant to Section 2.04 a
Revolving Credit Note, a Term Note, and/or a Swingline Note, as applicable,
in each case dated as of the Initial Borrowing Date and complying with the
provisions of Section 2.04.
(c) Senior Subsidiary Guarantee Agreement. The Senior Subsidiary
Guarantee Agreement shall have been duly executed by each Subsidiary
Guarantor, shall have been delivered to the Senior Collateral Agent and
shall be in full force and effect.
(d) Senior Indemnity, Subrogation and Contribution Agreement. The
Senior Indemnity, Subrogation and Contribution Agreement shall have been
duly executed by the parties thereto, shall have been delivered to the
Senior Collateral Agent and shall be in full force and effect.
(e) Senior Subsidiary Security Agreement. The Senior Subsidiary
Security Agreement shall have been duly executed by each Subsidiary
Guarantor and shall have been delivered to the Senior Collateral Agent and
shall be in full force and effect on such date and each document (including
each Uniform Commercial Code financing statement and in the case of
Intellectual Property (as defined in the Senior Subsidiary Security
Agreement) appropriate filings in United States Patent and Trademark Office
and the United States Copyright Office ) required by law to be filed,
registered or recorded in order to create and perfect in favor of the
Senior Collateral Agent for the benefit of the Senior Bank Parties a valid,
legal and perfected first-priority security interest in and lien on the
Senior Collateral shall have been delivered to the Senior Collateral Agent.
(f) Senior Mortgages. (i) The Agents shall have received (i)
counterparts of a Senior Mortgage with respect to each Mortgaged Property
duly executed, acknowledged and delivered by the record owner of such
Mortgaged Property and in recordable form, and (ii) mortgage and lien
searches satisfactory to the Senior Administrative Agent.
(g) Collateral Trust and Intercreditor Agreement. The Collateral
Trust and Intercreditor Agreement shall have been duly executed by the
Borrower and each other party thereto, shall have been delivered to the
Senior Collateral Agent, and shall be in full force and effect.
(h) Perfection Certificates. The Senior Collateral Agent shall
have received a Perfection Certificate with respect to each Subsidiary
Guarantor dated the Initial Borrowing Date and duly executed by a Financial
Officer of the Borrower.
(i) Lien Searches. The Senior Collateral Agent shall have received
the results of a search of the Uniform Commercial Code (or equivalent
filings) filings made with respect to the Borrower and each other Obligor
in the states (or other jurisdictions) in which the chief executive office
of each such Person is located, any offices of such Persons in which
records have been kept relating to Accounts and the other jurisdictions in
which Uniform Commercial Code filings (or equivalent filings) are to be
made pursuant to the preceding clause, together with copies of the
financing statements (or similar documents) disclosed by such search, and
accompanied by evidence satisfactory to the Senior Collateral Agent that
the Liens indicated in any such financing statement (or similar document)
would be permitted under Section 5.15 or have been released (or
arrangements shall have been made for the release or discharge thereof
reasonably satisfactory to the Senior Administrative Agent).
(j) Approvals and Consents. All requisite material governmental
authorities and third parties shall have approved or consented to the
transactions contemplated hereby to the extent required, all applicable
appeal periods shall have expired and there shall be no governmental or
judicial action, actual or threatened, that could reasonably be expected to
restrain, prevent or impose burdensome conditions on the transactions
contemplated hereby.
(k) Working Capital. The Agents shall be reasonably satisfied with
the sufficiency of amounts available under this Agreement to meet the
ongoing working capital requirements of the Borrower and its Subsidiaries.
(l) Business Plan. The Agents and the Banks shall have received a
three year business plan of the Borrower which shall be satisfactory in all
material respects to the Agents and the Banks.
(m) Existing Management. The Agents shall be satisfied with any
proposed changes in the management of the Borrower.
(n) Borrowing Base Certificate. The Senior Administrative Agent
shall have received a Borrowing Base Certificate dated the Initial
Borrowing Date, containing information as of a date not more than eight
Business Days before the Initial Borrowing Date, and executed by a
Financial Officer of the Borrower. The Borrowing Base Amount shall be
sufficient to support the initial Credit Events.
(o) Borrowing Base Appraisal. The Senior Administrative Agent
shall have received such valuations and appraisals of the inventory and
accounts receivable that are part of the Borrowing Base by an independent
appraisal firm reasonably satisfactory to the Senior Administrative Agent
as the Senior Administrative Agent shall reasonably request. The Senior
Administrative Agent shall have completed a field examination, the results
of which shall be satisfactory to the Agents.
(p) Opinions of Borrower's Counsel. The Senior Administrative
Agent shall have received opinions of:
(i) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special New
York counsel for the Borrower, substantially in the form of
Exhibit O-1 hereto; and
(ii) Xxxxxx X. Xxxxxx, General Counsel of the Borrower,
substantially in the form of Exhibit O-2 hereto.
The Borrower hereby requests such counsel to deliver such opinions.
(q) Corporate Documents. The Senior Administrative Agent shall
have received all documents it may reasonably request relating to the
existence of the Borrower and the Subsidiary Guarantors, the corporate
authority for and the validity of this Agreement and the other Senior Loan
Documents, and any other matters relevant hereto, all in form and substance
satisfactory to the Senior Administrative Agent.
(r) Payments of Senior Fees, Etc. The Senior Administrative Agent
shall have received all Senior Fees and other amounts due and payable on or
before the Initial Borrowing Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder or under any other Senior Loan
Document.
(s) Consummation of Transactions. The Transactions shall have been
consummated substantially concurrently with the initial Credit Event in
accordance with Annex 3, and the capital structure of the Borrower shall be
as set forth in Annex 3. All of the conditions precedent set forth in the
Transaction Documents shall have been satisfied or waived, and no material
provision of the Transaction Documents shall have been amended,
supplemented, waived or otherwise modified without the prior written
consent of the Agents. The Agents shall be satisfied with the Transaction
Documents in all respects.
(t) Cash Management System. The Borrower shall have established a
cash management system reasonably satisfactory to the Senior Administrative
Agent that complies with Section 5.13.
(u) Insurance. The Senior Administrative Agent shall have received
a copy of, or a certificate as to coverage under, the insurance policies
required by Section 5.03 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 Senior Collateral Agent as additional insured, in form and
substance satisfactory to the Senior Administrative Agent.
(v) Environmental Assessment. The Senior Administrative Agent
shall have received Phase I desk audits relating to the Mortgaged
Properties reasonably satisfactory to the Agents, from an environmental
consulting firm reasonably satisfactory to the Agents, as to any
environmental hazards, liabilities or Remedial Action to which the Borrower
or any of the Subsidiaries may be subject.
(w) Environmental and Employee Matters. The Agents shall be
reasonably satisfied as to the amount and nature of any environmental and
employee health and safety exposures to which the Borrower and the
Subsidiaries may be subject and the plans of the Borrower with respect
thereto.
(x) Officer's Certificate. The Senior Administrative Agent shall
have received a certificate, dated the Initial Borrowing Date and signed by
a Financial Officer of the Borrower, confirming compliance with the
conditions precedent set forth in Section 3.02, and as to such other
matters relating to the satisfaction of the conditions specified in this
Section 3.01 as the Senior Administrative Agent may reasonably request.
(y) Second Priority Collateral Documents. Each of the Second
Priority Mortgages, the Second Priority Subsidiary Security Agreement, the
Second Priority Subsidiary Guarantee Agreements shall be in form an
substance satisfactory to the Agents, shall have been duly executed by each
Subsidiary Guarantor, and by or on behalf of the Second Priority Debt
Parties, shall have been delivered to the Senior Collateral Agent, and
shall be in full force and effect.
(z) Transaction Documents. The Senior Administrative Agent shall
have received, with a copy for each Bank, a copy of each Transaction
Document reasonably requested by the Senior Administrative Agent, certified
by a Financial Officer of the Borrower.
(aa) No Litigation. There shall have been (i) no development in
any Existing Litigation after April 10, 2000, and (ii) no litigation or
administrative proceeding commenced, that in case of either clause (i) or
(ii) could reasonably be expected to have a Material Adverse Effect. There
shall have been no development in any Existing Litigation after April 10,
2000, and there shall have been no litigation or administrative proceeding
that, in the Banks' sole judgment, could impair the validity,
enforceability or priority of the security interests to be granted in favor
of the Banks under the Senior Loan Documents.
(bb) No Material Adverse Change. There shall have been no material
adverse change in the revenues, store operations, inventory, accounts
receivable, business or prospects of the Borrower and its Subsidiaries
considered as a whole, or to the Borrower's knowledge, in any relationship
with any vendor or third party insurance payor of the Borrower or any of
its Consolidated Subsidiaries, considered as a whole, since November 2,
1999, other than, in each case, as publicly disclosed before April 10,
2000.
(cc) Landlord's Waivers. The Senior Administrative Agent shall
have received waivers, in form and substance reasonably satisfactory to the
Banks, from the lessor of each leased distribution center of the Subsidiary
Guarantors of any statutory, common law or contractual landlord's lien with
respect to any inventory of any Subsidiary Guarantor (other than with
respect to inventory located at leased warehouses having a value in the
aggregate not to exceed $40,000,000); provided, however, that if failure to
comply with this condition would not otherwise reduce the principal amount
of the Loans that the Borrower may borrow on the Initial Borrowing Date
pursuant to Section 2.01(b)(ii), or result in a prepayment obligation
pursuant to Section 2.12(b), the Senior Administrative Agent may waive this
condition for one or more periods of not more than 120 days in the
aggregate.
(dd) Intercompany Inventory Purchase Agreement. The Intercompany
Inventory Purchase Agreement shall have been duly executed by the Borrower
and each other party thereto, and shall have been delivered to the Senior
Administrative Agent, and shall be in full force and effect.
(ee) Legal Matters. All legal matters incident to this Agreement,
the Borrowings and extensions of credit hereunder and the other Senior Loan
Documents shall be satisfactory to the Banks.
(ff) Flood Hazard Certificates. The Senior Administrative Agent
shall have received standard flood hazard determination certificates in the
form required by 12 CFR 22.6 for each Mortgaged Property.
SECTION 3.02. ALL CREDIT EVENTS. On the date of each issuance of a
Letter of Credit and each Borrowing of a Loan (each such event being called
a "Credit Event") (other than a Borrowing pursuant to Section 2.02(e) or a
Borrowing pursuant to Section 2.16(e)) each of the following conditions
shall have been satisfied (or waived in accordance with Section 9.05):
(a) Request. The Borrower shall have delivered a Borrowing Request
to the Senior Administrative Agent, or an Issuance Request to the Senior
Administrative Agent and the applicable Issuing Bank, or a Swingline
Request to the Senior Administrative Agent and the Swingline Banks, as the
case may be.
(b) Representations and Warranties. The fact that the
representations and warranties of the Borrower contained in this Agreement
(except, in the case of a Refunding Borrowing, the representations and
warranties set forth in Sections 4.04(a)(iii) and Section 4.06 as to any
matter which has theretofore been disclosed in writing by the Borrower to
the Banks) shall be true in all material respects on and as of the date of
such Credit Event.
(c) No Default. The fact that, immediately after such Credit
Event, no Default shall have occurred and be continuing.
(d) Borrowing Base. The Borrowing Base Amount shall be sufficient
to support such Credit Event.
Each Credit Event shall be deemed to constitute a representation and
warranty by the Borrower on the date of such Credit Event as to the matters
specified in clauses (b) (except as aforesaid) and (c) of this Section, and
the Borrower expects the proceeds of such Credit Event (other than the
issuance of a Letter of Credit) will be applied to uses of proceeds which
are permitted pursuant to Section 5.24 and which are reasonably anticipated
to be made within the five Business Days following such Credit Event.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. CORPORATE EXISTENCE AND POWER. The Borrower is a
corporation and each Subsidiary Guarantor is a corporation (or other
entity) duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization (except as otherwise indicated
in Schedule 1.01(c)), and has all corporate (or other organizational)
powers and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION. (a) The execution, delivery and performance by the Borrower
and each Subsidiary Guarantor of each Senior Loan Document to which it is a
party are within the Borrower's corporate powers or such Subsidiary
Guarantor's corporate (or other organizational) powers, have been duly
authorized by all necessary corporate or other action, require no action by
or in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or
by-laws (or other organizational documents) of the Borrower or such
Subsidiary Guarantor or of any agreement or instrument evidencing or
governing Debt of the Borrower or any Subsidiary or any other material
agreement, instrument, judgment, injunction, order or decree binding upon
the Borrower or any Subsidiary or result in the creation or imposition of
any Lien on any asset of the Borrower or any Subsidiary pursuant to any
such agreement, instrument, judgment, injunction, order or decree (other
than the Liens created by the Senior Collateral Documents). None of the
Borrower or any of the Subsidiaries is in default in any manner under any
provision of any Material Financial Obligation, or any other material
agreement or instrument to which it is a party or by which it or any of its
properties or assets are or may be bound, where such default could
reasonably be expected to have a Material Adverse Effect.
(b) The execution, delivery and performance by the Borrower and
each Subsidiary Guarantor of each Transaction Document (other than the
Senior Loan Documents) to which it is a party are within the Borrower's
corporate powers or such Subsidiary Guarantor's corporate (or other
organizational) powers, have been duly authorized by all necessary
corporate or other action, require no action by or in respect of, or filing
with, any governmental body, agency or official and do not contravene, or
constitute a default under, any provision of applicable law or regulation
or of the certificate of incorporation or by-laws (or other organizational
documents) of the Borrower or such Subsidiary Guarantor or of any agreement
or instrument evidencing or governing Debt of the Borrower or any
Subsidiary or any other material agreement, instrument, judgment,
injunction, order or decree binding upon the Borrower or any Subsidiary or
result in the creation or imposition of any Lien on any asset of the
Borrower or any Subsidiary pursuant to any such agreement, instrument,
judgment, injunction, order or decree (other than the Liens permitted by
Section 5.15).
SECTION 4.03. BINDING EFFECT. This Agreement and each other Senior
Loan Document constitutes a valid and binding agreement of the Borrower and
the Subsidiary Guarantors, and each Note, when executed and delivered in
accordance with this Agreement, will constitute a valid and binding
obligation of the Borrower, in each case enforceable in accordance with its
terms.
SECTION 4.04. FINANCIAL AND OTHER INFORMATION. (a) Effective upon
and after delivery by the Borrower of the Initial Financial Statements,
(i) the consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of February 26, 2000 and each
following fiscal year end of the Borrower and its Consolidated
Subsidiaries and the related consolidated statements of income and
cash flows for the fiscal year then ended, reported on by Deloitte
& Touche (or other independent public accountants of nationally
recognized standing) fairly present, in conformity with generally
accepted accounting principles, the consolidated financial
position of the Borrower and its Consolidated Subsidiaries as of
such date and their consolidated results of operations and cash
flows for such fiscal year;
(ii) the consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of such fiscal quarter end and
each following fiscal quarter end of the Borrower and its
Consolidated Subsidiaries (other than the fourth fiscal quarter of
any fiscal year) and the related consolidated statements of income
and cash flows for the fiscal quarter then ended, set forth in the
Borrower's quarterly report on Form 10-Q for the fiscal quarter
then ended, a copy of which will be delivered to each of the
Banks, fairly present, in conformity with generally accepted
accounting principles applied on a basis consistent with the
Initial Financial Statements, the consolidated financial position
of the Borrower and its Consolidated Subsidiaries as of such date
and their consolidated results of operations and cash flows for
such fiscal period, subject to normal year-end adjustments; and
(iii) there has been no material adverse change in the
business, financial position, results of operations or prospects
of the Borrower and its Consolidated Subsidiaries, considered as a
whole since May 27, 2000.
(b) Since November 2, 1999, and until delivery by the Borrower of
the Initial Financial Statements, there has been no material adverse effect
on the revenues, store operations, inventory, accounts receivable, business
or prospects of the Borrower and its Subsidiaries considered as a whole, or
to the Borrower's knowledge, in any relationship with any vendor or third
party insurance payor of the Borrower or any of its Consolidated
Subsidiaries, considered as a whole, other than, in each case, as publicly
disclosed before April 10, 2000.
SECTION 4.05. ACCURACY OF INFORMATION. (a) Subject to any
disclosure in the Initial Financial Statements for the period on or before
May 27, 2000, all information (other than financial projections) that has
been or will hereafter be made available to the Agents or any Bank by or on
behalf of the Borrower or any of its representatives in connection with the
transactions contemplated hereby is and will be complete and correct in all
material respects and does not and will not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements contained therein not misleading in light of the
circumstances under which such statements were or are made.
(b) Each Borrowing Base Certificate that has been or will
hereafter be made available to the Agents or any Bank is and will be
complete and correct in all material respects.
(c) All financial projections, if any, that have been or will be
prepared by or on behalf of the Borrower or any of its representatives and
made available to the Agents or any Bank have been or will be prepared in
good faith based upon assumptions that are reasonable at the time made and
at the time the related financial projections are made available to the
Agents.
(d) Subject to any disclosure in the Initial Financial Statements,
for the period on or before May 27, 2000, the Borrower has disclosed to the
Banks in writing any and all facts which materially and adversely affect
the business, operations or condition, financial or otherwise, of the
Borrower and its Subsidiaries or the Borrower's ability to perform its
obligations under this Agreement.
SECTION 4.06. LITIGATION. There has been (a) no development in any
Existing Litigation after April 10, 2000, and (b) no litigation or
administrative proceeding that in case of either clause (a) or (b) could
reasonably be expected to have a Material Adverse Effect. There has been no
development in any Existing Litigation after April 10, 2000, and there has
been no litigation or administrative proceeding that could, in the Majority
Banks' sole judgment, impair the validity, enforceability or priority of
the security interests to be granted in favor of the Banks under the Senior
Loan Documents.
SECTION 4.07. COMPLIANCE WITH ERISA. Each member of the ERISA
Group has fulfilled its obligations under the minimum funding standards of
ERISA and the Internal Revenue Code with respect to each Plan and is in
compliance in all material respects with the presently applicable
provisions of ERISA and the Internal Revenue Code with respect to each
Plan, except to the extent that the failure to do so could not reasonably
be expected to have a Material Adverse Effect. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412
of the Internal Revenue Code in respect of any Plan, (ii) failed to make
any contribution or payment to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could result in the imposition of a Lien
or the posting of a bond or other security under ERISA or the Internal
Revenue Code or (iii) incurred any liability under Title IV of ERISA other
than a liability to the PBGC for premiums under Section 4007 of ERISA, in
each case except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
SECTION 4.08. TAXES. The Borrower and its Subsidiaries have filed
all United States Federal income tax returns, and the Borrower and its
Subsidiaries have filed all other material tax returns, which are required
to be filed by them and have paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Borrower or any Subsidiary
Guarantor except where the payment of any such taxes is being contested in
good faith by appropriate proceedings. Effective upon delivery by the
Borrower of the Initial Financial Statements, the charges, accruals and
reserves on the books of the Borrower and its Consolidated Subsidiaries in
respect of taxes or other governmental charges are, in the opinion of the
Borrower, adequate.
SECTION 4.09. SUBSIDIARIES. Schedule 1.01(c) sets forth a complete
and correct list of the Borrower's Subsidiaries as of the Initial Borrowing
Date, and the percentage ownership interest of the Borrower therein. Each
of the Borrower's corporate Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted. Each of the Borrower's
Subsidiaries is an "Unrestricted Subsidiary" as referred to in Section
5.10.
SECTION 4.10. ENVIRONMENTAL MATTERS. In the ordinary course of its
business, the Borrower conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of the
Borrower and its Subsidiaries, in the course of which it identifies and
evaluates associated liabilities and costs (including, without limitation,
any capital or operating expenditures required for clean-up or closure of
properties presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with environmental
protection standards imposed by law or as a condition of any license,
permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction
in the level of or change in the nature of operations conducted thereat,
any costs or liabilities in connection with off-site disposal of wastes or
hazardous substances, and any actual or potential liabilities to third
parties, including employees, and any related costs and expenses). On the
basis of this review, the Borrower has reasonably concluded that such
associated liabilities and costs, including the costs of compliance with
Environmental Laws, are unlikely to have a Material Adverse Effect.
SECTION 4.11. YEAR 2000 COMPLIANCE. The Borrower has (i) initiated
a review and assessment of all areas within the business and operations of
the Borrower and its Subsidiaries (including those areas affected by
suppliers and vendors) that could be adversely affected by the "Year 2000
Problem") (that is, the risk that computer applications used by it or any
of its Subsidiaries (or their respective supplier and vendors) may be
unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999), (ii)
developed a plan and timeline for addressing the Year 2000 Problem on a
timely basis and (iii) to date, implemented such plan in substantial
accordance with such timetable. The Borrower reasonably believes that all
computer applications that are material to the business or operations of
the Borrower or any of its Subsidiaries will on a timely basis be able to
perform properly date-sensitive functions for all dates before and from and
after January 1, 2000, except to the extent that a failure to do so could
not reasonably be expected to have a Material Adverse Effect.
SECTION 4.12. OTHER REPRESENTATIONS. The representations and
warranties of the Borrower and each Subsidiary Guarantor set forth in each
other Senior Loan Document and in each other Transaction Document are true
and correct.
SECTION 4.13. EXISTING AND INDEPENDENT LETTERS OF CREDIT. Schedule
4.13(a) sets forth all of the Existing Trade Letters of Credit of the
Borrower and its Subsidiaries as of the Initial Borrowing Date which are to
become Letters of Credit under this Agreement pursuant to Section 2.17.
Schedule 4.13(b) sets forth all of the Independent Standby Letters of
Credit of the Borrower and its Subsidiaries as of the Initial Borrowing
Date which will continue to be outstanding in accordance with their terms
after the Initial Borrowing Date. The Borrower and the Subsidiaries are
account parties of no other letters of credit as of the Initial Borrowing
Date.
SECTION 4.14. INSURANCE. Schedule 4.14 sets forth a true, complete
and correct description of all liability, property and casualty insurance
maintained by the Borrower or by the Borrower for its Subsidiaries as of
the Initial Borrowing Date. Such insurance is in full force and effect and
all premiums have been duly paid. The Borrower and its 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.
SECTION 4.15. SOLVENCY. Immediately after the consummation of the
Transactions to occur on the Initial Borrowing Date and immediately
following the making of each Loan made on the Initial Borrowing Date and
after giving effect to the application of the proceeds of such Loans, the
fair value of the assets of the Borrower and the other Obligors, taken as a
whole, at a fair valuation, will exceed their debts and liabilities,
subordinated, contingent or otherwise; the present fair saleable value of
the property of the Borrower and the other Obligors, 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;
the Borrower and the other Obligors, 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 the Borrower and the
other Obligors 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 Initial Borrowing
Date.
SECTION 4.16. TITLE TO PROPERTIES. (a) Each of the Borrower and
the Subsidiaries has good and marketable title to, or valid leasehold
interests in, all its material real properties (including all Mortgaged
Properties) and valid title to all other assets, 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 and assets for their
intended purposes. All such material properties and assets are free and
clear of Liens that secure indebtedness for borrowed money, other than
Liens expressly permitted by Section 5.15 and as set forth in Schedule
4.16(b)(ii) (or arrangements reasonably satisfactory to the Senior
Administrative Agent have been made for the release or discharge of such
Liens).
(b) Schedule 1.01(b) sets forth the address of each Mortgaged
Property on the Initial Borrowing Date. As of the Initial Borrowing Date,
none of the Mortgaged Properties are subject to leases, license agreements
or subleases under which the Borrower or any Subsidiary is the
lessor/licensor except as set forth on Schedule 4.16(b)(i). Each Mortgaged
Property is free of Liens that secure indebtedness for borrowed money
except for the Second Priority Mortgages and as set forth on Schedule
4.16(b)(ii) (or arrangements reasonably satisfactory to the Senior
Administrative Agent have been made for the release of such Liens).
(c) Schedule 4.16(c) sets forth the address of every leased
warehouse or distribution center in which inventory owned by the Company
and or any Subsidiary is located.
SECTION 4.17. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT. None of the Borrower or any Subsidiary is an "investment
company" as defined in, or subject to regulation under, the Investment
Company Act of 1940 or a "holding company" as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935.
SECTION 4.18. LABOR MATTERS. As of the Initial Borrowing Date,
there are no strikes, lockouts or slowdowns against the Borrower or any
Subsidiary pending or, to the knowledge of the Borrower, threatened. The
hours worked by and payments made to employees of the Borrower and the
Subsidiaries have not been in violation 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.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment
hereunder or any Loan or other amount payable remains unpaid or any Letter
of Credit remains outstanding:
SECTION 5.01. INFORMATION. The Borrower will deliver to each of
the Banks:
(a) (i) with respect to the fiscal year of the Borrower
ended February 26, 2000 as soon as available but not later than
July 11, 2000, and (ii) with respect to each following fiscal year
of the Borrower as soon as available and in any event within 90
days (or within such longer period of time, not greater than 120
days, to which the SEC may extend the filing deadline for the
Borrower's Annual Report on Form 10-K) after the end of each such
fiscal year, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such fiscal year and
the related consolidated statements of income and cash flows for
such fiscal year, setting forth in each case in comparative form
the figures for the previous fiscal year, all reported on without
any material qualification by Deloitte & Touche (or other
independent public accountants of nationally recognized standing);
(b) with respect to the fiscal quarter of the Borrower
ending May 27, 2000 as soon as available but not later then July
11, 2000, and (ii) with respect to each following fiscal quarter
of the Borrower (other than the last fiscal quarter of a fiscal
year) as soon as available and in any event within 45 days (or
within such longer period of time, not greater than 60 days, to
which the SEC may extend the filing deadline for the Borrower's
Quarterly Report on Form 10-Q) after the end of each such fiscal
quarter, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and the
related consolidated statements of income and cash flows for such
quarter and for the portion of the Borrower's fiscal year ended at
the end of such quarter, setting forth in each case in comparative
form the figures for the corresponding quarter and the
corresponding portion of the Borrower's previous fiscal year, all
certified (subject to normal year-end adjustments) as to fairness
of presentation, generally accepted accounting principles and
consistency by a Financial Officer of the Borrower;
(c) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b) above, a
certificate of a Financial Officer of the Borrower (i) setting
forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the requirements of
Sections 5.11, 5.16, 5.17, 5.18 and 5.19 on the date of such
financial statements, (ii) stating whether any Default exists on
the date of such certificate and, if any Default then exists,
setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto and
(iii) in the case of the certificate delivered together with the
financial statements referred to in clause (a) above, a
calculation of Excess Cash Flow for the applicable period
specified in Section 2.12(e) and the amount required for
Reductions hereunder, if any, in respect thereof;
(d) simultaneously with the delivery of each set of
financial statements referred to in clause (a) above, a statement
of the firm of independent public accountants which reported on
such statements (i) whether anything has come to their attention
to cause them to believe that any Default existed on the date of
such statements and (ii) confirming the calculations set forth in
the officer's certificate delivered simultaneously therewith
pursuant to clause (c) above;
(e) within three Business Days after the end of each
fiscal month 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 $5,000,000;
(f) (i) within five days after any officer of the
Borrower obtains knowledge of any Default, if such Default is then
continuing, a certificate of a Financial Officer of the Borrower
setting forth information with respect thereto in reasonable
detail and the action which the Borrower is taking or proposes to
take with respect thereto, and (ii) within five days after the
general counsel of the Borrower obtains knowledge of the filing or
commencement of any action, suit or proceeding, whether at law or
in equity or by or before any court, governmental authority or
other tribunal, against the Borrower or any Affiliate thereof that
could reasonably be expected to result in a Material Adverse
Effect a certificate of such general counsel of the Borrower
setting forth information with respect thereto in reasonable
detail and the action which the Borrower is taking or proposes to
take with respect thereto;
(g) within four Business Days after the end of each
fiscal week a Borrowing Base Certificate showing the Borrowing
Base Amount as of the close of business on the last day of such
fiscal week, each such Borrowing Base Certificate to be certified
as complete and correct on behalf of the Borrower by a Financial
Officer of the Borrower;
(h) promptly upon the mailing thereof to the shareholders
of the Borrower generally, copies of all financial statements,
reports and proxy statements so mailed;
(i) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports
on Forms 10-K, 10-Q and 8-K (or their equivalents) which the
Borrower shall have filed with the SEC;
(j) within five days, if and when any member of the ERISA
Group (i) gives or any Financial Officer becomes aware that such
member is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA) with respect to any
Plan which might constitute grounds for a termination of such Plan
under Title IV of ERISA, or any Financial Officer knows that the
plan administrator of any Plan has given or any Financial Officer
becomes aware that such member is required to give notice of any
such reportable event, a copy of the notice of such reportable
event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV
of ERISA or notice that any Multiemployer Plan is in
reorganization, is insolvent or has been terminated, a copy of
such notice; (iii) receives notice from the PBGC under Title IV of
ERISA of an intent to terminate, impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer, any Plan, a copy of such notice; (iv)
applies for a waiver of the minimum funding standard under Section
412 of the Internal Revenue Code, a copy of such application; (v)
gives notice of intent to terminate any Plan under Section 4041(c)
of ERISA, a copy of such notice and other information filed with
the PBGC; (vi) gives notice of withdrawal from any Plan pursuant
to Section 4063 of ERISA, a copy of such notice; or (vii) fails to
make any payment or contribution to any Plan or Multiemployer Plan
or in respect of any Benefit Arrangement or makes any amendment to
any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other
security, a certificate of a Financial Officer of the Borrower
setting forth details as to such occurrence and action, if any,
which the Borrower or applicable member of the ERISA Group is
required or proposes to take;
(k) on or prior to the dates specified below (or, in the
reasonable discretion of the Senior Administrative Agent, no later
than 5 days thereafter):
(i) a monthly forecast of cash receipts and
disbursements, commencing with July, 2000, no later than
the first day of each month in respect of such forecast;
(ii) a monthly reconciliation of actual cash
receipts and disbursements to the forecast for such month
delivered pursuant to clause (i) above, no later than the
25th day of the next succeeding month;
(iii) a weekly sales report for each week,
commencing with the week ending June 17, 2000, no later
than the 4th day following the last day of the week in
respect of which such sales report is to be delivered;
(iv) an operating forecast for each month in the
fiscal year ending on or closest to February 28, 2002, no
later than March 31, 2001; and
(v) a monthly reconciliation of actual operating
results for each month specified in the operating
forecast delivered pursuant to clause (iv) above to the
budget for such month, no later than the 30th day of the
next succeeding month; and
(l) from time to time such additional information
regarding the financial position or business of the Borrower and
its Subsidiaries or the Collateral as the Senior Administrative
Agent, at the request of any Bank, may reasonably request.
Information required to be delivered pursuant to clauses (a), (b), (h) and
(i) shall be deemed to have been delivered on the date on which the
Borrower provides notice to the Banks that such information has been posted
on the Borrower's website on the Internet at the website address listed on
the signature pages hereof, at xxx.xxx/xxxxx/xxxxxxxx.xxx or at another
website identified in such notice and accessible by the Banks 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), (h) and (i) to
any Bank which requests such delivery.
SECTION 5.02. PAYMENT OF OBLIGATIONS. The Borrower will, and will
cause each of its Subsidiaries to, pay and discharge, as the same shall
become due and payable, (i) all material claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons prior
to the time such claims or demands give rise to a material Lien upon any of
its property or assets or a material risk of forfeiture of a Mortgaged
Property, and (ii) all material taxes, assessments and governmental charges
or levies upon it or its property or assets, except where any of the items
in clause (i) or (ii) above may be contested in good faith by appropriate
proceedings, and the Borrower or such Subsidiary, as the case may be, shall
have set aside on its books, in accordance with generally accepted
accounting principles, appropriate reserves, if any, for the accrual of any
such items.
SECTION 5.03. MAINTENANCE OF PROPERTY; INSURANCE. (a) The Borrower
will keep, and will cause each Subsidiary to keep, all property useful in
its business in good working order and condition, ordinary wear and tear
excepted.
(b) The Borrower will, and will cause each of its Subsidiaries to,
maintain (either in the name of the Borrower or in such Subsidiary's own
name) with financially sound and responsible insurance companies, insurance
on all their respective properties in at least such amounts and against at
least such risks (and with such risk retention) as are usually insured
against in the same general area by companies of established repute engaged
in the same or a similar business; and will furnish to the Banks, upon
request from the Senior Administrative Agent, information presented in
reasonable detail as to the insurance so carried. The Borrower will, and
will cause each of its Subsidiaries to, maintain such insurance in a
coverage amount of not less than 90% of the coverage amount as of the
Initial Borrowing Date, with deductibles, risks covered and other
provisions (other than amount of premiums) not materially less favorable to
the Borrower and its Subsidiaries as of the Initial Borrowing Date.
(c) The Borrower will, and will cause each of the Subsidiary
Guarantors to, 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 Senior Administrative Agent and the
Senior Collateral Agent, which endorsement shall provide that, from and
after the Initial Borrowing Date, if the insurance carrier shall have
received written notice from the Senior Administrative Agent or the Senior
Collateral Agent of the occurrence of an Event of Default, the insurance
carrier shall pay all proceeds otherwise payable to the Borrower and any
other Obligor under such policies directly to the Senior Collateral Agent
for application pursuant to the Collateral Trust and Intercreditor
Agreement; cause all such policies to provide that neither the Borrower,
the Senior Administrative Agent, the Senior Collateral Agent nor any other
party shall be a coinsurer thereunder and to contain a "Replacement Cost
Endorsement", without any deduction for depreciation, and such other
provisions as the Senior Administrative Agent or the Senior Collateral
Agent may reasonably require from time to time to protect their interests;
deliver broker's certificates to the Senior Collateral Agent; 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 Senior Administrative Agent and the
Senior Collateral Agent (giving the Senior Administrative Agent and the
Senior Collateral 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 Senior Administrative Agent and the
Senior Collateral Agent; deliver to the Senior Administrative Agent and the
Senior Collateral 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 Senior
Administrative Agent and the Senior Collateral Agent) together with
evidence reasonably satisfactory to the Senior Administrative Agent and the
Senior Collateral Agent of payment of the premium therefor.
(d) [Reserved].
(e) The Borrower will, and will cause each of the Subsidiary
Guarantors to, with respect to any Mortgaged Property, carry and maintain
comprehensive general liability insurance including the "broad form CGL
endorsement" and coverage on an occurrence basis against claims made for
personal injury (including bodily injury, death and property damage) and
umbrella liability insurance against any and all claims, in no event for a
combined single limit of less than $10,000,000, naming the Senior
Collateral Agent (for the benefit of the Senior Bank Parties) as an
additional insured, on forms satisfactory to the Senior Collateral Agent.
(f) The Borrower will notify the Senior Administrative Agent and
the Senior Collateral Agent promptly whenever any separate insurance
concurrent in form or contributing in the event of loss with that required
to be maintained under this Section is taken out by the Borrower or its
Subsidiaries; and promptly deliver to the Senior Administrative Agent and
the Senior Collateral Agent a duplicate original copy of such policy or
policies.
