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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
October 16, 2023 (October 15, 2023)
Rite
Aid Corporation
(Exact name of registrant as specified in its
charter)
Delaware |
|
1-5742 |
|
23-1614034 |
(State
or Other Jurisdiction of Incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer
Identification Number) |
P.O.
Box 3165
Harrisburg,
Pennsylvania 17105
(Address of principal executive offices, including
zip code)
(717)
761-2633
(Registrant’s telephone number, including
area code)
N/A
(Former name
or former address, if changed since last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading
Symbol(s) |
|
Name of each exchange on
which registered |
Common
Stock, $1.00 par value |
|
RAD |
|
The
New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ¨
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Explanatory Note
This Form 8-K/A is filed as an amendment to the Current Report on Form
8-K filed by Rite Aid Corporation (“Rite Aid” or the “Company”) on October 16, 2023 (the “Original Form
8-K”) solely in order to file a corrected Exhibit 10.1 to the Original Form 8-K (which supersedes and replaces in its entirety Exhibit
10.1 to the Original Form 8-K). Other than such correction, there are no other changes to the Original Form 8-K, and the descriptions below repeat in their entirety the similar disclosure in the Original Form 8-K.
Item 1.01 Entry into a Material Definitive
Agreement.
The information set forth below in Item 1.03 in
this Current Report on Form 8-K under the captions “Restructuring Transactions”, “DIP ABL Credit Agreement”,
“DIP Term Loan Credit Agreement”, and “Elixir Stalking Horse APA” is hereby incorporated by reference into this
Item 1.01.
Item 1.03 Bankruptcy or Receivership.
Voluntary Petitions for Bankruptcy
On October 15, 2023 (the “Petition
Date”), Rite Aid Corporation (“Rite Aid” or the “Company”) and certain of its direct and
indirect subsidiaries (together with the Company, the “Debtors”) filed voluntary petitions to commence proceedings
under chapter 11 (the “Chapter 11 Cases”) of title 11 of the United States Code (the “Bankruptcy Code”)
in the United States Bankruptcy Court for the District of New Jersey (the “Bankruptcy Court”). The Debtors have requested
that the Chapter 11 Cases be jointly administered under the caption In re Rite Aid Corporation., et al. The Debtors continue
to operate their business as “debtors in possession” under the jurisdiction of the Bankruptcy Court and in accordance with
the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Debtors filed with the Bankruptcy Court certain
motions seeking a variety of customary “first day” relief, including authority to pay employee wages and benefits, to pay
vendors and suppliers for goods and services provided both before and after the Petition Date, and to continue honoring insurance and
tax obligations as they come due. In addition, the Company filed with the Bankruptcy Court a motion seeking approval of certain procedures
relating to the marketing and auction (if necessary) of all or some of the Company’s assets and a motion (the “DIP Motion”)
seeking approval of the Company’s entry into debtor-in-possession financing arrangements on the terms and conditions set forth in
the DIP Credit Agreements (as defined and described below).
Additional information about the Chapter 11 Cases,
including access to Bankruptcy Court documents, is available online at https://restructuring.ra.kroll.com/RiteAid, a website administered
by Kroll Restructuring Administration, LLC, a third-party bankruptcy claims and noticing agent. The documents and other information on
this web site are not part of this Current Report on Form 8-K and shall not be deemed incorporated by reference herein.
Restructuring Transactions
On October 15, 2023, prior to the
commencement of the Chapter 11 Cases, the Company and certain of its direct and indirect subsidiaries (the “Company
Parties”) reached an agreement in principle (the “Restructuring Term
Sheet”) with certain holders of the Company’s 7.500% Senior Secured Notes due 2025 and 8.000% Senior Secured Notes due 2026 (together, the “Senior
Secured Notes”) and the indentures relating to the same (such holders, the “Consenting
Noteholders”) on the terms of a comprehensive restructuring transaction (the “Restructuring
Transaction”) to be implemented through the Chapter 11 Cases. The Restructuring Term Sheet remains subject to
definitive documentation, including execution of a restructuring support agreement (the “Restructuring
Support Agreement”), which the Company expects to enter into with the Consenting Noteholders in the coming days. The
Restructuring Support Agreement, if and when executed by the Company and the Consenting Noteholders, will be on substantially the
same terms as those set forth in the Restructuring Term Sheet. Capitalized terms used but not otherwise defined in this
“Restructuring Support Agreement” section of this Current Report on Form 8-K have the meanings given to them in the
Restructuring Term Sheet and the Plan (as defined below), as applicable.
The Restructuring Transaction contemplates
agreed-upon terms for a pre-arranged financial and operational restructuring (the “Restructuring”). Through the
Restructuring, the Consenting Noteholders will, subject to certain terms and conditions and agreement on the terms of the
Restructuring Support Agreement, support a restructuring of the existing debt of, existing equity interests in, and certain other
obligations of the Company Parties, pursuant to a plan of reorganization (the “Plan”) under Chapter 11 of the
Bankruptcy Code in the Chapter 11 Cases.
Subject to definitive documentation and the
satisfaction of certain terms and conditions, the Restructuring contemplates a debt-for-equity transaction to be implemented through
the Plan (the “Plan Restructuring”) pursuant to which holders of the Senior Secured Notes will receive, in full
satisfaction of their claims, common equity of the Company or an entity formed to indirectly acquire substantially all of the assets
and/or stock of the Company as may be contemplated by the Restructuring (“New Rite Aid”). In the event the Plan
Restructuring is not effectuated in accordance with the terms and conditions of the Restructuring Term Sheet, the Restructuring Term
Sheet contemplates that the Consenting Noteholders will agree, subject to agreement on the terms of the Restructuring Support
Agreement and subject to certain terms and conditions, to purchase all, substantially all, or a material portion of the
Company’s assets through a “credit bid” sale transaction under section 363 of the Bankruptcy Code (the
“Credit Bid Transaction”). Any Plan Restructuring or Credit Bid Transaction will be subject to the
Company’s potential receipt of otherwise “higher or better” offers pursuant to the court-approved sale to be run
by the Debtors in Chapter 11 with respect to a sale of the Debtors’ assets. In a Plan Restructuring, Credit Bid Transaction,
or any other transaction contemplated by the Restructuring Support Agreement, it is possible that holders of Secured Notes Claims
receive all or a portion of their recovery in the form of cash proceeds of one or more asset sales or a combination of cash proceeds
and equity in New Rite Aid.
The Plan, which remains subject to ongoing
negotiations, embodies the terms set forth in the Restructuring Term Sheet, which, among other things, contemplates treatment of the
claims of the Company’s stakeholders as set forth below. Bracketed items reflect the conditional nature of such treatment, as
is set forth in the Plan.
| · | each holder of a claim on account of the DIP ABL Facility shall receive, in full satisfaction of its claim,
(a) in the event of a Plan Restructuring, its allocated share of the Exit ABL Facility, or (b) in the event of a Credit Bid
Transaction or an Alternative Sale Transaction, either, at the DIP ABL Lenders’ discretion, (i) payment in full, in Cash, or
(ii) its allocated share of the Exit ABL Facility; |
| · | each holder of a claim on account of the DIP FILO Facility shall receive, in full satisfaction of its
claim, (a) in the event of a Plan Restructuring, its allocated share of the Exit FILO Term Loan Facility, or (b) in the event
of a Credit Bid Transaction or an Alternative Sale Transaction, either, at the DIP FILO Lenders’ discretion, (i) payment in
full, in Cash, or (ii) its allocated share of the Exit FILO Term Loan Facility; |
| · | each holder of a DIP Term Loan Claim shall receive, in full and final satisfaction of its claim, payment
in full, in Cash; |
| · | to the extent any allowed ABL Facility Claim remains outstanding on the Effective Date, each holder of
an ABL Facility claim shall receive, in full and final satisfaction of its claim, either payment in full, in Cash, or reinstatement of
the Allowed ABL Facility Claim under the Exit ABL Facility; |
| · | to the extent any allowed FILO Term Loan Facility Claim remains outstanding on the Effective Date, each
holder of a FILO Term Loan Facility Claim shall receive, in full and final satisfaction of its claim, either payment in full, in Cash,
of all ABL Facility Claims, or reinstatement of the Allowed FILO Term Loan Facility Claims under the FILO Term Loan Facility; |
| · | each holder of an allowed Senior Secured Notes Claim, in full satisfaction of its claim, shall receive
(a) in the event of a Plan Restructuring, [(i) 100% of the common equity (the “New Common Stock”) of New
Rite Aid, subject to dilution by the Management Incentive Plan, and any equity-linked securities issued to the holders of allowed General
Unsecured Claims, plus (ii) its pro rata share of the takeback facility, if applicable; or (b) in the event the Restructuring
Transaction is not a Plan Restructuring, [its pro rata share of the Distributable Proceeds, if any, pursuant to the Waterfall Recovery]]; |
| · | each holder of an allowed General Unsecured Claim, in full satisfaction of its claim, subject to (A) the
DIP Term Loan Claims, the ABL Facility Claims, and the FILO Term Loan Facility Claims being satisfied in full, in Cash, or such other
treatment acceptable to the DIP Lenders and / or the ABL Lenders and the FILO Lenders, as applicable, in their sole discretion, and (B) the
satisfaction of any Allowed Adequate Protection Claims, shall receive [[__]% of an equity-linked instrument in New Rite
Aid (form and terms to be determined), calculated as of the Effective Date and equal to the product of a formula calculated as the (midpoint
value of owned real estate not encumbered prior to the Petition Date, less the costs and expenses to be paid by, or estimated to be paid
by, the Debtors’ Estates to administer the Chapter 11 Cases) divided by (the sum of the numerator plus the total amount
(including principal and accrued but unpaid interest) of the equitized Senior Secured Notes Claims)]; |
| · | each Intercompany Claim shall be, at the option of the Debtors, reinstated, set off, settled, distributed,
contributed, cancelled, or released without any distribution on account of such Intercompany Claim, or such other treatment as is reasonably
determined by the Debtors; |
| · | each Intercompany Interest shall be, at the option of the Debtors, reinstated, set off, settled, distributed,
contributed, cancelled, or released without any distribution on account of such Intercompany Interest, or such other treatment as is reasonably
determined by the Debtors; |
| · | all Existing Equity Interests in Rite Aid will be cancelled and extinguished, and Holders of Existing
Equity Interests in Rite Aid shall receive no recovery on account of such Interests; and |
| · | Section 510(b) Claims shall be discharged, cancelled, released, and extinguished without any
distribution to Holders of such Claims. |
The Restructuring Term Sheet contains milestones
for the progress of the Chapter 11 Cases (the “Milestones”), which include the dates by which the Debtors are required
to, among other things, obtain certain orders of the Court and consummate the Restructuring Transactions.
Although the Company intends to pursue the
Restructuring as contemplated by the Restructuring Term Sheet, there can be no assurance that the Company will be successful in
entering into a Restructuring Support Agreement on the terms set forth in the Restructuring Term Sheet and the terms of the
Restructuring Support Agreement and Plan may be subject to material change. In addition, the transactions contemplated by the
Restructuring Term Sheet are subject to approval by the Bankruptcy Court, among other conditions. Accordingly, no assurance can be
given that the transactions described therein will be consummated on the expected terms, if at all.
The foregoing description of the Restructuring
Term Sheet is not complete and is qualified in its entirety by reference to the Restructuring Term Sheet, a copy of which is attached
to this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference.
DIP ABL Credit Agreement
Subject to the approval of the Bankruptcy Court,
the Company, as borrower (the “DIP ABL Borrower”), and certain of the Company’s direct and indirect debtor-subsidiaries,
as guarantors (together with the DIP ABL Borrower, the “DIP ABL Loan Parties”), expect to enter into that certain debtor-in-possession
credit agreement (the “DIP ABL Credit Agreement”) with the lenders from time to time party thereto (the “DIP
ABL Lenders”) and Bank of America, N.A., as administrative agent and collateral agent (the “DIP ABL Agent”),
on the terms and conditions set forth therein. Capitalized terms used but not otherwise defined in this “DIP ABL Credit Agreement”
section of this Current Report on Form 8-K shall have the meanings given to them elsewhere in this Current Report on Form 8-K
(or, if not defined herein, in the DIP ABL Credit Agreement). Pursuant to the DIP ABL Credit Agreement, the DIP ABL Lenders have agreed,
upon the terms and conditions set forth therein, to make available to the DIP ABL Borrower a superpriority senior secured debtor-in-possession
asset-based credit facility in the aggregate principal amount of $3.25 billion, consisting of (x) a $2.85 billion revolving credit
facility (the “DIP Revolving Facility”), and (y) a $400 million first-in last-out term loan facility (the “DIP
FILO Facility,” and, together with the DIP Revolving Facility, the “DIP ABL Facilities”) in order to (a) repay
all outstanding obligations arising under, or related to, the Existing Credit Agreement and the Existing Facilities, (b) fund the
Chapter 11 Cases, (c) provide working capital for the DIP ABL Loan Parties during the pendency of the Chapter 11 Cases, and (d) make
certain other payments as more fully provided in the Bankruptcy Court orders approving the DIP ABL Facilities, all in accordance with
an Approved Budget (subject to the Permitted Variance) and as otherwise provided therein. The DIP ABL Loan Parties’ obligations
under the DIP ABL Credit Agreement will be secured by liens on substantially all of the personal property of the DIP ABL Loan Parties,
subject to certain exceptions.
The DIP ABL Facilities will mature on the date
that is twelve months from the Closing Date. The interest rate applicable to loans under the DIP Revolving Facility is an adjusted Term
SOFR-based rate (determined in a customary manner) plus a margin of 3.25%. Additionally, the Company is required to pay a fee of 0.50%
per annum on the daily unused amount of the commitments under the DIP Revolving Facility. The interest rate applicable to loans under
the DIP FILO Facility is an adjusted Term SOFR-based rate (determined in a customary manner) plus a margin of 5.25%, which margin is subject
to downward adjustment to 4.75% upon the occurrence of certain paydown events, and a 1.00% upfront fee payable upon the Closing Date.
The DIP ABL Credit Agreement includes customary
negative covenants for debtor-in-possession loan agreements of this type, including covenants limiting the DIP ABL Borrower and its restricted
subsidiaries’ ability to, among other things, incur additional indebtedness, create liens on assets, make investments, loans, advances
or guarantees, engage in mergers, consolidations, sales of assets and acquisitions and pay dividends and distributions, in each case subject
to customary exceptions for debtor-in-possession loan agreements of this type. The DIP ABL Credit Agreement also includes representations
and warranties, mandatory prepayments, affirmative covenants and events of default customary for financings of this type. Certain bankruptcy-related
events are also events of default, including, but not limited to, the dismissal by the Bankruptcy Court of any of the Chapter 11 Cases,
the conversion of any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code, the appointment of a trustee pursuant
to chapter 11 of the Bankruptcy Code, and certain other events related to the impairment of the DIP ABL Lenders’ rights or liens
granted under the DIP ABL Credit Agreement.
The foregoing description of the DIP ABL Credit
Agreement and the DIP ABL Facilities does not purport to be complete and is qualified in its entirety by reference to the DIP ABL Credit
Agreement, a substantially final form of which is attached to this Current Report on Form 8-K as Exhibit 10.2 and is incorporated
herein by reference.
DIP Term Loan Credit Agreement
Subject to the approval of the Bankruptcy Court,
the Company, as borrower (the “DIP Term Loan Borrower”), and certain of the Company’s direct and indirect debtor-subsidiaries,
as guarantors (together with the DIP Term Loan Borrower, the “DIP Term Loan Parties”), expect to enter into that
certain debtor-in-possession term loan agreement (the “DIP Term Loan Credit Agreement,” and, together with the
DIP ABL Credit Agreement, the “DIP Credit Agreements”) with the lenders from time to time party thereto (the “DIP
Term Loan Lenders”) and Bank of America, N.A., as administrative agent and collateral agent (the “DIP Term Loan Agent”),
on the terms and conditions set forth therein. Capitalized terms used but not otherwise defined in this “DIP Term Loan Credit Agreement”
section of this Current Report on Form 8-K shall have the meanings given to them elsewhere in this Current Report on Form 8-K
(or, if not defined herein, in the DIP Term Loan Credit Agreement). Pursuant to the DIP Term Loan Credit Agreement, the DIP Term Loan
Lenders have agreed, upon the terms and conditions set forth therein, including the approval of the Bankruptcy Court, to make available
to the DIP Term Loan Borrower a senior secured debtor-in-possession term loan credit facility in the aggregate principal amount of $200
million (the “DIP Term Loan Facility,” together with the DIP ABL Facility and the DIP FILO Facility, the “DIP
Facilities”) in order to (a) fund the Chapter 11 Cases, (b) make certain other payments as more fully provided in
the Bankruptcy Court orders approving the DIP Term Loan Facility, and (c) provide working capital for the DIP Term Loan Parties during
the pendency of the Chapter 11 Cases, all in accordance with an Approved Budget (subject to the Permitted Variance) and as otherwise provided
therein. The obligations under the DIP Term Loan Credit Agreement will be secured by liens on substantially all of the real and personal
property of the DIP Term Loan Parties, subject to certain exceptions.
The DIP Term Loan Facility will mature on the
date that is twelve months from the Closing Date. The interest rate applicable to loans under the DIP Term Loan Facility is an adjusted
Term SOFR-based rate (determined in a customary manner) plus a margin of 7.50%.
The DIP Term Loan Credit Agreement includes customary
negative covenants for debtor-in-possession loan agreements of this type, including covenants limiting the DIP Term Loan Borrower and
its restricted subsidiaries’ ability to, among other things, incur additional indebtedness, create liens on assets, make investments,
loans, advances or guarantees, engage in mergers, consolidations, sales of assets and acquisitions and pay dividends and distributions,
in each case subject to customary exceptions for debtor-in-possession loan agreements of this type. The DIP Term Loan Credit Agreement
also includes representations and warranties, mandatory prepayments, affirmative covenants and events of default customary for financings
of this type. Certain bankruptcy-related events are also events of default, including, but not limited to, the dismissal by the Bankruptcy
Court of any of the Chapter 11 Cases, the conversion of any of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code,
the appointment of a trustee pursuant to chapter 11 of the Bankruptcy Code, and certain other events related to the impairment of the
DIP Term Loan Lenders’ rights or liens granted under the DIP Term Loan Credit Agreement.
The foregoing description of the DIP Term Loan
Credit Agreement and the DIP Term Loan Facility does not purport to be complete and is qualified in its entirety by reference to the DIP
Term Loan Credit Agreement, a substantially final form of which is attached to this Current Report on Form 8-K as Exhibit 10.3
and is incorporated herein by reference.
In connection with the Chapter 11 Cases, the Debtors
filed the DIP Motion seeking Bankruptcy Court approval of their entry into and performance under the DIP Credit Agreements and use of
cash collateral, as well as certain related relief. The Debtors expect that the Bankruptcy Court will grant
the DIP Motion on an interim basis on or about October 16, 2023. The Debtors will seek the Bankruptcy Court’s approval of the
DIP Motion on a final basis in the coming weeks.
Elixir Stalking Horse APA
On October 15, 2023, Hunter Lane, LLC, a
subsidiary of the Company, and certain of Hunter Lane, LLC’s subsidiaries (collectively, the “Sellers”) entered
into an asset purchase agreement (the “Elixir Stalking Horse APA”) with a buyer, MedImpact Healthcare Systems, Inc.
(the “Buyer”), pursuant to which the Buyer has agreed to purchase, subject to the terms and conditions contained therein,
substantially all of the assets of the Sellers, which, collectively constitute the “Elixir Assets.” The Sellers are Debtors
in the Chapter 11 Cases.
The acquisition of the Elixir Assets by the Buyer
pursuant to the Elixir Stalking Horse APA is subject to approval of the Bankruptcy Court and one or more auctions, if necessary, to solicit
higher or otherwise better bids. On October 15, 2023, the Debtors filed a motion (the “Bidding Procedures Motion”)
seeking approval of, among other things, certain marketing, auction, and bidding procedures (“Bidding Procedures”),
pursuant to which the Debtors will solicit and select the highest or otherwise best offer(s) for the sale or sales of the Elixir
Assets and the Debtors’ retail asset portfolio. The Bidding Procedures Motion additionally seeks Bankruptcy Court approval of the
Elixir Stalking Horse APA and designation of the Buyer as the “stalking horse” bidder for the Elixir Assets. The Debtors
anticipate that the Bankruptcy Court will enter an order approving the relief requested in the Bidding Procedures Motion after a hearing
scheduled for October 16. 2023.
In accordance with the Bidding Procedures, if
the Debtors receive any higher or otherwise better bids by November 16, 2023, the Debtors expect to conduct an auction for the
Elixir Assets by November 20, 2023. As the stalking horse bidder, the Buyer’s offer to purchase the Elixir Assets, as set forth
in the Elixir Stalking Horse APA, serves as the minimum or bid floor on which the Debtors, their creditors, other stakeholders, and other
bidders may rely. Other interested bidders will be permitted to participate in the auction for the Elixir Assets, if, in accordance with
the Bidding Procedures, such interested bidders submit qualifying offers that are higher or otherwise better than the stalking horse bid.
Under the terms of the Elixir Stalking Horse
APA, the Buyer has agreed, subject to Bankruptcy Court approval and absent any higher or otherwise better bid, to acquire the Elixir
Assets from the Sellers for $575 million (the “Purchase
Price”), subject to certain adjustments in accordance with the terms and conditions of the Elixir Stalking Horse APA,
plus the assumption of specified liabilities related to the Elixir Assets. If the Sellers receive a better or otherwise higher bid
and the Bankruptcy Court approves the Sellers’ consummation of an alternative sale of the Elixir Assets to any purchaser other
than the Buyer, the Sellers will pay the Buyer a break-up fee and reimbursement of certain expenses associated with the negotiation,
drafting, and execution of the Elixir Stalking Horse APA, not to exceed 3.5% of the Purchase Price in the aggregate, subject to
approval by the Bankruptcy Court.
The foregoing description of the Bidding Procedures
and Elixir Stalking Horse APA remain subject to approval by the Bankruptcy Court, is not complete, and is qualified in its entirety by
reference to the Elixir Stalking Horse APA, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.4,
and is hereby incorporated herein by reference.
Item 2.04 Triggering Events that Accelerate
or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The filing of the Chapter 11 Cases constitutes
an event of default that accelerated obligations under the following debt instruments and agreements (the “Debt Instruments”):
| · | Credit Agreement, dated as of December 20, 2018, among Rite Aid Corporation, the lenders from time
to time party thereto and Bank of America, N.A., as administrative agent and collateral agent, amended by (i) the First Amendment
to Credit Agreement, dated as of January 6, 2020, among Rite Aid Corporation, the lenders party thereto and Bank of America, N.A.,
as administrative agent and collateral agent, (ii) the Second Amendment to Credit Agreement, dated as of August 20, 2021, among
Rite Aid Corporation, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent and (iii) the
Third Amendment to Credit Agreement, dated as of December 1, 2022, among Rite Aid Corporation, the lenders party thereto and Bank
of America, N.A., as administrative agent and collateral agent; |
| · | Indenture, dated as of August 1, 1993, between Rite Aid Corporation, as issuer, and Morgan Guaranty
Trust Company of New York, as trustee, related to the Company’s 7.70% Notes due 2027; |
| · | Supplemental Indenture, dated as of February 3, 2000, between Rite Aid Corporation and U.S. Bank
Trust National Association (as successor trustee to Morgan Guaranty Trust Company of New York) to the Indenture dated as of August 1,
1993, between Rite Aid Corporation and Morgan Guaranty Trust Company of New York, relating to the Company’s 7.70% Notes due 2027; |
| · | Indenture, dated as of December 21, 1998, between Rite Aid Corporation, as issuer, and Harris Trust
and Savings Bank, as trustee, related to the Company’s 6.875% Notes due 2028; |
| · | Supplemental Indenture, dated as of February 3, 2000, between Rite Aid Corporation and Harris Trust
and Savings Bank to the Indenture, dated December 21, 1998, between Rite Aid Corporation and Harris Trust and Savings Bank, related
to the Company’s 6.875% Notes due 2028; |
| · | Indenture, dated as of February 5, 2020, among Rite Aid Corporation, the subsidiary guarantors named
therein and The Bank of New York Mellon Trust Company, N.A., related to the Company’s 7.500% Senior Secured Notes due 2025; |
| · | Indenture, dated as of July 27, 2020, among Rite Aid Corporation, the subsidiary guarantors named
therein and The Bank of New York Mellon Trust Company, N.A., related to the Company’s 8.000% Senior Secured Notes due 2026; |
| · | Supplemental Indenture, dated as of August 27, 2021, among Rite Aid Corporation, the subsidiary guarantors
named therein and The Bank of New York Mellon Trust Company, N.A., to the Indenture, dated as of February 5, 2020, related to the
Company’s 7.500% Senior Secured Notes due 2025; |
| · | Supplemental Indenture, dated as of August 27, 2021, among Rite Aid Corporation, the subsidiary guarantors
named therein and The Bank of New York Mellon Trust Company, N.A., to the Indenture, dated as of July 27, 2020, related to the Company’s
8.000% Senior Secured Notes due 2026; |
| · | Supplemental Indenture, dated as of March 31, 2022, among Rite Aid Corporation, the subsidiary guarantors
named therein and The Bank of New York Mellon Trust Company, N.A., to the Indenture, dated as of February 5, 2020, related to the
Company’s 7.500% Senior Secured Notes due 2025; |
| · | Supplemental Indenture, dated as of March 31, 2022, among Rite Aid Corporation, the subsidiary guarantors
named therein and The Bank of New York Mellon Trust Company, N.A., to the Indenture, dated as of July 27, 2020, related to the Company’s
8.000% Senior Secured Notes due 2026; |
| · | Supplemental Indenture, dated as of September 19, 2022, among Rite Aid Corporation, the subsidiary
guarantors named therein and The Bank of New York Mellon Trust Company, N.A., to the Indenture, dated as of February 5, 2020, related
to the Company’s 7.500% Senior Secured Notes due 2025; and |
| · | Supplemental Indenture, dated as of September 19, 2022, among Rite Aid Corporation, the subsidiary
guarantors named therein and The Bank of New York Mellon Trust Company, N.A., to the Indenture, dated as of July 27, 2020, related
to the Company’s 8.000% Senior Secured Notes due 2026. |
The Debt Instruments provide that, as a result
of the Chapter 11 Cases, the principal amount together with accrued and unpaid fees and interest thereon, and in the case of the indebtedness
outstanding under the senior notes, premium, if any, thereon, shall be immediately due and payable. Accordingly, all long-term debt was
classified as current on the unaudited condensed consolidated balance sheet as of September 2, 2023. However, any efforts to enforce
payment obligations under the Debt Instruments are automatically stayed as a result of the Chapter 11 Cases and the creditors’ rights
in respect of the Debt Instruments are subject to the applicable provisions of the Bankruptcy Code. Additionally, in connection with the
Chapter 11 Cases, the Company has incurred, and expects to continue to incur, significant professional fees and other costs in connection
with the Chapter 11 Cases. There can be no assurance that the Company’s current liquidity is sufficient to allow it to satisfy its
obligations related to the Chapter 11 Cases or to pursue confirmation of the Plan.
Item 7.01 Regulation FD Disclosure.
Press Release
On October 15, 2023, the Company issued a
press release announcing the filing of the Chapter 11 Cases. A copy of the press release is attached as Exhibit 99.1 to this Current
Report on Form 8-K and incorporated herein by reference.
Cleansing Materials
In August and September 2023, the Company
entered into confidentiality agreements with certain of the secured noteholders (as amended from time to time, the “Confidentiality
Agreements”). Pursuant to the Confidentiality Agreements, the Company agreed to publicly disclose certain information upon the
occurrence of certain events (the “Cleansing Materials”), including updated financial projections prepared by the Company
and provided to such holders, which are attached to this Current Report on Form 8-K as Exhibit 99.2.
The Cleansing Materials are based solely on information
available to the Company as of the date of the Cleansing Materials and were not prepared with a view toward public disclosure. The Cleansing
Materials should not be relied on by any party for any reason. The Cleansing Materials should not be relied upon as a reliable prediction
of future events. Neither the Company nor any third party has made or makes any representation to any person regarding the accuracy of
any Cleansing Materials or undertakes any obligation to publicly update the Cleansing Materials to reflect circumstances existing after
the date when the Cleansing Materials were prepared or conveyed or to reflect the occurrence of future events.
The information contained in this Item 7.01, including
in Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be
deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange
Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the
extent expressly set forth by specific reference in such a filing.
Item 8.01 Other Events.
Cautionary Note Regarding the Company’s
Securities
The Company cautions that trading in its securities
during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for the Company’s
securities may bear little or no relationship to the actual recovery, if any, by holders of the Company’s securities in the Chapter
11 Cases. In particular, the Company expects that its equity holders could experience a significant or complete loss on their investment,
depending on the outcome of the Chapter 11 Cases.
Cautionary Statement Regarding Forward-Looking
Statements
Statements in this report that are not historical,
are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such
statements include, but are not limited to, statements regarding the Debtors’ continued operation of the business as “debtors-in-possession”;
the Company’s expectation to be granted “first day relief” and its impact on the ability to pay for continuing obligations,
including, but not limited to, employee wages, vendors, suppliers for goods, services, taxes and insurance; the Company’s expectation
that it will enter into the Restructuring Support Agreement with the Consenting Noteholders and the anticipated timeline for doing so;
the Company’s expectation that the transactions contemplated by the Restructuring Term Sheet are consummated by the Bankruptcy Court
in the terms outlined herein; the Company’s expectation regarding entry into the DIP Credit Agreements and the Bankruptcy Court’s
approval thereof; the Company’s expectation regarding the Elixir Stalking Horse APA and the Bankruptcy Court’s approval thereof
and of the Bidding Procedures; statements regarding the amount of professional fees and other costs incurred in connection with the Chapter
11 Cases; and any assumptions underlying any of the foregoing. Words such as “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,”
“project,” “should,” and “will” and variations of such words and similar expressions are intended
to identify such forward-looking statements.
These forward-looking statements are not guarantees
of future performance and involve risks, assumptions and uncertainties, including, but not limited to: the Company’s ability to
fund its planned operations for the next twelve months and its ability to continue as a going concern; the adverse impact of the Chapter
11 Cases on the Company’s business, financial condition, and results of operations; the Company’s ability to successfully
consummate the Restructuring and emerge from the Chapter 11 Cases, including by entering into the Restructuring Support Agreement and
ultimately satisfying the conditions and milestones set forth therein; the Company’s ability to improve its liquidity and long-term
capital structure and to address its debt service obligations through the Restructuring; the Company’s ability to make the required
payments under the agreements governing its current debt obligations; the Company’s ability to maintain relationships with suppliers,
customers, employees and other third parties as a result of the Restructuring and the Chapter 11 Cases; the Company’s ability to
execute on currently contemplated asset sales; the effects of the Restructuring and the Chapter 11 Cases on the Company and the interests
of various constituents; risks and uncertainties associated with the Restructuring, including the Company’s ability to receive approvals
for debtor-in-possession financing, obtain confirmation of the Plan under the Chapter 11 Cases and successfully consummate the Restructuring;
the Company’s ability to receive any required approvals of the Plan and the responses of its securityholders and other stakeholders,
including those party to the Restructuring Term Sheet, and ultimately, the Restructuring Support Agreement; subject to the successful
outcome of the Restructuring, the nature, cost, impact and outcome of pending and future litigation, other legal or regulatory proceedings,
or governmental investigations and actions, including those related to opioids, “usual and customary” pricing, government
payer programs, business practices, or other matters; the Company’s ability to maintain the listing of its common stock on the New
York Stock Exchange (the “NYSE”), and the resulting impact of either (i) a delisting or (ii) remedies taken
to prevent a delisting on the Company’s results of operations and financial condition]; the risks and certainties of assumptions
made in any projections contained in the Cleansing Materials; and other risks and uncertainties described from time to time in the Company’s
filings with the U.S. Securities and Exchange Commission (the “SEC”).
These and other risks, assumptions and uncertainties
are more fully described in Item 1A (Risk Factors) of the Company’s most recent Annual Report on Form 10-K and in other documents
that we file or furnish with the SEC, which you are encouraged to read. Should one or more of these risks or uncertainties materialize,
or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking
statements. Accordingly, you are cautioned not to rely on these forward-looking statements, which speak only as of the date they are made.
The Company expressly disclaims any current intention, and assumes no duty, to update publicly any forward-looking statement after the
distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Numbers |
|
Description |
|
Incorporation By Reference To |
10.1 |
|
*Restructuring Term Sheet |
|
Filed herewith. |
10.2 |
|
*Restructuring Term Sheet
*DIP ABL Credit Agreement |
|
Exhibit 10.2 to Form 8-K, filed on October 16, 2023 |
10.3 |
|
*DIP Term Loan Credit Agreement |
|
Exhibit 10.3 to Form 8-K, filed on October 16, 2023 |
10.4 |
|
*Elixir Stalking Horse APA |
|
Exhibit 10.4 to Form 8-K, filed on October 16, 2023 |
99.1 |
|
Press Release, dated October 15, 2023 |
|
Exhibit 99.1 to Form 8-K, filed on October 16, 2023 |
99.2 |
|
Cleansing Materials |
|
Exhibit 99.2 to Form 8-K, filed on October 16, 2023 |
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
|
|
| * | In accordance with Item 601(a)(5) of Regulation S-K, certain schedules or similar attachments to this exhibit have been omitted from this
filing. |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: October 16, 2023
|
RITE AID CORPORATION |
|
|
|
|
By: |
/s/ Matthew C. Schroeder |
|
|
Name: |
Matthew C. Schroeder |
|
|
Title: |
Executive Vice President and Chief Financial Officer |
Exhibit 10.1
Execution Version
RSA |
RSA |
·
The Company and the ad hoc group of senior secured noteholders (the “Secured AHG”) shall enter into a restructuring
support agreement (“RSA”) consistent with the terms set forth herein and as otherwise agreed by the Company and Consenting
Noteholders that hold at least 66.67% of the aggregate principal amount of Secured Notes outstanding as of the petition date.
·
RSA effectiveness shall be subject to the following CP (in addition to other customary CPs):
o RSA shall be entered into by holders of at least 66.67% of the aggregate principal amount of Secured Notes outstanding as of the
petition date (such participating holders, the “Consenting Noteholders”);
o RSA shall contain, among other terms, (i) a covenant by the Debtors to make commercially reasonable efforts to sell, transfer,
or otherwise monetize the CMS Receivable and to keep the professionals for the Required Consenting Noteholders and DIP ABL/FILO/Term Loan
Lenders reasonably informed on the status thereof; (ii) will commence a process to sell, transfer, or otherwise monetize the CMS Receivable,
which process shall be on terms acceptable to DIP ABL/FILO/Term Loan Lenders, the Consenting Noteholders holding at least 66.67% of the
Secured Notes held by all Consenting Noteholders (the “Required Consenting Noteholders”), and which process the Debtors,
the Required Consenting Noteholders, and DIP ABL/FILO/Term Loan Lenders shall negotiate in good faith; and (iii) the Debtors will use
good faith efforts to commence a RFP process to solicit third-party bids to become the Debtors’ primary pharmaceutical provider
and to keep the professionals for the Required Consenting Noteholders and DIP ABL/FILO/Term Loan Lenders reasonably informed on the status
thereof.
o Company shall enter into agreement(s) on or before the Petition Date concerning the treatment of key critical vendors’ claims
and contract(s) (as applicable) both during the chapter 11 case and on a post-emergence basis on terms acceptable to the Company and the
Required Consenting Noteholders
o Agreement on the Paydown Escrow Schedule and Cash Collateral provisions (defined and set forth below) among the Company, the ABL,
and the Required Consenting Noteholders
·
The RSA shall provide that (a) the Consenting Noteholders reserve all rights as to Definitive Documents (to be defined in
the RSA), including Global Bidding Procedures Order, the Interim DIP Order, the Interim Store Closing Order, the Confirmation Scheduling
Order, the Plan, and the Disclosure Statement, that are filed within the first 30 days of the Petition Date, and no consent or approval
by the Consenting Noteholders shall be deemed to have been given by a failure to object to such pleadings, (b) the Debtors and Consenting
Noteholders shall negotiate in good faith on the form of all Definitive Documents, including amendments to any filed pleadings, and (c) upon
the second business day following the date upon which the Final DIP Order is entered, the Required Consenting Noteholders shall have the
option to terminate the RSA if any Definitive Documents, including any motions that have already been filed or orders that have already
been entered, are not in form and substance acceptable to the Required Consenting Noteholders or otherwise inconsistent with the terms
set herein.
|
Implementation |
Mechanism |
Chapter
11 Plan of Reorganization / Section 363 Process. The restructuring transactions will be effectuated through a chapter 11
plan (the “Plan Restructuring”) on terms acceptable to the Company and the Required Consenting Noteholders (the “Plan”)
if, in addition to the satisfaction of other customary conditions and unless otherwise agreed by the Company and the Required
Consenting Noteholders, (i) the Required Consenting Noteholders determine no later than two business days before the voting deadline
in the Disclosure Statement Order that treatment and quantum of administrative expense and priority claims under the Plan is acceptable,
(ii) the Confirmation Order is entered on or before the applicable milestone set forth below, and (iii) an Acceptable Sale Termination
Event (as defined below) has not occurred (the “Plan Conditions”). To effectuate the restructuring transactions described
herein, the Company Parties shall file a Plan that is materially consistent with this Term Sheet.
· Required Consenting Noteholders to credit bid to purchase RAD 2.0 (defined as RAD Retail Business, excluding [400] stores contemplated
for closure, subject to Designation Rights Arrangement) (the “AHG Credit Bid”).
·
If the Plan Conditions are satisfied on or before the applicable confirmation milestone set forth below, the AHG Credit Bid shall
be effectuated pursuant to the Plan.
·
“Reorganized Rite Aid” is defined as RAD 2.0, less any additional stores closed pursuant to the Additional GOB
Sales (defined below), less the assets sold in the PBM Sale, less any other assets sold pursuant to the Retail Sale Process.
If the Plan Conditions are not
satisfied on or before the milestone set forth below, the AHG Credit Bid, subject to the results of the Retail Sale Process, shall be
implemented pursuant to a sale order under section 363 of the Bankruptcy Code (the “Sale Order”) and a liquidating
chapter 11 plan (in the event of the AHC Credit Bid, the “Credit Bid – 363 Sale”; and in the event of an alternative
sale, the “Alternative Sale Transaction”).
Regardless of whether the parties
are pursuing a Plan Restructuring, the Company will file a motion seeking approval of the AHG Credit Bid under section 363 (the “Sale
Motion”) such that the hearing to approve the Sale Motion and entry of the Sale Order may occur on or before the applicable
milestones set forth below if the Plan is not confirmed on or before the applicable confirmation milestone.
|
AHG Credit Bid |
·
AHG Credit Bid shall be subject to the following CPs, in addition to other customary CPs:
o
Reasonably acceptable inventory and working capital on an enterprise and per-store basis;
o
Acceptable go-forward agreements with key vendors, including on treatment of any prepetition/administrative claims;
o
Acceptable exit financing from ABL/FILO lenders; and
o
NewCo to have access to sufficient liquidity at emergence / consummation of the sale.
·
Company and the AHG to engage in good faith discussions on Rite Aid 2.0 store footprint, with additional stores identified for
closure to be incorporated into GOB process
|
Treatment of Claims & Interests under a Plan |
ABL / FILO Claims |
Repaid in full in cash at exit or upon consummation of third-party sales, unless ABL/FILO lenders agree to roll into exit financing |
Senior DIP TL Claims
|
Repaid in full in cash at exit or upon consummation of third-party sales |
Senior Secured Notes Claims (if any)
|
In the event of the Plan Restructuring,
100% of the new common stock in Reorganized Rite Aid, subject to dilution on account of the new stock issued pursuant to the Management
Incentive Plan (the “New Common Stock”) and any equity-linked instruments issued to Holders of Allowed General Unsecured
Claims, plus takeback debt in an amount to be determined by the Required Consenting Noteholders and the Company; or
In the event the Restructuring
Transaction is not a Plan Restructuring, [its Pro Rata share of the Distributable Proceeds, if any, pursuant to the Waterfall Recovery.]
|
Admin/Priority Claims |
Treatment and quantum on terms acceptable to the Required Consenting Noteholders. |
Unsecured Trade Claims |
Subject to same treatment as General Unsecured Claims (excl. Trade Claims), described below. |
General Unsecured Claims (excl. Trade Claims) |
Subject to (i) DIP Term Loan Claims and ABL/FILO Claims being satisfied in full, in cash, or such other treatment acceptable to the DIP Term Loan Lenders and/or ABL/FILO lenders, as applicable, in their sole discretion, and (ii) the satisfaction of any Allowed Adequate Protection Claims, [---]% of an equity-linked instrument in Reorganized Rite Aid (form and terms to be determined), calculated as of the Plan Effective Date and equal to the product of a formula calculated as the (Midpoint Value of owned Real Estate not encumbered prior to the Petition Date, less the costs and expenses paid by, or estimated to be paid by, the Debtors’ estates to administer the chapter 11 cases) divided by (the sum of the numerator plus the total amount (including principal and accrued but unpaid interest) of equitized Senior Secured Notes Claims) |
Equity |
Cancelled |
MIP |
MIP at NewCo or Reorganized Rite Aid, as applicable, to be determined and allocated by the board of such entity |
Treatment of Claims & Interests if AHG Credit Bid Implemented Through a 363 Sale |
· See Paydown and Escrow Schedule.
·
All proceeds, other than an agreed Wind-Down Budget, shall be used to repay DIP Term Loan Claims, ABL/FILO Claims, Secured Notes
Claims, and, if applicable, any general unsecured claims in accordance with the priority set forth in Exhibit A (and otherwise in in accordance
with Financing Order), or an otherwise agreed waterfall among the ABL/FILO Lenders, Company, and Required Consenting Noteholders.
·
Wind-Down Budget shall include an amount sufficient to fund the Professional Fee Escrow, administrative expense claims and priority
claims (in an amount to be negotiated and acceptable to the Required Consenting Noteholders, the DIP Term Loan lenders, ABL/FILO lenders
and the Company Parties as a condition precedent of the effectiveness of the Sale Order as set forth above), [WARN obligations], and other
amounts to be agreed among the DIP Term Loan lenders, the ABL/FILO Lenders, Company, and Required Consenting Noteholders.
|
Store Rationalization |
· The AHG Credit Bid shall include the exclusive right, whether implemented through a Plan Restructuring
or otherwise, exercisable in the Required Consenting Noteholders’ sole discretion, to designate the assumption, assumption and assignment,
or rejection of store leases (the “Designation Rights”) as set forth in that certain
store rationalization agreement between the Company Parties and the Consenting Noteholders, pursuant to which the stores designated for
rejection shall become subject to a GOB sale process on terms acceptable to the Company Parties and the Required Consenting Noteholders
(the “Additional GOB Sales”).
· The following provisions apply with respect to the Designation Rights:
o
The Required Consenting Noteholders will have reasonable consent rights on sell vs. pour decisions with respect to all stores/assets
subject to the GOB process.
o
The proceeds of prescription file sales in connection with of GOB sales (other than (x) Initial GOB Sales and (y) GOB sales conducted
in connection with an exercise of remedies by ABL / FILO Lenders or DIP Term Loan Lenders or after a Cash Collateral Termination Event)
representing [the excess above borrowing base advance amounts, determined in a manner acceptable to the ABL / FILO Lenders, the DIP Term
Loan Lenders, and the Required Consenting Noteholders] to repay the DIP ABL facility and result in a corresponding permanent availability
reserve.
·
It shall be a condition to closing of the AHG Credit Bid, whether such credit bid is effectuated through the Plan or through the
Sale Order, that, prior to the day that is 120 days after the Petition Date, the Debtors shall have obtained an extension of the deadline
to assume or reject the leases subject to the AHG Credit Bid to 210 days after the Petition Date.
|
PBM Sale |
· Sale of the PBM business to a third party if determined to be value-maximizing (based on good-faith discussions and consultation
between Company, DIP Term lenders, ABL / FILO Lenders, and Required Consenting Noteholders); provided that the RSA will include
a termination right exercisable by the Required Consenting Noteholders if the Company receives a Qualified Bid (other than any AHG Credit
Bid) for the PBM business that is acceptable to the Required Consenting Noteholders that the Debtors decline to accept (an “Acceptable
PBM Sale Termination Event”)
·
PBM Sale Timeline Deadlines, subject to Court availability
·
November 17, 2023 – Qualified Bid Deadline
·
November 29, 2023 – Auction
·
December 8, 2023 – Sale Hearing
·
See Paydown and Escrow Schedule.
|
CMS Receivable |
·
See Paydown and Escrow Schedule below and RSA provisions above.
·
The sale, transfer, encumbrance, or monetization of the CMS Receivable and the process thereto shall be in accordance with this
term sheet, the DIP ABL/FILO/Term Loan facilities and the Paydown and Escrow Schedule/priority set forth in Exhibit A.
|
Retail Business Sale |
·
Company to run third party sale process for retail business, with to-be-agreed adjustment mechanics to the extent there are value-maximizing
third party bids for particular assets, regions, or the Company as a whole
·
Closing of any sales to occur as soon as possible following receipt of necessary regulatory approvals
·
Retail Business Sale Timeline Deadlines, subject to Court availability
o
November 16, 2023 – Initial Indications of Interest Deadline
o
December 7, 2023 – Qualified Bid Deadline
o
December 15, 2023 – Auction
o
January 8, 2024
·
Disclosure Statement Hearing on updated Plan and Disclosure Statement, as updated to reflect auction results
·
Approval Hearing: Third-party 363 Sales
o
Approval Hearing:
·
AHG Credit Bid: (i) if Plan Restructuring à February 19, 2024 and (ii) if Credit-Bid
363 Sale à February 26, 2024
· Third-party sales executable by Company in its business judgment in consultation with the Required Consenting Noteholders, ABL/FILO
Lenders, and DIP Term Lenders.
·
The Required Consenting Noteholders shall have (i) an RSA termination right if (a) the Debtor seek approval of a Qualified Bid
(other than the AHG Credit Bid) that the Required Consenting Noteholders do not support or (b) the Debtors refuse to seek approval of
a Qualified Bid (other than the AHG Credit Bid) that is supported by the Required Consenting Noteholders, includes aggregate consideration
of a value in excess of an amount to be agreed relative to the assets proposed to be sold in connection with such Qualified Bid, and is
otherwise value maximizing and agreed to by and DIP ABL/FILO/Term Loan Lenders and (ii) a covenant that the Debtors will seek in good
faith to maximize value to the greatest extent possible in pursuit of Qualified Bids (other than the AHG Credit Bid), take all such necessary
actions to achieve that outcome, and work in good faith with the Consenting Noteholders in connection with such efforts.
· Allocation of sale proceeds to be in accordance with the priority set forth in Exhibit A (and otherwise in in accordance with Financing
Order), or otherwise on terms acceptable to the Company, DIP Term lenders, ABL/FILO Lenders, and Required Consenting Noteholders
|
Critical Vendors / First Day Relief |
All payments under first day motions (critical vendor, etc.) above $1 million to a single party (or group of affiliated parties) will be subject to Required Consenting Noteholders’ approval. |
Case Milestones |
·
Milestones acceptable, subject to ongoing discussions and agreements on other open terms.
·
October 15, 2023 – Petition Date; file “First Day Pleadings”, including Plan and Disclosure Statement.
o
Filing of store closing motion, which seeks authorization to establish procedures for the Company to conduct store closing sales,
including sales (or pours) of prescription assets.
o
Filing of lease rejection motion, which seeks to reject unexpired leases of non-residential real property and abandon certain personal
property on the premises of the rejected lease.
o
Filing of confirmation scheduling motion.
·
October 17, 2023
o
Entry of Global Bidding Procedures Order
o
Entry of Interim DIP Order
o
Entry of Interim Store Closing Order
o Entry of Confirmation Scheduling Order
· November 16, 2023
o
Entry of Final DIP Order
o
Entry of Final Store Closing Order
o
Entry of First Lease Rejection Order
o
Entry of Bar Date Order
·
December 7, 2023 – agreed form of Credit Bid APA among the Company and Consenting Noteholders consistent with the terms set
forth herein
·
January 8, 2024
o
File Sale Motion (regardless of whether the parties are still seeking to consummate the Plan Restructuring as of such date) to
approve AHG Credit Bid
o
Obtain entry of order approving third-party bids resulting from the retail business sale process
·
January 14, 2024 – Entry of Disclosure Statement Order
·
February 19, 2024 – Entry of Confirmation Order
·
February 26, 2024 - Entry the Sale Order if either (a) the Plan Conditions are not satisfied or (b) the Plan Conditions are satisfied
but the Plan is not confirmed, in each case, on or before February 19 |
Adequate Protection For Senior Secured Notes Claims |
Secured noteholders to consent
to Company’s use of secured noteholders’ prepetition collateral, including cash collateral.
