Rite Aid 2015 Annual Report Download - page 39

borrowings outstanding under the revolver and had letters of credit outstanding against the revolver of
$71.1 million, which resulted in additional borrowing capacity of $1,203.9 million. If at any time the
total credit exposure outstanding under our Amended and Restated Senior Secured Credit Facility and
the principal amount of our other senior obligations exceeds the borrowing base, we will be required to
make certain other mandatory prepayments to eliminate such shortfall.
The Amended and Restated Senior Secured Credit Facility restricts us and the subsidiary
guarantors from accumulating cash on hand in excess of $200.0 million at any time when revolving
loans are outstanding (not including cash located in our store deposit accounts, cash necessary to cover
our current liabilities, cash proceeds of escrow notes issued in connection with a proposed business
acquisition, including the proceeds from our April 2, 2015 issuance of $1.8 billion of our 6.125% senior
notes due 2023, issued to finance the cash portion of our pending acquisition of EnvisionRx, and
certain other exceptions) and from accumulating cash on hand with revolver borrowings in excess of
$100.0 million over three consecutive business days. The Amended and Restated Senior Secured Credit
Facility also states that if at any time (other than following the exercise of remedies or acceleration of
any senior obligations or second priority debt and receipt of a triggering notice by the senior collateral
agent from a representative of the senior obligations or the second priority debt) either (a) an event of
default exists under our Amended and Restated Senior Secured Credit Facility or (b) the sum of
revolver availability under our Amended and Restated Senior Secured Credit Facility and certain
amounts held on deposit with the senior collateral agent in a concentration account is less than
$100.0 million for three consecutive business days (a ‘‘cash sweep period’’), the funds in our deposit
accounts will be swept to a concentration account with the senior collateral agent and will be applied
first to repay outstanding revolving loans under the Amended and Restated Senior Secured Credit
Facility, and then held as collateral for the senior obligations until such cash sweep period is rescinded
pursuant to the terms of our Amended and Restated Senior Secured Credit Facility.
The Amended and Restated Senior Secured Credit Facility allows us to have outstanding, at any
time, up to $1.5 billion (or $1.8 billion solely to the extent incurred in anticipation of the funding of the
Pending Acquisition) in secured second priority debt, split-priority term loan debt, unsecured debt and
disqualified preferred stock in addition to borrowings under the Amended and Restated Senior Secured
Credit Facility and existing indebtedness, provided that not in excess of $750.0 million of such secured
second priority debt, split-priority term loan debt, unsecured debt and disqualified preferred stock shall
mature or require scheduled payments of principal prior to 90 days after the latest of (a) the fifth
anniversary of the effectiveness of the Amended and Restated Senior Secured Credit Facility and
(b) the latest maturity date of any Term Loan or Other Revolving Loan (each as defined in the
Amended and Restated Senior Secured Credit Facility) (excluding bridge facilities allowing extensions
on customary terms to at least the date that is 90 days after such date and, with respect to any escrow
notes issued by Rite Aid, excluding any special mandatory redemption of the type described in
clause (iii) of the definition of ‘‘Escrow Notes’’ in the Amended and Restated Senior Secured Credit
Facility). Subject to the limitations described in clauses (a) and (b) of the immediately preceding
sentence, the Amended and Restated Senior Secured Credit Facility additionally allows us to issue or
incur an unlimited amount of unsecured debt and disqualified preferred stock so long as a Financial
Covenant Effectiveness Period (as defined in the Amended and Restated Senior Secured Credit
Facility) is not in effect; provided, however, that certain of our other outstanding indebtedness limits
the amount of unsecured debt that can be incurred if certain interest coverage levels are not met at the
time of incurrence or other exemptions are not available. The Amended and Restated Senior Secured
Credit Facility also contains certain restrictions on the amount of secured first priority debt we are able
to incur. The Amended and Restated Senior Secured Credit Facility also allows for the voluntary
repurchase of any debt or the mandatory repurchase of our 8.5% convertible notes due 2015 or other
convertible debt, so long as the Amended and Restated Senior Secured Credit Facility is not in default
and we maintain availability under our revolving credit facility of more than (i) prior to the repayment
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