(g) In connection with the covenants set forth in this Section, it
is agreed that:
(i) none of the Senior Administrative Agent, the Banks,
or their respective 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 other
Obligor 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 Senior Administrative Agent, the
Senior Collateral Agent, the Banks 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 Senior
Administrative Agent, the Senior Collateral Agent, the Banks and
their agents and employees; and
(ii) the designation of any form, type or amount of
insurance coverage by the Senior Administrative Agent, the Senior
Collateral Agent or the Majority Banks under this Section shall in
no event be deemed a representation, warranty or advice by the
Senior Administrative Agent, the Senior Collateral Agent or the
Banks that such insurance is adequate for the purposes of the
business of the Borrower and the Subsidiaries or the protection of
their properties.
SECTION 5.04. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
Except as otherwise permitted in 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 its
Subsidiaries, and will preserve, renew and keep in full force and effect,
and will cause each Subsidiary (except where such Subsidiary merges into a
Subsidiary Guarantor) to preserve, renew and keep in full force and effect
their respective legal existence and their respective rights, privileges
and franchises necessary or desirable in the normal conduct of business;
provided that the foregoing will not prohibit any merger or liquidation of,
or sale of assets by, a Subsidiary that is permitted by Section 5.22.
SECTION 5.05. COMPLIANCE WITH LAWS. The Borrower will comply, and
cause each Subsidiary to comply, in all material respects with all
applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws
and ERISA and the rules and regulations thereunder) applicable to it or its
property except where the necessity of compliance therewith is contested in
good faith by appropriate proceedings or where the failure to comply would
not have a Material Adverse Effect.
SECTION 5.06. INSPECTION OF PROPERTY, BOOKS AND RECORDS. The
Borrower will keep, and will cause each Subsidiary to keep, proper books of
record and account in which full, true and correct entries shall be made of
all dealings and transactions in relation to its business and activities;
and will permit, and will cause each Subsidiary to permit, representatives
of any Bank (at such Bank's expense, unless a Default has occurred and is
continuing, in which case at the Borrower's expense), after such Bank has
consulted the Senior Administrative Agent with respect thereto, to visit
and inspect any of their properties, to examine and make abstracts from any
of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers, employees
and independent public accountants, all at such reasonable times and as
often as may reasonably be desired.
SECTION 5.07. RESTRICTION ON OTHER AGREEMENTS, PAYMENT
LIMITATIONS, DEBT PREPAYMENTS, AMENDMENTS TO OTHER AGREEMENTS. (a) The
Borrower will not, and will not permit any Subsidiary to, enter into any
agreement which imposes a limitation on incurrence by the Borrower and its
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 Collateral to secure the Senior Obligations), or (ii) is more
restrictive than the limitation on Liens set forth in this Agreement or
(iii) which imposes other covenants more restrictive than those set forth
in this Agreement except, in each case, (A) agreements with respect to Debt
secured by Liens permitted by Section 5.15 containing restrictions on the
ability to transfer or grant Liens on the assets securing such Debt, (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 Initial Borrowing Date and not entered into in
contemplation of the Transactions and (F) the Existing Facilities Documents
and the Forward Commitment Agreement as in effect on the Initial Borrowing
Date.
(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 capital stock of such Subsidiary held
by, or pay any Debt 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 such encumbrances or restrictions existing under or by reason (A) any
restriction existing under the Senior Loan Documents, the Second Priority
Debt Documents, the Indentures or the Forward Commitment Agreement, (B) any
restrictions with respect to PCS imposed pursuant to a PCS Disposition
pending the consummation thereof, (C) customary non-assignment provisions
in leases and other contracts entered into in the ordinary course of
business, and (D) as required by applicable law.
(c) The Borrower will not, and will not permit any Subsidiary to,
make or offer to make any optional or voluntary payment, prepayment,
repurchase or redemption or, or otherwise voluntarily or optionally
defease, the Existing Facilities, the Exchange Debt Obligations, the
Synthetic Lease Facilities, the Existing Notes (as defined in Annex 3)
(other than pursuant to the Exchange Offer, as defined in Annex 3), the
Exchange Notes or any other Debt for borrowed money of the Borrower or any
Subsidiary, or segregate funds for any such payment, prepayment,
repurchase, redemption or defeasance, except for refinancings, refundings
and exchanges pursuant to Section 5.20(d) or repurchases or redemption of
such Debt for consideration consisting solely of common stock of the
Borrower or Qualified Preferred Stock or prepayments of Capital Leases in
connection with the sale, closing or relocation of Stores; or
(d) The Borrower shall 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 Senior Bank Parties or
their interests under the Senior Loan Documents without the prior written
approval of the Senior Collateral Agent, provided, however, the foregoing
shall not limit the Borrower's responsibilities pursuant to Section 3.2 of
the Intercompany Inventory Purchase Agreement.
SECTION 5.08. FURTHER ASSURANCES. The Borrower will cause each of
the Subsidiary Guarantors to execute any and all further documents,
financing statements, recordations, agreements and instruments, and take
all further action (including filing Uniform Commercial Code and other
financing statements, recordations, mortgages and deeds of trust) that may
be required under applicable law, or that the Majority Banks, the
Syndication Agents, the Senior Administrative Agent or the Senior
Collateral Agent may reasonably request, in order to effectuate the
transactions contemplated by the Senior Loan Documents and in order to
grant, preserve, protect and perfect the validity and first priority of the
security interests created or intended to be created by the Senior
Collateral Documents. The Borrower will cause any subsequently acquired or
organized Domestic Subsidiary to execute a Senior Subsidiary Guarantee
Agreement, Senior Indemnity, Subrogation and Contribution Agreement, Senior
Subsidiary Security Agreement and any applicable financing statement or
other recordation from time to time, and to comply with the terms thereof.
The Borrower agrees to cause to be provided such evidence as the Senior
Collateral Agent shall reasonably request as to the perfection and priority
status of each such security interest and Lien.
SECTION 5.09. BORROWING BASE REVIEWS. (a) The Borrower will, and
will cause each of the Subsidiary Guarantors to, from time to time upon the
request of the Senior Collateral Agent or the Majority Banks through the
Senior Administrative Agent, or upon any request from an increase in the
Pharmaceutical Advance Rate above 62% or an increase in the Other Inventory
Advance Rate above 55%, permit the Senior Collateral Agent or professionals
(including investment bankers, consultants, accountants, lawyers and
appraisers) retained by the Senior Collateral Agent to conduct evaluations
and appraisals of (i) the Borrower's practices in the computation of the
Borrowing Base Amount and (ii) the assets included in the Borrowing Base
Amount, and pay the reasonable fees and expenses of such professionals.
(b) The Borrower will, and will cause each of the Subsidiary
Guarantors 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
and Eligible Inventory in the Borrowing Base Amount as the Senior
Collateral Agent shall require based upon the results of such evaluation
and appraisal in its reasonable judgment to reflect Borrowing Base Factors.
SECTION 5.10. SUBSIDIARIES. The Borrower will cause all of its
Subsidiaries that own Eligible Accounts Receivable or Eligible Inventory to
be "Unrestricted Subsidiaries" as defined in, and for all purposes of, each
of the Indentures and will deliver such documents to the trustees under
each of the Indentures and take such actions thereunder as may be necessary
to effect the foregoing.
SECTION 5.11. INTERCOMPANY TRANSFERS. The Borrower shall establish
and maintain accounting systems capable of tracing intercompany transfers
of funds and other assets.
SECTION 5.12. INVENTORY PURCHASING. (a) The Borrower shall, and
shall cause each Subsidiary party to the Intercompany Inventory Purchase
Agreement, at all times to establish and 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.
(b) The Borrower shall notify in writing in a manner reasonably
satisfactory to the Senior Administrative Agent all of its Vendors (as such
term is defined in the Intercompany Inventory Purchase Agreement) no later
than 30 days from the Closing Date with respect to the Intercompany
Inventory Purchase Agreement. In addition, the Borrower shall use its best
efforts to obtain the consent of any Vendor to the Intercompany Inventory
Purchase Agreement no later than 120 days from the Closing Date; provided,
that (i) any such Vendor which presents invoices for the purchase of
inventory reflecting Rite Aid Hdqtrs. Corp. as the purchaser shall be
deemed to have given such consent, and (ii) to the extent that any Vendor
(or inventory supplied by any Vendor) which is material to the conduct of
the business of the Borrower and its Subsidiaries, taken as a whole, has
not given such consent within 120 days from the Closing Date, the Borrower
will thereafter diligently endeavor to obtain such consents.
(c) 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) acquisition of inventory from McKesson
Corporation consistent with past practice, and (ii) foodstuffs, 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 5.13. CASH MANAGEMENT SYSTEM. The Borrower will cause each
Subsidiary Guarantor to at all times maintain a Cash Management System that
complies with Schedule 5 of the Senior Subsidiary Security Agreement. The
Borrower will cause each Subsidiary Guarantor to comply with each
obligation thereof under the Cash Management System. The Borrower will
cause each Subsidiary Guarantor to comply with each of its obligations
under the Cash Management System, and shall cause each Subsidiary Guarantor
to use its best efforts to cause any applicable third party to effectuate
the Cash Management System.
SECTION 5.14. RESTRICTION ON SALE AND LEASEBACK TRANSACTIONS.
Except for a sale or transfer by a Subsidiary to a Subsidiary Guarantor,
the Borrower will not, and will not permit any Subsidiary to, enter into
any Sale and Leaseback Transaction after the Closing Date other than
(a) a Sale and Leaseback Transaction listed on
Schedule 5.14(a),
(b) with respect to any property other than a Mortgaged
Property owned by the Borrower or any Subsidiary Guarantor as of
the Initial Borrowing Date, for a lease for a period, including
renewals, not exceeding 24 months, by the end of which period it
is intended that the use of such property or equipment by the
lessee will be discontinued; provided, however, that such Sale and
Leaseback Transaction will be subject to Section 5.23(b),
(c) with respect to any property other than a Mortgaged
Property, if entered into in respect of property acquired,
developed or constructed by the Borrower or a Subsidiary after the
Initial Borrowing Date, if such Sale and Leaseback Transaction is
entered into within 24 months from the date of completion of such
acquisition, development or construction (which, in the case of
any Store, shall be deemed to be 24 months from the date of the
opening of such Store), or
(d) if none of clauses (a) through (c) above are
applicable, any other Sale and Leaseback Transaction not involving
a Mortgaged Property, subject to Section 5.23(b).
SECTION 5.15. RESTRICTION ON LIENS. The Borrower will not, and
will not permit any Subsidiary to, create, issue, incur, assume or
guarantee any Secured Debt; provided that the foregoing covenant shall not
apply to the following:
(a) (i) any Lien on any property in connection with a
Sale and Leaseback Transaction permitted by Section 5.14, (ii) the
acquisition by the Borrower or a Subsidiary of property subject to
any Lien upon such property existing at the time of acquisition
thereof, whether or not assumed by the Borrower or such Subsidiary
and not created in anticipation of such acquisition which
acquisition is not otherwise prohibited by this Agreement, or
(iii) any conditional sales agreement or other title retention
agreement with respect to any property hereafter acquired;
provided that the Lien does not attach to other property except
unimproved real property previously owned upon
which any new construction has taken place and subsequent additions
to such acquired or constructed property;
(b) any Lien created for the sole purpose of extending,
renewing or refunding, in whole or part, any Lien permitted by
this Section 5.15 or any Lien securing the Debt of the Borrower or
of any Subsidiary on the date of this Agreement or of a
corporation at the time such corporation becomes a Subsidiary, or
any extensions, renewals or refundings of any such Lien; provided
that the principal amount of Debt secured thereby shall not exceed
the principal amount of Debt so secured at the time of such
extension, renewal or refunding and that such extension, renewal
or refunding Lien shall be limited to all or that part of the same
property which secured the Debt so extended, renewed or refunded;
(c) any Lien securing Debt of a Subsidiary owing to a
Subsidiary Guarantor;
(d) any Lien created by the Senior Loan Documents;
(e) any Lien created or permitted by the Second Priority
Collateral Documents with respect to the Second Priority Debt
Obligations in favor of the Second Priority Debt Parties; provided
that such Lien is created simultaneously with or after an
equivalent Lien under the Senior Collateral Documents on the
applicable Collateral and is subject to the Collateral Trust and
Intercreditor Agreement, and any Lien on the proceeds of such
Collateral permitted by the Collateral Trust and Intercreditor
Agreement;
(f) any Lien under the Exchange Debt First Priority
Collateral Documents in favor of the Exchange Debt Parties,
provided that such Lien is limited to the Exchange Debt First
Priority Collateral;
(g) any Lien under the PCS Pledge Agreement and the
Xxxxxxxxx.xxx Pledge Agreement in favor of the Existing Facility
Parties and the Synthetic Lease Parties, provided that such Lien
is limited to the "Collateral" as such term is defined in each
such document;
(h) existing Liens under the Synthetic Lease Documents
and Liens under the Synthetic Leases permitted pursuant to Section
5.29;
(i) Liens identified on Schedule 5.15(i); provided,
however, that such Liens do not attach to any other property other
than that identified in such Schedule;
(j) Liens in respect of Debt or Attributable Debt
permitted under Section 5.20(f), (g), (h), (i) and (j) so long as
such Liens attach only to (i) the equipment subject to such
financing, (ii) the property to which they attach on the Initial
Borrowing Date (or in the case of any lease which is reclassified
as a Capital Lease, any property subject to such lease on the
Initial Borrowing Date), or (iii) the property or assets
constructed, developed or purchased with such financing;
(k) any Lien consisting of the cash collateralization of
Independent Standby Letters of Credit if (i) there is a default in
the payment when due of any reimbursement obligation in connection
therewith or (ii) if (and for so long as) an Event of Default has
occurred and is continuing hereunder; and
(l) any Lien on Net Cash Proceeds of Reduction Events
allocated to the Exchange Note Obligations in accordance with the
Collateral Trust and Intercreditor Agreement, which Lien arises
pursuant to Section 10.14 of the Exchange Note Indenture.
SECTION 5.16. CAPITAL EXPENDITURES. The aggregate amount of
Consolidated Capital Expenditures for any period set forth below shall not
exceed the amount set forth below opposite such period:
PERIOD AMOUNT
IF A PCS DIVESTITURE
IF NO PCS DIVESTITURE HAS HAS BEEN
BEEN CONSUMMATED ON OR CONSUMMATED ON OR
BEFORE THE LAST DAY OF SUCH BEFORE THE LAST DAY OF
PERIOD, MAXIMUM SUCH PERIOD, MAXIMUM
CONSOLIDATED CAPITAL RETAIL CAPITAL
EXPENDITURES EXPENDITURES
Fiscal quarter ending on August 26, 2000 $70,000,000 $64,000,000
Two fiscal quarters ending on November 25, 2000 $138,000,000 $125,000,000
Three fiscal quarters ending on March 3, 2001 $205,000,000 $186,000,000
Four fiscal quarters ending on June 2, 2001 $270,000,000 $245,000,000
Four fiscal quarters ending on September 1, 2001 $265,000,000 $241,000,000
Four fiscal quarters ending on December 1, 2001 $265,000,000 $242,000,000
Four fiscal quarters ending on March 2, 2002 $265,000,000 $243,000,000
Four fiscal quarters ending on June 1, 2002 $265,000,000 $243,000,000
SECTION 5.17. MINIMUM EBITDA. The aggregate amount of Consolidated
EBITDA, Retail EBITDA or PCS EBITDA, as the case may be, for any period set
forth below shall not be less than the amount set forth below opposite such
period:
PERIOD AMOUNT
IF A PCS IF NO PCS
DIVESTITURE HAS DIVESTITURE
IF NO PCS BEEN HAS BEEN
DIVESTITURE HAS BEEN CONSUMMATED CONSUMMATED
CONSUMMATED ON OR ON OR BEFORE ON OR BEFORE
BEFORE THE LAST DAY OF THE LAST DAY OF THE LAST DAY
SUCH PERIOD, SUCH PERIOD, OF SUCH
MINIMUM MINIMUM PERIOD,
CONSOLIDATED RETAIL MINIMUM
EBITDA EBITDA PCS EBITDA
Fiscal quarter ending on August 26, 2000 $104,000,000 $81,000,000 N/A
Two fiscal quarters ending on November 25, 2000 $244,000,000 $194,000,000 N/A
Three fiscal quarters ending on March 3, 2001 $448,000,000 $364,000,000 N/A
Four fiscal quarters ending on March 3, 2001 N/A N/A $100,000,000
Four fiscal quarters ending on June 2, 2001 $599,000,000 $480,000,000 N/A
Four fiscal quarters ending on September 1, 2001 $680,000,000 $542,000,000 N/A
Four fiscal quarters ending on December 1, 2001 $760,000,000 $603,000,000 N/A
Four fiscal quarters ending on March 2, 2002 $860,000,000 $689,000,000 $100,000,000
Four fiscal quarters ending on June 1, 2002 $894,000,000 $720,000,000 N/A
SECTION 5.18. MINIMUM INTEREST COVERAGE RATIO. At no time shall
the Consolidated Interest Coverage Ratio or the Retail Interest Coverage
Ratio, as the case may be, for any period be less than the amount set forth
below opposite such period:
PERIOD AMOUNT
IF NO PCS DIVESTITURE HAS IF A PCS DIVESTITURE HAS
BEEN CONSUMMATED ON OR BEEN CONSUMMATED ON OR
BEFORE THE LAST DAY OF BEFORE THE LAST DAY OF SUCH
SUCH PERIOD, THE PERIOD, THE MINIMUM
MINIMUM CONSOLIDATED RETAIL INTEREST COVERAGE
INTEREST COVERAGE RATIO RATIO
Fiscal quarter ending on August 26, 2000 .75 .72
Two fiscal quarters ending on November 25, 2000 .86 .84
Three fiscal quarters ending on March 3, 2001 1.01 1.00
Four fiscal quarters ending on June 2, 2001 1.01 .99
Four fiscal quarters ending on September 1, 2001 1.12 1.09
Four fiscal quarters ending on December 1, 2001 1.23 1.19
Four fiscal quarters ending on March 2, 2002 1.39 1.37
Four fiscal quarters ending on June 1, 2002 1.40 1.40
SECTION 5.19. MINIMUM FIXED CHARGE COVERAGE RATIO. At no time
shall the Consolidated Fixed Charge Coverage Ratio or the Retail Fixed
Charge Coverage Ratio, as the case may be, for any period set forth below
be less than the amount set forth below opposite such period:
PERIOD AMOUNT
IF NO PCS DIVESTITURE HAS
BEEN CONSUMMATED ON OR IF A PCS DIVESTITURE HAS
BEFORE THE LAST DAY OF BEEN CONSUMMATED ON OR
SUCH PERIOD, THE BEFORE THE LAST DAY OF SUCH
MINIMUM CONSOLIDATED PERIOD, THE MINIMUM
FIXED CHARGE COVERAGE RETAIL FIXED CHARGE
RATIO COVERAGE RATIO
Fiscal quarter ending on August 26, 2000 .88 .88
Two fiscal quarters ending on November 25, 2000 .94 .93
Three fiscal quarters ending on March 3, 2001 1.01 1.00
Four fiscal quarters ending on June 2, 2001 1.01 .99
Four fiscal quarters ending on September 1, 2001 1.06 1.04
Four fiscal quarters ending on December 1, 2001 1.11 1.09
Four fiscal quarters ending on March 2, 2002 1.19 1.17
Four fiscal quarters ending on June 1, 2002 1.20 1.19
SECTION 5.20. RESTRICTION ON DEBT. The Borrower will not, and will
not permit any of its Subsidiaries to, incur or at any time be liable with
respect to any Debt or any Attributable Debt in respect of any Sale and
Leaseback Transaction except:
(a) Debt under the Senior Loan Documents;
(b) the Existing Facility Obligations, the Exchange Note
Obligations, and Debt under the Indentures in each case in a
principal amount not greater than the principal amount thereof on
the Initial Borrowing Date after giving effect to the
Transactions; provided that no Subsidiary Guarantor will have any
liability thereon except its obligations under the Second Priority
Collateral Agreements or the Exchange Debt First Priority
Collateral Documents;
(c) Attributable Debt of (i) the Synthetic Lease
Obligations in a principal amount not greater than the principal
amount thereof on the Initial Borrowing Date, plus amounts
permitted pursuant to Section 5.29; provided that no Subsidiary
Guarantor will have any liability thereon except its obligations
under the Second Priority Collateral Agreements and (ii) any Sale
and Leaseback Transactions in existence on the Closing Date;
(d) unsecured Debt of the Borrower extending, or having
the effect of extending, the maturity of, or refunding,
refinancing or exchanging, in whole or in part, Debt described in
clauses (b) and (c), provided that (i) the terms of any such
extending, refunding, refinancing or exchanging of Debt, and of
any agreement entered into and of any instrument issued in
connection therewith, are otherwise permitted by the Senior Loan
Documents, (ii) the terms relating to principal amount,
amortization, maturity, convertibility and subordination (if any),
and other material terms taken as a whole, of any such extending,
refunding, refinancing or exchanging of Debt, and of any agreement
entered into and of any instrument issued in connection therewith,
are no less favorable in any material respect to the Borrower and
the Subsidiaries or the Senior Bank Parties than the terms of any
agreement or instrument governing the Debt being extended,
refunded, refinanced or exchanged and the interest rate applicable
to such extending, refunding or refinancing Debt does not exceed
the then applicable market interest rate, and (iii) the principal
amount of such extending, refunding, refinancing or exchanging of
Debt shall not be increased above the principal amount of the Debt
being extended, refunded, refinanced or exchanged outstanding
immediately prior to such extension, refunding, refinancing or
exchanging;
(e) indorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business;
(f) Debt for borrowed money and Capital Leases existing
on the date hereof and set forth in Schedule 5.20(f), but not any
extensions, renewals or replacements of such Debt;
(g) Debt or Attributable Debt in respect of Capital
Leases (whether or not in the form of Sale and Leaseback
Transactions or Synthetic Leases) so long as such Capital Leases
were leases existing as of the Initial Borrowing Date, which are
reclassified from operating leases to Capital Leases;
(h) Debt (including Capital Leases) and Attributable Debt
in respect of Synthetic Leases and Sale and Leaseback Transactions
in respect of equipment financing or leasing in the ordinary
course of business of the Borrower and its Subsidiaries consistent
with past practices;
(i) Debt (including Capital Leases) and Attributable Debt
in respect of Synthetic Leases and Sale and Leaseback Transactions
incurred to finance the acquisition, development, construction or
opening of any Store after the Initial Borrowing Date which is not
inconsistent with the Borrower's business plan delivered pursuant
to Section 3.01(l); provided that such Debt or Attributable Debt
is (A) incurred within 24 months of the completion of the
acquisition, development, construction or opening thereof, and any
Lien securing such Debt or Attributable Debt is limited to the
Store financed with the proceeds thereof, or (B) in the case of a
Sale and Leaseback Transaction, permitted under Section 5.14(a),
(b) or (c);
(j) Debt (including Capital Leases) and Attributable Debt
in respect of Synthetic Leases and Sale and Leaseback Transactions
incurred to finance the acquisition after the Initial Borrowing
Date of property or assets provided that (i) such Debt or
Attributable Debt is incurred within 24 months of the acquisition
of such property or assets, (ii) any Lien securing such Debt or
Attributable Debt is limited to the property or assets financed
with the proceeds thereof and (iii) the aggregate principal amount
of Debt and Attributable Debt incurred pursuant to this clause (j)
shall not exceed $50,000,000 at any time outstanding; and
(k) Debt in respect of the Independent Standby Letters of
Credit, or any extension, renewals, replacements or reissuances
thereof; provided that the aggregate drawable stated amount and
unreimbursed drawings of all Independent Standby Letters of Credit
outstanding at any time shall not exceed $34,000,000 less the
stated amount of any such letters of credit which expire or are
not extended, replaced or renewed;
(l) Debt of the Borrower and its Subsidiaries in respect
of intercompany investments permitted under Section 5.21(a); and
(m) unsecured Debt of the Borrower not otherwise
permitted by this Section in an aggregate principal amount at any
time outstanding not to exceed $100,000,000.
SECTION 5.21. LIMITATION ON INVESTMENTS AND ACQUISITIONS. (a)
Neither the Borrower nor any Subsidiary will make or acquire any Investment
in any Person other than:
(i) Investments in Subsidiary Guarantors, other than PCS
and its Subsidiaries;
(ii) Investments of the Borrower and the Subsidiary
Guarantors in existence on the Initial Borrowing Date;
(iii) advances made by Rite Aid Hdqtrs. Corp. to PCS that
reduce the intercompany payable due from Rite Aid Hdqtrs. Corp. to
PCS;
(iv) Temporary Cash Investments;
(v) Investments received as consideration for any sale or
other disposition permitted by Section 5.23;
(vi) Investments in Xxxxxxxxx.xxx existing on the date
hereof;
(vii) Investments of PCS and its Subsidiaries in PCS and
its Subsidiaries;
(viii) Investments by the Subsidiaries of the Borrower in
the Borrower, but only to the extent that the uses of the proceeds
of such Investments would be permitted as uses of proceeds of the
Loans pursuant to Section 5.24(b);
(ix) Exchange Notes issued by the Borrower to and held by
SPV pursuant to the Forward Commitment Agreement; and
(x) any Investment by a Subsidiary Guarantor in a Person
other than a Subsidiary that is not otherwise permitted by the
foregoing clauses of this Section if, immediately after such
Investment is made or acquired, the aggregate net book value of
all Investments permitted by this clause (x) does not exceed at
any one time outstanding the greater of (A) $200,000,000 or, (B)
after the delivery of the Initial Financial Statements, 10% of
Consolidated Net Worth.
(b) The Borrower will not, and will not permit any Subsidiary to,
consummate any Business Acquisition to the extent that the aggregate
consideration paid or payable by the Borrower or any Subsidiary (including
Debt assumed or consolidated in accordance with generally accepted
accounting principles) in connection with all such Business Acquisitions on
or after the Initial Borrowing Date would exceed $15,000,000.
SECTION 5.22. CONSOLIDATIONS AND MERGERS. (a) Without limiting the
restrictions on Business Acquisitions set forth above, the Borrower will
not consolidate or merge with or into any other Person; provided that the
Borrower may merge with another Person if (i) the Borrower is the
corporation surviving such merger, (ii) immediately after giving effect to
such merger, no Default shall have occurred and be continuing, and (iii) if
such other Person is a Subsidiary Guarantor, such Subsidiary Guarantor
shall have no property that constitutes Senior Collateral.
(b) No Subsidiary Guarantor will consolidate or merge with or into
any other Person, except
(i) without limiting the restrictions on Business
Acquisitions set forth above, a Subsidiary Guarantor may merge
with another Person if (A) either (1) a Subsidiary Guarantor is
the corporation surviving such merger, or (2) the Subsidiary
Guarantor that merges with such Person shall have no property that
constitutes Senior Collateral, and (B) immediately after giving
effect to such merger, no Default shall have occurred and be
continuing,
(ii) PCS or its Subsidiaries may consolidate with or
merge into another Person as part of a PCS Disposition.
SECTION 5.23. DISPOSITIONS OF ASSETS. (a) The Borrower will not
dispose of any capital stock of any Subsidiary Guarantor other than to
another Subsidiary Guarantor, or permit any Subsidiary Guarantor to issue
capital stock to any Person other than the Borrower or another Subsidiary
Guarantor, except, in each case, for a PCS Disposition.
(b) The Borrower will not, and will not permit any Subsidiary
Guarantor to, dispose of
any property or assets except
(i) any Permitted Disposition;
(ii) any PCS Disposition or sale or other disposition of
the stock of Xxxxxxxxx.xxx; and
(iii) any other disposition of property or assets of the
Borrower or any Subsidiary for fair value not in the ordinary
course of business; provided that
(A) with respect to such dispositions of
Collateral under this clause (iii) (1) at least 75% of
the consideration therefor shall consist of cash, and (2)
the Net Cash Proceeds of such disposition of Collateral
are applied as provided in Section 4.05 of the Collateral
Trust and Intercreditor Agreement; and
(B) if the amount of any prepayment under
Section 4.05 of the Collateral Trust and Intercreditor
Agreement would be less than the applicable Required
Prepayment Amount, such disposition will not be
consummated without the prior approval of the Majority
Banks; provided, however that this limitation shall not
apply to such dispositions to the extent that the
cumulative value of the consideration received by the
Borrower and any such Subsidiary for all such
dispositions otherwise limited by this clause (B) does
not exceed $50,000,000.
(c) The consideration received by the Borrower or the applicable
Subsidiary Guarantor for any PCS Disposition or the disposition of the
capital stock of Xxxxxxxxx.xxx shall be for the fair market value of such
disposition and shall consist solely of a combination of at least 75% cash
and no more than 25% of publicly traded securities, in each case payable
and deliverable at the closing of such disposition, unless, (i) in the case
of a PCS Disposition, the "Required Banks" under the PCS Facility otherwise
agree or (ii) in the case of a disposition of the capital stock of
Xxxxxxxxx.xxx, the "Required Banks" under the RCF Facility otherwise agree.
Consideration in the form of forgiveness of intercompany obligations shall
be disregarded for purposes of determinations of compliance with this
clause (c).
SECTION 5.24. USE OF PROCEEDS. (a) The proceeds of the Term Loans
will be used by the Borrower exclusively (i) to be advanced to the
applicable Subsidiary Guarantors to finance the repurchase by Subsidiary
Guarantors that are the sellers thereof from the purchasers thereof of all
outstanding uncollected receivables to be collected by the Borrower as
collection agent under the Securitization Facility, (ii) to pay transaction
costs for the Transactions, and (iii) for purposes set forth in clause (b).
(b) The proceeds of the Revolving Loans and Swingline Loans will
be used by the solely Borrower 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 Guarantors for their general corporate purposes,
including working capital, permitted Capital Expenditures and
permitted Business Acquisitions;
(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 5.21(a) in, the Borrower or any Subsidiary
Guarantors;
(iii) payment by the Borrower of principal, interest,
fees and expenses with respect to its Debt when due (including
associated costs, fees and expenses) and payment of the Borrower's
taxes, administrative, operating and other expenses; and
(iv) dividends required to be made in respect of the
capital stock listed on Schedule 5.24(b)(iv).
(c) Letters of Credit may be issued in the ordinary course of the
Borrower's business for permitted general corporate purposes.
(d) No use of the proceeds of the Loans or the issuance of Letters
of Credit will be for the purpose of prepaying commercial paper prior to
the maturity thereof and no such use of proceeds will be, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any "margin stock" within the meaning of Regulation U.
The Borrower will ensure that no such use of proceeds or issuance of
Letters of Credit will violate Regulation T, U or X.
SECTION 5.25. 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 capital stock of Xxxxxxxxx.xxx and its Subsidiaries
(including any distributions or other assets received in respect
thereto), Investments received as consideration in connection with
the PCS Disposition or a disposition of Xxxxxxxxx.xxx,
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, Temporary
Cash 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 5.24(b).
SECTION 5.26. RESTRICTED PAYMENTS. After the date hereof, neither
the Borrower nor any Subsidiary will declare or make any Restricted Payment
other than
(a) payments of dividends to Subsidiary Guarantors; and
(b) payments of cash dividends (i) to the Borrower for
purposes permitted as uses of the proceeds of the Loans pursuant
to Section 5.24(b), and (ii) required to be made in respect of the
capital stock listed on Schedule 5.24(b)(iv).
SECTION 5.27. BUSINESS OF BORROWER AND SUBSIDIARIES. The Borrower
will not, and will not cause or permit any of the Subsidiaries to, engage
at any time in any business or business activity other than the business
conducted on the Initial Borrowing Date by it and business activities
reasonably incidental thereto. Without limitation of the foregoing, the
Borrower will not permit SPV to have any assets or liabilities or conduct
any business other than as specifically contemplated by the Forward
Commitment Agreement.
SECTION 5.28. TRANSACTIONS WITH AFFILIATES. The Borrower will not,
and will not cause or permit any of the Subsidiaries to, directly or
indirectly enter into or conduct any transactions or series of transactions
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with, or for the benefit of, any Affiliate of the
Borrower, other than the payment of transaction costs approved by the
Senior Administrative Agent before the Initial Borrowing Date (an
"Affiliate Transaction"), other than
(a) the payment of compensation to directors, officers,
and employees of the Borrower and its Subsidiaries in the ordinary
course of business;
(b) payments in respect of Affiliate Transactions
required to be made pursuant to agreements or arrangements in
effect on the Initial Borrowing Date and set forth in Schedule
5.28 hereto;
(c) Affiliate Transactions involving the acquisition of
inventory in the ordinary course of business, provided that (i)
the terms of such Affiliate 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, and (ii) if such
Affiliate 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 Affiliate Transaction and, in its good
faith judgment, believes that such Affiliate Transaction complies
with clauses (i)(B) and (C) of this paragraph;
(d) the issuance of Exchange Notes by the Borrower to the
SPV as contemplated by the Forward Commitment Agreement;
(e) any other Affiliate Transaction, provided that (i)
the terms of such Affiliate 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, and (ii) if such
Affiliate Transaction involves aggregate payments or value in
excess of $25,000,000 in any 12-month period, the board of
directors of the Borrower (including a majority of the
disinterested members of the board of directors) approves such
Affiliate Transaction and, in its good faith judgment, believes
that such Affiliate Transaction complies with clauses (i)(B) and
(C) of this paragraph and (iii) if such Affiliate Transaction
involves aggregate payments or value in excess of $50,000,000 in
any 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; and
(f) Affiliate Transactions between or among the Borrower
and/or one or more Subsidiary Guarantors; provided that any such
transaction between PCS or a Subsidiary of PCS (a "PCS Entity"),
on the one hand, and the Borrower or a Subsidiary Guarantor which
is not a PCS Entity, on the other hand, shall be in the ordinary
course of business.
SECTION 5.29. NEW SYNTHETIC LEASES. Neither the Borrower nor any
Subsidiary will enter into any Synthetic Lease after the Initial Borrowing
Date if, after giving effect thereto, the aggregate amount financed under
all Synthetic Leases entered into in any period of twelve consecutive
calendar months commencing after the date hereof would exceed $35,000,000
unless such Synthetic Lease is otherwise permitted under Section 5.20(h),
(i) or (j).
SECTION 5.30. 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.
SECTION 5.31. LIMITATION ON DERIVATIVE OBLIGATIONS. The Borrower
will not, and will not permit any of its Subsidiaries to, incur or at any
time be liable with respect to any monetary liability under any Derivative
Obligations; unless such Derivative Obligations are entered into for bona
fide hedging purposes of the Borrower or its Subsidiary Guarantors (as
determined in good faith by the board of directors or senior management of
the Borrower) and correspond in terms of notional amount, duration,
currencies and interest rates, as applicable, to Debt of the Borrower or
its Subsidiary Guarantors incurred without violation of this Agreement or
to business transactions of the Borrower or its Subsidiary Guarantors on
customary terms entered into in the ordinary course of business, and do not
exceed an amount equal to the aggregate principal amount of the Loans and
the Second Priority Debt Obligations.