The cash collateral order shall
include the following forms of adequate protection for the secured noteholders:
·
(a) to the extent of any diminution in value of the secured noteholders’ collateral, (i) valid, binding, enforceable, and
perfected security interests in, and liens on, the Debtors’ assets, including pre-petition unencumbered assets (the “Unencumbered
Assets”) of the Company as of the Petition Date, which liens and security interests shall be junior and subordinate to the carve-out
and otherwise have the priority set forth in Exhibit A and (ii) allowed superpriority administrative expense claims as provided for in
sections 503(b) and 503(7) of the Bankruptcy Code, subject to the carve-out and other priority terms set forth in Exhibit A; provided
that, for the avoidance of doubt, such liens shall not prime the DIP Term Loan Lenders’ first-priority liens on the Unencumbered
Assets.
·
(b) payment of the reasonable and documented prepetition and postpetition fees and expenses of Secured Notes Trustee (including
Riker Danzig LLP) and the advisors to the Secured AHG (including Paul, Weiss, FTI, Evercore, and local counsel);
·
(c) the milestones set forth in this term sheet and otherwise set forth in the DIP documents;
·
(d) all reporting provided to the prepetition ABL Lenders and the DIP Lenders, including copies of the DIP Budget,(ii) weekly
reporting and conference calls with the advisors to the Ad Hoc Group on status of the Retail Business sale process, (iii) weekly
reporting on the status of lease renegotiations by property, including any settlements achieved with any landlords by property, and (iv)
other customary reporting as reasonably requested by the advisors to the Ad Hoc Group;
·
(e) consent rights on payments on account of prepetition claims pursuant to any first day relief or otherwise in excess of
$1 million to any single party or group of affiliated parties, including on account of 503(b)(9) claims;
·
(f) subject to entry of the Final DIP Order, standard 506(c) waiver, standard waiver of the equities of the case doctrine
under section 552(b), and standard marshaling waiver; and
·
(g) the provisions set forth in the Paydown and Escrow Schedule.
|
Cash Collateral |
·
The Required Consenting Noteholders shall have the right to terminate the Debtors’ use of cash collateral upon (a) the breach
of any “ABL/FILO Case Milestone” (subject to the extension rights of the ABL/FILO/DIP TL agents for 10 BD in accordance with
the ABL/FILO/DIP TL facilities) in effect as of the petition date, which may not be further extended, modified, or amended for the purposes
of these provisions without the prior written consent of the Required Consenting Noteholders or (b) if the Plan is not confirmed
or the order approving the Credit-Bid 363 Sale is not entered on or before [February 26, 2024] (each, a “Cash Collateral
Termination Event”)
·
If any Cash Collateral Termination Event exists, holders of at least 66.67% in aggregate principal amount of the Secured Notes
outstanding at the time of such Cash Collateral Termination Event (the “Required Secured Noteholders”) may elect
to send a written notice to the ABL Agent, the DIP Agents, the Debtors and the Committee ( a “Cash Collateral Standstill Notice”),
informing such parties that a Cash Collateral Termination Event has occurred and is continuing, and upon the expiration of 5 business
days, the Required Secured Noteholders may elect to send a notice (“Cash Collateral Termination Notice”) to the Debtors
and the ABL/TL Agents terminating the Debtors’ use of Cash Collateral effective as of the 30th day following delivery
of such Cash Collateral Termination Notice (such date, the “Cash Collateral Termination Date”)
·
Following the occurrence of the Cash Collateral Termination Date, the ABL/FILO Agent and the DIP TL Agent retains the right to
consent to the use cash collateral solely for the purpose of conducting a sale of all or substantially all of the DIP Collateral (i)
on terms and conditions acceptable to the ABL/FILO Agent and the DIP TL Agent, (ii) with respect to Notes Priority Collateral, on terms
and conditions acceptable to the Required Secured Noteholders; and (iii) with respect to DIP Collateral that is not Notes Priority Collateral,
in good-faith consultation with, and reasonable updates to, the Required Secured Noteholders.
|
Paydown and Escrow Schedule |
With respect
to the application of (i) [PBM Sale Proceeds]1 and (ii) CMS Receivable Proceeds:
·
First $200 million to repay the DIP FILO Facility
·
Second $250 million escrowed solely for the benefit of the Second Lien Notes and to pay down the Second Lien Notes
·
Third, $100 million to repay the DIP ABL Facility (with a 100% corresponding permanent availability reserve)
·
Any additional proceeds shall be shared 50/50 between the DIP ABL Facility on the one hand and the Second Lien Notes on the other
hand provided:
o
Any amounts paid to the DIP ABL Facility shall result in a corresponding permanent availability reserve; and
o
Any amounts paid to the Second Lien Notes shall be escrowed solely for the benefit of the Second Lien Notes
Any amounts escrowed
for the benefit of the Second Lien Notes shall be held in an interest-bearing escrow account and not be used for any other purpose and
shall be escrowed solely for the benefit of the Second Lien Notes to be released upon the earliest of (a) the effective date of the Plan;
(b) consummation of a Sale approving the AHG Credit Bid and pursuant to such Sale, each of the ABL/FILO/DIP TL Facilities has either been
paid in full in cash, consensually converted to an exit facility, or received such other treatment acceptable to the respective ABL/FILO/DIP
TL Lenders in their sole discretion, or (c) consummation of a Sale approving a sale of substantially all of the Debtors’ assets
to one or more third party purchasers and pursuant to such Sale, each of the ABL/FILO/DIP TL Facilities has either been paid in full in
cash, consensually converted to an exit facility, or received such other treatment acceptable to the respective ABL/FILO/DIP TL Lenders
in their sole discretion, provided, if the Second Lien Notes are otherwise paid in full, in Cash, from the proceeds of the Retail
Sale Process, such escrowed amounts shall be released back to the applicable Debtor for distribution in accordance with the Plan. Notwithstanding
the foregoing, upon the earliest to occur of (a) a DIP Termination Event, (b) Cash Collateral Termination Date or (c) any (x) termination
of the RSA, or (y) breach by the Required Secured Noteholders that would give rise to a termination by the Debtors of the RSA, any
amounts previously escrowed for the benefit of the Second Lien Notes shall be applied in accordance with the lien priorities set forth
in Exhibit A/Financing Order; provided that (1) any application of escrowed funds (as a result of the occurrence of any event described
in clauses (a) or (b)) to the payment of any revolving loans under the ABL/FILO/DIP TL shall be accompanied by a permanent reserve against
the borrowing base and (2) any application of escrowed funds (as a result of the occurrence of any event described in cause (c)) to the
payment of any revolving loans under the ABL/FILO/DIP TL may, at the sole discretion of the ABL Agent, be accompanied by a permanent reserve
against the borrowing base.
|
|
Nothing set forth in the RSA or any related document shall be deemed to amend or otherwise modify the terms and conditions of the ABL/FILO/DIP TL facilities or the Financing Orders. The exercise of all rights and remedies with respect to collateral shall at all times remain subject to the Pre-Petition ICA and the Financing Order. |
Other Key Provisions To Be Set Forth in RSA |
D&O
Indemnification. Under the restructuring transactions, all indemnifications currently in place (whether in the by-laws, certificates
of incorporation or formation, limited liability company agreements, other organizational documents, board resolutions, indemnification
agreements, employment contracts, or otherwise) for the current and former directors, officers, managers, employees, attorneys, accountants,
investment bankers, and other professionals of the Company Parties, as applicable, shall be assumed and survive the effectiveness of the
restructuring.
D&O
Policy Assumption. On the Plan Effective Date, the applicable Company Parties shall be deemed to have assumed all unexpired
directors’, managers’, and officers’ liability insurance policies.
Releases
and Exculpation. The Plan shall contain customary releases and exculpations, which, for the avoidance of doubt, shall be supported
by the Secured AHG pursuant to the RSA to which this term sheet will be appended.
Fiduciary
Out. The RSA shall contain a customary “fiduciary out” that each Debtor (and the Board thereof, including any special
committee thereof) may exercise.
|
1 | Definitive documentation to include agreed formula for aggregate proceeds calculation. |
Exhibit A
Priority |
Assets of the Type Constituting both
DIP Shared Collateral and ABL Priority
Collateral, and Proceeds of Avoidance
Actions with Respect to such Assets |
Assets of the Type Constituting both DIP
Shared Collateral and Split-Lien Priority
Collateral and Proceeds of Avoidance
Actions with Respect to such Assets |
DIP Term Loan Exclusive Collateral |
1st Priority |
Carve Out |
Carve Out |
Carve Out |
2nd Priority |
Permitted Prior Liens |
Permitted Prior Liens |
Permitted Prior Liens |
3rd Priority |
DIP ABL Liens |
DIP Term Loan Liens |
Notes Adequate Protection Liens |
DIP Term Loan Liens |
4th Priority |
Prepetition ABL Adequate Protection Liens |
Notes Liens |
Notes Adequate Protection Liens |
5th Priority |
Prepetition ABL Liens |
DIP ABL Liens |
DIP Term Loan Liens |
Prepetition ABL Adequate Protection Liens |
6th Priority |
Notes Adequate Protection Liens |
Prepetition ABL Adequate Protection Liens |
|
7th Priority |
Notes Liens |
Prepetition ABL Liens |
|
|
|
|
|
|
|
Defined
Terms:
“DIP
Shared Collateral” means the Debtors’ interest in all assets and properties (whether tangible or intangible), other than
DIP Term Loan Exclusive Collateral, whether now owned by or owing to, or hereafter acquired by, or arising in favor of, the Debtors (including
under any trade names, styles, or derivations thereof), and whether owned or consigned by or to, or leased from or to, the Debtors, and
regardless of where located, of the type that would constitute Prepetition Collateral (but for application of section 552(b) of
the Bankruptcy Code) and, upon entry of the Final Order, proceeds of Avoidance Actions (other than proceeds of Avoidance Actions constituting
DIP Term Loan Exclusive Collateral).
“ABL Priority Collateral”
has the meaning set forth in the Prepetition Intercreditor Agreement.
“Split-Lien Priority Collateral”
has the meaning set forth in the Prepetition Intercreditor Agreement.
“DIP
Term Loan Exclusive Collateral” means the Debtors’ interest in all of following assets and properties, whether now owned
by or owing to, or hereafter acquired by, or arising in favor of, the Debtors, and whether owned or consigned by or to, or leased from
or to, the Debtors, and regardless of where located: (a) all real property and interests therein (including both fee and leasehold
interests); (b) all proceeds of leasehold interests; (c) all equity interests in the direct or indirect subsidiaries of Rite Aid; (d)
all other assets of the Debtors, other than to the extent constituting DIP Shared Collateral; (e) all “Commercial
Tort Claims” (as defined in Article 9 of the Uniform Commercial Code) related to the foregoing; (f) all insurance policies relating
to the foregoing; (g) except to the extent constituting DIP Shared Collateral, all “Documents”, all “General Intangibles”,
all “Instruments” and all “Letter-of-Credit Rights” (as each quoted term is defined in Article 9 of the Uniform
Commercial Code) related to the foregoing; (h) all collateral and guarantees given by any other person with respect to any of the foregoing,
and all “Supporting Obligations” (including “Letter-of-Credit Rights”) (as each quoted term is defined in Article
9 of the Uniform Commercial Code) with respect to any of the foregoing; (i) all books and records to the extent relating to any of the
foregoing; (j) all products and proceeds of the foregoing; and (k) upon entry of the Final DIP Order, proceeds of avoidance actions with
respect to assets of the type referred to in clauses (a) through (d) of this definition; provided that DIP Term Loan Exclusive
Collateral shall not include the Debtors’ real property leases (but shall include all proceeds of such leases) to the extent a grant
of a security interest therein would violate or invalidate such lease or create a right of termination in favor of any other party thereto
after giving effect to the applicable anti-assignment provisions of the Uniform Commercial Code and the Bankruptcy Code.
Exhibit 10.2
DEBTOR-IN-POSSESSION CREDIT AGREEMENT
dated as of October [●], 2023,
among
RITE
AID CORPORATION,
as the Borrower
THE
LENDERS PARTY HERETO,
and
bank
of america, n.a.,
as Administrative Agent and Collateral Agent
WELLS
FARGO BANK, NATIONAL ASSOCIATION,
as Syndication Agent
CAPITAL ONE, NATIONAL ASSOCIATION,
BMO
BANK N.A.,
FIFTH
THIRD BANK, NATIONAL ASSOCIATION,
MUFG
BANK, LTD.,
PNC
BANK, NATIONAL ASSOCIATION,
TRUIST
BANK,
and
ING
CAPITAL LLC,
as
Co-Documentation Agents,
BofA
SECURITIES, INC.,
WELLS
FARGO BANK, NATIONAL ASSOCIATION,
CAPITAL ONE, NATIONAL ASSOCIATION,
BMO
BANK N.A.,
FIFTH
THIRD BANK, NATIONAL ASSOCIATION,
MUFG
BANK, LTD.,
PNC
CAPITAL MARKETS LLC,
TRUIST
SECURITIES, INC.,
and
ING
CAPITAL LLC,
as Joint Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
Page
ARTICLE I Definitions |
2 |
|
|
SECTION 1.01. |
Defined Terms |
2 |
SECTION 1.02. |
Classification of Loans and Borrowings |
77 |
SECTION 1.03. |
Terms Generally |
77 |
SECTION 1.04. |
Accounting Terms; GAAP |
77 |
SECTION 1.05. |
Divisions |
78 |
SECTION 1.06. |
Excluded Swap Obligations |
78 |
SECTION 1.07. |
Times of Day |
79 |
SECTION 1.08. |
Letter of Credit Amounts |
79 |
SECTION 1.09. |
Interest Rates |
79 |
|
|
|
ARTICLE II
The Credits |
80 |
|
|
SECTION 2.01. |
Commitments |
80 |
SECTION 2.02. |
Loans and Borrowings |
81 |
SECTION 2.03. |
Requests for Borrowings |
82 |
SECTION 2.04. |
Swingline Loans |
82 |
SECTION 2.05. |
Letters of Credit |
84 |
SECTION 2.06. |
Funding of Borrowings |
92 |
SECTION 2.07. |
Interest Elections |
94 |
SECTION 2.08. |
Termination and Reduction of Commitments |
95 |
SECTION 2.09. |
Repayment of Loans; Evidence of Indebtedness |
96 |
SECTION 2.10. |
Amortization and Repayment of Term Loans |
97 |
SECTION 2.11. |
Prepayment of Loans |
98 |
SECTION 2.12. |
Fees |
100 |
SECTION 2.13. |
Interest |
102 |
SECTION 2.14. |
Alternate Rate of Interest; Illegality |
102 |
SECTION 2.15. |
Increased Costs |
106 |
SECTION 2.16. |
Break Funding Payments |
107 |
SECTION 2.17. |
Taxes |
107 |
SECTION 2.18. |
Payments Generally; Pro Rata Treatment; Sharing of
Setoffs |
112 |
SECTION 2.19. |
Mitigation Obligations; Replacement of Lenders |
114 |
SECTION 2.20. |
Borrowing Base Advance Rates; Reserves |
115 |
SECTION 2.21. |
Incremental Loans |
116 |
SECTION 2.22. |
Defaulting Lenders |
117 |
SECTION 2.23. |
Protective Advances |
119 |
|
|
|
ARTICLE III
Representations and Warranties |
120 |
|
|
SECTION 3.01. |
Organization; Powers |
120 |
SECTION 3.02. |
Authorization; Enforceability |
120 |
SECTION 3.03. |
Governmental Approvals; No Conflicts |
121 |
SECTION 3.04. |
Financial Condition; No Material Adverse Effect; Approved
Budget |
121 |
SECTION 3.05. |
Properties |
122 |
SECTION 3.06. |
Litigation and Environmental Matters |
122 |
SECTION 3.07. |
Compliance with Laws and Agreements |
123 |
SECTION 3.08. |
Investment and Holding Company Status |
123 |
SECTION 3.09. |
Taxes |
123 |
SECTION 3.10. |
ERISA |
124 |
SECTION 3.11. |
Disclosure; Accuracy of Information |
124 |
SECTION 3.12. |
Subsidiaries |
124 |
SECTION 3.13. |
Insurance |
124 |
SECTION 3.14. |
Labor Matters |
124 |
SECTION 3.15. |
Real Estate Leases |
125 |
SECTION 3.16. |
Federal Reserve Regulations |
125 |
SECTION 3.17. |
Security Interests |
125 |
SECTION 3.18. |
Use of Proceeds |
125 |
SECTION 3.19. |
Anti-Corruption Laws and Sanctions |
125 |
SECTION 3.20. |
Affected Financial Institutions; Covered Entities |
126 |
SECTION 3.21. |
Chapter 11 Case Matters |
126 |
|
|
|
ARTICLE IV
Conditions |
127 |
|
|
SECTION 4.01. |
Conditions Precedent to Effectiveness |
127 |
SECTION 4.02. |
Conditions Precedent to each Credit Event |
131 |
|
|
|
ARTICLE V
Affirmative Covenants |
132 |
|
|
SECTION 5.01. |
Financial Statements and Other Information |
132 |
SECTION 5.02. |
Notices of Material Events |
136 |
SECTION 5.03. |
Information Regarding Collateral |
136 |
SECTION 5.04. |
Existence; Conduct of Business |
137 |
SECTION 5.05. |
Payment of Obligations |
137 |
SECTION 5.06. |
Maintenance of Properties |
137 |
SECTION 5.07. |
Insurance |
137 |
SECTION 5.08. |
Books and Records; Inspection and Audit Rights; Collateral
and Borrowing Base Reviews |
138 |
SECTION 5.09. |
Compliance with Laws |
139 |
SECTION 5.10. |
Use of Proceeds and Letters of Credit |
140 |
SECTION 5.11. |
Additional Subsidiaries |
140 |
SECTION 5.12. |
Further Assurances |
141 |
SECTION 5.13. |
[Reserved] |
141 |
SECTION 5.14. |
Intercompany Transfers |
141 |
SECTION 5.15. |
Inventory Purchasing |
141 |
SECTION 5.16. |
Cash Management System |
141 |
SECTION 5.17. |
Specified Elixir Assets |
141 |
SECTION 5.18. |
Company Financial Advisors and Lender
Group Consultants |
142 |
SECTION 5.19. |
Approved Budget |
143 |
SECTION 5.20. |
Chapter 11 Case Milestones |
144 |
SECTION 5.21. |
Compliance with Bankruptcy Court Orders, Bankruptcy
Code, Etc. |
145 |
SECTION 5.22. |
Real Estate Leases |
145 |
SECTION 5.23. |
Assumption and Rejection of Contracts and Real Estate
Leases |
145 |
SECTION 5.24. |
Post-Closing Obligations |
146 |
|
|
|
ARTICLE VI
Negative Covenants |
146 |
|
|
SECTION 6.01. |
Indebtedness; Certain Equity Securities |
146 |
SECTION 6.02. |
Liens |
150 |
SECTION 6.03. |
Fundamental Changes |
152 |
SECTION 6.04. |
Investments, Loans, Advances, Guarantees and Acquisitions |
152 |
SECTION 6.05. |
Asset Sales |
154 |
SECTION 6.06. |
Sale and Leaseback Transactions |
155 |
SECTION 6.07. |
Hedging Agreements |
155 |
SECTION 6.08. |
Restricted Payments; Certain Payments of Indebtedness |
155 |
SECTION 6.09. |
Transactions with Affiliates |
156 |
SECTION 6.10. |
Restrictive Agreements |
157 |
SECTION 6.11. |
Amendment of Material Documents |
159 |
SECTION 6.12. |
Minimum ABL Availability |
160 |
SECTION 6.13. |
Restrictions on Asset Holdings by the Borrower |
160 |
SECTION 6.14. |
Corporate Separateness |
160 |
SECTION 6.15. |
Cash Management |
161 |
SECTION 6.16. |
Use of Proceeds |
161 |
SECTION 6.17. |
Intellectual Property Collateral |
161 |
SECTION 6.18. |
Elixir Monetization Event |
161 |
|
|
|
ARTICLE VII
Events of Default |
162 |
|
|
SECTION 7.01. |
Events of Default |
162 |
SECTION 7.02. |
Application of Proceeds |
168 |
|
|
|
ARTICLE VIII
Rights of Agents |
170 |
|
|
SECTION 8.01. |
Appointment and Authority of Agents |
170 |
SECTION 8.02. |
Rights as a Lender |
171 |
SECTION 8.03. |
Exculpatory Provisions |
171 |
SECTION 8.04. |
Reliance by the Agents |
172 |
SECTION 8.05. |
Delegation of Duties |
172 |
SECTION 8.06. |
Resignation or Removal of an Agent |
172 |
SECTION 8.07. |
Reports and Financial Statements |
174 |
SECTION 8.08. |
Non-Reliance on Agents and Other
Lenders |
175 |
SECTION 8.09. |
[Reserved] |
175 |
SECTION 8.10. |
Split-Priority Implementing Agreements |
175 |
SECTION 8.11. |
No Other Duties |
175 |
SECTION 8.12. |
Agents May File Proofs of Claim; Credit Bidding |
176 |
SECTION 8.13. |
Collateral and Guaranty Matters |
177 |
SECTION 8.14. |
Additional Secured Parties |
179 |
SECTION 8.15. |
Certain ERISA Matters |
179 |
SECTION 8.16. |
Recovery of Erroneous Payments |
180 |
|
|
|
ARTICLE IX
Miscellaneous |
181 |
|
|
SECTION 9.01. |
Notices |
181 |
SECTION 9.02. |
Waivers; Amendments |
183 |
SECTION 9.03. |
Expenses; Indemnity; Damage Waiver |
187 |
SECTION 9.04. |
Successors and Assigns |
189 |
SECTION 9.05. |
Survival |
195 |
SECTION 9.06. |
Integration; Effectiveness |
196 |
SECTION 9.07. |
Severability |
196 |
SECTION 9.08. |
Right of Setoff |
196 |
SECTION 9.09. |
Governing Law; Jurisdiction; Consent to Service of
Process |
197 |
SECTION 9.10. |
WAIVER OF JURY TRIAL |
197 |
SECTION 9.11. |
[Reserved] |
198 |
SECTION 9.12. |
Headings |
198 |
SECTION 9.13. |
Confidentiality |
198 |
SECTION 9.14. |
Interest Rate Limitation |
199 |
SECTION 9.15. |
Certain Intercreditor Agreements and Financing Order |
199 |
SECTION 9.16. |
Cash Sweep |
200 |
SECTION 9.17. |
USA Patriot Act |
200 |
SECTION 9.18. |
Certain Permitted Intercreditor Arrangements |
200 |
SECTION 9.19. |
Loan Modification Offers |
202 |
SECTION 9.20. |
No Advisory or Fiduciary Responsibility |
203 |
SECTION 9.21. |
Electronic Execution; Electronic Records |
204 |
SECTION 9.22. |
Acknowledgement and Consent to Bail-In of Affected
Financial Institutions |
205 |
SECTION 9.23. |
Acknowledgement Regarding Any Supported QFCs |
206 |
ANNEXES: |
|
|
|
|
|
Annex I – Approved Budget |
|
SCHEDULES: |
|
|
|
|
|
Schedule 1.01(a) |
- |
Excluded Subsidiaries |
Schedule 1.01(b) |
- |
Existing Letters of Credit |
Schedule 1.01(c) |
- |
Specified Prescription
File Stores |
Schedule 2.01 |
- |
Commitments and Applicable
Percentage |
Schedule 3.04 |
- |
Undisclosed Liabilities |
Schedule 3.05(a)(1) |
- |
Properties |
Schedule 3.05(a)(2) |
- |
Owned Real Property |
Schedule 3.05(a)(3) |
- |
Ground-Leased Real Property |
Schedule 3.05(c) |
- |
Stores, Warehouses and
Distribution Centers |
Schedule 3.06(a) |
- |
Litigation |
Schedule 3.06(b) |
- |
Environmental Matters |
Schedule 3.06(c) |
- |
Hazardous Materials |
Schedule 3.12 |
- |
Subsidiaries |
Schedule 3.13 |
- |
Insurance |
Schedule 3.14 |
- |
Labor |
Schedule 3.15 |
- |
Real Estate Matters |
Schedule 5.20 |
- |
Chapter 11 Case Milestones |
Schedule 5.24 |
- |
Post-Closing Obligations |
Schedule 6.01(a)(xii) |
- |
Existing Indebtedness |
Schedule 6.01(b) |
- |
Equity Issuances |
Schedule 6.02(a)(xi) |
- |
Liens |
Schedule 6.04 |
- |
Investments |
Schedule 6.08(a) |
- |
Restricted Payments |
Schedule 6.09 |
- |
Affiliate Transactions |
Schedule 9.01 |
- |
Notices |
|
|
|
EXHIBITS: |
|
(form of) |
|
|
|
Exhibit A-1 |
- |
Revolving Credit Note |
Exhibit A-2 |
- |
FILO Note |
Exhibit A-3 |
- |
Term Note |
Exhibit B |
- |
Assignment and Acceptance
Agreement |
Exhibit C |
- |
Borrowing Base Certificate |
Exhibit D |
- |
Borrowing/Interest Election
Request |
Exhibit E |
- |
Compliance Certificate |
Exhibit F-1 – F-4 |
- |
U.S. Tax Compliance Certificates |
Exhibit G |
- |
Interim Financing Order |
Exhibit H |
- |
Cash Management Order |
Exhibit I |
- |
Allocation of Proceeds
of Elixir Monetization Events and Specified Elixir Sale |
Exhibit J |
- |
Owned Property Master
List |
DEBTOR-IN-POSSESSION
CREDIT AGREEMENT
This
DEBTOR-IN-POSSESSION CREDIT AGREEMENT, dated as of October [●], 2023, is among RITE AID CORPORATION, a Delaware
corporation (the “Borrower”), each lender from time to time party hereto (each a “Lender”, and
collectively, the “Lenders”), and BANK OF AMERICA, N.A., as administrative agent (in such capacity,
including any successor thereto, the “Administrative Agent”) and collateral agent (in such capacity, including any
successor thereto, the “Collateral Agent”) for the Senior Loan Secured Parties (as hereinafter defined), with BofA
SECURITIES, INC., WELLS FARGO BANK, NATIONAL ASSOCIATION, CAPITAL ONE, NATIONAL ASSOCIATION, BMO BANK N.A.,
FIFTH THIRD BANK, NATIONAL ASSOCIATION, MUFG BANK, LTD, PNC CAPITAL MARKETS LLC, TRUIST
SECURITIES, INC. and ING CAPITAL LLC, as joint lead arrangers and joint bookrunners hereunder (in such capacities,
the “Arrangers”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as co-syndication agent hereunder (in such capacity,
the “Syndication Agent”), and CAPITAL ONE, NATIONAL ASSOCIATION, BMO BANK N.A., FIFTH THIRD BANK,
NATIONAL ASSOCIATION, MUFG BANK, LTD, PNC BANK, NATIONAL ASSOCIATION, TRUIST
BANK and ING CAPITAL LLC, as co-documentation agents hereunder (in such capacity, the “Co-Documentation Agents”).
PRELIMINARY STATEMENTS
A. On
October [●], 2023 (the “Petition Date”), the Borrower and the Subsidiary Loan Parties commenced cases under
Chapter 11 of the Bankruptcy Code, 11 U.S.C. 101 et seq. (the “Bankruptcy Code”), case numbers [●] through [●]
(collectively, the “Chapter 11 Case”) by filing voluntary petitions for relief under Chapter 11 with the United States
Bankruptcy Court for the District of New Jersey (the “Bankruptcy Court”).
B. The
Borrower and the other Loan Parties continue to operate their businesses and manage their properties as debtors and debtors-in-possession
pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code.
C. The
Borrower has requested, and the Lenders have agreed, upon the terms and conditions set forth in this Agreement, to make available to
the Borrower a senior secured credit facility in an aggregate principal amount not to exceed $3,250,000,000 consisting of (x) a
$2,850,000,000 revolving credit facility, and (y) a $400,000,000 first-in last-out term loan facility in order to (a) repay
the Pre-Petition Obligations as provided herein, (b) fund the Chapter 11 Case in accordance with the Approved Budget (subject to
the Permitted Variance) and as provided herein, (c) make certain other payments on the Closing Date as more fully provided herein,
and (d) provide working capital for the Borrower and the Subsidiary Loan Parties during the pendency of the Chapter 11 Case in accordance
with the Approved Budget (subject to the Permitted Variance) and as provided herein.
D. The
Borrower and the Subsidiary Loan Parties desire to secure the Senior Obligations under the Senior Loan Documents by granting to the Senior
Collateral Agent, on behalf of itself and the other Secured Parties, a security interest in and liens upon substantially all of their
assets, whether now existing or hereafter acquired, in each instance as more fully set forth in the Senior Loan Documents and in the
Financing Order.
E. All
Senior Loan Obligations of the Borrower and the Subsidiary Loan Parties to the Lenders and other Senior Secured Parties under this Agreement
and under the other Senior Loan Documents shall be full recourse to each of the Borrower and the Subsidiary Loan Parties, secured by
the Collateral Agent’s security interest in and liens on all or substantially all of the assets of the Borrower and the other Loan
Parties included in the Collateral and entitled to super-priority administrative claim status under the Bankruptcy Code as provided herein
and in the Financing Order.
F. Accordingly,
in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined
Terms. As used in this Agreement, the following terms have the meanings specified below:
“2025 7.500% Note
Indenture” means the Indenture dated as of February 5, 2020, as supplemented prior to the date hereof, among the Borrower,
the Subsidiary Loan Parties party thereto and The Bank of New York Mellon Trust Company, as trustee, relating to the 2025 7.500% Notes.
“2026 8.000% Note
Indenture” means the Indenture dated as of July 27, 2020, as supplemented prior to the date hereof, among the Borrower,
the Subsidiary Loan Parties party thereto and The Bank of New York Mellon Trust Company, as trustee, relating to the 2026 8.000% Notes.
“2027 7.70% Note Indenture”
means the Indenture dated as of August 1, 1993, as supplemented prior to the date hereof, between the Borrower and U.S. Bank Trust
National Association (as successor to Morgan Guaranty Trust Company of New York), as trustee, relating to the 2027 7.70% Notes.
“2028 6.875% Note
Indenture” means the Indenture dated as of December 21, 1998, as supplemented prior to the date hereof, between the Borrower
and The Bank of New York Mellon Trust Company (as successor to Harris Trust and Savings Bank), as trustee, relating to the 2028 6.875%
Notes.
“ABL Availability”
means, on any date of determination, (a) the ABL Loan Cap at such time minus (b) the Total ABL Outstandings at such
time.
“ABL Borrowing Base
Amount” means an amount equal to the sum, without duplication, of the following:
(a) the
Accounts Receivable Advance Rate multiplied by the face amount of Eligible Accounts Receivable; plus
(b) the
Credit Card Receivable Advance Rate multiplied by the face amount of Eligible Credit Card Accounts Receivable; plus
(c) the
Pharmaceutical Inventory Advance Rate multiplied by the Eligible Pharmaceutical Inventory Value; plus
(d) the
Other Inventory Advance Rate multiplied by the Eligible Other Inventory Value; plus
(e) the
ABL Scripts Availability; minus
(f) the
FILO Push-Down Reserve; minus
(g) the
ABL Term Loan Push-Down Reserve; minus
(h) the
Elixir Proceeds Reserve; minus
(i) the
Carve Out Reserve; minus
(j) any
reserves established by the Administrative Agent, in accordance with Section 2.20(b), in the exercise of its commercially
reasonable judgment to reflect Borrowing Base Factors.
provided,
that, for purposes of determining the ABL Borrowing Base Amount at any date of determination, the amount set forth in clause (e) of
this definition shall not exceed 32.5% of the ABL Borrowing Base Amount.
The ABL Borrowing Base Amount shall be computed
and reported weekly with respect to Eligible Accounts Receivable, Eligible Inventory, Eligible Credit Card Accounts Receivable and Eligible
Script Lists, in each case in accordance with Sections 2.20 and 5.01(f). The ABL Borrowing Base Amount at any time in effect
shall be determined by reference to the Borrowing Base Certificate most recently delivered pursuant to Section 5.01(f), giving
effect to reserves effected pursuant to Section 2.20(b) after the date of delivery thereof.
“ABL
Intercreditor Agreement” means the Pari Passu Intercreditor Agreement, dated as of the Closing Date, by and among the
Senior Collateral Agent and the ABL Term Loan Agent, as acknowledged by the Loan Parties, as may be amended, restated, amended and restated,
supplemented or otherwise modified from time to time.
“ABL License”
means the irrevocable license granted by the Subsidiary Loan Parties to the Senior Collateral Agent for the benefit of the Senior Loan
Secured Parties and the other Senior Secured Parties pursuant to Section 7.05 of the Senior Security Agreement.
“ABL Loan Cap”
means, at any time, an amount equal to the lesser of (a) the Total ABL Commitments and (b) the ABL Borrowing Base Amount.
“ABL Priority Collateral”
means all Collateral of the type that constitutes “ABL Priority Collateral” as defined in the Split-Priority Intercreditor
Agreement. Notwithstanding the foregoing to the contrary, Collateral consisting of any Intellectual Property shall only be deemed ABL
Priority Collateral until the occurrence of the Collateral Designation Date. Thereafter, such Collateral consisting of any Intellectual
Property shall be deemed to be Split-Lien Priority Collateral.
“ABL Scripts Availability”
means, at any time of determination of the ABL Borrowing Base Amount, the product of (a) Script Lists Advance Rate multiplied
by (b) the Eligible Script Lists Value.
“ABL Term Lenders”
means those certain lenders and other financial institutions from time to time party to the ABL Term Loan Agreement as lenders.
“ABL Term Loan Agent”
means Bank of America, in its capacity as administrative agent and collateral agent under the ABL Term Loan Agreement and the other ABL
Term Loan Documents, together with any of its successors or assigns in such capacities.
“ABL Term Loan Agreement”
means the Term Loan Agreement, dated as of the Closing Date, by and among the Loan Parties party thereto, the ABL Term Lenders, the ABL
Term Loan Agent, and the other parties thereto, as amended, restated, amended and restated, supplemented or otherwise modified from time
to time.
“ABL Term Loan Borrowing
Base Amount” means the “Borrowing Base Amount” as defined in the ABL Term Loan Agreement.
“ABL Term Loan Documents”
means, collectively, (a) the ABL Term Loan Agreement and (b) all agreements, documents and instruments at any time executed
and/or delivered in connection therewith, each as amended, restated, amended and restated, supplemented or otherwise modified from time
to time.
“ABL Term Loan Exclusive
Collateral” means all “Term Loan Exclusive Collateral” as defined in the ABL Term Loan Agreement.
“ABL Term Loan Exclusive
Collateral Accounts” means one or more Deposit Accounts of the Borrower or a Subsidiary Loan Party, established at Bank of
America, for the purpose (and solely for the purpose) of holding proceeds of ABL Term Loan Exclusive Collateral.
“ABL
Term Loan Obligations” means the “ Obligations” as defined in the ABL Term Loan Agreement.
“ABL
Term Loan Push-Down Reserve” means, at any time of determination, a reserve (established against the ABL Borrowing Base
Amount) by the Administrative Agent at such time in an amount equal to the amount (if any) by which the aggregate outstanding principal
amount of the ABL Term Loans exceeds the ABL Term Loan Borrowing Base Amount.
“ABL Term Loans”
means the “Loans” under and as defined in the ABL Term Loan Agreement.
“ABR”, when
used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
“Accepting Lenders”
shall have the meaning assigned to such term in Section 9.19(a).
“Account”
means (a) “accounts” as defined in the UCC, (b) all Payment Intangibles consisting of amounts owing from credit
card and debit card issuers and processors and all rights under contracts relating to the creation or collection of such Payment Intangibles
and (c) all rights to payment of a monetary obligation, whether or not earned by performance, (x) for property that has been
or is to be sold, leased, licensed, assigned, or otherwise disposed of, (y) for services rendered or to be rendered, or (z) arising
out of the use of a credit or charge card or information contained on or for use with the card. The term “Account” does not
include (i) rights to payment evidenced by “chattel paper” or an “instrument,” (ii) commercial tort
claims, (iii) deposit accounts, (iv) investment property, or (v) letter-of-credit rights or letters of credit.
“Account Debtor”
means an “account debtor” as such term is defined in the UCC, including a credit card or debit card issuer and a credit card
or debit card processor.
“Accounts Receivable
Advance Rate” means the accounts receivable advance rate determined in accordance with Section 2.20(a).
“Actual Cash Receipts”
means, for any period of determination, the amount of all cash receipts actually received by the Loan Parties and their Subsidiaries
(excluding, for the avoidance of doubt, any borrowings under this Agreement) from the operations of the Loan Parties and their Subsidiaries
(including from any Asset Sales) during such period, which corresponds to the sum of (a) the cash receipts aggregated in the line
items “Total Receipts” (or words of similar import) and “Script Sales” (or words of similar import) for such
period in the “WCF” tab of the “Retail & Corp Bank TWCF” portion of the Approved Budget, (b) the
cash receipts aggregated in the line item “Total Receipts” (or words of similar import) for such period in the “TWCF
– PBM” tab of the “Elixir TWCF” portion of the Approved Budget, all as determined in a manner consistent with
the Approved Budget and (c) the cash receipts aggregated in the line item “Total Receipts” (or words of similar import)
for such period in the “TWCF – EIC” tab of the “Elixir TWCF” portion of the Approved Budget, all as determined
in a manner consistent with the Approved Budget.
“Actual
Net Cash Flow” means, the sum of (a) for any period of determination with respect to the Loan Parties and their Subsidiaries
(other than, in each case, the Elixir Subsidiaries), the actual net cash flow of such Loan Parties and Subsidiaries for such period,
which corresponds to the line item “Net Cash Flow” (or words of similar import) for such period in the “WCF”
tab of the “Retail & Corp Bank TWCF” portion of the Approved Budget, (b) for any period of determination
with respect to the Elixir Subsidiaries (other than Elixir Insurance Company), the actual net cash flow of the Elixir Subsidiaries (other
than Elixir Insurance Company) for such period, which corresponds to the line item “Net Operating Cash Flow” (or words of
similar import) for such period in the “TWCF– PBM” tab of the “Elixir TWCF” portion of the Approved Budget,
all as determined in a manner consistent with the Approved Budget, and (c) for any period of determination with respect to the Elixir
Subsidiaries, the actual net cash flow of Elixir Insurance Company for such period, which corresponds to the line item “Net Operating
Cash Flow” (or words of similar import) for such period in the “TWCF – EIC” tab of the “Elixir TWCF”
portion of the Approved Budget, all as determined in a manner consistent with the Approved Budget.
“Actual
Non-Operating Disbursement Amounts” means, for any period of determination, the amount of all non-operating disbursements
actually paid by the Loan Parties and their Subsidiaries during such period, which corresponds to the disbursements described under the
headings “Interest & Fees”, “Normal Course Professional Fees”, “Restructuring Professional Fees”,
and “Other Non-Operating” (or words of similar import) for such period in the Approved Budget, all as determined in a manner
consistent with the Approved Budget.
“Actual
Operating Disbursement Amounts” means, for any period of determination, the amount of all operating disbursements actually
paid by the Loan Parties and their Subsidiaries during such period, which corresponds to the sum of (a) the disbursements aggregated
in the line item “Total Operating Disbursements” (or words of similar import) for such period in the “WCF” tab
of the “Retail & Corp Bank TWCF” portion of the Approved Budget, (b) the disbursements aggregated in the line
item “Total Operating Disbursements” (or words of similar import) for such period in the “TWCF – PBM” tab
of the “Elixir TWCF” portion of the Approved Budget, all as determined in a manner consistent with the Approved Budget, and
(c) the disbursements aggregated in the line item “Total Operating Disbursements” (or words of similar import) for such
period in the “TWCF – EIC” tab of the “Elixir TWCF” portion of the Approved Budget, all as determined in
a manner consistent with the Approved Budget.
“Actual Other Inventory
Levels” means, as of any date of determination, the actual aggregate consolidated ledger Other Inventory levels of the Loan
Parties as of such date, which corresponds to the budgeted consolidated ledger levels with respect to Other Inventory levels of the Loan
Parties for such date set forth in the “Borrowing Base Summary” tab of the “Retail & Corp Bank TWCF”
portion of the Approved Budget opposite the heading “Other Inventory Balance” (or words of similar import), all as determined
in a manner consistent with the Approved Budget.
“Actual Other Inventory
Receipts” means, for any period of determination, the aggregate amount of the value, determined at cost, of all Other Inventory
actually received by the Loan Parties during such period, which corresponds to the Other Inventory receipts during such period set forth
in the “Inventory Purchases Summary” tab of the “Retail & Corp Bank TWCF” portion of the Approved Budget
opposite the heading “DSD Other & Warehouse Purchases” (or words of similar import), all as determined in a manner
consistent with the Approved Budget.
“Actual Pharmaceutical
Inventory Levels” means, as of any date of determination, the actual aggregate consolidated ledger Pharmaceutical Inventory
levels of the Loan Parties as of such date, which corresponds to the budgeted consolidated ledger levels with respect to Pharmaceutical
Inventory levels of the Loan Parties for such date set forth in the “Borrowing Base Summary” tab of the “Retail &
Corp Bank TWCF” portion of the Approved Budget opposite the heading “Pharmacy Inventory Balance” (or words of similar
import), all as determined in a manner consistent with the Approved Budget.
“Actual Pharmaceutical
Inventory Receipts” means, for any period of determination, the aggregate amount of the value, determined at cost, of all Pharmaceutical
Inventory actually received by the Loan Parties during such period, which corresponds to the Pharmaceutical Inventory receipts during
such period set forth in the “Inventory Purchases Summary” tab of the “Retail & Corp Bank TWCF” portion
of the Approved Budget opposite the heading “Purchases [DSD McKesson]” (or words of similar import), all as determined in
a manner consistent with the Approved Budget.
“Additional Lender”
means, at any time, any bank or other financial institution (other than any such bank or financial institution that is a Lender at such
time) that agrees to provide any portion of any Incremental Facility pursuant to an Incremental Facility Agreement or Refinancing Indebtedness
pursuant to a Refinancing Amendment, provided that each Additional Lender shall be subject to the approval of the Administrative
Agent (such approval not to be unreasonably withheld) and the Borrower.
“Additional Senior
Debt” means any Indebtedness incurred by the Borrower (other than Indebtedness constituting Senior Loan Obligations) that is
(x) Guaranteed by the Subsidiary Loan Parties pursuant to the Senior Subsidiary Guarantee Agreement (and not Guaranteed by any other
Person) and (y) is secured by the Collateral on a pari passu basis (but without regard to control of remedies) with the Senior
Loan Obligations pursuant to the Senior Security Agreement (and not secured by Liens on any other assets of the Borrower or any other
Person (other than assets that, substantially concurrently with the incurrence of such Indebtedness, become Collateral on which a Lien
is granted to the Senior Collateral Agent pursuant to the Senior Security Agreement and/or other Senior Collateral Documents to secure
the Senior Loan Obligations)); provided, however, that (a) such Indebtedness is permitted to be incurred, secured
and Guaranteed on such basis by the Senior Debt Documents, the Second Priority Debt Documents and the Split-Priority Debt Documents,
and (b) the Representative for the holders of such Indebtedness shall have become party to and bound by the provisions of (i) the
Senior Lien Intercreditor Agreement pursuant to, and by satisfying the conditions set forth in, Section 5.02(c) thereof
(and, if such Indebtedness will be the initial Additional Senior Debt incurred by the Borrower, then the Borrower, the Subsidiary Loan
Parties, the Senior Collateral Agent, the Administrative Agent and the Representative for such initial Additional Senior Debt shall have
executed and delivered the Senior Lien Intercreditor Agreement) and (ii) each other Applicable Intercreditor Agreement then in effect,
in accordance with the requirements thereof. Additional Senior Debt shall include any Registered Equivalent Notes and Guarantees thereof
by the Subsidiary Loan Parties pursuant to the Senior Subsidiary Guarantee Agreement issued in exchange thereof. For the avoidance of
doubt, (x) all Permitted First-Priority Debt shall constitute Additional Senior Debt, and (y) Split-Priority Term Loan Debt
will not constitute Additional Senior Debt. Notwithstanding anything to the contrary in this Agreement or in any other Senior Loan Document,
no Additional Senior Debt may be incurred or established at any time on or after the Closing Date, unless the Administrative Agent and
the Required Lenders shall otherwise consent thereto in writing.
“Additional Senior
Debt Documents” means, with respect to any series, issue or class of Additional Senior Debt, the promissory notes, indentures,
collateral documents and other operative agreements evidencing or governing such Indebtedness, including the Senior Collateral Documents
executed in favor of the Additional Senior Debt Parties.
“Additional Senior
Debt Obligations” means, with respect to any series, issue or class of Additional Senior Debt, (a) all principal of, and
interest payable with respect to, such Additional Senior Debt, (b) all other amounts payable to the related Additional Senior Debt
Parties under the related Additional Senior Debt Documents (including in each case of clauses (a) and (b) above,
any interest, fees and other amounts which accrue after the commencement of any case, proceeding or other action relating to a Bankruptcy
Proceeding of the Borrower or any Subsidiary Loan Party, whether or not allowed or allowable, in whole or in part, as a claim in such
Bankruptcy Proceeding) and (c) any renewals or extensions of the foregoing.
“Additional Senior
Debt Parties” means, with respect to any series, issue or class of Additional Senior Debt, the holders of such Indebtedness,
any trustee or agent therefor under any related Additional Senior Debt Documents and the beneficiaries of each indemnification obligation
undertaken by the Borrower or any Subsidiary Loan Party under any related Additional Senior Debt Documents, but shall not include the
Loan Parties or any Subsidiary thereof (unless such Loan Party or such Subsidiary is a holder of such Indebtedness, a trustee or agent
therefor or beneficiary of such an indemnification obligation).
“Administrative Agent”
shall have the meaning assigned to such term in the preamble to this Agreement.
“Administrative Questionnaire”
means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affected Class”
shall have the meaning assigned to such term in Section 9.19(a).
“Affected Financial
Institution” means (a) any EEA Financial Institution or (b) any U.K. Financial Institution.
“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.
“Agent Parties”
has the meaning assigned to such term in Section 9.01(d).
“Agents”
means, collectively, the Administrative Agent, the Collateral Agent and the Senior Collateral Agent, in each case, in their respective
capacities as such.
“Agreement”
means this Debtor-In-Possession Credit Agreement, as amended, amended and restated, restated, supplemented or otherwise modified and
in effect from time to time.
“Alternate Base Rate”
means, for any day, a fluctuating rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the
Federal Funds Effective Rate in effect on such day plus ½ of 1% and (c) Term SOFR plus 1.00%; and if the Alternate
Base Rate as so determined shall be less than one percent, then the Alternate Base Rate shall be deemed to be one percent for purposes
of this Agreement. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 2.14 hereof,
then the Alternate Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without
regard to clause (c) of the first sentence of this definition until the circumstances giving rise to such circumstance no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or Term SOFR shall be
effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or Term SOFR, as the
case may be.
“Annualized Transitioned
Prescription File Amount” means, without duplication, with respect to any Specified Prescription File Store, as of any date
of determination, an amount equal to (a) the aggregate number of Transitioned Prescription Files (if any) included as Eligible Script
Lists during the twelve (12) fiscal months ended immediately prior to the closing of such Specified Prescription File Store multiplied
by (b) solely to the extent that a period of 12 full fiscal months have not elapsed since the closure of any such Specified
Prescription File Store, the Remaining Annualized Period multiplied by (c) the Applicable Retention Rate.
“Anti-Corruption Laws”
means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Subsidiaries concerning or relating
to bribery, corruption or money laundering (and including any predicate crime to money laundering, or any financial record keeping and
reporting requirements related thereto), including the U.S. Foreign Corrupt Practices Act of 1977 and the UK Bribery Act 2010.
“Applicable Credit
Party” has the meaning set forth in Section 8.16.
“Applicable Intercreditor
Agreement” means, at any time of determination and solely to the extent then in effect, the ABL Intercreditor Agreement, the
Junior Lien Intercreditor Agreement and/or the Split-Priority Intercreditor Agreement.
“Applicable Percentage”
means (a) in respect of the FILO Facility, with respect to any FILO Lender at any time, the percentage (carried out to the ninth
decimal place) of the FILO Facility represented by (i) on or prior to the Closing Date, such FILO Lender’s FILO Commitment
at such time and (ii) thereafter, the principal amount of such FILO Lender’s FILO Loans, (b) with respect to any Term
Facility, with respect to any Term Lender at any time, the percentage (carried out to the ninth decimal place) of the Term Facility represented
by, as applicable and as the context may require, (x) the principal amount of such Term Lender’s Term Loans, (y) Term
Loans of any applicable Class, in each case, after giving effect to any Incremental Refinancing Term Loans made or to be made with respect
to any Incremental Term Commitment, Loan Modification Term Loans made or to be made with respect to any Loan Modification Term Commitment
and any Refinancing Term Loans made or to be made with respect to any Refinancing Term Commitment or (z) on or prior to the effectiveness
of any Incremental Facility or Refinancing Amendment for all or a portion of the Term Facility, such Term Lender’s Incremental
Term Commitment, Loan Modification Term Commitment or any Refinancing Term Commitment of any Class at such time, and (c) in
respect of the Revolving Facility, with respect to any Revolving Lender at any time, the percentage (carried out to the ninth decimal
place) of the Revolving Facility represented by such Revolving Lender’s Revolving Commitment or, as the context may require, Revolving
Commitment of any applicable Class at such time, subject (in each case) to adjustment as provided herein. If the commitment of each
Revolving Lender to make Revolving Loans, the obligation of the Issuing Banks to issue Letters of Credit and the obligation of the Swingline
Lender to make Swingline Loans have been terminated or if the Total Revolving Commitments have expired, then the Applicable Percentage
of each Revolving Lender in respect of the Revolving Facility or any Class of the Revolving Facility shall be determined based on
the Applicable Percentage of such Revolving Lender in respect of the Revolving Facility most recently in effect (including, with respect
to any such Class), giving effect to any subsequent assignments. The Applicable Percentage of each Lender in respect of each Facility
is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable.