ARTICLE 6
DEFAULTS
SECTION 6.01. EVENTS OF DEFAULT. If one or more of the following
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal
of any Loan, or shall fail to pay within five days of the due date
thereof any interest, fees or other amount payable hereunder;
(b) the Borrower or any Subsidiary Guarantor shall fail
to observe or perform any covenant contained in Sections 5.07,
5.12, 5.13, 5.14, 5.15, 5.16, 5.17, 5.18, 5.19, 5.20, 5.21, 5.22,
5.23, 5.24, 5.26, 5.27, 5.28, and 5.29;
(c) the Borrower or any Subsidiary Guarantor shall fail
to observe or perform any covenant or agreement contained in the
Senior Loan Documents (other than those covered by clause (a) or
(b) above) in the case of covenants contained in Section 5.06 or
5.09, for 5 days, and in the case of any other covenant, for 20
days after written notice thereof has been given to the Borrower
by the Senior Administrative Agent at the request of the Majority
Banks;
(d) any representation, warranty, certification or
statement made (or deemed made) by the Borrower or any Subsidiary
Guarantor in any Senior Loan Document or in any certificate,
financial statement or other document delivered pursuant to any
Senior Loan Document shall prove to have been incorrect in any
material respect when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to make any
payment in respect of any Material Financial Obligations,
including any obligation to reimburse letter of credit obligations
or to post cash collateral with respect thereto, when due or
within any applicable grace period;
(f) any event or condition shall occur which results in
the acceleration of the maturity of any Material Financial
Obligations or enables (or, if such event or condition does not
otherwise give rise to a Default hereunder, which with the giving
of notice or lapse of time or both would enable) the holder of
such Material Financial Obligations or any Person acting on such
holder's behalf to accelerate the maturity thereof;
(g) the Borrower or any Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, or shall consent to any such
relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as
they become due, or shall take any corporate action to authorize
any of the foregoing;
(h) an involuntary case or other proceeding shall be
commenced against the Borrower or any Subsidiary seeking
liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official
of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be
entered against the Borrower or any Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when
due an amount or amounts aggregating in excess of $5,000,000 which
it shall have become liable to pay under Title IV of ERISA; or
notice of intent to terminate a Material Plan shall be filed under
Title IV of ERISA by any member of the ERISA Group, 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 Material Plan; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material 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 one or more
members of the ERISA Group to incur a current payment obligation
in excess of $25,000,000;
(j) judgments or orders, individually or in the
aggregate, for the payment of money in excess of $25,000,000 shall
be rendered against the Borrower or any Subsidiary and such
judgment or order shall continue unsatisfied and unstayed for a
period of 30 days;
(k) (i) any Lien created by any Senior Collateral
Document shall at any time fail to constitute a valid and (to the
extent required by such Senior Collateral Document) perfected Lien
on all of the Senior Collateral purported to be subject thereto,
securing the obligations purported to be secured thereby, with the
priority required by the Senior Loan Documents; provided, however,
if such failure does not result in a prepayment obligation
pursuant to Section 2.12(b), such failure continues uncured for 30
days, or (ii) the Borrower or any Subsidiary shall so assert in
writing, or any Senior Loan Document shall become invalid or the
Borrower or any Subsidiary shall so assert in writing;
(l) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) other than Green Equity Investors III, L.P., and its
Affiliates shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the SEC under said Act) of
20% or more of the outstanding shares of common stock of the
Borrower; or, during any period of 12 consecutive calendar months,
individuals who were directors of the Borrower on the first day of
such period shall cease to constitute a majority of the board of
directors of the Borrower; or
(m) any Subsidiary Guarantor 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 Senior Administrative Agent shall have given
its prior written consent;
then, and in every such event, the Senior Administrative Agent shall (i) if
requested by the Majority Revolving Credit Banks, by notice to the Borrower
terminate the Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding more than 50% in aggregate principal amount of
the Loans, by notice to the Borrower declare the Loans (together with
accrued interest thereon) to be, and the Loans (together with accrued
interest thereon) shall thereupon become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; provided that in the case of any
of the Events of Default specified in clause (g) or (h) above with respect
to the Borrower, without any notice to the Borrower or any other act by the
Senior Administrative Agent or the Banks, the Commitments shall thereupon
terminate and the Loans (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
SECTION 6.02. NOTICE OF DEFAULT. The Senior Administrative Agent
shall give notice to the Borrower under Section 6.01(c) promptly upon being
requested to do so by any Bank and shall thereupon notify all the Banks
thereof.
ARTICLE 7
THE AGENTS
SECTION 7.01. APPOINTMENT AND AUTHORIZATION. Each Bank irrevocably
appoints and authorizes the Senior Administrative Agent, the Senior
Collateral Agent and the Syndication Agents to take such action as agent on
its behalf and to exercise such powers under the Senior Loan Documents as
are delegated to such Agent by the terms thereof, together with all such
powers as are reasonably incidental thereto. The Senior Administrative
Agent is hereby expressly authorized by the Banks and the Issuing Banks,
without hereby limiting any implied authority, (a) to receive on behalf of
the Banks and the Issuing Banks all payments of principal of and interest
on the Loans, all payments in respect of L/C Disbursements and all other
amounts due to the Banks hereunder, and promptly to distribute to each Bank
its proper share of each payment so received; (b) to give notice on behalf
of each of the Banks or the Issuing Banks to the Borrower of any Event of
Default specified in this Agreement of which the Senior Administrative
Agent has actual knowledge acquired in connection with its agency
hereunder; and (c) to distribute to each Bank copies of all notices,
financial statements and other materials delivered by the Borrower or any
other Obligor pursuant to this Agreement or the other Senior Loan Documents
as received by the Senior Administrative Agent. Without limiting the
generality of the foregoing, the Agents are hereby expressly authorized to
execute any and all documents (including releases) with respect to the
Senior Collateral and the rights of the Senior Bank Parties with respect
thereto, as contemplated by and in accordance with the provisions of this
Agreement and the Senior Collateral Documents.
SECTION 7.02. SENIOR ADMINISTRATIVE AGENT AND AFFILIATES. Each of
Citicorp USA, Xxxxxx Financial, Inc., and Fleet Retail Finance Inc. shall
have the same rights and powers under the Senior Loan Documents as any
other Bank and may exercise or refrain from exercising the same as though
it were not an Agent, and Citicorp USA, Xxxxxx Financial, Inc., and Fleet
Retail Finance Inc. 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 affiliate of the Borrower as if it were not an Agent.
SECTION 7.03. ACTION BY AGENTS. The obligations of the Agents
under the Senior Loan Documents are only those expressly set forth therein.
Without limiting the generality of the foregoing, no Agent shall be
required to take any action with respect to any Default, except as
expressly provided in the Senior Loan Documents. The Banks hereby
acknowledge that no Agent shall be under any duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this
Agreement unless it shall be requested in writing to do so by the Majority
Banks or the Supermajority Banks, as the case may be.
SECTION 7.04. CONSULTATION WITH EXPERTS. Each of the Agents may
consult with legal counsel (who may be counsel for the Borrower),
independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or
experts.
SECTION 7.05. LIABILITY OF SENIOR ADMINISTRATIVE AGENT. Neither
any Agent nor any of their affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action
taken or not taken by it or any of them in connection herewith (i) with the
consent or at the request of the Majority Banks (or such other number or
percentage of Banks as may be specified in the Senior Loan Documents for
particular purposes) or (ii) in the absence of its or their own gross
negligence or willful misconduct. Neither any Agent nor any of their
affiliates nor any of their respective directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire
into or verify (i) any statement, warranty or representation made in
connection with the Senior Loan Documents or any Borrowing hereunder; (ii)
the performance or observance of any of the covenants or agreements of the
Borrower; (iii) the satisfaction of any condition specified in Article 3,
except receipt of items required to be delivered to the Agents; or (iv) the
validity, effectiveness or genuineness of any Senior Loan Document or any
other instrument or writing furnished in connection herewith. No Agent
shall incur any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank wire, telex
or similar writing) believed by it to be genuine or to be signed by the
proper party or parties.
SECTION 7.06. INDEMNIFICATION. Each Bank shall, ratably in
accordance with its Credit Exposure, indemnify the Agents, their affiliates
and their respective directors, officers, agents and employees (to the
extent not reimbursed by the Borrower) against any cost, expense (including
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees' gross negligence or willful
misconduct) that such indemnitees may suffer or incur in connection with
this Agreement or any action taken or omitted by such indemnitees
hereunder.
SECTION 7.07. CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon any Agent or any other Bank, 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
Bank also acknowledges that it will, independently and without reliance
upon any Agent or any other Bank, 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 any action under this
Agreement.
SECTION 7.08. RESIGNATION OF AGENTS. Either Syndication Agent may
resign at any time by giving notice thereof to the other Agents, the Banks
and the Borrower. The Senior Administrative Agent and the Senior Collateral
Agent may resign at any time by giving notice thereof to the other Agents,
the Banks and the Borrower. Upon any such resignation of the Senior
Administrative Agent or Senior Collateral Agent, the Majority Banks shall
have the right, with (so long as no Default shall have occurred and be
continuing) the consent of the Borrower (which shall not be unreasonably
withheld or delayed), to appoint a successor Senior Administrative Agent or
Senior Collateral Agent. If no successor Senior Administrative Agent or
Senior Collateral Agent, as the case may be, shall have been so appointed
by the Majority Banks, and shall have accepted such appointment, within 30
days after the retiring Senior Administrative Agent or Senior Collateral
Agent, as the case may be, gives notice of resignation, then the retiring
Senior Administrative Agent or Senior Collateral Agent, as the case may be,
may, on behalf of the Banks, appoint a successor Senior Administrative
Agent or Senior Collateral Agent, as the case may be, which shall be a
commercial bank organized or licensed under the laws of the United States
of America or of any State thereof and having a combined capital and
surplus of at least $500,000,000. Upon the acceptance of its appointment as
Senior Administrative Agent or Senior Collateral Agent, as the case may be,
by a successor Senior Administrative Agent or Senior Collateral Agent, as
the case may be, such successor Senior Administrative Agent or Senior
Collateral Agent shall thereupon succeed to and become vested with all the
rights and duties of the retiring Senior Administrative Agent or Senior
Collateral Agent, and the retiring Senior Administrative Agent or Senior
Collateral Agent shall be discharged from its duties and obligations under
the Senior Loan Documents. After any retiring Senior Administrative Agent's
or Senior Collateral Agent's resignation hereunder, the provisions of this
Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Senior Administrative Agent or Senior Collateral
Agent.
SECTION 7.09. REMOVAL OF SENIOR ADMINISTRATIVE AGENT. Either
Senior Administrative Agent or the Senior Collateral Agent may be removed,
with or without cause, at any time by vote of the Majority Banks and notice
thereof to the other Agents, the Banks and the Borrower. Upon any such
removal of the Senior Administrative Agent or the Senior Collateral Agent,
as the case may be, the Majority Banks shall have the right, with (so long
as no Default shall have occurred and be continuing) the consent of the
Borrower (which shall not be unreasonably withheld or delayed), to appoint
a successor Senior Administrative Agent or Senior Collateral Agent, which
shall be a commercial bank organized or licensed under the laws of the
United States of America or of any State thereof and having a combined
capital and surplus of at least $500,000,000. Upon the acceptance of its
appointment as Senior Administrative Agent or Senior Collateral Agent, as
the case may be, by a successor Senior Administrative Agent or Senior
Collateral Agent, as the case may be, such successor Senior Administrative
Agent or Senior Collateral Agent shall thereupon succeed to and become
vested with all the rights and duties of the removed Senior Administrative
Agent or Senior Collateral Agent, and the removed Senior Administrative
Agent or Senior Collateral Agent shall be discharged from its duties and
obligations under the Senior Loan Documents. After any removed Senior
Administrative Agent's or Senior Collateral Agent's removal hereunder, the
provisions of this Article shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Senior Administrative Agent
or Senior Collateral Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR
UNFAIR. If on or prior to the first day of any Interest Period for any
Euro-Dollar Borrowing:
(a) the Senior Administrative Agent determines that
deposits in dollars (in the applicable amounts) are not being
offered to the Senior Administrative Agent in the London interbank
market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount of
the Commitments of the relevant Class advise the Senior
Administrative Agent that the Adjusted London Interbank Offered
Rate as determined by the Senior Administrative Agent will not
adequately and fairly reflect the cost to such Banks of funding
their Euro-Dollar Loans for such Interest Period,
the Senior Administrative Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Senior Administrative Agent
notifies the Borrower that the circumstances giving rise to such suspension
no longer exist, the obligations of the Banks to make Euro-Dollar Loans or
to continue or convert outstanding Loans as or into Euro-Dollar Loans,
shall be suspended, and each outstanding Euro-Dollar Loan shall be
converted into a Base Rate Loan on the last day of the then current
Interest Period applicable thereto. Unless the Borrower notifies the Senior
Administrative Agent at least two Domestic Business Days before the date of
any Euro-Dollar Borrowing for which a Borrowing Request has previously been
given that it elects not to borrow on such date, such Borrowing shall
instead be made as a Base Rate Borrowing.
SECTION 8.02. ILLEGALITY. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Euro-Dollar
Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency
shall make it unlawful or impossible for any Bank (or its Euro-Dollar
Lending Office) to make, maintain or fund its Euro-Dollar Loans and such
Bank shall so notify the Senior Administrative Agent, the Senior
Administrative Agent shall forthwith give notice thereof to the other Banks
and the Borrower, whereupon until such Bank notifies the Borrower and the
Senior Administrative Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of such Bank to make Euro-Dollar
Loans shall be suspended. Before giving any notice to the Senior
Administrative Agent pursuant to this Section, such Bank shall designate a
different Euro-Dollar Lending Office if such designation will avoid the
need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such notice is given, each
Euro-Dollar Loan of such Bank then outstanding shall be converted to a Base
Rate Loan either (a) on the last day of the then current Interest Period
applicable to such Euro-Dollar Loan if such Bank may lawfully continue to
maintain and fund such Loan as a Euro-Dollar Loan to such day or (b)
immediately if such Bank shall determine that it may not lawfully continue
to maintain and fund such Loan as a Euro-Dollar Loan to such day. Interest
and principal on any such Base Rate Loan shall be payable on the same dates
as, and on a pro rata basis with, the interest and principal payable on the
related Euro-Dollar Loans of the other Banks.
SECTION 8.03. INCREASED COST AND REDUCED RETURN. (a) If on or
after the date of this Agreement, the adoption of any applicable law, rule
or regulation, or any change in any applicable law, rule or regulation, or
any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Euro-Dollar Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall impose, modify or deem applicable any reserve (including,
without limitation, any such requirement imposed by the Federal Reserve
Board, but excluding any such requirement included in Statutory Reserves),
special deposit, insurance assessment or similar requirement against assets
of, deposits with or for the account of, or credit extended by, any Bank
(or its Euro-Dollar Lending Office) or shall impose on any Bank (or its
Euro-Dollar Lending Office) or on the London interbank market any other
condition affecting its Euro-Dollar Loans, its Note or its obligation to
make Euro-Dollar Loans and the result of any of the foregoing is to
increase the cost to such Bank (or its Euro-Dollar Lending Office) of
making or maintaining any Euro-Dollar Loan, or to reduce the amount of any
sum received or receivable by such Bank (or its Euro-Dollar Lending Office)
under this Agreement or under its Note with respect thereto, by an amount
deemed by such Bank to be material, then, within 15 days after demand by
such Bank (with a copy to the Senior Administrative Agent), the Borrower
shall pay to such Bank (on an after-tax basis) such additional amount or
amounts as will compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change
in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive
regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations hereunder to a level
below that which such Bank (or its Parent) could have achieved but for such
adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by such Bank
to be material, then from time to time, within 15 days after demand by such
Bank (with a copy to the Senior Administrative Agent), the Borrower shall
pay to such Bank such additional amount or amounts as will compensate such
Bank (or its Parent) (on an after-tax basis) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Senior
Administrative Agent of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Bank to compensation
pursuant to this Section and will designate a different Euro-Dollar Lending
Office if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
clearly demonstrable error. In determining such amount, such Bank may use
any reasonable averaging and attribution methods.
SECTION 8.04. TAXES. (a) Any and all payments by the Borrower to
or for the account of any Bank or the Senior Administrative Agent hereunder
or under any Note shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto,
excluding,
(i) in the case of each Bank and the Senior
Administrative Agent, taxes imposed on its income, and franchise
or similar taxes imposed on its net income,
(A) by the jurisdiction or any political
subdivision thereof under the laws of which such Bank or
the Senior Administrative Agent (as the case may be) is
organized, or
(B) by any jurisdiction or any political
subdivision thereof in which such Bank or the Senior
Administrative Agent (as the case may be) carries on
business (but only if such taxes are imposed as a result
of the carrying on of such business in that jurisdiction)
or,
(C) in the case of each Bank, by the
jurisdiction or any political subdivision thereof where
such Bank's Applicable Lending Office is located or
carries on business, and
(ii) taxes to which a Bank becomes subject after the
Applicable Date as a result of a change in the residence, place of
incorporation, or principal place of business of such Bank, a
change in the Applicable Lending Office of such Bank or other
similar circumstances, or as a result of the recognition by such
Bank of gain on the sale, assignment or participation by such Bank
of the participating interests in its creditor positions
hereunder,
(all such non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If
the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder or under any Note to any Bank or the
Senior Administrative Agent, (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) such
Bank or the Senior Administrative Agent (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, (iii) the Borrower
shall pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law and (iv) the Borrower
shall furnish to the Senior Administrative Agent, at its address referred
to in Section 9.01, the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, or
charges or similar levies which arise from any payment made hereunder or
under any Note or from the execution or delivery of, or otherwise with
respect to, any Senior Loan Document (hereinafter referred to as "Other
Taxes").
(c) The Borrower agrees to indemnify each Bank and the Senior
Administrative Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section 8.04)
paid by such Bank or the Senior Administrative Agent (as the case may be)
and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made
within 15 days from the date such Bank or the Senior Administrative Agent
(as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of
this Agreement in the case of each Bank listed on the signature pages
hereof and on or prior to the date on which it becomes a Bank in the case
of each other Bank (the "Applicable Date"), and from time to time
thereafter if requested in writing by the Borrower (but only so long as
such Bank remains lawfully able to do so), shall provide the Borrower with
Internal Revenue Service Form 1001 or W-8BEN, 4224 or W-8ECI, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that each of such Bank and such Bank's Applicable
Lending Office is entitled to benefits under an income tax treaty to which
the United States is a party which reduces the rate of withholding tax on
payments of interest or certifying that the income receivable pursuant to
this Agreement is effectively connected with the conduct of a trade or
business in the United States. If the form provided by a Bank at the time
such Bank first becomes a party to this Agreement indicates a United States
interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from "Taxes" as defined in Section
8.04(a).
(e) For any period with respect to which a Bank has failed to
provide the Borrower with the appropriate form pursuant to Section 8.04(d)
(unless such failure is due to a change in treaty, law or regulation
occurring subsequent to the date on which a form originally was required to
be provided), such Bank shall not be entitled to indemnification under
Section 8.04(a) with respect to Taxes imposed by the United States;
provided, however, that should a Bank, which is otherwise exempt from or
subject to a reduced rate of withholding tax, become subject to Taxes
because of its failure to deliver a form required hereunder, the Borrower
shall take such steps as such Bank shall reasonably request to assist such
Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or
for the account of any Bank pursuant to this Section 8.04, then such Bank
will change the jurisdiction of its Applicable Lending Office so as to
eliminate or reduce any such additional payment which may thereafter accrue
if such change, in the judgment of such Bank, is not otherwise
disadvantageous to such Bank.
SECTION 8.05. BASE RATE LOANS SUBSTITUTED FOR AFFECTED EURO-DOLLAR
LOANS. If (a) the obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (b) any Bank has demanded
compensation under Section 8.03 or 8.04 with respect to its Euro-Dollar
Loans and the Borrower shall, by at least five Euro-Dollar Business Days'
prior notice to such Bank through the Senior Administrative Agent, have
elected that the provisions of this Section shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the circumstances
giving rise to such suspension or demand for compensation no longer exist,
all Loans which would otherwise be made by such Bank as (or continued as or
converted into) Euro-Dollar Loans shall instead be Base Rate Loans (on
which interest and principal shall be payable contemporaneously with the
related Euro-Dollar Loans of the other Banks). If such Bank notifies the
Borrower that the circumstances giving rise to such suspension or demand
for compensation no longer exist, the principal amount of each such Base
Rate Loan shall be converted into a Euro-Dollar Loan on the first day of
the next succeeding Interest Period applicable to the related Euro-Dollar
Loans of the other Banks.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including bank
wire, telex, facsimile transmission or similar writing) and shall be given
to such party at its address or telex number set forth in Annex 2, in an
Administrative Questionnaire pursuant to Section 9.05(a), or at such other
address or telex number as such party may specify from time to time for the
purpose by notice to the Senior Administrative Agent and the Borrower. Each
such notice, request or other communication shall be effective (a) if given
by telex, when such telex is transmitted to the telex number specified in
this Section and the appropriate answerback is received, (b) if given by
mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (c) if given by any
other means, when delivered at the address specified in this Section;
provided that notices to the Senior Administrative Agent under Article 2 or
Article 8 shall not be effective until received.
SECTION 9.02. NO WAIVERS. No failure or delay by the Senior
Administrative Agent or any Bank in exercising any right, power or
privilege under any Senior Loan Document shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies provided in the Senior Loan Documents
shall be cumulative and not exclusive of any rights or remedies provided by
law.
SECTION 9.03. EXPENSES; INDEMNIFICATION. (a) The Borrower shall
pay (i) all reasonable out-of-pocket expenses of the Senior Administrative
Agent, including fees and disbursements of special counsel for the Senior
Administrative Agent, in connection with the preparation and administration
of the Senior Loan Documents, any waiver or consent thereunder or any
amendment thereof or any Default or alleged Default hereunder and (ii) if
an Event of Default occurs, all out-of-pocket expenses incurred by the
Senior Administrative Agent and each Bank, including fees and disbursements
of counsel, in connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings resulting
therefrom.
(b) The Borrower agrees to indemnify the Senior Administrative
Agent and each Bank, their respective affiliates and the respective
directors, officers, agents and employees of the foregoing (each an
"Indemnitee") and hold each Indemnitee harmless from and against any and
all liabilities, losses, damages, costs and expenses of any kind,
including, without limitation, the reasonable fees and disbursements of
counsel, which may be incurred by such Indemnitee in connection with any
administrative or judicial proceeding (whether or not such Indemnitee shall
be designated a party thereto) brought or threatened relating to or arising
out of this Agreement or any actual or proposed use of proceeds of Loans
hereunder; provided that no Indemnitee shall have the right to be
indemnified hereunder for such Indemnitee's own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
SECTION 9.04. SETOFF; SHARING OF SETOFFS. (a) If an Event of
Default shall have occurred and be continuing, each Bank 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
Indebtedness at any time owing by such Bank to or for the credit or the
account of any Subsidiary Guarantor against any or all the obligations of
such Subsidiary Guarantor now or hereafter existing under this Agreement
and the other Senior Loan Documents held by such Bank, irrespective of
whether or not such Bank shall have made any demand under this Agreement or
any other Senior Loan Document and although such obligations may be
unmatured and regardless of the adequacy of any collateral. The rights of
each Bank under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Bank may have.
(b) Each Bank agrees that if it shall, by exercising any right of
setoff or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal and interest due with respect to any Loan
held by it which is greater than the proportion received by any other Bank
in respect of the aggregate amount of principal and interest due with
respect to any Loan held by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the
Loan held by the other Banks, and such other adjustments shall be made, as
may be required so that all such payments of principal and interest with
respect to the Loans held by the Banks shall be shared by the Banks pro
rata; provided that nothing in this Section shall impair the right of any
Bank to exercise any right of setoff or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of
the Borrower other than its indebtedness under the Loans. The Borrower
agrees, to the fullest extent it may effectively do so under applicable
law, that any holder of a participation in a Loan acquired pursuant to the
foregoing arrangements may exercise rights of setoff or counterclaim and
other rights with respect to such participation as fully as if such holder
of a participation were a direct creditor of the Borrower in the amount of
such participation.
SECTION 9.05. AMENDMENTS AND WAIVERS; RELEASE OF SENIOR COLLATERAL
AND SUBSIDIARY GUARANTORS. (a) Any provision of this Agreement or the Notes
may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed by the Borrower, by the Majority Banks (or if such
provision by its terms requires the consent of the Supermajority Banks or
all of the Banks, by the Supermajority Banks or all of the Banks, as the
case may be, and if the rights or duties of the Senior Administrative Agent
are affected thereby, by the Senior Administrative Agent); provided that no
such amendment or waiver shall, unless signed by all the Banks, (i)
increase or decrease the Commitment of any Bank (except for a ratable
decrease in the Commitments of all Banks) or subject any Bank to any
additional obligation, (ii) reduce the principal of or rate of interest on
any Loan or any fees hereunder, (iii) postpone the date fixed for any
payment of principal of or interest on any Loan or any fees hereunder or
for termination of any Commitment, (iv) waive any condition for the initial
Credit Event, (v) amend or waive any provision of Section 2.12 or Section
2.18, the definitions of "Term Exposure", "Borrowing Base Amount" and
"Required Prepayment Amount" or Section 4.05 of the Collateral Trust and
Intercreditor Agreement, or (vi) change the percentage of the Commitments
or of the aggregate unpaid principal amount of the Loans, or the number of
Banks, the definitions of Majority Banks or Supermajority Banks, which
shall be required for the Banks or any of them to take any action under
this Section or any other provision of this Agreement.
(b) Any provision of any Senior Collateral Document may be amended
or waived if, but only if, such amendment or waiver is in writing and is
signed by the Borrower and the Senior Administrative Agent with the consent
of the Majority Banks; provided that no such amendment or waiver shall,
unless signed by all the Banks, (i) alter the priorities set forth in
Section 4.01 of the Collateral Trust and Intercreditor Agreement or (ii)
effect or permit a release of all or substantially all of the Senior
Collateral. Notwithstanding the foregoing, (i) Senior Collateral shall be
released from the Lien of 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 Senior Administrative Agent shall execute
and deliver all release documents reasonably requested to evidence such
release; provided that arrangements satisfactory to the Senior
Administrative Agent shall have been made for application of the cash
proceeds thereof in accordance with Section 2.12 and for the pledge of any
non-cash proceeds thereof pursuant to the Senior Collateral Documents, and
(ii) if a Subsidiary Guarantor 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 Guarantor 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 9.06. 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, except that the
Borrower may not assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its
Commitments or any or all of its Loans. In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not upon
notice to the Borrower and the Senior Administrative Agent, such Bank shall
remain responsible for the performance of its obligations hereunder, and
the Borrower and the Senior Administrative Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. Any agreement pursuant to which any
Bank may grant such a participating interest shall provide that such Bank
shall retain the sole right and responsibility to enforce the obligations
of the Borrower hereunder including, without limitation, the right to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such participation agreement may provide that such
Bank will not agree to any modification, amendment or waiver of this
Agreement described in clause (i), (ii) or (iii) of Section 9.05(a) without
the consent of the Participant. The Borrower agrees that each Participant
shall, to the extent provided in its participation agreement, be entitled
to the benefits of Article 8 with respect to its participating interest. An
assignment or other transfer which is not permitted by clause (c) or (d)
below shall be given effect for purposes of this Agreement only to the
extent of a participating interest granted in accordance with this clause
(b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part of all, of
its rights and obligations under this Agreement and the Notes, and such
Assignee shall assume such rights and obligations, pursuant to an
Assignment and Assumption Agreement hereto executed by such Assignee and
such transferor Bank, with (and subject to) notice to, and the subscribed
consent of, the Borrower, so long as no Default shall have occurred and be
continuing, and the Senior Administrative Agent (such consent of the
Borrower and the Senior Administrative Agent not to be unreasonably
withheld or delayed); provided that (i) if an Assignee is an affiliate of
such transferor Bank or is a Bank prior to giving effect to such
assignment, such notice shall be given but no such consent shall be
required, and (ii) in the case of an assignment of less than all of the
rights and obligations of a Bank hereunder, such assignment shall be in a
minimum amount of $5,000,000 and multiples of $1,000,000. Upon execution
and delivery of such instrument and payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between
such transferor Bank and such Assignee, such Assignee shall be a Bank party
to this Agreement and shall have all the rights and obligations of a Bank
with Loans, participations and Commitments as set forth in such instrument
of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any
assignment pursuant to this clause (c), the transferor Bank, the Senior
Administrative Agent and the Borrower shall make appropriate arrangements
so that, if required, a new Note is issued to the Assignee. In connection
with any such assignment, the transferor Bank shall pay to the Senior
Administrative Agent an administrative fee for processing such assignment
in the amount of $3,500, and the transferee Bank shall deliver a completed
Administrative Questionnaire to the Senior Administrative Agent. If the
Assignee is not incorporated under the laws of the United States of America
or a state thereof, it shall, prior to the first date on which interest or
fees are payable hereunder for its account, deliver to the Borrower and the
Senior Administrative Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with
Section 8.04.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement and its Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations
hereunder.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.03
than such Bank would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Borrower's prior
written consent or by reason of the provisions of Section 8.02, 8.03 or
8.04 requiring such Bank to designate a different Applicable Lending Office
under certain circumstances or at a time when the circumstances giving rise
to such greater payment did not exist.
SECTION 9.07. GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement and each Note shall be governed by and construed in accordance
with the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York State court sitting in
New York City for purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. The
Borrower irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient
forum.
SECTION 9.08. COUNTERPARTS; INTEGRATION. This Agreement may be
signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject
matter hereof.
SECTION 9.09. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
AGENTS AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.10. COLLATERAL TRUST AND INTERCREDITOR AGREEMENT. Each
Bank, Issuing Bank and Agent hereby authorizes the Senior Administrative
Agent to enter into the Collateral Trust Agreement and each other Senior
Collateral Document on its behalf, and agrees that the Senior
Administrative Agent and the Senior Collateral Agent may enforce the rights
and remedies of the Senior Bank Parties under each Senior Loan Document to
the extent provided in the Senior Collateral Documents and the Collateral
Trust and Intercreditor Agreement.
SECTION 9.11. CASH SWEEP. (a) On any day which:
(i) an Event of Default exists, or
(ii) the lesser of the Revolving Credit Commitments
(after deducting the Aggregate Revolving Credit Exposure at such
time) and the Borrowing Base Amount (after deducting the Aggregate
Revolving Credit Exposure and the aggregate Term Exposures of the
Banks at such time), in each case, together with all amounts then
on deposit in the Cash Sweep Cash Collateral Account, is less than
(A) $300,000,000 for the period prior to the date of issuance of
consolidated financial statements of the Borrower and its
Consolidated Subsidiaries as of and for the fiscal year of the
Borrower ended February 26, 2000; and (B) $100,000,000 for all
periods on and after the issuance of such financial statements,
the Senior Collateral Agent, upon its determination or upon request by the
Majority Banks, 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 the Revolving Credit Commitments
(after deducting the Aggregate Revolving Credit Exposure at such
time) and the Borrowing Base Amount (after deducting the Aggregate
Revolving Credit Exposure and the aggregate Term Exposures of the
Banks at such time), in each case, together with all amounts then
on deposit in the Cash Sweep Cash Collateral Account, is for any
period of 21 consecutive days, greater than (A) $300,000,000 for
the period prior to the date of issuance of consolidated financial
statements of the Borrower and its Consolidated Subsidiaries as of
and for the fiscal year of the Borrower ended February 26, 2000,
and (B) $100,000,000 on and after the issuance of such financial
statements,
the Senior Collateral Agent shall automatically rescind any Cash Sweep Notice.
(c) The Senior Collateral Agent reserves the right to send as many
Cash Sweep Notices to the extent that it is entitled to do so under the
Senior Subsidiary Security Agreement.
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 USA, INC., as Senior Administrative
Agent
By:_________________________________________
Name:
Title:
CITICORP USA, INC., as Senior Collateral Agent
By:_________________________________________
Name:
Title:
XXXXXX FINANCIAL, INC., as Syndication
Agent
By:_________________________________________
Name:
Title:
FLEET RETAIL FINANCE INC., as Syndication
Agent
By:_________________________________________
Name:
Title:
CITICORP USA, INC., as Issuing Bank and
Swingline Bank
By:_________________________________________
Name:
Title:
FLEET RETAIL FINANCE INC., as Issuing Bank
and Swingline Bank
By:_________________________________________
Name:
Title:
MELLON BANK, N.A., as Issuing Bank solely
with respect to the Existing Trade Letters
of Credit
By:_________________________________________
Name:
Title:
FLEET RETAIL FINANCE INC., as
Swingline Bank
By:_________________________________________
Name:
Title:
FOOTHILL INCOME TRUST II, L.P.
By:_________________________________________
Name:
Title:
FOOTHILL CAPITAL CORPORATION
By:_________________________________________
Name:
Title:
THE CHASE MANHATTAN BANK
By:_________________________________________
Name:
Title:
THE CIT GROUP/BUSINESS CREDIT,
INC.
By:_________________________________________
Name:
Title:
GMAC BUSINESS CREDIT, LLC
By:_________________________________________
Name:
Title:
GMAC COMMERCIAL CREDIT LLC
By:_________________________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION
By:_________________________________________
Name:
Title:
PPM AMERICA, INC.
By:_________________________________________
Name:
Title:
NATIONAL CITY COMMERCIAL
FINANCE, INC.
By:_________________________________________
Name:
Title:
AMSOUTH BANK
By:_________________________________________
Name:
Title:
DEBIS FINANCIAL SERVICES, INC.
By:_________________________________________
Name:
Title:
BANCA NAZIONALE
DELL'AGRICOLTURA, S.p.A ACTING
THROUGH ITS NEW YORK BRANCH
By:_________________________________________
Name:
Title:
THE PROVIDENT BANK
By:_________________________________________
Name:
Title:
SIEMENS FINANCIAL SERVICES, INC.
By:_________________________________________
Name:
Title:
SOVEREIGN BANK
By:_________________________________________
Name:
Title:
TEXTRON FINANCIAL CORPORATION
By:_________________________________________
Name:
Title:
KZH CRESCENT LLC
By:_________________________________________
Name:
Title:
KZH CRESCENT-2 LLC
By:_________________________________________
Name:
Title:
KZH CRESCENT-3 LLC
By:_________________________________________
Name:
Title:
UNITED OF OMAHA LIFE INSURANCE
COMPANY
BY: TCW ASSET MANAGEMENT
COMPANY, ITS INVESTMENT
ADVISOR
By:_________________________________________
Name:
Title:
ANNEX 1
INITIAL REVOLVING CREDIT COMMITMENTS AND TERM LOAN COMMITMENTS
Bank Term Loan Revolving Credit Total
Commitment Commitment Commitment
Citicorp USA, Inc. $ 247,785,714.29 $45,714,285.71 $293,500,000.00
Xxxxxx Financial, Inc. $ 14,285,714.29 $35,714,285.71 $50,000,000.00
Fleet Retail Finance Inc. $ 18,571,428.57 $46,428,571.43 $65,000,000.00
Foothill Income Trust II, L.P. $ 30,142,857.14 $12,857,142.86 $43,000,000.00
Foothill Capital Corporation $ 14,285,714.29 $35,714,285.71 $50,000,000.00
The Chase Manhattan Bank $ 18,571,428.57 $46,428,571.43 $65,000,000.00
The CIT Group/Business Credit, Inc. $ 14,285,714.29 $35,714,285.71 $50,000,000.00
GMAC Business Credit, LLC $ 7,142,857.14 $17,857,142.86 $25,000,000.00
GMAC Commercial Credit, LLC $ 21,428,571.43 $53,571,428.57 $75,000,000.00
General Electronic Capital Corporation $ 44,428,571.43 $48,571,428.57 $93,000,000.00
PPM America, Inc. $ 14,285,714.29 $35,714,285.71 $50,000,000.00
National City Commercial Finance, Inc. $ 7,142,857.14 $17,857,142.86 $25,000,000.00
Amsouth $ 5,714,285.71 $14,285,714.29 $20,000,000.00
Debis Financial Services, Inc. $ 4,285,714.29 $10,714,285.71 $15,000,000.00
Banca Nazionale Dell'Agricoltura S.p.A. $ 2,857,142.86 $7,142,857.42 $10,000,000.00
The Provident Bank $ 2,857,142.86 $7,142,857.14 $10,000,000.00
Siemens Financial Services, Inc. $ 2,857,142.86 $7,142,857.14 $10,000,000.00
Sovereign Bank $ 2,857,142.86 $7,142,857.14 $10,000,000.00
Textron Financial Corporation $ 5,714,285.71 $14,285,714.29 $20,000,000.00
KZH Crescent LLC $ 5,500,000.00 $5,500,000.00
KZH Crescent-2 LLC $ 7,500,000.00 $7,500,000.00
KZH Crescent-3 LLC $ 5,500,000.00 $5,500,000.00
United of Omaha Life Insurance Company $ 2,000,000.00 $2,000,000.00
TOTAL COMMITMENTS $500,000,000.00 $500,000,000.00 $1,000,000,000.00
ANNEX 2
ADMINISTRATIVE INFORMATION
NAME AND ADDRESS TELEPHONE TELECOPY ATTENTION
Rite Aid Corporation (000) 000-0000 (000) 000-0000 Chief Financial
00 Xxxxxx Xxxx Xxxxxxx
Xxxx Xxxx, XX 00000
xxx.xxxxxxx.xxx
Citicorp USA, Inc., as Senior
Administrative Agent
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Citicorp USA, Inc., as Senior
Collateral Agent
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Financial, Inc., as 000-000-0000 000-000-0000 Xxxxx X'Xxxxx
Syndication Agent
000 X. Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Fleet Retail Finance Inc., as 000-000-0000 000-000-0000 Xxxx Xxxxxx
Syndication Agent 000-000-0000 000-000-0000 Xxxxxxx Xxxxx
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Citicorp USA, Inc., as Swingline
Bank
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
[Fleet National Bank], as
Swingline Bank
[Address]
Citicorp USA, Inc., as Issuing
Bank
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
[Fleet Retail Finance Inc.], as
Issuing Bank
[Address]
[Mellon Bank, N.A.], as Issuing
Bank
[Address]
[Name of Bank]
Notices:
Domestic Lending Office:
Euro-Dollar Lending Office:
Foothill Capital Corporation 000-000-0000 000-000-0000 Xxxx Xxxxxxxx
00000 Xxxxx Xxxxxx Xxxx, Xxxxx
0000
Xxx Xxxxxxx, XX 00000
The Chase Manhattan Bank 000-000-0000 000-000-0000 Xxxxxx Xxxx
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
CIT Business Credit 000-000-0000 000-000-0000 Xxxx Xxxxxxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
GMAC Business Credit, LLC 000-000-0000 000-000-0000 X. Xxxxxxxxx Xxxxx
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
General Electric Capital 000-000-0000 000-000-0000 Xxxxx Xxxxx
Corporation
000 Xxxxxxxxxxx Xxx., 0xx Xxxxx,
Xxx Xxxxx
Xxxxxxx, XX 00000
PPM America, Inc. 000-000-0000 000-000-0000 Xxxxxxx Xxxxxxxx
000 Xxxx Xxxxxx Xx., Xxxxx 0000
Xxxxxxx, XX 00000
National City Commercial Finance, Inc. 000-000-0000 000-000-0000 Xxxxxxx XxXxxxxxx
0000 X. Xxxxx Xx., Xxxxx 000
Xxxxxxxxx, XX 00000
AmSouth Bank 000-000-0000 000-000-0000 Xxxxx Xxxxxxx
0000 0xx Xxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
or
000 Xxxx Xxxxxx 000-000-0000 000-000-0000 Xxxxxxx X. Xxxxxxxxx
Xxx Xxxx, XX 00000
Debis Financial Services, Inc. 000-000-0000 000-000-0000 Xxxxx Xxxxxxxx
00 Xxxxxxxxxxxx Xxxxx Xxxxx, Xxxxx
0000
Xxxxxxxxxx, XX 00000
Banca Nazionale dell'Agricoltura- 000-000-0000 000-000-0000 Xxxxxxxxx D.
New York
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
The Provident Bank 000-000-0000 000-000-0000 Xxxxxxxx X. Xxxxxx
Xxx Xxxx Xxxxxx Xxxxxx, 000X
Xxxxxxxxxx, Xxxx 00000
Siemens Financial Services, Inc. 000-000-0000 000-000-0000 Xxxxxx Xxxxxxx
000 XX Xxxxxxx 00
Xxxxxxxxxxx, XX 00000
Sovereign Bank 000-000-0000 000-000-0000 Xxxxxxx Xxxxxxx
Two Aldwyn Center
Xxxxx 000 & Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Textron Financial Corporation 000-000-0000 000-000-0000 Shikwe Zimba
0000 Xxxxx Xxxxx Xxxxxxx, #000 770-360-1442 000-000-0000 Xxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
KZH Crescent LLC 000-000-0000 000-000-0000 Xxxx X. Gold
c/o Trust Company of the West Xxxxxx X. Xxxxxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000-0000
KZH Crescent-2 LLC 000-000-0000 000-000-0000 Xxxx X. Gold
c/o Trust Company of the West Xxxxxx X. Xxxxxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000-0000
KZH Crescent-3 LLC 000-000-0000 000-000-0000 Xxxx X. Gold
c/o Trust Company of the West Xxxxxx X. Xxxxxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000-0000
TCW Asset Management Company 000-000-0000 000-000-0000 Xxxx X. Gold
000 Xxxx Xxxxxx, Xxxxx 0000 Xxxxxx X. Xxxxxxxx
Xxx Xxxx, XX 00000-0000 Xxxxxxxx X. Xxxxxx
ANNEX 3
DESCRIPTION OF THE TRANSACTIONS
All capitalized terms used herein but not defined herein shall
have the meanings provided in the Senior Credit Facility to which this
Annex 3 is attached and the Definitions Annex referred to therein. The
following transactions are referred to herein as the "Transactions".
1. Rite Aid will obtain a new senior secured credit facility
pursuant to the Senior Credit Facility in an aggregate principal amount of
$1,000,000,000. The Revolving Credit Commitments under the Senior Credit
Facility will incorporate the Existing Trade Letters of Credit as Letters
of Credit under the Senior Credit Facility.
2. The Independent Standby Letters of Credit will continue to be
outstanding under the Independent Standby L/C Documents.
3. The Senior Bank Obligations will be unconditionally guaranteed
by the Subsidiary Guarantors pursuant to the Senior Subsidiary Guarantee
Agreement and secured by a first priority security interest in the Senior
Collateral pursuant to the Senior Subsidiary Security Agreement and the
Senior Mortgages.
4. Rite Aid will provide its lenders with respect to each of
Existing Facilities the option to exchange (the "Debt Exchange") a portion
of the Debt under the Existing Facilities (the "Exchangeable Debt") for a
combination of:
(x) shares of common stock, par value $.01 per share (the
"Common Stock"), of Rite Aid with an aggregate value equal to 50%
of the aggregate principal amount of the Exchangeable Debt (based
on a price per share of Common Stock of $5.50), together with
registration rights; and
(y) except as described below with respect to Xxxxxx,
indebtedness in an aggregate principal amount equal to 50% of the
principal amount of the Exchangeable Debt (the "Exchange Debt");
(collectively, the "Exchange Offer"); provided that X.X. Xxxxxx Ventures
Corporation shall convert $200,000,000 of Debt to Common Stock of Rite Aid
and Xxxxxx Guaranty Trust Company of New York and X.X. Xxxxxx Ventures
Corporation, (together, "Xxxxxx") shall exchange approximately $189,000,000
of Debt for Exchange Debt. The maximum aggregate amount of Exchangeable
Debt that will be eligible for the Debt Exchange shall be equal to the
product of two multiplied by the value of 20% of the outstanding Common
Stock of Rite Aid prior to the Debt Exchange. Xxxxxx shall participate in
the Debt Exchange with respect to all of its outstanding loans to Rite Aid,
and the remaining lenders with respect to Debt under the Existing
Facilities shall be permitted to participate in the Debt Exchange on a pro
rata basis.
5. The terms of the Exchange Debt will include (i) a first
priority security interest in the Exchange Debt First Priority Collateral,
(ii) a Second Priority Lien on the Senior Collateral that will be shared
with the Existing Facilities, the Synthetic Leases and the Exchange Notes
on a pari passu basis pursuant to the Second Priority Subsidiary Security
Agreement, (iii) an unconditional subordinated guarantee by all of the
Subsidiary Guarantors pursuant to the Second Priority Subsidiary Guarantee
Agreement, (iv) with respect to any Debt under the Existing Facilities that
constitutes Exchangeable Debt, continued Liens on the pledged stock of PCS
and Xxxxxxxxx.xxx pursuant to the PCS Pledge Agreement and the
Xxxxxxxxx.xxx Pledge Agreement, and (v) a maturity date of August 15, 2002.
6. To the extent the Debt under the Existing Facilities has not
been exchanged for Exchange Debt and shares of Common Stock in connection
with the Debt Exchange, Rite Aid will modify the terms of, and obtain the
appropriate amendments to, the Existing Facilities, in order to, among
other things, provide for the extension of the maturity date of Debt under
the Existing Facilities to August 15, 2002, modify existing covenants to
conform substantially to those of the Senior Credit Facility (except that
certain of the financial covenants will be set at less restrictive levels
satisfactory to the Agent) and provide that the obligations of Rite Aid
under the Existing Facilities be guaranteed on a subordinated basis by the
Subsidiary Guarantors pursuant to the Second Priority Subsidiary Guarantee
Agreement . The Second Priority Guarantee Agreement shall be secured by a
Second Priority Lien on the Senior Collateral pursuant to the Second
Priority Subsidiary Security Agreement that will be shared among the
Existing Facilities, the Exchange Debt, the Exchange Notes and the Existing
Synthetic Leases on a pari passu basis, subject to special provisions
governing the application of proceeds from dispositions of Collateral of
PCS.
7. Rite Aid will modify the terms of, and obtain the appropriate
amendments to, the Synthetic Leases to, among other things, provide for the
modification of certain covenants and provide that the obligations of Rite
Aid under the Synthetic Leases shall be secured by the Second Priority Lien
on the Second Priority Senior Collateral pursuant to the Second Priority
Subsidiary Security Agreement.
8. Not less than $467,500,000 in principal amount of Rite Aid's
senior indenture debt consisting of $200,000,000 of 5.50% Notes due 2000
and $350,000,000 of 6.70% Notes due 2001 (the "Existing Notes") will be
exchanged at par in an exchange offer in accordance with Section 4(2) of
the Securities Act of 1933 (the "Securities Act") for 10.50% Senior Secured
Notes due 2002 (the "Exchange Notes") of Rite Aid, which will mature on
September 15, 2002 and will, among other things, be guaranteed by the
Subsidiary Guarantors pursuant to the Second Priority Subsidiary Guarantee
Agreement.
9. Xxxxxxx Xxxxx Xxxxxx Inc. and X.X. Xxxxxx Securities Inc.
(collectively, the "Dealer Managers") will enter into the Forward
Commitment Agreement pursuant to which they severally agree to purchase
additional Exchange Notes on December 15, 2000, in an aggregate principal
amount equal to the amount by which the aggregate principal amount of the
Existing Notes that are validly tendered and exchanged pursuant to the
Exchange Offer is less than $467,500,000.
10. All outstanding receivables under Rite Aid's accounts
receivable securitization facility (the "Securitization Facility") will be
repurchased by the seller thereof from the purchaser thereof and the
Securitization Facility and all security interests in connection therewith
terminated. Provisions satisfactory to the Senior Administrative Agent
shall be made for the filing of appropriately completed termination
statements on Form UCC-3.
11. Costs and expenses (including, without limitation, all fees
and amounts payable under the Senior Fee Letters) incurred in connection
with the foregoing transactions will be paid in an amount approximately
equal to $60,000,000 (the "Transaction Costs").
12. All Transactions which are contemplated by the Senior Loan
Documents or the Second Priority Debt Documents to have been consummated on
the Closing Date or substantially concurrently with the Closing Date shall
have been consummated.
13. The application of funds on the Closing Date will be as set
forth in a funds flow memo dated the Closing Date which is satisfactory to
the Senior Administrative Agent.
ANNEX 4
DEFINITIONS ANNEX
This is the Definitions Annex referred to in the Senior Loan
Documents (such term and each other capitalized term used herein as defined
below, and if not defined herein, have the meanings assigned to such terms
in the applicable Senior Loan Document or Second Priority Debt Document)
and the Second Priority Debt Documents. The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of
such terms.
References to any agreement or contract are to such agreement or
contract as amended, modified or supplemented from time to time in
accordance with the terms thereof and of each Senior Loan Document and
Second Priority Debt Document containing restrictions or imposing
conditions on the amendment, modification or supplementing of such
agreement or contract.
"Affiliate" means, when used with respect to a specified Person,
another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control
with the Person specified.
"Asset Sale" means any sale, transfer or other disposition
(including pursuant to a Sale and Leaseback Transaction) of any property or
asset of the Borrower or any Subsidiary (including any equity interest in a
Subsidiary), other than a Permitted Disposition
"Attributable Debt" means, as to any particular Capital Lease or
Sale and Leaseback Transaction under which the Borrower or any Subsidiary
is at the time liable, at any date as of which the amount thereof is to be
determined (i) in the case of a transaction involving a Capital Lease, the
amount on such date of the obligation thereunder that would appear on a
balance sheet prepared as of such date in accordance with generally
accepted accounting principles, or (ii) in the case of a Sale and Leaseback
Transaction not involving a Capital Lease, the then present value of the
minimum rental obligations under such Sale and Leaseback Transaction during
the remaining term thereof (after giving effect to any extensions at the
option of the lessor) computed by discounting the respective rental
payments at the actual interest factor included in such payments or, if
such interest factor cannot be readily determined, at the rate per annum
that would be applicable to a Capital Lease of the Borrower having similar
payment terms. The amount of any rental payment required to be made under
any such Sale and Leaseback Transaction not involving a Capital Lease may
exclude amounts required to be paid by the lessee on account of maintenance
and repairs, insurance, taxes, assessments, utilities, operating and labor
costs and similar charges, whether or not characterized as rent.
"Bankruptcy Proceeding" means any proceeding under Title 11 of the
U.S. Code or any other Federal, state or foreign bankruptcy, insolvency,
reorganization, receivership or similar law.
"Basket Asset Sale" means any sale or disposition (including a
Sale and Leaseback Transaction not involving any Mortgaged Property) of
office locations, stores or other personal or real property (including any
improvements thereon), whether or not constituting Mortgaged Property, or
leasehold interest therein for fair value in the ordinary course of
business consistent with past practice and not inconsistent with the
Borrower's business plan delivered to the Representatives on the Closing
Date, provided, however, that, (i) the aggregate consideration received
therefor (including the fair market value of any non-cash consideration)
shall not exceed $75,000,000 in any fiscal year (calculated without regard
to Sale and Leaseback Transactions permitted by Section 5.14(a), (b) and
(c) of the Senior Credit Facility as in effect on the Closing Date) and
(ii) at least 75% of such consideration shall consist of cash.
"Borrower" means Rite Aid.
"Business Day" means any day other than a Saturday, Sunday or day
on which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Euro-Dollar Loan,
the term "Business Day" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.
"Capital Markets Transaction" means the receipt by the Borrower or
a Subsidiary of proceeds of an issuance in the public or private capital
markets of long-term debt securities, of equity securities or of
equity-linked (e.g., trust preferred) securities (other than any proceeds
in respect of the issuance of Exchange Notes to SPV and the disposition of
such Exchange Notes pursuant to the Forward Commitment Agreement).
"Casualty/Condemnation" means any event that gives rise to
Casualty/Condemnation Proceeds.
"Casualty/Condemnation Proceeds" means
(a) any insurance proceeds under any insurance policies
or otherwise with respect to any casualty or other insured damage
to any assets of the Borrower or its Subsidiaries, and
(b) any proceeds received by the Borrower or any
Subsidiary of any action or proceeding for the taking of any
assets of the Borrower or its Subsidiaries, or any part thereof or
interest therein, for public or quasi-public use under the power
of eminent domain, by reason of any similar public improvement or
condemnation proceeding,
less, in each case (i) any fees, commissions and expenses (including the
costs of adjustment and condemnation proceedings) and other costs paid or
incurred by the Borrower or any Subsidiary in connection therewith, (ii)
income taxes reasonably estimated to be payable as a result of any gain
recognized in connection with the receipt of such payment or proceeds and
(iii) payment of the outstanding amount of any Debt (or Attributable Debt),
other than the Secured Obligations, together with premium or penalty, if
any, and interest thereon (or comparable obligations in respect of
Attributable Debt), that is secured by a Lien on (or if Attributable Debt,
the lease of) the stock or assets in question and that has priority over
both the Senior Lien and the Second Priority Lien and is to be repaid as a
result of receipt of such payments or proceeds; provided, however, that no
such proceeds shall constitute Casualty/Condemnation Proceeds to the extent
that such proceeds are (A) reinvested in other like fixed or capital assets
within 180 days of the Casualty/Condemnation that gave rise to such
proceeds or (B) committed to be reinvested in other like fixed or capital
assets within 180 days of such Casualty/Condemnation, with diligent pursuit
of such reinvestment, and reinvested in such assets within 365 days of such
Casualty/Condemnation.
"Citibank" means Citibank, N.A.
"Citibank Standby L/C Documents" means the reimbursement
agreements, letter of credit applications and other documents relating to
the Citibank Standby Letters of Credit.
"Citibank Standby L/C Obligations" means (a) each payment,
including payments in respect of reimbursements and cash collateralization,
required to be made by Rite Aid under the Citibank Standby L/C Documents in
respect of Citibank Standby Letters of Credit in an aggregate amount at any
time outstanding not in excess of (i) $8,000,000 minus (ii) the cumulative
amount of proceeds of Collateral applied to such obligations as the result
of the exercise of remedies under the Senior Collateral Documents and (b)
all other monetary obligations, including fees, costs, expenses and
indemnities (including interest and monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding)
of Rite Aid or any Obligor under the Citibank Standby L/C Documents to the
extent attributable to the Citibank Standby Letters of Credit referred to
in clause (a).
"Citibank Standby Letters of Credit" means the standby letters of
credit issued for the account of the Borrower by Citibank outstanding on
the Closing Date in an aggregate face amount of approximately $8,000,000,
together with any standby letter of credit (other than any letter of credit
issued under the Senior Credit Facility) hereafter issued by Citibank for
the account of any Obligor, provided that the Citibank Standby Letters of
Credit shall be limited to an amount at any time outstanding not in excess
of (i) $8,000,000 minus (ii) the cumulative amount of proceeds of
Collateral applied as the result of the exercise of remedies under the
Senior Collateral Documents to reimbursement and cash collateralization
obligations in respect of Citibank Standby Letters of Credit.
"Closing Date" means the date on which the Senior Credit Facility,
the amendments and restatements giving rise to the Existing Facilities and
the exchange offer and other transactions giving rise to the Exchange Notes
become effective.
"Collateral" means the Senior Collateral and the Second Priority
Collateral.
"Collateral Documents" means (a) the Senior Collateral Documents
and (b) the Second Priority Collateral Documents.
"Collateral Trust and Intercreditor Agreement" means the
Collateral Trust and Intercreditor Agreement, dated as of June 12, 2000,
among Rite Aid, the Subsidiary Guarantors, the Second Priority Collateral
Trustee, the Senior Collateral Agent and each Second Priority
Representative.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "Controlling" and "Controlled" shall have meanings
correlative thereto.
"Debt" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all obligations of such
Person as lessee which are capitalized in accordance with generally
accepted accounting principles, (v) all non-contingent obligations of such
Person to reimburse any bank or other Person in respect of amounts paid
under a letter of credit or similar instrument, (vi) all Debt secured by a
Lien on any asset of such Person, whether or not such Debt is otherwise an
obligation of such Person, and (vii) all Debt of others Guaranteed by such
Person.
"Debt Facility" means any of the Senior Credit Facility, the
Existing Facilities, the Synthetic Lease Facilities and the Exchange Note
Indenture.
"Default Rate" means a rate per annum (computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as the
case may be) equal to the sum of (a) the rate of interest publicly
announced by Citibank in New York, New York, from time to time as its "base
rate", plus (b) 2.00%.
"Designated Asset Disposition" means any sale, transfer or other
disposition of Exchange Debt First Priority Collateral other than a
Permitted Disposition.
"Domestic Subsidiary" means any Subsidiary incorporated or
organized under the laws of the United States of America, any State thereof
or the District of Columbia.
"Xxxxxxxxx.xxx Common Stock" means the common stock of
Xxxxxxxxx.xxx, Inc., a Delaware corporation, owned by Rite Aid.
"Xxxxxxxxx.xxx Pledge Agreement" means the Xxxxxxxxx.xxx Pledge
Agreement dated as of October 25, 1999 and amended and restated as of June
12, 2000, between the Borrower and Xxxxxx Guaranty Trust Company of New
York, as agent thereunder.
"Exchange Debt Facility" means the Exchange Debt Facility dated as
of June 12, 2000 among Rite Aid Corporation, the banks party thereto and
Xxxxxx Guaranty Trust Company of New York, as administrative agent.
"Exchange Debt Facility Documents" means the collective reference
to the "Loan Documents" as defined in the Exchange Debt Facility.
"Exchange Debt First Priority Collateral" means the prescription
files of Rite Aid's Subsidiaries and the proceeds thereof.
"Exchange Debt First Priority Collateral Documents" means the
collective reference to the "First Priority Collateral Documents", as
defined in the Exchange Debt Facility.
"Exchange Debt Obligations" means (i) all principal of and
interest (including, without limitation, any interest which accrues after
the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on any loans made
under the Exchange Debt Facility, (ii) all other amounts payable by the
Borrower to the Exchange Debt Parties under the Exchange Debt Facility
Documents, and (iii) any renewals or extensions of any of the foregoing;
provided, however, that the principal amount of indebtedness included in
the Exchange Debt Obligations shall not exceed the maximum amount from time
to time permitted to be outstanding by the Collateral Trust and
Intercreditor Agreement.
"Exchange Debt Parties" means all parties to the Exchange Debt
Facility Documents other than the Obligors or any Affiliate thereof, the
Senior Bank Parties and the Representatives, but including the
administrative agent under the Exchange Debt Facility and the beneficiaries
of each indemnification obligation undertaken by Rite Aid or any other
Obligor under any Exchange Debt Facility Document.
"Exchange Note Documents" means the Exchange Notes and the
Exchange Note Indenture, Exchange and Registration Rights Agreement among
the State Street Bank and Trust, as trustee, Rite Aid and the Subsidiary
Guarantors, and the Forward Commitment Agreement.
"Exchange Note Indenture" means the Indenture dated as of June 12,
2000, among Rite Aid, the Subsidiary Guarantors and State Street Bank and
Trust Company, as trustee, relating to the Exchange Notes.
"Exchange Note Obligations" means (i) all principal of and
interest (including, without limitation, any interest which accrues after
the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on the Exchange
Notes, (ii) all other amounts payable by the Borrower to the Exchange Note
Parties under the Exchange Note Documents, and (iii) any renewals or
extensions of any of the foregoing.
"Exchange Note Parties" means all parties to the Exchange Note
Documents and the holders from time to time of the Exchange Notes, in each
case other than the Obligors or any Affiliate thereof, the Senior Bank
Parties and the Representatives, but including the trustee under the
Exchange Note Indentures and the beneficiaries of each indemnification
obligation undertaken by Rite Aid or any other Obligor under any Exchange
Note Document.
"Exchange Notes" means the 10.50% Senior Secured Notes Due 2002 of
Rite Aid (i) issued in exchange for certain 5.50% Notes Due 2000 of Rite
Aid and 6.70% Notes Due 2001 of Rite Aid or (ii) issued on the Closing Date
to SPV and to be transferred to SSB, JPM and their respective transferees
and assignees pursuant to the Forward Commitment Agreement; provided,
however, that the aggregate principal amount of Exchange Notes issued
pursuant to the Forward Commitment Agreement shall not exceed $93,158,000.
"Existing Facilities" means
(a) the PCS Facility;
(b) the RCF Facility;
(c) the Xxxxx Facility; and
(d) the Exchange Debt Facility.
"Existing Facilities Documents" means the collective reference to
(i) the PCS Facility Documents, (ii) the RCF Facility Documents, (iii) the
Xxxxx Facility Documents and (iv) the Exchange Debt Facility Documents.
"Existing Facility Obligations" means the PCS Facility
Obligations, the RCF Facility Obligations, the Xxxxx Facility Obligations
and the Exchange Debt Obligations.
"Existing Facility Parties" means the PCS Facility Parties, the
RCF Facility Parties, the Xxxxx Facility Parties and the Exchange Debt
Parties.
"Xxxxx Facility" means the Amendment No. 3 to Note Agreement,
Amendment No. 4 to Guaranty Agreement, Amendment No. 1 to Put Agreement
(the "Omnibus Amendment") dated as of June 12, 2000, relating to the
Adjustable Rate Senior Secured Notes due August 15, 2002 originally issued
by Xxxxx, Inc. and guaranteed by Rite Aid. The "Xxxxx Facility " shall be
deemed to include the Note Agreement dated as of September 30, 1996, among
Xxxxx, Inc., and each of the Purchasers listed in Annex 1 thereto, as
amended through the Closing Date.
"Xxxxx Facility Documents" means (i) the Xxxxx Facility, (ii) the
Guaranty Agreement dated as of September 30, 1996 pursuant to which Rite
Aid guaranteed the obligations of Xxxxx, Inc. under the Xxxxx Facility;
(iii) the Put Agreement dated as of September 30, 1996 entered into by Rite
Aid, and (iv) the Security Agreement dated as of September 30, 1996 entered
into by Xxxxx, Inc. and The Prudential Insurance Company of America as the
Security Agent on behalf of the Xxxxx Facility Parties, in each case as
amended through the Closing Date.
"Xxxxx Facility Obligations" means (i) all outstanding principal
amounts under the Xxxxx Facility Documents, (ii) all interest (including,
without limitation, any interest which accrues after the commencement of
any case, proceeding or other action relating to the bankruptcy, insolvency
or reorganization of the Borrower, whether or not allowed or allowable as a
claim in any such proceeding) on the principal amounts pursuant to clause
(i) of this definition, (iii) any renewals or extensions of any of the
foregoing and (iv) any and all other amounts payable by the Borrower in
respect of the Xxxxx Facility Documents; provided, however, that the
principal amount of indebtedness included in the Xxxxx Facility Obligations
shall not exceed the maximum amount from time to time permitted to be
outstanding by the Collateral Trust and Intercreditor Agreement.
"Xxxxx Facility Parties" means The Prudential Insurance Company of
America and Pruco Life Insurance Company and their successors and assigns
as noteholders and purchasers under the Xxxxx Facility Documents and The
Prudential Insurance Company of America, as Security Agent under the Xxxxx
Facility Documents and its successor or assignee.
"Forward Commitment Agreement" means the Forward Commitment
Agreement dated June 12, 2000, among Rite Aid, SPV, SSB and JPM.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of
any other Person; provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding meaning.
"Indentures" mean, collectively, (a) the Indenture dated as of
December 21, 1998, between Rite Aid and Xxxxxx Trust and Savings Bank, as
trustee, (b) the Indenture dated as of August 1, 1993, between Rite Aid and
Xxxxxx Guaranty Trust Company of New York, as trustee, (c) the Indenture
dated as September 10, 1997, between Rite Aid and Xxxxxx Trust and Savings
Bank, as trustee and (d) the Indenture dated as of September 22, 1998,
between Rite Aid and Xxxxxx Trust and Savings Bank, as trustee.
"Independent Standby L/C Documents" means the Citibank Standby L/C
Documents and the Mellon Standby L/C Documents.
"Independent Standby L/C Obligations" means the Citibank Standby
L/C Obligations and the Mellon Standby L/C Obligations.
"Independent Standby L/C Parties" means Citibank and Mellon Bank
in their capacities as issuers of Independent Standby Letters of Credit.
"Independent Standby Letters of Credit" means the Citibank Standby
Letters of Credit and the Mellon Standby Letters of Credit.
"Instructing Group" means, until the Senior Obligation Payment
Date, the Majority Senior Parties, and thereafter the Second Priority
Instructing Group.
"JPM" means X.X. Xxxxxx Securities, Inc.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset, including, without limitation, the interest of a vendor or
lessor under any conditional sale agreement, Capital Lease or other title
retention agreement relating to such asset.
"Majority Senior Parties" means the Majority Banks, as defined in
the Senior Credit Facility, or with respect to any waiver, amendment or
request, Senior Banks having such amount of unused Revolving Credit
Commitments, Revolving Credit Exposure, unused Term Loan Commitments and
outstanding Term Loans as may be required under the Senior Credit Facility
to approve the same.
"Mellon Bank" means Mellon Bank, N.A.
"Mellon Standby L/C Documents" mean the reimbursement agreements,
letter of credit applications and other documents relating to the Mellon
Standby Letters of Credit.
"Mellon Standby L/C Obligations" means (a) each payment, including
payments in respect of reimbursements and cash collateralization, required
to be made by Rite Aid under the Mellon Standby L/C Documents in respect of
Mellon Standby Letters of Credit in an aggregate amount at any time
outstanding not in excess of (i) $26,000,000 minus (ii) the cumulative
amount of proceeds of Collateral applied to such obligations as the result
of the exercise of remedies under the Senior Collateral Documents and (b)
all other monetary obligations, including fees, costs, expenses and
indemnities (including interest and monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable as a claim in such
proceeding) of Rite Aid under the Mellon Standby L/C Documents to the
extent attributable to the Mellon Standby Letters of Credit referred to in
clause (a).
"Mellon Standby Letters of Credit" means the standby letters of
credit issued for the account of the Borrower by Mellon Bank outstanding on
the Closing Date in an aggregate face amount of $26,000,000, together with
any standby letter of credit (other than any letter of credit issued under
the Senior Credit Facility) hereafter issued by Mellon Bank for the account
of any Obligor provided that the Mellon Standby Letters of Credit shall be
limited to an amount at any time outstanding not in excess of (i)
$26,000,000 minus (ii) the cumulative amount of proceeds of Collateral
applied as the result of the exercise of remedies under the Senior
Collateral Documents to reimbursement and cash collateralization
obligations in respect of Mellon Standby Letters of Credit.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor
to its business of rating debt securities.
"Net Cash Proceeds" means,
(a) with respect to any sale, transfer or other
disposition of any property or asset (a "Disposition"), an amount
equal to the cash proceeds received by the Borrower or any of its
Subsidiaries from or in respect of such Disposition (including,
when received, any cash proceeds received in respect of any
noncash proceeds of any Disposition), less (I) the sum of
(i) reasonable costs and expenses paid or
incurred in connection with such transaction, including,
without limitation, any underwriting brokerage or other
customary selling commissions and reasonable legal,
advisory and other fees and expenses (including title and
recording expenses, associated therewith), payments of
unassumed liabilities relating to the assets sold and any
severance and termination costs;
(ii) the amount of any Debt (or Attributable
Debt), together with premium or penalty, if any, and
accrued interest thereon (or comparable obligations in
respect of Attributable Debt) secured by a Lien on (or if
Attributable Debt, the lease of) any asset disposed of in
such Disposition and discharged from the proceeds
thereof, but only to the extent such Lien has priority
over the Senior Lien, the Second Priority Lien and the
Liens under the Exchange Debt First Priority Collateral
Documents;
(iii) any taxes actually paid or to be payable
by such Person (as estimated by a senior financial or
accounting officer of the Borrower, giving effect to the
overall tax position of the Borrower) in respect of such
Disposition;
(iv) the portion of such cash proceeds which the
Borrower determines in good faith and reasonably should
be reserved for post-closing adjustments, including,
without limitation, indemnification payments and purchase
price adjustments, provided, that on the date that all
such post-closing adjustments have been determined, the
amount (if any) by which the reserved amount in respect
of such Disposition exceeds the actual post-closing
adjustments payable by the Borrower or any of the
Subsidiary Guarantors shall constitute Net Cash Proceeds
on such date; and
(v) in the case of a PCS Divestiture the sum of
(1) the PCS Incremental Investment as of the date of
consummation of such disposition plus (2) the aggregate
Net Cash Proceeds of PCS Dispositions in the form of Sale
and Leaseback Transactions theretofore applied to
prepayments of the PCS Facility; and
plus (II) in the case of a PCS Divestiture, the PCS Investment
Reduction as of the date of consummation of such transaction;
(b) with respect to any Capital Markets Transaction, an
amount equal to the cash proceeds received by the Borrower or any
of its Subsidiaries from or in respect of such Capital Markets
Transaction, less any reasonable transaction costs; including
investment banking and underwriting fees, discounts and
commissions and any other expenses (including legal fees and
expenses) reasonably incurred by such Person in respect of such
Capital Markets Transaction; and
(c) with respect to receipt of Casualty/Condemnation
Proceeds, the amount thereof.
"Obligors" means Rite Aid, the Subsidiary Guarantors and any other
Person who is liable for any of the Secured Obligations.
"paid in full" means paid in full in cash.
"PCS" means PCS Holding Corporation, a Delaware corporation, and
its successors.
"PCS Common Stock" means the common stock of PCS owned by Rite
Aid.