“Applicable Rate”
means, on any day:
(a) with
respect to the Revolving Facility, the Revolving Loans and Swingline Loans (other than any Revolving Loan under Other Revolving Commitments
of any Revolving Commitment Series, a rate per annum equal to 2.25% in the case of any ABR Revolving Loan and 3.25% in the case of any
Term SOFR Revolving Loan;
(b) with
respect to the FILO Facility and the FILO Loans, initially, a rate per annum equal to 4.25% in the case of any ABR FILO Loan and 5.25%
in the case of any Term SOFR FILO Loan; provided that (i) to the extent (x) the FILO Loans shall have been prepaid with
proceeds of a Specified Elixir Sale and/or Elixir Monetization Event by an aggregate amount of at least $100,000,000 (but less than $200,000,000)
after the Closing Date and (y) the Script Lists Advance Rate for the FILO Borrowing Base Amount shall have been reduced by at least
500 basis points in accordance with this Agreement, on and as of the date the conditions set forth in the immediately foregoing clause
(x) and (y) are satisfied, such rate per annum shall be reduced to a rate per annum equal to 4.00% in the case of
any ABR FILO Loan and 5.00% in the case of any Term SOFR FILO Loan and (ii) to the extent (x) the FILO Loans shall have been
prepaid with proceeds of a Specified Elixir Sale and/or Elixir Monetization Event by an aggregate amount of at least $200,000,000 after
the Closing Date and (y) the Script Lists Advance Rate for the FILO Borrowing Base Amount shall have been reduced by at least 1,000
basis points in accordance with this Agreement, on and as of the date the conditions set forth in the immediately foregoing clause
(x) and (y) are satisfied, such rate per annum shall be reduced to a rate per annum equal to 3.75% in the case of
any ABR FILO Loan and 4.75% in the case of any Term SOFR FILO Loan;
(c) with
respect to the commitment fees payable pursuant to Section 2.12(a), a rate per annum equal to 0.50%; and
(d) with
respect to any (i) Term Loan, (ii) Revolving Loan under Other Revolving Commitments of any Revolving Commitment Series, or
(iii) any commitment fees in respect of any of the foregoing, the “Applicable Rate” shall in each case be as set forth
in the applicable Loan Modification Agreement, Refinancing Amendment, Loan Modification Agreement or Incremental Facility Amendment (as
applicable) relating thereto.
“Applicable Retention
Rate” means, with respect to the Transitioned Prescription Files of any Specified Prescription File Store, a percentage equal
to the lesser of (a) 32.3% and (b) 0.75 multiplied by the Average Weekly Retention Rate; provided, however, that in
the event that the Borrower shall not, at the reasonable request of the Administrative Agent, be able to provide reasonably detailed
information as may be required to evidence the Average Weekly Retention Rate (or any subcomponent thereof), the Applicable Retention
Rate with respect to any such Specified Prescription File Store (or the aggregate of all such Specified Prescription File Stores) shall
be deemed to be zero (0).
“Applicable Revolving
Percentage” means with respect to any Revolving Lender at any time, such Revolving Lender’s Applicable Percentage in
respect of the Revolving Facility (or, as the context may require, the Applicable Percentage in respect of the Revolving Facility reflecting
a specified Class of Revolving Commitments) at such time.
“Appropriate Lender”
means, at any time, (a) with respect to any of the FILO Facility, Term Facility or the Revolving Facility, a Lender that has a Commitment
with respect to such Facility or holds a FILO Loan, Term Loan or a Revolving Loan, respectively (or as applicable and as the context
shall require, a Lender that has a Class of Commitments under such Facility or holds a specified Class of Loans) at such time,
(b) with respect to the LC Sublimit, (i) each applicable Issuing Bank and (ii) if any Letters of Credit have been issued
pursuant to Section 2.05, the Revolving Lenders and (c) with respect to the Swingline Sublimit, (i) the Swing Line
Lender and (ii) if any Swing Line Loans are outstanding pursuant to Section 2.04, the Revolving Lenders.
“Approved Budget”
means the debtor-in-possession thirteen (13) week budget prepared by the Borrower, in the form of Annex I hereto, and initially
furnished to the Administrative Agent on or before the Closing Date and which is approved by, and in form and substance satisfactory
to, the Administrative Agent, in its sole discretion, as the same may or shall, as applicable, thereafter be updated, modified and/or
supplemented from time to time as provided in Section 5.19. The initial Approved Budget shall commence as of the week of
October 15, 2023. The Approved Budget shall include a weekly cash budget, including information on a line item basis as to (a) projected
cash receipts, including from Asset Sales (corresponding to Budgeted Cash Receipts), (b) projected operating and non-operating disbursements
(including separate line items for ordinary course operating expenses, capital expenditures, bankruptcy-related expenses (including a
line item for professional fees and expenses budgeted for the Case Professionals on a weekly basis), and any other fees and expenses
relating to the Senior Loan Documents) (corresponding to Budgeted Operating Disbursement Amounts and Budgeted Non-Operating Disbursement
Amounts, as applicable), (c) projected net cash flow (corresponding to Budgeted Net Cash Flow), (d) projected Other Inventory
and Pharmaceutical Inventory receipts (corresponding to Budgeted Other Inventory Receipts and Budgeted Pharmaceutical Inventory Receipts,
respectively), (e) projected Other Inventory and Pharmaceutical Inventory levels (corresponding to Budgeted Other Inventory Levels
and Budgeted Pharmaceutical Inventory Levels, respectively), and (f) projected total liquidity (including ABL Availability) and
projected calculations of the ABL Borrowing Base Amount, the FILO Borrowing Base Amount and the ABL Term Loan Borrowing Base Amount.
Notwithstanding anything to the contrary herein, the Approved Budget shall consist of files separately presenting the performance of
(i) the Loan Parties and the Subsidiaries (in each other than any Elixir Subsidiaries), (ii) the Elixir Subsidiaries (other
than Elixir Insurance Company) and (iii) Elixir Insurance Company (it being understood and agreed that the Administrative Agent
may consent to the modification of such presentation in connection with any Specified Elixir Sale).
“Approved Budget Variance
Report” means a weekly report, prepared by the Borrower (after consultation with the Company Financial Advisors) and provided
by the Borrower to the Administrative Agent in accordance with Section 5.19(d), (a) showing by line item (i) Actual
Cash Receipts, (ii) Actual Operating Disbursement Amounts, (iii) Actual Non-Operating Disbursement Amounts, (iv) Actual
Net Cash Flow, (v) Actual Other Inventory Receipts, (vi) Actual Pharmaceutical Inventory Receipts, (vii) intercompany
balances among Elixir Insurance Company and the Loan Parties, (viii) Actual Other Inventory Levels, (ix) Actual Pharmaceutical
Inventory Levels, and (x) actual total liquidity (including ABL Availability) (in each case of clauses (i) through (vii) above,
for the Prior Week, the most recent Cumulative Four-Week Period and the most recent Cumulative Period, and in each case of clauses
(viii) through (x), as of the last day of the Prior Week), noting therein all variances, on a line-item basis, from amounts
set forth for such period (or such date, as applicable) in the Approved Budget, and shall include or be accompanied by explanations for
all material variances and (b) determining compliance with the covenants set forth in Section 5.19(c). The Approved
Budget Variance Report shall be in a form, and shall contain supporting information, satisfactory to the Administrative Agent.
“Approved Fund”
means a CLO managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers
or manages a Lender.
“Arrangers” as defined
in the preamble of this Agreement.
“Asset Sale”
means any sale, lease, assignment, transfer or other disposition (including pursuant to a Sale and Leaseback Transaction) of any property
or asset (whether now owned or hereafter acquired, whether in one transaction or a series of related transactions and whether by way
of merger or otherwise) of the Borrower or any Subsidiary (including of any Equity Interest in a Subsidiary).
“Assignment and Acceptance”
means an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit B, or any other form (including
electronic documentation generated by use of an electronic platform) approved by the Administrative Agent.
“Attorney Costs”
means the reasonable and documented fees, expenses and disbursements of the applicable law firm or external legal counsel.
“Attributable Debt”
means, as to any particular Capital Lease or Sale and Leaseback Transaction under which the Borrower or any Subsidiary is at the time
liable, as of any date as of which the amount thereof is to be determined (a) in the case of a transaction involving a Capital Lease,
the amount as of such date of Capital Lease Obligations with respect thereto and (b) in the case of a Sale and Leaseback Transaction
not involving a Capital Lease, the then present value of the minimum rental obligations under such Sale and Leaseback Transaction during
the remaining term thereof (after giving effect to any extensions at the option of the lessor) computed by discounting the rental payments
at the actual interest factor included in such payments or, if such interest factor cannot be readily determined, at the rate per annum
that would be applicable to a Capital Lease of the Borrower having similar payment terms. The amount of any rental payment required to
be made under any such Sale and Leaseback Transaction not involving a Capital Lease may exclude amounts required to be paid by the lessee
on account of maintenance and repairs, insurance, taxes, assessments, utilities, operating and labor costs and similar charges, whether
or not characterized as rent. Any determination of any rate implicit in the terms of a Capital Lease or a lease in a Sale and Leaseback
Transaction not involving a Capital Lease made in accordance with generally accepted financial practices by the Borrower shall be binding
and conclusive absent manifest error.
“Auto-Extension Letter
of Credit” has the meaning assigned to such term in Section 2.05(c).
“Automatic Stay”
shall mean the automatic stay imposed under Section 362 of the Bankruptcy Code.
“Average Weekly Transitioned
Prescription File Count” means, with respect to any Specified Prescription File Store, an amount equal to (a) the aggregate
number of Transitioned Prescription Files (if any) included as Eligible Script Lists during the twelve (12) fiscal months ended immediately
prior to the closing of such Specified Prescription File Store divided by (b) fifty-two (52).
“Average Weekly Retention
Rate” means, for any applicable period, with respect to the aggregate amount of Transitioned Prescription Files from any Specified
Prescription File Store, the percentage derived by dividing (a) the average weekly number of Transitioned Prescription Files
of such Specified Prescription File Store that are utilized by customers in another Store of a Subsidiary Loan Party (other than a Specified
Prescription File Store) for such period by (b) the Average Weekly Transitioned Prescription File Count of such Specified
Prescription File Store.
“Bail-In Action”
means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected
Financial Institution.
“Bail-In Legislation”
means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament
and of the Council of the European Union, the implementing law, rule, regulation or requirement for such EEA Member Country from time
to time which is described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, Part I of the
United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom
relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than
through liquidation, administration or other insolvency proceedings).
“Bank of America”
means Bank of America, N.A. and its successors.
“Bank of America Concentration
Account” shall have the meaning assigned to such term in the Senior Security Agreement.
“Bankruptcy Code”
means Title 11 of the United States Code (11 U.S.C. Section 101 et seq.) as now or hereafter in effect, or any successor thereto.
“Bankruptcy Court”
shall have the meaning assigned to such term in the preliminary statements hereto.
“Bankruptcy Proceeding”
means any proceeding under any Debtor Relief Law.
“Bankruptcy Rules”
means the Federal Rules of Bankruptcy Procedure as in effect from time to time and applicable to the Chapter 11 Case.
“Beneficial
Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.
“Beneficial Ownership
Regulation” means 31 C.F.R. § 1010.230.
“Benefit Plan”
means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan”
as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42)
or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan”
or “plan”.
“Board”
means the Board of Governors of the Federal Reserve System of the United States of America.
“BofA Securities”
means BofA Securities, Inc., and its Subsidiaries and Affiliates.
“Borrower”
shall have the meaning assigned to such term in the preamble to this Agreement.
“Borrower Materials”
has the meaning specified in Section 5.01.
“Borrowing”
means (a) a Loan of the same Class and Type, made, converted or continued on the same date and, in the case of a Term SOFR
Loan, as to which a single Interest Period is in effect or (b) a Swingline Loan.
“Borrowing Base Certificate”
means a certificate, substantially in the form of Exhibit C or in such other form as the Administrative Agent may approve,
which shall be certified as complete and correct by a Financial Officer of the Borrower.
“Borrowing Base Factors”
means (a) landlord’s liens affecting Eligible Inventory, (b) factors affecting the saleability or collectability of Eligible
Accounts Receivable, Eligible Credit Card Accounts Receivable, Eligible Script Lists or Eligible Inventory at retail or in liquidation,
(c) factors affecting the market value of Eligible Inventory, Eligible Accounts Receivable, Eligible Credit Card Accounts Receivable
or Eligible Script Lists, (d) other impediments to the Senior Collateral Agent’s ability to realize upon the Eligible Accounts
Receivable, the Eligible Credit Card Accounts Receivable, the Eligible Inventory or the Eligible Script Lists, (e) other factors
affecting the credit value to be afforded the Eligible Accounts Receivable, Eligible Credit Card Accounts Receivables, the Eligible Inventory
and the Eligible Script Lists, and (f) such other factors as the Administrative Agent from time to time determines in its commercially
reasonable discretion as being appropriate to reflect criteria, events, conditions, contingencies or risks that adversely affect any
component of the ABL Borrowing Base Amount, FILO Borrowing Base Amount or to reflect that a Default or an Event of Default then exists.
Without limiting the generality of the foregoing, such Borrowing Base Factors may include, in the Administrative Agent’s commercially
reasonable judgment acting in good faith (but are not limited to): (i) rent; (ii) customs duties, and other costs to release
inventory that is being imported into the United States; (iii) outstanding taxes and other governmental charges, including ad valorem,
real estate, personal property, sales and other taxes that may have priority over (or that is pari passu in priority to) the interests
of the Senior Collateral Agent in the Collateral; (iv) if a Default or an Event of Default then exists, salaries, wages and benefits
due to employees of the Borrower or any Subsidiary, (v) customer credit liabilities (including in respect of customer deposits,
gift cards, merchandise credit and loyalty rewards programs), (vi) Senior Loan Bank Product Liabilities, (vii) warehousemen’s
or bailee’s charges and other Permitted Encumbrances which may have priority over (or that is pari passu in priority to)
the interests of the Senior Collateral Agent in the Collateral (other than (x) the senior Liens of the holders of the Existing Split-Priority
Indebtedness (or their debt representative) on any Split-Lien Priority Collateral that secures the Existing Split-Priority Indebtedness
or (y) the pari passu Liens of the ABL Term Loan Agent on any Collateral that secures the ABL Term Loan Obligations) and
(viii) any administrative claims and priority claims in the Chapter 11 Case.
“Borrowing Request”
means a notice of Borrowing pursuant to Section 2.03, which shall be substantially in the form of Exhibit D or
such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission
system as shall be approved by the Administrative Agent) appropriately completed and signed by a Responsible Officer of the Borrower.
“BRG” means
Berkeley Research Group, LLC.
“Budgeted Cash Receipts”
means, for any period of determination, an amount equal to the sum of (a) the budgeted cash receipts aggregated in the line items
“Total Receipts” (or words of similar import) and “Script Sales” (or words of similar import) for such period
in the “WCF” tab of the “Retail & Corp Bank TWCF” portion of the Approved Budget, (b) the budgeted
cash receipts aggregated in the line item “Total Receipts” (or words of similar import) for such period in the “TWCF
– PBM” tab of the “Elixir TWCF” portion of the Approved Budget, and (c) the budgeted cash receipts aggregated
in the line item “Total Receipts” (or words of similar import) for such period in the “TWCF – EIC” tab
of the “Elixir TWCF” portion of the Approved Budget.
“Budgeted
Net Cash Flow” means the sum of (a) for any period of determination with respect to the Loan Parties and their Subsidiaries
(other than, in each case, the Elixir Subsidiaries), an amount equal to the budgeted net cash flow shown on the line item “Net
Cash Flow” (or words of similar import) for such period in the “WCF” tab of the “Retail & Corp Bank
TWCF” portion of the Approved Budget, (b) for any period of determination with respect to the Elixir Subsidiaries,
the budgeted net cash flow of the Elixir Subsidiaries (other than Elixir Insurance Company) for such period, which corresponds to the
line item “Net Operating Cash Flow” (or words of similar import) for such period in the “TWCF – PBM” tab
of the “Elixir TWCF” portion of the Approved Budget, and (c) for any period of determination with respect to the Elixir
Subsidiaries, the budgeted net cash flow of Elixir Insurance Company for such period, which corresponds to the line item “Net Operating
Cash Flow” (or words of similar import) for such period in the “TWCF – EIC” tab of the “Elixir TWCF”
portion of the Approved Budget.
“Budgeted
Non-Operating Disbursement Amounts” means, for any period of determination, an amount equal to the sum of the budgeted
non-operating disbursements described under the headings “Interest & Fees”, “Normal Course Professional Fees”,
“Restructuring Professional Fees”, and “Other Non-Operating” (or words of similar import) for such period in
the Approved Budget.
“Budgeted
Operating Disbursement Amounts” means, for any period of determination, an amount equal to the sum of (a) the budgeted
operating disbursements aggregated in the line item “Total Operating Disbursements” (or words of similar import) for such
period in the “WCF” tab of the “Retail & Corp Bank TWCF” portion of the Approved Budget, (b) the
budgeted operating disbursements aggregated in the line item “Total Operating Disbursements” (or words of similar import)
for such period in the “TWCF – PBM” tab of the “Elixir TWCF” portion of the Approved Budget, and (c) the
budgeted operating disbursements aggregated in the line item “Total Operating Disbursements” (or words of similar import)
for such period in the “TWCF – EIC” tab of the “Elixir TWCF” portion of the Approved Budget.
“Budgeted
Other Inventory Levels” means, as of any date of determination, the budgeted aggregate consolidated Other Inventory
levels of the Loan Parties as of such date, as set forth in the “Borrowing Base Summary” tab of the “Retail &
Corp Bank TWCF” portion of the Approved Budget opposite the heading “Other Inventory Balance” (or words of similar
import).
“Budgeted
Other Inventory Receipts” means, for any period of determination, the budgeted amount of the value, determined at cost,
of all Other Inventory to be received by the Loan Parties during such period, as set forth in the “Inventory Purchases Summary”
tab of the “Retail & Corp Bank TWCF” portion of the Approved Budget opposite the heading “DSD Other &
Warehouse Purchases” (or words of similar import).
“Budgeted
Pharmaceutical Inventory Levels” means, as of any date of determination, the budgeted aggregate consolidated Pharmaceutical
Inventory levels of the Loan Parties as of such date, as set forth in the “Borrowing Base Summary” tab of the “Retail &
Corp Bank TWCF” portion of the Approved Budget opposite the heading “Pharmacy Inventory Balance” (or words of similar
import).
“Budgeted
Pharmaceutical Inventory Receipts” means, for any period of determination, the budgeted amount of the value, determined
at cost, of all Pharmaceutical Inventory to be received by the Loan Parties during such period, as set forth in the “Inventory
Purchases Summary” tab of the “Retail & Corp Bank TWCF” portion of the Approved Budget opposite the heading
“Purchases [DSD McKesson]” (or words of similar import).
“Business Acquisition”
means (a) an Investment by the Borrower or any of the Subsidiaries in any other Person (including an Investment by way of acquisition
of debt or equity securities of any other Person) pursuant to which such Person shall become a Subsidiary or shall be merged into or
consolidated with the Borrower or any of the Subsidiaries or (b) an acquisition by the Borrower or any of the Subsidiaries of the
property and assets of any Person (other than the Borrower or any of the Subsidiaries) that constitute substantially all of the assets
of such Person or any division or other business unit of such Person.
“Business Day”
means any day other than a Saturday, Sunday or day on which commercial banks in New York City or Boston, Massachusetts are authorized
or required by law to close.
“Capital Lease”
means any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which, in accordance
with GAAP, should be capitalized on the lessee’s balance sheet; provided, that notwithstanding the foregoing, only
those leases (assuming for purposes hereof that such leases were in existence prior to giving effect to the adoption of ASU No. 2016-02
“Leases (Topic 842)” and ASU No. 2018-11 “Leases (Topic 842)”) that would have constituted Capitalized Leases
or financing leases in conformity with GAAP as in effect prior to giving effect to the adoption of ASU No. 2016-02 “Leases
(Topic 842)” and ASU No. 2018-11 “Leases (Topic 842)”, shall be considered Capitalized Leases or financing leases
hereunder, and all calculations and deliverables under this Agreement or any other Senior Loan Document shall be made or delivered, as
applicable, in accordance therewith (other than the financial statements delivered pursuant to Section 5.01 of this Agreement).
“Capital Lease Obligations”
of any Person means the obligations of such Person to pay rent or other amounts under any Capital Lease, which obligations should be
classified and accounted for as Capital Leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall
be the capitalized amount thereof determined in accordance with GAAP.
“Carve Out”
has the meaning assigned to the term “Carve Out” in the Financing Order.
“Carve Out Reserve”
means the “Carve Out Borrowing Base Reserve” (as defined in the Financing Order), a reserve established (against the ABL
Borrowing Base Amount) by the Administrative Agent in respect of the Carve Out in accordance with the Financing Order.
“Carve Out Trigger
Notice” has the meaning assigned to such term in the Financing Order.
“Case Professionals”
means the Loan Parties’ and any Statutory Committee’s professionals, including the Company Financial Advisors, retained by
any of them by final order of the Bankruptcy Court (which order has not been reversed, vacated or stayed unless such stay is no longer
effective) under Section 327, 330 or 1103(a) of the Bankruptcy Code.
“Cash Collateralize”
means, to pledge and deposit with or deliver to the Collateral Agent, for the benefit of one or more of the Issuing Banks or Swingline
Lender (as applicable) and the Lenders, as collateral for the Senior Obligations in respect of Letters of Credit, Senior Loan Obligations
in respect of Swingline Loans, or obligations of Lenders to fund participations in respect of Senior Loan Obligations in respect of Letters
of Credit and/or Senior Loan Obligations in respect of Swingline Loans (as the context may require), cash or deposit account balances
or, if the Collateral Agent, the applicable Issuing Bank or Swingline Lender shall agree in their sole discretion, other credit support,
in each case pursuant to documentation in form and substance reasonably satisfactory to (x) the Collateral Agent and (y) the
applicable Issuing Bank or the Swingline Lender. “Cash Collateral” shall have a meaning correlative to the foregoing and
shall include the proceeds of such Cash Collateral and other credit support.
“Cash Management Order”
means the order of the Bankruptcy Court entered in the Chapter 11 Case, substantially in the form of Exhibit H and/or otherwise
in form and satisfactory to the Loan Parties and the Administrative Agent, together with all extensions, modifications and amendments
that are in form and substance acceptable to the Loan Parties and the Administrative Agent, which, among other matters, authorizes the
Loan Parties to use their cash management system and treasury arrangements.
“Cash Management System”
shall have the meaning assigned to such term in the Senior Security Agreement.
“Cash Sweep Period”
shall have the meaning assigned to such term in the Senior Security 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 properties or
assets of the Borrower or the Subsidiaries; and
(b) any
proceeds received by the Borrower or any Subsidiary in connection with any action or proceeding for the taking of any properties or assets
of the Borrower or the Subsidiaries, or any part thereof or interest therein, for public or quasi-public use under the power of eminent
domain, by reason of any similar public improvement or condemnation proceeding;
minus,
in each case (i) any fees, commissions and expenses (including the costs of adjustment and condemnation proceedings) and other costs
paid or incurred by the Borrower or any Subsidiary in connection therewith, and (ii) the amount of any Indebtedness (or Attributable
Debt), other than the Senior Obligations, together with premium or penalty, if any, and interest thereon (or comparable obligations in
respect of Attributable Debt), that is secured by a Lien on (or if Attributable Debt, the lease of) the properties or assets in question
with priority (with respect to such properties or assets) over the Senior Lien and any applicable Lien of the ABL Term Loan Agent created
under the ABL Term Loan Documents, any Split-Priority Lien, and/or any Second Priority Lien, that is, subject to the terms of the Financing
Order, required to be repaid as a result of the receipt by the Borrower or a Subsidiary of such payments or proceeds.
“Change in Control”
means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning
of the Securities Exchange Act of 1934, as amended, and the rules of the SEC thereunder as in effect on the Closing Date) of 40%
or more of the outstanding shares of common stock of the Borrower; (b) at the end of any period of 12 consecutive calendar months,
the occupation of a majority of the seats on the board of directors of the Borrower by Persons who were not members of the board of directors
of the Borrower on the first day of such period (other than any new directors whose election or appointment by such board of directors
or whose nomination for election by the stockholders of the Borrower was approved by a vote of not less than three-fourths of the directors
then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously
so approved); or (c) the occurrence of a “Change of Control”, as defined in any indenture or other agreement that governs
the terms of any Material Indebtedness.
“Change in Law”
means the occurrence, after the Closing Date, of any of the following: (a) the adoption of any law, rule, regulation or treaty,
(b) any change in any law, rule, regulation or treaty or in the interpretation or application thereof by any Governmental Authority
or (c) compliance by any Lender or any Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such
Lender or by such Lender’s or such Issuing Bank’s holding company, if any) with any request, rule, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or issued after the Closing Date; provided, however,
that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and each
request, rule, guideline or directive thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives
promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority)
or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case under clauses (x) and
(y) above be deemed to be a “Change in Law”, regardless of the date enacted, adopted, implemented or issued.
“Chapter 11 Case”
shall have the meaning assigned to such term in the preliminary statements hereto.
“Chapter 11 Case Milestones”
shall have the meaning assigned to such term in Section 5.20.
“Charges”
has the meaning assigned to such term in Section 9.14.
“Class”
shall mean, (a) when used in respect of any Loan or Borrowing, whether such Loan or the Loans comprising such Borrowing are FILO
Loans, Revolving Loans (other than any Revolving Loan under Other Revolving Commitments of any Revolving Commitment Series), Revolving
Loans under any Other Revolving Commitments of a given Revolving Commitment Series, Refinancing Term Loans or Incremental Refinancing
Term Loans; and (b) when used in respect of any Commitment, (i) whether such Commitment is in respect of a Commitment to make
FILO Loans, (ii) whether such Commitment is a Revolving Commitment (other than any Other Revolving Commitment) or an Other Revolving
Commitment of a given Revolving Commitment Series and (iii) whether such Commitment is an Incremental Term Commitment, Loan
Modification Term Commitment or Refinancing Term Commitment, it being understood and agreed that any Incremental Term Commitment, Loan
Modification Term Commitment, Refinancing Term Commitment or any Revolving Commitment Series that have different terms and conditions
(together with the Commitments in respect thereof) from any Class of existing Incremental Term Commitments, existing Loan Modification
Term Commitments, existing Refinancing Term Commitments or any existing Revolving Commitments Series, respectively, as applicable, shall
be construed (together with the Loans thereunder) to be in separate and distinct Classes.
“CLO” means
any Person (other than a natural Person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business.
“Closing Date”
means October [●], 2023.
“CME” means
CME Group Benchmark Administration Limited.
“Code” means
the Internal Revenue Code of 1986, as amended from time to time.
“Collateral”
means all of the “Collateral” and “Senior Collateral” or other similar term referred to in the
Senior Collateral Documents and all of the other property of the Loan Parties that is or is intended under the terms of the Senior Collateral
Documents to be subject to Liens in favor of the Senior Collateral Agent for the benefit of the Senior Loan Secured Parties and the other
Senior Secured Parties; provided that, without limiting the foregoing, (a) all of the property constituting (i) Second
Priority Collateral, (ii) Split-Lien Collateral and/or (iii) “Collateral” (as defined in the ABL Term Loan Agreement),
other than any ABL Term Loan Exclusive Collateral, shall, in each case, be subject to Liens in favor of the Senior Collateral Agent for
the benefit of the Senior Loan Secured Parties and the other Senior Secured Parties and (b) such term shall also include all “DIP
Shared Collateral” under and as defined in the Financing Order. For the avoidance of any doubt, the term “Collateral”
shall not include any ABL Term Loan Exclusive Collateral.
“Collateral Agent”
shall have the meaning assigned to such term in the preamble to this Agreement.
“Collateral and Guarantee
Requirement” means the requirement that:
(a) the
Collateral Agent shall have received from the Borrower and each Subsidiary Loan Party either (i) a counterpart of, or a supplement
to, each Senior Collateral Document duly executed and delivered on behalf of such Loan Party or (ii) in the case of any Person that
becomes a Subsidiary Loan Party after the Closing Date, a supplement to each applicable Senior Collateral Document, in the form specified
therein, duly executed and delivered on behalf of such Subsidiary Loan Party;
(b) (i) the
Administrative Agent shall be satisfied that, subject to the Financing Order and terms thereof, the Senior Collateral Documents (including
the Financing Order) shall be effective to create in favor of the Collateral Agent a legal, valid and enforceable security interest and
Lien upon the Collateral, with the priority set forth in the Financing Order, (ii) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably requested by the Agents to be filed, registered or recorded to create
the Liens intended to be created by the Senior Collateral Documents and perfect such Liens to the extent required by, and with the priority
required by, this Agreement and the Senior Collateral Documents (including the Financing Order), shall have been filed, registered or
recorded or delivered to the Senior Collateral Agent for filing, registration or recording, and (iii) the Agents shall have been
provided with all authorizations, consents and approvals from each Loan Party, Governmental Authority and other Person reasonably requested
by it to file, record or register all documents and instruments referred to in clause (b)(ii) of this definition; and
(c) each
Loan Party shall have obtained all consents and approvals required to be obtained by it in connection with the execution and delivery
of all Senior Collateral Documents to which it is a party and the granting by it of the Liens thereunder.
“Collateral Designation
Date” means the date that each of the following conditions shall be first satisfied: (a) no Default or Event of Default
shall have occurred and is continuing or would result from the designation of Intellectual Property as Split-Lien Priority Collateral;
(b) the Borrower shall have repaid in full in cash all FILO Loans and other Senior Loan Obligations in respect of the FILO Facility;
(c) all FILO Commitments shall have been terminated; (d) the Borrower shall have submitted a certificate of a Responsible Officer
of the Borrower (i) designating Intellectual Property owned by the Subsidiary Loan Parties which constitutes Collateral as Split-Lien
Priority Collateral and (ii) certifying that the condition set forth in clause (a) shall be satisfied at the time of
such designation (after giving effect to such designation and the incurrence of any Indebtedness and other related transactions in connection
therewith); provided, however, that notwithstanding such designation, (A) all such Collateral shall be expressly subject
to the ABL License, and (B) such Intellectual Property shall continue to constitute Collateral securing the Senior Obligations,
with the priority required by each Applicable Intercreditor Agreement.
“Combined Borrowing
Base Amount” means, at any time, an amount equal to the sum of (a) the ABL Borrowing Base Amount, plus (b) the
FILO Borrowing Base Amount.
“Combined Loan Cap”
means, at any time, an amount equal to the sum of (a) the lesser of (i) the Total ABL Commitments at such time and (ii) the
ABL Borrowing Base Amount at such time (calculated without giving effect to the FILO Push-Down Reserve), plus (b) lesser
of (i) the FILO Facility at such time and (ii) the FILO Borrowing Base Amount at such time.
“Commitment”
means the Revolving Commitments (other than any Other Revolving Commitment), an Other Revolving Commitment of a given Revolving Commitment
Series, the FILO Commitments, an Incremental Term Commitment, a Loan Modification Term Commitment and/or the Refinancing Term Commitments,
or any combination thereof (as the context requires).
“Communication”
means this Agreement, any Senior Loan Document and any document, amendment, approval, consent, information, notice, certificate, request,
statement, disclosure or authorization related to any Senior Loan Document.
“Company Financial
Advisors” means (a) Alvarez & Marsal North America, LLC, as financial and restructuring advisor to the Loan Parties,
or any other financial/restructuring advisor reasonably acceptable to the Administrative Agent and (b) Guggenheim Securities, LLC,
as investment banker to the Loan Parties, or any other investment banker reasonably acceptable to the Administrative Agent.
“Compliance Certificate”
means a certificate, substantially in the form of Exhibit E or in such other form as the Administrative Agent may approve,
which shall be certified as complete and correct by a Financial Officer of the Borrower.
“Conforming Changes”
means, with respect to the use, administration of or any conventions associated with SOFR or any proposed Successor Rate or Term SOFR,
as applicable, any conforming changes to the definitions of “Alternate Base Rate”, “SOFR”, “Term SOFR”
and “Interest Period”, timing and frequency of determining rates and making payments of interest and other technical, administrative
or operational matters (including, for the avoidance of doubt, the definitions of “Business Day” and “U.S. Government
Securities Business Day”, timing of borrowing requests or prepayment, conversion or continuation notices and length of lookback
periods) as may be appropriate, in the reasonable discretion of the Administrative Agent, to reflect the adoption and implementation
of such applicable rate(s) and to permit the administration thereof by the Administrative Agent in a manner substantially consistent
with market practice (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively
feasible or that no market practice for the administration of such rate exists, in such other manner of administration as the Administrative
Agent determines is reasonably necessary, after consultation with the Borrower, in connection with the administration of this Agreement
or any other Senior Loan Document); provided that, notwithstanding anything herein to the contrary, no “Conforming Changes”
shall result in any material effect on the timing or amount of payments or borrowings.
“Consolidated Subsidiary”
means, with respect to any Person, at any date, any Subsidiary or other entity the accounts of which would, in accordance with GAAP,
be consolidated with those of such Person in its consolidated financial statements if such statements were prepared as of such date.
“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.
“Convertible Debt”
means any debt security of the Borrower issued in the capital markets which, by its terms, may be converted or exchanged, in whole or
part, at the option of the holder thereof into common Equity Interests of the Borrower.
“Covered Party”
has the meaning assigned to such term in Section 9.23(a).
“Credit Card Accounts
Receivable” means any Account due to any Subsidiary Loan Party from a credit card or debit card issuer or processor arising
from purchases made on the following credit cards or debit cards: Visa, MasterCard, American Express, Diners Club, Discover, JCB, Carte
Blanche and such other credit cards or debit cards as the Administrative Agent shall approve in its commercially reasonable judgment
from time to time, in each case which have been earned by performance by such Subsidiary Loan Party but not yet paid to such Subsidiary
Loan Party by the credit card or debit card issuer or the credit card or debit card processor, as applicable.
“Credit Card Receivable
Advance Rate” means the accounts receivable advance rate determined in accordance with Section 2.20(a).
“Credit Extension
Conditions” means, in relation to any determination thereof at any time, the requirement that:
(a) Total
Outstandings at such time shall not exceed the Combined Loan Cap at such time (other than as a result of any Protective Advance constituting
an Overadvance);
(b) Total
ABL Outstandings at such time shall not exceed the ABL Loan Cap at such time (other than as a result of any Protective Advance constituting
an Overadvance);
(c) Total
Revolving Outstandings at such time shall not exceed the Total Revolving Commitments at such time;
(d) Revolving
Exposure of any Lender (other than the Revolving Lender acting as the Swingline Lender) at such time shall not exceed the Revolving Commitment
of such Lender at such time;
(e) Total
FILO Outstandings at such time shall not exceed the FILO Borrowing Base at such time, except to the extent a FILO Push-Down Reserve has
been established in the amount of such excess;
(f) LC
Exposure of all Revolving Lenders at such time shall not exceed the LC Sublimit; and
(g) Swingline
Exposure of all Revolving Lenders at such time shall not exceed the Swingline Sublimit.
“Cumulative Four-Week
Period” means, as of any date of determination thereof, the four-week period up to and through the Saturday of the most recent
week then ended, or if a four-week period has not then elapsed from the Petition Date, such shorter period since the Petition Date through
the Saturday of the most recent week then ended.
“Cumulative Period”
means, as of any date of determination thereof, the period from the Petition Date through the Saturday of the most recent week ended.
“Daily Simple SOFR”
with respect to any applicable determination date means the SOFR published on such date by the SOFR Administrator on the SOFR Administrator’s
Website.
“Debtor Relief Laws”
means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions
from time to time in effect.
“Default”
means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
“Defaulting Lender”
means, subject to Section 2.22(b), any Lender that (a) has failed, within two Business Days of the date required to
be funded or paid, to (i) fund all or any portion of its Loans unless such Lender notifies the Administrative Agent in writing that
such failure is the result of such Lender’s good faith determination that one or more conditions precedent to funding (each of
which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied,
or (ii) pay to the Administrative Agent, any Issuing Bank, any Swingline Lender or any other Lender any other amount required to
be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans), (b) has notified the
Borrower, the Administrative Agent, any Issuing Bank or the Swingline Lender in writing that it does not intend or expect to comply with
its funding obligations hereunder or generally under other agreements in which it commits to extend credit, or has made a public statement
to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states
that such position is based on such Lender’s good faith determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has
failed, within three Business Days after written request by the Administrative Agent, any Issuing Bank or the Borrower made in good faith,
to provide a certification from an authorized officer of such Lender in writing to the Administrative Agent and the Borrower that it
will comply with its obligations (and is financially able to meet such obligations) hereunder to fund prospective Loans and participations
in outstanding Letters of Credit and Swingline Loans (provided that such Lender shall cease to be a Defaulting Lender pursuant
to this clause (c) upon receipt of such written certification by the Administrative Agent and the Borrower), or (d) has,
or has a direct or indirect parent company that has (i) become the subject of a Bankruptcy Proceeding, (ii) had appointed for
it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization
or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory
authority acting in such a capacity (in each case of clause (i) or (ii), other than pursuant to an Undisclosed Administration)
or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue
of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental
Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts
within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental
Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative
Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall
be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.22(b))
upon delivery of written notice of such determination to the Borrower, each Issuing Bank, the Swingline Lender and each Lender.
“Deposit Account”
shall have the meaning assigned to such term in the Senior Security Agreement.
“Disqualified Institution”
means:
(a) any
Person that is a competitor of the Borrower and identified by legal name by the Borrower in good faith in writing to the Administrative
Agent from time to time after the Closing Date; and
(b) any
Affiliate of any Person described in clause (a) that is readily identifiable as such solely on the basis of its names (other
than, solely in the case of Affiliates of any Person described in the foregoing clause (a), any such Affiliate that is a bank,
financial institution or debt fund that regularly invest in commercial loans or similar extensions of credit in the ordinary course of
business and for which no personnel involved with the relevant competitor make investment decisions);
provided
that in no event shall any update to the list of Disqualified Institutions (i) be effective prior to two (2) Business
Days after receipt thereof by the Administrative Agent or (ii) apply retroactively to disqualify any Persons that have previously
acquired an assignment or participation interest under this Agreement or that is party to a pending trade; provided, however,
that such Persons shall be prohibited from acquiring any additional assignment or participation interest under this Agreement following
the effectiveness of such Person’s designation as a Disqualified Institution.
“Disqualified Preferred
Stock” means Preferred Stock of the Borrower that is not Qualified Preferred Stock.
“dollars”
and “$” each refer to lawful money of the United States of America.
“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.
“EEA Financial Institution”
means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of
an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in
clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a Subsidiary
of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision
with its parent.
“EEA Member Country”
means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority”
means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including
any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Electronic Copy”
shall have the meaning set forth in Section 9.21.
“Electronic Record”
and “Electronic Signature” have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended
from time to time.
“Eligible Accounts
Receivable” means, at any date of determination, all Accounts (other than Credit Card Accounts Receivable) of the Subsidiary
Loan Parties that satisfy at the time of creation and continue to meet the same at the time of such determination the usual and customary
eligibility criteria established from time to time by the Administrative Agent (after consultation with the Borrower) in its commercially
reasonable judgment. On the Closing Date, those criteria are:
(a) such
Account constitutes an “Account” within the meaning of the UCC;
(b) all
payments on such Account are by the terms of such Account due not later than 90 days after the date of service (i.e., the
transaction date) and are otherwise on terms that are normal and customary in the business of the Borrower and the Subsidiaries;
(c) such
Account has been billed and has not remained unpaid for more than 120 days following the date of service;
(d) such
Account is denominated in dollars;
(e) such
Account arose from a completed, outright and lawful sale of goods or the completed performance of services by the applicable Subsidiary
Loan Party and accepted by the applicable Account Debtor, and the amount of such Account has been properly recognized as revenue on the
books of the applicable Subsidiary Loan Party;
(f) such
Account is owned solely by a Subsidiary Loan Party;
(g) the
proceeds of such Account are payable solely to a Deposit Account which (i) is under the control of the Senior Collateral Agent and
(ii) has not been released or transferred in accordance with Section 5.16 or otherwise;
(h) such
Account arose in the ordinary course of business of the applicable Subsidiary Loan Party;
(i) not
more than 50% of the aggregate amount of Accounts from the same Account Debtor and any Affiliates thereof remain unpaid for more than
120 days following the date of service;
(j) such
Account (i) does not arise under any (x) Medicare program or (y) any Medicaid program of any State which may limit recovery
upon any such Account upon any Bankruptcy Proceeding related to a Subsidiary Loan Party (including Hawaii, Illinois, Minnesota,
Montana, New Mexico and Ohio) and (ii) is not due from any Governmental Authority (other than from any Medicaid program of any State,
except to the extent excluded pursuant to clause (j)(y) above);
(k) to
the knowledge of the Borrower and the Subsidiaries, no event of death, bankruptcy, insolvency or inability to pay creditors generally
of the Account Debtor of such Account has occurred, and no notice thereof has been received;
(l) payment
of such Account is not being disputed by the Account Debtor thereof and is not subject to any material bona fide claim, counterclaim,
offset or chargeback;
(m) 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;
(n) 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 Administrative Agent in favor of the applicable Subsidiary
Loan Party), and (ii) is not an Affiliate or Subsidiary or an Affiliate of any of the Loan Parties;
(o) such
Account (i) is subject to a perfected first-priority security interest in favor of the Senior Collateral Agent pursuant to the Senior
Collateral Documents (subject to any Permitted Encumbrances; provided that the Administrative Agent shall have established appropriate
reserves against the ABL Borrowing Base Amount (as determined by the Administrative Agent in the exercise of its commercially reasonable
judgment) with respect to any Permitted Encumbrances ranking senior to or pari passu with the Liens of the Senior Collateral Agent,
in an amount not to exceed the claims secured by such Permitted Encumbrances) and (ii) is not subject to any other Lien (other than
(x) any Lien created pursuant to the Senior Debt Documents, the Pre-Petition Senior Debt Documents, the ABL Term Loan Documents,
the Split-Priority Debt Documents or the Second Priority Debt Documents or (y) Permitted Encumbrances (provided that the
Administrative Agent may establish appropriate reserves against the ABL Borrowing Base Amount (as determined by the Administrative Agent
in the exercise of its commercially reasonable judgment) with respect to any Permitted Encumbrances, in an amount not to exceed the claims
secured by such Permitted Encumbrances));
(p) with
respect to any such Account for an amount greater than $5,000,000, the Account Debtor has not been disapproved by the Required Lenders
(based, on the Required Lenders’ reasonable judgment, upon the creditworthiness of such Account Debtor);
(q) the
representations and warranties contained in the Senior Loan Documents with respect to such Account are true and correct in all material
respects;
(r) such
Account does not consist of amounts due from vendors as rebates or allowances or reflect finance charges;
(s) such
Account is not due from an Account Debtor which is the subject of a Bankruptcy Proceeding or that is a Sanctioned Person; and
(t) such
Account is in full force and effect and constitutes a legal, valid and binding obligation of the Account Debtor, enforceable against
such Account Debtor in accordance with its terms and the applicable Subsidiary Loan Party’s right to receive payment in respect
of such Account is not contingent upon the fulfillment of any condition whatsoever.
“Eligible Credit Card
Accounts Receivable” means, at any date of determination, any Credit Card Account Receivable that (i) has been earned
and represents the bona fide amounts due to a Subsidiary Loan Party from a credit card or debit card processor and/or credit card or
debit card issuer, and in each case originated in the ordinary course of business of the applicable Subsidiary Loan Party and (ii) is
not excluded as an Eligible Credit Card Accounts Receivable pursuant to any of clauses (a) through (j) below.
Without limiting the foregoing, to qualify as an Eligible Credit Card Accounts Receivable, a Credit Card Account Receivable shall indicate
no Person other than a Subsidiary Loan Party as payee or remittance party. Eligible Credit Card Accounts Receivable shall not include
any Credit Card Account Receivable if:
(a) such
Credit Card Account Receivable is not owned by a Subsidiary Loan Party or such Subsidiary Loan Party does not have good or marketable
title to such Credit Card Account Receivable;
(b) such
Credit Card Account Receivable (i) does not constitute an “Account” (as defined in the UCC), or (ii) does not constitute
a “Payment Intangible” (as defined in the UCC);
(c) such
Credit Card Account Receivable has been outstanding more than five Business Days;
(d) the
credit card or debit card issuer or credit card or debit card processor of the applicable credit card or debit card with respect to such
Credit Card Account Receivable is the subject of any Bankruptcy Proceedings or is a Sanctioned Person;
(e) such
Credit Card Account Receivable is not a valid, legally enforceable obligation of the applicable credit card or debit card issuer with
respect thereto;
(f) such
Credit Card Account Receivable (i) is not subject to a perfected first-priority security interest in favor of the Senior Collateral
Agent pursuant to the Senior Collateral Documents (subject to any Permitted Encumbrances; provided that the Administrative Agent
shall have established appropriate reserves against the ABL Borrowing Base Amount (as determined by the Administrative Agent in the exercise
of its commercially reasonable judgment) with respect to any Permitted Encumbrances ranking senior to or pari passu with the Liens
of the Senior Collateral Agent, in an amount not to exceed the claims secured by such Permitted Encumbrances), or (ii) is subject
to any Lien whatsoever (other than (x) any Lien created pursuant to the Senior Debt Documents, the Pre-Petition Senior Debt Documents,
the ABL Term Loan Documents, the Split-Priority Debt Documents or the Second Priority Debt Documents or (y) Permitted Encumbrances
(provided that the Administrative Agent may establish appropriate reserves against the ABL Borrowing Base Amount (as determined
by the Administrative Agent in the exercise of its commercially reasonable judgment) with respect to any Permitted Encumbrances, in an
amount not to exceed the claims secured by such Permitted Encumbrances));
(g) such
Credit Card Account Receivable does not conform in all material respects to all representations, warranties or other provisions in the
Senior Loan Documents or in the credit card or debit card agreements relating to such Credit Card Account Receivable or any default exists
under the applicable credit card or debit card agreement;
(h) such
Credit Card Account Receivable is subject to risk of set-off, non-collection or not being processed due to unpaid and/or accrued credit
card or debit card processor fee balances, to the extent of the lesser of the balance of such Credit Card Account Receivable or unpaid
credit card or debit card processor fees;
(i) the
proceeds of such Credit Card Account Receivable are not paid into a Deposit Account which (A) is under the control of the Senior
Collateral Agent or (B) has been released or transferred in accordance with Section 5.16 or otherwise; or
(j) such
Credit Card Account Receivable does not meet such other usual and customary eligibility criteria for Credit Card Account Receivables
as the Administrative Agent (after consultation with the Borrower) may determine from time to time in its commercially reasonable judgment.
In determining the amount to be so included in
the calculation of the value of an Eligible Credit Card Accounts Receivable, the face amount thereof shall be reduced by, without duplication,
to the extent not reflected in such face amount, (i) the amount of all customary fees and expenses in connection with any credit
card or debit card arrangements and (ii) the aggregate amount of all cash received in respect thereof but not yet applied by the
Subsidiary Loan Party to reduce the amount of such Eligible Credit Card Accounts Receivable.