"PCS Disposition" means (i) any sale or other disposition of
capital stock of PCS (or of any non-cash proceeds thereof), (ii) any sale,
lease or other disposition (including a Casualty/Condemnation) by PCS or
any of its Subsidiaries of any asset, other than (y) dispositions of
inventory, cash, cash equivalents and other cash management investments and
obsolete, unused or unnecessary equipment, in each case in the ordinary
course of business, and (z) dispositions to PCS or a wholly-owned
Subsidiary of PCS or (iii) any sale, lease or other disposition (including
a Casualty/Condemnation) of PCS Land.
"PCS Divestiture" means a PCS Disposition as a result of which the
business of PCS is no longer conducted by a Consolidated Subsidiary of the
Borrower.
"PCS/Drugstore Pledged Collateral" means the capital stock of PCS
and Xxxxxxxxx.xxx pledged by Rite Aid under the PCS Pledge Agreement and
the Xxxxxxxxx.xxx Pledge Agreement and all income and profits thereon,
dividends and other payments and distributions with respect thereto and all
proceeds of the foregoing subject to a Lien under such agreements.
"PCS Excluded Assets" means (i) any Collateral consisting of
assets of PCS or a Subsidiary of PCS, other than PCS Linked Accounts, (ii)
PCS Land and (iii) any proceeds of clauses (i) and (ii). For purposes of
Article IV of the Collateral Trust and Intercreditor Agreement, any
proceeds of enforcement of the Senior Subsidiary Guarantee Agreement or the
Second Priority Guarantee Agreement against PCS or a Subsidiary of PCS
(other than with respect to the PCS Linked Accounts and the proceeds
thereof) shall be deemed to be proceeds of Collateral consisting of PCS
Excluded Assets.
"PCS Facility" means the PCS Facility dated as of June 12, 2000,
among Rite Aid, the banks party thereto and Xxxxxx Guaranty Trust Company
of New York, as administrative agent.
"PCS Facility Documents" means the "Loan Documents" as defined in
the PCS Facility.
"PCS Facility Obligations" means (i) all principal of and interest
(including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on any loan made
under the PCS Facility, (ii) all other amounts payable by the Borrower
under the PCS Facility Documents and (iii) any renewals or extensions of
any of the foregoing; provided, however, that the principal amount of
indebtedness included in the PCS Facility Obligations shall not exceed the
maximum amount from time to time permitted to be outstanding by the
Collateral Trust and Intercreditor Agreement.
"PCS Facility Parties" means the parties to the PCS Facility
Documents other than the Obligors, the Senior Bank Parties and the
Representatives, but including the administrative agent under the PCS
Facility and the beneficiaries of each indemnification obligation by Rite
Aid or any other Obligor under any PCS Facility Documents.
"PCS Incremental Investment" means, at any date, the amount, if
any, by which the inter-company payable owing by Rite Aid Hdqtrs. Corp. to
PCS at such date is less than such amount as at May 27, 2000. The Borrower
shall promptly notify each of the Representatives following the Closing
Date of such latter amount.
"PCS Investment Reduction" means, at any date, the excess, if any,
of (i) the amount, if any, by which the intercompany payable owing by Rite
Aid Hdqtrs. Corp. to PCS at such date is greater than such amount as at May
27, 2000, over (ii) the cumulative PCS EBITDA, as defined in the Senior
Credit Facility, for the period from May 27, 2000, to such date.
"PCS Land" means the real property described as X.X. 00xx Xxxxxx
and Mountainview Road, Scottsdale, Arizona, together with any improvements
thereon.
"PCS Linked Accounts" means any accounts receivable owed to PCS by
third party insurers in respect of claims generated by other Subsidiaries
of Rite Aid and giving rise to related accounts payable owed by PCS to such
other Subsidiaries of Rite Aid.
"PCS Pledge Agreement" means the PCS Pledge Agreement dated as of
October 25, 1999 and amended and restated as of June 12, 2000, between the
Borrower and Xxxxxx Guaranty Trust Company of New York, as agent
thereunder.
"Permitted Disposition" means any of the following:
(i) dispositions of inventory at retail, cash, cash
equivalents and other cash managing investments and obsolete,
unused, uneconomic or unnecessary equipment, in each case in the
ordinary course of business;
(ii) a disposition to a Subsidiary Guarantor, provided,
that (A) if the property subject to such disposition constitutes
Collateral immediately before giving effect to such disposition,
such property continues to constitute Collateral subject to the
Senior Lien and the Second Priority Lien, and (B) no dispositions
of property will be made to or by PCS or its Subsidiaries except
in the ordinary course of business consistent with past practice;
(iii) a sale or discount, in each case without recourse
and in the ordinary course of business, of overdue Accounts (as
defined in the Senior Credit Facility) arising in the ordinary
course of business, but only to the extent such Accounts are no
longer Eligible Accounts Receivable (as defined in the Senior
Credit Facility) and such sale or discount is in connection with
the compromise or collection thereof consistent with customary
industry practice (and not as part of any bulk sale);
(iv) Basket Asset Sales; and
(v) any disposition of Exchange Notes by SPV to SSB or
JPM (or their respective successors, assigns and affiliates),
pursuant to the Forward Commitment Agreement as in effect on the
Closing Date.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"RCF Facility" means the RCF Facility dated as of June 12, 2000,
among Rite Aid, the banks party thereto and Xxxxxx Guaranty Trust Company
of New York, as administrative agent.
"RCF Facility Documents" means the "Loan Documents" as defined in
the RCF Facility.
"RCF Facility Obligations" means (i) all principal of and interest
(including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on any loan made
under the RCF Facility, (ii) all other amounts payable by the Borrower to
the RCF Facility Parties under the RCF Facility Documents and (iii) any
renewals or extensions of any of the foregoing; provided, however, that the
principal amount of indebtedness included in the RCF Facility Obligations
shall not exceed the maximum amount from time to time permitted to be
outstanding by the Collateral Trust and Intercreditor Agreement.
"RCF Facility Parties" means the parties to the RCF Facility
Documents other than the Obligors.
"Reduction" means, when applied to any Debt Facility, (i) the
permanent repayment of outstanding loans (or obligations in respect of
Attributable Debt) under such Debt Facility, (ii) the permanent reduction
of outstanding lending commitments under such Debt Facility or (iii) the
permanent cash collateralization of outstanding letters of credit under
such facility (together with the termination of any lending commitments
utilized by such letters of credit).
"Reduction Event" is (i) a PCS Disposition, (ii) a Capital Markets
Transaction, (iii) a Designated Asset Disposition, (iv) a Senior Collateral
Disposition, (v) other Asset Sales or (vi) receipt of other
Casualty/Condemnation Proceeds.
"Related Exchange Debt" means, with respect to any of the Existing
Facilities (other than the Exchange Debt Facility), Debt under the Exchange
Debt Facility issued in exchange for Debt under such Existing Facility.
"Related Exchange Debt Obligation" shall mean Exchange Debt
Obligations in respect of Related Exchange Debt.
"Representatives" means each of the Senior Collateral Agent and
the Second Priority Representatives.
"Required Prepayment Amount" has the meaning assigned to such term
in the Senior Credit Facility, as in effect on the Closing Date.
"Rite Aid" means Rite Aid Corporation, a Delaware corporation, and
its successors.
"Rite Aid Hdqtrs. Corp." means Rite Aid Hdqtrs. Corp., a Delaware
corporation and a Wholly-Owned Consolidated Subsidiary of the Borrower.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor to its business of rating
debt securities.
"Sale and Leaseback Transaction" means the sale or transfer by the
Borrower or any Subsidiary of any office building (including its
headquarters), distribution center, manufacturing plant, warehouse, Store
or equipment now or hereafter owned by the Borrower or any Subsidiary with
the intention that the Borrower or any Subsidiary take back a lease
thereof.
"Second Priority Collateral" means all the "Second Priority
Collateral" as defined in any Second Priority Collateral Documents and
shall also include the Mortgaged Properties and the proceeds thereof, but
shall not in any event include the PCS/Drugstore Pledged Collateral or the
Exchange Debt First Priority Collateral.
"Second Priority Collateral Documents" means the Second Priority
Mortgages, the Second Priority Subsidiary Security Agreement, the Second
Priority Subsidiary Guarantee Agreement, the Second Priority Indemnity,
Subrogation and Contribution Agreement, the Collateral Trust and
Intercreditor Agreement and each of the mortgages, security agreements and
other instruments and documents executed and delivered by any Subsidiary
Guarantor pursuant to any of the foregoing for purposes of providing
collateral security or credit support for any Second Priority Debt
Obligation or obligation under the Second Priority Subsidiary Guarantee
Agreement but specifically excluding the Xxxxxxxxx.xxx Pledge Agreement,
the Exchange Debt First Priority Collateral Documents and the PCS Pledge
Agreement.
"Second Priority Collateral Trustee" means Wilmington Trust
Company, in its capacity as collateral trustee under the Collateral Trust
and Intercreditor Agreement and the Second Priority Collateral Documents,
and its successors.
"Second Priority Debt Documents" means the Existing Facility
Documents, the Exchange Note Documents, the Synthetic Lease Documents and
the Second Priority Collateral Documents.
"Second Priority Debt Obligations" means the collective reference
to the Exchange Debt Obligations, the Exchange Note Obligations, the
Synthetic Lease Obligations, the PCS Facility Obligations, the RCF Facility
Obligations and the Xxxxx Facility Obligations.
"Second Priority Debt Parties" means the Existing Facility
Parties, the Exchange Note Parties, the Synthetic Lease Parties and the
Second Priority Collateral Trustee.
"Second Priority Facilities" means the Exchange Debt Facility, the
Exchange Note Indenture, the Synthetic Lease Facilities, the PCS Facility,
the RCF Facility and the Xxxxx Facility.
"Second Priority Indemnity, Subrogation and Contribution
Agreement" means the Second Priority Indemnity, Subrogation and
Contribution Agreement, dated as of June 12, 2000, among Rite Aid, the
Subsidiary Guarantors and the Second Priority Collateral Trustee.
"Second Priority Instructing Group" means Second Priority
Representatives with respect to Second Priority Facilities under which at
least a majority of the then aggregate amount of Second Priority Debt
Obligations are outstanding.
"Second Priority Lien" means the Liens on the Second Priority
Collateral in favor of the Second Priority Debt Parties under the Second
Priority Collateral Documents.
"Second Priority Mortgages" means the mortgages, deeds of trust,
leasehold mortgages, assignments of leases and rents, modifications and
other security documents which create a Lien in favor of the Second
Priority Collateral Trustee for the benefit of the Second Priority Debt
Parties, delivered pursuant to the Second Priority Debt Documents, each
substantially in the form of Exhibit [ ] to the RCF Facility, with such
changes as are approved by the Senior Collateral Agent and the Second
Priority Representatives.
"Second Priority Representative" means, in respect of each Second
Priority Facility, the trustee under the Exchange Note Indenture and the
administrative agent, security agent or agent under each other Second
Priority Facility and each of their successors in such capacities.
"Second Priority Subsidiary Guarantee Agreement" means the Second
Priority Subsidiary Guarantee Agreement, dated as of June 12, 2000, made by
the Subsidiary Guarantors (including any additional Subsidiary Guarantor
becoming party thereto after the Closing Date) in favor of the Second
Priority Collateral Trustee for the benefit of the Second Priority Debt
Parties.
"Second Priority Subsidiary Security Agreement" means the Second
Priority Subsidiary Security Agreement, dated as of June 12, 2000, made by
the Subsidiary Guarantors (including any additional Subsidiary Guarantor
becoming party thereto after the Closing Date) in favor of the Second
Priority Collateral Trustee for the benefit of the Second Priority Debt
Parties.
"Secured Obligations" means the Senior Obligations and the Second
Priority Debt Obligations.
"Senior Bank" means a "Bank" as defined in the Senior Credit
Facility.
"Senior Bank Obligations" means (i) the principal of each loan
made under the Senior Credit Facility, (ii) all reimbursement and cash
collateralization obligations in respect of letters of credit issued under
the Senior Credit Facility, (iii) all monetary obligations of the Borrower
or any Subsidiary under each Senior Interest Rate Agreement entered into
with any counterparty that was a Senior Bank (or an Affiliate thereof) at
the time such Senior Interest Rate Agreement was entered into, (iv) all
interest on the loans, letter of credit reimbursement, fees and other
obligations under the Senior Credit Facility or such Senior Interest Rate
Agreements (including, without limitation any interest which accrues after
the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower or any Subsidiary
Guarantor, whether or not allowed or allowable as a claim in such
proceeding), (v) all other amounts payable by the Borrower under the Senior
Loan Documents and (vi) all increases, renewals, extensions and
refinancings of the foregoing; provided, however, that the principal amount
of the indebtedness under the Senior Credit Facility included in the Senior
Bank Obligations shall not exceed the maximum amount from time to time
permitted to be outstanding by the Collateral Trust and Intercreditor
Agreement.
"Senior Bank Parties" means each party to the Senior Credit
Facility other than any Obligor, each counterparty to a Senior Interest
Rate Agreement, the beneficiaries of each indemnification obligation
undertaken by Rite Aid or any other Obligor under any Senior Loan Document,
and the successors and permitted assigns of each of the foregoing.
"Senior Collateral" means all the "Senior Collateral" as defined
in any Senior Collateral Document and shall also include the Mortgaged
Properties and the proceeds thereof, but shall not in any event include the
PCS/Drugstore Pledged Collateral and the Exchange Debt First Priority
Collateral.
"Senior Collateral Agent" means Citicorp USA, Inc., in its
capacity as Senior Collateral Agent under the Senior Collateral Documents,
and its successors.
"Senior Collateral Disposition" means (i) any sale, transfer or
other disposition of Senior Collateral (including any property or assets
that would constitute Senior Collateral but for the release of the Senior
Lien with respect thereto in connection with such sale, transfer or other
disposition), other than a PCS Disposition, or a Permitted Disposition or
(ii) a Casualty/Condemnation with respect to Senior Collateral (other than
PCS Excluded Assets).
"Senior Collateral Documents" means the Senior Mortgages, the
Senior Subsidiary Security Agreement, the Senior Subsidiary Guarantee
Agreement, the Senior Indemnity, Subrogation and Contribution Agreement,
the Collateral Trust and Intercreditor Agreement and each of the mortgages,
security agreements and other instruments and documents executed and
delivered by any Subsidiary Guarantor pursuant to any of the foregoing or
pursuant to the Senior Credit Facility or for purposes of providing
collateral security or credit support for any Senior Obligation or
obligation under the Senior Subsidiary Guarantee Agreement.
"Senior Credit Facility" means the Senior Credit Agreement, dated
as of June 12, 2000, among Rite Aid, as Borrower, the Senior Banks, the
Swingline Banks, the Issuing Banks, the Senior Administrative Agent, the
Senior Collateral Agent and the Syndication Agents.
"Senior Indemnity, Subrogation and Contribution Agreement" means
the Senior Indemnity, Subrogation and Contribution Agreement, dated as of
June 12, 2000 among Rite Aid, the Subsidiary Guarantors (including
Subsidiary Guarantors becoming party thereto after the Closing Date) and
the Senior Collateral Agent.
"Senior Interest Rate Agreement" means any Interest Rate Agreement
entered into with Rite Aid or any Subsidiary, if the applicable
counterparty was a Senior Bank or an Affiliate thereof at the time the
Interest Rate Agreement was entered into.
"Senior Lien" means the Liens on the Senior Collateral in favor of
the Senior Secured Parties under the Senior Collateral Documents.
"Senior Loan Documents" means the Senior Credit Facility, the
Notes referred to in the Senior Credit Facility, each Senior Interest Rate
Agreement, and the Senior Collateral Documents.
"Senior Mortgages" means the mortgages, deeds of trust, leasehold
mortgages, assignments of leases and rents, modifications and other
security documents delivered pursuant to the Senior Credit Facility, each
substantially in the form of Exhibit J to the Senior Credit Facility, with
such changes as are approved by the Senior Collateral Agent.
"Senior Obligation Payment Date" means the date on which (i) the
Senior Obligations have been paid in full, (ii) all lending commitments
under the Senior Credit Facility have been terminated and (iii) there are
no outstanding Independent Standby Letters of Credit or letters of credit
issued under the Senior Credit Facility other than such as have been fully
cash collateralized under documents and arrangements satisfactory to the
issuer of such letters of credit.
"Senior Obligations" means (a) the Senior Bank Obligations and (b)
the Independent Standby L/C Obligations.
"Senior Secured Parties" means (a) the Senior Bank Parties and (b)
the Independent Standby L/C Parties.
"Senior Subsidiary Guarantee Agreement" means the Senior
Subsidiary Guarantee Agreement, made by the Subsidiary Guarantors
(including Subsidiary Guarantors that become parties thereto after the
Closing Date) in favor of the Senior Collateral Agent for the benefit of
the Senior Secured Parties.
"Senior Subsidiary Security Agreement" means the Senior Subsidiary
Security Agreement, made by the Subsidiary Guarantors (including Subsidiary
Guarantors that become parties thereto after the Closing Date) in favor of
the Senior Collateral Agent for the benefit of the Senior Secured Parties.
"SPV" means Fiona One Corp., a Delaware corporation and a
wholly-owned Subsidiary of Rite Aid which is organized for the sole purpose
of acquiring Exchange Notes on the Closing Date from Rite Aid and selling
such Exchange Notes to SSB and JPM in accordance with the Forward
Commitment Agreement.
"SSB" means Xxxxxxx Xxxxx Xxxxxx Inc.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by the
Borrower.
"Subsidiary Guarantor" means each Subsidiary that is party to the
Senior Subsidiary Guarantee Agreement, the Second Priority Subsidiary
Guarantee Agreement or any other Senior Collateral Document or Second
Priority Collateral Document.
"Synthetic Lease Documents" means the documents governing the
Synthetic Leases.
"Synthetic Lease Facilities" means certain synthetic leases
entered into by the Subsidiary Guarantors and guaranteed by Rite Aid having
an aggregate discounted present value of approximately $214,000,000, as
amended and restated as of the Closing Date.
"Synthetic Lease Obligations" means all rent and supplemental
rent, all fees and all other expenses or amounts payable by any Obligors to
any Synthetic Lease Parties under any Synthetic Lease Document; provided,
however, that the aggregate amount of the Synthetic Lease Obligations shall
not exceed the maximum amount from time to time permitted to be outstanding
by the Collateral Trust and Intercreditor Agreement.
"Synthetic Lease Parties" means all parties to the Synthetic Lease
Documents other than the Obligors.
"Temporary Cash Investment" means any investment by any Person in
(i) direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof, (ii)
commercial paper rated at least A-1 by S&P and P-1 by Xxxxx'x, (iii) time
deposits with, including certificates of deposit issued by, any office
located in the United States of any bank or trust company which is
organized or licensed under the laws of the United States or any state
thereof and has capital, surplus and undivided profits aggregating at least
$500,000,000, (iv) repurchase agreements with respect to securities
described in clause (i) above entered into with an office of a bank or
trust company meeting the criteria specified in clause (iii) above,
provided in each case that such investment matures within one year from the
date of acquisition thereof by such Person or (v) money market mutual funds
at least 90% the assets of which are held in investments referred to in
clauses (i) through (iv) above (except that the maturities of certain
investments held by any such money market funds may exceed one year so long
as the dollar-weighted average life of the investments of such money market
mutual fund is less than one year).
"Uniform Commercial Code" or "UCC" means, unless otherwise
specified, the Uniform Commercial Code as from time to time in effect in
the State of New York.
EXHIBIT A-1
[FORM OF] TERM NOTE
$ New York, New York
June 14, 2000
FOR VALUE RECEIVED, the undersigned, RITE AID CORPORATION, a
Delaware corporation (the "Borrower"), hereby promises to pay to the order
of [Name of Bank] (the "Bank") or its registered assigns, at the office of
the Senior Administrative Agent, at [Address] on the Maturity Date, such
term and each other term used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Senior Credit Agreement
dated as of June 12, 2000 (as the same may be amended, supplemented or
otherwise modified from time to time, the "Senior Credit Agreement"), among
the Borrower, the Banks, the Swingline Banks, the Issuing Banks, the Senior
Administrative Agent, the Senior Collateral Agent and the Syndication
Agents, the lesser of the principal sum of [TERM LOAN COMMITMENT] DOLLARS
($ ) and the aggregate unpaid principal amount of all Term Loans made to
the Borrower by the Bank pursuant to the Senior Credit Agreement, in lawful
money of the United States of America in immediately available funds, and
to pay interest from the date hereof on the principal amount hereof from
time to time outstanding, in like funds, at said office, at the rate or
rates per annum and payable on the dates provided in the Senior Credit
Agreement.
The Borrower promises to pay interest, on demand, on any overdue
principal and, to the extent permitted by law, overdue interest from their
due dates at the rate or rates provided in the Senior Credit Agreement.
The Borrower hereby waives diligence, presentment, demand, protest
and notice of any kind whatsoever. The nonexercise by the holder of any of
its rights hereunder in any particular instance shall not constitute a
waiver thereof in that or any subsequent instance.
All borrowings evidenced by this Term Note and all payments and
prepayments of the principal hereof and interest hereon and the respective
dates thereof shall be endorsed by the holder hereof on the schedule
attached hereto and made a part hereof or on a continuation thereof which
shall be attached hereto and made a part hereof, or otherwise recorded by
such holder in its internal records; provided, however, that the failure of
the holder hereof to make such a notation or any error in such notation
shall not affect the obligations of the Borrower under this Term Note.
This Term Note is one of the Term Notes referred to in the Senior
Credit Agreement, which, among other things, contains provisions for the
acceleration of the maturity hereof upon the happening of certain events,
for optional and mandatory prepayment of the principal hereof before the
maturity hereof and for the amendment or waiver of certain provisions of
the Senior Credit Agreement, all upon the terms and conditions therein
specified.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAWS. The Borrower hereby submits to the nonexclusive jurisdiction of
the United States District Court for the Southern District of New York and
of any New York State court sitting in New York City for purposes of all
legal proceedings arising out of or relating to this Note. The Borrower
irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
RITE AID CORPORATION,
By_______________________
Name:
Title:
LOANS AND PAYMENTS
Unpaid Name of
Payments of Principal Person
Amount and Principal / Balance Making
Date Type of Loan Maturity Date Interest of Note Notation
--------------- --------------------- --------------------- --------------------- -------------- --------------
EXHIBIT A-2
[FORM OF] REVOLVING CREDIT NOTE
$ NEW YORK, NEW YORK
JUNE 14, 2000
FOR VALUE RECEIVED, the undersigned, RITE AID CORPORATION, a
Delaware corporation (the "Borrower"), hereby promises to pay to the order
of [Name of Bank] (the "Bank") or its registered assigns, at the office of
the Senior Administrative Agent at [Address], on the Maturity Date, such
term and each other term used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Senior Credit Agreement
dated as of June 12, 2000 (as the same may be amended, supplemented or
otherwise modified from time to time, the "Senior Credit Agreement"), among
the Borrower, the Banks, the Swingline Banks, the Issuing Banks, the Senior
Administrative Agent, the Senior Collateral Agent and the Syndication
Agents, the lesser of the principal sum of [REVOLVING CREDIT COMMITMENT]
DOLLARS ($ ) and the aggregate unpaid principal amount of all Revolving
Loans made by the bank to the Borrower pursuant to the Senior Credit
Agreement, in lawful money of the United States of America in immediately
available funds, and to pay interest from the date hereof on the principal
amount thereof from time to time outstanding, in like funds, at said
office, at the rate or rates per annum and payable on such dates as
provided in to the Senior Credit Agreement.
The Borrower promises to pay interest, on demand, on any overdue
principal and, to the extent permitted by law, overdue interest from their
due dates at a rate or rates provided in the Senior Credit aAreement.
The Borrower hereby waives diligence, presentment, demand, protest
and notice of any kind whatsoever. The nonexercise by the holder of any of
its rights hereunder in any particular instance shall not constitute a
waiver thereof in that or any subsequent instance.
All borrowings evidenced by this Revolving Credit Note and all
payments and prepayments of the principal hereof and interest hereon and
the respective dates thereof shall be endorsed by the holder hereof on the
schedule attached hereto and made a part hereof or on a continuation
thereof which shall be attached hereto and made a part hereof, or otherwise
recorded by such holder in its internal records; provided, however, that
the failure of the holder hereof to make such a notation or any error in
such notation shall not affect the obligations of the Borrower to make
payments of principal and interest in accordance with the terms of this
revolving credit note and the Senior Credit Agreement.
This Revolving Credit Note is one of the Revolving Credit Notes
referred to in the Senior Credit Agreement which, among other things,
contains provisions for the acceleration of the maturity hereof upon the
happening of certain events, for optional and mandatory prepayment of
the principal hereof before the maturity hereof and for the amendment or
waiver of certain provisions of the senior credit agreement, all upon the
terms and conditions therein specified.
THIS REVOLVING CREDIT NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS. The Borrower hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of
any New York State Court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Note. The Borrower
irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
RITE AID CORPORATION,
BY_______________________
Name:
Title:
LOANS AND PAYMENTS
Unpaid Name of
Payments of Principal Person
Amount and Principal / Balance Making
Date Type of Loan Maturity Date Interest of Note Notation
--------------- --------------------- --------------------- --------------------- -------------- --------------
EXHIBIT A-3
[FORM OF] SWINGLINE NOTE
$ New York, New York
June 14, 2000
FOR VALUE RECEIVED, the undersigned, RITE AID CORPORATION, a
Delaware corporation (the "Borrower"), hereby promises to pay to the order
of [Name of Bank] (the "Bank") or its registered assigns, at the office of
the Senior Administrative Agent at [Address], on the Maturity Date, such
term and each other term used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Senior Credit Agreement
dated as of June 12, 2000 (as the same may be amended, modified, extended
or restated from time to time, the "Senior Credit Agreement"), among the
Borrower, the Swingline Banks, the Issuing Banks, the Senior Administrative
Agent, the Senior Collateral Agent and the Syndication Agents, the
aggregate unpaid principal amount of all Swingline Loans made by the Bank
to the Borrower pursuant to the Senior Credit Agreement, in lawful money of
the United States of America in immediately available funds, and to pay
interest from the date hereof on the principal amount thereof from time to
time outstanding, in like funds, at said office, at the rate or rates per
annum and payable on such dates as provided in the Senior Credit Agreement.
The Borrower promises to pay interest, on demand, on any overdue
principal and, to the extent permitted by law, overdue interest from their
due dates at a rate or rates as provided in the Senior Credit Agreement.
The Borrower hereby waives diligence, presentment, demand, protest
and notice of any kind whatsoever. The nonexercise by the holder of any of
its rights hereunder in any particular instance shall not constitute a
waiver thereof in that or any subsequent instance.
All Borrowings evidenced by this Swingline Note and all payments
and prepayments of the principal hereof and interest hereon and the
respective dates thereof shall be endorsed by the holder hereof on the
schedule attached hereto and made a part hereof or on a continuation
thereof which shall be attached hereto and made a part hereof, or otherwise
recorded by such holder in its internal records; provided, however, that
the failure of the holder hereof to make such a notation or any error in
such notation shall not affect the obligation of the Borrower to make
payments of principal and interest in accordance with the terms of this
Swingline Note and the Senior Credit Agreement.
This Swingline Note is one of the Swingline Notes referred to in
the Senior Credit Agreement which, among other things, contains provisions
for the acceleration of the maturity hereof upon the happening of certain
events, for optional and mandatory prepayment of the principal hereof
before the maturity hereof and for the amendment or waiver of certain
provisions of the Senior Credit Agreement, all upon the terms and
conditions therein specified.
THIS SWINGLINE NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. The
Borrower hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New
York State Vourt sitting in New York City for purposes of all legal
proceedings arising out of or relating to this note. The Borrower
irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
RITE AID CORPORATION,
By_______________________
Name:
Title:
LOANS AND PAYMENTS
Unpaid Name of
Payments of Principal Person
Adjusted Base Principal / Balance Making
Date Amount of Loan Rate Interest of Note Notation
--------------- --------------------- --------------------- --------------------- -------------- --------------
EXHIBIT B
[FORM OF] BORROWING REQUEST
Citicorp Usa, Inc., as Senior Administrative Agent for
the Banks Referred to Below,
[Address]
Attention :
[Date]
Ladies and Gentlemen:
The undersigned, Rite Aid Corporation, a Delaware Corporation (the
"Borrower"), refers to the Senior Credit Agreement dated as of June 12,
2000 (as the same may be amended, supplemented or otherwise modified from
time to time, the "Senior Credit Agreement"), among the Borrower, the
Banks, the Swingline Banks, the Issuing Banks, the Senior Administrative
Agent, the Senior Collateral Agent and the Syndication Agents. The Borrower
hereby gives you notice pursuant to Section 2.03 Of the Senior Credit
Agreement that it requests a borrowing under the Senior Credit Agreement,
and in that connection sets forth below the terms on which such borrowing
is requested to be made:
Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Senior Credit
Agreement.
(A) Date of Borrowing
(which is a Business Day) ______________________
(B) Principal Amount of
Borrowing* ______________________
(C) Type of Loan (Term, Revolving or
or Swingline) ______________________
(D) Interest rate basis** ______________________
--------
* Not less than $5,000,000 and in a multiple of $1,000,000.
** Include for Revolving Loans and Term Loans only.
(E) Interest Period and the last
day thereof* ______________________
(F) Funds are requested to be disbursed to the Borrower's account with
[ ] (Account No. ).
Upon acceptance of any or all of the Loans offered by the Banks in
response to this request, the Borrower shall be deemed to have represented
and warranted that the conditions to lending specified in Sections 3.02 (b)
and (c) of the Senior Credit Agreement have been satisfied.
RITE AID CORPORATION,
By_______________________
Name:
Title:
--------
* Include for Revolving Loans and Term Loans only.
EXHIBIT C
[[FORM OF]]
CONTINUATION/CONVERSION REQUEST
Citicorp USA, Inc., as Senior Administrative Agent
[Address]
Attention: [Name]
[Title]
RITE AID CORPORATION
Ladies and Gentlemen:
This Continuation/Conversion Request is delivered to you pursuant
to Section 2.09 of the Senior Credit Agreement dated as of June 12, 2000
(as amended, supplemented or otherwise modified from time to time, the
"Senior Credit Agreement"), among the Borrower, the Banks, the Swingline
Banks, the Issuing Banks, the Senior Administrative Agent, the Senior
Collateral Agent and the Syndication Agents. Capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned to such
terms in the Senior Credit Agreement.
The Borrower hereby requests that on [ ], 20[ ]:
[(PAGE2I) $[ ] of the presently outstanding principal
amount of [Base Rate Loans][Euro-Dollar Loans]
be [converted into][continued as] [Base Rate
Loans][Euro-Dollar Loans].]*
[(ii) $[ ] of the presently outstanding principal amount of
Euro-Dollar Loans having an Interest Period of [ ] months
[seven days] be converted to Euro-Dollar Loans having an
Interest Period of [ ] months. [seven days]]**
The Borrower hereby:
--------
* Include paragraph (i) if a conversion or continuation of Loans is
being requested.
** Include paragraph (ii) if a conversion of the Interest Period with
respect to Eurodollar Loans is being requested.
(a) certifies and warrants that no Default or Event of Default
has occurred and is continuing; and
(b) agrees that if before the time of such continuation or
conversion any matter certified to herein will not be
true and correct at such time as if then made, it will
immediately so notify the Senior Administrative Agent.
Each matter certified to herein shall be deemed to be certified at
the date of such continuation or conversion as if then made unless the
Senior Administrative Agent shall have received written notice to the
contrary from the Borrower before such continuation or conversion.
The Borrower has caused this Continuation/Conversion Request to be
executed and delivered, and the certifications and warranties contained
herein to be made, this [ ] day of [ ], 20[ ].
RITE AID CORPORATION,
By_______________________
Name:
Title:
EXHIBIT D
[[FORM OF]]
ISSUANCE REQUEST
Citicorp USA, Inc., as Senior Administrative Agent
[ ], as Issuing Bank
[Address]
Attention: [ ]
RITE AID CORPORATION
Ladies and Gentlemen:
This Letter of Credit Request is delivered to you pursuant to
Section 2.17(b) of the Senior Credit Agreement dated as of June 12, 2000
(as amended, supplemented or otherwise modified from time to time, the
"Senior Credit Agreement"), the Borrower, the Banks, the Swingline Banks,
the Issuing Banks, the Senior Administrative Agent, the Senior Collateral
Agent and the Syndication Agents. Capitalized terms used herein and not
otherwise defined herein shall have the meanings provided in the Senior
Credit Agreement.
The Borrower hereby requests that [the Issuing Bank issue a Letter
of Credit for the account of the Borrower on __________, 20 in an aggregate
stated amount of $__________. The beneficiary of the Letter of Credit will
be and the Letter of Credit will have a stated expiration date of
__________] [Letter of Credit No. __________ in the amount of $___________
be hereby [extended][amended] as follows: __________ ].
The Borrower hereby certifies and warrants that:
(pAGE2I) the representations and warranties in the Senior
Credit Agreement will be true and correct in all
material respects on the date of issuance of the
Letter of Credit requested hereby.
(ii) no Default or Event of Default has occurred and is
continuing nor, after giving effect to the [issuance of
the Letter of Credit] [amendment][extension] of Letter of
Credit No._____] requested hereby, would such a Default or
Event of Default occur.
(iii) after giving effect to the [issuance of the Letter of
Credit] [amendment][extension] of Letter of Credit
No._____] requested hereby, the L/C Exposure shall not
exceed $[__,000,000].
(iv) after giving effect to the [issuance of the Letter of
Credit] [[amendment][extension] of Letter of Credit No.
_____] requested hereby, the Aggregate Revolving Credit
Exposure shall not exceed the Total Revolving Credit
Commitment.
The Borrower has caused this Letter of Credit request to be
executed and delivered, and the certifications and warranties contained
herein to be made, this [ ] day of [ ], 20[ ].
RITE AID CORPORATION,
By_______________________
Name:
Title:
EXHIBIT E
[FORM OF]
BORROWING BASE CERTIFICATE
Citicorp USA, Inc. as Senior Administrative Agent
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention:
Ladies and Gentlemen:
Pursuant to Section 5.01(g) of the Senior Credit Agreement dated
as of June 12, 2000 (as amended, supplemented or otherwise modified from
time to time, the "Senior Credit Agreement") among the Borrower, the
Swingline Banks, the Issuing Banks, the Senior Administrative Agent, the
Senior Collateral Agent and the Syndication Agents, the undersigned officer
of the Borrower named hereby certifies the truth, accuracy and completeness
of the information attached hereto as Annex 1 as of the close of business
on [ ]. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Senior Credit
Agreement.