“Eligible Inventory”
means, at any date of determination, all inventory (as defined in the Uniform Commercial Code) owned by any Subsidiary Loan Party that
satisfies at the time of such determination the usual and customary eligibility criteria established from time to time by the Administrative
Agent (after consultation with the Borrower) in its commercially reasonable judgment. On the Closing Date, Eligible Inventory shall exclude,
without duplication, the following:
(a) any
such inventory that has been shipped to a customer, even if on a consignment or “sale or return” basis, or is otherwise not
in the possession or control of or any Subsidiary Loan Party or a warehouseman or bailee of any Subsidiary Loan Party;
(b) any
inventory against which any Subsidiary Loan Party has taken a reserve, to the extent of such reserve, to the extent specified by the
Administrative Agent from time to time in its commercially reasonable judgment to reflect Borrowing Base Factors;
(c) any
inventory that has been discontinued or is otherwise of a type (SKU) not currently offered for sale on a regular basis by the Subsidiary
Loan Parties (including any such inventory obtained in connection with a Business Acquisition) to the extent specified by the Administrative
Agent from time to time in its commercially reasonable judgment to reflect Borrowing Base Factors;
(d) (i) are
to be returned to the vendor, or (ii) are bill and hold goods;
(e) inventory
acquired in a Business Acquisition, unless and until the Administrative Agent has completed or received (A) an appraisal of such
inventory from appraisers reasonably satisfactory to the Administrative Agent, establishes an advance rate and reserves therefor and
otherwise agrees that such inventory shall be deemed Eligible Inventory and (B) such other due diligence as the Administrative Agent
may reasonably require, all of the results of the foregoing in respect of such inventory to be reasonably satisfactory to the Administrative
Agent (provided that, for the avoidance of doubt, this clause shall not be construed to permit any Business Acquisition);
(f) any
inventory not located in the United States or otherwise not subject to a valid and perfected Lien of the Senior Collateral Agent in favor
of the Senior Loan Secured Parties under the Senior Collateral Documents, subject to no prior or equal Lien other than in favor of the
other Senior Secured Parties;
(g) any
supply, scrap or obsolete inventory or inventory that is otherwise unsaleable;
(h) any
inventory that is past its expiration date, is damaged or not in good condition, is packaging and shipping materials, is a sample used
for marketing purposes or does not meet all material standards imposed by any Governmental Authority having regulatory authority over
such inventory, except in each case to the extent of its net realizable value as determined by the Administrative Agent from time to
time in its commercially reasonable judgment;
(i) any
inventory that is subject to any licensing, patent, royalty, trademark, trade name or copyright agreement with any third Person from
whom the Borrower or any of its Subsidiaries has received notice of a dispute in respect of such agreement, to the extent that the Administrative
Agent determines, in its commercially reasonable judgment, that such dispute could be expected to prevent the sale of such inventory;
(j) any
inventory which is subject to a negotiable document of title which has not been delivered to the Administrative Agent;
(k) inventory
that has been sold but not yet delivered or as to which a Subsidiary Loan Party has accepted a deposit;
(l) any
inventory to the extent that such inventory is not comprised of readily marketable materials of a type manufactured, consumed or held
for resale by the Subsidiary Loan Parties in the ordinary course of business;
(m) any
inventory to the extent that such inventory consists of raw materials, component parts and/or work-in-progress or inventory that is subject
to progress billing or retainage, or is inventory for which a performance, surety or completion bond or similar assurance has been issued;
(n) any
inventory in respect of which the applicable representations and warranties in the Senior Loan Documents are not true and correct in
all material respects;
(o) any
inventory to which the Subsidiary Loan Parties do not have good title or any inventory which a Subsidiary Loan Party holds on consignment
or on a “sale or return” basis;
(p) any
inventory that (i) is not subject to a perfected first-priority security interest in favor of the Senior Collateral Agent pursuant
to the Senior Collateral Documents (subject to any Permitted Encumbrances; provided that the Administrative Agent shall have established
appropriate reserves against the ABL Borrowing Base Amount (as determined by the Administrative Agent in the exercise of its commercially
reasonable judgment) with respect to any Permitted Encumbrances ranking senior to or pari passu with the Liens of the Senior Collateral
Agent, in an amount not to exceed the claims secured by such Permitted Encumbrances), or (ii) is subject to any Lien whatsoever
(other than (x) any Lien created pursuant to the Senior Debt Documents, the Pre-Petition Senior Debt Documents, the ABL Term Loan
Documents, the Split-Priority Debt Documents or the Second Priority Debt Documents or (y) Permitted Encumbrances (provided
that the Administrative Agent may establish appropriate reserves against the ABL Borrowing Base Amount (as determined by the Administrative
Agent in the exercise of its commercially reasonable judgment) with respect to any Permitted Encumbrances, in an amount not to exceed
the claims secured by such Permitted Encumbrances));
(q) any
Pharmaceutical Inventory that is held at a Store location where the in-store pharmacy has been closed for business; and
(r) any
inventory that has been determined by the Administrative Agent, in its commercially reasonable judgment and after consultation with the
Borrower, to be excluded from “Eligible Inventory” in order to reflect Borrowing Base Factors.
“Eligible Other Inventory
Value” means, at any date of determination, an amount equal to (a) the cost of Eligible Inventory that is Other Inventory
(less any appropriate reserve for obsolete Other Inventory and any profits accrued in connection with transfers of Other Inventory
between the Borrower and the Subsidiaries or between Subsidiaries) at such date, in dollars, determined in accordance with GAAP consistently
applied and on a basis consistent with that used in the preparation of the most recent audited consolidated financial statements of the
Borrower and its Consolidated Subsidiaries delivered to the Lenders prior to the Closing Date or pursuant to Section 5.01(a),
multiplied by (b) the Net Orderly Liquidation Rate with respect to such Other Inventory.
“Eligible Pharmaceutical
Inventory Value” means, at any date of determination, an amount equal to (a) the cost of Eligible Inventory that is Pharmaceutical
Inventory (less any appropriate reserve for obsolete Pharmaceutical Inventory and any profits accrued in connection with transfers
of Pharmaceutical Inventory between the Borrower and the Subsidiaries or between Subsidiaries) at such date, in dollars, determined in
accordance with GAAP consistently applied and on a basis consistent with that used in the preparation of the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered to the Lenders prior to the Closing Date or pursuant
to Section 5.01(a), multiplied by (b) the Net Orderly Liquidation Rate with respect to such Pharmaceutical Inventory.
“Eligible Script Lists”
means, at any date of determination, all Prescription Files owned and maintained on such date by the Subsidiary Loan Parties setting
forth Persons (and addresses, telephone numbers or other contact information therefor) who currently purchase or otherwise obtain, in
any Store owned or operated by any Subsidiary Loan Party, medication required to be dispensed by a licensed professional; provided
that Eligible Script Lists shall not include any Prescription File if:
(a) such
Prescription File is located or otherwise maintained at premises other than those owned, leased or licensed and, in each case, controlled
by a Subsidiary Loan Party;
(b) such
Prescription File (i) is not subject to a perfected first-priority security interest in favor of the Senior Collateral Agent pursuant
to the Senior Collateral Documents (subject to any Permitted Encumbrances; provided that the Administrative Agent shall have established
appropriate reserves (as determined by the Administrative Agent in the exercise of its commercially reasonable judgment) with respect
to any Permitted Encumbrances ranking senior to or pari passu with the Liens of the Senior Collateral Agent, in an amount not
to exceed the claims secured by such Permitted Encumbrances), or (ii) is subject to any Lien whatsoever (other than (x) any
Lien created pursuant to the Senior Debt Documents, the Pre-Petition Senior Debt Documents, the ABL Term Loan Documents, the Split-Priority
Debt Documents or the Second Priority Debt Documents or (y) Permitted Encumbrances (provided that the Administrative Agent
may establish appropriate reserves (as determined by the Administrative Agent in the exercise of its commercially reasonable judgment)
with respect to any Permitted Encumbrances, in an amount not to exceed the claims secured by such Permitted Encumbrances));
(c) such
Prescription File is related to a location referred to in clause (a) that has closed for business, except to the extent such
Prescription File (x) has been utilized by the applicable customer at another operating Store location or (y) such Prescription
File constitutes a Transitioned Prescription File;
(d) Transitioned
Prescription Files; provided that, until a period of twelve (12) fiscal months has elapsed since the closure of any Specified
Prescription File Store, the Annualized Transitioned Prescription File Amount for such Specified Prescription File Store may be included
as Eligible Script Lists (subject to compliance with the other requirements of this definition (other than clause (c) hereof));
(e) such
Prescription File is not of a type included in an appraisal of Prescription Files received by the Administrative Agent from time to time
in accordance with this Agreement; or
(f) such
Prescription File is not in a form that may be sold or otherwise transferred or is subject to regulatory restrictions prohibiting the
sale or transfer thereof.
For the avoidance of any doubt, Eligible
Script Lists shall not include (x) any Prescription Files previously sold or disposed of or (y) any Prescription Files maintained
at a Specified Prescription File Store (except to the extent constituting a Transitioned Prescription File, limited in all cases to the
Transitioned Prescription Files Amount).
“Eligible Script Lists
Value” means, at any date of determination, the product of (a) the average, orderly liquidation value of such Eligible
Script Lists, on a per Prescription File basis, net of (to the extent not given effect in the ordinary liquidation value) operating expenses,
liquidation expenses and commissions reasonably anticipated in the disposition of such assets, as reasonably determined from time to
time by reference to the most recent appraisal of Prescription Files received by the Administrative Agent that is conducted by an independent
appraiser satisfactory to the Administrative Agent, multiplied by (b) the number of Prescription Files in such Eligible Script
Lists for the twelve (12) fiscal months most recently ended; provided, however, that the amount of Transitioned Prescription Files included
in the determination of Eligible Scripts Lists Value shall equal Transitioned Prescription Files Amount.
“Elixir Business Segment”
means the business segment owned and operated by the Elixir Subsidiaries.
“Elixir Insurance
Company” means Elixir Insurance Company, an Ohio corporation.
“Elixir Monetization
Event” means a factoring transaction or securitization arrangement with respect to, or a financing secured by, the Specified
Elixir Assets.
“Elixir Proceeds Reserve”
means the “Elixir Proceeds Reserve” (as defined in Exhibit I hereto), a reserve established and maintained (against
the ABL Borrowing Base Amount) by the Administrative Agent as and when required, and otherwise in accordance with, the Exhibit I
hereto.
“Elixir Subsidiaries”
means, collectively, Hunter Lane, LLC and its direct and indirect Subsidiaries.
“Environmental Laws”
means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way to pollution or protection of the environment, preservation
or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety
matters (regarding exposure to Hazardous Materials).
“Environmental Liability”
means all liabilities, obligations, damages, losses, claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and
costs, (including administrative oversight costs, natural resource damages and remediation costs), whether contingent or otherwise, arising
out of or relating to: (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release of any
Hazardous Materials or (e) any contract, agreement or other consensual arrangement to the extent liability is assumed or imposed
with respect to any of the foregoing.
“Equity Interests”
means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate”
means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or
(c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer
under Section 414(m) or (o) of the Code.
“ERISA Event”
means (a) any “reportable event”, as defined in Section 4043(c) of ERISA or the regulations issued thereunder
with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any
Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether
or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates
of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any
ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint
a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect
to its withdrawal or partial withdrawal from any Multiemployer Plan; (g) the receipt by the Borrower or any ERISA Affiliate of any
notice concerning the imposition of Withdrawal Liability on it or a determination that a Multiemployer Plan is, or is expected to be,
insolvent within the meaning of Title IV of ERISA; or (h) the existence of any event or condition that could reasonably be
expected to constitute grounds under ERISA for the termination by the PBGC of, or the appointment of a trustee to administer, any Plan.
“Escrow Notes”
means Indebtedness consisting of debt securities issued by the Borrower or by an Escrow Notes Issuer, which debt securities (a) in
the case of debt securities issued by an Escrow Notes Issuer, shall require the proceeds or substantially all the proceeds of such debt
securities to be held as security for the repayment of such debt securities, or to be held in escrow, pending satisfaction or waiver of
certain conditions set forth in the documentation governing such debt securities, (b) in the case of debt securities issued by an
Escrow Notes Issuer, shall, other than Guarantees in respect of interest thereon, fees, and customary indemnities, provide recourse solely
to the assets of such Escrow Notes Issuer and (c) shall be subject to mandatory redemption or prepayment if the conditions set forth
in the documentation governing such debt securities are not satisfied by the date specified in such documentation; provided that
in the case of debt securities issued by an Escrow Notes Issuer, upon satisfaction or waiver of such conditions, such Escrow Notes Issuer
shall merge with and into the Borrower with the Borrower being the surviving corporation, and becoming the issuer under such debt securities,
and such debt securities shall, after giving effect to such merger, constitute Permitted Unsecured Indebtedness which does not mature
or require scheduled payments of principal prior to the date that is ninety (90) days after the Latest Maturity Date in effect at the
time such Indebtedness is originally incurred as Escrow Notes; provided, further, that in the case of debt securities issued
by the Borrower, upon satisfaction or waiver of such conditions, such debt securities shall constitute Permitted Unsecured Indebtedness
which does not mature or require scheduled payments of principal prior to the date that is ninety (90) days after the Latest Maturity
Date in effect at the time such Indebtedness is originally incurred as Escrow Notes. Notwithstanding anything to the contrary in this
Agreement or in any other Senior Loan Document, no Escrow Notes may be issued at any time on or after the Closing Date, unless the Administrative
Agent and the Required Lenders shall otherwise consent thereto in writing.
“Escrow Notes Issuer”
means a Subsidiary of the Borrower that issues, or intends to issue, Escrow Notes, and that at the time such Escrow Notes are to be issued,
does not own any operating assets.
“EU Bail-In Legislation
Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in
effect from time to time.
“Event of Default”
has the meaning assigned to such term in Section 7.01.
“Excluded Subsidiary”
means each Subsidiary listed on Schedule 1.01(a) hereto; provided that (a) any Subsidiary that Guarantees any
other Material Indebtedness of the Borrower shall not be deemed to be an “Excluded Subsidiary”, and (b) any Subsidiary
that incurs Material Indebtedness (other than Indebtedness owing to the Borrower or any of its Subsidiaries) shall not be deemed to be
an “Excluded Subsidiary”, to the extent any such Material Indebtedness is guaranteed by the Borrower or any Subsidiary Loan
Party.
“Excluded Taxes”
means, with respect to any Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income Taxes imposed on (or measured by) its net income (however denominated) or franchise
Taxes, in each case, (i) imposed by the United States of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located
or (ii) that are Other Connection Taxes, (b) any branch profits Taxes imposed by the United States of America or any similar
Tax imposed by any other jurisdiction described in clause (a) above, (c) in the case of a Foreign Lender (other than
an assignee pursuant to a request by the Borrower under Section 2.19(b)), any U.S. Federal withholding Tax that (i) is
in effect and would apply to amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time
of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to any withholding
Tax pursuant to Section 2.17(a), or (ii) is attributable to such Foreign Lender’s failure to comply with Section 2.17(f) and
(d) any U.S. Federal withholding Taxes imposed under FATCA.
“Existing Letters of
Credit” means each letter of credit identified on Schedule 1.01(b) hereto.
“Existing Non-Guaranteed
Indebtedness” means Indebtedness outstanding as of the Petition Date under the Existing Non-Guaranteed Indentures.
“Existing Non-Guaranteed
Indentures” means, collectively, (a) the 2027 7.70% Note Indenture and (b) the 2028 6.875% Note Indenture.
“Existing Split-Priority
Indebtedness” means Indebtedness outstanding as of the Petition Date under the Existing Split-Priority Indentures.
“Existing Split-Priority
Indentures” means, collectively, (a) the 2025 7.500% Note Indenture and (b) the 2026 8.000% Note Indenture.
“Facility”
means the FILO Facility, Term Facility and/or the Revolving Facility, as applicable and as the context may require.
“FATCA” means
Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements
entered into pursuant to Section 1471(b) of the Code.
“Federal Funds Effective
Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate
on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate
is so published on such next succeeding Business Day, the Federal Funds Effective Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by
the Administrative Agent.
“Fee Letter”
means the Fee Letter, dated as of the Closing Date, among the Borrower, the Administrative Agent and the other parties thereto.
“FILO Borrowing Base
Amount” means an amount equal to the sum, without duplication, of the following:
(a) the
Accounts Receivable Advance Rate multiplied by the face amount of Eligible Accounts Receivable; plus
(b) the
Credit Card Receivable Advance Rate multiplied by the face amount of Eligible Credit Card Accounts Receivable; plus
(c) the
Pharmaceutical Inventory Advance Rate multiplied by the Eligible Pharmaceutical Inventory Value; plus
(d) the
Other Inventory Advance Rate multiplied by the Eligible Other Inventory Value; plus
(e) the
FILO Scripts Availability; minus
(f) any
reserves established by the Administrative Agent, in accordance with Section 2.20(b), in the exercise of its commercially
reasonable judgment to reflect Borrowing Base Factors (which reserves shall not be duplicative of reserves implemented against the ABL
Borrowing Base Amount).
The FILO Borrowing Base Amount
shall be computed and reported weekly with respect to Eligible Accounts Receivable, Eligible Inventory, Eligible Credit Card Accounts
Receivable and Eligible Script Lists, in each case in accordance with Sections 2.20 and 5.01(f). The FILO Borrowing Base
Amount at any time in effect shall be determined by reference to the Borrowing Base Certificate most recently delivered pursuant to Section 5.01(f),
giving effect to reserves effected pursuant to Section 2.20(b) after the date of delivery thereof.
“FILO Commitment”
means, with respect to each FILO Lender, the commitment of such FILO Lender to make FILO Loans to the Borrower pursuant to Section 2.01(b),
in an aggregate principal amount not to exceed the amount set forth opposite such FILO Lender’s name on Schedule 2.01 on
and as of the Closing Date under the caption “FILO Commitment”.
“FILO
Facility” means, at any time (a) prior to the deemed funding of the FILO Loans on the Closing Date, the Total FILO Commitments
of the FILO Lenders at such time and (b) thereafter, the sum of (x) the outstanding amount of the FILO Commitments at such time
and (y) the aggregate outstanding principal amount of the FILO Loans made to the Borrower by the FILO Lenders at such time.
The aggregate principal amount of the FILO Facility as of the Closing Date is $400,000,000.
“FILO Lender”
means (a) prior to the deemed funding of the FILO Loans on the Closing Date, any Lender that has a FILO Commitment at such time,
and (b) thereafter, any Lender that holds a FILO Loan or FILO Commitment at such time.
“FILO Loan”
means a Loan made pursuant to Section 2.01(b).
“FILO Maturity Date”
means October [●], 20241; provided that, if any such date is not a Business Day, the FILO Maturity Date
shall be deemed to be the next preceding Business Day.
“FILO Push-Down Reserve”
means, at any time of determination, a reserve established (against the ABL Borrowing Base Amount) by the Administrative Agent at such
time in an amount equal to the amount (if any) by which the Total FILO Outstandings exceed the FILO Borrowing Base Amount.
“FILO
Scripts Availability” means, at any time of determination of the FILO Borrowing Base Amount, the sum of (a) (i) Script
Lists Advance Rate, multiplied by (ii) the Eligible Script Lists Value, plus (b) the amount of ABL Scripts Availability
(in excess of 32.5% of the ABL Borrowing Base Amount) (if any) that is excluded from the ABL Borrowing Base Amount by operation of the
first proviso set forth in the definition of the term “ABL Borrowing Base Amount”; provided that in no event
shall the sum of (i) FILO Scripts Availability included in the determination of the FILO Borrowing Base Amount and (ii) ABL
Scripts Availability included in the determination of the ABL Borrowing Base Amount exceed, in the aggregate, an amount equal to forty-three
and one-half percent (43.5%) of the Combined Borrowing Base Amount.
“Final Financing Order”
means, the order of the Bankruptcy Court entered in the Chapter 11 Case after a final hearing under Bankruptcy Rule 4001(c)(2) or
such other procedures as approved by the Bankruptcy Court, which order shall be in form and substance satisfactory to the Loan Parties
and the Administrative Agent, and from which no appeal or motion to reconsider has been filed, together with all extensions, modifications
and amendments thereto, in form and substance satisfactory to the Loan Parties and the Administrative Agent.
“Final Order Entry
Date” means the date on which the Bankruptcy Court enters the Final Financing Order.
“Financial Officer”
means with respect to any Person, the chief financial officer, principal accounting officer, treasurer, vice president of financial accounting,
vice president (or more senior level officer) of finance or accounting, senior director of treasury or controller of such Person. Any
document delivered hereunder that is signed by a Financial Officer of a Loan Party shall be conclusively presumed to have been authorized
by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Financial Officer, shall be conclusively
presumed to have acted on behalf of such Loan Party.
“Financing Order”
means, as the context may require, the Interim Financing Order or the Final Financing Order, whichever is then applicable.
“Foreign Lender”
means (a) if the Borrower is a U.S. Person, any Lender, with respect to such Borrower, that is not a U.S. Person, and (b) if
the Borrower is not a U.S. Person, any Lender, with respect to such Borrower, that is resident or organized under the laws of a jurisdiction
other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
1 Note to Draft – One year from Closing Date.
“Fronting Exposure”
means, at any time there is a Revolving Lender that is a Defaulting Lender, (a) with respect to any Issuing Bank, such Defaulting
Lender’s LC Exposure with respect to Letters of Credit issued by such Issuing Bank other than LC Exposure as to which such Defaulting
Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof
and (b) with respect to the Swingline Lender, such Defaulting Lender’s Applicable Percentage of outstanding Swingline Loans
made by such Swingline Lender, other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been
reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.
“GAAP” means
generally accepted accounting principles in the United States of America.
“Governmental Authority”
means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national body exercising
such powers or functions, such as the European Union or the European Central Bank).
“Government Lockbox
Account” shall have the meaning assigned to such term in the Senior Security Agreement.
“Government Lockbox
Account Agreement” shall have the meaning assigned to such term in the Senior Security Agreement.
“Government Lockbox
Account Bank” shall have the meaning assigned to such term in the Senior Security Agreement.
“Ground-Leased Real
Property” means real property that is ground leased by a Loan Party pursuant to a Real Estate Lease and a Loan Party owns the
improvements on such real property, including all such real property described on Schedule 3.05(a)(3).
“Guarantee”
of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing
or having the economic effect of guaranteeing any Indebtedness or other monetary obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation
or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease
property, securities or services for the purpose of assuring the owner of such Indebtedness or other monetary obligation of the payment
thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor
so as to enable the primary obligor to pay such Indebtedness or other monetary obligation or (d) as an account party in respect of
any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee
shall not include endorsements for collection or deposit in the ordinary course of business.
“Hazardous Materials”
means (a) petroleum products and byproducts, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, radon gas, chlorofluorocarbons
and all other ozone-depleting substances, or (b) any chemical, material, substance, waste, pollutant or contaminant that is prohibited,
limited or regulated by or pursuant to any Environmental Law.
“Hedging Agreement”
means any interest rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index
swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction,
collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction
(including any option with respect to any of the foregoing transactions) or any combination of the foregoing transactions.
“HIPAA” means
the Health Insurance Portability and Accountability Act of 1996, as amended.
“Incremental Commitment”
has the meaning assigned to such term in Section 2.21.
“Incremental Facility”
has the meaning assigned to such term in Section 2.21.
“Incremental Facility
Amendment” has the meaning assigned to such term in Section 2.21.
“Incremental Refinancing
Term Loan” has the meaning assigned to such term in Section 2.21, and shall include each Class of such Loans
established pursuant to an Incremental Facility Amendment.
“Incremental Revolving
Commitment” has the meaning assigned to such term in Section 2.21.
“Incremental Senior
Debt Refinancing Facility” has the meaning assigned to such term in Section 2.21.
“Incremental Term Commitment”
shall mean any Lender’s or Additional Lender’s commitment to make any Incremental Refinancing Term Loans pursuant to Section 2.21.
“Indebtedness”
of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (e) all
Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed by
such Persons, provided that the amount of such Indebtedness will be the lesser of the fair market value of such property and the amount
of Indebtedness of such other Person, (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations
of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty, (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances and
(j) all Disqualified Preferred Stock valued, as of the date of determination, at the greater of (i) the maximum aggregate amount
that would be payable upon maturity, or upon the mandatory redemption, repayment or repurchase thereof and (ii) the maximum liquidation
preference of such Disqualified Preferred Stock. The Indebtedness of any Person shall include the Indebtedness of any other entity (including
any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s
ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person
is not liable therefor.
“Indemnified Taxes”
means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of
the Borrower under any Senior Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.
“Indemnitee”
has the meaning assigned to such term in Section 9.03(b).
“Ineligible Person”
has the meaning assigned to such term in Section 9.04(b)(ii)(E).
“Information”
has the meaning assigned to such term in Section 9.13.
“Information Certificate”
means a certificate in the form of Schedule 4 to the Senior Security Agreement or any other form approved by the Agents.
“Intellectual Property”
shall have the meaning set forth in the Senior Security Agreement.
“Intercompany Inventory
Purchase Agreement” means the Intercompany Inventory Purchase Agreement dated as of December 18, 2018 (as amended), among
the Borrower, Rite Aid Hdqtrs. Corp., the Distribution Subsidiaries as defined and named therein and the Operating Subsidiaries as defined
and named therein.
“Intercreditor Agreements”
means, collectively, the Senior Lien Intercreditor Agreement and each Applicable Intercreditor Agreement, in each case, to the extent
then in effect.
“Interest Election
Request” means a notice of (a) a conversion of Loans from one Type to the other or (b) a continuation of Term SOFR
Loans, in each case, pursuant to Section 2.07, which shall be substantially in the form of Exhibit D or such other
form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as
shall be approved by the Administrative Agent) appropriately completed and signed by a Responsible Officer of the Borrower.
“Interest Payment Date”
means (a) with respect to any ABR Loan (other than a Swingline Loan), the first day of each calendar month, (b) with respect
to any Term SOFR Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part, and (c) with
respect to any Swingline Loan, the day that such Loan is required to be repaid.
“Interest Period”
means, with respect to any Term SOFR Borrowing, the period commencing on the date such Term SOFR Borrowing is disbursed or converted or
continued as a Term SOFR Borrowing and ending on the date that is one month thereafter; provided that (i) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day (unless
such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding
Business Day), (ii) any Interest Period of one month that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period, and (iii) no Interest Period for any applicable Class of Loans shall extend
beyond the Latest Maturity Date for such applicable Class; provided that in the case of any Revolving Loan, no Interest Period
shall extend beyond the next upcoming Revolving Maturity Date to occur. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such
Borrowing.
“Interim Financing
Order” means the order of the Bankruptcy Court entered in the Chapter 11 Case after an interim hearing, substantially in the
form attached hereto as Exhibit G and/or otherwise in form and substance satisfactory to the Loan Parties and the Administrative
Agent, together with all extensions, modifications, and amendments thereto approved by the Borrower and the Administrative Agent.
“Investment”
by any Person in any other Person means (a) any direct or indirect loan, advance or other extension of credit, assumption of debt,
or capital contribution to or for the account of such other Person (by means of any transfer of cash or other property to any Person or
any payment for property or services for the account or use of any Person, or otherwise), (b) any direct or indirect purchase or
other acquisition of any Equity Interests, bond, note, debenture or other debt or equity security or evidence of Indebtedness, or any
other ownership interest (including, any option, warrant or any other right to acquire any of the foregoing), issued by such other Person,
whether or not such acquisition is from such or any other Person, (c) any direct or indirect payment by such Person on a Guarantee
of or for the account of such other Person or any direct or indirect issuance by such Person of such a Guarantee (provided, however,
that for purposes of Section 6.04, payments under Guarantees not exceeding the amount of the Investment attributable to the
issuance of such Guarantee will not be deemed to result in an increase in the amount of such Investment), or (d) any Business Acquisition.
Any repurchase by the Borrower of its own Equity Interests or Indebtedness shall not constitute an Investment for purposes of this Agreement.
The amount of any Investment shall be the original principal or capital amount thereof less all returns of principal or equity thereon
(and without adjustment by reason of the financial condition of such other Person) and shall, if made by the transfer or exchange of property
other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such property
at the time of such transfer or exchange.
“Issuing Bank Agreement”
has the meaning assigned to such term in Section 2.05(k).
“Issuing Banks”
means Bank of America, N.A., Wells Fargo Bank, National Association, and any other Revolving Lender from time to time designated by the
Borrower as an Issuing Bank, with the consent of such Revolving Lender (in its sole and absolute discretion) and the Administrative Agent
(such consent not to be unreasonably withheld, conditioned or delayed), and their respective successors in such capacity (it being agreed
that any such other Revolving Lender shall be under no obligation to be an Issuing Bank hereunder). An Issuing Bank may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case the term “Issuing Banks”
shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate (it being agreed that such Issuing Bank shall,
or shall cause such Affiliate to, comply with the requirements of Section 2.05(p) with respect to such Letters of Credit).
At any time there is more than one Issuing Bank, any singular references to the Issuing Bank shall mean any Issuing Bank, each Issuing
Bank, the Issuing Bank that has issued the applicable Letter of Credit, or all Issuing Banks, as the context may require.
“Joint Venture”
means, with respect to any Person, at any date, any other Person in whom such Person directly or indirectly holds an Investment consisting
of an Equity Interest, and whose financial results would not be consolidated under GAAP with the financial results of such Person on the
consolidated financial statements of such Person, if such statements were prepared in accordance with GAAP as of such date.
“Junior Lien Intercreditor
Agreement” means the Intercreditor Agreement, in substantially the form attached as Exhibit J-2 to the Pre-Petition Credit
Agreement or such other form as is reasonably acceptable to the Administrative Agent and the Borrower, among the Loan Parties, the Senior
Collateral Agent, the Administrative Agent as the Representative for the Senior Loan Secured Parties and the other Representatives from
time to time party thereto.
“Latest Maturity Date”
means, at any date of determination, as applicable and as the context may require (a) the latest of (i) the latest Revolving
Maturity Date, (ii) the latest FILO Maturity Date, (ii) the latest Term Facility Maturity Date, in each case, applicable to
any Class of Loans or Commitments outstanding hereunder and in effect on such date of determination or (b) with respect to any
Class of Commitments or Loans, the latest such date specified in clause (a) above with respect to such Class of
Commitments or Loans.
“LC Commitment”
means, with respect to each Issuing Bank, the commitment of such Issuing Bank to issue Letters of Credit pursuant to Section 2.05,
subject to the LC Sublimit and the limitation that the aggregate amount of Letters of Credit issued by (a) with respect to each of
Bank of America, N.A. and Wells Fargo Bank, National Association, each in its capacity as an Issuing Bank shall not exceed $125,000,000
at any time outstanding with respect to any such Issuing Bank, and (b) with respect to each of Capital One, National Association,
PNC Bank, National Association, BMO Bank, N.A., MUFG Bank, LTD., Fifth Third Bank, National Association, ING Capital LLC, and
Truist Bank, each in in its capacity as an Issuing Bank shall not exceed $50,000,000 at any time outstanding (in each case of clause
(a) and (b), unless otherwise agreed by such Issuing Bank); provided, however, that notwithstanding the
foregoing to the contrary, any Issuing Bank may, in its sole discretion, issue Letters of Credit in an aggregate amount exceeding its
LC Commitment, subject to the other Credit Extension Conditions.
“LC Disbursement”
means a payment made by an Issuing Bank pursuant to a Letter of Credit.
“LC Exposure”
means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure
of any Revolving Lender at any time shall be its Applicable Revolving Percentage of the total LC Exposure at such time.
“LC Sublimit”
has the meaning assigned to such term in Section 2.05(b)(i).
“Lender Group Consultants”
has the meaning assigned to such term in Section 5.18(b).
“Lenders”
shall have the meaning assigned to such term in the preamble to this Agreement and shall include any other Person that shall have become
a party hereto pursuant to an Assignment and Acceptance, an Incremental Facility Amendment or a Refinancing Amendment, other than any
such Person that ceases to be a party hereto pursuant to an Assignment and Acceptance or otherwise in accordance with the terms of this
Agreement. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.
“Letter of Credit”
means (a) each Existing Letter of Credit, and (b) any letter of credit issued pursuant to this Agreement under the Revolving
Commitments.
“Lien” means,
with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, Capital Lease or title retention
agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in
the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
“Liquidation”
means the exercise by any Agent of those rights and remedies of the Agents under the Senior Loan Documents and applicable law as a creditor
of the Loan Parties, including (after the occurrence and during the continuation of an Event of Default) the conduct by any or all of
the Loan Parties, acting with the consent of the Agents, of any public, private or “Going-Out-Of-Business Sale” or other disposition
of Collateral for the purpose of liquidating the Collateral. Derivations of the word “Liquidation” (such as “Liquidate”)
are used with like meaning in this Agreement.
“Loan Modification
Agreement” shall mean a Loan Modification Agreement in form and substance reasonably satisfactory to the Administrative Agent
and the Borrower, among the Borrower, the Subsidiary Loan Parties, as applicable, and one or more Accepting Lenders to reflect any Permitted
Amendment.
“Loan Modification
Offer” shall have the meaning assigned to such term in Section 9.19(a).
“Loan Modification
Term Commitment” shall mean any Accepting Lender’s commitment to convert or, continue (in the case of existing Term Loans),
an Affected Class of Loans and/or Commitments as Loan Modification Term Loans pursuant to a Loan Modification Agreement effected
under Section 9.19.
“Loan Modification
Term Loan” has the meaning assigned to such term in Section 9.19(c).
“Loan Parties”
means the Borrower and the Subsidiary Loan Parties.
“Loans” means
the loans made by the Lenders to the Borrower pursuant to this Agreement (including, unless the context otherwise requires, the Revolving
Loans, the FILO Loans, the Term Loans, and the Swingline Loans.
“Lockbox Account”
shall have the meaning assigned to such term in the Senior Security Agreement.
“Margin Stock”
means “margin stock”, as such term is defined in Regulation U of the Board.
“Material Adverse Effect”
means a material adverse effect on (a) the business, assets, operations, properties or condition (financial or otherwise) of the
Borrower and the Subsidiaries, taken as a whole, (b) the ability of any Loan Party to perform any of its material obligations under
any Senior Loan Document to which it is a party or (c) the legality, validity or enforceability of the Senior Loan Documents (including
the validity, enforceability or priority of security interests granted thereunder) or the rights of or benefits or remedies available
to the Lenders under any Senior Loan Document. Notwithstanding the foregoing, (i) the filing of the Chapter 11 Case (and any defaults
under pre-petition agreements, so long as the exercise of remedies as a result of such defaults are subject to the Automatic Stay or such
agreements are voided or invalidated by the Bankruptcy Court) and (ii) the incurrence of any Pre-Petition claim or liability that
is unsecured and junior in priority to the Senior Loan Obligations, will, individually and collectively, each not be deemed to have a
Material Adverse Effect.
“Material Indebtedness”
means (a) the Indebtedness of the Borrower or the Subsidiaries arising under the ABL Term Loan Documents and (b) Indebtedness
(other than the Loans and Letters of Credit), or obligations in respect of one or more Hedging Agreements, of any one or more of the Borrower
or the Subsidiaries in an aggregate principal amount exceeding $5,000,000. For purposes of this definition, the “principal amount”
of the obligations of the Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.
“Maximum Rate”
has the meaning assigned to such term in Section 9.14.
“Medicaid”
means that government-sponsored entitlement program under Title XIX, P.L. 89-97 of the Social Security Act, which provides federal grants
to states for medical assistance based on specific eligibility criteria, as set forth on Section 1396, et seq. of Title 42 of the
United States Code.
“Medicare”
means that government-sponsored insurance program under Title XVIII, P.L. 89-97, of the Social Security Act, which provides for a health
insurance system for eligible elderly and disabled individuals, as set forth at Section 1395, et seq. of Title 42 of the United States
Code.
“Moody’s”
means Moody’s Investors Service, Inc., or any successor to its business of rating debt securities.
“Multiemployer Plan”
means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“Net Cash Proceeds”
means:
(a) with
respect to any Asset Sale (other than in connection with an Elixir Monetization Event), an amount equal to the cash proceeds received
by the Borrower or any of the Subsidiaries from or in respect of such Asset Sale (including, when received, any cash proceeds received
in respect of any noncash proceeds of any Asset Sale), less the sum of the following:
(i) reasonable
costs and expenses paid or incurred in connection with such transaction, including any underwriting brokerage or other customary selling
commissions and reasonable legal, advisory and other fees and expenses (including title and recording expenses, associated therewith);
and
(ii) the
amount of any Indebtedness (or Attributable Debt), together with premium or penalty, if any, and accrued interest thereon (or comparable
obligations in respect of Attributable Debt) secured by a Lien on (or if Attributable Debt, the lease of) any asset disposed of in such
Asset Sale and discharged from the proceeds thereof, but only to the extent such Lien has priority over the Senior Lien, the Split-Priority
Lien and the Second Priority Lien, in each case, with respect to such assets;
(b) with
respect to the proceeds received by the Borrower or a Subsidiary from or in respect of an issuance of Indebtedness for borrowed money,
of equity securities, or of equity-linked (e.g., trust preferred) securities (other than, in any event, the proceeds of any Elixir Monetization
Event), an amount equal to the cash proceeds received by the Borrower or any of the Subsidiaries from or in respect of such issuance,
less any reasonable transaction costs, including investment banking and underwriting fees, discounts and commissions and any other expenses
(including legal fees and expenses) reasonably incurred by such Person in respect of such issuance;
(c) with
respect to a Casualty/Condemnation, the amount of Casualty/Condemnation Proceeds; and
(d) with
respect to any Elixir Monetization Event (whether by Asset Sale, incurrence of Indebtedness or otherwise), an amount equal to the cash
proceeds received by the Borrower or any of the Subsidiaries from or in respect of such Elixir Monetization Event, less the sum
of the following:
(i) reasonable
transaction costs and expenses paid or incurred in connection with such Elixir Monetization Event, including (A) investment banking
and underwriting fees, discounts and commissions, (B) brokerage or other customary selling commissions, and (C) any other expenses
(including legal and advisory fees and expenses) reasonably incurred; and
(ii) an
amount of proceeds reasonably acceptable to the Administrative Agent permitted to remain at Elixir Insurance Company.
“Net Orderly Liquidation
Rate” means, with respect to any type of inventory, at any date of determination, the fraction, expressed as a percentage (a) the
numerator of which is the amount equal to the recovery on the aggregate amount of the applicable category of inventory at such time on
a “going out of business sale” basis for such inventory, net of operating expenses, liquidation expenses and commissions reasonably
anticipated in the disposition of such assets, as determined from time to time by reference to the most recent acceptable inventory appraisal
(including desktop appraisal) received by the Administrative Agent that is conducted by an independent appraiser reasonably satisfactory
to the Administrative Agent with respect to such type of inventory, and (b) the denominator of which is the cost of the aggregate
amount of such category of inventory subject to such appraisal.
“Non-Defaulting Lender”
means, at any time, each Lender that is not a Defaulting Lender at such time.
“Non-Extension Notice
Date” has the meaning assigned to such term in Section 2.05(c).
“OFAC” means
the Office of Foreign Assets Control of the U.S. Department of the Treasury.
“Offer Period”
has the meaning assigned to such term in Section 2.21.
“Other Connection Taxes”
means, with respect to any Agent, any Lender, any Issuing Bank or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, Taxes imposed as a result of a present or former connection between such recipient and the jurisdiction
imposing such Tax (other than connections arising from such recipient having executed, delivered, become a party to, performed its obligations
under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced
any Senior Loan Document, or sold or assigned an interest in any Loan or Senior Loan Document).
“Other Incremental
Revolving Commitments” has the meaning assigned to such term in Section 2.21.
“Other Inventory”
means all inventory other than Pharmaceutical Inventory.
“Other Inventory Advance
Rate” means the other inventory advance rate determined in accordance with Section 2.20(a).
“Other Revolving Commitments”
means, with respect to each Revolving Lender, each Class of Revolving Commitments resulting from (a) a modification of an existing
Revolving Credit Commitments pursuant to a Loan Modification Agreement entered into in connection with a Loan Modification Offer, (b) Refinancing
Revolving Commitments established pursuant to a Refinancing Amendment or (c) Other Incremental Revolving Commitments under an Incremental
Facility established pursuant to an Incremental Facility Amendment. Any Other Revolving Commitments effected pursuant to a Loan Modification
Agreement, Refinancing Amendment or Other Incremental Revolving Commitments established pursuant to an Incremental Facility Amendment,
shall, in each case, be designated a series (each, an “Other Revolving Commitment Series”) of Other Revolving Commitments
for all purposes of this Agreement; provided that any Other Revolving Commitments effected from an existing Class of Revolving
Commitments may be, to the extent provided in the applicable Loan Modification Agreement, Refinancing Amendment or Incremental Facility
Amendment, as applicable, designated as an increase in any previously established Revolving Commitment Series with respect to such
Existing Revolving Tranche. The amount of Other Revolving Commitments on the Closing Date is $0. Notwithstanding anything to the contrary
in this Agreement or in any other Senior Loan Document, no Other Revolving Commitments may be incurred or established at any time on or
after the Closing Date, unless the Administrative Agent and the Required Lenders shall otherwise consent thereto in writing.
“Other Taxes”
means any and all present or future recording, filing, stamp, court or documentary, excise, transfer, sales, property or similar Taxes,
charges or levies arising from any payment made under any Senior Loan Document or from the execution, delivery or enforcement of, or otherwise
with respect to, any Senior Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment
(other than an assignment made pursuant to Section 2.19).
“Overadvance”
means a Revolving Loan, Swingline Loan, advance, or providing of credit support (such as the issuance, renewal, amendment or extension
of a Letter of Credit) to the Borrower to the extent that, immediately after the making of such Loan or advance or the providing of such
credit support, ABL Availability is less than zero (or, solely, for purposes of determining the existence of a Protective Advance
or Unintentional Overadvance, a Revolving Loan, Swingline Loan, advance, or providing of credit support resulting in ABL Availability
being less than the amount required to be maintained pursuant to Section 6.12).
“Owned
Real Property” means real property that a Loan Party owns in fee simple absolute, including all such real property described
on Schedule 3.05(a)(2).
“Participant”
has the meaning assigned to such term in Section 9.04(c)(i).
“Participant Register”
has the meaning assigned to such term in Section 9.04(c)(i).
“PBGC” means
the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
“Permitted Amendments”
shall have the meaning assigned to such term in Section 9.19(c).
“Permitted Disposition”
means any of the following:
(a) dispositions
of inventory at retail, cash, cash equivalents and other cash management investments and obsolete, unused, uneconomic or unnecessary equipment
or inventory, or other assets, in each case in the ordinary course of business;
(b) a
disposition to a Subsidiary Loan Party, provided that if the property subject to such disposition constitutes Collateral immediately
before giving effect to such disposition, such property continues to constitute Collateral subject to the Senior Lien;
(c) a
sale or discount, in each case without recourse and in the ordinary course of business, of overdue Accounts arising in the ordinary course
of business, but only to the extent such Accounts are no longer Eligible Accounts Receivable 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); and
(d) non-exclusive
licenses of Intellectual Property of the Borrower or any Subsidiary in the ordinary course of business, which do not interfere, individually
or in the aggregate in any material respect with the conduct of the business of the Loan Parties and their Subsidiaries, taken as a whole,
and leases, assignments or subleases in the ordinary course of business.
“Permitted Encumbrances”
means:
(a) Liens
imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.05;
(b) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more than sixty (60) days or are being contested in compliance with
Section 5.05;
(c) subject
to the Financing Order and the terms thereof, pledges and deposits made in the ordinary course of
business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;
(d) subject
to the Financing Order and the terms thereof, deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the
ordinary course of business;
(e) judgment
liens in respect of Post-Petition judgments that do not constitute an Event of Default under Section 7.01(k);
(f) easements,
zoning restrictions, rights-of-way, encroachments and similar encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not (i) materially detract from the value of the affected property
or (ii) materially interfere with the ordinary conduct of business of the Borrower or any Subsidiary;
(g) any
zoning, land use, environmental or similar law or right reserved to or vested in any Governmental Authority to control or regulate the
use of any real property that does not (i) materially detract from the value of the affected property or (ii) materially interfere
with the ordinary conduct of the business of the Borrower or any of the Subsidiaries;
(h) licenses,
sublicenses, leases or subleases granted in the ordinary course of business with respect to real property and, to the extent constituting
a Lien, the Real Estate Leases for Ground-Leased Real Property;
(i) landlord
Liens arising by law securing obligations that are not overdue by more than sixty (60) days or that are being contested in good faith
by appropriate proceedings;
(j) Liens
arising from precautionary UCC filings regarding operating leases or the consignment of goods to the Borrower or any Subsidiary;
(k) Liens
arising by virtue of statutory or common law provisions relating to banker’s Liens, Liens in favor of securities intermediaries,
rights of set off or similar rights and remedies with respect to deposit accounts or securities accounts or other funds or assets maintained
with depository institutions and securities intermediaries;
(l) Liens
in favor of a credit card or debit card processor arising in the ordinary course of business under any processor agreement and relating
solely to the amounts paid or payable by, or customary deposits or reserves held by, such credit card or debit card processor;
(m) Liens
in favor of customs and revenues authorities imposed by applicable laws arising in the ordinary course of business in connection with
the importation of goods and securing obligations (i) that are not overdue by more than thirty (30) days, or (ii)(A) that are
being contested in good faith by appropriate proceedings, (B) the applicable Loan Party or Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP and (C) such contest effectively suspends collection of the contested
obligation and enforcement of any Lien securing such obligation;
(n) Liens
arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary
course of business;
(o) any
interest or title of a lessor, sublessor, licensor or sublicensor under leases, subleases, licenses or sublicenses (including software
and other technology licenses) entered into by the Borrower or any of its Subsidiaries in the ordinary course of business; and
(p) to
the extent existing as of the Petition Date, any encumbrance or restriction (including put and call arrangements) contained in the applicable
organizational documents with respect to Equity Interests of any Joint Venture or similar arrangement pursuant to any Joint Venture or
similar arrangement;
provided
that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.
“Permitted First Priority
Debt” means any Indebtedness incurred by the Borrower (other than Indebtedness constituting Senior Loan Obligations) that is
(x) Guaranteed by the Subsidiary Loan Parties pursuant to the Senior Subsidiary Guarantee Agreement (and not Guaranteed by any other
Person) and (y) is secured by the Collateral on a pari passu basis (but without regard to control of remedies) with the Senior
Loan Obligations pursuant to the Senior Security Agreement (and not secured by Liens on any other assets of the Borrower or any other
Person (other than assets that, substantially concurrently with the incurrence of such Indebtedness, become Collateral on which a Lien
is granted to the Senior Collateral Agent pursuant to the Senior Security Agreement and/or other Senior Collateral Documents)); provided,
however, that (a) such Indebtedness is permitted to be incurred, secured and Guaranteed on such basis by each Senior Debt
Document, each other Second Priority Debt Document and each Split-Priority Debt Document, (b) such Indebtedness constitutes Refinancing
Indebtedness in respect of Revolving Loans, FILO Loans, or Term Loans, Revolving Commitments, FILO Commitments, Other Revolving Commitments
or other Commitments, Permitted First Priority Debt incurred pursuant to Section 6.01(a)(i) or any combination of the
foregoing, (c) such Indebtedness has a later maturity and a longer weighted average life than the Refinanced Debt (as defined in
“Refinancing Indebtedness”) in respect of which such Indebtedness is Refinancing Indebtedness, (d) [reserved], (e) at
the option of the Borrower, such Indebtedness may contain market call and make-whole provisions as of the time of its issuance or incurrence,
(f) as of the date of incurrence, a member of the senior management of the Borrower determines in good faith that such Indebtedness
contains covenants (including with respect to amortization and convertibility) and events of default on market terms and (g) the
Representative for the holders of such Indebtedness shall have become party to and bound by the provisions of (i) the Senior Lien
Intercreditor Agreement pursuant to, and by satisfying the conditions set forth in, Section 5.02(c) thereof (and, if such Indebtedness
will be the initial Permitted First Priority Debt incurred by the Borrower, then the Borrower, the Subsidiary Loan Parties, the Senior
Collateral Agent, the Administrative Agent and the Representative for such initial Permitted First Priority Debt shall have executed and
delivered the Senior Lien Intercreditor Agreement and (B) each Applicable Intercreditor Agreement then in effect, in accordance with
the requirements thereof. Permitted First Priority Debt shall include any Registered Equivalent Notes and Guarantees thereof by the Subsidiary
Loan Parties pursuant to the Senior Subsidiary Guarantee Agreement issued in exchange thereof. Notwithstanding anything to the contrary
in this Agreement or in any other Senior Loan Document, no Permitted First Priority Debt may be incurred or established at any time on
or after the Closing Date, unless the Administrative Agent and the Required Lenders shall otherwise consent thereto in writing.
“Permitted Investments”
means any investment by any Person in (a) direct obligations of the United States or any agency thereof, or obligations guaranteed
by the United States or any agency thereof, (b) commercial paper rated at least A-1 by S&P and P-1 by Moody’s at the time
of acquisition thereof, (c) time deposits with, including certificates of deposit issued by, any office located in the United States
of any bank or trust company which is organized or licensed under the laws of the United States or any state thereof and at the time such
deposit is made or certificate of deposit issued, has capital, surplus and undivided profits aggregating at least $500,000,000, (d) repurchase
agreements with respect to securities described in clause (a) above entered into with an office of a bank or trust company
meeting the criteria specified in clause (c) above at the time such repurchase agreement is entered into, provided
in each case that such investment matures within one year from the date of acquisition thereof by such Person or (e) money market
mutual funds at least 80% of the assets of which are held in investments referred to in clauses (a) through (d) above
determined at the time of such investment (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).
“Permitted Prior Lien”
means any Lien permitted by the Pre-Petition Credit Agreement, to the extent any such permitted Lien is valid, binding, enforceable, properly
perfected, non-avoidable and senior in priority to the Liens securing the Pre-Petition Senior Obligations as of the Petition Date.
“Permitted Real Estate
Disposition” means (a) the sale of the Owned Real Property located at (i) 1426 Mount Ephraim Avenue, Camden, NJ, (ii) 7796
Munson Road, Mentor, OH, and (iii) 5272 Torresdale Avenue, Philadelphia, PA and (iv) 7301-7303 Frankford Avenue, Philadelphia,
PA, in each case, in accordance with and as set forth in the applicable sale agreements for each property in the forms delivered to the
Administrative Agent prior to the Closing Date (and without any material amendments thereto unless otherwise approved in accordance with
the ABL Term Loan Agreement) and only so long as the Net Cash Proceeds thereof are applied to the ABL Term Loans in accordance with the
ABL Term Loan Agreement and (b) the sale or other transfer of other real property and related improvements, including Sale and Leaseback
Transactions, so long as (i) the consideration for such sale is at least the greater of (x) the fair market value of such real
property (measured at the time of contractually agreeing to such sale) or (y) the value corresponding to such real property as shown
in the column titled “Est. Property Value AS IS Occupied” on the tab titled “Summary” on Exhibit J,
(ii) 100% of the consideration therefor shall consist of cash, (iii) such sale is to a non-affiliated third party, (iv) to
the extent constituting a Sale and Leaseback Transactions, the applicable lease back to the relevant Loan Party in such Sale and Leaseback
Transaction is on market terms (as reasonably determined by the Borrower in good faith), (v) the Net Cash Proceeds thereof are used
to prepay the ABL Term Loans in accordance with the ABL Term Loan Agreement and (vi) the terms and conditions applicable to such
sale are reasonably acceptable to the Administrative Agent.
“Permitted Second Priority
Debt” means Second Priority Debt of the Borrower; provided that (a) the terms of any such Indebtedness, and of any
agreement entered into and of any instrument issued in connection therewith, are otherwise permitted by the Senior Loan Documents, (b) if
such Indebtedness is issued or incurred to Refinance existing Indebtedness, such Indebtedness has a later maturity and a longer weighted
average life than such existing Indebtedness, (c) [reserved], (d) at the option of the Borrower, such Indebtedness may contain
market call and make-whole provisions as of the time of its issuance or incurrence, and (e) as of the date of incurrence, a member
of the senior management of the Borrower determines in good faith that such Indebtedness contains covenants (including with respect to
amortization and convertibility) and events of default on market terms. Notwithstanding anything to the contrary in this Agreement or
in any other Senior Loan Document, no Permitted Second Priority Debt may be incurred or established at any time on or after the Closing
Date, unless the Administrative Agent and the Required Lenders shall otherwise consent thereto in writing.
“Permitted Split-Priority
Term Loan Debt” means Split-Priority Term Loan Debt of the Borrower; provided that (a) if such Indebtedness is issued
or incurred to Refinance existing Indebtedness, such Indebtedness has a later maturity and a longer weighted average life than such existing
Indebtedness, (b) (i) to the extent such Indebtedness is incurred pursuant to “tranche B” term loan facilities,
the applicable Split-Priority Debt Documents shall not include amortization provisions other than customary amortization provisions and
amortization requirements for “tranche B” term loan Indebtedness, as determined as of the date of issuance or incurrence by
a Responsible Officer of the Borrower in good faith and (ii) to the extent such Indebtedness is incurred pursuant to senior high
yield notes or other senior notes, such Indebtedness (A) is not subject to mandatory redemption, repurchase, prepayment or sinking
fund obligation (except customary asset sale or change-of-control provisions), in each case prior to the then Latest Maturity Date in
effect and (B) has mandatory prepayment, repurchase or redemption, covenant, default and remedy provisions customary for senior high
yield notes or other senior notes, as the case may be, in each case of clause (A) and (B), as determined as of the
date of issuance or incurrence by a Responsible Officer of the Borrower in good faith, (c) at the option of the Borrower, such Indebtedness
may contain prepayment premium provisions as of the time of its issuance or incurrence, and (d) as of the date of incurrence, a member
of the senior management of the Borrower determines in good faith that such Indebtedness contains covenants and events of default on market
terms. As of the Closing Date, the outstanding Permitted Split-Priority Term Loan Debt consists of the Existing Split-Priority Indebtedness.
Notwithstanding anything to the contrary in this Agreement or in any other Senior Loan Document, (x) no additional Permitted Split-Priority
Term Loan Debt may be incurred or established at any time on or after the Closing Date, unless the Administrative Agent and the Required
Lenders shall otherwise consent thereto in writing and (y) interest and fees in respect of the Existing Split-Priority Indebtedness
shall constitute Permitted Split-Priority Term Loan Debt to the extent included in any Approved Budget.
“Permitted Unsecured
Indebtedness” means unsecured Indebtedness (including Convertible Debt) of the Borrower; provided that (a) the terms
of any such Indebtedness, and of any agreement entered into and of any instrument issued in connection therewith, are otherwise permitted
by the Senior Loan Documents, (b) if such Indebtedness is issued or incurred to refinance existing Indebtedness, such Indebtedness
has a maturity that is no earlier than, and a weighted average life that is no shorter than, such existing Indebtedness, (c) such
Indebtedness shall not mature or require scheduled payments of principal prior to the date that is 90 days after the Latest Maturity Date
in effect at the time such Indebtedness is incurred, and (d) such Indebtedness shall otherwise be on terms acceptable to the Administrative
Agent.
“Permitted Variance”
has the meaning assigned to such term in Section 5.19(c).
“Person”
means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
“Petition Date”
shall have the meaning assigned to such term in the preliminary statements hereto.
“Pharmaceutical Inventory”
means all inventory consisting of products that can be dispensed only on order of a licensed professional.
“Pharmaceutical Inventory
Advance Rate” means the pharmaceutical inventory advance rate determined in accordance with Section 2.20(a).
“Plan” means
any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412
of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate has any liability or is (or, if
such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.
“Platform”
has the meaning assigned to such term in Section 5.01(k).
“Post-Petition”
means the time period commencing immediately upon the filing of the Chapter 11 Case.
“Preferred Stock”
means, with respect to any corporation, capital stock issued by such corporation that is entitled to a preference or priority, in respect
of dividends or distributions upon liquidation, over some other class of capital stock issued by such corporation.
“Prepayment Event”
means:
(a) any
sale, transfer or other disposition (including pursuant to a Sale and Leaseback Transaction) of any property or asset of the Borrower
or any Subsidiary (including in connection with any Specified Sale Transaction and any Elixir Monetization Event), but excluding any sales,
transfers or other dispositions described in clauses (a) and (d) of Section 6.05; or
(b) any
casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property
or asset of the Borrower or any Subsidiary (including any Casualty/Condemnation); or
(c) the
incurrence by the Borrower or any Subsidiary of (i) any Indebtedness pursuant to an Elixir Monetization Event or (ii) any Indebtedness
not permitted to be incurred under Section 6.02(a); or
(d) without
limiting or duplicating any of the foregoing, any other Elixir Monetization Event;
provided,
however, that, any of the events described in clauses (a) and (b) above pertaining solely to ABL Term Loan
Exclusive Collateral shall not constitute a Prepayment Event hereunder.
“Pre-Petition”
means the time period ending immediately prior to the filing of the Chapter 11 Case.
“Pre-Petition Agent”
shall mean the “Administrative Agent”, “Collateral Agent” and “Senior Collateral Agent”, as such terms
are defined in the Pre-Petition Credit Agreement.
“Pre-Petition Credit
Agreement” means that certain Credit Agreement, dated as of December 20, 2018, among the Borrower, the Pre-Petition Lenders,
Bank of America, as the Pre-Petition Agent, and the other agents and arrangers party thereto, as amended, restated, supplemented or otherwise
modified prior to the Closing Date.
“Pre-Petition FILO
Facility” means the “FILO Facility” as such term is defined in the Pre-Petition Credit Agreement.
“Pre-Petition FILO
Loans” means, at any time of determination, the “FILO Loans” (as such term is defined in the Pre-Petition Credit
Agreement) at such time.
“Pre-Petition FILO
Obligations” means, at any time of determination, the Pre-Petition Senior Obligations relating to the Pre-Petition FILO Facility.“Pre-Petition
LC Exposure” means the “LC Exposure” as defined in the Pre-Petition Credit Agreement.
“Pre-Petition Lenders”
means the “Lenders” from time to time party to the Pre-Petition Credit Agreement.
“Pre-Petition Revolving
Facility” means the “Revolving Facility”, as such term is defined in the Pre-Petition Credit Agreement.
“Pre-Petition Revolving
Loans” means, at any time of determination, the “Revolving Loans” (as such term is defined in the Pre-Petition Credit
Agreement) at such time.
“Pre-Petition Revolving
Obligations” means, at any time of determination, the Pre-Petition Senior Obligations relating to the Pre-Petition Revolving
Facility.
“Pre-Petition Senior
Obligations” means all “Senior Obligations”, as such term is defined in the Pre-Petition Credit Agreement.
“Pre-Petition Senior
Loan Documents” means the “Senior Loan Documents” as such term is defined in the Pre-Petition Credit Agreement.
“Pre-Petition Total
Revolving Outstandings” means, at any time of determination, the “Total Revolving Outstandings” at such time under
and as defined in the Pre-Petition Credit Agreement.
“Prescription File”
has the meaning specified in the Senior Security Agreement.
“Prime Rate”
means the rate of interest announced by Bank of America from time to time as its prime rate. Such rate is set by Bank of America on the
basis of various factors, including its costs and desired return, general economic conditions and other factors, and is used as a reference
point for pricing some loans, which may be priced at, above or below such rate. Any change in such rate publicly announced by Bank of
America shall take effect at the opening of business on the day specified in the announcement.
“Prior Week”
means, as of any date of determination, the immediately preceding week ended on a Saturday and commencing on the prior Sunday.
“Protective Advance”
means any extension of credit hereunder (including any such extension of credit resulting in an Overadvance) that is made, or is permitted
to remain outstanding, by the Administrative Agent, in its sole discretion, to:
(a) maintain,
protect or preserve the value of the Collateral and/or the Administrative Agent’s, Collateral Agent’s, Senior Collateral Agent’s
and the Senior Loan Secured Parties’ rights therein, including to preserve the Loan Parties’ business assets and infrastructure
(such as the payment of insurance premiums, taxes, necessary suppliers, rent and payroll);
(b) commence
the exercise of remedies;
(c) fund
an orderly liquidation or wind-down of the Loan Parties’ assets or business or a Bankruptcy Proceeding (including the Chapter 11
Case) (whether or not occurring prior to or after the commencement of any such Bankruptcy Proceeding);
(d) enhance
the likelihood of, or maximize, the repayment of the Senior Loan Obligations or the Pre-Petition Senior Obligations; or
(e) pay
any other amount chargeable to the Borrower or the other Loan Parties hereunder or under any other Senior Loan Document or under any Pre-Petition
Senior Loan Document;
provided
that, (i) at the time the Administrative Agent shall elect to make, or permit such Protective Advance to remain outstanding, such
Protective Advance, together with all other Protective Advances then outstanding, shall not exceed seven and one-half of one percent (7.5%)
of the ABL Loan Cap at such time, (ii) unless a Liquidation is taking place, such Protective Advance may not remain outstanding for
more than sixty (60) consecutive days and (iii) no Protective Advance shall be made or permitted to remain outstanding, if after
giving effect thereto, the Total ABL Outstandings (including all Overadvances) shall exceed the Total ABL Commitments (as in effect prior
to any termination of Commitments pursuant to Section 7.01 hereof). The forgoing shall not modify or abrogate any of the provisions
of (A) Section 2.05 regarding any Revolving Lender’s obligations with respect to LC Disbursements, or (B) Section 2.04
regarding any Revolving Lender’s obligations with respect to participations in Swingline Loans and settlements thereof.
“PTE” means
a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“Public Lender”
has the meaning assigned to such term in Section 5.01(k).
“QFC Credit Support”
has the meaning assigned to such term in Section 9.23.
“Qualified Preferred
Stock” means Preferred Stock of the Borrower that does not require any cash payment (including in respect of redemptions or
repurchases), other than in respect of cash dividends, before the date that is six months after the Latest Maturity Date.
“Real Estate Lease”
means any agreement, whether written or oral, and all amendments, guaranties and other agreements relating thereto, pursuant to which
a Loan Party is party for the purpose of using or occupying any real property for any period of time.
“Refinance”
means, with respect to any issuance of Indebtedness, to replace, renew, extend, refinance, repay, refund, repurchase, redeem, defease
or retire, or to issue Indebtedness in exchange or as a replacement therefor, including any successive Refinancing. “Refinanced”
and “Refinancing” shall have correlative meanings.
“Refinanced Debt”
has the meaning set forth in the definition of the term “Refinancing Indebtedness”.
“Refinancing Amendment”
means an amendment to this Agreement in form and substance reasonably satisfactory to the Administrative Agent and the Borrower executed
by each of (a) the Borrower and each Subsidiary Loan Party, as applicable, (b) the Administrative Agent and (c) each Additional
Lender and Lender that agrees to provide any portion of the Refinancing Indebtedness being incurred pursuant thereto, in accordance with
Section 6.01(c).
“Refinancing Indebtedness”
means Indebtedness (which shall be deemed to include Attributable Debt, Revolving Commitments and any other revolving commitments solely
for the purposes of this definition), including any successive Refinancing Indebtedness, (a) issued, incurred or otherwise obtained
(including by means of the extension or renewal of existing Indebtedness) in exchange for, or to extend, renew, replace or refinance,
in whole or part, existing Indebtedness (provided that, if such existing Indebtedness is revolving Indebtedness, there is a corresponding
reduction in the applicable lending commitments), Attributable Debt, Revolving Commitments or other revolving commitments (including Additional
Senior Debt or any successive Refinancing Indebtedness) (“Refinanced Debt”) or (b) incurred pursuant to any Revolving
Commitments that constitute Refinancing Indebtedness pursuant to clause (a) above; provided that (i) the
terms of any such Indebtedness, and of any agreement entered into and of any instrument issued in connection therewith, are otherwise
permitted by the Senior Loan Documents, (ii) such extending, renewing or refinancing Indebtedness (including, if such Indebtedness
includes any Revolving Commitments, the unused portion of such Revolving Commitments) is in an original aggregate principal amount not
greater than the aggregate principal amount of, and unpaid interest on, the Refinanced Debt (and, in the case of Refinanced Debt consisting,
in whole or in part, of unused Revolving Commitments, the amount thereof) plus the amount of any premiums paid thereon, fees and
expenses associated therewith and original issue discount related to such extending, renewing or refinancing Indebtedness, (iii) such
Indebtedness has a maturity that is no earlier than, and a weighted average life that is no shorter than, the Refinanced Debt, (iv) at
the option of the Borrower, such Indebtedness may contain call and make-whole provisions that are market with respect to such type of
Indebtedness as of the time of its issuance or incurrence, (v) if the Refinanced Debt or any Guarantees thereof are subordinated
in right of payment to the Senior Loan Obligations, such Indebtedness shall be subordinated in right of payment to the Senior Loan Obligations,
on terms no less favorable, taken as a whole, to the holders of the Senior Loan Obligations than the subordination terms of such Refinanced
Debt or Guarantees thereof, (vi) unless such Indebtedness is incurred pursuant to this Agreement (including any Refinancing Amendment
executed in accordance with Section 6.01(c) or Loan Modification Agreement executed in accordance with Section 9.19),
a member of the senior management of the Borrower determines in good faith at the time of incurrence that such Indebtedness contains covenants
(including with respect to amortization and convertibility) and events of default on terms that are market with respect to such type of
Indebtedness, (vii) such Indebtedness is benefited by Guarantees (if any) which, taken as a whole, are not materially less favorable
to the Lenders than the Guarantees (if any) in respect of such Refinanced Debt, (viii) if such Refinanced Debt or any Guarantees
thereof are secured, (1) such Indebtedness and any Guarantees thereof are either unsecured or secured only by such property or assets
as secured the Refinanced Debt and Guarantees thereof and not any additional property or assets of the Borrower or any Subsidiary (other
than (A) property or assets acquired after the issuance or incurrence of such Refinancing Indebtedness that would have been subject
to the Lien securing refinanced Indebtedness if such Indebtedness had not been refinanced, (B) additions to the property or assets
subject to the Lien, (C) the proceeds of the property or assets subject to the Lien and (D) if such Refinancing Indebtedness
consists in whole or in part of Revolving Commitments, cash or cash equivalents to secure obligations in respect of letters of credit
issued thereunder) and (2) if such Refinanced Debt is Second Priority Debt and such Refinancing Indebtedness is secured, such Indebtedness
must be Permitted Second Priority Debt, (ix) if such Refinanced Debt and any Guarantees thereof are unsecured, such Indebtedness
and Guarantees thereof are also unsecured, (x) any Net Cash Proceeds of such Indebtedness (other than any such Indebtedness that
consists of unused Revolving Commitments) are used no later than forty-five (45) days following receipt thereof to repay the Refinanced
Debt and pay any accrued interest, fees, premiums (if any) and expenses in connection therewith, provided that, if such Refinanced
Debt (other than unused Revolving Commitments) comprises Indebtedness under this Agreement or Additional Senior Debt, then such Refinanced
Debt shall be repaid, defeased or satisfied and discharged, and all accrued interest, fees and premiums (if any) in connection therewith
shall be paid, on the date such Indebtedness is issued, incurred or obtained; and provided, further, that to the extent
that such Refinanced Debt consists, in whole or in part, of Revolving Commitments or other revolving commitments (or Revolving Loans,
Swingline Loans or other revolving loans incurred pursuant to any Revolving Commitments or other revolving commitments, as applicable),
such Revolving Commitments, or other revolving commitments, as applicable, shall be terminated, and all accrued fees in connection therewith
shall be paid, on the date such Indebtedness is issued, incurred or obtained, and (xi) if such Refinanced Debt is Indebtedness incurred
under this Agreement or Additional Senior Debt and the Refinancing Indebtedness in respect thereof will be secured, then such Refinancing
Indebtedness must be (A) Permitted First Priority Debt, (B) incurred pursuant to this Agreement (including pursuant to a Refinancing
Amendment) or (C) Permitted Second Priority Debt, and in each case, subject to the Intercreditor Agreements. Notwithstanding anything
to the contrary in this Agreement or in any other Senior Loan Document, no Refinancing Indebtedness may be incurred or established at
any time on or after the Closing Date, unless the Administrative Agent and the Required Lenders shall otherwise consent thereto in writing.
“Refinancing Revolving
Commitment” has the meaning assigned to such term in Section 6.01(c).
“Refinancing Term Commitment”
shall mean any Lender’s or Additional Lender’s commitment to make any Refinancing Term Loans pursuant to Section 6.01(c).
“Refinancing Term Loan”
has the meaning assigned to such term in Section 6.01(c).
“Register”
has the meaning set forth in Section 9.04(b).
“Registered Equivalent
Notes” means, with respect to any notes originally issued in a Rule 144A or other private placement transaction under the
Securities Act of 1933, substantially identical notes (having the same Guarantees) issued in a dollar for dollar exchange therefor pursuant
to an exchange offer registered with the SEC.
“Related Parties”
means, with respect to any specified Person, such Person’s Affiliates and the partners, directors, officers, employees, agents,
trustees, administrators, managers, consultants (including, in the case of the Administrative Agent, the Lender Group Consultants), service
providers, representatives and advisors of such Person and such Person’s Affiliates.
“Remaining
Annualized Period” means, with respect to any Specified Prescription File Store, for purposes of determining the Annualized
Transitioned Prescription File Amount for such Specified Prescription File Store, the result of (a)(x) fifty-two (52) minus
(y) the number of weeks that have elapsed since the date that such Specified Prescription File Store closed, divided by (b) fifty-two
(52).
“Remedies
Notice Period” means the “Remedies Notice Period” as such term is defined in the Financing Order.
“Removal Effective
Date” has the meaning assigned to such term in Section 8.06(b).
“Reports”
has the meaning assigned to such term in Section 8.07(b).
“Representatives”
means the Senior Representatives, the Second Priority Representatives and the Split-Priority Representatives.
“Required FILO Lenders”
means, at any time (a) prior to the deemed funding of the FILO Loans on the Closing Date, FILO Lenders holding FILO Commitments aggregating
more than fifty percent (50%) of the Total FILO Commitments, and (b) thereafter, FILO Lenders whose percentage of the Total FILO
Outstandings, aggregate more than fifty percent (50%) of such Total FILO Outstandings. The FILO Commitments and the share of Total FILO
Outstandings of any Defaulting Lender shall be disregarded in determining Required FILO Lenders at any time.
“Required
Lenders” means, at any time, collectively, (a) Lenders holding more than fifty percent (50%) of the sum of (i) the
Total Revolving Commitments, plus (ii) (A) at any time prior to the deemed funding of the FILO Loans on the Closing Date,
the Total FILO Commitments, or (B) at any time thereafter, the Total FILO Outstandings plus (iii) in respect of the Term
Facility, the aggregate principal amount of the Term Loans outstanding at such time, or (b) if the Commitments have been terminated,
Lenders whose percentage of the Total Outstandings (calculated assuming settlement and repayment of all Swingline Loans by the Lenders)
aggregate more than fifty percent (50%) of such Total Outstandings. The Commitments and the share of Total Outstandings of any Defaulting
Lender shall be disregarded in determining Required Lenders at any time; provided that the amount of any participation in (x) any
unreimbursed LC Disbursements that such Defaulting Lender that is a Revolving Lender has failed to fund or (y) any Swingline Loan
that such Defaulting Lender has failed to fund that have not been reallocated to and funded by another Lender shall be deemed to be held
by the Lender that is the applicable Issuing Bank or Swingline Lender, as the case may be, in making such determination.
“Required Revolving
Lenders” means, at any time, Lenders having Revolving Commitments aggregating more than fifty percent (50%) of the sum of the
Total Revolving Commitments, or if the Revolving Commitments have been terminated, Lenders whose percentage of the Total Revolving Outstandings
(calculated assuming settlement and repayment of all Swingline Loans by the Lenders) aggregate more than fifty percent (50%) of such Total
Revolving Outstandings. The Commitments and the share of Total Revolving Outstandings of any Defaulting Lender shall be disregarded in
determining Required Revolving Lenders at any time; provided that the amount of any participation in any unreimbursed LC Disbursements
or Swingline Loans that such Defaulting Lender that is a Revolving Lender has failed to fund that have not been reallocated to and funded
by another Revolving Lender shall be deemed to be held by the Revolving Lender that is the applicable Issuing Bank or Swingline Lender,
as the case may be, in making such determination.
“Required Term Lenders”
means, at any time Term Lenders whose percentage of the Total Term Outstandings, aggregate more than fifty percent (50%) of such Total
Term Outstandings. The share of Total Term Outstandings of any Defaulting Lender shall be disregarded in determining Required Term Lenders
at any time.
“Rescindable
Amount” has the meaning as defined in Section 2.18(d).
“Resignation Effective
Date” has the meaning assigned to such term in Section 8.06(a).
“Resolution Authority”
means an EEA Resolution Authority or, with respect to any UK Financial Institution, a U.K. Resolution Authority.
“Responsible Officer”
means the chief executive officer, president, each executive vice president, each vice president, each Financial Officer, or other similar
officer of a Loan Party (or, solely in the case of Health Dialog Services Corporation, secretary) and, solely for purposes of the delivery
of secretary’s certificates and incumbency certificates pursuant to Section 4.01, each secretary or any assistant secretary
of a Loan Party and, solely for purposes of notices given pursuant to Article II, any other officer or employee of the applicable
Loan Party so designated by any of the foregoing officers in a notice or other certificate to the Administrative Agent or any other officer
or employee of the applicable Loan Party designated in or pursuant to an agreement between the applicable Loan Party and the Administrative
Agent or with the consent of the Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer
of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on
the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.
“Restricted Payment”
means any dividend or other distribution (whether in cash, securities or other property, except dividends payable solely in shares of
the Borrower’s common stock or Qualified Preferred Stock) with respect to any Equity Interests in the Borrower or any Subsidiary,
or any payment (whether in cash, securities or other property, except payments made solely with common equity), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests
in the Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Borrower or any Subsidiary.
“Restructuring Support
Agreement” means a restructuring support agreement, by and among the Loan Parties, certain holders of the Existing Split-Priority
Indebtedness and the other parties thereto, entered into after the Closing Date, which is upon terms and conditions acceptable to the
Administrative Agent, as amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with
this Agreement.
“Revolving Availability
Period” means in respect of any Class of Revolving Commitments, the period from and including the Closing Date (or, if
later, the effective date for such Class of Revolving Commitments) to the earliest of (a) Revolving Maturity Date for such Class,
(b) the date of termination of the Total Revolving Commitments pursuant to Section 7.01 or otherwise, and (c) the
date of (i) the effectiveness of any plan of reorganization under Section 1129 of the Bankruptcy Code and/or (ii) the closing
of a sale of all or substantially all of the working capital assets of the Loan Parties pursuant to Section 363 of the Bankruptcy
Code.
“Revolving Commitment”
means, with respect to each Revolving Lender, the commitment of such Revolving Lender to make Revolving Loans and to acquire participations
in Letters of Credit and Swingline Loans hereunder (including, pursuant to any Incremental Revolving Commitment or any Other Incremental
Revolving Commitment), in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Revolving
Lender’s name on Schedule 2.01 hereto under the caption “Revolving Commitment” (or, in the case of any Other
Revolving Commitment, under the caption reflecting such Revolving Commitment Series) or opposite such caption in the Assignment and Acceptance
pursuant to which such Revolving Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance
with this Agreement or as amended from time to time pursuant to this Agreement (including in connection with any Loan Modification Agreement,
Refinancing Amendment or Incremental Facility Amendment, as applicable) or any assignment of Revolving Commitments.
“Revolving Commitment
Series” has the meaning assigned to such term in the definition of “Other Revolving Commitments”.
“Revolving Exposure”
means, with respect to any Revolving Lender at any time, the sum of the principal amount of such Revolving Lender’s Revolving Loans
outstanding at such time, such Revolving Lender’s LC Exposure at such time, such Revolving Lender’s Swingline Exposure at
such time, and such Revolving Lender’s Applicable Revolving Percentage of outstanding Protective Advances at such time.
“Revolving Facility”
means, as applicable and as the context may require, at any time (a) the Total Revolving Commitments of the Revolving Lenders at
such time or (b) the aggregate principal amount of the Revolving Lenders’ Revolving Commitments under any specific Class. The
aggregate principal amount of the Revolving Facility as of the Closing Date is $2,850,000,000.
“Revolving Lender”
means a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with any Revolving Exposure.
“Revolving Loan”
means a Loan made pursuant to Section 2.01(a).
“Revolving Maturity
Date” means, as the context may require, with respect to Revolving Commitments, October [●], 20242;
provided that, if any such date is not a Business Day, the Revolving Maturity Date shall be deemed to be the next preceding Business
Day.
“S&P”
means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor to its business
of rating debt securities.
“Sale and Leaseback
Transaction” means any arrangement whereby the Borrower or a Subsidiary shall sell or transfer any office building (including
its headquarters), distribution center, manufacturing plant, warehouse, Store, equipment or other property, real or personal, now or hereafter
owned by the Borrower or a Subsidiary with the intention that the Borrower or any Subsidiary rent or lease the property sold or transferred
(or other property of the buyer or transferee substantially similar thereto).
“Sanctioned Entity”
means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly
or indirectly controlled by a country or its government, or (d) a Person resident in or determined to be resident in a country, in
each case of clauses (a) through (d) above that is a target of Sanctions, including a target of any country or
territory sanctions program administered and enforced by OFAC.
2 Note to Draft – One year from Closing Date.
“Sanctioned Person”
means, at any time, (a) any Person listed in any Sanctions-related list of designated or blocked Persons maintained by OFAC, the
U.S. Department of State, the United Nations, the United Kingdom or the European Union, (b) any Person operating, organized or resident
in a Sanctioned Country, or (c) any Person owned 50% or more directly or indirectly owned or controlled (individually or in the aggregate)
by, or acting on behalf of, any such Person or Persons described in the foregoing clauses (a) or (b) above.
“Sanctions”
means individually and collectively, respectively, any and all economic sanctions, trade sanctions, financial sanctions, sectoral sanctions,
secondary sanctions, trade embargoes anti-terrorism laws and other sanctions laws, regulations or embargoes, including those imposed,
administered or enforced from time to time by: (a) the United States of America, including those administered by OFAC, the U.S. Department
of State, the U.S. Department of Commerce, or through any existing or future executive order, (b) the United Nations, (c) His
Majesty’s Treasury of the United Kingdom, or (d) the European Union.
“Scheduled Unavailability
Date” has the meaning specified in Section 2.14(b)(ii).
“Script Lists Advance
Rate” means the Script Lists advance rate determined in accordance with Section 2.20(a).
“SEC” means
the United States Securities and Exchange Commission and any successor agency thereto.
“Second Priority Collateral”
means all the “Second Priority Collateral” as defined in any Second Priority Collateral Document.
“Second Priority Collateral
Documents” means the Second Priority Subsidiary Security Agreement, the Second Priority Subsidiary Guarantee Agreement, the
Second Priority Indemnity, Subrogation and Contribution Agreement, the Junior Lien Intercreditor Agreement and each of the security agreements
and other instruments and documents executed and delivered by any Subsidiary Loan Party pursuant to any of the foregoing for purposes
of providing collateral security or credit support for any Second Priority Debt Obligation or obligation under the Second Priority Subsidiary
Guarantee Agreement.
“Second Priority Debt”
means any Indebtedness incurred by the Borrower that is (x) Guaranteed by the Subsidiary Loan Parties pursuant to the Second Priority
Subsidiary Guarantee Agreement (and not Guaranteed by any other Person) and (y) is secured by the Collateral on a junior basis to
the Senior Loan Obligations (and not secured by Liens on any other assets of the Borrower or any other Person (other than assets that,
substantially concurrently with the incurrence of such Indebtedness, become Collateral on which a Lien is granted to the Senior Collateral
Agent pursuant to the Senior Security Agreement and/or other Senior Collateral Documents for the benefit of the Senior Loan Secured Parties))
but on a pari passu basis (but without regard to control of remedies) with the other Second Priority Debt Obligations and, if issued
on or after the Closing Date, matures after the date that is 90 days after the Latest Maturity Date in effect on the date of issuance
of such Indebtedness (subject to clause (f) of the definition of “Permitted Second Priority Debt”); provided,
however, that (a) such Indebtedness is permitted to be incurred, secured and Guaranteed on such basis by each Senior Debt
Document, each Split-Priority Debt Document and each other Second Priority Debt Document and (b) the Representative for the holders
of such Second Priority Debt shall have become party to and bound by the terms of (x) the Junior Lien Intercreditor Agreement pursuant
to, and by satisfying the conditions set forth therein (and, if such Indebtedness will be the initial Second Priority Debt incurred by
the Borrower, then the Borrower, the Subsidiary Loan Parties, the Senior Collateral Agent, the Administrative Agent and the Representative
for such initial Second Priority Debt shall have executed and delivered the Junior Lien Intercreditor Agreement) and (y) each other
Applicable Intercreditor Agreement, in accordance with the requirements thereof. Second Priority Debt shall include any Registered Equivalent
Notes issued in exchange thereof. Notwithstanding anything to the contrary in this Agreement or in any other Senior Loan Document, no
Second Priority Debt may be incurred or established at any time on or after the Closing Date, unless the Administrative Agent and the
Required Lenders shall otherwise consent thereto in writing.
“Second Priority Debt
Documents” means, with respect to any series, issue or class of Second Priority Debt, the promissory notes, indentures, credit
agreements and other operative agreements or instruments evidencing or governing such Indebtedness, including the Second Priority Collateral
Documents.
“Second Priority Debt
Facility” means the indenture, credit agreement or other governing agreement or instrument with respect to any class or series
of Second Priority Debt.
“Second Priority Debt
Obligations” means, with respect to any series, issue or class of Second Priority Debt, (a) all principal of, and interest
payable with respect to, such Second Priority Debt, (b) all other amounts payable to the related Second Priority Debt Parties under
the related Second Priority Debt Documents (including, in each case of clauses (a) and (b) above, any interest,
fees and other amounts which accrue after the commencement of any case, proceeding or other action relating to a Bankruptcy Proceeding
of the Borrower or any Subsidiary Loan Party, whether or not allowed or allowable, in whole or in part, as a claim in such Bankruptcy
Proceeding) and (c) any renewals or extensions of the foregoing.
“Second Priority Debt
Parties” means, with respect to any series, issue or class of Second Priority Debt, the holders of such Indebtedness, any trustee
or agent therefor under any related Second Priority Debt Documents and the beneficiaries of each indemnification obligation undertaken
by any Loan Party under any related Second Priority Debt Documents, but shall not include the Loan Parties or any Affiliates thereof (unless
such Loan Party or Affiliate is a holder of such Indebtedness, a trustee or agent therefor or beneficiary of such an indemnification obligation).
“Second Priority Indemnity,
Subrogation and Contribution Agreement” means the Second Priority Indemnity, Subrogation and Contribution Agreement, in substantially
the form of Exhibit I attached to the Pre-Petition Credit Agreement or such other form as is reasonably acceptable to the
Administrative Agent and the Borrower.
“Second Priority Lien”
means the Liens on the Second Priority Collateral in favor of the Second Priority Debt Parties under the Second Priority Collateral Documents.
“Second Priority Representative”
means, in respect of a Second Priority Debt Facility, the trustee, administrative agent, security agent or similar agent under such Second
Priority Debt Facility, as the case may be, and each of their successors in such capacities.
“Second Priority Subsidiary
Guarantee Agreement” means the Second Priority Subsidiary Guarantee Agreement, in substantially the form of Exhibit G attached
to the Pre-Petition Credit Agreement or such other form reasonably acceptable to the Administrative Agent and the Borrower.
“Second Priority Subsidiary
Security Agreement” means the Second Priority Subsidiary Security Agreement in substantially the form of Exhibit H attached
to the Pre-Petition Credit Agreement or such other form reasonably acceptable to the Administrative Agent and the Borrower.
“Senior Bank Products”
means, collectively, (in each case, whether existing on the Closing Date or arising thereafter) (a) any services or facilities (other
than Senior Cash Management Services) provided to any Loan Party or any Subsidiary by any Lender or any Affiliate of a Lender on account
of (i) credit or debit cards, (ii) purchase cards, (iii) merchant services, (iv) lease financing or related services,
and (v) supply chain financing, and (b) any Senior Hedging Agreements.
“Senior Cash Management
Agreement” means any agreement to provide Senior Cash Management Services.
“Senior Cash Management
Services” means any one or more of the following types of services or facilities provided to any Loan Party or any Subsidiary
by any Lender or any Affiliate of a Lender (in each case, whether existing on the Closing Date or arising thereafter): (a) automated
clearing house transfer transactions, (b) treasury and/or cash management services, including controlled disbursement services, cash
vault services, depository, overdraft and electronic funds transfer services, and (c) deposit and other accounts.
“Senior Collateral
Agent” means the Collateral Agent, in its capacity as senior collateral agent for the Senior Loan Secured Parties and the other
Senior Secured Parties under the Senior Collateral Documents, and any successor thereof or replacement senior collateral agent appointed
in accordance with the terms of this Agreement, the Senior Security Agreement, the Senior Lien Intercreditor Agreement, and any Applicable
Intercreditor Agreement.
“Senior Collateral
Documents” means the Financing Order, the Senior Security Agreement, the Senior Subsidiary Guarantee Agreement, the Senior Indemnity,
Subrogation and Contribution Agreement, the Senior Lien Intercreditor Agreement (upon and after the initial execution and delivery thereof
by the initial parties thereto), and each Applicable Intercreditor Agreement (upon and after the initial execution and delivery thereof
by the initial parties thereto) and each of the security agreements and other instruments and documents executed and delivered by any
Subsidiary Loan Party pursuant to any of the foregoing or pursuant to any Senior Debt Document for purposes of providing collateral security
or credit support for any Senior Obligation or obligation under the Senior Subsidiary Guarantee Agreement.
“Senior Debt Documents”
means (a) the Senior Loan Documents and (b) any Additional Senior Debt Documents.
“Senior Hedging Agreement”
means any Hedging Agreement entered into with the Borrower or any Subsidiary, if the applicable counterparty was a Lender or an Affiliate
thereof (a) on the Closing Date, in the case of any Hedging Agreement entered into prior to the Closing Date or (b) at the time
the Hedging Agreement was entered into, in the case of any Hedging Agreement entered into on or after the Closing Date.
“Senior Indemnity,
Subrogation and Contribution Agreement” means the Senior Indemnity, Subrogation and Contribution Agreement, dated as of the
Closing Date, among the Borrower, the Subsidiary Loan Parties (including additional Subsidiary Loan Parties becoming party thereto in
accordance with the terms thereof) and the Senior Collateral Agent.
“Senior Lien”
means the Liens on the Collateral in favor of the Senior Secured Parties under the Senior Collateral Documents.
“Senior Lien Intercreditor
Agreement” means the Intercreditor Agreement, in substantially the form attached as Exhibit J-1 to the Pre-Petition Credit
Agreement or such other form as is reasonably acceptable to the Administrative Agent and the Borrower, among the Senior Collateral Agent,
the Borrower, the Loan Parties, the Administrative Agent as the Representative for the Senior Loan Secured Parties and the other Senior
Representatives from time to time party thereto for purposes thereof for any Additional Senior Debt Parties.
“Senior Loan Bank Product
Liabilities” means liabilities and obligations with respect to or arising from (a) any Senior Cash Management Services
and (b) any Senior Bank Products, as each may be amended from time to time; provided that (i) the “Senior Loan
Bank Product Liabilities” shall exclude any Excluded Swap Obligations and (ii) in order for any item described in clauses
(a) or (b) above, as applicable, to be included for purposes of a distribution under Section 7.02 clauses
ELEVENTH or TWELFTH, as applicable, if the provider of such Senior Cash Management Services or Senior Bank Products is any
Person other than the Administrative Agent or its Affiliates, then the Administrative Agent shall have received from the applicable provider
of such Senior Cash Management Services or Senior Bank Products (A) a written notice to the Administrative Agent of (x) the
existence of such Senior Cash Management Services or Senior Bank Products, (y) the maximum dollar amount of obligations arising thereunder
(“Senior Loan Bank Product Liabilities Amount”), and (z) the methodology to be used by such parties in determining
the Senior Loan Bank Product Liabilities Amount owing from time to time, and (B) a report, at such times as may be requested by the
Administrative Agent, setting forth the then outstanding Senior Loan Bank Product Liabilities Amount with respect to such Senior Bank
Products and Senior Cash Management Services of such Person.
“Senior Loan Bank Product
Liabilities Amount” has the meaning set forth in the definition of “Senior Loan Bank Product Liabilities”.
“Senior Loan Documents”
means this Agreement, the Letters of Credit, the Fee Letter, all Borrowing Base Certificates, all Compliance Certificates (including all
Approved Budget Variance Reports attached thereto), the Information Certificate, any promissory notes issued to any Lender pursuant to
this Agreement, each Refinancing Amendment, each Loan Modification Agreement, each Incremental Facility Amendment, and the Senior Collateral
Documents and any other agreement now or hereafter executed and delivered in connection herewith (excluding agreements entered into in
connection with any transaction arising out of any Senior Bank Products or Cash Management Services), each as amended and in effect from
time to time.
“Senior Loan Obligation
Payment Date” means the date on which (a) the Senior Loan Obligations have been indefeasibly paid in full in cash (other
than (i) contingent indemnification obligations and other obligations of the Loan Parties that expressly survive the termination
of the Senior Loan Documents for which no claim has been asserted and (ii) Senior Loan Obligations with respect to Senior Loan Bank
Product Liabilities not yet due and payable, except to the extent the Administrative Agent has received written notice, at least three
(3) Business Days prior to any proposed Senior Loan Obligation Payment Date stating that arrangements reasonably satisfactory to
the applicable provider thereof in respect of Senior Bank Products or Senior Cash Management Services have not been made), all Letters
of Credit shall have expired or terminated (or been Cash Collateralized or backstopped in a manner reasonably satisfactory to the applicable
Issuing Bank) and all LC Exposure have been reduced to zero (or Cash Collateralized or backstopped in a manner reasonably satisfactory
to the applicable Issuing Bank), and (b) all lending commitments under this Agreement and the other Senior Loan Documents have been
terminated.
“Senior Loan Obligations”
means (a) the principal of each Loan made under this Agreement, (b) all reimbursement and cash collateralization obligations
in respect of letters of credit issued under this Agreement, (c) all Senior Loan Bank Product Liabilities, (d) all interest
on the loans, letter of credit reimbursement, fees, indemnification and other obligations under this Agreement, or with respect to such
Senior Loan Bank Product Liabilities (including any interest, fees and other amounts which accrue after the commencement of any case,
proceeding or other action relating to a Bankruptcy Proceeding of the Borrower or any Subsidiary Loan Party, whether or not allowed or
allowable, in whole or in part, as a claim in such Bankruptcy Proceeding), (e) all other amounts payable by the Borrower or any Subsidiary
under the Senior Loan Documents or in respect of Senior Loan Bank Product Liabilities and (f) all increases, renewals, extensions
and Refinancings of the foregoing.
“Senior Loan Secured
Parties” means collectively, the Administrative Agent, the Collateral Agent, the Senior Collateral Agent, the Lenders, the Issuing
Banks, each co-agent or sub-agent of any Agent, each other party to this Agreement other than any Loan Party, each counterparty to a Senior
Hedging Agreement or Senior Cash Management Agreement, the beneficiaries of each indemnification or expense reimbursement obligation undertaken
by the Borrower or any other Loan Party under any Senior Loan Document, and the successors and permitted assigns of each of the foregoing.
“Senior Obligations”
means the Senior Loan Obligations and the Additional Senior Debt Obligations.
“Senior Representative”
means, in respect of the Senior Loan Documents or any Additional Senior Debt Documents, the trustee, administrative agent, collateral
agent, security agent or similar agent under such Senior Loan Documents or any Additional Senior Debt Documents, as the case may be, and
each of their successors in such capacities.
“Senior Secured Parties”
means the Senior Loan Secured Parties and any Additional Senior Debt Parties.
“Senior Security Agreement”
means the Senior Security Agreement, dated as of the Closing Date, among the Borrower, the Subsidiary Loan Parties (including additional
Subsidiary Loan Parties that become parties thereto in accordance with the terms thereof) and the Senior Collateral Agent, for the benefit
of the Senior Secured Parties, as such agreement may be amended, supplemented or otherwise modified from time to time.
“Senior Subsidiary
Guarantee Agreement” means the Senior Subsidiary Guarantee Agreement, dated as of the Closing Date, made by the Subsidiary Loan
Parties (including additional Subsidiary Loan Parties that become parties thereto in accordance with the terms thereof) in favor of the
Senior Collateral Agent, for the benefit of the Senior Secured Parties, as such agreement may be amended, supplemented or otherwise modified
from time to time.
“SOFR” means
the Secured Overnight Financing Rate as administered by the SOFR Administrator.
“SOFR Adjustment”
means 0.10% (10 basis points).
“SOFR Administrator”
means the Federal Reserve Bank of New York (or a successor administrator of SOFR).
“SOFR Administrator’s
Website” means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor
source for SOFR identified as such by the SOFR Administrator from time to time.
“Specified Elixir Assets”
means Medicare Part D payments owing to Elixir Insurance Company from the Center for Medicare & Medicaid Services (other
than, for the avoidance of doubt, any such payments purchased prior to the Petition Date pursuant to Elixir Insurance Company’s
existing receivables purchase arrangement).
“Specified Elixir Sale”
means any sale or other disposition of (a) all or any portion of the Elixir Business Segment and/or (b) all or any of the Equity
Interests of the Elixir Subsidiaries as a going concern under Section 363 of the Bankruptcy Code or otherwise. Any Specified Elixir
Sale shall be conducted pursuant to bidding procedures, sales procedures, approval orders, purchase agreements, agency documents or other
agreements, documents or instruments, as applicable, in form and substance and on terms satisfactory to the Administrative Agent.
“Specified Going Concern
Sale” means a sale, in one or a series of related transactions, of all or substantially all of (or, if approved in writing by
the Administrative Agent, certain of) the assets of the Loan Parties as a going concern under Section 363 of the Bankruptcy Code
or otherwise. The Specified Going Concern Sale shall be conducted pursuant to bidding procedures, sales procedures, approval orders, purchase
agreements, agency documents or other agreements, documents or instruments, as applicable, in form and substance and on terms satisfactory
to the Administrative Agent.
“Specified Non-Going
Concern Sale” means the sale or other disposition on an equity basis (or, if approved by the Administrative Agent in its sole
discretion, on a fee basis) of the entire chain of Stores (or the entire chain of Stores remaining after completion of, or not contemplated
to be included in, the Specified Going Concern Sale) and all of the assets relating thereto on a non-going concern basis under Section 363
of the Bankruptcy Code or otherwise. The Specified Non-Going Concern Sale shall be conducted pursuant to bidding procedures, sales procedures,
approval orders, purchase agreements, agency documents or other agreements, documents or instruments, as applicable, in form and substance
and on terms satisfactory to the Administrative Agent.
“Specified
Other Assets Sale” means a sale, in one or a series of related transactions, of all remaining assets of the Loan Parties
under Section 363 of the Bankruptcy Code or otherwise, to the extent such assets are not otherwise included in any other Specified
Sale Transaction. The Specified Other Assets Sale shall be conducted pursuant to bidding procedures, sales procedures, approval orders,
purchase agreements, agency documents or other agreements, documents or instruments, as applicable, in form and substance and on terms
satisfactory to the Administrative Agent.
“Specified Prescription
File Stores” means the Specified Stores set forth on Schedule 1.01(c) that have closed for business and, as to which,
the Borrower (or other applicable Loan Party) has elected to transition (all or a portion of) the Prescription Files located at such Specified
Store to another operating Store location (any such Prescription File subject to such transition, a “Transitioned Prescription
File”).
“Specified
Sale Process Default” means any Event of Default under and as arising under the following Sections of this Agreement: (a) Section 7.01(a) or
Section 7.01(b) (Non-Payment Events), (b) Section 7.01(c) (Incorrect Information), solely to the
extent relating to information, or representations and warranties made in, any Approved Budget Variance Report, any Borrowing Base Certificate,
any Compliance Certificate, or any reporting or information delivered with respect to achievement of any Chapter 11 Case Milestone, or
(c) Section 7.01(d) with respect to a breach of (i) Section 5.01(f) (Borrowing Base Certificates),
(ii) Section 5.19(c) (Approved Budget Covenant Compliance), (iii) Section 5.19(d) (Approved
Budget Variance Reports), (iv) Section 5.20 (Chapter 11 Case Milestones) and (v) Section 6.12 (Minimum
ABL Availability) (solely in the case of this clause (c), which Event of Default has occurred and is continuing for two (2) Business
Days or more).
“Specified Sale Transaction”
means any or all of a Specified Going Concern Sale, a Specified Non-Going Concern Sale, a Specified Elixir Sale, or a Specified Other
Assets Sale.
“Specified Stores”
means the Stores identified to the Administrative Agent, the Lenders, the ABL Term Loan Agent and the ABL Term Loan Lenders prior
to the Petition Date; provided that the Loan Parties may adjust the identity and number of Specified Stores, in consultation with
the Administrative Agent, except that any upward or downward adjustment of the total number of Specified Stores of greater than 75 Stores
shall be subject to (a) the prior written consent of the Administrative Agent and (b) solely in the case of such an upward adjustment,
the Borrower’s retention of a store closing consultant reasonably satisfactory to the Administrative Agent and the Borrower.
“Specified Store Closing
Sale” means the closure of any Specified Stores and any related sale(s) of assets conducted pursuant to the Store Closing
Order.
“Split-Lien Collateral”
means all assets of the Loan Parties of the type that constitutes “Split-Lien Collateral” (as defined in the Split-Priority
Intercreditor Agreement) immediately prior to the Petition Date. For the avoidance of doubt, the term “Split-Lien Collateral”
shall not include any ABL Term Loan Exclusive Collateral.
“Split-Lien Priority
Collateral” means all Split-Lien Collateral that constitutes “Split-Lien Priority Collateral” as defined in the
Split-Priority Intercreditor Agreement.
“Split-Priority Debt
Documents” means, with respect to any series, issue or class of Split-Priority Term Loan Debt, the credit agreements, indentures,
notes, instruments or other operative agreements evidencing or governing such Indebtedness.
“Split-Priority
Debt Facility” means the credit agreement or indenture with respect to any class or series of Split-Priority Term Loan
Debt. As of the Closing Date, the outstanding Split-Priority Debt Facilities consist of the Existing Split-Priority Indentures.
“Split-Priority Debt
Parties” means, with respect to any series, issue or class of Split-Priority Term Loan Debt, the holders of such Indebtedness,
any trustee or agent therefor under any related Split-Priority Debt Documents and the beneficiaries of each indemnification obligation
undertaken by any Loan Party under any related Split-Priority Debt Documents, but shall not include any Loan Party or any Affiliates thereof
(unless such Loan Party or Affiliate is a holder of such Indebtedness, a trustee or agent therefor or beneficiary of such an indemnification
obligation named as such in a Split-Priority Debt Document).
“Split-Priority Implementing
Agreements” has the meaning assigned to such term in the definition of “Split-Priority Term Loan Debt” herein.
“Split-Priority Intercreditor
Agreement” has the meaning assigned to such term in the definition of “Split-Priority Term Loan Debt” herein, and
shall include, as of the Closing Date, that certain Intercreditor Agreement, dated as of February 5, 2020, by and between the Senior
Collateral Agent and The Bank of New York Mellon Trust Company, as the initial Split-Priority Representative, as the same may be amended,
amended and restated, restated supplemented or otherwise modified from time to time (including pursuant to the joinder dated as of July 27,
2020).