RITE AID CORPORATION
By_____________________
Name:
Title:
Annex 1
Total
-----
Accounts Receivable Advance Rate x the
book value of the Eligible Accounts $
Receivable
Pharmaceutical Inventory Advance Rate x
Eligible Inventory Value of Eligible
Inventory consisting of products that can
be dispensed only on order of a licensed
professional
Other Inventory Advance Rate x Eligible
Inventory Value of all other Eligible
Inventory
Reserves
TOTAL AVAILABILITY
Outstanding Term Loans
Outstanding Revolving Credit Loans
Letter of Credit Exposure
Outstanding Swingline Loans
TOTAL
EXCESS AVAILABILITY
EXHIBIT F
[[FORM OF]]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Senior Credit Agreement dated as of June
12, 2000 (as amended, supplemented or otherwise modified from time to time,
the "Senior Credit Agreement"), among the Borrower, the Banks, the
Swingline Banks, the Issuing Banks, the Senior Administrative Agent, the
Senior Collateral Agent and the Syndication Agents. Capitalized terms used
herein and not defined herein shall have the meanings assigned to such
terms in the Senior Credit Agreement.
1. [ ] (the "Assignor") hereby sells and assigns, without
recourse, to the Assignee, and the Assignee hereby purchases and assumes,
without recourse, from the Assignor, effective as set forth below, the
interests set forth below (the "Assigned Interest") in the Assignor's
rights and obligations under the Senior Credit Agreement and the other
Senior Loan Documents, including, without limitation, the amounts and
percentages set forth below of (pAGE2I) the Commitments of the Assignor on
the Effective Date, (ii) the Loans owing to the Assignor which are
outstanding on the Effective Date and (iii) participations in Letters of
Credit and Swingline Loans which are outstanding on the Effective Date.
Each of the Assignor and the Assignee hereby makes and agrees to be bound
by all the representations, warranties and agreements set forth in Section
9.06(c) of the Senior Credit Agreement, a copy of which has been received
by each such party. From and after the Effective Date (pAGE2I) the Assignee
shall be a party to and be bound by the provisions of the Senior Credit
Agreement and, to the extent of the interests assigned by this Assignment
and Acceptance, have the rights and obligations of a Bank thereunder and
under the Senior Loan Documents and (ii) the Assignor shall, to the extent
of the interests assigned by this Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Senior Credit
Agreement. The Assignor represents that it is the sole legal owner of the
Assigned Interest free and clear of all liens and encumbrances and has not
conveyed any interest in the Assigned Interest to any other Person.
2. This Assignment and Acceptance is being delivered to the Senior
Administrative Agent together with (pAGE2I) the Notes evidencing the Loans
included in the Assigned Interest, (ii) if the Assignee is organized under
the laws of a jurisdiction outside the United States, the forms specified
in Section 8.04(d) of the Senior Credit Agreement, duly completed and
executed by such Assignee, (iii) if the Assignee is not already a Bank
under the Senior Credit Agreement, an Administrative Questionnaire in the
form of Exhibit P to the Senior Credit Agreement and (iv) a processing and
recordation fee of $3,500.
3. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):
Percentage Assigned of
Applicable
Facility/Commitment (set forth,
to at least 8 decimals, as a
percentage of the Facility and
Principal Amount the aggregate Commitments of
Facility/Commitment Assigned all Banks thereunder)
------------------- --------------------- -------------------------------
Revolving Credit $ %
Term Loans $ %
Swingline Loans $ %
The terms set forth above are
hereby agreed to:
Accepted*
_________________, as Assignor CITICORP USA, INC.,
as Senior Administrative Agent
by:___________________________ by:_________________________
Name: Name:
Title: Title:
--------
* To be completed to the extent consents are required under Section
9.06(b) of the Senior Credit Agreement.
_________________, as Assignee RITE AID CORPORATION,
by:___________________________ by:_________________________
Name: Name:
Title: Title:
[Issuing Bank]
by:_________________________
Name:
Title:
[Swingline Bank]
by:_________________________
Name:
Title:
EXHIBIT G
[FORM OF] SENIOR SUBSIDIARY GUARANTEE
AGREEMENT dated as of June 12, 2000, among each
of the subsidiaries listed on Schedule I hereto
(each such subsidiary individually, a
"Subsidiary Guarantor" and collectively, the
"Subsidiary Guarantors") of RITE AID
CORPORATION, a Delaware corporation (the
"Borrower"), and CITICORP USA, INC., a Delaware
corporation, as collateral agent (the "Senior
Collateral Agent") for the Senior Secured
Parties.
See Exhibit 10.4 of Form 8-K.
EXHIBIT H
[FORM OF] SENIOR SUBSIDIARY SECURITY AGREEMENT
See Exhibit 10.3 of Form 8-K.
EXHIBIT I
[FORM OF] SENIOR INDEMNITY, SUBROGATION and
CONTRIBUTION AGREEMENT dated as of June 12, 2000,
among RITE AID CORPORATION, a Delaware corporation
(the "Borrower"), each Subsidiary of the Borrower
listed on Schedule I hereto (the "Subsidiary
Guarantors") and CITICORP USA, INC., a Delaware
corporation ("Citicorp USA"), as collateral agent (in
such capacity, the "Senior Collateral Agent") for the
Senior Secured Parties.
See Exhibit 10.5 of Form 8-K.
EXHIBIT J
===========================================================================
Citicorp/Rite Aid
[FORM OF]
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FINANCING STATEMENT
From
[ ]
to
CITICORP USA, INC.
----------------------------------------
Dated:
Premises:
----------------------------------------
===========================================================================
TABLE OF CONTENTS
Page
ARTICLE I
Representations, Warranties and Covenants
of Mortgagor
SECTION 1.01. Title.......................................................
SECTION 1.02. Senior Credit Agreement; Senior
Subsidiary Guarantee Agreement;
Certain Amounts...........................................
SECTION 1.03. Payment of Taxes, Liens and
Charges...................................................
SECTION 1.04. Payment of Closing Costs ...................................
SECTION 1.05. Plans; Alterations and Waste; Repairs
SECTION 1.06. Insurance ..................................................
SECTION 1.07. Casualty; Condemnation/Eminent Domain.......................
SECTION 1.08. Assignment of Leases and Rents .............................
SECTION 1.09. Restrictions on Transfers and
Encumbrances..............................................
SECTION 1.10. Security Agreement .........................................
SECTION 1.11. Filing and Recording .......................................
SECTION 1.12. Further Assurances .........................................
SECTION 1.13. Additions to Mortgaged Property ............................
SECTION 1.14. No Claims Against Mortgagee ................................
SECTION 1.15. Fixture Filing .............................................
SECTION 1.16. Notice Regarding Special Flood Hazards......................
ARTICLE II
Defaults and Remedies
SECTION 2.01. Events of Default...........................................
SECTION 2.02. Demand for Payment..........................................
SECTION 2.03. Rights To Take Possession, Operate and
Apply Revenues...........................................
SECTION 2.04. Right To Cure Mortgagor's Failure to
Perform..................................................
SECTION 2.05. Right to a Receiver.........................................
SECTION 2.06. Foreclosure and Sale........................................
SECTION 2.07. Other Remedies..............................................
SECTION 2.08. Application of Sale Proceeds and
Rents....................................................
SECTION 2.09. Mortgagor as Tenant Holding Over............................
SECTION 2.10. Waiver of Appraisement, Valuation, Stay,
Extension and Redemption Laws............................
SECTION 2.11. Discontinuance of Proceedings...............................
SECTION 2.12. Suits To Protect the Mortgaged
Property.................................................
SECTION 2.13. Filing Proofs of Claim......................................
SECTION 2.14. Possession by Mortgagee.....................................
SECTION 2.15. Waiver......................................................
SECTION 2.16. Remedies Cumulative.........................................
ARTICLE III
Miscellaneous
SECTION 3.01. Partial Invalidity..........................................
SECTION 3.02. Notices.....................................................
SECTION 3.03. Successors and Assigns......................................
SECTION 3.04. Satisfaction and Cancelation................................
SECTION 3.05. Definitions.................................................
SECTION 3.06. Multisite Real Estate Transaction...........................
ARTICLE IV
Particular Provisions
SECTION 4.01. Applicable Law; Certain Particular
Provisions......................................
Exhibit A Description of Land
Exhibit B Premises Located in a Special Flood Hazard Area
Appendix A Local Law Provisions
Appendix B Definitions Annex
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FINANCING STATEMENT dated as of June
[ ], 2000 (this "Mortgage"), by [RITE AID SUBSIDIARY], a [ ],
having an office at 00 Xxxxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxxxx 00000
(the "Mortgagor"), to CITICORP USA, INC., a Delaware corporation,
having an office at 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000( the
"Mortgagee") as Senior Collateral Agent for the benefit of the
Senior Secured Parties.
WITNESSETH THAT:
Capitalized terms used but not defined in this Mortgage have the
meanings given to them in the Definitions Annex annexed hereto as Appendix
B.
Reference is made to the Senior Credit Agreement dated as of even
date herewith (as amended, replaced or refinanced from time to time, the
"Senior Credit Agreement"), among Rite Aid Corporation, a Delaware
corporation (the "Borrower"), the banks from time to time party thereto,
Citicorp USA, Inc., as Senior Administrative Agent and Senior Collateral
Agent and Xxxxxx Financial, Inc. and Fleet Retail Finance, Inc. as
Syndication Agents.
Pursuant to the terms of, and subject to the conditions specified
in, the Senior Credit Agreement, (i) the Senior Banks have agreed to make
certain term and revolving loans to the Borrower, (ii) one or more Senior
Banks (the "Swingline Banks") have agreed to make swingline loans to the
Borrower on an uncommitted basis (the "Swingline Loans" - together with the
loans referenced in clause (i), above, the "Senior Loans") and (iii) one or
more Senior Banks (the "Issuing Banks") have agreed to issue letters of
credit (the "Letters of Credit") for the account of the Borrower.
Reference is made to certain letter of credit applications,
reimbursement agreements and other documents (the "Independent Standby LC
Documents") pursuant to which Mellon Bank, N.A. and Citibank, N.A. (the
"Independent Standby L/C Parties") have issued and may in the future issue
certain standby letters of credit (the "Independent Standby Letters of
Credit") for the account of the Borrower.
Mortgagor is a wholly owned subsidiary of the Borrower and will
derive substantial benefit from the making of the Senior Loans by the
Senior Banks and the issuance of the Letters of Credit by the Issuing
Banks. In order to induce the Senior Banks to make the Senior Loans and the
Issuing Banks to issue Letters of Credit, the Mortgagor has agreed to
guarantee the due and punctual payment of the Senior Bank Obligations and
the Independent Standby L/C Obligations (together, the "Senior
Obligations") pursuant to the terms of the senior subsidiary guarantee
agreement dated as of even date herewith (the "Senior Subsidiary Guarantee
Agreement") made by Mortgagor and certain other Subsidiaries of Borrower
(each, a "Subsidiary Guarantor") in favor of Mortgagee in its capacity as
Senior Collateral Agent for the benefit of the Senior Bank Parties and the
Independent Standby L/C Parties (together, the "Senior Secured Parties").
The sum of the principal amount of the Senior Loans and the
Letters of Credit from time to time outstanding and secured hereby shall
not exceed $1,000,000,000. The aggregate amount of Independent Standby
Letters of Credit from time to time outstanding and secured hereby shall
not exceed $34,000,000.
The obligations of the Senior Banks to make Senior Loans and of
the Issuing Banks to issue Letters of Credit are conditioned upon, among
other things, the execution and delivery by the Mortgagor of this Mortgage
in the form hereof to secure the guarantee of the Senior Obligations
contained in the Senior Subsidiary Guarantee Agreement.
Pursuant to the requirements of the Senior Credit Agreement and
the Senior Subsidiary Guarantee Agreement, the Mortgagor therefore grants
this Mortgage to create a lien on and a security interest in the Mortgaged
Property (as defined herein) to secure the payment and performance of the
Senior Obligations. The Senior Credit Agreement also requires the granting
by other Subsidiary Guarantors of mortgages, deeds of trust and deeds to
secure debt (the "Other Mortgages") that create liens on and security
interests in certain parcels of real property (each, a "Mortgaged
Property") other than the Mortgaged Property to secure the payment and
performance of the Senior Obligations.
Granting Clauses
NOW, THEREFORE, IN CONSIDERATION OF the foregoing and in order to
secure the due and punctual payment and performance of the Senior
Obligations for the benefit of the Senior Secured Parties, Mortgagor hereby
grants, conveys, mortgages, assigns and pledges to the Mortgagee and its
successors and assigns forever, a security interest in, all the following
described property (the "Mortgaged Property") whether now owned or held or
hereafter acquired:
(1) the land more particularly described on Exhibit A
hereto (the "Land"), together with all rights appurtenant thereto
which may, by their terms or as a matter of law, be conveyed or
assigned along with the Land, including the easements over certain
other adjoining land granted by any easement agreements, covenant
or restrictive agreements and all air rights, mineral rights,
water rights, oil and gas rights and development rights, if any,
relating thereto, and also together with all of the other
easements, rights, privileges, interests, hereditaments and
appurtenances thereunto belonging or in any way appertaining and
all of the estate, right, title, interest, claim or demand
whatsoever of Mortgagor therein and in the streets and ways
adjacent thereto, either in law or in equity, in possession or
expectancy, now or hereafter acquired (the "Premises");
(2) all buildings, improvements, structures, paving,
parking areas, walkways and landscaping now or hereafter erected
or located upon the Land, and all fixtures of every kind and type
affixed to the Premises or attached to or forming part of any
structures, buildings or improvements and replacements thereof now
or hereafter erected or located upon the Land (the
"Improvements");
(3) all apparatus, appliances, building materials,
equipment, fittings, machinery and other articles of tangible
personal property of every kind and nature, and replacements
thereof owned by Mortgagor and now or at any time hereafter
affixed to the Improvements or the Premises, including all pumps,
tanks, machinery, equipment, lifts, fire sprinklers and alarm
systems, fire prevention or control systems, cleaning rigs, air
conditioning, heating, boilers, refrigerating, electronic
monitoring, water, loading, unloading, lighting, power,
sanitation, waste removal, communications, partitions, lighting
fixtures, freezers, refrigerators, walk-in coolers, signs (indoor
and outdoor) and all other items of tangible personal property of
any kind affixed to the Improvements or the Premises, it being
understood that the enumeration of any specific articles of
property shall in no way result in or be held to exclude any items
of property not specifically mentioned (the property referred to
in this subparagraph (3), the "Fixtures");
(4) all general intangibles owned by Mortgagor and
relating to design, development, operation, management and use of
the Premises or the Improvements, all certificates of occupancy,
zoning variances, building, use or other permits, approvals,
authorizations and consents obtained from and all materials
prepared for filing or filed with any governmental agency in
connection with the development, use, operation or management of
the Premises and Improvements, all construction, service,
engineering, consulting, leasing, architectural and other similar
contracts concerning the design, construction, management,
operation, occupancy and/or use of the Premises and Improvements,
all architectural drawings, plans, specifications, soil tests,
feasibility studies, appraisals, environmental studies,
engineering reports and similar materials relating to any portion
of or all of the Premises and Improvements, and all payment and
performance bonds or warranties or guarantees relating to the
Premises or the Improvements, all to the extent assignable (the
"Permits, Plans and Warranties");
(5) all now or hereafter existing leases or licenses
(under which Mortgagor is landlord or licensor) and subleases
(under which Mortgagor is sublandlord), concession, management,
mineral or other agreements of a similar kind that permit the use
or occupancy of the Premises or the Improvements for any purpose
in return for any payment, or the extraction or taking of any gas,
oil, water or other minerals from the Premises in return for
payment of any fee, rent or royalty (collectively, "Leases"), and
all agreements or contracts for the sale or other disposition of all
or any part of the Premises or the Improvements, now or hereafter
entered into by Mortgagor, together with all charges, fees, income,
issues, profits, receipts, rents, revenues or royalties payable
thereunder ("Rents");
(6) all real estate tax refunds and all proceeds of the
conversion, voluntary or involuntary, of any of the Mortgaged
Property into cash or liquidated claims ("Proceeds"), including
Proceeds of insurance maintained by the Mortgagor and condemnation
awards, any awards that may become due by reason of the taking by
eminent domain or any transfer in lieu thereof of the whole or any
part of the Premises or Improvements or any rights appurtenant
thereto, and any awards for change of grade of streets, together
with any and all moneys now or hereafter on deposit for the
payment of real estate taxes, assessments or common area charges
levied against the Mortgaged Property, unearned premiums on
policies of fire and other insurance maintained by the Mortgagor
covering any interest in the Mortgaged Property or required by the
Senior Credit Agreement; and
(7) all extensions, improvements, betterments, renewals,
substitutes and replacements of and all additions and
appurtenances to, the Land, the Premises, the Improvements, the
Fixtures, the Permits, Plans and Warranties and the Leases,
hereinafter acquired by or released to the Mortgagor or
constructed, assembled or placed by the Mortgagor on the Land, the
Premises or the Improvements, and all conversions of the security
constituted thereby, immediately upon such acquisition, release,
construction, assembling, placement or conversion, as the case may
be, and in each such case, without any further mortgage, deed of
trust, conveyance, assignment or other act by the Mortgagor, all
of which shall become subject to the lien of this Mortgage as
fully and completely, and with the same effect, as though now
owned by the Mortgagor and specifically described herein.
TO HAVE AND TO HOLD the Mortgaged Property unto the Mortgagee, its
successors and assigns, for the ratable benefit of the Senior Secured
Parties, forever, subject only to the Permitted Encumbrances (as
hereinafter defined) and to satisfaction and cancelation as provided in
Section 3.04.
ARTICLE I
Representations, Warranties and Covenants of Mortgagor
Mortgagor agrees, covenants, represents and/or warrants as
follows:
SECTION 1.01. Title. (a) Mortgagor has good and marketable title to:
(i) an indefeasible fee estate in the Land and Improvements; and
(ii) all of the Fixtures;
subject only to (A) liens, pledges, charges and other encumbrances which
are identified in Section 4.16(a) of the Senior Credit Agreement and (B)
minor defects in title that do not interfere with the ability of Mortgagor
or any other subsidiary of the Borrower to conduct its business as
presently conducted or to utilize the Mortgaged Property for its intended
purpose (collectively, the "Permitted Encumbrances").
(b) There are no Leases affecting the Land or the Improvements
except as disclosed in the Senior Credit Agreement.
(c) Mortgagor is not obligated under, and the Mortgaged Property
is not bound by or subject to, any right, of first refusal, option or other
contractual right to sell, assign or otherwise dispose of any Mortgaged
Property or any interest therein.
(d) The granting of this Mortgage is within Mortgagor's corporate
powers and has been duly authorized by all necessary corporate, and, if
required, stockholder action. This Mortgage has been duly executed and
delivered by Mortgagor and constitutes a legal, valid and binding
obligation of Mortgagor, enforceable 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.
(e) This Mortgage, when duly recorded in the appropriate public
records and when financing statements are duly filed in the appropriate
public records, will create a valid, perfected and enforceable
first-priority lien upon and security interest in all the Mortgaged
Property subject only to the Permitted Encumbrances. As of the date hereof,
there are no defenses or offsets to this Mortgage that will be asserted by
Mortgagor or its affiliates (or any third party defense or offset now known
to Mortgagor or its affiliates) or to any of the Senior Obligations secured
hereby for so long as any portion of the Senior Obligations remains
outstanding. Mortgagor will forever warrant and defend its title to the
Mortgaged Property, the rights of Mortgagee therein under this Mortgage and
the validity and priority of the lien of this Mortgage against the claims
of all persons and parties except those having rights under Permitted
Encumbrances, to the extent of those rights.
SECTION 1.02. Senior Credit Agreement; Senior Subsidiary Guarantee
Agreement; Certain Amounts. (a) This Mortgage is given pursuant to the
Senior Credit Agreement and the Senior Subsidiary Guarantee Agreement. Each
and every term and provision of the Senior Credit Agreement and the Senior
Subsidiary Guarantee Agreement (excluding the governing law provisions
thereof), including the rights, remedies, obligations, covenants,
conditions, agreements, indemnities, representations and warranties of the
parties thereto shall be considered as if a part of this Mortgage.
(b) If Mortgagee exercises any of its rights or remedies under
this Mortgage, or if any actions or proceedings (including any bankruptcy,
insolvency or reorganization proceedings) are commenced in which Mortgagee
is made a party and is obliged to defend or uphold or enforce this Mortgage
or the rights of Mortgagee hereunder or the terms of any Lease, or if a
condemnation proceeding is instituted affecting the Mortgaged Property,
Mortgagor will pay all reasonable sums, including reasonable attorneys'
fees and disbursements, incurred by Mortgagee related to the exercise of
any remedy or right of Mortgagee pursuant hereto and the reasonable
expenses of any such action or proceeding together with all statutory or
other costs, disbursements and allowances, interest thereon from the date
of demand for payment thereof at the lesser of (i) the rate specified in
Section 2.07(b) of the Senior Credit Agreement and (ii) the rate which,
together with all fees, charges and other amounts which are treated as
interest on such amounts under applicable law, constitutes the maximum
lawful rate which may be contracted for, charged, taken, received or
reserved by Mortgagee in accordance with applicable law (the "Default
Interest Rate"), and such sums and the interest thereon shall, to the
extent permissible by law, be a lien on the Mortgaged Property prior to any
right, title to, interest in or claim upon the Mortgaged Property attaching
or accruing subsequent to the recording of this Mortgage and shall be
secured by this Mortgage to the extent permitted by law. Any payment of
amounts due under this Mortgage not made on or before the due date for such
payments shall accrue interest daily without notice from the due date until
paid at the Default Interest Rate, and such interest at the Default
Interest Rate shall be paid by Mortgagor to Mortgagee within 10 days after
Mortgagor's receipt of notice from the Mortgagee that it is due.
SECTION 1.03. Payment of Taxes, Liens and Charges. (a) Except to
the extent they are being contested in the manner permitted by the Senior
Credit Agreement, Mortgagor will pay and discharge from time to time prior
to the time when the same shall become delinquent, and before any interest
or penalty accrues thereon or attaches thereto (i) all taxes and
assessments (general and special), water and sewer rents and/or charges,
public or private impositions, levies, dues, permit, inspection and license
fees, vault charges, service charges, public or private common area charges
or maintenance charges, utility charges of every kind and nature which may
become liens on the Mortgaged Property with priority over the lien of this
Mortgage and (ii) all other material public or private charges, whether
created or evidenced by recorded or unrecorded documents or of a like or
different nature, imposed upon or assessed against the Mortgaged Property
or any part thereof or upon the Rents from the Mortgaged Property or
arising in respect of the occupancy, use, operation or possession thereof.
(b) In the event of the passage of any state, Federal, municipal
or other governmental law, order, rule or regulation subsequent to the date
hereof (i) deducting from the value of real property for the purpose of
taxation any lien or encumbrance thereon or in any manner changing or
modifying the laws now in force governing the taxation of this Mortgage or
debts secured by mortgages or deeds of trust (other than laws governing
income, franchise and similar taxes generally) or the manner of
collecting taxes thereon and (ii) imposing a tax to be paid by Mortgagee,
either directly or indirectly, on this Mortgage or any of the Senior Loan
Documents, or requiring an amount of taxes to be withheld or deducted
therefrom, Mortgagor will promptly notify Mortgagee of such event. In such
event, (A) Mortgagor shall at the request of Mortgagee, execute an
instrument or agreement which obligates Mortgagor to make such additional
payments as may be necessary to place Mortgagor and the Senior Secured
Parties in the same economic position they would have been in with respect
to the Senior Loans and other Senior Obligations if such law, order, rule
or regulation had not been passed and (B) Mortgagor shall make such
additional payments.
(c) At any time that an Event of Default (as hereinafter defined)
shall occur and be continuing, or if required by any law applicable to
Mortgagor or to Mortgagee, Mortgagee shall have the right to direct
Mortgagor to make an initial deposit on account of real estate taxes and
assessments, insurance premiums and common area charges, levied against or
payable in respect of the Mortgaged Property in advance and thereafter on a
quarterly basis, each such deposit to be equal to one-quarter of any such
annual charges estimated in a reasonable manner by Mortgagee in order to
accumulate with Mortgagee sufficient funds to pay such taxes, assessments,
insurance premiums and charges. Any such deposits held by Mortgagee shall
be returned to Mortgagor within 30 days after this Mortgage is released or
satisfied as provided in Section 3.04.
SECTION 1.04. Payment of Closing Costs. Mortgagor shall pay all
reasonable costs incurred by or on behalf of the Mortgagee in connection
with, relating to or arising out of the preparation, execution and
recording of this Mortgage, including title company charges, inspection
costs, recording fees and taxes, attorneys', engineers' and consultants'
fees and disbursements and all other, similar expenses of every kind.
SECTION 1.05. Plans; Alterations and Waste; Repairs. (a) To the
extent the same exist on the date hereof or are obtained in connection with
future permitted alterations, Mortgagor shall maintain a complete set of
final plans, specifications, blueprints and drawings for the Mortgaged
Property either at the Mortgaged Property or in a particular office at the
headquarters of Mortgagor to which Mortgagee shall have access upon
reasonable advance notice and at reasonable times.
(b) Mortgagor shall not:
(i) demolish or remove all or any material portion of the
Improvements;
(ii) commit any waste on the Mortgaged Property or make any
alterations to the Mortgaged Property which would materially diminish the
utility of Mortgaged Property in the conduct of the business of the
Mortgagor or its affiliates as conducted thereon on the date hereof;
(iii) change the use of the Mortgaged Property or take any other
action with respect to the Mortgaged Property if it would materially
increase the risk of fire or any other hazard or violate the terms of any
insurance policy required by Section 1.06 hereof;
without the consent of the Mortgagee in each instance, such consent not to
be unreasonably withheld or delayed.
(c) Mortgagor will keep and maintain the Improvements and the
Fixtures in good repair, working order and condition, reasonable wear and
tear excepted.
SECTION 1.06. Insurance. Mortgagor will purchase and maintain
liability insurance, insurance on the Improvements and Fixtures and other
insurance in accordance with the terms of the Senior Credit Agreement.
SECTION 1.07. Casualty; Condemnation/Eminent Domain. Mortgagor
shall give Mortgagee prompt written notice of any casualty or other damage
to the Mortgaged Property or any proceeding for the taking of the Mortgaged
Property or any portion thereof or interest therein under power of eminent
domain or by condemnation or any similar proceeding. The proceeds received
by or on behalf of the Mortgagor in respect of any such casualty, damage or
taking shall constitute trust funds held by the Mortgagor for the benefit
of the Senior Secured Parties to be applied in accordance with the terms of
the Senior Credit Agreement.
SECTION 1.08. Assignment of Leases and Rents. (a) Mortgagor hereby
irrevocably and absolutely grants, transfers and assigns all of its right
title and interest in all Leases, together with any and all extensions and
renewals thereof for purposes of securing and discharging the performance
by Mortgagor of the Senior Obligations. Mortgagor has not assigned or
executed any assignment of, and will not assign or execute any assignment
of, any other Lease or their respective Rents to anyone other than
Mortgagee.
(b) Without Mortgagee's prior written consent, which shall not be
unreasonably withheld or delayed, Mortgagor will not enter into, modify,
amend, terminate or consent to the cancelation or surrender of any Lease.
(c) Subject to Section 1.08(d), Mortgagor has assigned and
transferred to Mortgagee all of Mortgagor's right, title and interest in
and to the Rents now or hereafter arising from each Lease heretofore or
hereafter made or agreed to by Mortgagor, it being intended that this
assignment establish, subject to Section 1.08(d), an absolute transfer and
assignment of all Rents and all Leases to Mortgagee and not merely to grant
a security interest therein. Subject to Section 1.08(d), Mortgagee may in
Mortgagor's name and stead (with or without first taking possession of any
of the Mortgaged Property personally or by receiver as provided herein)
operate the Mortgaged Property and rent, lease or let all or any portion of
any of the Mortgaged Property to any party or parties at such rental and
upon such terms as Mortgagee shall, in its sole discretion, determine, and
may collect and have the benefit of all of said Rents arising from or
accruing at any time thereafter or that may thereafter become due under any
Lease.
(d) So long as an Event of Default shall not have occurred and be
continuing, Mortgagee will not exercise any of its rights under Section
1.08(c), and Mortgagor shall receive and collect the Rents accruing under
any Lease; but after the happening and during the continuance of any Event
of Default, Mortgagee may, at its option, receive and collect all Rents and
enter upon the Premises and Improvements through its officers, agents,
employees or attorneys for such purpose and for the operation and
maintenance thereof. Mortgagor hereby irrevocably authorizes and directs
each tenant, if any, and each successor, if any, to the interest of any
tenant under any Lease, respectively, to rely upon any notice of a claimed
Event of Default sent by Mortgagee to any such tenant or any of such
tenant's successors in interest, and thereafter to pay Rents to Mortgagee
without any obligation or right to inquire as to whether an Event of
Default actually exists and even if some notice to the contrary is received
from the Mortgagor, who shall have no right or claim against any such
tenant or successor in interest for any such Rents so paid to Mortgagee.
Each tenant or any of such tenant's successors in interest from whom
Mortgagee or any officer, agent, attorney or employee of Mortgagee shall
have collected any Rents, shall be authorized to pay Rents to Mortgagor
only after such tenant or any of their successors in interest shall have
received written notice from Mortgagee that the Event of Default is no
longer continuing, unless and until a further notice of an Event of Default
is given by Mortgagee to such tenant or any of its successors in interest.
(e) Mortgagee will not become a mortgagee in possession so long as
it does not enter or take actual possession of the Mortgaged Property. In
addition, Mortgagee shall not be responsible or liable for performing any
of the obligations of the landlord under any Lease, for any waste by any
tenant, or others, for any dangerous or defective conditions of any of the
Mortgaged Property, for negligence in the management, upkeep, repair or
control of any of the Mortgaged Property or any other act or omission by
any other person.
(f) Mortgagor shall furnish to Mortgagee, within 45 days after a
request by Mortgagee to do so (but no more frequently than twice annually),
a written statement containing the names of all tenants, subtenants and
concessionaires of the Premises or Improvements, the terms of any Lease,
the space occupied and the rentals or license fees payable thereunder.
SECTION 1.09. Restrictions on Transfers and Encumbrances. Except
as expressly permitted by the Senior Credit Agreement or this Mortgage,
Mortgagor shall not directly or indirectly sell, convey, alienate, assign,
lease, sublease, license, mortgage, pledge, encumber or otherwise transfer,
create, consent to or suffer the creation of any lien, charges or any form
of encumbrance upon any interest in or any part of the Mortgaged Property,
or be divested of its title to the Mortgaged Property or any interest
therein in any manner or way, whether voluntarily or involuntarily (other
than resulting from a condemnation), or engage in any common, cooperative,
joint, time-sharing or other congregate ownership of all or part thereof.
SECTION 1.10. Security Agreement. This Mortgage is both a mortgage
of real property and a grant of a security interest in personal property,
and shall constitute and serve as a "Security Agreement" within the meaning
of the uniform commercial code as adopted in the state wherein the Premises
are located ("UCC"). Mortgagor has hereby granted unto Mortgagee a security
interest in and to all the Mortgaged Property described in this Mortgage
that is not real property, and simultaneously with the recording of this
Mortgage, Mortgagor has filed or will file UCC financing statements, and
will file continuation statements prior to the lapse thereof, at the
appropriate offices in the state in which the Premises are located to
perfect the security interest granted by this Mortgage in all the Mortgaged
Property that is not real property. Mortgagor hereby appoints Mortgagee as
its true and lawful attorney-in-fact and agent, for Mortgagor and in its
name, place and stead, in any and all capacities, to execute any document
and to file the same in the appropriate offices (to the extent it may
lawfully do so), and to perform each and every act and thing reasonably
requisite and necessary to be done to perfect the security interest
contemplated by the preceding sentence. Mortgagee shall have all rights
with respect to the part of the Mortgaged Property that is the subject of a
security interest afforded by the UCC in addition to, but not in limitation
of, the other rights afforded Mortgagee hereunder and under the Security
Agreement.
SECTION 1.11. Filing and Recording. Mortgagor will cause this
Mortgage, any other security instrument creating a security interest in or
evidencing the lien hereof upon the Mortgaged Property and each instrument
of further assurance to be filed, registered or recorded in such manner and
in such places as may be required by any present or future law in order to
publish notice of and fully to protect the lien hereof upon, and the
security interest of Mortgagee in, the Mortgaged Property. Mortgagor will
pay all filing, registration and recording fees, all Federal, state, county
and municipal recording, documentary or intangible taxes and other taxes,
duties, imposts, assessments and charges, and all reasonable expenses
incidental to or arising out of or in connection with the execution,
delivery and recording of this Mortgage, any mortgage supplemental hereto,
any security instrument with respect to the Fixtures or any instrument of
further assurance.
SECTION 1.12. Further Assurances. Upon demand by Mortgagee,
Mortgagor will, at the cost of Mortgagor and without expense to Mortgagee,
do, execute, acknowledge and deliver all such further acts, deeds,
conveyances, mortgages, assignments, notices of assignment, transfers and
assurances as Mortgagee shall from time to time reasonably require for the
better conveying, assigning, transferring and confirming unto Mortgagee the
property and rights hereby conveyed or assigned or intended now or
hereafter so to be, or which Mortgagor may be or may hereafter become bound
to convey or assign to Mortgagee, or for carrying out the intention or
facilitating the performance of the terms of this Mortgage, or for filing,
registering or recording this Mortgage, and on demand, Mortgagor will also
execute and deliver and hereby appoints Mortgagee as its true and lawful
attorney-in-fact and agent, for Mortgagor and in its name, place and stead,
in any and all capacities, to execute and file to the extent it may
lawfully do so, one or more financing statements, chattel mortgages or
comparable security instruments reasonably requested by Mortgagee to
evidence more effectively the lien hereof upon the Fixtures and to perform
each and every act and thing requisite and necessary to be done to
accomplish the same.
SECTION 1.13. Additions to Mortgaged Property. All right, title
and interest of Mortgagor in and to all extensions, improvements,
betterments, renewals, substitutes and replacements of, and all additions
and appurtenances to, the Mortgaged Property hereafter acquired by or
released to Mortgagor or constructed, assembled or placed by Mortgagor upon
the Premises or the Improvements, and all conversions of the security
constituted thereby, immediately upon such acquisition, release,
construction, assembling, placement or conversion, as the case may be, and
in each such case without any further mortgage, conveyance, assignment or
other act by Mortgagor, shall become subject to the lien and security
interest of this Mortgage as fully and completely and with the same effect
as though now owned by Mortgagor and specifically described in the grant of
the Mortgaged Property above, but at any and all times Mortgagor will
execute and deliver to Mortgagee any and all such further assurances,
mortgages, conveyances or assignments thereof as Mortgagee may reasonably
require for the purpose of expressly and specifically subjecting the same
to the lien and security interest of this Mortgage.
SECTION 1.14. No Claims Against Mortgagee. Nothing contained in
this Mortgage shall constitute any consent or request by Mortgagee, express
or implied, for the performance of any labor or services or the furnishing
of any materials or other property in respect of the Mortgaged Property or
any part thereof, nor as giving Mortgagor any right, power or authority to
contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would
permit the making of any claim against Mortgagee in respect thereof.