“Split-Priority Lien”
means the Liens on the Collateral in favor of the Split-Priority Debt Parties under the Split-Priority Debt Documents.
“Split-Priority Representative”
means, in respect of any Split-Priority Debt Facility, the administrative agent, collateral agent, security agent or similar agent under
such Split-Priority Debt Facility, as the case may be, and each of their successors in such capacities.
“Split-Priority Term
Loan Debt” means Indebtedness of the Borrower incurred after the Closing Date pursuant to either (a) a bank credit facility
(other than this Agreement) that has terms customary for similarly structured “tranche B” term loan facilities or (b) senior
high yield notes or other senior notes (whether such notes are issued for cash, in exchange for other notes of the Borrower or for other
consideration), which Indebtedness (i) is Guaranteed by the Subsidiary Loan Parties and not by any other Person, (ii) does not
mature earlier than the date that is 90 days after the Latest Maturity Date in effect on the date of incurrence of such Indebtedness (subject
to clause (e) of the definition of “Permitted Split-Priority Term Loan Debt”), (iii) is secured (x) by
the Split-Lien Priority Collateral on a first-priority basis (with the Senior Obligations being secured by the Split-Lien Priority Collateral
on a second priority basis that is, however, senior, to any Liens or security interests securing Second Priority Debt) and (y) by
the ABL Priority Collateral on a second-priority basis to the Liens and security interests securing the Senior Obligations (but on a basis
senior to any Liens or security interests securing Second Priority Debt), and (iv) is not secured by Liens on any other assets other
than the Collateral (or assets that, substantially concurrently with the incurrence of such Indebtedness, become Collateral on which a
Lien is granted to the Senior Collateral Agent pursuant to the Senior Security Agreement and/or other Senior Collateral Documents for
the benefit of the Senior Loan Secured Parties); provided, however, that (A) the incurrence and terms (including with
respect to collateral, security interests and the priority thereof) of any such Indebtedness, including the terms of any credit, security,
intercreditor or similar agreement entered into and of any instrument issued in connection therewith, are otherwise permitted by the Senior
Debt Documents and the Second Priority Debt Documents (if any Second Priority Debt is outstanding); (B) the Senior Lien Intercreditor
Agreement, the Junior Lien Intercreditor Agreement and the other Senior Collateral Documents, and, if any Second Priority Debt is outstanding,
the Second Priority Collateral Documents, shall have been amended to the extent required to permit and implement the priority of the Liens
securing such Split-Priority Term Loan Debt contemplated by clauses (iii)(x) and (iii)(y) above (or if there is
no outstanding Additional Senior Debt and no outstanding Second Priority Debt, such agreements relating to intercreditor arrangements
with respect to the Collateral may, alternatively, be replaced by an intercreditor agreement between the Representatives for the Senior
Loan Secured Parties and the holders of such Split-Priority Term Loan Debt (a “Split-Priority Intercreditor Agreement”),
in each case on terms and conditions reasonably acceptable to the Administrative Agent and, insofar as such amended agreements or replacement
agreements deal with intercreditor issues relating to the relative rights of the Senior Secured Parties and the holders of Split-Priority
Term Loan Debt in the Collateral, on terms and conditions both reasonably acceptable to the Administrative Agent and customary for similar
intercreditor agreements relating to cross-collateralized asset-based credit facilities, on the one hand, and tranche B term loan facilities
or senior high yield notes or other senior notes, as applicable, on the other hand (the amendments to agreements and any Split-Priority
Intercreditor Agreement referred to in this clause (B) being referred to herein as the “Split-Priority Implementing
Agreements”); (C) the applicable Split-Priority Representative shall have become party to the intercreditor agreements
referred to in clause (B) of this proviso, which shall be in full force and effect and (D) the Administrative Agent shall have
received a certificate, dated the date such Indebtedness is incurred and signed by a Financial Officer of the Borrower, confirming compliance
with the requirements set forth in clause (A) of this proviso. As of the Closing Date, the outstanding Split-Priority Term Loan Debt
consists of the Existing Split-Priority Indebtedness. Notwithstanding anything to the contrary in this Agreement or in any other Senior
Loan Document, no Split-Priority Term Loan Debt may be incurred or established at any time on or after the Closing Date, unless the Administrative
Agent and the Required Lenders shall otherwise consent thereto in writing.
“Statutory Committee”
means any official committee of unsecured creditors in the Chapter 11 Case pursuant to Section 1102 of the Bankruptcy Code.
“Store” means
any retail store (which may include any real property, fixtures, equipment, inventory and Prescription Files related thereto) operated,
or to be operated, by any Subsidiary Loan Party.
“Store Closing Order”
means any order of the Bankruptcy Court entered in the Chapter 11 Case approving the Loan Parties’ closure of Stores and sales
of assets related thereto, which order shall be in form and substance satisfactory to the Loan Parties and the Administrative Agent, and
from which no appeal or motion to reconsider has been filed, together with all extensions, modifications and amendments thereto, in form
and substance satisfactory to the Loan Parties and the Administrative Agent.
“Subject Modification”
has the meaning specified in Section 9.02(d)(iii).
“subsidiary”
means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50%
of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date,
owned, controlled or held by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
“Subsidiary”
means any subsidiary of the Borrower.
“Subsidiary Loan Party”
means each Subsidiary of the Borrower that becomes party to the Senior Subsidiary Guarantee Agreement on or after the Closing Date. Notwithstanding
any provision in the Senior Loan Documents to the contrary, no Excluded Subsidiary shall be required to become a Subsidiary Loan Party.
“Successor Rate”
has the meaning specified in Section 2.14(b).
“Supported QFC”
has the meaning assigned to such term in Section 9.23.
“Swingline Exposure”
means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Revolving
Lender at any time shall be its Applicable Revolving Percentage of the total Swingline Exposure at such time.
“Swingline Lender”
means Bank of America, in its capacity as the lender of Swingline Loans hereunder.
“Swingline Loan”
means a Loan made pursuant to Section 2.04.
“Swingline Sublimit”
has the meaning set forth in Section 2.04(a).
“Taxes” means
any and all present or future taxes, levies, imposts, duties, deductions, charges, assessments, fees or withholdings imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable thereto.
“Term Facility”
means, at any time, as applicable and as the context may require, (a) the aggregate principal amount of the Incremental Refinancing
Term Loans, Loan Modification Term Loans and Refinancing Term Loans of all Term Lenders outstanding at such time (after giving effect
to any Incremental Refinancing Term Loans made or to be made with respect to any Incremental Term Commitment, any Loan Modification Term
Loans made or to be made with respect to any Loan Modification Term Commitment and any Refinancing Term Loans made or to be made with
respect to any Refinancing Term Commitment) or (b) the aggregate principal amount of any specific Class of Term Loans of the
applicable Term Lenders outstanding at such time (after giving effect to any Incremental Refinancing Term Loans made or to be made with
respect to any Incremental Term Commitment, any Loan Modification Term Loans made or to be made with respect to any Loan Modification
Term Commitment and any Refinancing Term Loans made or to be made with respect to any Refinancing Term Commitment). The aggregate principal
amount of the Term Facility on the Closing Date is $0. Notwithstanding anything to the contrary in this Agreement or in any other Senior
Loan Document, no Term Facility may be incurred or established at any time on or after the Closing Date, unless the Administrative Agent
and the Required Lenders shall otherwise consent thereto in writing.
“Term Facility Maturity
Date” shall mean, with respect to any Class of Term Loans, the maturity date set forth in the Incremental Facility Amendment
or Refinancing Amendment with respect to such Class of Term Loans; provided in each case that if such day is not a Business
Day, the Term Facility Maturity Date shall be the Business Day immediately preceding such day.
“Term Lender”
means any Lender that holds (a) Incremental Refinancing Term Loans at such time or any Incremental Term Commitment in respect thereof
at such time, (b) any Loan Modification Term Loans at such time or any Loan Modification Term Commitment in respect thereof at such
time, or (c) Refinancing Term Loans at such time or any Refinancing Term Commitment in respect thereof at such time.
“Term Loans”
means, collectively (a) Incremental Refinancing Term Loans, (b) Loan Modification Term Loans and (c) Refinancing Term Loans.
“Term SOFR”
means:
(a) for
any Interest Period with respect to a Term SOFR Loan, the rate per annum equal to the Term SOFR Screen Rate two (2) U.S. Government
Securities Business Days prior to the commencement of such Interest Period with a term equivalent to such Interest Period; provided
that if the rate is not published prior to 11:00 a.m. on such determination date then Term SOFR means the Term SOFR Screen rate on
the first U.S. Government Securities Business Day immediately prior thereto, in each case, plus the SOFR Adjustment for such Interest
Period; and
(b) for
any interest calculation with respect to an ABR Loan on any date, the rate per annum equal to the Term SOFR Screen Rate with a term of
one month commencing that day;
provided
that, if the Term SOFR determined in accordance with either of the foregoing provisions clause (a) or (b) of this
definition would otherwise be less than one percent, the Term SOFR shall be deemed to be one percent for purposes of this Agreement.
“Term SOFR Loan”
means a Loan that bears interest based on clause (a) of the definition of “Term SOFR.”
“Term SOFR Replacement
Date” has the meaning specified in Section 2.14(b).
“Term SOFR Screen Rate”
means the forward-looking SOFR term rate administered by CME (or any successor administrator satisfactory to the Administrative Agent)
and published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may
be designated by the Administrative Agent from time to time).
“Total ABL Commitments”
means, at any time, the aggregate of (a) the Revolving Commitments at such time and (b) the Term Facility at such time.
“Total ABL Outstandings”
means, at any time, the sum of (a) the Total Revolving Outstandings at such time plus (b) the aggregate outstanding principal
amount of all Term Loans at such time.
“Total FILO Commitments”
means, at any time, the aggregate of the FILO Commitments of all FILO Lenders at such time.
“Total FILO Outstandings”
means, at any time, the aggregate outstanding amount of all FILO Loans at such time.
“Total Outstandings”
means, at any time, the sum of (x) the Total ABL Outstandings at such time, plus (y) the Total FILO Outstandings at such
time.
“Total Revolving Commitments”
means, at any time, the aggregate of the Revolving Commitments of all Revolving Lenders at such time.
“Total Revolving Outstandings”
means, at any time, the aggregate outstanding amount of (a) the Pre-Petition Total Revolving Outstandings at such time, (b) all
Revolving Loans at such time, (c) all Swingline Loans at such time and (d) the LC Exposure at such time.
“Total Term Outstandings”
means, at any time, the aggregate outstanding amount of all Term Loans at such time.
“Transaction Expenses”
means any fees or expenses (including without limitation arrangement or underwriting or similar fees as well as upfront fees or original
issue discount) incurred or paid by the Borrower or any of the Subsidiaries in connection with the Transactions (including in connection
with (a) this Agreement and the other Senior Loan Documents and (b) the ABL Term Loan Agreement and the other ABL Term Loan
Documents).
“Transactions”
means, collectively, (a) the execution and delivery by the Loan Parties of the Senior Loan Documents to which they are a party and
the making (or deemed making) of the Loans and the issuance of Letters of Credit (if any), in each case, on the Closing Date, (b) the
execution and delivery by the Loan Parties of the ABL Term Loan Documents to which they are a party and the making of the ABL Term Loans
on the Closing Date, (c) the payment of the Transaction Expenses, and (d) the undertaking of the transactions and obligations
related to any of the foregoing.
“Transitioned Prescription
File” has the meaning set forth in the definition of “Specified Prescription File Store”.
“Transitioned Prescription
Files Amount” means, for all Specified Stores that have closed for business, an amount equal to the aggregate Annualized Transitioned
Prescription File Amounts for all such Specified Stores; provided, however, that in no event shall the aggregate amount
of all Transitioned Prescriptions Files included in determining the Annualized Transitioned Prescription File Amounts exceed the initial
8,500,000 of Transitioned Prescriptions Files since the Closing Date.
“Type”, when
used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing,
is determined by reference Term SOFR or the Alternate Base Rate.
“U.K. Financial Institution”
means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom
Prudential Regulation Authority) or any person subject to IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by
the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates
of such credit institutions or investment firms.
“U.K. Resolution Authority”
means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Undisclosed Administration”
means in relation to any Person, the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian
or other similar official by a supervisory authority or regulator under or based on the law in the country where such Person is subject
to home jurisdiction supervision if applicable law requires that such appointment is not to be publicly disclosed.
“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.
“Unintentional Overadvance”
means an Overadvance which, to the Administrative Agent’s knowledge, did not constitute an Overadvance when made but which has become
an Overadvance resulting from changed circumstances beyond the control of the Senior Loan Secured Parties, including (a) a reduction
in the Net Orderly Liquidation Rate or otherwise, in the value of the Collateral, (b) components of the ABL Borrowing Base Amount
or the FILO Borrowing Base Amount on any date thereafter being deemed ineligible, (c) the imposition of, or increase in, any reserves
to reflect Borrowing Base Factors, the FILO Push-Down Reserve, the ABL Term Loan Push-Down Reserve, or the Carve Out Reserve, (d) a
reduction in advance rates after the funding of any Loan or advance or the issuance, renewal or amendment of a Letter of Credit, (e) the
return of uncollected checks or other items of payment applied to the reduction of Loans or other similar involuntary or unintentional
actions, or (f) any misrepresentation by the Loan Parties.
“USA Patriot Act”
means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.
“U.S. Government Securities
Business Day” means any Business Day, except any Business Day on which any of the Securities Industry and Financial Markets
Association, the New York Stock Exchange or the Federal Reserve Bank of New York is not open for business cause such day is a legal holiday
under the federal laws of the United States or the laws of the State of New York, as applicable.
“U.S. Person”
means a “United States person” within the meaning of Section 7701(a)(30) of the Code.
“U.S. Tax Compliance
Certificate” has the meaning specified in Section 2.17(e)(ii)(B)(3).
“U.S. Trustee”
shall mean the United State Trustee applicable to the Chapter 11 Case.
“Withdrawal Liability”
means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Sections 4203 and 4205, respectively, of ERISA.
“Write-Down and Conversion
Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution
Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers
are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution
Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or
any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations
of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised
under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related
to or ancillary to any of those powers.
SECTION 1.02. Classification
of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Term SOFR Loan”) or by Class and Type (e.g., a “Term SOFR Revolving
Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by
Type (e.g., a “Term SOFR Borrowing”) or by Class and Type (e.g., a “Term SOFR Revolving Borrowing”).
SECTION 1.03. Terms
Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions
on such amendments, supplements or modifications set forth herein); provided, however, that amendments to the Second Priority
Debt 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 and under the Second Priority Debt Documents, the Additional Senior Debt Documents,
the Senior Lien Intercreditor Agreement and the Junior Lien Intercreditor Agreement, as applicable, or are consented to in writing for
such purpose by the Required Lenders (or such other percentage of the Lenders as may be specified herein) and the applicable holders of
Second Priority Debt and Additional Senior Debt required by the terms of the Second Priority Debt Documents and the Additional Senior
Debt Documents, as applicable, (b) any reference herein to any Person shall be construed to include such Person’s successors
and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall
be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this
Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting
Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests
an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP
or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith;
provided further that, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts
and ratios referred to herein shall be made without giving effect to (i) any election under Accounting Standards Codification 825-10-25
(previously referred to as Statement of Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial
Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary
at “fair value,” as defined therein and (ii) any treatment of Indebtedness in respect of convertible debt instruments
under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having
a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness
shall at all times be valued at the full stated principal amount thereof.
SECTION 1.05. Divisions.
For all purposes under the Senior Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable
event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset,
right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the
subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the
first date of its existence by the holders of its Equity Interests at such time.
SECTION 1.06. Excluded
Swap Obligations.
(a) Notwithstanding
any provision of this Agreement or any other Senior Loan Document, no Guarantee (including, for the avoidance of doubt, the guarantee
obligations of each Subsidiary Loan Party under the Senior Loan Documents insofar as such Subsidiary Loan Party is jointly liable for
obligations of any other Subsidiary Loan Party) by any Subsidiary Loan Party under any Senior Loan Document shall include a Guarantee
of any Senior Obligation that, as to such Subsidiary Loan Party, is an Excluded Swap Obligation, and no Collateral provided by any Subsidiary
Loan Party shall secure any Senior Obligation that, as to such Subsidiary Loan Party, is an Excluded Swap Obligation. In the event that
any payment is made by, or any collection is realized from, any Subsidiary Loan Party as to which any Senior Obligations are Excluded
Swap Obligations, or from any Collateral provided by such Subsidiary Loan Party, the proceeds thereof shall be applied to pay the Senior
Obligations of such Subsidiary Loan Party as otherwise provided herein without giving effect to such Excluded Swap Obligations and each
reference in this Agreement or any other Senior Loan Document to the ratable application of such amounts as among the Senior Obligations
or any specified portion of the Senior Obligations that would otherwise include such Excluded Swap Obligations shall be deemed so to provide.
(b) The
following terms shall for purposes of this Section 1.06 have the meanings set forth below:
“Commodity Exchange
Act” means the Commodity Exchange Act (7 U.S. C. § et seq.), as amended from time to time, and any successor statute.
“Excluded Swap Obligation”
means, with respect to Subsidiary Loan Party, any Swap Obligation if, and to the extent that, the Guarantee by such Subsidiary Loan Party
of, or the grant by such Subsidiary Loan Party of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or
becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the
application or official interpretation of any thereof) by virtue of such Subsidiary Loan Party’s failure for any reason to constitute
an “eligible contract participant” as defined in the Commodity Exchange Act at the time the Guarantee of such Subsidiary Loan
Party becomes effective with respect to such related Swap Obligation.
“Swap Obligation”
means, with respect to any Subsidiary Loan Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes
a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.
SECTION 1.07. Times
of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard,
as applicable).
SECTION 1.08. Letter
of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated
amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that,
by its terms or the terms of any letter of credit application or other issuer document related thereto, provides for one or more automatic
increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter
of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.
SECTION 1.09. Interest
Rates. The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative Agent have any liability
with respect to the administration, submission or any other matter related to any reference rate referred to herein or with respect to
any rate (including, for the avoidance of doubt, the selection of such rate and any related spread or other adjustment) that is an alternative
or replacement for or successor to any such rate (including any Successor Rate) (or any component of any of the foregoing) or the effect
of any of the foregoing, or of any Conforming Changes. Any Person acting as the Administrative Agent and its affiliates or other related
entities may engage in transactions or other activities unrelated to this Agreement that affect any reference rate referred to herein,
or any alternative, successor or replacement rate (including any Successor Rate) (or any component of any of the foregoing) or any related
spread or other adjustments thereto, in each case, in a manner adverse to the Borrower. The Administrative Agent may select information
sources or services in its reasonable discretion to ascertain any reference rate referred to herein or any alternative, successor or replacement
rate (including any Successor Rate) (or any component of any of the foregoing), in each case pursuant to the terms of this Agreement,
and shall have no liability to the Borrower, any Lender or any other Person for damages of any kind, including direct or indirect, special,
punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or
in equity), for the selection of any such information source or service made by the Administrative Agent in its reasonable discretion
or for any error or any other action or omission by such information source or service or calculation of any such rate (or component thereof)
provided by any such information source or service.
ARTICLE II
The Credits
SECTION 2.01. Commitments.
(a) Subject
to the terms and conditions set forth herein, each Revolving Lender, severally and not jointly with any other Revolving Lender, agrees
to make Revolving Loans denominated in dollars to the Borrower from time to time during the Revolving Availability Period in an aggregate
principal amount that will not exceed its Revolving Commitment; provided that each of the Credit Extension Conditions shall be
satisfied after giving effect to such any such Revolving Loans. Within the foregoing limits and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Revolving Loans.
(b) Subject
to the terms and conditions set forth herein, each FILO Lender, severally and not jointly with any other FILO Lender, shall be deemed
to make a single Loan denominated in dollars to the Borrower on the Closing Date in the amount of such FILO Lender’s FILO Commitment
in order to give effect to Section 2.01(e); provided that each of the Credit Extension Conditions shall be satisfied
after giving effect to any such FILO Loans. The FILO Loan Borrowing on the Closing Date shall consist of FILO Loans made simultaneously
by the FILO Lenders in accordance with their respective FILO Commitments. FILO Loans made to the Borrower that are repaid or prepaid may
not be reborrowed.
(c) Notwithstanding
anything to the contrary in this Agreement, any Lender may exchange, continue or rollover all of the portion of its Loans in connection
with any refinancing, extension, loan modification or similar transaction permitted by the terms of this Agreement, pursuant to a cashless
settlement mechanism approved by the Borrower, the Administrative Agent, and such Lender.
(d) Notwithstanding
anything to the contrary contained in this Agreement or any other Senior Loan Document, on the Final Order Entry Date, but subject to
the Financing Order, the total outstanding amount of the Pre-Petition Revolving Obligations shall constitute Senior Obligations under
the Revolving Facility established pursuant to this Agreement in accordance with the Financing Order, with (i) the outstanding amount
of all Pre-Petition Revolving Loans being refinanced as Revolving Loans under this Agreement on the Final Order Entry Date, and (ii) all
accrued and unpaid interest, expenses, fees and other sums payable in respect of the Pre-Petition Revolving Obligations through the Final
Order Entry Date, including any such amounts not previously paid as adequate protection payments pursuant to the Financing Order, being
paid in cash by the Borrower to the Administrative Agent on the Final Order Entry Date; provided, however, that, on the
Closing Date, (x) the outstanding amount of all Pre-Petition LC Exposure, shall constitute LC Exposure under this Agreement on the
Closing Date (including all Existing Letters of Credit issued pursuant to the Pre-Petition Credit Agreement being deemed issued under
this Agreement on the Closing Date) and (y) all Senior Bank Products (as defined in the Pre-Petition Credit Agreement) and Senior
Cash Management Services (as defined in the Pre-Petition Credit Agreement) being deemed Senior Bank Products and Senior Cash Management
Services for purposes of this Agreement and the other Senior Loan Documents.
(e) Notwithstanding
anything to the contrary contained in this Agreement or any other Senior Loan Document, on the Closing Date, but subject to the Financing
Order, the total outstanding amount of the Pre-Petition FILO Obligations shall constitute Senior Obligations under the FILO Facility established
pursuant to this Agreement in accordance with the Financing Order, with (i) the outstanding amount of all Pre-Petition FILO Loans
being refinanced as FILO Loans under this Agreement on the Closing Date, and (ii) all accrued and unpaid interest, expenses, fees
and other sums payable in respect of the Pre-Petition FILO Obligations through the Closing Date, being paid in cash by the Borrower to
the Administrative Agent on the Closing Date.
SECTION 2.02. Loans
and Borrowings.
(a) Each
Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the
Appropriate Lenders ratably in accordance with the amounts of their Applicable Percentage of the applicable Class of Commitments.
(b) Subject
to Section 2.14, each Borrowing shall be comprised entirely of ABR Loans or Term SOFR Loans as the Borrower may request in
accordance herewith; provided that each Swingline Loan shall be an ABR Loan. Each Lender at its option may make any Term SOFR Loan
by causing any branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect
the obligations of the Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) At
the commencement of each Interest Period for any Term SOFR Borrowing, such Borrowing shall be in an aggregate principal amount that is
an integral multiple of $1,000,000 and not less than $5,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be
in an aggregate principal amount that is an integral multiple of $1,000,000; provided that an ABR Revolving Borrowing may be in
an aggregate principal amount that is equal to the entire unused balance of the total Revolving Commitments or that is required to finance
the reimbursement of an LC Disbursement as contemplated by Section 2.05(e). Each Swingline Loan shall be in an amount that
is an integral multiple of $1,000,000. Borrowings of more than one Type may be outstanding at the same time; provided that there
shall not at any time be more than a total of ten (10) separate Interest Periods outstanding.
(d) Notwithstanding
any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing
if the Interest Period requested with respect thereto would end after the applicable Latest Maturity Date for the relevant Class of
Commitments.
SECTION 2.03. Requests
for Borrowings. Each Borrowing shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be
made by (a) telephone or (b) by submission of a Borrowing Request (including by electronic mail or facsimile), provided that
each such Borrowing Request shall be submitted (a) in the case of a Borrowing of Term SOFR Loans, not later than 11:00 a.m. two
Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 1:00 p.m. on
the Business Day of the proposed Borrowing. Each telephonic notice and Borrowing Request shall be irrevocable. Each such telephonic notice
and Borrowing Request shall specify the following information in compliance with Section 2.02:
(a) whether
the requested Borrowing is to be a Revolving Borrowing, Term Loan Borrowing or FILO Borrowing and the respective Class of Commitments
subject to such Borrowing;
(b) the
aggregate principal amount of such Borrowing;
(c) the
date of such Borrowing, which shall be a Business Day;
(d) whether
such Borrowing is to be an ABR Borrowing or a Term SOFR Borrowing;
(e) in
the case of a Term SOFR Borrowing, the Interest Period (which, whether or not designated, shall be a period of one month, as contemplated
by the definition of “Interest Period”); and
(f) the
location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06.
If no election as to the Type
of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each Appropriate Lender of the details thereof and of the amount of
such Lender’s Loan to be made as part of the requested Borrowing.
SECTION 2.04. Swingline
Loans.
(a) Subject
to the terms and conditions set forth herein, the Swingline Lender may, in its sole discretion in reliance upon the agreements of the
Revolving Lenders set forth in this Section 2.04, make Swingline Loans to the Borrower from time to time during the Revolving
Availability Period (provided that such Swingline Lender shall not be required to make Swingline Loans after the Latest Maturity Date
applicable to the Class of Revolving Commitments held by such Swingline Lender) in an aggregate principal amount at any time outstanding
that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $100,000,000 (the “Swingline
Sublimit”), or (ii) failure of any of the Credit Extension Conditions to be satisfied; provided that (x) the
Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan and (y) the Swingline
Lender shall not have any obligation, under this Agreement or otherwise, to make any Swingline Loan requested by the Borrower hereunder
and may, in its sole discretion, decline to make a requested Swingline Loan. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans. Immediately upon the making of a Swingline
Loan, the Swingline Lender shall be deemed to grant, and each Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Swingline Lender a risk participation in such Swingline Loan in an amount equal to the product of such Revolving
Lender’s Applicable Revolving Percentage (determined without regard to any separate Class or Classes of Revolving Commitments
of such Lender) times the amount of such Swingline Loan.
(b) To
request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by (i) telephone or (ii) by submission
of a Borrowing Request, provided that any such Borrowing Request (including by electronic mail or facsimile) shall be submitted
not later than 1:00 p.m. on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The Administrative Agent will promptly advise
the Swingline Lender of any such notice received from the Borrower. The Swingline Lender shall make each Swingline Loan available to the
Borrower by means of a wire transfer to an account designated by the Borrower (or, in the case of a Swingline Loan made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e), by remittance to the relevant Issuing Bank) by 3:00 p.m. the
requested date of such Swingline Loan, unless the Swingline Lender has received notice (by telephone or in writing) from the Administrative
Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of the proposed Borrowing of Swingline Loans (A) directing
the Swingline Lender not to make such Swingline Loan as a result of the failure of the Credit Extension Conditions to be satisfied), or
(B) that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, in each case, other
than as a result of a Protective Advance.
(c) Interest
on each Swingline Loan shall be payable on the Interest Payment Date with respect thereto.
(d) The
Administrative Agent shall (i) at any time when Swingline Loans in an aggregate principal amount of $10,000,000 or more are outstanding,
at the request of the Swingline Lender in its sole discretion, or (ii) on the date that is seven days after the date on which a Swingline
Loan was made, deliver on behalf of the Borrower a Borrowing Request pursuant to Section 2.03 for an ABR Revolving Borrowing
in the amount of such Swingline Loans; provided, however, that the obligations of the Lenders to fund such Borrowing
shall not be subject to the conditions set forth in Section 4.02.
(e) The
Swingline Lender may by written notice given to the Administrative Agent not later than 12:00 p.m. on any Business Day require
the Revolving Lenders to fund its participation interest on such Business Day in all or a portion of the Swingline Loans outstanding.
Such notice shall specify the aggregate principal amount of Swingline Loans in which Revolving Lenders will fund its participation interest.
Promptly upon receipt of such notice (but no later than 2:00 p.m. on such Business Day), the Administrative Agent will give
notice thereof to each Revolving Lender, specifying in such notice such Lender’s Applicable Revolving Percentage of such Swingline
Loan(s). Each Revolving Lender hereby absolutely and unconditionally agrees, upon timely receipt of notice as provided above, to pay to
the Administrative Agent, for the account of the Swingline Lender, such Revolving Lender’s Applicable Revolving Percentage of such
Swingline Loan(s). Each Revolving Lender acknowledges and agrees that its obligation to acquire and fund participations in Swingline Loans
pursuant to this Section is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments (including any Class thereof), and that each such payment
shall be made without any offset, abatement, withholding or reduction whatsoever. Each Revolving Lender shall comply with its obligation
under this Section by wire transfer of immediately available funds, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of
the Revolving Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the
Revolving Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to
this Section, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline
Lender. Any amounts received by the Swingline Lender from the Borrower (or other Person on behalf of the Borrower) in respect of a Swingline
Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative
Agent, and any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Revolving
Lenders that shall have made their payments pursuant to this Section, ratably, and to the Swingline Lender, as their interests may appear.
The purchase of participations in a Swingline Loan pursuant to this Section shall not relieve the Borrower of any default in the
payment thereof.
SECTION 2.05. Letters
of Credit.
(a) General.
Subject to the terms and conditions set forth herein, the Borrower may request the issuance of (and the applicable Issuing Bank, as specified
by the Borrower, will, in reliance on the agreements of the Revolving Lenders set forth in this Section 2.05, issue) Letters
of Credit denominated in dollars for its own account or the account of any of its Subsidiaries, in a form reasonably acceptable to the
Administrative Agent and the relevant Issuing Bank, at any time and from time to time during the Revolving Availability Period (provided
that such Issuing Bank shall not be required to issue such Letters of Credit after the Latest Maturity Date applicable to the Class of
Revolving Commitments held by such Issuing Bank). Letters of Credit issued hereunder shall constitute utilization of the Revolving Commitments.
In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, an Issuing Bank relating
to any Letter of Credit, the terms and conditions of this Agreement shall control.
(b) Notice
of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment, renewal
or extension of an outstanding Letter of Credit), the Borrower shall deliver (or transmit by electronic communication (including
by electronic mail or facsimile), if arrangements for doing so have been approved by the applicable Issuing Bank) to the relevant Issuing
Bank and the Administrative Agent not later than 1:00 p.m. at least two (2) Business Days (or such later date and time as the Administrative
Agent and such Issuing Bank may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with Section 2.05(c)), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by an Issuing Bank, the Borrower also shall submit a letter of credit application on such Issuing Bank’s
standard form in connection with any request for a Letter of Credit. All Existing Letters of Credit shall be deemed to have been issued
pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions of this Agreement and,
subject to Section 2.05(a), any letter of credit application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, an Issuing Bank relating to any such Existing Letters of Credit.
(i) A
Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter
of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension
(i) the total LC Exposure shall not exceed $600,000,000 (the “LC Sublimit”) and (iii) each of the Credit
Extension Conditions shall be satisfied. If the conditions for borrowing under Section 4.02 cannot be fulfilled, the Required Lenders
may direct the Issuing Banks to, and the Issuing Banks thereupon shall, cease to issue Letters of Credit (other than as Protective Advances)
until such conditions can be satisfied or are waived in accordance with Section 9.02.
(ii) No
Issuing Bank shall be under any obligation to issue any Letter of Credit if:
(A) any
order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Bank
from issuing the Letter of Credit, or any law applicable to such Issuing Bank or any request or directive (whether or not having the force
of law) from any Governmental Authority with jurisdiction over such Issuing Bank shall prohibit, or request that such Issuing Bank refrain
from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon such Issuing Bank with respect
to the Letter of Credit any restriction, reserve or capital requirement (for which such Issuing Bank is not otherwise compensated or entitled
to compensation hereunder) not in effect on the Closing Date, or shall impose upon such Issuing Bank any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which such Issuing Bank in good faith deems material to it and for which such Issuing
Bank is not otherwise compensated or entitled to compensation hereunder;
(B) the
issuance of such Letter of Credit would violate one or more policies of such Issuing Bank applicable to letters of credit generally;
(C) except
as otherwise agreed by the Administrative Agent and such Issuing Bank, the Letter of Credit is in an initial stated amount less than $100,000;
(D) any
Revolving Lender is at that time a Defaulting Lender, unless such Issuing Bank has entered into arrangements, including the delivery of
Cash Collateral, satisfactory to such Issuing Bank (in its sole discretion) with the Borrower or such Lender to eliminate such Issuing
Bank’s actual or potential Fronting Exposure (after giving effect to Section 2.22(a)(iv)) with respect to the Defaulting
Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other Senior Loan Obligations
in respect of Letters of Credit as to which such Issuing Bank has actual or potential Fronting Exposure, as it may elect in its sole discretion;
(E) the
Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or
(F) the
issuance of such Letter of Credit would cause the aggregate amount of the Letters Credit issued by such Issuing Bank to exceed such Issuing
Bank’s LC Commitment.
(iii) No
Issuing Bank shall be under any obligation to amend any Letter of Credit if (A) such Issuing Bank would have no obligation at such time
to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of the Letter of Credit does not accept
the proposed amendment to the Letter of Credit.
(c) Expiration
Date. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date that is one year
after the date of the issuance of such Letter of Credit subject to the provisions of this Section 2.05(c), and (ii) the
date that is five Business Days prior to the Revolving Maturity Date (applicable to the Class of Revolving Commitments with the Latest
Maturity Date held by the Issuing Bank which issued such Letter of Credit). If the Borrower so requests in any applicable letter of credit
application, the applicable Issuing Bank may, in its discretion, agree to issue a Letter of Credit that has automatic extension provisions
(each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit
the applicable Issuing Bank to prevent any such extension at least once in each twelve (12) month period (commencing with the date of
issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension
Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued, but not less than
thirty (30) days prior to the scheduled expiration or renewal thereof. Unless otherwise directed by the Issuing Bank, the Borrower shall
not be required to make a specific request to the Issuing Bank for any such extension. Once an Auto-Extension Letter of Credit has been
issued, the Revolving Lenders shall be deemed to have authorized (but may not require) the Issuing Bank to permit the extension of such
Letter of Credit at any time to an expiry date not later than the date set forth in clause (ii) above; provided, however, that
the applicable Issuing Bank shall not permit any such extension if (A) such Issuing Bank has determined that it would not be permitted,
or would have no obligation at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof, or (B)
it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension
Notice Date (1) from the Administrative Agent that the Required Revolving Lenders have elected not to permit such extension or (2) from
the Administrative Agent, any Revolving Lender or the Borrower that one or more of the applicable conditions specified in Section 4.02
is not then satisfied, and in each such case directing the Issuing Bank not to permit such extension.
(d) Participations.
By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof or extending the expiration
date thereof) and without any further action on the part of the applicable Issuing Bank or the Lenders, such Issuing Bank hereby grants
to each Revolving Lender, and each Revolving Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit in
an amount equal to such Lender’s Applicable Revolving Percentage (determined without regard to any separate Class or Classes
of Revolving Commitments of such Lender) of the aggregate amount available to be drawn under such Letter of Credit. In consideration and
in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for the account of the applicable Issuing Bank, such Lender’s Applicable Revolving Percentage of each LC Disbursement made by an
Issuing Bank not later than 2:00 p.m. on the Business Day specified in the notice provided by the Administrative Agent to the Revolving
Lenders pursuant to Section 2.05(e) until such LC Disbursement is reimbursed by the Borrower or at any time after any reimbursement
payment is required to be refunded to the Borrower for any reason, including after the Revolving Maturity Date and any expiration of any
Class of Commitments applicable to any Revolving Lender. Each Revolving Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this Section 2.05(d) in respect of Letters of Credit is absolute, unconditional and irrevocable and
shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence
and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Each Revolving Lender further acknowledges and agrees that its participation in each Letter
of Credit will be automatically adjusted to reflect such Revolving Lender’s Applicable Revolving Percentage of the aggregate amount
available to be drawn under such Letter of Credit at each time such Lender’s Commitment is amended pursuant to the operation of
Section 2.21 or 2.22, as a result of an assignment in accordance with Section 9.04 or otherwise pursuant to this
Agreement (including as a result of the expiration of any Class of Revolving Commitments).
(e) Reimbursement.
If any Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement
by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 3:30 p.m. on the date that such
LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m. on such date, or,
if such notice has not been received by the Borrower prior to such time on such date, then not later than 1:00 p.m. on the Business
Day immediately following the day that the Borrower receives such notice; provided that, the Borrower may, subject to the conditions
to borrowing set forth herein, request in accordance with Section 2.03 or 2.04 that such payment be financed with an ABR
Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make
such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower fails to make
such payment when due, the Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the payment then
due from the Borrower in respect thereof and such Lender’s Applicable Revolving Percentage (determined without regard to any separate
Class or Classes of Revolving Commitments of such Lender) thereof. Promptly following receipt of such notice, each Revolving Lender shall
pay to the Administrative Agent such Applicable Revolving Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis,
to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the relevant Issuing Bank the
amounts so received by it from the Revolving Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower
pursuant to this Section 2.05(e), the Administrative Agent shall distribute such payment to such Issuing Bank or, to the extent
that Revolving Lenders have made payments pursuant to this Section 2.05(e) to reimburse such Issuing Bank, then to such Lenders
and such Issuing Bank as their interests may appear. Any payment made by a Revolving Lender pursuant to this Section 2.05(e) to
reimburse an Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above)
shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement. If any Revolving Lender
fails to make available to the Administrative Agent for the account of the applicable Issuing Bank any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 2.05(e), then, without limiting the other provisions of this Agreement,
the applicable Issuing Bank shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount
with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available
to such Issuing Bank at a rate per annum equal to the greater of the Federal Funds Effective Rate and a rate determined by the applicable
Issuing Bank in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees
customarily charged by such Issuing Bank in connection with the foregoing. If such Lender pays such amount (with interest and fees as
aforesaid), the amount so paid shall constitute such Lender’s Revolving Loan included in the relevant Revolving Borrowing or payment
in respect of its participation interest in respect of the relevant LC Disbursement, as the case may be. A certificate of any Issuing
Bank submitted to any Revolving Lender (through the Administrative Agent) with respect to any amounts owing under this section shall be
conclusive absent manifest error.
(f) Obligations
Absolute. The Borrower’s obligation to reimburse LC Disbursements as provided in Section 2.05(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 this Agreement, or any term or provision
therein or herein, (ii) the existence of any claim, counterclaim, setoff, defense or other right that the Borrower or any Subsidiary may
have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any
such transferee may be acting), any Issuing Bank or any other Person, whether in connection with this Agreement, the transactions contemplated
hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction; (iii) any draft, demand,
certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement in such draft or other document being untrue or inaccurate in any respect, or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under such Letter of Credit, (iv) waiver by any Issuing Bank of any requirement
that exists for such Issuing Bank’s protection and not the protection of the Borrower or any waiver by such Issuing Bank which does
not in fact materially prejudice the Borrower, (v) any payment made by any Issuing Bank in respect of an otherwise complying item presented
after the date specified as the expiration date of, or the date by which documents must be received under such Letter of Credit if presentation
after such date is authorized by the UCC, the ISP or the UCP, as applicable, (vi) payment by the applicable Issuing Bank under a Letter
of Credit against presentation of a draft or other document that does not comply strictly with the terms of such Letter of Credit, or
any payment made by any Issuing Bank under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee
of such Letter of Credit, including any arising in connection with any Bankruptcy Proceeding; or (vii) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or
equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder. None of the Administrative Agent,
any Lender or any Issuing Bank, or any of their Related Parties, shall have any liability or responsibility by reason of or in connection
with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery
of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing
thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the relevant
Issuing Bank; provided that the foregoing shall not be construed to excuse such Issuing Bank or its Related Parties from liability
to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived
by the Borrower to the fullest extent permitted by applicable law) suffered by the Borrower that are caused by such Issuing Bank’s
or its Related Parties gross negligence or willful misconduct (as determined by a court of competent jurisdiction by a final and non-appealable
judgment) in determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of an Issuing Bank or its Related Parties
(as determined by a court of competent jurisdiction by a final and non-appealable judgment), such Issuing Bank or its Related Parties
shall be deemed to have exercised care in each such determination, and that:
(i) an
Issuing Bank may replace a purportedly lost, stolen, or destroyed original Letter of Credit or missing amendment thereto with a certified
true copy marked as such or waive a requirement for its presentation;
(ii) an
Issuing Bank may accept documents that appear on their face to be in substantial compliance with the terms of a Letter of Credit without
responsibility for further investigation, regardless of any notice or information to the contrary, and may make payment upon presentation
of documents that appear on their face to be in substantial compliance with the terms of such Letter of Credit and without regard to any
non-documentary condition in such Letter of Credit;
(iii) an
Issuing Bank shall have the right, in its sole discretion, to decline to accept such documents and to make such payment if such documents
are not in strict compliance with the terms of such Letter of Credit; and
(iv) this
sentence shall establish the standard of care to be exercised by an Issuing Bank when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof (and the parties hereto hereby waive, to the extent permitted by applicable law,
any standard of care inconsistent with the foregoing).
(g) Without
limiting the foregoing, none of the Administrative Agent, the Lenders, any Issuing Bank, or any of their Related Parties shall have any
liability or responsibility by reason of (i) any presentation that includes forged or fraudulent documents or that is otherwise affected
by the fraudulent, bad faith, or illegal conduct of the beneficiary or other Person, (ii) an Issuing Bank declining to take-up documents
and make payment (A) against documents that are fraudulent, forged, or for other reasons by which that it is entitled not to honor
or (B) following a Borrower’s waiver of discrepancies with respect to such documents or request for honor of such documents
or (iii) an Issuing Bank retaining proceeds of a Letter of Credit based on an apparently applicable attachment order, blocking regulation,
or third-party claim notified to such Issuing Bank.
(h) The
Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of
any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will immediately notify the applicable
Issuing Bank. The Borrower shall be conclusively deemed to have waived any such claim against each Issuing Bank and its correspondents
unless such notice is given as aforesaid.
(i) Disbursement
Procedures. The applicable Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent
a demand for payment under a Letter of Credit. The applicable Issuing Bank shall promptly notify the Administrative Agent and the Borrower
by telephone (confirmed by electronic mail or facsimile) of such demand for payment and whether such Issuing Bank has made or will
make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower
of its obligation to reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.
(j) Interim
Interest. If an Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full
on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such
LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable
to ABR Revolving Loans; provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to Section
2.05(e), then Section 2.13(c) shall apply. Interest accrued pursuant to this Section 2.05(j) shall be for the account
of the applicable Issuing Bank, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to Section
2.05(e) to reimburse such Issuing Bank shall be for the account of such Lender to the extent of such payment.
(k) Resignation
or Replacement of the Issuing Bank. An Issuing Bank may resign at any time by giving 180 days’ prior written notice to
the Administrative Agent, the Borrower and the Lenders, and an Issuing Bank may be replaced at any time by written agreement (an “Issuing
Bank Agreement”) among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank, which
shall set forth the LC Commitment of such successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement
of an Issuing Bank. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account
of the replaced Issuing Bank pursuant to Section 2.12(b). From and after the effective date of any Issuing Bank Agreement, (i)
the successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor
or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement
of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto to the extent of its Commitment hereunder and shall
continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters of Credit. Upon the expiration of the Revolving Commitments
of an Issuing Bank (upon the occurrence of the Latest Maturity Date applicable to any Class of Revolving Commitments of such Issuing Bank),
such Issuing Bank shall be deemed to have resigned as an Issuing Bank hereunder without the requirement for any further notice to or consent
from any other Person unless such Issuing Bank shall have previously agreed to act as an Issuing Bank with respect to any Class of Revolving
Commitments with a later maturity.
(l) Applicability
of ISP and UCP. Unless otherwise expressly agreed by the applicable Issuing Bank and the Borrower when a Letter of Credit is issued
by it (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP shall apply to each standby
Letter of Credit, and (ii) the rules of the UCP shall apply to each commercial Letter of Credit. Notwithstanding the foregoing, no Issuing
Bank shall be responsible to the Borrower for, and no Issuing Bank’s rights and remedies against the Borrower shall be impaired
by, any action or inaction of any Issuing Bank required or permitted under any law, order, or practice that is required or permitted to
be applied to any Letter of Credit or this Agreement, including the Law or any order of a jurisdiction where any Issuing Bank or the beneficiary
is located, the practice stated in the ISP or UCP, as applicable, or in the decisions, opinions, practice statements, or official commentary
of the ICC Banking Commission, the Bankers Association for Finance and Trade – International Financial Services Association (BAFT),
or the Institute of International Banking Law & Practice, whether or not any Letter of Credit chooses such law or practice.
(m) Role
of Issuing Bank. Each Issuing Bank shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents
associated therewith, and each Issuing Bank shall have all of the benefits and immunities (A) provided to the Administrative Agent in
Article VIII with respect to any acts taken or omissions suffered by such Issuing Bank in connection with Letters of Credit issued
by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative
Agent” as used in Article VIII included such Issuing Bank with respect to such acts or omissions, and (B) as additionally
provided herein with respect to such Issuing Bank.
(n) Cash
Collateralization. If any Event of Default shall occur and be continuing, the Borrower shall (or shall cause Subsidiary Loan Parties
to), promptly (and in any event within one (1) Business Day following receipt by the Borrower of a written demand for the deposit
of cash collateral pursuant to this paragraph from the Administrative Agent (or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure representing greater than 50% of the total LC Exposure)) deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal to
103% of the total LC Exposure as of such date plus any accrued and unpaid interest thereon. The Borrower also shall (or shall cause
Subsidiary Loan Parties to) deposit cash collateral pursuant to this Section 2.05(n) (i) as and to the extent required by (x) Section 2.11(b),
and any such cash collateral so deposited and held by the Administrative Agent hereunder shall constitute part of the ABL Borrowing Base
Amount for purposes of determining compliance with Section 2.11(b) and (y) any other provision of this Agreement, and
(ii) if any Letter of Credit remains outstanding after the date specified in Section 2.05(c)(ii), with respect to any
Issuing Bank, in an amount equal to 100% of the stated amount of each such Letter of Credit. Each such deposit shall be held by the Administrative
Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent
shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. The Administrative Agent shall,
at the Borrower’s risk and expense, invest all such deposits in Permitted Investments chosen in the sole discretion of the Administrative
Agent after consultation with the Borrower, provided that no consultation shall be required if a Default has occurred and is continuing.
Other than any interest earned in respect of the investment of such deposits, such deposits shall not bear interest. Interest or profits,
if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse
each Issuing Bank for LC Disbursements for which it has not been reimbursed (together with related fees, costs, and customary processing
charges) and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the
LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to (i) the consent of Revolving Lenders with
LC Exposure representing greater than 50% of the total LC Exposure and (ii) in the case of any such application at a time when any Revolving
Lender is a Defaulting Lender (but only if, after giving effect thereto, the remaining cash collateral shall be less than the aggregate
LC Exposure of all the Defaulting Lenders), the consent of each Issuing Bank), be applied to satisfy the Senior Loan 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 Bank of America Concentration Account). If the Borrower is required
to provide an amount of cash collateral hereunder pursuant to Section 2.11(b), (c) or (d), such amount (to the
extent not applied as aforesaid or as otherwise provided herein) shall be returned to the Borrower as and to the extent that, after giving
effect to such return, the Borrower would remain in compliance with Section 2.11(b), (c) or (d), no Issuing
Bank shall have any exposure in respect of any outstanding Letter of Credit that is not fully covered by the Revolving Commitments of
the Non-Defaulting Lenders and/or the remaining cash collateral and no Default shall have occurred and be continuing. Unless and except
to the extent that the deposit of cash collateral directly by the Borrower would not result in an obligation to grant a security interest
in such cash collateral to the holders of other outstanding Indebtedness of the Borrower, the Borrower will cause Subsidiary Loan Parties
to deposit all cash collateral required to be deposited pursuant to this Section 2.05(n), Section 2.11(b) or otherwise.
(o) Additional
Issuing Banks. The Borrower may, at any time and from time to time with the consent of the Administrative Agent (which consent shall
not be unreasonably withheld) and such Lender, designate one or more additional Lenders to act as an issuing bank under the terms of this
Agreement. Any Lender designated as an issuing bank pursuant to this Section 2.05(o) shall be deemed to be an “Issuing
Bank” (in addition to being a Lender) in respect of Letters of Credit issued or to be issued by such Lender, and, with respect to
such Letters of Credit, such term shall thereafter apply to the other Issuing Banks and such Lender in its capacity as an Issuing Bank.
(p) Reporting
by Issuing Banks to the Administrative Agent. At the end of each week and otherwise upon request of the Administrative Agent, each
Issuing Bank shall provide the Administrative Agent with a certificate identifying the Letters of Credit issued by such Issuing Bank and
outstanding on such date, the amount and expiration date of each such Letter of Credit, the beneficiary thereof, the amount, if any, drawn
under each such Letter of Credit and any other information reasonably requested by the Administrative Agent with respect to such Letters
of Credit. The Administrative Agent shall promptly enter all such information received by it pursuant to this Section 2.05(p)
in the Register.