SECTION 1.15. Fixture Filing. Certain portions of the Mortgaged
Property are or will become "fixtures" (as that term is defined in the UCC)
on the Land, and this Mortgage, upon being filed for record in the real
estate records of the county wherein such fixtures are situated, shall
operate also as a financing statement filed as a fixture filing in
accordance with the applicable provisions of said UCC upon such portions of
the Mortgaged Property that are or become fixtures. The addresses of the
Mortgagor, as debtor, and Mortgagee, as secured party, are set forth in the
first page of this Mortgage.
SECTION 1.16. Notice Regarding Special Flood Hazards. Mortgagee
has informed Mortgagor, and Mortgagor hereby acknowledges that it realizes,
that the Premises listed on Exhibit B is in an area identified by the
Director of the Federal Emergency Management Agency as a "special flood
hazard area" described in 12 C.F.R. ss.22.2, and Mortgagor hereby
acknowledges that it has received, prior to the making of the Senior Loans
and the incurrence of indebtedness constituting part of the Senior
Obligations, the notice regarding Federal disaster relief assistance
referred to in the Appendix to 12 C.F.R. Part 22.
ARTICLE II
Defaults and Remedies
SECTION 2.01. Events of Default. Any event of default under the
Senior Credit Agreement (as such term is defined therein, an "Event of
Default") shall constitute an Event of Default under this Mortgage.
SECTION 2.02. Demand for Payment. If an Event of Default shall
occur and be continuing, then, requirement of protest, demand or notice of
Mortgagee, Mortgagor will pay to Mortgagee all amounts due hereunder and
under the Senior Credit Agreement and such further amount as shall be
sufficient to cover the costs and expenses of collection, including
attorneys' fees, disbursements and expenses incurred by Mortgagee, and
Mortgagee shall be entitled and empowered to institute an action or
proceedings at law or in equity for the collection of the sums so due and
unpaid, to prosecute any such action or proceedings to judgment or final
decree, to enforce any such judgment or final decree against Mortgagor and
to collect, in any manner provided by law, all moneys adjudged or decreed
to be payable.
SECTION 2.03. Rights To Take Possession, Operate and Apply
Revenues. (a) If an Event of Default shall occur and be continuing,
Mortgagor shall, upon demand of Mortgagee, forthwith surrender to Mortgagee
actual possession of the Mortgaged Property and, if and to the extent not
prohibited by applicable law, Mortgagee itself, or by such officers or
agents as it may appoint, may then enter and take possession of all the
Mortgaged Property without the appointment of a receiver or an application
therefor, and exclude Mortgagor and its agents and employees wholly
therefrom.
(b) If Mortgagor shall for any reason fail to surrender or deliver
the Mortgaged Property or any part thereof after such demand by Mortgagee,
Mortgagee may to the extent not prohibited by applicable law, obtain a
judgment or decree conferring upon Mortgagee the right to immediate
possession or requiring Mortgagor to deliver immediate possession of the
Mortgaged Property to Mortgagee, to the entry of which judgment or decree
Mortgagor hereby specifically consents. Mortgagor will pay to Mortgagee,
upon demand, all reasonable expenses of obtaining such judgment or decree,
including reasonable compensation to Mortgagee's attorneys and agents with
interest thereon at the Default Interest Rate; and all such expenses and
compensation shall, until paid, be secured by this Mortgage.
(c) Upon every such entry or taking of possession, Mortgagee may,
to the extent not prohibited by applicable law, hold, store, use, operate,
manage and control the Mortgaged Property, conduct the business thereof
and, from time to time, (i) make all necessary and proper maintenance,
repairs, renewals, replacements, additions, betterments and improvements
thereto and thereon, (ii) purchase or otherwise acquire additional
fixtures, personalty and other property, (iii) insure or keep the Mortgaged
Property insured, (iv) manage and operate the Mortgaged Property and
exercise all the rights and powers of Mortgagor to the same extent as
Mortgagor could in its own name or otherwise with respect to the same, or
(v) enter into any and all agreements with respect to the exercise by
others of any of the powers herein granted Mortgagee, all as may from time
to time be directed or determined by Mortgagee to be in its best interest
and Mortgagor hereby appoints Mortgagee as its true and lawful
attorney-in-fact and agent, for Mortgagor and in its name, place and stead,
in any and all capacities, to perform any of the foregoing acts. Mortgagee
may collect and receive all the Rents, issues, profits and revenues from
the Mortgaged Property, including those past due as well as those accruing
thereafter, and, after deducting (i) all expenses of taking, holding,
managing and operating the Mortgaged Property (including compensation for
the services of all persons employed for such purposes), (ii) the costs of
all such maintenance, repairs, renewals, replacements, additions,
betterments, improvements, purchases and acquisitions, (iii) the costs of
insurance, (iv) such taxes, assessments and other similar charges as
Mortgagee may at its option pay, (v) other proper charges upon the
Mortgaged Property or any part thereof and (vi) the compensation, expenses
and disbursements of the attorneys and agents of Mortgagee, Mortgagee shall
apply the remainder of the moneys and proceeds so received as provided in
Section 2.08.
(d) Whenever, before any sale of the Mortgaged Property under
Section 2.06, all Senior Obligations that are then due shall have been paid
and all Events of Default fully cured, Mortgagee will surrender possession
of the Mortgaged Property back to Mortgagor, its successors or assigns. The
same right of taking possession shall, however, arise again if any
subsequent Event of Default shall occur and be continuing.
SECTION 2.04. Right To Cure Mortgagor's Failure to Perform. Should
Mortgagor fail in the payment, performance or observance of any term,
covenant or condition set forth in this Mortgage or the Senior Credit
Agreement (with respect to the Mortgaged Property) for 10 days after notice
of such failure from Mortgagee (in the case of a monetary default) or 20
days after notice of such failure from Mortgagee (in the case of a
non-monetary default), Mortgagee may pay, perform or observe the same, and
all payments made or costs or expenses incurred by Mortgagee in connection
therewith shall be secured hereby and shall be repaid by Mortgagor to
Mortgagee with interest thereon at the Default Interest Rate from the date
incurred within 10 days after demand made by Mortgagee. Mortgagee shall be
the judge using reasonable discretion of the necessity for any such actions
and of the amounts to be paid. Mortgagee is hereby empowered to enter and
to authorize others to enter upon the Premises or the Improvements or any
part thereof for the purpose of performing or observing any such defaulted
term, covenant or condition without having any obligation to so perform or
observe and without thereby becoming liable to Mortgagor, to any person in
possession holding under Mortgagor or to any other person.
SECTION 2.05. Right to a Receiver. If an Event of Default shall
occur and be continuing, Mortgagee, upon application to a court of
competent jurisdiction, shall be entitled as a matter of right to the
appointment of a receiver (which may be Mortgagee or an employee of
Mortgagee) to take possession of and to operate the Mortgaged Property and
to collect and apply the Rents. The receiver shall have all of the rights
and powers permitted under the laws of the state wherein the Mortgaged
Property is located. Mortgagor shall pay to Mortgagee upon demand all
reasonable expenses, including receiver's fees, reasonable attorney's fees
and disbursements, costs and agent's compensation incurred pursuant to the
provisions of this Section 2.05; and all such expenses shall be secured by
this Mortgage and shall be, without demand, immediately repaid by Mortgagor
to Mortgagee with interest thereon at the Default Interest Rate.
SECTION 2.06. Foreclosure and Sale. (a) If an Event of Default
shall occur and be continuing, Mortgagee may elect to sell the Mortgaged
Property or any part of the Mortgaged Property by exercise of the power of
foreclosure or of sale granted to Mortgagee by applicable law or this
Mortgage. In such case, Mortgagee may commence a civil action to foreclose
this Mortgage, or it may proceed and sell the Mortgaged Property to satisfy
any Senior Obligation. Mortgagee or an officer appointed by a judgment of
foreclosure to sell the Mortgaged Property, may sell all or such parts of
the Mortgaged Property as may be chosen by Mortgagee at the time and place
of sale fixed by it in a notice of sale, either as a whole or in separate
lots, parcels or items as Mortgagee shall deem expedient, and in such order
as it may determine, at public auction to the highest bidder. Mortgagee or
an officer appointed by a judgment of foreclosure to sell the Mortgaged
Property may postpone any foreclosure or other sale of all or any portion
of the Mortgaged Property by public announcement at such time and place of
sale, and from time to time thereafter may postpone such sale by public
announcement or subsequently noticed sale. Without further notice,
Mortgagee or an officer appointed to sell the Mortgaged Property may make
such sale at the time fixed by the last postponement, or may, in its
discretion, give a new notice of sale. Any person, including Mortgagor or
Mortgagee or any designee or affiliate thereof, may purchase at such sale.
(b) The Mortgaged Property may be sold subject to unpaid taxes and
Permitted Encumbrances, and, after deducting all costs, fees and expenses
of Mortgagee (including costs of evidence of title in connection with the
sale), Mortgagee or an officer that makes any sale shall apply the proceeds
of sale in the manner set forth in Section 2.08.
(c) Any foreclosure or other sale of less than the whole of the
Mortgaged Property or any defective or irregular sale made hereunder shall
not exhaust the power of foreclosure or of sale provided for herein; and
subsequent sales may be made hereunder until the Senior Obligations have
been satisfied, or the entirety of the Mortgaged Property has been sold.
(d) If an Event of Default shall occur and be continuing,
Mortgagee may instead of, or in addition to, exercising the rights
described in Section 2.06(a) above and either with or without entry or
taking possession as herein permitted, proceed by a suit or suits in law or
in equity or by any other appropriate proceeding or remedy (i) to
specifically enforce payment of some or all of the Senior Obligations, or
the performance of any term, covenant, condition or agreement of this
Mortgage or any other Senior Loan Document or any other right, or (ii) to
pursue any other remedy available to Mortgagee, all as Mortgagee shall
determine most effectual for such purposes.
SECTION 2.07. Other Remedies. (a) In case an Event of Default
shall occur and be continuing, Mortgagee may also exercise, to the extent
not prohibited by law, any or all of the remedies available to a secured
party under the UCC.
(b) In connection with a sale of the Mortgaged Property or any
Fixtures and the application of the proceeds of sale as provided in Section
2.08, Mortgagee shall be entitled to enforce payment of and to receive up
to the principal amount of the Senior Obligations, plus all other charges,
payments and costs due under this Mortgage, and to recover a deficiency
judgment for any portion of the aggregate principal amount of the Senior
Obligations remaining unpaid, with interest.
SECTION 2.08. Application of Sale Proceeds and Rents. After any
foreclosure sale of all or any portion of the Mortgaged Property, Mortgagee
shall receive and apply the proceeds of the sale together with any Rents
that may have been collected and any other sums that may then be held by
Mortgagee under this Mortgage as follows:
FIRST, to the payment of the costs and expenses of such
sale, including compensation to Mortgagee's attorneys and agents,
and of any judicial proceedings wherein the same may be made, and
of all expenses, liabilities and advances made or incurred by
Mortgagee under this Mortgage, together with interest at the
Default Interest Rate on all advances made by Mortgagee, including
all taxes, assessments (or other charges) (except any taxes,
assessments or other charges subject to which the Mortgaged
Property shall have been sold) and the cost of removing any liens
or encumbrances (except any liens or encumbrances subject to which
the Mortgaged Property was sold);
SECOND, to the Mortgagee for the distribution to the
Senior Secured Parties for the satisfaction of the Senior
Obligations owed to the Senior Secured Parties;
THIRD, to the holder of any subordinate mortgage encumbering
the Mortgaged Property entitled to receive such proceeds; and
FOURTH, to the Mortgagor, its successors or assigns, or
as a court of competent jurisdiction may otherwise direct.
The Mortgagee shall have absolute discretion as to the time of application
of any such proceeds, moneys or balances in accordance with this Mortgage.
In the event of any inconsistency between this Section 2.08 and the
Collateral Trust and Intercreditor Agreement, the Collateral Trust and
Intercreditor Agreement shall control. Nothing in this Mortgage shall be
interpreted to make the Mortgagee an agent of the Second Priority Debt
Parties. Upon any sale of the Mortgaged Property by the Mortgagee
(including pursuant to a power of sale granted by statute or under a
judicial proceeding), the receipt of the Mortgagee or of the officer making
the sale shall be a sufficient discharge to the purchaser or purchasers of
the Mortgaged Property so sold and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money
paid over to the Mortgagee or such officer or be answerable in any way for
the misapplication thereof.
SECTION 2.09. Mortgagor as Tenant Holding Over. If Mortgagor
remains in possession of any of the Mortgaged Property after any
foreclosure sale by Mortgagee, at Mortgagee's election Mortgagor shall be
deemed a tenant holding over and shall forthwith surrender possession to
the purchaser or purchasers at such sale or be summarily dispossessed or
evicted according to provisions of law applicable to tenants holding over.
SECTION 2.10. Waiver of Appraisement, Valuation, Stay, Extension
and Redemption Laws. Mortgagor waives, to the extent not prohibited by law,
(i) the benefit of all laws now existing or that hereafter may be enacted
(x) providing for any appraisement or valuation of any portion of the
Mortgaged Property and/or (y) in any way extending the time for the
enforcement or the collection of amounts due under any of the Senior
Obligations or creating or extending a period of redemption from any sale
made in collecting said debt or any other amounts due Mortgagee, (ii) any
right to at any time insist upon, plead, claim or take the benefit or
advantage of any law now or hereafter in force providing for any homestead
exemption, stay, statute of limitations, extension or redemption, or sale
of the Mortgaged Property as separate tracts, units or estates or as a
single parcel in the event of foreclosure or notice of deficiency, and
(iii) all rights of redemption, valuation, appraisement, stay of execution,
notice of election to mature or declare due the whole of or each of the
Senior Obligations and marshaling in the event of foreclosure of this
Mortgage.
SECTION 2.11. Discontinuance of Proceedings. In case Mortgagee
shall proceed to enforce any right, power or remedy under this Mortgage by
foreclosure, entry or otherwise, and such proceedings shall be discontinued
or abandoned for any reason, or shall be determined adversely to Mortgagee,
then and in every such case Mortgagor and Mortgagee shall be restored to
their former positions and rights hereunder, and all rights, powers and
remedies of Mortgagee shall continue as if no such proceeding had been
taken.
SECTION 2.12. Suits To Protect the Mortgaged Property. Mortgagee
shall have power (a) to institute and maintain suits and proceedings to
prevent any impairment of the Mortgaged Property by any acts that may be
unlawful or in violation of this Mortgage, (b) to preserve or protect its
interest in the Mortgaged Property and in the Rents arising therefrom and
(c) to restrain the enforcement of or compliance with any legislation or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of or compliance with such enactment,
rule or order would impair the security or be prejudicial to the interest
of Mortgagee hereunder.
SECTION 2.13. Filing Proofs of Claim. In case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment,
composition or other proceedings affecting Mortgagor, Mortgagee shall, to
the extent permitted by law, be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have the
claims of Mortgagee allowed in such proceedings for the Senior Obligations
secured by this Mortgage at the date of the institution of such proceedings
and for any interest accrued, late charges and additional interest or other
amounts due or that may become due and payable hereunder after such date.
SECTION 2.14. Possession by Mortgagee. Notwithstanding the
appointment of any receiver, liquidator or trustee of Mortgagor, any of its
property or the Mortgaged Property, Mortgagee shall be entitled, to the
extent not prohibited by law, to remain in possession and control of all
parts of the Mortgaged Property now or hereafter granted under this
Mortgage to Mortgagee in accordance with the terms hereof and applicable
law.
SECTION 2.15. Waiver. (a) No delay or failure by Mortgagee to
exercise any right, power or remedy accruing upon any breach or Event of
Default shall exhaust or impair any such right, power or remedy or be
construed to be a waiver of any such breach or Event of Default or
acquiescence therein; and every right, power and remedy given by this
Mortgage to Mortgagee may be exercised from time to time and as often as
may be deemed expedient by Mortgagee. No consent or waiver by Mortgagee to
or of any breach or Event of Default by Mortgagor in the performance of the
Senior Obligations shall be deemed or construed to be a consent or waiver
to or of any other breach or Event of Default in the performance of the
same or of any other Senior Obligations by Mortgagor hereunder. No failure
on the part of Mortgagee to complain of any act or failure to act or to
declare an Event of Default, irrespective of how long such failure
continues, shall constitute a waiver by Mortgagee of its rights hereunder
or impair any rights, powers or remedies consequent on any future Event of
Default by Mortgagor.
(b) Even if Mortgagee (i) grants some forbearance or an extension
of time for the payment of any sums secured hereby, (ii) takes other or
additional security for the payment of any sums secured hereby, (iii)
waives or does not exercise some right granted herein or under the Senior
Loan Documents, (iv) releases a part of the Mortgaged Property from this
Mortgage, (v) agrees to change some of the terms, covenants, conditions or
agreements of any of the Loan Documents, (vi) consents to the filing of a
map, plat or replat affecting the Premises, (vii) consents to the granting
of an easement or other right affecting the Premises or (viii) makes or
consents to an agreement subordinating Mortgagee's lien on the Mortgaged
Property hereunder; no such act or omission shall preclude Mortgagee from
exercising any other right, power or privilege herein granted or intended
to be granted in the event of any breach or Event of Default then made or
of any subsequent default; nor, except as otherwise expressly provided in
an instrument executed by Mortgagee, shall this Mortgage be altered
thereby. In the event of the sale or transfer by operation of law or
otherwise of all or part of the Mortgaged Property, Mortgagee is hereby
authorized and empowered to deal with any vendee or transferee with
reference to the Mortgaged Property secured hereby, or with reference to
any of the terms, covenants, conditions or agreements hereof, as fully and
to the same extent as it might deal with the original parties hereto and
without in any way releasing or discharging any liabilities, obligations or
undertakings.
SECTION 2.16. Remedies Cumulative. No right, power or remedy
conferred upon or reserved to Mortgagee by this Mortgage is intended to be
exclusive of any other right, power or remedy, and each and every such
right, power and remedy shall be cumulative and concurrent and in addition
to any other right, power and remedy given hereunder or now or hereafter
existing at law or in equity or by statute.
ARTICLE III
Miscellaneous
SECTION 3.01. Partial Invalidity. In the event any one or more of
the provisions contained in this Mortgage shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such validity,
illegality or unenforceability shall, at the option of Mortgagee, not
affect any other provision of this Mortgage, and this Mortgage shall be
construed as if such invalid, illegal or unenforceable provision had never
been contained herein or therein.
SECTION 3.02. Notices. All notices requests, demands and other
communications hereunder shall be in writing and given to Mortgagor in
accordance with the terms of the Senior Credit Agreement at the address set
forth on the first page of this Mortgage and to the Mortgagee as provided
in the Senior Credit Agreement.
SECTION 3.03. Successors and Assigns. All of the grants,
covenants, terms, provisions and conditions herein shall run with the
Premises and the Improvements and shall apply to, bind and inure to, the
benefit of the permitted successors and assigns of Mortgagor and the
successors and assigns of Mortgagee.
SECTION 3.04. Satisfaction and Cancelation. (a) The conveyance to
Mortgagee of the Mortgaged Property as security created and consummated by
this Mortgage shall be null and void when all the Senior Obligations have
been indefeasibly paid in full in accordance with the terms of the Loan
Documents and the Senior Banks have no further commitment to make Senior
Loans under the Senior Credit Agreement, no Letters of Credit are
outstanding and the Issuing Bank has no further obligation to issue Letters
of Credit under the Senior Credit Agreement.
(b) Upon a sale or financing by Mortgagor of all or any portion of
the Mortgaged Property that is permitted by the Senior Credit Agreement and
the application of the Net Proceeds of such sale or financing in accordance
with the Senior Credit Agreement, the lien of this Mortgage shall be
released from the applicable portion of the Mortgaged Property. Mortgagor
shall give the Mortgagee reasonable written notice of any sale or financing
of the Mortgaged Property prior to the closing of such sale or financing.
(c) In connection with any termination or release pursuant to
paragraph (a), the Mortgage shall be marked "satisfied" by the Mortgagee,
and this Mortgage shall be canceled of record at the request and at the
expense of the Mortgagor. Mortgagee shall execute any documents reasonably
requested by Mortgagor to accomplish the foregoing or to accomplish any
release contemplated by this Section 3.04 and Mortgagor will pay all costs
and expenses, including reasonable attorneys' fees, disbursements and other
charges, incurred by Mortgagee in connection with the preparation and
execution of such documents.
SECTION 3.05. Definitions. As used in this Mortgage, the singular
shall include the plural as the context requires and the following words
and phrases shall have the following meanings: (a) "including" shall mean
"including but not limited to"; (b) "provisions" shall mean "provisions,
terms, covenants and/or conditions"; (c) "lien" shall mean "lien, charge,
encumbrance, security interest, mortgage or deed of trust"; (d)
"obligation" shall mean "obligation, duty, covenant and/or condition"; and
(e) "any of the Mortgaged Property" shall mean "the Mortgaged Property or
any part thereof or interest therein". Any act that Mortgagee is permitted
to perform hereunder may be performed at any time and from time to time by
Mortgagee or any person or entity designated by Mortgagee. Any act that is
prohibited to Mortgagor hereunder is also prohibited to all lessees of any
of the Mortgaged Property, except to the extent that a Lease executed prior
to the date hereof expressly permits such act without the consent of the
Mortgagor or the holder of any mortgage. Each appointment of Mortgagee as
attorney-in-fact for Mortgagor under the Mortgage is irrevocable, with
power of substitution and coupled with an interest. Subject to express
provisions to the contrary contained in this Mortgage, Mortgagee has the
right to refuse to grant its consent, approval or acceptance or to indicate
its satisfaction, in its sole discretion, whenever such consent, approval,
acceptance or satisfaction is required hereunder. To the extent that this
Mortgage provides that any particular consent, approval, acceptance or
satisfaction is subject to the terms of the Senior Credit Agreement, it
shall be granted or withheld as provided in the Senior Credit Agreement.
SECTION 3.06. Multisite Real Estate Transaction. Mortgagor
acknowledges that this Mortgage is one of a number of Other Mortgages that
secure the Senior Obligations. Mortgagor agrees that the lien of this
Mortgage shall be absolute and unconditional and shall not in any manner be
affected or impaired by any acts or omissions whatsoever of Mortgagee, and
without limiting the generality of the foregoing, the lien hereof shall not
be impaired by any acceptance by the Mortgagee of any security for or
guarantees of any of the Senior Obligations hereby secured, or by any
failure, neglect or omission on the part of Mortgagee to realize upon or
protect any Obligation or indebtedness hereby secured or any collateral
security therefor including the Other Mortgages and other Loan Documents.
The lien hereof shall not in any manner be impaired or affected by any
release (except as to the property released), sale, pledge, surrender,
compromise, settlement, renewal, extension, indulgence, alteration,
changing, modification or disposition of any of the Senior Obligations
secured or of any of the collateral security therefor, including the Other
Mortgages and other Loan Documents or of any guarantee thereof, and
Mortgagee may at its discretion foreclose, exercise any power of sale, or
exercise any other remedy available to it under any or all of the Other
Mortgages and other Loan Documents without first exercising or enforcing
any of its rights and remedies hereunder. Such exercise of Mortgagee's
rights and remedies under any or all of the Other Mortgages and other Loan
Documents shall not in any manner impair the indebtedness hereby secured or
the lien of this Mortgage and any exercise of the rights or remedies of
Mortgagee hereunder shall not impair the lien of any of the Other Mortgages
and other Loan Documents or any of Mortgagee's rights and remedies
thereunder. Mortgagor specifically consents and agrees that Mortgagee may
exercise its rights and remedies hereunder and under the Other Mortgages
and other Senior Loan Documents separately or concurrently and in any order
that it may deem appropriate and waives any rights of subrogation.
ARTICLE IV
Particular Provisions
This Mortgage is subject to the following provisions relating to
the particular laws of the state wherein the Premises are located:
SECTION 4.01. Applicable Law; Certain Particular Provisions. This
Mortgage shall be governed by and construed in accordance with the internal
law of the State in which the Mortgaged Property is located without regard
to principles of conflicts of laws and Mortgagor and Mortgagee agree to
submit to jurisdiction and the laying of venue for any suit on this
Mortgage in such state, except that the internal laws of the State of New
York (without regard to principles of conflicts of laws) shall govern (i)
those terms and conditions contained in the Senior Credit Agreement and/or
the Senior Subsidiary Guarantee Agreement which are incorporated by
reference herein and (ii) the resolution of issues arising under the Senior
Credit Agreement and/or the Senior Subsidiary Guarantee Agreement to the
extent that such resolution is necessary to the interpretation of this
Mortgage. The terms and provisions set forth in Appendix A attached hereto
are hereby incorporated by reference as though fully set forth herein. In
the event of any conflict between the terms and provisions contained in the
body of this Mortgage and the terms and provisions set forth in Appendix A,
the terms and provisions set forth in Appendix A shall govern and control.
[The balance of this page intentionally left blank.]
IN WITNESS WHEREOF, this Mortgage has been duly executed and
delivered to Mortgagee by Mortgagor on the date of the acknowledgment
attached hereto.
[NAME OF Mortgagor], a [ ],
by:
__________________________________
Name:
Title:
Attest:
by:
_______________________________
Name:
Title:
[Corporate Seal]
[LOCAL FORM OF ACKNOWLEDGMENT]
Exhibit A
to Mortgage
Description of Land
Exhibit B
Premises Located in a
Special Flood Hazard Area
None.
Appendix A
to Mortgage
Local Law Provisions
Appendix B
to Mortgage
Definitions Annex
This is the Definitions Annex referred to in the Senior Loan
Documents (such term and each other capitalized term used herein as defined
below, and if not defined herein, have the meanings assigned to such terms
in the applicable Senior Loan Document or Second Priority Debt Document)
and the Second Priority Debt Documents. The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of
such terms.
References to any agreement or contract are to such agreement or
contract as amended, modified or supplemented from time to time in
accordance with the terms thereof and of each Senior Loan Document and
Second Priority Debt Document containing restrictions or imposing
conditions on the amendment, modification or supplementing of such
agreement or contract.
"Affiliate" means, when used with respect to a specified Person,
another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control
with the Person specified.
"Asset Sale" means any sale, transfer or other disposition
(including pursuant to a Sale and Leaseback Transaction) of any property or
asset of the Borrower or any Subsidiary (including any equity interest in a
Subsidiary), other than a Permitted Disposition
"Assignee" has the meaning ascribed to it in Section 9.06(c) of
the Senior Credit Agreement.
"Assignment and Acceptance Agreement" means an assignment and
acceptance agreement in the form of Exhibit F to the Senior Credit
Agreement.
"Attributable Debt" means, as to any particular Capital Lease or
Sale and Leaseback Transaction under which the Borrower or any Subsidiary
is at the time liable, at any date as of which the amount thereof is to be
determined (i) in the case of a transaction involving a Capital Lease, the
amount on such date of the obligation thereunder that would appear on a
balance sheet prepared as of such date in accordance with generally
accepted accounting principles, or (ii) in the case of a Sale and Leaseback
Transaction not involving a Capital Lease, the then present value of the
minimum rental obligations under such Sale and Leaseback Transaction during
the remaining term thereof (after giving effect to any extensions at the
option of the lessor) computed by discounting the respective rental
payments at the actual interest factor included in such payments or, if
such interest factor cannot be readily determined, at the rate per annum
that would be applicable to a Capital Lease of the Borrower having similar
payment terms. The amount of any rental payment required to be made under
any such Sale and Leaseback Transaction not involving a Capital Lease may
exclude amounts required to be paid by the lessee on account of maintenance
and repairs, insurance, taxes, assessments, utilities, operating and labor
costs and similar charges, whether or not characterized as rent.
"Bank" means each bank listed on the signature pages of the Senior
Credit Agreement, each Assignee which becomes a Bank pursuant to Section
9.06(c) of the Senior Credit Agreement, and their respective successors.
Unless the context clearly indicates otherwise, the term "Bank" shall
include the Swingline Banks.
"Bankruptcy Proceeding" means any proceeding under Title 11 of the
U.S. Code or any other Federal, state or foreign bankruptcy, insolvency,
reorganization, receivership or similar law.
"Basket Asset Sale" means any sale or disposition (including a
Sale and Leaseback Transaction not involving any Mortgaged Property) of
office locations, stores or other personal or real property (including any
improvements thereon), whether or not constituting Mortgaged Property, or
leasehold interest therein for fair value in the ordinary course of
business consistent with past practice and not inconsistent with the
Borrower's business plan delivered to the Representatives on the Closing
Date, provided, however, that, (i) the aggregate consideration received
therefor (including the fair market value of any non-cash consideration)
shall not exceed $75,000,000 in any fiscal year (calculated without regard
to Sale and Leaseback Transactions permitted by Section 5.14(a), (b) and
(c) of the Senior Credit Facility as in effect on the Closing Date) and
(ii) at least 75% of such consideration shall consist of cash.
"Borrower" means Rite Aid.
"Business Day" means any day other than a Saturday, Sunday or day
on which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Euro-Dollar Loan,
the term "Business Day" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.
"Capital Lease" means any lease of property which, in accordance
with generally accepted accounting principles, should be capitalized on the
lessee's balance sheet.
"Capital Markets Transaction" means the receipt by the Borrower or
a Subsidiary of proceeds of an issuance in the public or private capital
markets of long-term debt securities, of equity securities or of
equity-linked (e.g., trust preferred) securities (other than any proceeds
in respect of the issuance of Exchange Notes to SPV and the disposition of
such Exchange Notes pursuant to the Forward Commitment Agreement).
"Casualty/Condemnation" means any event that gives rise to
Casualty/Condemnation Proceeds.
"Casualty/Condemnation Proceeds" means
(a) any insurance proceeds under any insurance policies
or otherwise with respect to any casualty or other insured damage
to any assets of the Borrower or its Subsidiaries, and
(b) any proceeds received by the Borrower or any
Subsidiary of any action or proceeding for the taking of any
assets of the Borrower or its Subsidiaries, or any part thereof or
interest therein, for public or quasi-public use under the power
of eminent domain, by reason of any similar public improvement or
condemnation proceeding,
less, in each case (i) any fees, commissions and expenses (including the
costs of adjustment and condemnation proceedings) and other costs paid or
incurred by the Borrower or any Subsidiary in connection therewith, (ii)
income taxes reasonably estimated to be payable as a result of any gain
recognized in connection with the receipt of such payment or proceeds and
(iii) payment of the outstanding amount of any Debt (or Attributable Debt),
other than the Secured Obligations, together with premium or penalty, if
any, and interest thereon (or comparable obligations in respect of
Attributable Debt), that is secured by a Lien on (or if Attributable Debt,
the lease of) the stock or assets in question and that has priority over
both the Senior Lien and the Second Priority Lien and is to be repaid as a
result of receipt of such payments or proceeds; provided, however, that no
such proceeds shall constitute Casualty/Condemnation Proceeds to the extent
that such proceeds are (A) reinvested in other like fixed or capital assets
within 180 days of the Casualty/Condemnation that gave rise to such
proceeds or (B) committed to be reinvested in other like fixed or capital
assets within 180 days of such Casualty/Condemnation, with diligent pursuit
of such reinvestment, and reinvested in such assets within 365 days of such
Casualty/Condemnation.
"Citibank" means Citibank, N.A.
"Citibank Standby L/C Documents" means the reimbursement
agreements, letter of credit applications and other documents relating to
the Citibank Standby Letters of Credit.
"Citibank Standby L/C Obligations" means (a) each payment,
including payments in respect of reimbursements and cash collateralization,
required to be made by Rite Aid under the Citibank Standby L/C Documents in
respect of Citibank Standby Letters of Credit in an aggregate amount at any
time outstanding not in excess of (i) $8,000,000 minus (ii) the cumulative
amount of proceeds of Collateral applied to such obligations as the result
of the exercise of remedies under the Senior Collateral Documents and (b)
all other monetary obligations, including fees, costs, expenses and
indemnities (including interest and monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding)
of Rite Aid or any Obligor under the Citibank Standby L/C Documents to the
extent attributable to the Citibank Standby Letters of Credit referred to
in clause (a).
"Citibank Standby Letters of Credit" means the standby letters of
credit issued for the account of the Borrower by Citibank outstanding on
the Closing Date in an aggregate face amount of approximately $8,000,000,
together with any standby letter of credit (other than any letter of credit
issued under the Senior Credit Facility) hereafter issued by Citibank for
the account of any Obligor, provided that the Citibank Standby Letters of
Credit shall be limited to an amount at any time outstanding not in excess
of (i) $8,000,000 minus (ii) the cumulative amount of proceeds of
Collateral applied as the result of the exercise of remedies under the
Senior Collateral Documents to reimbursement and cash collateralization
obligations in respect of Citibank Standby Letters of Credit.
"Closing Date" means the date on which the Senior Credit Facility,
the amendments and restatements giving rise to the Existing Facilities and
the exchange offer and other transactions giving rise to the Exchange Notes
become effective.
"Collateral" means the Senior Collateral and the Second Priority
Collateral.
"Collateral Documents" means (a) the Senior Collateral Documents
and (b) the Second Priority Collateral Documents.
"Collateral Trust and Intercreditor Agreement" means the
Collateral Trust and Intercreditor Agreement, dated as of June 12, 2000,
among Rite Aid, the Subsidiary Guarantors, the Second Priority Collateral
Trustee, the Senior Collateral Agent and each Second Priority
Representative.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "Controlling" and "Controlled" shall have meanings
correlative thereto.
"Debt" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all obligations of such
Person as lessee which are capitalized in accordance with generally
accepted accounting principles, (v) all non-contingent obligations of such
Person to reimburse any bank or other Person in respect of amounts paid
under a letter of credit or similar instrument, (vi) all Debt secured by a
Lien on any asset of such Person, whether or not such Debt is otherwise an
obligation of such Person, and (vii) all Debt of others Guaranteed by such
Person.
"Debt Facility" means any of the Senior Credit Facility, the
Existing Facilities, the Synthetic Lease Facilities and the Exchange Note
Indenture.
"Default Rate" means a rate per annum (computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as the
case may be) equal to the sum of (a) the rate of interest publicly
announced by Citibank in New York, New York, from time to time as its "base
rate", plus (b) 2.00%.
"Designated Asset Disposition" means any sale, transfer or other
disposition of Exchange Debt First Priority Collateral other than a
Permitted Disposition.
"Domestic Subsidiary" means any Subsidiary incorporated or
organized under the laws of the United States of America, any State thereof
or the District of Columbia.
"Xxxxxxxxx.xxx Common Stock" means the common stock of Xxxxxxxxx.xxx,
Inc., a Delaware corporation, owned by Rite Aid.
"Xxxxxxxxx.xxx Pledge Agreement" means the Xxxxxxxxx.xxx Pledge
Agreement dated as of October 25, 1999 and amended and restated as of June
12, 2000, between the Borrower and Xxxxxx Guaranty Trust Company of New
York, as agent thereunder.
"Exchange Debt Facility" means the Exchange Debt Facility dated as
of June 12, 2000 among Rite Aid Corporation, the banks party thereto and
Xxxxxx Guaranty Trust Company of New York, as administrative agent.