(q) Letters
of Credit Issued for Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations
of, or is for the account of, a Subsidiary, the Borrower shall be obligated to reimburse, indemnify and compensate the applicable Issuing
Bank hereunder for any and all drawings under such Letter of Credit as if such Letter of Credit had been issued solely for the
account of the Borrower. The Borrower irrevocably waives any and all defenses that might otherwise be available to it as a guarantor or
surety of any or all of the obligations of such Subsidiary in respect of such Letter of Credit. The Borrower hereby acknowledges that
the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s
business derives substantial benefits from the businesses of such Subsidiaries.
SECTION
2.06. Funding of Borrowings.
(a) Each
Appropriate Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately
available funds by (i) in the case of Term SOFR Borrowings, 12:00 p.m., and (ii) in the case of ABR Borrowings, 3:00 p.m., in each
case, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders; provided
that Swingline Loans shall be made as provided in Section 2.04. The Administrative Agent will make such Loans available to
the Borrower by wire transfer, in like funds, to an account designated by the Borrower in the applicable Borrowing Request. Wire transfers
to the Borrower of all Loans (other than Swingline Loans and same-day ABR Revolving Borrowings) shall be made no later than 2:00 p.m.
Wire transfers to the Borrower of Swingline Loans and same-day ABR Revolving Borrowings shall be made no later than 4:00 p.m.
(b) Unless
the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing (or, in the case of any
Borrowing of ABR Loans, prior to 2:00 p.m. on the date of such Borrowing) that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share
available on such date (or, in the case of a Borrowing of ABR Loans, that such Lender has made such share available by the time required)
in accordance with Section 2.06(a) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.
In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower
to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater
of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank
compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the
foregoing or (ii) in the case of the Borrower, the interest rate applicable to ABR Revolving Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing. If the Borrower and such
Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly
remit to the Borrower the amount of such interest paid by the Borrower for such period. Any payment by the Borrower shall be without prejudice
to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.
(c) If
any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided herein, and such
funds are not made available to the Borrower by the Administrative Agent because the conditions to any applicable extension of credit
set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall promptly
return such funds (in like funds as received from such Lender) to such Lender, without interest.
(d) The
obligations of the Lenders hereunder to make Loans, to fund participations in Letters of Credit and Swingline Loans and to make
payments pursuant to Section 9.03(c) are several and not joint. The failure of any Lender to make any Loan, to fund any such participation
or to make any payment under Section 9.03(c) on any date required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase
its participation or to make its payment under Section 9.03(c).
(e) Nothing
herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation
by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
SECTION
2.07. Interest Elections.
(a) Each
Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of Term SOFR Borrowing,
shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of Term SOFR Borrowings, may elect Interest Periods therefor, all as
provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the Loans (of any Class) comprising such Borrowing, and the
Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Borrowings, which
may not be converted or continued.
(b) To
make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by (i) telephone,
or (ii) submission of an Interest Election Request (including by electronic mail or facsimile) by the time that a Borrowing Request
would be required to be made under Section 2.03 if the Borrower were requesting a Revolving Borrowing of the Type resulting
from such election to be made on the effective date of such election. Each such notice and Interest Election Request shall be irrevocable
and, in the case of an Interest Election Request, signed by the Borrower.
(c) Each
Interest Election Request shall specify the following information in compliance with Section 2.02 and this Section
2.07(c):
(i) the
Borrowing and Class of Loans to which such Interest Election Request applies and, if different options are being elected with respect
to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
(ii) the
effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii) whether
the resulting Borrowing is to be an ABR Borrowing or a Term SOFR Borrowing; and
(iv) if
the resulting Borrowing is a Term SOFR Borrowing, the Interest Period to be applicable thereto after giving effect to such election (which,
whether or not designated, shall be a period of one month, as contemplated by the definition of “Interest Period”).
(d) Promptly
following receipt of an Interest Election Request, the Administrative Agent shall advise each Appropriate Lender of the details
thereof and of such Lender’s portion of each resulting Borrowing.
(e) If
the Borrower fails to deliver a timely Interest Election Request with respect to a Term SOFR Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and
is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event
of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Term SOFR Borrowing and (ii) unless repaid,
each Term SOFR Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto. Except as otherwise
provided herein, a Term SOFR Loan may be continued or converted only on the last day of an Interest Period for such Term SOFR Loan.
(f) A
Revolving Loan Borrowing, a Term Loan Borrowing or FILO Loan Borrowing may not be converted to or continued as a Term SOFR Borrowing
if after giving effect thereto the Interest Period therefor would end after the earliest Revolving Maturity Date, the earliest Term Facility
Maturity Date or the FILO Maturity Date, as applicable for such Class.
(g) With
respect to SOFR or Term SOFR, the Administrative Agent, in consultation with the Borrower, will have the right to make Conforming Changes
from time to time and, notwithstanding anything to the contrary herein or in any other Senior Loan Document, any amendments implementing
such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other
Loan Document; provided, that, with respect to any such amendment effected, the Administrative Agent shall post each such amendment implementing
such Conforming Changes to the Borrower and the Lenders reasonably promptly after such amendment becomes effective. Notwithstanding anything
herein or in any other Senior Loan Document to the contrary, the Administrative Agent and the Borrower shall cooperate in good faith and
use commercially reasonable efforts to satisfy any applicable requirements under proposed or final
United States Treasury Regulations or other regulatory guidance such that any amendments implementing such Conforming Changes shall not
result in a deemed exchange of any Loan under Section 1001 of the Code.
SECTION
2.08. Termination and Reduction of Commitments.
(a) Unless
previously terminated in accordance with the terms of this Agreement, (i) the Revolving Commitments shall terminate on the
Revolving Maturity Date (applicable to such Class of Revolving Commitments), (ii) the FILO Commitments shall terminate on the Closing
Date upon the deemed making of the FILO Loans on such date by the applicable FILO Lenders, and (iii) each Incremental Term Commitment,
Loan Modification Term Commitment and each Refinancing Term Commitment shall terminate upon the funding of the related Incremental Refinancing
Term Loan, Loan Modification Term Loan or Refinancing Term Loan, as applicable, or otherwise in accordance with the applicable Incremental
Facility Amendment, Loan Modification Offer and/or Refinancing Amendment.
(b) The
Borrower may at any time terminate, or from time to time reduce, the unused Revolving Commitments of any Class; provided
that (i) each such reduction of the Commitments of any Class shall be in an amount that is an integral multiple of $1,000,000 and not
less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent
prepayment of the Revolving Loans in accordance with Section 2.11, the Total Revolving Exposure would exceed the Total Revolving
Commitments or the Swingline Sublimit or the LC Sublimit shall exceed the Total Revolving Commitments.
(c) The
Borrower shall notify the Administrative Agent of any election to terminate or reduce the unused Revolving Commitments under Section 2.08(b)
at least one (1) Business Day prior to the effective date of such termination or reduction, specifying such election and the effective
date thereof. Promptly following receipt of any such notice, the Administrative Agent shall advise the Revolving Lenders of the contents
thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of voluntary
termination or reduction of the Revolving Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness
of other credit facilities or other financings, in which case such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Revolving Commitments
of any Class shall be permanent. Each reduction of the Revolving Commitments of any Class shall be made ratably among the Lenders in accordance
with their Applicable Revolving Percentage of such Class.
SECTION
2.09. Repayment of Loans; Evidence of Indebtedness.
(a) The
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent, for the account of each Revolving Lender,
the then unpaid principal amount of each Revolving Loan of a particular Class of such Lender on the Revolving Maturity Date of such Class
of Revolving Loan (it being understood and agreed that, subject to the other terms and conditions hereof, the Borrower may make Borrowings
of Revolving Loans under any remaining Revolving Commitments of any other Class to effect such repayment), (ii) to the Swingline
Lender the then unpaid principal amount of each Swingline Loan on the earlier of (A) the Revolving Maturity Date (applicable to the
Class of Revolving Commitments with the Latest Maturity Date held by the Swingline Lender) and (B) the date that is seven days after
the date on which such Swingline Loan was made; provided that on each date that a Revolving Borrowing is made, the Borrower shall
repay all Swingline Loans that were outstanding on the date such Borrowing was requested, (iii) to the Administrative Agent, for
the account of each FILO Lender, the then unpaid principal amount of each FILO Loan of such Lender on the FILO Maturity Date, (iv) to
the Administrative Agent, for the account of each Term Lender, the then unpaid principal amount of the Term Loans of each applicable Class
on the Term Facility Maturity Date for such Class, and (v) to the Administrative Agent, for the account of the applicable Senior Loan
Secured Parties, upon the occurrence of any of the following: (A) the effective date of any plan of reorganization under Section 1129
of the Bankruptcy Code, (B) the closing date of a sale of all or substantially all of the working capital assets of the Loan Parties pursuant
to Section 363 of the Bankruptcy Code, and (C) the date of the termination or expiration of all outstanding Commitments hereunder, all
outstanding Senior Obligations (other than contingent indemnification obligations and other obligations of the Loan Parties that expressly
survive the termination of the Senior Loan Documents for which no claim has been asserted).
(b) Each
Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from
time to time under this Agreement.
(c) The
Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period, if any, applicable thereto, (ii) the amount of any principal or interest due and payable or to become
due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder
for the account of the Lenders and each Lender’s share thereof.
(d) The
entries made in the accounts maintained pursuant to Section 2.09(b) or (c) shall be prima facie evidence of
the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent
to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance
with the terms of this Agreement.
(e) Any
Lender may request that Loans of any Class made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute
and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in the form attached hereto as Exhibit A-1, A-2 or A-3, as applicable, or in such other
form approved by the Administrative Agent and the Borrower. Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 9.04(b)) be represented by one or more promissory notes in such
form payable to the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
(f) Upon
the occurrence of a Revolving Maturity Date for any applicable Class of Revolving Loans, the Applicable
Revolving Percentages with respect to each remaining Class of Revolving Commitments shall be readjusted without any further action or
consent of any other party, to reflect the expiration of the Class of Revolving Commitments as to which the Revolving Maturity Date has
occurred. In connection with the foregoing, the Revolving Lenders immediately after effectiveness to the readjusted Applicable Revolving
Percentages shall purchase and assign at par such amounts of the Revolving Loans outstanding at such time as the Administrative Agent
may require such that all of the Revolving Lenders effectively participate in each of the outstanding Revolving Loans on a pro rata basis
in accordance with their readjusted Applicable Revolving Percentages. The Administrative Agent and the Lenders hereby agree that
the minimum borrowing, pro rata borrowing and pro rata payment requirements contained elsewhere in this Agreement shall not apply to the
transactions effected pursuant to the immediately preceding sentence.
SECTION
2.10. Amortization and Repayment of Term Loans.
(a) The
principal amount of each Class of Term Loans shall mature on such date and shall amortize in such amounts payable at such times as are
set forth in the applicable Refinancing Amendment, Incremental Facility Agreement or Loan Modification Agreement. Except as otherwise
provided in the applicable Refinancing Amendment, Incremental Facility Amendment or Loan Modification Agreement, any prepayment of a Term
Borrowing pursuant to Section 2.11(b), (c) or (d) shall be applied to reduce the subsequent scheduled repayments of such Borrowings
in direct order of their maturity.
(b) Prior
to any repayment of any Term Borrowing hereunder, the Borrower shall select the Borrowing or Borrowings to be repaid and shall notify
the Administrative Agent by telephone (confirmed by electronic mail or facsimile) of such selection not later than 1:00 p.m.
two (2) Business Days before the scheduled date of such repayment. Each repayment of an Term Borrowing shall be applied ratably to the
Loans included in the repaid Borrowing. Repayments of Term Borrowings shall be accompanied by accrued interest on the amount repaid.
SECTION
2.11. Prepayment of Loans.
(a) The
Borrower shall have the right, at any time and from time to time, to prepay any Borrowing in whole or in part, subject to the requirements
of this Section; provided, however, that any partial prepayment made pursuant to this Section 2.11(a) shall
be in a principal amount that is a multiple of $1,000,000 and not less than $5,000,000; provided, further, that the
Borrower shall not be permitted to prepay any FILO Loan, other than (i) in connection with a termination of the Total ABL Commitments
and payment in full in cash of all Senior Loan Obligations under the Senior Loan Documents, or (ii) in connection with any mandatory prepayments
required pursuant to this Section 2.11.
(b) (i) In
the event and on each date that the Total Outstandings on such date exceed the Combined Loan Cap (other than as a result of Protective
Advances pursuant to Section 2.23(a)), the Borrower shall on each such date apply an amount equal to such excess as follows: first,
to repay the outstanding Pre-Petition Revolving Loans, until paid in full, second, to the extent of any remaining excess, or if
no Pre-Petition Revolving Loans are outstanding, to prepay Revolving Borrowings and Swingline Loans, until paid in full, third,
to the extent of any remaining excess or, if no Revolving Borrowings or Swingline Loans are outstanding, to make a deposit in a cash collateral
account maintained by the Administrative Agent pursuant to Section 2.05(n) to Cash Collateralize outstanding LC Exposure,
fourth, to the extent of any remaining excess, to prepay any Term Loans, and fifth, to the extent after giving effect to
any such prepayments and provision of cash collateral, the Total FILO Outstandings exceed the FILO Borrowing Base Amount, to prepay FILO
Loans in an amount equal to such excess.
(ii) In
the event and on each date that the Total ABL Outstandings on such date exceed the then-current ABL Borrowing Base Amount (other than
as a result of Protective Advances pursuant to Section 2.23(a)), the Borrower shall on each such date apply an amount equal to
such excess as follows: first, to repay the outstanding Pre-Petition Revolving Loans, until paid in full, second, to the
extent of any remaining excess, or if no Pre-Petition Revolving Loans are outstanding, to prepay Revolving Borrowings and Swingline Loans,
until paid in full, third, to the extent of any remaining excess or, if no Revolving Borrowings or Swingline Loans are outstanding,
to make a deposit in a cash collateral account maintained by the Administrative Agent pursuant to Section 2.05(n) to Cash
Collateralize outstanding LC Exposure, fourth, to the extent of any remaining excess, to prepay any Term Loans, and fifth,
to the extent after giving effect to any such prepayments and provision of cash collateral, the Total FILO Outstandings exceed the FILO
Borrowing Base Amount, to prepay FILO Loans in an amount equal to such excess.
(iii) In
the event and on each date that the Total Revolving Outstandings exceed the Total Revolving Commitments, the Borrower shall on such date
apply an amount equal to such excess first, to repay the outstanding Pre-Petition Revolving Loans, second, to the extent
of any remaining excess, or if no Pre-Petition Revolving Loans are outstanding, to prepay Revolving Borrowings and Swingline Borrowings,
until paid in full, and third, to the extent of any remaining excess, or if no Revolving Borrowings or Swingline Loans are outstanding,
to a cash collateral account maintained by the Administrative Agent pursuant to Section 2.05(n) to Cash Collateralize outstanding
LC Exposure.
(c) During
the continuance of a Cash Sweep Period, the Loans shall be repaid daily in accordance with (and to the extent required under) the provisions
of the Senior Security Agreement and Section 7.02 (without regard to minimum and integral amounts); provided that
(i) the Net Cash Proceeds of Prepayment Events shall be applied as set forth in Section 2.11(d) and (ii) any payment required by
Section 2.11(b) or Section 2.11(e) shall be applied as set forth in such Sections.
(d) Subject
to the terms of the Financing Order and the ABL Intercreditor Agreement, (i) in the event and on each occasion that any Net Cash Proceeds
are received by or on behalf of the Borrower or any Subsidiary in respect of any Prepayment Event (other than any Prepayment Event resulting
from the Specified Elixir Sale or an Elixir Monetization Event), the Borrower shall promptly (and in any event within one (1) Business
Day) after such Net Cash Proceeds are received, deliver to the Administrative Agent an aggregate amount equal to 100% of the Net Cash
Proceeds resulting from such Prepayment Event, which Net Cash Proceeds shall be applied first, to repay the outstanding Pre-Petition
Revolving Loans, until paid in full, second, to the extent of any remaining excess, or if no Pre-Petition Revolving Loans are outstanding,
to prepay Revolving Loans and Swingline Loans, until paid in full, third, to the extent of any remaining excess or, if no Revolving
Loans or Swingline Loans are outstanding, to make a deposit in a cash collateral account maintained by the Administrative Agent pursuant
to Section 2.05(n) to Cash Collateralize outstanding LC Exposure, fourth, to the extent of any remaining excess, to
prepay any Term Loans, and fifth, to the extent after giving effect to any such prepayments and provision of cash collateral, the
Total FILO Outstandings exceed the FILO Borrowing Base Amount, to prepay FILO Loans in an amount equal to such excess; and (ii) in the
event and on each occasion that any Net Cash Proceeds are received by or on behalf of the Borrower or any Subsidiary in respect of any
Prepayment Event resulting from the Specified Elixir Sale or any Elixir Monetization Event, the Borrower shall promptly (and in any event
within one (1) Business Day) after such Net Cash Proceeds are received, deliver to the Administrative Agent an aggregate amount equal
to 100% of the Net Cash Proceeds resulting from such Prepayment Event, which Net Cash Proceeds shall be applied in accordance with Exhibit
I (it being understood and agreed that amounts jointly determined by the Borrower and the Administrative Agent to be due to any Person
(other than any Senior Secured Party), in accordance with Exhibit I, may, at the Administrative Agent’s option, be delivered
directly to such Person).
(e) On
March 1, 2024, solely to the extent a Specified Elixir Sale has not been consummated prior to such date, the Borrower shall repay outstanding
FILO Loans in an amount equal to the result (not less than zero) of (i) $100,000,000, minus (ii) the aggregate amount of Net Cash
Proceeds of an Elixir Monetization Event applied to the FILO Loans in accordance with Exhibit I on or prior to March 1, 2024.
(f) In
connection with any optional or mandatory prepayment of Loans, outstanding ABR Loans of the applicable Class of Loans subject to such
prepayment shall be repaid before outstanding Term SOFR Loans of such Class are repaid.
(g) The
Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) of any
optional or mandatory prepayment of Loans (other than pursuant to Section 2.11(b) or (c)) by (x) telephone or (y) in writing
(including by electronic mail or facsimile). Such written notice of prepayment shall be delivered (i) in the case of prepayment of a Term
SOFR Loan, not later than 1:00 p.m. one (1) Business Day before the date of prepayment, (ii) in the case of prepayment of an ABR
Borrowing, not later than 1:00 p.m. on the Business Day of such prepayment or (iii) in the case of prepayment of a Swingline Loan,
not later than 1:00 p.m. on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date,
the Borrowings to be prepaid and the principal amount and Class of each Borrowing or portion thereof to be prepaid and, in the case of
a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment; provided that a notice of optional
prepayment delivered by the Borrower pursuant to this Section may state that it is conditioned on the effectiveness of other credit facilities
or other financing, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied. Promptly following receipt of any such notice (other than a notice relating
solely to Swingline Loans), the Administrative Agent shall advise the applicable Appropriate Lenders of the contents thereof. Each partial
prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of
a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest
to the extent required by Section 2.13. Payments shall be without premium or penalty, provided that the Borrower shall reimburse
the Lenders for funding losses in accordance with Section 2.16.
(h) Notwithstanding
anything to the contrary herein, no optional prepayment of the FILO Loans may be made prior to termination of the Revolving Commitments.
SECTION
2.12. Fees.
(a) The
Borrower agrees to pay to the Administrative Agent for the account of each Revolving Lender a commitment fee, which shall accrue at the
Applicable Rate per annum on the daily unused amount of the Revolving Commitment of each applicable Class of such Lender during
the period from and including the Closing Date to but excluding the date on which such Commitment terminates. Accrued commitment fees
shall be payable in arrears on the first day of each calendar month and on the date on which the Total Revolving Commitments terminate
(or, if earlier, with respect to any Class of Revolving Commitments, the Revolving Maturity Date for such Class), commencing on the first
such date to occur after the Closing Date. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the last day). For purposes of computing commitment fees
pursuant to this Section 2.12(a), a Revolving Commitment of a Lender shall be deemed to be used to the extent of the outstanding
Revolving Loans and LC Exposure of such Lender (and the Swingline Exposure of such Lender shall be disregarded for such purpose), provided
that if a Lender shall have more than one Class of Revolving Commitments, such Revolving Commitments of each Class shall be deemed to
be used to the extent of such Revolving Loans and LC Exposure on a ratable basis.
(b) The
Borrower agrees to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable Rate as in effect from time to time for interest on Term
SOFR Revolving Loans on the daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the Closing Date to but excluding the later of the date on which such Lender’s
Revolving Commitment of an applicable Class terminates and the date on which such Lender ceases to have any LC Exposure (with any LC Exposure
of a Lender that has more than one Class of Revolving Commitments being deemed to be allocated between each Class of such Revolving Commitments
on a ratable basis), and (ii) to each Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on the daily outstanding
amount of such Issuing Bank’s Letters of Credit during the period from and including the Closing Date to but excluding the later
of the date of termination of the Total Revolving Commitments and the date on which there ceases to be any LC Exposure (or, if earlier,
the Latest Revolving Maturity Date of Revolving Commitments held by such Issuing Bank), as well as such Issuing Bank’s customary
issuance, presentation, amendment and other processing fees, and other standard costs and charges with respect to the issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees, fronting fees and other fees accrued
shall be paid monthly in arrears on the first day of each calendar month, commencing on the first such date to occur after the Closing
Date; provided that all such fees shall be payable on the date on which the Total Revolving Commitments terminate (or, if earlier,
the termination of Revolving Commitments of all Classes of any applicable Lender) and any such fees accruing after the date on which the
Total Revolving Commitments terminate shall be payable on demand. Any other fees payable to an Issuing Bank pursuant to this Section
2.12(b) shall be payable within 10 days after demand. All participation fees and fronting fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(c) The
Borrower agrees to pay to the Administrative Agent and the Collateral Agent, for their own accounts, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative Agent or the Collateral Agent, as the case may be.
(d) All
fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the relevant
Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders
entitled thereto. Fees paid shall not be refundable under any circumstances.
(e) The
Borrower agrees to pay the fees set forth in each Incremental Facility Amendment, Refinancing Amendment and/or Loan Modification Agreement
relating to the applicable Other Revolving Commitments and the Term Loans.
SECTION
2.13. Interest.
(a) The
Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the
Applicable Rate.
(b) The
Loans comprising each Term SOFR Borrowing shall bear interest at Term SOFR for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
(c) Notwithstanding
the foregoing, upon the occurrence and during the continuation of an Event of Default, at the option of the Administrative Agent or at
the request of the Required Lenders (or, immediately (without any further act of any Person), upon the occurrence of an Event of
Default under clause (a) or clause (b) of Section 7.01), the Borrower shall pay interest on all of the Senior Loan
Obligations to but excluding the date of actual payment, after as well as before judgment, (i) in the case of principal, at a rate
per annum equal to 2.00% plus the rate otherwise applicable to such Loan as provided in the preceding sub-sections of this Section
and (ii) in the case of any other amount, at a rate per annum equal to 2.00% plus the rate applicable to ABR Revolving Loans
as provided in Section 2.12(a).
(d) Accrued
interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and (i) in the case of FILO Loans,
on the FILO Maturity Date, (ii) in the case of Revolving Loans of each Class on the earlier of the Revolving Maturity Date of such Class
and the date on which the Total Revolving Commitments are terminated, and (iii) in the case of Term Loans, the Term Facility Maturity
Date; provided that (i) interest accrued pursuant to Section 2.13(c) shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Revolving Availability
Period with respect to the applicable Class), accrued interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any Term SOFR Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion, together with any amounts due
and payable pursuant to Section 2.16.
(e) All
interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base
Rate (including ABR Loans determined by reference to Term SOFR) shall be computed on the basis of a year of 365 days (or 366 days
in a leap year), and in each case shall be payable for the actual number of days elapsed. Each determination by the Administrative Agent
of an interest rate or fee hereunder shall be conclusive absent manifest error.
SECTION
2.14. Alternate Rate of Interest; Illegality.
(a) If
in connection with any request for a Term SOFR Loan or a conversion of ABR Loans to Term SOFR Loans or continuation of any such
Loans, as applicable,
(i) the
Administrative Agent determines that (A) no Successor Rate has been determined in accordance with Section 2.14(b) and the circumstances
under clause (i) of Section 2.14(b) or the Scheduled Unavailability Date has occurred, or (B) adequate and reasonable means
do not exist for determining Term SOFR for any requested Interest Period with respect to a proposed Term SOFR Loan or in connection with
an existing or proposed ABR Loan; or
(ii) the
Administrative Agent is advised by the Required Lenders that Term SOFR for such Interest Period will not adequately and fairly reflect
the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice
thereof to the Borrower and the Lenders by telephone, electronic mail or facsimile as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) the
obligation of the Lenders to make or maintain Term SOFR Loans shall be suspended, (to the extent of the affected Term SOFR Loans or Interest
Periods), (ii) in the event of a determination described in the preceding sentence with respect to the Term SOFR component of the Alternate
Base Rate, the utilization of the Term SOFR component in determining the Alternate Base Rate shall be suspended, (iii) any Interest Election
Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Term SOFR Borrowing shall be ineffective
and (iv) if any Borrowing Request requests a Term SOFR Borrowing, such Borrowing shall be made as an ABR Borrowing.
(b) Replacement
of Term SOFR or Successor Rate. Notwithstanding anything to the contrary in this Agreement or any other Senior Loan Document, if the
Administrative Agent determines (which determination shall be conclusive absent manifest error), or the Borrower or Required Lenders notify
the Administrative Agent (with, in the case of the Required Lenders, a copy to the Borrower) that the Borrower or Required Lenders, as
applicable, have determined that:
(i) adequate
and reasonable means do not exist for ascertaining a one month interest period of Term SOFR, including because the Term SOFR Screen Rate
is not available or published on a current basis and such circumstances are unlikely to be temporary; or
(ii) CME
or any successor administrator of the Term SOFR Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent
or such administrator with respect to its publication of Term SOFR, in each case, acting in such capacity, has made a public statement
identifying a specific date after which one month interest periods of Term SOFR or the Term SOFR Screen Rate shall or will no longer be
made available, or permitted to be used for determining the interest rate of U.S. dollar denominated syndicated loans, or shall or will
otherwise cease, provided that, at the time of such statement, there is no successor administrator that is satisfactory to the Administrative
Agent, that will continue to provide such interest periods of Term SOFR after such specific date (the latest date on which one month interest
periods of Term SOFR or the Term SOFR Screen Rate are no longer available permanently or indefinitely, the “Scheduled Unavailability
Date”);
then, on a date and time determined by the Administrative
Agent (in consultation with the Borrower) (any such date, the “Term SOFR Replacement Date”), which date shall be at
the end of an Interest Period or on the relevant interest payment date, as applicable, for interest calculated and, solely with respect
to clause (ii) above, no later than the Scheduled Unavailability Date, Term SOFR will be replaced hereunder and under any Senior
Loan Document with Daily Simple SOFR plus the SOFR Adjustment, in each case, without any amendment to, or further action or consent of
any other party to, this Agreement or any other Senior Loan Document (the “Successor Rate”).
If the Successor Rate is Daily Simple SOFR plus
the SOFR Adjustment, all interest payments will be payable on a monthly basis, on the first Business Day of each calendar month.
Notwithstanding anything to the contrary herein,
(i) if the Administrative Agent determines that Daily Simple SOFR is not available on or prior to the Term SOFR Replacement Date, or if
(ii) the events or circumstances of the type described in Section 2.14(b)(i) or (ii) have occurred with respect to the Successor
Rate then in effect, then in each case, the Administrative Agent and the Borrower may amend this Agreement solely for the purpose of replacing
Term SOFR or any then current Successor Rate in accordance with this Section 2.14 at the end of any Interest Period, relevant interest
payment date or payment period for interest calculated, as applicable, with an alternative benchmark rate giving due consideration to
any evolving or then existing convention for similar U.S. dollar denominated credit facilities syndicated and agented in the United States
for such alternative benchmark, and, in each case, including any mathematical or other adjustments to such benchmark giving due consideration
to any evolving or then existing convention for similar U.S. denominated credit facilities syndicated and agented in the United States
for such benchmark. For the avoidance of doubt, any such proposed rate and adjustments shall constitute a “Successor Rate”.
Any such amendment shall become effective at 5:00 p.m. on the fifth Business Day after the Administrative Agent shall have posted
such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have delivered
to the Administrative Agent written notice that such Required Lenders object to such amendment.
The Administrative Agent will promptly (in one
or more notices) notify the Borrower and each Lender of the implementation of any Successor Rate.
Any Successor Rate shall be applied in a manner
consistent with market practice; provided that to the extent such market practice is not administratively feasible for the Administrative
Agent, each Successor Rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent (after consultation
with the Borrower).
Notwithstanding anything else herein, if at any
time any Successor Rate as so determined would otherwise be less than one percent, the Successor Rate will be deemed to be one percent
for the purposes of this Agreement and the other Senior Loan Documents.
In connection with the implementation and administration
of a Successor Rate, the Administrative Agent will have the right, after consultation with the Borrower, to make Conforming Changes from
time to time and, notwithstanding anything to the contrary herein or in any other Senior Loan Document, any amendments implementing such
Conforming Changes will become effective only after written notice thereof to the Borrower but otherwise without any further action or
consent of any other party to this Agreement; provided that, with respect to any such amendment effected, the Administrative Agent
shall post each such amendment implementing such Conforming Changes to the Borrower and the Lenders reasonably promptly after such amendment
becomes effective. Notwithstanding anything herein or in any other Senior Loan Document to the contrary, the Administrative Agent and
the Borrower shall cooperate in good faith and use commercially reasonable efforts to satisfy any
applicable requirements under proposed or final United States Treasury Regulations or other regulatory guidance such that any amendments
implementing such Conforming Changes shall not result in a deemed exchange of any Loan under Section 1001 of the Code.
For purposes of this Section 2.14, those
Lenders that either have not made, or do not have an obligation under this Agreement to make, the relevant Loans in Dollars shall be excluded
from any determination of Required Lenders.
(c) Illegality.
If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any
Lender or its applicable lending office to make, maintain or fund Loans whose interest is determined by reference to SOFR or Term SOFR,
or to determine or charge interest rates based upon SOFR or Term SOFR, then, upon notice thereof by such Lender to the Borrower (through
the Administrative Agent), (a) any obligation of such Lender to make or continue Term SOFR Loans or to convert ABR Loans to Term SOFR
Loans shall be suspended, and (b) if such notice asserts the illegality of such Lender making or maintaining ABR Loans the interest rate
on which is determined by reference to the Term SOFR component of the Alternate Base Rate, the interest rate on which Base Rate Loans
of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Term SOFR
component of the Alternate Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances
giving rise to such determination no longer exist. Upon receipt of such notice, (i) the Borrower shall, upon demand from such Lender (with
a copy to the Administrative Agent), prepay or, if applicable, convert all Term SOFR Loans of such Lender to ABR Loans (the interest rate
on which ABR Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference
to the Term SOFR component of the Alternate Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Term SOFR Loan to such day, or immediately, if such Lender may not lawfully continue to maintain such Term SOFR
Loan and (ii) if such notice asserts the illegality of such Lender determining or charging interest rates based upon SOFR, the Administrative
Agent shall during the period of such suspension compute the Alternate Base Rate applicable to such Lender without reference to the Term
SOFR component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender
to determine or charge interest rates based upon SOFR. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest
on the amount so prepaid or converted, together with any additional amounts required pursuant to Section 2.16.
SECTION
2.15. Increased Costs.
(a) If
any Change in Law shall:
(i) impose,
modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Lender or any Issuing Bank;
(ii) impose
on any Lender or any Issuing Bank any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such
Lender or any Letter of Credit or participation therein; or
(iii) subject
any Agent, any Lender or any Issuing Bank to any Taxes (other than (A) Indemnified Taxes and (B) Excluded Taxes) on its loans, loan principal,
letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;
and the result of any of the foregoing shall be
to increase the cost to such Agent, such Lender or such Issuing Bank, as applicable, of making, converting to, continuing or maintaining
any Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Agent, such Lender or such Issuing Bank
of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter
of Credit) or to reduce the amount of any sum received or receivable by such Agent, such Lender or such Issuing Bank hereunder (whether
of principal, interest or any other amount), then the Borrower will pay to such Agent, such Lender or such Issuing Bank, as the case may
be, such additional amount or amounts as will compensate such Agent, such Lender or such Issuing Bank, as the case may be, for such additional
costs incurred or reduction suffered to the extent notification thereof is delivered to the Borrower as set forth in this Section 2.15.
(b) If
any Lender or any Issuing Bank determines that any Change in Law regarding capital requirements or liquidity has or would have the effect
of reducing the rate of return on such Lender’s or such Issuing Bank’s capital or on the capital of such Lender’s or
such Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a level below that which such Lender or such
Issuing Bank or such Lender’s or such Issuing Bank’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s or such Issuing Bank’s policies and the policies of such Lender’s or such Issuing Bank’s
holding company with respect to capital or liquidity adequacy), then from time to time the Borrower will pay to such Lender or such Issuing
Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank or such Lender’s
or such Issuing Bank’s holding company for any such reduction suffered. Each Lender will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge that will entitle such Lender to compensation pursuant to this Section 2.15;
provided that the failure to provide such notification will not affect such Lender’s rights to compensation hereunder.
(c) A
certificate of a Lender or an Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or such Issuing Bank
or its holding company, as the case may be, as specified in Section 2.15(a) or (b) shall be delivered to the Borrower
and shall be conclusive absent manifest error. The Borrower shall pay such Lender or such Issuing Bank, as the case may be, the amount
shown as due on any such certificate within 10 days after receipt thereof.
(d) Failure
or delay on the part of any Lender or any Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of
such Lender’s or such Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be required
to compensate a Lender or an Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior
to the date that such Lender or such Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or such Issuing Bank’s intention to claim compensation therefor; provided
further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred
to above shall be extended to include the period of retroactive effect thereof.
(e) Notwithstanding
anything contained herein to the contrary, no Lender or Issuing Bank shall be entitled to any compensation pursuant to this Section unless
such Lender or Issuing Bank certifies in its reasonable good faith determination that it is imposing such charges or requesting such compensation
from borrowers (similarly situated to the Borrower) under comparable syndicated credit facilities as a matter of general practice and
policy.
SECTION
2.16. Break Funding Payments. In the event of (a) the payment of any principal of any
Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion
of any Loan other than an ABR Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Loan other than an ABR Loan on the date specified in any notice delivered pursuant hereto (regardless of whether
such notice may be revoked under Section 2.11(g) and is revoked in accordance therewith), or (d) the assignment of any Term
SOFR Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19,
then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event, but excluding
any loss of margin. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to
this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the
amount shown as due on any such certificate within ten (10) days after receipt thereof.
SECTION
2.17. Taxes.
(a) Any
and all payments by or on account of any obligation of the Borrower hereunder or under any other Senior Loan Document shall be made free
and clear of and without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (determined
in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment
by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely
pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is
an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after making all required deductions
and withholdings (including deductions and withholdings applicable to additional sums payable under this Section) the Administrative
Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions or
withholdings been made.
(b) In
addition, the Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of
the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(c) The
Borrower shall indemnify each Agent, each Lender and each Issuing Bank, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes payable or paid by, or required to be deducted or withheld from a payment to, such Agent, such Lender or such
Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder or under
any other Senior Loan Document (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section)
and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability
delivered to the Borrower by a Lender or an Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or
an Issuing Bank, shall be conclusive absent manifest error.
(d) As
soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e) (i)
Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Senior
Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or
the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative
Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably
requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or
not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the
preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in clauses
(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal
or commercial position of such Lender. Notwithstanding the foregoing, in the case of an applicable Borrower or any applicable Loan Party
that, in each case, is not a U.S. Person, the applicable Lender will not be subject to the requirements on this Section 2.17(e)(i)
unless it has received written notice from such Borrower or such other Loan Party advising it of the availability of an exemption or reduction
of withholding Tax under the laws of the jurisdiction in which such Borrower or such other Loan Party is located and containing all applicable
documentation (together, if requested by such Lender, with a certified English translation thereof) required to be completed by such Lender
in order to receive any such exemption or reduction, and such Lender is reasonably satisfied that it is legally able to provide such documentation
to such Borrower or such other Loan Party.
(ii) Without
limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,
(A) any
Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes
a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent),
executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax;
(B) any
Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number
of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following
is applicable:
(1) in
the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments
of interest under any Senior Loan Document, executed copies of IRS Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction
of, U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable
payments under any Senior Loan Document, IRS Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of, U.S. Federal withholding
Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(2) executed
copies of IRS Form W-8ECI;
(3) in
the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit F-1 to the effect that such Foreign Lender is not a “bank” within the meaning
of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B)
of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) executed copies of IRS Form W-8BEN or W-8BEN-E; or
(4) to
the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form
W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit F-2 or Exhibit F-3, IRS Form
W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership
and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender
may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit F-4 on behalf of each such direct and indirect
partner.
(C) Any
Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number
of copies as shall be requested by the recipient), on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of any other
form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. Federal withholding Tax, duly completed,
together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made.
(D) If
a payment made to a Lender under any Senior Loan Document (or a payment made to a Participant pursuant to a participation granted by any
Lender) would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender (or Participant) were to fail to comply with
the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Lender who granted the participation
only) at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent
(or, in the case of a Participant, the Lender who granted the participation) such documentation prescribed by applicable law (including
as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative
Agent (or, in the case of a Participant, the Lender who granted the participation) as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender's obligations under
FATCA or to determine the amount to deduct and withhold from such payment. Each Lender (or Participant) agrees that if any form or certification
it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly
notify the Borrower and the Administrative Agent (or, in the case of the Participant, the Lender who granted the participation) in writing
of its legal inability to do so. Solely for purposes of this clause (D), “FATCA” shall include any amendments made
to FATCA after the date of this Agreement.
(f) Each
Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable
to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes
and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender's failure to comply with the
provisions of Section 9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to
such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Senior Loan Document, and any reasonable
expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent
shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts
at any time owing to such Lender under any Senior Loan Document or otherwise payable by the Administrative Agent to the Lender from any
other source against any amount due to the Administrative Agent under this Section 2.17(f).
(g) If
any Agent, Lender or Issuing Bank determines, in its sole discretion exercised in good faith, that it has received a refund of
any Taxes as to which it has been indemnified pursuant to this Section 2.17 (including by the payment of additional amounts pursuant
to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity
payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes)
of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such
refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over
pursuant to this Section 2.17(g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority)
in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to
the contrary in this Section 2.17(g), in no event will the indemnified party be required to pay any amount to an indemnifying party
pursuant to this Section 2.17(g) the payment of which would place the indemnified party in a less favorable net after-Tax position
than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted,
withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This
Section 2.17(g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(h) Each
Party’s obligations under this Section shall survive the resignation or replacement of the Administrative Agent or any assignment
of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all
obligations under any Senior Loan Document.
(i) For
purposes of this Section, the term “Lender” includes any Issuing Bank and the term “applicable law” includes FATCA.
SECTION
2.18. Payments Generally; Pro Rata Treatment; Sharing of Setoffs.
(a) The
Borrower shall make each payment required to be made by it hereunder or under any other Senior Loan Document (whether of principal, interest,
fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise)
prior to the time expressly required hereunder or under such other Senior Loan Document for such payment (or, if no such time is expressly
required, prior to 2:00 p.m. on the date when due), in immediately available funds, free and clear of and without condition
or deduction for any counterclaim, defense, recoupment or setoff. Any amounts received after such time on any date may, in the discretion
of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Administrative Agent at its office for payments from time to time notified in writing
to the Borrower, except payments to be made directly to an Issuing Bank or Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled
thereto and payments pursuant to other Senior Loan Documents shall be made to the Persons specified therein. The Administrative Agent
shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following
receipt thereof, in the same form received. If any payment under any Senior Loan Document shall be due on a day that is not a Business
Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments under each Senior Loan Document shall be made in dollars.
(b) If
at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed
LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and
fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.
(c) If
any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest
on any of its Loans or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion
of the aggregate principal amount of its Loans and participations in LC Disbursements and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate relative amounts of principal
of and accrued interest on their Loans and participations in LC Disbursements and Swingline Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this Section
2.18(c) shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans
or participations in LC Disbursements and Swingline Loans to any assignee or participant, other than to the Borrower or any Subsidiary
or Affiliate thereof (as to which the provisions of this Section 2.18(c) shall apply). The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of the Borrower in the amount of such participation.
(d) Unless
the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders, the Issuing Banks of the Swingline Lender hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders, an Issuing Bank or the Swingline Lender, as the case may be, the amount due. With respect
to any payment that the Administrative Agent makes for the account of the Lenders, any Issuing Bank or the Swingline Lender hereunder
as to which the Administrative Agent determines (which determination shall be conclusive absent manifest error) that any of the following
applies (such payment referred to as the “Rescindable Amount”) and: (i) the Borrower or any other Loan Party has not
in fact made such payment; (ii) the Administrative Agent has made a payment in excess of the amount so paid by the Borrower or any other
Loan Party (whether or not then owed); or (iii) the Administrative Agent has for any reason otherwise erroneously made such payment; then
each of the Lenders, the Issuing Banks and the Swingline Lender, as the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the Rescindable Amount so distributed to such Lender, such Issuing Bank, or the Swingline Lender, as the case may
be, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to
but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on interbank compensation. A notice of the Administrative Agent
to any Lender or the Borrower with respect to any amount owing under this Section 2.18(d) shall be conclusive, absent manifest
error.
(e) If
any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(d), 2.05(d) or (e),
2.06(b), 2.18(d) or 9.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision
hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are fully paid.
(f) To
the extent not paid by the Borrower when due, the Administrative Agent, without any request being made by, and without
notice to or consent from, the Borrower, may advance any interest, fee, or other payment required under any Senior Loan Document
to which any Senior Loan Secured Party is entitled and may charge the same to the Administrative Agent’s loan account for the Revolving
Facility notwithstanding any failure to satisfy the conditions set forth in Section 4.02; provided that such charges do
not cause the Total Revolving Outstandings to exceed the Total Revolving Commitments. Such action on the part of the Administrative Agent
shall not constitute a waiver of the Administrative Agent’s rights and the Borrower obligations, if any, under Section 2.11(b).
Any amount which is added to the principal balance of the Administrative Agent’s loan account for the Revolving Facility as provided
in this Section 2.18(f) shall bear interest at the interest rate then and thereafter applicable to ABR Revolving Loans.
SECTION
2.19. Mitigation Obligations; Replacement of Lenders.
(a) If
any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject
such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees
to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b) If
(i) any Lender requests compensation under Section 2.15, (ii) the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, (iii) any Lender has become a
Defaulting Lender or (iv) any Lender refuses to consent to any amendment or waiver of any Senior Loan Document requested by the Borrower
that requires the consent of all Lenders (or all Lenders within a specified Class), and such amendment or waiver is consented to
by the Required Lenders (or the requisite majority of Lenders with respect to a specified Class), then the Borrower may, at its sole expense
and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment);
provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent (and, if a Revolving Commitment
is being assigned, the Issuing Banks and the Swingline Lender), which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline
Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of
any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a material reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.
SECTION
2.20. Borrowing Base Advance Rates; Reserves.
(a) As
of the Closing Date, (i) with respect to determination of the ABL Borrowing Base Amount, (1) the Accounts Receivable Advance Rate
will be 85%, (2) the Pharmaceutical Inventory Advance Rate will be 90%, (3) the Other Inventory Advance Rate will be 90%, (4) the Script
Lists Advance Rate will be 45% and (v) the Credit Card Receivable Advance Rate will be 90% and (ii) with respect to determination of the
FILO Borrowing Base Amount, (1) the Accounts Receivable Advance Rate will be 5%, (2) the Pharmaceutical Inventory Advance Rate will be
5%, (3) the Other Inventory Advance Rate will be 5%, (4) the Script Lists Advance Rate will be 15% and (5) the Credit Card Receivable
Advance Rate will be 5%. After the Closing Date, upon application of Net Cash Proceeds of a Specified Elixir Sale or an Elixir Monetization
Event (a) in an amount greater than or equal to $100,000,000 but less than $200,000,000 (in the aggregate for all such transactions),
the Script Lists Advance Rate for purposes of the FILO Borrowing Base Amount shall be reduced by an amount equal to 500 basis points and
(b) in an amount greater than or equal to $200,000,000 (in the aggregate for all such transactions), the Script Lists Advance Rate for
purposes of the FILO Borrowing Base Amount shall be reduced by an amount equal to 1,000 basis points; provided that if a Specified
Elixir Sale has not been consummated prior to March 1, 2024, then on such date, there shall be a reduction in the Script Lists Advance
Rate for purposes of the FILO Borrowing Base Amount by an amount equal to 500 basis points.
(b) The
establishment or increase of any reserve against the ABL Borrowing Base Amount or the FILO Borrowing Base Amount based on the Borrowing
Base Factors will be limited to the exercise by the Administrative Agent of its commercially reasonable judgment, and shall be made upon
at least two (2) Business Days’ prior written notice (which may be made by e-mail) to the Borrower (which written notice will include
a reasonably detailed description of the reserve being established or increased); provided that, notwithstanding the foregoing
to the contrary, no such prior written notice shall be required for changes to any reserves resulting solely by virtue of mathematical
calculations of the amount of the reserves in accordance with the methodology of calculation previously utilized or if an Event of Default
is continuing; provided further that, during such two (2) Business Day period, (i) the Borrower agrees that the Borrower shall
not be entitled to borrow Loans or request any issuance or increase of any Letters of Credit (A) to the extent the making of any such
Loans or issuance or increase of any such Letters of Credit, would cause the Total Revolving Outstandings to exceed the ABL Borrowing
Base Amount (determined as if such new or modified reserves were in effect) or (B) to the extent a Default under Section 6.12 (compliance
therewith being determined as if such new or modified reserves were in effect) would immediately result, and (ii) the Administrative Agent
shall be available to discuss any such reserve or modification to a reserve with the Borrower, and the Borrower may take any action that
may be required so that the event, condition or matter that is the basis for such reserve or modification no longer exists or exists in
a manner that would result in the establishment of a lower reserve or result in a lesser increase in any existing reserve, in each case,
in a manner and to the extent reasonably satisfactory to the Administrative Agent. Notwithstanding anything to the contrary herein, (x)
the amount of any reserve or change established in connection with the Borrowing Base Factors shall have a reasonable relationship to
the event, condition or other matter that is the basis for such reserve or such change and (y) no reserves or changes shall be duplicative
of reserves or changes already accounted for through eligibility criteria or advance rates.