"Exchange Debt Facility Documents" means the collective reference
to the "Loan Documents" as defined in the Exchange Debt Facility.
"Exchange Debt First Priority Collateral" means the prescription
files of Rite Aid's Subsidiaries and the proceeds thereof.
"Exchange Debt First Priority Collateral Documents" means the
collective reference to the "First Priority Collateral Documents", as
defined in the Exchange Debt Facility.
"Exchange Debt Obligations" means (i) all principal of and
interest (including, without limitation, any interest which accrues after
the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on any loans made
under the Exchange Debt Facility, (ii) all other amounts payable by the
Borrower to the Exchange Debt Parties under the Exchange Debt Facility
Documents, and (iii) any renewals or extensions of any of the foregoing;
provided, however, that the principal amount of indebtedness included in
the Exchange Debt Obligations shall not exceed the maximum amount from time
to time permitted to be outstanding by the Collateral Trust and
Intercreditor Agreement.
"Exchange Debt Parties" means all parties to the Exchange Debt
Facility Documents other than the Obligors or any Affiliate thereof, the
Senior Bank Parties and the Representatives, but including the
administrative agent under the Exchange Debt Facility and the beneficiaries
of each indemnification obligation undertaken by Rite Aid or any other
Obligor under any Exchange Debt Facility Document.
"Exchange Note Documents" means the Exchange Notes and the
Exchange Note Indenture, Exchange and Registration Rights Agreement among
the State Street Bank and Trust, as trustee, Rite Aid and the Subsidiary
Guarantors, and the Forward Commitment Agreement.
"Exchange Note Indenture" means the Indenture dated as of June 12,
2000, among Rite Aid, the Subsidiary Guarantors and State Street Bank and
Trust Company, as trustee, relating to the Exchange Notes.
"Exchange Note Obligations" means (i) all principal of and
interest (including, without limitation, any interest which accrues after
the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on the Exchange
Notes, (ii) all other amounts payable by the Borrower to the Exchange Note
Parties under the Exchange Note Documents, and (iii) any renewals or
extensions of any of the foregoing.
"Exchange Note Parties" means all parties to the Exchange Note
Documents and the holders from time to time of the Exchange Notes, in each
case other than the Obligors or any Affiliate thereof, the Senior Bank
Parties and the Representatives, but including the trustee under the
Exchange Note Indentures and the beneficiaries of each indemnification
obligation undertaken by Rite Aid or any other Obligor under any Exchange
Note Document.
"Exchange Notes" means the 10.50% Senior Secured Notes Due 2002 of
Rite Aid (i) issued in exchange for certain 5.50% Notes Due 2000 of Rite
Aid and 6.70% Notes Due 2001 of Rite Aid or (ii) issued on the Closing Date
to SPV and to be transferred to SSB, JPM and their respective transferees
and assignees pursuant to the Forward Commitment Agreement.
"Existing Facilities" means
(a) the PCS Facility;
(b) the RCF Facility;
(c) the Xxxxx Facility; and
(d) the Exchange Debt Facility.
"Existing Facilities Documents" means the collective reference to
(i) the PCS Facility Documents, (ii) the RCF Facility Documents, (iii) the
Xxxxx Facility Documents and (iv) the Exchange Debt Facility Documents.
"Existing Facility Obligations" means the PCS Facility
Obligations, the RCF Facility Obligations, the Xxxxx Facility Obligations
and the Exchange Debt Obligations.
"Existing Facility Parties" means the PCS Facility Parties, the
RCF Facility Parties, the Xxxxx Facility Parties and the Exchange Debt
Parties.
"Xxxxx Facility" means the Amendment No. 3 to Note Agreement,
Amendment No. 4 to Guaranty Agreement, Amendment No. 1 to Put Agreement
(the "Omnibus Agreement") dated as of June 12, 2000, relating to the
Adjustable Rate Senior Secured Notes due August 15, 2002 originally issued
by Xxxxx, Inc. and guaranteed by Rite Aid pursuant to separate Note
Agreements dated as of September 30, 1996.
"Xxxxx Facility Documents" means the (i) Guaranty Agreement dated
as of September 30, 1996 pursuant to which Rite Aid guaranteed the
obligations of Xxxxx, Inc. under the Xxxxx Facility; (ii) Put Agreement
dated as of September 30, 1996 entered into by Rite Aid, and (iii) Security
Agreement dated as of September 30, 1996 entered into by Xxxxx, Inc. and
The Prudential Insurance Company of America as the Security Agent on behalf
of the Xxxxx Facility Parties, in each case as amended through the Closing
Date.
"Xxxxx Facility Obligations" means (i) all outstanding principal
amounts under the Xxxxx Facility Documents, (ii) all interest (including,
without limitation, any interest which accrues after the commencement of
any case, proceeding or other action relating to the bankruptcy, insolvency
or reorganization of the Borrower, whether or not allowed or allowable as a
claim in any such proceeding) on the principal amounts pursuant to clause
(i) of this definition, (iii) any renewals or extensions of any of the
foregoing and (iv) any and all other amounts payable by the Borrower in
respect of the Xxxxx Facility Documents; provided, however, that the
principal amount of indebtedness included in the Xxxxx Facility Obligations
shall not exceed the maximum amount from time to time permitted to be
outstanding by the Collateral Trust and Intercreditor Agreement.
"Xxxxx Facility Parties" means The Prudential Insurance Company of
America and Pruco Life Insurance Company and their successors and assigns
as noteholders and purchasers under the Xxxxx Facility Documents and The
Prudential Insurance Company of America, as Security Agent under the Xxxxx
Facility Documents and its successor or assignee.
"Forward Commitment Agreement" means the Forward Commitment
Agreement dated June 12, 2000, among Rite Aid, SPV, SSB and JPM.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of
any other Person; provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding meaning.
"Indentures" mean, collectively, (a) the Indenture dated as of
December 21, 1998, between Rite Aid and Xxxxxx Trust and Savings Bank, as
trustee, (b) the Indenture dated as of August 1, 1993, between Rite Aid and
Xxxxxx Guaranty Trust Company of New York, as trustee, (c) the Indenture
dated as September 10, 1997, between Rite Aid and Xxxxxx Trust and Savings
Bank, as trustee and (d) the Indenture dated as of September 22, 1998,
between Rite Aid and Xxxxxx Trust and Savings Bank, as trustee.
"Independent Standby L/C Documents" means the Citibank Standby L/C
Documents and the Mellon Standby L/C Documents.
"Independent Standby L/C Obligations" means the Citibank Standby
L/C Obligations and the Mellon Standby L/C Obligations.
"Independent Standby L/C Parties" means Citibank and Mellon Bank
in their capacities as issuers of Independent Standby Letters of Credit.
"Independent Standby Letters of Credit" means the Citibank Standby
Letters of Credit and the Mellon Standby Letters of Credit.
"Instructing Group" means, until the Senior Obligation Payment
Date, the Majority Senior Parties, and thereafter the Second Priority
Instructing Group.
"Issuing Bank" is defined in Section 2.17 (i) of the Senior Credit
Agreement, and shall include Citicorp USA, Inc., Fleet National Bank, and
with respect to the Existing Trade Letters of Credit pursuant to Section
2.17 of the Senior Credit Agreement, Mellon Bank.
"JPM" means X.X. Xxxxxx Securities, Inc.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset, including, without limitation, the interest of a vendor or
lessor under any conditional sale agreement, Capital Lease or other title
retention agreement relating to such asset.
"Majority Senior Parties" means the Majority Banks, as defined in
the Senior Credit Facility, or with respect to any waiver, amendment or
request, Senior Banks having such amount of unused Revolving Credit
Commitments, Revolving Credit Exposure, unused Term Loan Commitments and
outstanding Term Loans as may be required under the Senior Credit Facility
to approve the same.
"Mellon Bank" means Mellon Bank, N.A.
"Mellon Standby L/C Documents" mean the reimbursement agreements,
letter of credit applications and other documents relating to the Mellon
Standby Letters of Credit.
"Mellon Standby L/C Obligations" means (a) each payment, including
payments in respect of reimbursements and cash collateralization, required
to be made by Rite Aid under the Mellon Standby L/C Documents in respect of
Mellon Standby Letters of Credit in an aggregate amount at any time
outstanding not in excess of (i) $26,000,000 minus (ii) the cumulative
amount of proceeds of Collateral applied to such obligations as the result
of the exercise of remedies under the Senior Collateral Documents and (b)
all other monetary obligations, including fees, costs, expenses and
indemnities (including interest and monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable as a claim in such
proceeding) of Rite Aid under the Mellon Standby L/C Documents to the
extent attributable to the Mellon Standby Letters of Credit referred to in
clause (a).
"Mellon Standby Letters of Credit" means the standby letters of
credit issued for the account of the Borrower by Mellon Bank outstanding on
the Closing Date in an aggregate face amount of $26,000,000, together with
any standby letter of credit (other than any letter of credit issued under
the Senior Credit Facility) hereafter issued by Mellon Bank for the account
of any Obligor provided that the Mellon Standby Letters of Credit shall be
limited to an amount at any time outstanding not in excess of (i)
$26,000,000 minus (ii) the cumulative amount of proceeds of Collateral
applied as the result of the exercise of remedies under the Senior
Collateral Documents to reimbursement and cash collateralization
obligations in respect of Mellon Standby Letters of Credit.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor
to its business of rating debt securities.
"Net Cash Proceeds" means,
(a) with respect to any sale, transfer or other
disposition of any property or asset (a "Disposition"), an amount
equal to the cash proceeds received by the Borrower or any of its
Subsidiaries from or in respect of such Disposition (including,
when received, any cash proceeds received in respect of any
noncash proceeds of any Disposition), less (I) the sum of
(i) reasonable costs and expenses paid or incurred
in connection with such transaction, including, without
limitation, any underwriting brokerage or other customary
selling commissions and reasonable legal, advisory and other
fees and expenses (including title and recording expenses,
associated therewith), payments of unassumed liabilities
relating to the assets sold and any severance and termination
costs;
(ii) the amount of any Debt (or Attributable
Debt), together with premium or penalty, if any, and
accrued interest thereon (or comparable obligations in
respect of Attributable Debt) secured by a Lien on (or if
Attributable Debt, the lease of) any asset disposed of in
such Disposition and discharged from the proceeds
thereof, but only to the extent such Lien has priority
over the Senior Lien, the Second Priority Lien and the
Liens under the Exchange Debt First Priority Collateral
Documents;
(iii) any taxes actually paid or to be payable
by such Person (as estimated by a senior financial or
accounting officer of the Borrower, giving effect to the
overall tax position of the Borrower) in respect of such
Disposition;
(iv) the portion of such cash proceeds which the
Borrower determines in good faith and reasonably should
be reserved for post-closing adjustments, including,
without limitation, indemnification payments and purchase
price adjustments, provided, that on the date that all
such post-closing adjustments have been determined, the
amount (if any) by which the reserved amount in respect
of such Disposition exceeds the actual post-closing
adjustments payable by the Borrower or any of the
Subsidiary Guarantors shall constitute Net Cash Proceeds
on such date; and
(v) in the case of a PCS Divestiture the sum of
(1) the PCS Incremental Investment as of the date of
consummation of such disposition plus (2) the aggregate
Net Cash Proceeds of PCS Dispositions in the form of Sale
and Leaseback Transactions theretofore applied to
prepayments of the PCS Facility; and
plus (II) in the case of a PCS Divestiture, the PCS Investment
Reduction as of the date of consummation of such transaction;
(b) with respect to any Capital Markets Transaction, an
amount equal to the cash proceeds received by the Borrower or any
of its Subsidiaries from or in respect of such Capital Markets
Transaction, less any reasonable transaction costs; including
investment banking and underwriting fees, discounts and
commissions and any other expenses (including legal fees and
expenses) reasonably incurred by such Person in respect of such
Capital Markets Transaction; and
(c) with respect to receipt of Casualty/Condemnation
Proceeds, the amount thereof.
"Obligors" means Rite Aid, the Subsidiary Guarantors and any other
Person who is liable for any of the Secured Obligations.
"paid in full" means paid in full in cash.
"PCS" means PCS Holding Corporation, a Delaware corporation, and
its successors.
"PCS Common Stock" means the common stock of PCS owned by Rite
Aid.
"PCS Disposition" means (i) any sale or other disposition of
capital stock of PCS (or of any non-cash proceeds thereof), (ii) any sale,
lease or other disposition (including a Casualty/Condemnation) by PCS or
any of its Subsidiaries of any asset, other than (y) dispositions of
inventory, cash, cash equivalents and other cash management investments and
obsolete, unused or unnecessary equipment, in each case in the ordinary
course of business, and (z) dispositions to PCS or a wholly-owned
Subsidiary of PCS or (iii) any sale, lease or other disposition (including
a Casualty/Condemnation) of PCS Land.
"PCS Divestiture" means a PCS Disposition as a result of which the
business of PCS is no longer conducted by a Consolidated Subsidiary of the
Borrower.
"PCS/Drugstore Pledged Collateral" means the capital stock of PCS
and Xxxxxxxxx.xxx pledged by Rite Aid under the PCS Pledge Agreement and
the Xxxxxxxxx.xxx Pledge Agreement and all income and profits thereon,
dividends and other payments and distributions with respect thereto and all
proceeds of the foregoing subject to a Lien under such agreements.
"PCS Excluded Assets" means (i) any Collateral consisting of
assets of PCS or a Subsidiary of PCS, other than PCS Linked Accounts, (ii)
PCS Land and (iii) any proceeds of clauses (i) and (ii). For purposes of
Article IV of the Collateral Trust and Intercreditor Agreement, any
proceeds of enforcement of the Senior Subsidiary Guarantee Agreement or the
Second Priority Guarantee Agreement against PCS or a Subsidiary of PCS
(other than with respect to the PCS Linked Accounts and the proceeds
thereof) shall be deemed to be proceeds of Collateral consisting of PCS
Excluded Assets.
"PCS Facility" means the PCS Facility dated as of June 12, 2000,
among Rite Aid, the banks party thereto and Xxxxxx Guaranty Trust Company
of New York, as administrative agent.
"PCS Facility Documents" means the "Loan Documents" as defined in
the PCS Facility.
"PCS Facility Obligations" means (i) all principal of and interest
(including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on any loan made
under the PCS Facility, (ii) all other amounts payable by the Borrower
under the PCS Facility Documents and (iii) any renewals or extensions of
any of the foregoing; provided, however, that the principal amount of
indebtedness included in the PCS Facility Obligations shall not exceed the
maximum amount from time to time permitted to be outstanding by the
Collateral Trust and Intercreditor Agreement.
"PCS Facility Parties" means the parties to the PCS Facility
Documents other than the Obligors, the Senior Bank Parties and the
Representatives, but including the administrative agent under the PCS
Facility and the beneficiaries of each indemnification obligation by Rite
Aid or any other Obligor under any PCS Facility Documents.
"PCS Incremental Investment" means, at any date, the amount, if
any, by which the inter-company payable owing by Rite Aid Hdqtrs. Corp. to
PCS at such date is less than such amount as at the Closing Date. The
Borrower shall promptly notify each of the Representatives following the
Closing Date of such latter amount.
"PCS Investment Reduction" means, at any date, the excess, if any,
of (i) the amount, if any, by which the intercompany payable owing by Rite
Aid Hdqtrs. Corp. to PCS at such date is greater than such amount as at May
27, 2000, over (ii) the cumulative PCS EBITDA, as defined in the Senior
Credit Facility, for the period from May 27, 2000, to such date.
"PCS Land" means the real property described as X.X. 00xx Xxxxxx
and Mountainview Road, Scottsdale, Arizona, together with any improvements
thereon.
"PCS Linked Accounts" means any accounts receivable owed to PCS by
third party insurers in respect of claims generated by other Subsidiaries
of Rite Aid and giving rise to related accounts payable owed by PCS to such
other Subsidiaries of Rite Aid.
"PCS Pledge Agreement" means the PCS Pledge Agreement dated as of
October 25, 1999 and amended and restated as of June 12, 2000, between the
Borrower and Xxxxxx Guaranty Trust Company of New York, as agent
thereunder.
"Permitted Disposition" means any of the following:
(i) dispositions of inventory at retail, cash, cash
equivalents and other cash managing investments and obsolete,
unused, uneconomic or unnecessary equipment, in each case in the
ordinary course of business;
(ii) a disposition to a Subsidiary Guarantor, provided,
that (A) if the property subject to such disposition constitutes
Collateral immediately before giving effect to such disposition,
such property continues to constitute Collateral subject to the
Senior Lien and the Second Priority Lien, and (B) no dispositions
of property will be made to or by PCS or its Subsidiaries except
in the ordinary course of business consistent with past practice;
(iii) a sale or discount, in each case without recourse
and in the ordinary course of business, of overdue Accounts (as
defined in the Senior Credit Facility) arising in the ordinary
course of business, but only to the extent such Accounts are no
longer Eligible Accounts Receivable (as defined in the Senior
Credit Facility) and such sale or discount is in connection with
the compromise or collection thereof consistent with customary
industry practice (and not as part of any bulk sale);
(iv) Basket Asset Sales; and
(v) any disposition of Exchange Notes by SPV to SSB or
JPM (or their respective successors, assigns and affiliates),
pursuant to the Forward Commitment Agreement as in effect on the
Closing Date.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"RCF Facility" means the RCF Facility dated as of June 12, 2000,
among Rite Aid, the banks party thereto and Xxxxxx Guaranty Trust Company
of New York, as administrative agent.
"RCF Facility Documents" means the "Loan Documents" as defined in
the RCF Facility.
"RCF Facility Obligations" means (i) all principal of and interest
(including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on any loan made
under the RCF Facility, (ii) all other amounts payable by the Borrower to
the RCF Facility Parties under the RCF Facility Documents and (iii) any
renewals or extensions of any of the foregoing; provided, however, that the
principal amount of indebtedness included in the RCF Facility Obligations
shall not exceed the maximum amount from time to time permitted to be
outstanding by the Collateral Trust and Intercreditor Agreement.
"RCF Facility Parties" means the parties to the RCF Facility
Documents other than the Obligors.
"Reduction" means, when applied to any Debt Facility, (i) the
permanent repayment of outstanding loans (or obligations in respect of
Attributable Debt) under such Debt Facility, (ii) the permanent reduction
of outstanding lending commitments under such Debt Facility or (iii) the
permanent cash collateralization of outstanding letters of credit under
such facility (together with the termination of any lending commitments
utilized by such letters of credit).
"Reduction Event" is (i) a PCS Disposition, (ii) a Capital Markets
Transaction, (iii) a Designated Asset Disposition, (iv) a Senior Collateral
Disposition, (v) other Asset Sales or (vi) receipt of other
Casualty/Condemnation Proceeds.
"Related Exchange Debt" means, with respect to any of the Existing
Facilities (other than the Exchange Debt Facility), Debt under the Exchange
Debt Facility issued in exchange for Debt under such Existing Facility.
"Related Exchange Debt Obligation" shall mean Exchange Debt
Obligations in respect of Related Exchange Debt.
"Representatives" means each of the Senior Collateral Agent and the
Second Priority Representatives.
"Required Prepayment Amount" has the meaning assigned to such term
in the Senior Credit Facility, as in effect on the Closing Date.
"Revolving Credit Commitment" means, with respect to each Bank,
the commitment of such Bank to make Revolving Loans as set forth in Annex 1
of the Senior Credit Agreement, or in the Assignment and Acceptance
Agreement pursuant to which such Bank assumed its Revolving Credit
Commitment, as applicable, as the same may be (a) reduced from time to time
pursuant to Section 2.08 of the Senior Credit Agreement, and (b) reduced or
increased from time to time pursuant to assignments by or to such Bank
pursuant to Section 9.06 of the Senior Credit Agreement.
"Revolving Loans" means the revolving loans made by the Banks to
the Borrower pursuant to Section 2.01(b) of the Senior Credit Agreement.
"Rite Aid" means Rite Aid Corporation, a Delaware corporation, and
its successors.
"Rite Aid Hdqtrs. Corp." means Rite Aid Hdqtrs. Corp., a Delaware
corporation and a Wholly-Owned Consolidated Subsidiary of the Borrower.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor to its business of rating
debt securities.
"Sale and Leaseback Transaction" means the sale or transfer by the
Borrower or any Subsidiary of any office building (including its
headquarters), distribution center, manufacturing plant, warehouse, Store
or equipment now or hereafter owned by the Borrower or any Subsidiary with
the intention that the Borrower or any Subsidiary take back a lease
thereof.
"Second Priority Collateral" means all the "Second Priority
Collateral" as defined in any Second Priority Collateral Documents and
shall also include the Mortgaged Properties and the proceeds thereof, but
shall not in any event include the PCS/Drugstore Pledged Collateral or the
Exchange Debt First Priority Collateral.
"Second Priority Collateral Documents" means the Second Priority
Mortgages, the Second Priority Subsidiary Security Agreement, the Second
Priority Subsidiary Guarantee Agreement, the Second Priority Indemnity,
Subrogation and Contribution Agreement, the Collateral Trust and
Intercreditor Agreement and each of the mortgages, security agreements and
other instruments and documents executed and delivered by any Subsidiary
Guarantor pursuant to any of the foregoing for purposes of providing
collateral security or credit support for any Second Priority Debt
Obligation or obligation under the Second Priority Subsidiary Guarantee
Agreement but specifically excluding the Xxxxxxxxx.xxx Pledge Agreement,
the Exchange Debt First Priority Collateral Documents and the PCS Pledge
Agreement.
"Second Priority Collateral Trustee" means Wilmington Trust
Company, in its capacity as collateral trustee under the Collateral Trust
and Intercreditor Agreement and the Second Priority Collateral Documents,
and its successors.
"Second Priority Debt Documents" means the Existing Facility
Documents, the Exchange Note Documents, the Synthetic Lease Documents and
the Second Priority Collateral Documents.
"Second Priority Debt Obligations" means the collective reference
to the Exchange Debt Obligations, the Exchange Note Obligations, the
Synthetic Lease Obligations, the PCS Facility Obligations, the RCF Facility
Obligations and the Xxxxx Facility Obligations.
"Second Priority Debt Parties" means the Existing Facility
Parties, the Exchange Note Parties, the Synthetic Lease Parties and the
Second Priority Collateral Trustee.
"Second Priority Facilities" means the Exchange Debt Facility, the
Exchange Note Indenture, the Synthetic Lease Facilities, the PCS Facility,
the RCF Facility and the Xxxxx Facility.
"Second Priority Indemnity, Subrogation and Contribution
Agreement" means the Second Priority Indemnity, Subrogation and
Contribution Agreement, dated as of June 12, 2000, among Rite Aid, the
Subsidiary Guarantors and the Second Priority Collateral Trustee.
"Second Priority Instructing Group" means Second Priority
Representatives with respect to Second Priority Facilities under which at
least a majority of the then aggregate amount of Second Priority Debt
Obligations are outstanding.
"Second Priority Lien" means the Liens on the Second Priority
Collateral in favor of the Second Priority Debt Parties under the Second
Priority Collateral Documents.
"Second Priority Mortgages" means the mortgages, deeds of trust,
leasehold mortgages, assignments of leases and rents, modifications and
other security documents which create a Lien in favor of the Second
Priority Collateral Trustee for the benefit of the Second Priority Debt
Parties, delivered pursuant to the Second Priority Debt Documents, each
substantially in the form of Exhibit [ ] to the RCF Facility, with such
changes as are approved by the Senior Collateral Agent and the Second
Priority Representatives.
"Second Priority Representative" means, in respect of each Second
Priority Facility, the trustee under the Exchange Note Indenture and the
administrative agent, security agent or agent under each other Second
Priority Facility and each of their successors in such capacities.
"Second Priority Subsidiary Guarantee Agreement" means the Second
Priority Subsidiary Guarantee Agreement, dated as of June 12, 2000, made by
the Subsidiary Guarantors (including any additional Subsidiary Guarantor
becoming party thereto after the Closing Date) in favor of the Second
Priority Collateral Trustee for the benefit of the Second Priority Debt
Parties.
"Second Priority Subsidiary Security Agreement" means the Second
Priority Subsidiary Security Agreement, dated as of June 12, 2000, made by
the Subsidiary Guarantors (including any additional Subsidiary Guarantor
becoming party thereto after the Closing Date) in favor of the Second
Priority Collateral Trustee for the benefit of the Second Priority Debt
Parties.
"Secured Obligations" means the Senior Obligations and the Second
Priority Debt Obligations.
"Senior Bank" means a "Bank" as defined in the Senior Credit
Facility.
"Senior Bank Obligations" means (i) the principal of each loan
made under the Senior Credit Facility, (ii) all reimbursement and cash
collateralization obligations in respect of letters of credit issued under
the Senior Credit Facility, (iii) all monetary obligations of the Borrower
or any Subsidiary under each Senior Interest Rate Agreement entered into
with any counterparty that was a Senior Bank (or an Affiliate thereof) at
the time such Senior Interest Rate Agreement was entered into, (iv) all
interest on the loans, letter of credit reimbursement, fees and other
obligations under the Senior Credit Facility or such Senior Interest Rate
Agreements (including, without limitation any interest which accrues after
the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower or any Subsidiary
Guarantor, whether or not allowed or allowable as a claim in such
proceeding), (v) all other amounts payable by the Borrower under the Senior
Loan Documents and (vi) all increases, renewals, extensions and
refinancings of the foregoing; provided, however, that the principal amount
of the indebtedness under the Senior Credit Facility included in the Senior
Bank Obligations shall not exceed the maximum amount from time to time
permitted to be outstanding by the Collateral Trust and Intercreditor
Agreement.
"Senior Bank Parties" means each party to the Senior Credit
Facility other than any Obligor, each counterparty to a Senior Interest
Rate Agreement, the beneficiaries of each indemnification obligation
undertaken by Rite Aid or any other Obligor under any Senior Loan Document,
and the successors and permitted assigns of each of the foregoing.
"Senior Collateral" means all the "Senior Collateral" as defined
in any Senior Collateral Document and shall also include the Mortgaged
Properties and the proceeds thereof, but shall not in any event include the
PCS/Drugstore Pledged Collateral and the Exchange Debt First Priority
Collateral.
"Senior Collateral Agent" means Citicorp USA, Inc., in its
capacity as Senior Collateral Agent under the Senior Collateral Documents,
and its successors.
"Senior Collateral Disposition" means (i) any sale, transfer or
other disposition of Senior Collateral (including of any property or assets
that would constitute Senior Collateral but for the release of the Senior
Lien with respect thereto in connection with such sale, transfer or other
disposition), other than a PCS Disposition, or a Permitted Disposition or
(ii) a Casualty/Condemnation with respect to Senior Collateral (other than
PCS Excluded Assets).
"Senior Collateral Documents" means the Senior Mortgages, the
Senior Subsidiary Security Agreement, the Senior Subsidiary Guarantee
Agreement, the Senior Indemnity, Subrogation and Contribution Agreement,
the Collateral Trust and Intercreditor Agreement and each of the mortgages,
security agreements and other instruments and documents executed and
delivered by any Subsidiary Guarantor pursuant to any of the foregoing or
pursuant to the Senior Credit Facility or for purposes of providing
collateral security or credit support for any Senior Obligation or
obligation under the Senior Subsidiary Guarantee Agreement.
"Senior Credit Facility" means the Senior Credit Agreement, dated
as of June 12, 2000, among Rite Aid, as Borrower, the Senior Banks, the
Swingline Banks, the Issuing Banks, the Senior Administrative Agent, the
Senior Collateral Agent and the Syndication Agents.
"Senior Indemnity, Subrogation and Contribution Agreement" means
the Senior Indemnity, Subrogation and Contribution Agreement, dated as of
June 12, 2000 among Rite Aid, the Subsidiary Guarantors (including
Subsidiary Guarantors becoming party thereto after the Closing Date) and
the Senior Collateral Agent.
"Senior Interest Rate Agreement" means any Interest Rate Agreement
entered into with Rite Aid or any Subsidiary, if the applicable
counterparty was a Senior Bank or an Affiliate thereof at the time the
Interest Rate Agreement was entered into.
"Senior Lien" means the Liens on the Senior Collateral in favor of
the Senior Secured Parties under the Senior Collateral Documents.
"Senior Loan Documents" means the Senior Credit Facility, the
Notes referred to in the Senior Credit Facility, each Senior Interest Rate
Agreement, and the Senior Collateral Documents.
"Senior Mortgages" means the mortgages, deeds of trust, leasehold
mortgages, assignments of leases and rents, modifications and other
security documents delivered pursuant to the Senior Credit Facility, each
substantially in the form of Exhibit J to the Senior Credit Facility, with
such changes as are approved by the Senior Collateral Agent.
"Senior Obligation Payment Date" means the date on which (i) the
Senior Obligations have been paid in full, (ii) all lending commitments
under the Senior Credit Facility have been terminated and (iii) there are
no outstanding Independent Standby Letters of Credit or letters of credit
issued under the Senior Credit Facility other than such as have been fully
cash collateralized under documents and arrangements satisfactory to the
issuer of such letters of credit.
"Senior Obligations" means (a) the Senior Bank Obligations and (b)
the Independent Standby L/C Obligations.
"Senior Secured Parties" means (a) the Senior Bank Parties and (b)
the Independent Standby L/C Parties.
"Senior Subsidiary Guarantee Agreement" means the Senior
Subsidiary Guarantee Agreement, made by the Subsidiary Guarantors
(including Subsidiary Guarantors that become parties thereto after the
Closing Date) in favor of the Senior Collateral Agent for the benefit of
the Senior Secured Parties.
"Senior Subsidiary Security Agreement" means the Senior Subsidiary
Security Agreement, made by the Subsidiary Guarantors (including Subsidiary
Guarantors that become parties thereto after the Closing Date) in favor of
the Senior Collateral Agent for the benefit of the Senior Secured Parties.
"SPV" means Fiona One Corp., a Delaware corporation and a
wholly-owned Subsidiary of Rite Aid which is organized for the sole purpose
of acquiring Exchange Notes on the Closing Date from Rite Aid and selling
such Exchange Notes to SSB and JPM in accordance with the Forward
Commitment Agreement.
"SSB" means Xxxxxxx Xxxxx Xxxxxx Inc.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by the
Borrower.
"Subsidiary Guarantor" means each Subsidiary that is party to the
Senior Subsidiary Guarantee Agreement, the Second Priority Subsidiary
Guarantee Agreement or any other Senior Collateral Document or Second
Priority Collateral Document.
"Synthetic Lease" means a lease which is treated as an operating
lease under generally accepted accounting principles but as ownership of
the leased asset by the lessee for purposes of the Internal Revenue Code.
"Synthetic Lease Documents" means [the documents governing the
Synthetic Leases].
"Synthetic Lease Facilities" means certain synthetic leases
entered into by the Subsidiary Guarantors and guaranteed by Rite Aid having
an aggregate discounted present value of approximately $214,000,000, as
amended and restated as of the Closing Date.
"Synthetic Lease Obligations" means all rent and supplemental
rent, all fees and all other expenses or amounts payable by any Obligors to
any Synthetic Lease Parties under any Synthetic Lease Document; provided,
however, that the aggregate amount of the Synthetic Lease Obligations shall
not exceed the maximum amount from time to time permitted to be outstanding
by the Collateral Trust and Intercreditor Agreement.
"Synthetic Lease Parties" means all parties to the Synthetic Lease
Documents other than the Obligors.
"Temporary Cash Investment" means any investment by any Person in
(i) direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof, (ii)
commercial paper rated at least A-1 by S&P and P-1 by Moody's, (iii) time
deposits with, including certificates of deposit issued by, any office
located in the United States of any bank or trust company which is
organized or licensed under the laws of the United States or any state
thereof and has capital, surplus and undivided profits aggregating at least
$500,000,000, (iv) repurchase agreements with respect to securities
described in clause (i) above entered into with an office of a bank or
trust company meeting the criteria specified in clause (iii) above,
provided in each case that such investment matures within one year from the
date of acquisition thereof by such Person or (v) money market mutual funds
at least 90% the assets of which are held in investments referred to in
clauses (i) through (iv) above (except that the maturities of certain
investments held by any such money market funds may exceed one year so long
as the dollar-weighted average life of the investments of such money market
mutual fund is less than one year).
"Term Loans" means the term loans made by the Banks to the
Borrower pursuant Section 2.01(a) of the Senior Credit Agreement.
"Term Loan Commitments" means with respect to each Bank, the
commitment of such Bank to make Term Loans as set forth on Annex 1 of the
Senior Credit Agreement, or in the Assignment and Acceptance pursuant to
which such Bank assumed its Term Loan Commitment, as applicable, as the
same may be (a) reduced from time to time pursuant to Section 2.08 of the
Senior Credit Commitment and (b) reduced or increased from time to time
pursuant to assignments by or to such Bank pursuant to Section 9.06 of the
Senior Credit Commitment.
"Uniform Commercial Code" or "UCC" means, unless otherwise
specified, the Uniform Commercial Code as from time to time in effect in
the State of New York.
EXHIBIT K
[FORM OF] SECOND PRIORITY
SUBSIDIARY GUARANTEE AGREEMENT dated as
of June 12, 2000, among each of the
subsidiaries listed on Schedule I
hereto (each such subsidiary
individually, a "Subsidiary Guarantor"
and collectively, the "Subsidiary
Guarantors") of RITE AID CORPORATION, a
Delaware corporation (the "Borrower"),
and WILMINGTON TRUST COMPANY, a
Delaware banking corporation, as
collateral trustee (in such capacity,
the "Second Priority Collateral
Trustee") for the holders from time to
time of the Second Priority Debt
Obligations.
See Exhibit 10.9 of Form 8-K.
EXHIBIT L
[FORM OF] SECOND PRIORITY SUBSIDIARY SECURITY AGREEMENT
See Exhibit 10.10 of Form 8-K.
EXHIBIT M
[FORM OF] SECOND PRIORITY INDEMNITY,
SUBROGATION and CONTRIBUTION AGREEMENT dated
as of JUNE 12, 2000, among RITE AID
CORPORATION, a Delaware corporation (the
"Borrower"), each Subsidiary of the Borrower
listed on Schedule I hereto (the "Subsidiary
Guarantors") and WILMINGTON TRUST COMPANY, a
Delaware banking corporation, as collateral
trustee (in such capacity, the "Second
Priority Collateral Trustee") for the holders
from time to time of the Second Priority Debt
Obligations.
See Exhibit 10.11 of Form 8-K.
EXHIBIT N
=============================================================================
[FORM OF]
SECOND PRIORITY MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FINANCING STATEMENT
FROM
[ ]
AS SUBSIDIARY GUARANTOR,
THE MORTGAGOR,
TO
WILMINGTON TRUST COMPANY,
AS COLLATERAL TRUSTEE FOR THE SECOND PRIORITY DEBT PARTIES,
THE MORTGAGEE,
----------------------------------------
DATED:
PREMISES:
----------------------------------------
===========================================================================
See Exhibit 10.15 of Form 8-K.