SECTION
2.21. Incremental Loans. Subject to the last sentence of this Section 2.21,
at any time after the Closing Date and prior to the Latest Maturity Date, the Borrower may, by notice to the Administrative Agent (which
shall promptly deliver a copy to each of the Lenders), request the addition to this Agreement of (i) an incremental revolving credit facility
in the form of an increase in the Revolving Facility effected pursuant to either (x) additional commitments under any existing Class of
the Revolving Commitments (any such increase in such Revolving Commitments (including in respect of any existing Other Revolving Commitment
of any Other Revolving Commitment Series), an “Incremental Revolving Commitment”) or (y) the addition of a new tranche
of revolving commitments with pricing, maturity and/or other terms different from then existing Revolving Commitments as provided in this
Section 2.21 (any such additional tranche of revolving commitments, “Other Incremental Revolving Commitments”),
(ii) [reserved], or (iii) one or more new tranches of term loans (collectively “Incremental Refinancing Term Loans”)
constituting Refinancing Indebtedness in respect of Permitted First Priority Debt (an “Incremental Senior Debt Refinancing Facility”),
or any combination thereof (such Incremental Revolving Commitments, Other Incremental Revolving Commitments, Incremental Refinancing Term
Loans (in the form of an Incremental Senior Debt Refinancing Facility), collectively, the “Incremental Facilities”);
provided that no Split-Priority Term Loan Debt may be incurred as an Incremental Facility hereunder. The Incremental Facilities
shall (i) be in an aggregate principal amount not in excess of $0, (ii) rank pari passu in right of payment and of security
with the other Loans, and (iii) (A) if such Incremental Facility is an increase in the Revolving Facility pursuant to any Incremental
Revolving Commitment, such Incremental Facility shall be made on the same terms (including interest, payment and maturity terms), and
shall be subject to the same conditions as the applicable existing Class of Revolving Commitments to which such Incremental Revolving
Commitments relate (it being understood that customary arrangement or commitment fees payable to Arrangers or one or more Lenders or Additional
Lenders participating in such increase, as the case may be, may be different from those paid with respect to the existing Revolving Commitments
of the existing Revolving Lenders on or prior to the Closing Date or with respect to any other Lender in connection with any other Incremental
Facility), and (B) if such Incremental Facility is an increase in the Revolving Facility pursuant to Other Incremental Revolving
Commitments or if such Incremental Facility is in the form of Incremental Refinancing Term Loans, (x) such Incremental Facilities have
such pricing as may be agreed by the Borrower and the Administrative Agent, (y) in the case of any such Incremental Refinancing Term Loans,
shall amortize in a manner, and be subject to mandatory prepayments (if any) on terms, acceptable to the Administrative Agent, and mature
no earlier than the Latest Maturity date of the FILO Facility and any other then existing Incremental Refinancing Term Loans and (z) otherwise
be treated hereunder no more favorably than, in the case of Other Incremental Revolving Commitments, the Revolving Loans and Revolving
Commitments (other than any Revolving Loan under Other Revolving Commitments of any Revolving Commitment Series), and in the case of Incremental
Refinancing Term Loans, the outstanding FILO Loans and the FILO Facility and any other Incremental Refinancing Term Loans; provided
that the terms and provisions applicable to any Other Incremental Revolving Commitments or Incremental Refinancing Term Loans may provide
for additional or different financial or other covenants applicable only during periods after the Latest Maturity Date that is in effect
on the date of effectiveness of such Incremental Facility. At no time shall (i) the Total ABL Outstandings at such time exceed (ii) the
ABL Borrowing Base Amount in effect at such time, and the proceeds of the Incremental Facilities shall be used solely for the purposes
set forth in Section 5.10, and the proceeds of any Incremental Senior Debt Refinancing Facility shall be used solely to repay
Permitted First Priority Debt and interest and other amounts relating thereto that can be financed with Refinancing Indebtedness relating
to such Permitted First Priority Debt. Such notice shall set forth the requested amount and Class of Incremental Facilities, and shall
offer each Lender the opportunity to offer a commitment (the “Incremental Commitment”) to provide a portion of the
Incremental Facility by giving written notice of such offered commitment to the Administrative Agent and the Borrower within a time period
(the “Offer Period”) to be specified in the Borrower’s notice; provided, however, that no existing
Lender will be obligated to subscribe for any portion of such commitments. In the event that, at the expiration of the Offer Period, Lenders
shall have provided Commitments in an aggregate principal amount greater than the total amount of the Incremental Facility initially requested
by the Borrower, the commitments of the Lenders to the Incremental Facility shall be allocated ratably among the Lenders as agreed to
among the Borrower and the Administrative Agent. In the event that, at the expiration of the Offer Period, Lenders shall have provided
commitments in an aggregate principal amount less than the total amount of the Incremental Facility initially requested by the Borrower,
the Borrower may request that Incremental Facility commitments be made in a lesser amount equal to such commitments and/or shall have
the right to arrange for one or more Additional Lenders to extend commitments to provide a portion of the Incremental Facility in an aggregate
principal amount equal to the unsubscribed amount of the initial request; provided that the Additional Lenders shall be offered
the opportunity to provide the Incremental Facility only on terms previously offered to the existing Lenders pursuant to the immediately
preceding sentence. Commitments in respect of Incremental Facilities will become Commitments under this Agreement pursuant to an amendment
to this Agreement (such an amendment, an “Incremental Facility Amendment”) executed by each of the Borrower, each Subsidiary
Loan Party, each Lender agreeing to provide such Commitment, if any, each Additional Lender, if any, and the Administrative Agent. The
effectiveness of any Incremental Facility Amendment shall be subject to the satisfaction on the date thereof of each of the conditions
set forth in Section 4.02 of this Agreement as in effect on the Closing Date, such Incremental Facility (assuming that it
is fully drawn) being permitted under each indenture or other agreement governing any Material Indebtedness (giving pro forma effect to
all prepayments, repayments, defeasances and discharges of Indebtedness to be effected with the proceeds of such Loans as certified in
writing by a Responsible Officer of the Borrower) and such other conditions as are specified in the applicable Incremental Facility Amendment.
Notwithstanding anything to the contrary in this Agreement or in any other Senior Loan Document, no Incremental Facilities may be incurred
or established at any time on or after the Closing Date, unless the Administrative Agent and the Required Lenders shall otherwise consent
thereto in writing.
SECTION
2.22. Defaulting Lenders.
(a) Defaulting
Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender,
then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:
(i) Waivers
and Amendments. The Commitments, FILO Loans, Term Loans and Revolving Exposure of such Defaulting Lender shall not be included in
determining whether the Required Lenders or any other requisite Lenders have taken or may take any action hereunder or under any other
Senior Loan Document (including any consent to any amendment, waiver or other modification pursuant to Section 9.02); provided
that any amendment, waiver or other modification requiring the consent of all Lenders or all Lenders affected thereby shall, except as
otherwise provided in Section 9.02, require the consent of such Defaulting Lender in accordance with the terms hereof.
(ii) Defaulting
Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of
such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or otherwise) or received by the Administrative
Agent from a Defaulting Lender pursuant to Section 9.08 shall be applied at such time or times as may be determined by the Administrative
Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second,
to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to each Issuing Bank or the Swingline Lender; third,
to Cash Collateralize each Issuing Bank’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section
2.05(n); fourth, as the Borrower may request (so long as no Default exists), to the funding of any Loan in respect of which
such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent;
fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in
order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and
(y) Cash Collateralize the Issuing Bank’s future Fronting Exposure with respect to such Defaulting Lender with respect to future
Letters of Credit issued under this Agreement, in accordance with Section 2.05(n); sixth, to the payment of any amounts
owing to the Lenders or the Issuing Bank as a result of any judgment of a court of competent jurisdiction obtained by any Lender or the
Issuing Bank against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement;
seventh, so long as no Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court
of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach
of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent
jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or LC Disbursements in respect
of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit
were issued at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely
to pay the Loans of, and LC Disbursements owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment
of any Loans of, or LC Disbursements owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations
in Letters of Credit and Swingline Loans are held by the Lenders pro rata in accordance with the Commitments without giving effect to
Section 2.22(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held)
to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.22(a)(ii) shall be deemed paid
to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(iii) Certain
Fees.
(A) No
Defaulting Lender shall be entitled to receive any fee pursuant to Section 2.12(a) for any period during which that Lender is a
Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid
to that Defaulting Lender).
(B) Each
Defaulting Lender shall be entitled to receive fees in respect of Letters of Credit pursuant to Section 2.12(b) in respect of its
participations in Letters of Credit for any period during which that Lender is a Defaulting Lender only to the extent allocable to its
Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.05(n).
(C) With
respect to any participation fee in respect of Letters of Credit not required to be paid to any Defaulting Lender pursuant to clauses
(A) or (B) above, the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to
such Defaulting Lender with respect to such Defaulting Lender’s participation in Letters of Credit that has been reallocated to
such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to the Issuing Bank, the amount of any such fee otherwise payable
to such Defaulting Lender to the extent allocable to the Issuing Bank’s Fronting Exposure to such Defaulting Lender, and (z) not
be required to pay the remaining amount of any such fee.
(iv) Reallocation
of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in LC Exposure and
Swingline Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated
without regard to such Defaulting Lender’s Commitment) but only to the extent that such reallocation does not cause the aggregate
Revolving Exposure of any Non-Defaulting Lender to exceed such Lender’s Revolving Commitment. Subject to Section 9.22, no
reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from
that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s
increased exposure following such reallocation.
(v) Cash
Collateral, Repayment of Swingline Loans. If the reallocation described in clause (iv) above cannot, or can only partially, be effected,
the Borrower shall, without prejudice to any right or remedy available to it hereunder or under applicable law, (a) first, prepay
Swingline Loans in an amount equal to the Swingline Lender’s Fronting Exposure in respect of the Defaulting Lender and (b) second,
Cash Collateralize the Issuing Bank’s Fronting Exposure in respect of the Defaulting Lender in accordance with the procedures set
forth in Section 2.05(n).
(b) Defaulting
Lender Cure. If the Borrower, the Administrative Agent, each Swingline Lender and the Issuing Bank agree in writing that a
Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date
specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral),
that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other
actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters
of Credit and Swingline Loans to be held pro rata by the Lenders in accordance with the Commitments (without giving effect to Section
2.22(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively
with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided,
further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender
to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting
Lender.
(c) New
Swingline Loans/Letters of Credit. So long as any Lender is a Defaulting Lender, (i) each Swingline Lenders shall not be required
to fund any Swingline Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swingline Loan and
(ii) the Issuing Bank shall not be required to issue, amend, extend, renew or increase any Letter of Credit unless it is satisfied that
it will have no Fronting Exposure after giving effect thereto.
SECTION
2.23. Protective Advances.
(a) Notwithstanding
anything to the contrary contained in this Agreement, the Administrative Agent may, in its sole discretion, elect to make, or permit
to remain outstanding any Protective Advance. If a Protective Advance is made, or permitted to remain outstanding, pursuant to the preceding
sentence, then all Revolving Lenders shall be bound to make, or permit to remain outstanding, such Protective Advance based upon their
Applicable Revolving Percentage in accordance with the terms of this Agreement, regardless of whether the conditions to lending set forth
in Section 4.02 have been met. A Protective Advance may be made as a Revolving Loan, a Swingline Loan or as an issuance of
a Letter of Credit and each Revolving Lender (including the Swingline Lender) and each Issuing Bank, as applicable, agrees to make any
such requested Revolving Loan, Swingline Loan or Letter of Credit available to the Borrower. The obligation of each Revolving Lender (including
the Swingline Lender) and each Issuing Bank, as applicable, to participate in each Protective Advance shall be absolute and unconditional
and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right which such Person
may have against any other Lender, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a
Default, or (iii) any other occurrence, event or condition. The making or sufferance of any such Protective Advance on any one occasion
shall not obligate the Administrative Agent or any Revolving Lender to make or permit any Protective Advance on any other occasion. No
funding of a Protective Advance or sufferance of a Protective Advance shall constitute a waiver by the Administrative Agent or the Lenders
of any Event of Default caused thereby. In no event shall the Borrower or other Loan Party be deemed a beneficiary of this Section
2.23 nor authorized to enforce any of its terms. The Required Revolving Lenders may, upon not less than five (5) Business Days prior
written notice, revoke the authority of the Administrative Agent to make further Protective Advances.
(b) No
Protective Advance shall modify or abrogate any of the provisions of (i) Section 2.05 regarding the Revolving Lenders’
obligations to reimburse any LC Disbursement and to purchase participations with respect to LC Disbursements, respectively, or (ii) Section 2.04
regarding the Revolving Lenders’ obligations with respect to participations in applicable Swingline Loans and settlements thereof.
Notwithstanding anything herein to the contrary, no event or circumstance shall result in any claim or liability against the Administrative
Agent for any Unintentional Overadvances, and Unintentional Overadvances shall not reduce the amount of Protective Advances allowed hereunder.
(c) All
Protective Advances shall be payable by the Borrower on demand by the Administrative Agent or the Required Revolving Lenders. All
Overadvances (other than Overadvances constituting Protective Advances) shall be payable in accordance with the requirements of Section 2.11(b)(i).
All Protective Advances and Overadvances shall constitute Senior Loan Obligations secured by the Collateral and entitled to all benefits
of the Senior Loan Documents.
ARTICLE
III
Representations and Warranties
The Borrower represents and
warrants to the Lenders that:
SECTION
3.01. Organization; Powers. Each of the Borrower and the Subsidiaries is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to
carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where
such qualification is required.
SECTION
3.02. Authorization; Enforceability. Subject to entry by the Bankruptcy Court of the
Financing Order and any other applicable order of the Bankruptcy Court, the Transactions to be entered into by each Loan Party are within
such Loan Party’s corporate powers and have been duly authorized by all necessary corporate, limited liability company or similar
action and, if required, stockholder, member or similar action. Upon entry by the Bankruptcy Court of the Financing Order, this Agreement
will have been duly executed and delivered by the Borrower and will constitute, and each other Senior Loan Document to which any Loan
Party is to be a party, when executed and delivered by such Loan Party, will constitute, a legal, valid and binding obligation of the
Borrower or such Subsidiary Loan Party (as the case may be), enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles
of equity, regardless of whether considered in a proceeding in equity or at law.
SECTION
3.03. Governmental Approvals; No Conflicts. Except for the entry by the Bankruptcy
Court of the Financing Order, the Transactions (a) do not require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except filings necessary
to perfect Liens created under the Senior Loan Documents, (b) will not violate any applicable law or regulation or any order of any Governmental
Authority, except for such violations that, individually or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, (c) will not violate the charter, by-laws or other organizational documents of the Borrower or any of the Subsidiaries,
(d) will not violate or result in a default under any indenture, agreement or other instrument evidencing or governing Indebtedness
or any other material agreement binding upon the Borrower or any Subsidiary or its assets, or give rise to a right thereunder to require
any payment to be made by the Borrower or any Subsidiary, and (e) will not result in the creation or imposition of any Lien on any asset
of the Borrower or any Subsidiary, except Liens created under the Senior Loan Documents.
SECTION
3.04. Financial Condition; No Material Adverse Effect; Approved Budget.
(a) The
Borrower has heretofore furnished to the Lenders its consolidated balance sheet and statements of income, stockholders equity and cash
flows as of and for the fiscal year ended March 4, 2023, reported on by Deloitte & Touche LLP. Such financial statements
present fairly the financial position and results of operations and cash flows of the Borrower and its Consolidated Subsidiaries as of
such dates and for such periods in accordance with GAAP.
(b) Except
as disclosed (i) in the financial statements referred to in Section 3.04(a) or the notes thereto, (ii) in
the Borrower’s report or Form 10-K for the fiscal year ended March 4, 2023 or (iii) on Schedule 3.04, after
giving effect to the Transactions, none of the Borrower or the Subsidiaries has, as of the Closing Date, any material contingent liabilities,
unusual long-term loan commitments or unrealized losses.
(c) Since
the Petition Date, other than those events or circumstances customarily resulting from the commencement of the Chapter 11 Case,
no event or condition has occurred that has had or could be reasonably expected to have, either individually or in the aggregate, a Material
Adverse Effect.
(d) The
initial Approved Budget is attached to this Agreement as Annex I, which was furnished to the Administrative Agent on or prior to
the Closing Date, and each subsequent Approved Budget delivered in accordance with Section 5.19, has been (or when delivered,
will be) prepared by the Borrower (after consultation with the Company Financial Advisors) in good faith, with due care and based upon
assumptions the Borrower believed to be reasonable assumptions on the date of delivery of the then applicable Approved Budget. To the
knowledge of the Borrower, as of the Closing Date, no facts exist that, individually or in the aggregate, would result in any material
change to the Approved Budget for the period covered thereby.
SECTION
3.05. Properties.
(a)
(i) Each
of the Borrower and the Subsidiaries has good and marketable title to, or valid leasehold interests in, all its real and personal property
material to its business, except (A) for minor defects in title that do not interfere with its ability to conduct its business as currently
conducted or to utilize such properties for their intended purposes and (B) as set forth on Schedule 3.05(a)(1).
(ii) Schedule
3.05(a)(2) sets forth (A) the address (including street address and state) of all Owned Real Property and (B) the nature of use of
such Owned Real Property. None of the Owned Real Property is subject to any lease, license, sublease, assignment of leases or deed of
trust, except as otherwise set forth on such Schedule 3.05(a)(2).
(iii) Schedule 3.05(a)(3)
sets forth (A) the address (including street address and state) of all Ground-Leased Real Property and (B) the nature of use
of such Ground-Leased Real Property. No default by and Loan Party or any Subsidiary thereof has occurred and is continuing under any lease
pursuant to which a Loan Party leases Ground-Leased Real Property beyond any applicable notice or cure period, the result of which default
would result in termination of such lease or otherwise permit the ground lessor to terminate such ground lease, except to the extent set
forth on Schedule 3.05(a)(3).
All such real and
personal property are free and clear of all Liens, other than Liens permitted by Section 6.02.
(b) Each
of the Borrower and the Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and the Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
(c) Schedule 3.05(c)
sets forth the address of every Store, warehouse or distribution center of the Borrower and its Subsidiaries in which inventory
that is included in the determination of the ABL Borrowing Base Amount or the FILO Borrowing Base Amount is located as of the Closing
Date.
SECTION
3.06. Litigation and Environmental Matters.
(a) Except
as set forth on Schedule 3.06(a) and the Chapter 11 Case, there are no actions, suits or proceedings by or before any arbitrator
or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of
the Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined,
could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve any of
the Senior Loan Documents or the Transactions.
(b) Except
as set forth on Schedule 3.06(b) and except with respect to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of the Subsidiaries (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental
Law, (ii) has become subject to any Environmental Liability or (iii) has received notice of any claim with respect to
any Environmental Liability.
(c) Except
as set forth on Schedule 3.06(c), and except as could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (i) Hazardous Materials have not been released, discharged or disposed of, on any property currently or, to the knowledge
of any Loan Party, formerly owned or operated by any Loan Party or any Subsidiary thereof and (ii) neither the Borrower nor any of the
Subsidiaries are undertaking any investigation or assessment or remedial or response action relating to any actual or threatened release,
discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any Governmental
Authority or the requirements of any Environmental Law.
SECTION
3.07. Compliance with Laws and Agreements. Each of the Borrower and the Subsidiaries
is in compliance with (a) all laws, regulations and orders of any Governmental Authority applicable to it or its property (including HIPAA
and all other material healthcare laws and regulations) and (b) all indentures, agreements and other instruments binding upon it or its
property or assets, except where (i) the failure to be so, individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect or (ii) solely in the case of clause (b), any such non-compliance is subject to the Automatic Stay.
SECTION
3.08. Investment and Holding Company Status. Neither the Borrower nor any of the Subsidiaries
is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.
SECTION
3.09. Taxes. Each of the Borrower and the Subsidiaries has timely filed or caused to
be filed all Post-Petition United States Federal income Tax returns and reports and all other material Post-Petition Tax returns and reports
required to have been filed and has paid or caused to be paid all Post-Petition material Taxes required to have been paid, except (a)
where the payment of any such Taxes is being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary,
as applicable, has set aside on its books adequate reserves or (b) to the extent not required to be paid by the Bankruptcy Court. The
charges, accruals and reserves on the books of the Borrower and its Consolidated Subsidiaries in respect of Post-Petition Taxes or charges
imposed by a Governmental Authority are, in the opinion of the Borrower, adequate.
SECTION
3.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur, except
where failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
SECTION
3.11. Disclosure; Accuracy of Information.
(a) As
of the Closing Date, none of the reports, financial statements, certificates or other information, other than projections and other
information of a general economic or industry-specific nature, furnished by or on behalf of any Loan Party to any Agent or any Lender
in connection with the negotiation of this Agreement or any other Senior Loan Document or delivered hereunder or thereunder (as modified
or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary
to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided
that, with respect to projected financial information, financial estimates, forecasts and other forward-looking information, the Borrower
represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time so furnished.
(b) Each
Borrowing Base Certificate that has been or will be delivered to the Administrative Agent or any Lender is (or when delivered,
will be) complete and correct in all material respects.
SECTION
3.12. Subsidiaries. Schedule 3.12 sets forth the name of, and the ownership
interest of the Borrower in, each Subsidiary and identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of the Closing
Date.
SECTION
3.13. Insurance. Schedule 3.13 sets forth a description of all general liability,
property and casualty insurance maintained by or on behalf of the Borrower and the Subsidiaries as of the Closing Date and all such policies
of insurance are in full force and effect. The Borrower and the Subsidiaries have insurance, including self-insurance, in such amounts
and covering such risks and liabilities as are in accordance with normal industry practice for similarly situated Persons. The Borrower
reasonably believes that the insurance maintained by or on behalf of the Borrower and the Subsidiaries is adequate.
SECTION
3.14. Labor Matters. Except as set forth on Schedule 3.14, as of the Closing
Date, there are no strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending or, to the knowledge of the Borrower,
threatened which could reasonably be expected to result in a Material Adverse Effect. Except as set forth on Schedule 3.14, the
hours worked by and payments made to employees of the Borrower and the Subsidiaries have not been in violation in any material respect
of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters. Except as set
forth on Schedule 3.14, all payments due from the Borrower or any Subsidiary, or for which any claim may be made against the Borrower
or any Subsidiary, on account of wages, have been paid or accrued as a liability on the books of the Borrower or such Subsidiary. Except
as set forth on Schedule 3.14, the consummation of the Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement to which the Borrower or any Subsidiary is bound.
SECTION
3.15. Real Estate Leases. Except as set forth on Schedule 3.15, (a) each Real
Estate Lease for a Store location or leased warehouse or distribution center location of a Loan Party is enforceable (except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally
and by general principles of equity) against the lessor thereof in accordance with its terms and is in full force and effect and (b) subject
to the applicability of Section 365(d)(3) of the Bankruptcy Code, other than for defaults arising as a result of the commencement
of the Chapter 11 Case, the Loan Parties are not in default of the material terms of any such Real Estate Lease beyond the applicable
notice and cure period set forth therein; provided that the representation set forth in this Section 3.15 shall not apply
to (i) any Real Estate Lease relating to a Store or other real property location subject to a Specified Sale Transaction or the Specified
Store Closing Sale after (x) the completion of such Specified Sale Transaction or the Specified Store Closing Sale in respect of such
location and (y) the effective date of the rejection of the applicable Real Estate Lease or (ii) any Real Estate Lease rejected in accordance
with the procedures set forth in Section 5.23.
SECTION
3.16. Federal Reserve Regulations.
(a) Neither
the Borrower nor any Subsidiary is engaged principally, or as one of its important activities, in the business of extending credit for
the purpose of buying or carrying Margin Stock.
(b) No
part of the proceeds of any Loan or any Letter of Credit will be used by the Borrower or any Subsidiary, whether directly or indirectly,
and whether immediately, incidentally or ultimately, for any purpose that entails a violation of the provisions of Regulation T,
U or X of the Board.
SECTION
3.17. Security Interests. Subject to entry of the Financing Order by the Bankruptcy
Court, the Senior Collateral Documents are effective to create in favor of the Senior Collateral Agent, for the ratable benefit of the
Senior Secured Parties, a legal, valid and enforceable security interest in the Collateral, and such security interest shall constitute
a fully perfected Lien on, and security interest in, all right, title and interest of the grantors thereunder in the Collateral, with
the priority set forth in the Financing Order.
SECTION
3.18. Use of Proceeds. The Borrower will use the proceeds of the Loans and will request
the issuance of Letters of Credit only for the purposes permitted by Section 5.10.
SECTION
3.19. Anti-Corruption Laws and Sanctions. The Borrower has implemented and maintains
in effect policies and procedures reasonably designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors,
officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. Neither the Borrower nor any of its Subsidiaries nor,
to the knowledge of the Borrower or such Subsidiary, any director, officer, employee or agent of the Borrower or such Subsidiary (a) is
a Sanctioned Person or a Sanctioned Entity, (b) has any assets located in Sanctioned Entities, or (c) derives revenues from investments
in, or transactions with Sanctioned Persons or Sanctioned Entities in violation of applicable Sanctions. The Borrower, its Subsidiaries
and their respective officers and employees and, to the knowledge of the Borrower, its directors and agents, are in compliance with Anti-Corruption
Laws and applicable Sanctions in all material respects. None of (i) the Borrower, any Subsidiary or, to the knowledge of the Borrower
or such Subsidiary, any of their respective directors, officers or employees, or (ii) to the knowledge of the Borrower, any agent, affiliate
or representative of the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility
established hereby, is a Sanctioned Person or is located in a Sanctioned Country. The Transactions will not violate Anti-Corruption Laws
or applicable Sanctions.
SECTION
3.20. Affected Financial Institutions; Covered Entities. None of the Borrower or any
Subsidiary is (a) an Affected Financial Institution or (b) a Covered Entity.
SECTION
3.21. Chapter 11 Case Matters.
(a) The
Chapter 11 Case was commenced on the Petition Date in accordance with applicable law and notice of (i) the motion seeking approval of
the Senior Loan Documents and the Interim Financing Order and the Final Financing Order, (ii) the hearing for the entry of the Interim
Financing Order and (iii) the hearing for the entry of the Final Financing Order, in each case, has been or will be given in accordance
with applicable law and the Bankruptcy Rules.
(b) After
the entry of the Interim Financing Order, and pursuant to and to the extent permitted in the Financing Order, the Senior Obligations
will constitute allowed administrative expense claims in the Chapter 11 Case having priority over all administrative expense claims and
unsecured claims against the Loan Parties now existing or hereafter arising, of any kind whatsoever, including all administrative expense
claims of the kind specified in Sections 105, 326, 328, 330, 331, 503(a), 503(b), 506(c) (after entry of the Final Financing Order), 507(a),
507(b), 546(c), 546(d), 726, 1114 or any other provision of the Bankruptcy Code or otherwise, as provided under Section 364(c)(l) of the
Bankruptcy Code, subject to (i) the Carve Out and (ii) the priorities set forth in the Financing Order.
(c) After
the entry of the Interim Financing Order and pursuant to and to the extent permitted in the Financing Order, the Senior Obligations
will be secured by a valid and perfected first priority Lien on all of the Collateral, subject, as to priority only, to (i) the Carve
Out, (ii) the Permitted Prior Liens, (iii) the pari passu Liens securing the ABL Term Loan Obligations, to the extent permitted
by Section 6.02(a)(iii), and (iv) solely with respect to the Split-Lien Priority Collateral, the Liens securing the Existing Split-Priority
Indebtedness, to the extent permitted by Section 6.02(a)(iv).
(d) The
Interim Financing Order (with respect to the period on and after entry of the Interim Financing Order and prior to the Final Order Entry
Date) and the Final Financing Order (with respect to the period on and after the Final Order Entry Date), as the case may be, once
entered, is in full force and effect and has not been reversed, stayed (whether by statutory stay or otherwise), modified or amended.
(e) Notwithstanding
the provisions of Section 362 of the Bankruptcy Code, and subject to the applicable provisions of the Financing Order, upon the maturity
(whether by acceleration or otherwise) of any of the Senior Obligations, the Lenders shall be entitled to immediate payment of
such Senior Obligations (together with any outstanding Pre-Petition Obligations) and to enforce the remedies provided for hereunder, under
the other Senior Loan Documents or under applicable law, without further application to or order by the Bankruptcy Court.
ARTICLE
IV
Conditions
SECTION
4.01. Conditions Precedent to Effectiveness. This Agreement and the obligations of
the Lenders to make Loans and acquire participations in Letters of Credit and Swingline Loans of the Swingline Lender to make Swingline
Loans and of the Issuing Banks to issue Letters of Credit hereunder shall not become effective until the date on which the each of the
following conditions shall have been satisfied or waived in accordance with Section 9.02, except to the extent such conditions
are subject to Section 5.24:
(a) Senior
Loan Documents. The Administrative Agent (or its counsel) shall have received from each Loan Party and each Lender either (i)
a counterpart of this Agreement, the Senior Security Agreement, the Senior Subsidiary Guarantee Agreement, the Senior Indemnity
Subrogation and Contribution Agreement and each promissory note (for each Lender requesting a promissory note no later than three (3)
Business Days prior to the Closing Date) signed on behalf of each such party thereto or (ii) written evidence reasonably satisfactory
to the Administrative Agent (which may include facsimile transmission or electronic .pdf copy of a signed signature page of the agreements
referred to in the foregoing clause (i)) that each such party has signed a counterpart of the agreements referred to in the foregoing
clause (i) to which it is a party.
(b) Searches
and Collateral Matters. The Administrative Agent shall have received (i) the results of (x) searches of the Uniform Commercial Code
filings (or equivalent filings) and (y) judgment and tax lien searches, made with respect to the Loan Parties in the states or other jurisdictions
of formation of such Person and with respect to such other locations and names disclosed to the Administrative Agent, together
with copies of the financing statements (or similar documents) disclosed by such searches, and (ii) evidence of the completion of all
other actions, recordings and filings of, or with respect to, any Senior Collateral Document (or evidence that such actions, recordings
or filings will be completed substantially concurrently with the effectiveness of this Agreement and the Interim Financing Order) that
the Administrative Agent may deem necessary in order to satisfy the Collateral and Guarantee Requirement, including the entry by the Bankruptcy
Court of the Interim Financing Order.
(c) Opinions
of Counsel. The Administrative Agent shall have received a customary written opinion (addressed to the Administrative Agent
and the Lenders and dated as of the Closing Date) of Kirkland & Ellis LLP, counsel for the Loan Parties, covering
corporate authority matters and other customary matters consistent with debtor-in-possession credit facility opinions previously
delivered by Kirkland & Ellis LLP to Bank of America. The Borrower, on behalf of itself and each of the Subsidiary Loan Parties, hereby
requests such counsel to deliver such opinion.
(d) Secretary’s
Certificates; Corporate Authority. The Administrative Agent shall have received (i) a copy of the certificate or articles of incorporation
or organization (or similar organizational document), including all amendments thereto, of each Loan Party, certified, if applicable,
as of a recent date by the Secretary of State of the state of its organization, and a certificate as to the good standing (or local
equivalent) of each Loan Party (to the extent available in the relevant jurisdiction) as of a recent date, from such Secretary of State
or similar Governmental Authority; (ii) a certificate of the Secretary or Assistant Secretary of each Loan Party dated the Closing Date
and certifying (A) that attached thereto is a true and complete copy of the by-laws or operating (or limited liability company) agreement
(or similar governing document) of such Loan Party as in effect on the Closing Date and at all times since a date prior to the date of
the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions duly adopted
by the board of directors (or equivalent governing body) of such Loan Party authorizing the execution, delivery and performance of the
Senior Loan Documents to which such Person is a party, the Transactions and, in the case of the Borrower, the borrowings hereunder, and
that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the certificate or articles
of incorporation or formation of such Loan Party have not been amended since the date of the last amendment thereto shown on the certificate
of good standing furnished pursuant to clause (i) above, and (D) as to the incumbency and specimen signature of each officer executing
any Senior Loan Document or any other document delivered in connection herewith on behalf of such Loan Party; and (iii) a certificate
of another officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing the certificate pursuant
to clause (ii) above.
(e) Officer’s
Closing Certificate. The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower (i)
certifying that the conditions specified in Sections 4.01(l) through (n) have been satisfied and (ii) attaching a
true, correct and complete copy of (A) the Intercompany Inventory Purchase Agreement, as amended, and (B) the ABL Term Loan Agreement,
and in each case, certifying that such document is in full force and effect.
(f) Approved
Budget. The Administrative Agent shall have received the initial Approved Budget.
(g) Transaction
Funds Flow. The Administrative Agent shall have received a funds flow agreement relating to the Transactions (the “Transaction
Funds Flow”), in form and substance satisfactory to the Administrative Agent, duly executed by the Borrower, the Administrative
Agent and the other parties thereto.
(h) ABL
Intercreditor Agreement and ABL Term Loan Facility. The Administrative Agent shall have received the ABL Intercreditor Agreement,
duly executed by the parties thereto (and acknowledged by the Loan Parties), and substantially concurrently with the effectiveness of
this Agreement in accordance with this Section 4.01, (i) the ABL Term Loan Agreement and the other ABL Term Loan Documents to be
entered into on the date hereof shall be in full force and effect and (ii) the Net Cash Proceeds of the ABL Term Loans shall be disbursed
pursuant to the Transaction Funds Flow and otherwise is a manner consistent with the terms of the ABL Term Loan Agreement.
(i) Borrowing
Base Certificate; ABL Availability. The Administrative Agent and the Lenders shall have received a Borrowing Base Certificate,
as of October 7, 2023, executed by a Financial Officer of the Borrower, demonstrating that there shall be no less than $375,000,000 of
ABL Availability after giving pro forma effect to the Transactions on the Closing Date (including the incurrence of all Loans and Letters
of Credit on the Closing Date and the application of collections on the Closing Date).
(j) Insurance.
The Administrative Agent shall be satisfied with the amount, types and terms and conditions of all insurance maintained by the Borrower
and the Subsidiary Loan Parties (it being acknowledged and agreed by the Administrative Agent that the insurance identified on
Schedule 3.13 to this Agreement satisfies the condition in this Section 4.01(j)).
(k) Bankruptcy
Matters.
(i) The
Administrative Agent shall have received duly executed copies of the engagement letters for the Company Financial Advisors, which shall
be on terms and conditions reasonably acceptable to the Administrative Agent; it being agreed that the terms and conditions of the existing
engagements of Alvarez & Marsal North America, LLC and Guggenheim Securities, LLC as Company Financial Advisors are acceptable to
the Administrative Agent.
(ii) (A)
The Bankruptcy Court shall have entered the Interim Financing Order and the Cash Management Order, and (B) neither the Interim Financing
Order nor the Cash Management Order shall have been (1) stayed, vacated or reversed (in whole or in part as of the Closing Date) or (2)
amended or modified other than with the consent of the Administrative Agent.
(iii) (A)
The Administrative Agent shall have received drafts of the “first day” pleadings for the Chapter 11 Case, in each case, in
form and substance reasonably satisfactory to the Administrative Agent not later than a reasonable time in advance of the Petition Date
for the Administrative Agent’s counsel to review and analyze the same; and (B) all motions, orders (including the “first day”
orders) and other documents to be filed with and submitted to the Bankruptcy Court on the Petition Date shall cover such matters, and
be in form and substance, reasonably satisfactory to the Administrative Agent, and the Bankruptcy Court shall have approved and entered
all “first day” orders.
(iv) To
the extent a Restructuring Support Agreement is to be entered into on or prior to the Closing Date, such Restructuring Support agreement
shall be on terms and conditions acceptable to the Administrative Agent, and duly executed by the parties thereto.
(l) No
Material Adverse Effect. Since the Petition Date, other than those events or circumstances customarily resulting from the commencement
of the Chapter 11 Case, no event or condition has occurred that has had or could be reasonably expected to have, either individually or
in the aggregate, a Material Adverse Effect.
(m) Representations
and Warranties. The representations and warranties of the Loan Parties contained in each Senior Loan Document (including in
Article III of this Agreement) are true and correct in all material respects on and as of the Closing Date, after giving effect
to this Agreement and the consummation of the Transactions taking place on the Closing Date, as though made on and as of the Closing Date
(except to the extent any such representation or warranty expressly relates to an earlier date, in which case such representation and
warranty shall have been true and correct in all material respects as of such earlier date); provided that any representation or
warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and
correct in all respects on such respective dates.
(n) No
Default. No Default or Event of Default exists or has occurred and is continuing on and as of the Closing Date or, after giving
effect to this Agreement and the consummation of the Transactions taking place on the Closing Date, would result from the consummation
of the Transactions taking place on the Closing Date.
(o) USA
Patriot Act; KYC. The Administrative Agent and the Lenders shall have received, at least two (2) Business Days prior to the
Closing Date, all documentation and other information required by US Governmental Authorities under applicable “know your customer”
and anti-money laundering rules and regulations, including the USA Patriot Act and, with respect to any Loan Party that qualifies as a
“legal entity customer” under the Beneficial Ownership Regulation, a Beneficial Ownership Certification with respect to such
Loan Party, that shall have been reasonably requested by the Administrative Agent not less than five (5) Business Days prior to the Closing
Date.
(p) Fees
and Expenses. Substantially concurrently with the effectiveness of this Agreement in accordance with this Section 4.01,
(i) the Administrative Agent, the applicable Arrangers and the Lenders shall have received payment of all fees and other amounts due and
payable on the Closing Date pursuant to the fee letters (including the Fee Letter) executed and delivered by the Borrower in favor of
the Administrative Agent, such Arrangers or the Lenders (or any other their respective affiliates) in respect of the Transactions and
(ii) the Administrative Agent shall have received reimbursement or payment of all out-of-pocket expenses required to be reimbursed or
paid by the Borrower under this Agreement or any other Senior Loan Document and, in the case of this clause (ii), invoiced at least
one (1) day prior to the Closing Date.
Without limiting the generality
of the provisions of the last paragraph of Section 8.03, for purposes of determining compliance with the conditions specified
in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or
to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory
to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying
its objection thereto.
SECTION
4.02. Conditions Precedent to each Credit Event. The obligation of each Lender to make
a Loan on the occasion of any Borrowing on or after the Closing Date, and of each Issuing Bank to issue, amend, renew or extend any Letter
of Credit on or after the Closing Date, is subject to the satisfaction of the following conditions (each Borrowing and each issuance,
amendment, renewal or extension of a Letter of Credit (for purposes of this Section, an “issuance”) shall be deemed to constitute
a representation and warranty by Borrower on the date thereof as to the matters specified in Sections 4.02(b) through (f)
below):
(a) Appropriate
Notice. The Administrative Agent shall have received, in the case of a Borrowing, a Borrowing Request as required by Article
II, and in the case of the issuance, of a Letter of Credit, the Administrative Agent and the applicable Issuing Bank shall have received
notice with respect thereto in accordance with Article II;
(b) Representations
and Warranties. The representations and warranties of the Loan Parties contained in each Senior Loan Document (including in
Article III of this Agreement) are true and correct in all material respects on and as of the date of such Borrowing or issuance,
before and after giving effect to such Borrowing or issuance and to the application of the proceeds therefrom, as though made on and as
of such date (except to the extent any such representation or warranty expressly relates to an earlier date, in which case such representation
and warranty shall have been true and correct in all material respects as of such earlier date); provided that any representation
or warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true
and correct in all respects on such respective dates;
(c) No
Default or Event of Default. No event has occurred and is continuing, or would result from such Borrowing or issuance or from the
application of the proceeds therefrom, that constitutes a Default or an Event of Default;
(d) Credit
Extension Conditions. After giving effect to such Borrowing or issuance of any Letter of Credit, each of the Credit Extension Conditions
shall be satisfied; and
(e) ABL
Term Loan Proceeds. Solely in the case of a Borrowing of Revolving Loans, concurrently with or immediately after giving effect to
such Borrowing, the Borrower (i) shall have borrowed the full amount of the ABL Term Loans and (ii) shall have applied the proceeds of
the ABL Term Loans to fund its working capital needs (i.e., such proceeds are no longer on the Loan Parties’ balance sheet), in
each case, in accordance with the terms of the ABL Term Loan Agreement.
(f) Financing
Order. (i) The Interim Financing Order shall have been entered or the Final Financing Order shall have been entered following the
expiration of the Interim Financing Order; (ii) the Financing Order shall not have been vacated, stayed, reversed, modified, or amended
without the Administrative Agent’s consent and shall otherwise be in full force and effect; (iii) no motion for reconsideration
of the Financing Order shall have been timely filed by a Loan Party or any of their Subsidiaries; and (iv) no appeal of the Financing
Order shall have been timely filed.
The
conditions set forth in this Section 4.02 are for the sole benefit of the Senior Loan Secured Parties but until the Required
Revolving Lenders (in the case of any credit extension under the Revolving Facility), the Required FILO Lenders (in the case of any credit
extension under the FILO Facility) or the Required Term Lenders (in the case of any credit extension under the Term Facility), as applicable,
otherwise direct the Administrative Agent to cease making Loans and the Issuing Banks to cease issuing Letters of Credit, the Lenders
will fund their Applicable Percentage of all Loans and participate in all Swingline Loans and Letters of Credit whenever made or issued,
which are requested by the Borrower and which, notwithstanding the failure of the Loan Parties to comply with the provisions of
this ARTICLE IV, agreed to by the Administrative Agent, provided, however, the making of any such Loans or the
issuance of any Letters of Credit shall not be deemed a modification or waiver by any Senior Loan Secured Party of the provisions of this
ARTICLE IV on any future occasion or a waiver of any rights or the Senior Loan Secured Parties as a result of any such failure
to comply.
ARTICLE
V
Affirmative Covenants
Until the Senior Loan Obligation
Payment Date, the Borrower covenants and agrees with the Lenders that:
SECTION
5.01. Financial Statements and Other Information. The Borrower will furnish
to the Administrative Agent and (except in the case of Section 5.01(h)) each Lender:
(a) as
soon as available and in any event within 90 days (or such earlier date that is 10 days after the then-current filing
deadline for the Borrower’s Annual Report on Form 10-K) after the end of each fiscal year of the Borrower, its audited consolidated
balance sheet and related statements of income and cash flows as of the end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by Deloitte & Touche LLP or another registered independent public accounting
firm of recognized national standing (without a “going concern” or like qualification or exception and without any material
qualification or exception as to the scope of such audit, except as a result of the Chapter 11 Case) to the effect that such consolidated
financial statements present fairly in all material respects the financial position, results of operations and cash flows of the Borrower
and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP;
(b) (i)
as soon as available and in any event within 45 days (or such earlier date that is five days after the then-current filing deadline
for the Borrower’s Quarterly Report on Form 10-Q) after the end of each of the first three fiscal quarters of each fiscal year of
the Borrower, its consolidated balance sheet as of the end of such fiscal quarter and related statements of income for such fiscal quarter
and of income and cash flows for the then elapsed portion of such fiscal year, setting forth in each case in comparative form the figures
for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year and (ii)
as soon as available and in any event within 30 days after the end of each fiscal month of the Borrower, its consolidated balance
sheet as of the end of such fiscal month and related statements of income for such fiscal month and of income and cash flows for the then
elapsed portion of such fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods
of (or, in the case of the balance sheet, as of the end of) the previous fiscal year;
(c) concurrently
with any delivery of financial statements under Section 5.01(a) or (b), a Compliance Certificate (i) certifying
as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to
be taken with respect thereto, (ii) stating whether any change in GAAP or in the application thereof has occurred since the date
of the Borrower’s audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying
the effect of such change on the financial statements accompanying such certificate, (iii) setting forth the aggregate sale price
of Eligible Script Lists sold since the most recent date on which the Eligible Script Lists Value was provided to the Lenders, and (iv) reporting
and certifying as to such other matters as may be required thereby in connection with any delivery of a Compliance Certificate pursuant
to this Section 5.01(c) (as set forth in Exhibit E);
(d) (i) as
soon as practicable in advance of filing with the Bankruptcy Court or delivering to the Statutory Committee, if any, or to the U.S. Trustee,
as the case may be, the Final Financing Order, all other material proposed orders and pleadings related to (x) the Chapter 11 Case
(all of which must be in form and substance satisfactory to the Administrative Agent), (y) the Senior Obligations or the Pre-Petition
Senior Obligations, and/or (z) any Chapter 11 Case Milestones (all of which must be in form and substance satisfactory to the Administrative
Agent) and (ii) substantially simultaneously with the filing with the Bankruptcy Court or delivering to the Statutory Committee,
if any, or to the U.S. Trustee, as the case may be, monthly operating reports and all other notices, filings, motions, pleadings or other
information concerning the financial condition of the Loan Parties and their Subsidiaries or the Chapter 11 Case that may be filed with
the Bankruptcy Court or delivered to the Statutory Committee, if any, or to the U.S. Trustee;
(e) within
three (3) Business Days after the end of each fiscal month of the Borrower, a certificate of a Financial Officer setting forth in
reasonable detail a description of each disposition of assets not in the ordinary course of business (other than in connection with the
Specified Store Closing Sales) 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 $1,000,000;
(f) by
not later than 5:00 p.m., on the fourth Business Day of each week (but in any event not later than Friday of such week) (commencing
with the first such day of the first full calendar week following the Petition Date), a Borrowing Base Certificate showing the ABL Borrowing
Base Amount, the FILO Borrowing Base Amount and the ABL Term Loan Borrowing Base Amount, in each case, as of the close of business on
the last day of the Borrower’s most recent fiscal week;
(g) no
later than 60 days following the end of each fiscal year of the Borrower (or, in the reasonable discretion of the Administrative
Agent, no later than 30 days after the end of such 60-day period), forecasts for the Borrower and its Consolidated Subsidiaries of
(i) quarterly consolidated balance sheet data and related consolidated statements of income and cash flows for each quarter in the
next succeeding fiscal year, (ii) consolidated balance sheet data and related consolidated statements of income and cash flows for
each of the five fiscal years immediately following such fiscal year (or, if shorter, each fiscal year following such fiscal year through
the Latest Maturity Date) and (iii) month-end ABL Availability for each of the 12 months in the next succeeding fiscal year;
(h) not
later than 30 days prior to the commencement of each fiscal year, a certificate of a Financial Officer setting forth the end dates of
each of the fiscal quarters in such fiscal year;
(i) promptly
after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the
Borrower or any Subsidiary with the SEC, or with any national securities exchange, or distributed by the Borrower to its shareholders
generally, as the case may be;
(j) promptly
following any request therefor, information and documentation reasonably requested by the Administrative Agent or any Lender for purposes
of compliance with applicable “know your customer” and anti-money-laundering rules and regulations, including the USA
PATRIOT Act and the Beneficial Ownership Regulation;
(k) promptly
following any request therefor, such other information regarding the financial condition, business or identity of the Borrower or any
Subsidiary, or compliance with the terms of any Senior Loan Document, as any Agent, at the request of any Lender, may reasonably request,
including any information to be provided pursuant to Section 9.17 (provided that neither the Borrower nor any Subsidiary
shall be required to deliver any information or other documentation pursuant to this Section 5.01(k) that (i) constitutes
trade secrets or proprietary information, (ii) in respect of which disclosure to any Agent or any Lender (or their respective representatives
or contractors) is prohibited by applicable law, court order or regulation or any contractual obligation or (iii) is subject to attorney-client
or similar privilege or constitutes attorney work product; provided, however, that, in the event that any such Person not
provide any document or information in reliance on the foregoing clauses (ii) or (iii), such Person shall provide notice
to the Administrative Agent that such documents or information is being withheld and such Person shall use commercially reasonable efforts
to communicate the applicable documents or information in a way that would not violate the applicable obligation or risk waiver of such
privilege); and
(l) within
two (2) Business Days after the delivery thereof to the applicable recipient, (i) any reports, budgets, or other written information
or (ii) any indications of interest, term sheets or draft purchase or agency agreements (or similar documents) with respect to any
potential Specified Sale Transaction, Elixir Monetization Event or Permitted Real Estate Disposition, in each case, provided to (A) the
ABL Term Loan Agent or the ABL Term Lenders (or their respective advisors), whether pursuant to the ABL Term Loan Documents or otherwise
or (B) the holders of the Existing Secured Indenture Indebtedness or their applicable debt representative (or their respective advisors)
or any party to the Restructuring Support Agreement (or their respective advisors), whether pursuant to any agreements evidencing the
Existing Split-Priority Indebtedness, the Restructuring Support Agreement or otherwise.
Documents required to be delivered
pursuant to Section 5.01(a), (b) or (i) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date
(i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the
website address listed on Schedule 9.01 (or such other website as may be identified by the Borrower to the Administrative Agent
from time to time); or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website,
if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored
by the Administrative Agent); provided that: (x) to the extent reasonably required by the Administrative Agent or any Lender
as a result of any regulatory requirements, internal guidelines, compliance requirements or systems limitations, the Borrower shall deliver
paper copies of such documents to the Administrative Agent or any Lender upon its written request to the Borrower to deliver such paper
copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender, and (y) the
Borrower shall notify the Administrative Agent (by facsimile or electronic mail) of the posting of any such documents and, promptly following
the Administrative Agent’s written request therefor, provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain
paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with
any such request by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.
The Borrower hereby acknowledges
that (a) the Administrative Agent and/or the Arrangers may, but shall not be obligated to, make available to the Lenders and the
Issuing Banks materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”)
by posting the Borrower Materials on IntraLinks, Syndtrak, ClearPar, or a substantially similar electronic transmission system (the “Platform”)
and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material
non-public information with respect to the Borrower or its Subsidiaries, or the respective securities of any of the foregoing, and who
may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower hereby agrees
that it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public
Lenders and that (w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum,
shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials
“PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Arrangers, the Issuing Banks and the
Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary)
with respect to the Borrower or its securities for purposes of United States Federal and state securities laws (provided, however,
that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 9.12); (y) all
Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public
Side Information;” and (z) the Administrative Agent and the Arranger shall be entitled to treat any Borrower Materials that
are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side
Information.” Notwithstanding the foregoing, the Borrower shall be under no obligation to mark any Borrower Materials “PUBLIC”.
SECTION 5.02. Notices
of Material Events. The Borrower will furnish to the Administrative Agent and each Lender prompt written notice after any Responsible
Officer of the Borrower obtains knowledge of any of the following:
(a) the
occurrence of any Default;
(b) the
filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the
Borrower or any Subsidiary thereof that could reasonably be expected to result in a Material Adverse Effect;
(c) the
occurrence of any one or more ERISA Events that that could reasonably be expected to result in a Material Adverse Effect;
(d) (i) any
Lien (other than Permitted Encumbrances and security interests created under any Senior Loan Document, Second Priority Debt Document,
Split-Priority Debt Document or ABL Term Loan Document) on any material portion of the Collateral; or (ii) any casualty event relating
to a material portion of the Collateral;
(e) the
occurrence of any other event which could reasonably be expected to have a material adverse effect on the security interests created by
the Senior Loan Documents for the benefit of the Senior Loan Secured Parties or on the aggregate value of the Collateral;
(f) any
breach by any party to the Restructuring Support Agreement of its obligations thereunder (or receipt of any written notice sent by (or
on behalf of) a party to the Restructuring Support Agreement claiming any such breach) or any termination of the Restructuring Support
Agreement (or receipt of any written notice sent by (or on behalf of) a party to the Restructuring Support Agreement claiming or threatening
to terminate the Restructuring Support Agreement); and
(g) any
other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under Section 5.02
above shall be accompanied by a statement of a Responsible Officer or other executive officer of the Borrower setting forth the details
of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.03. Information
Regarding Collateral. The Borrower will furnish to the Administrative Agent prompt written notice of any change (i) in any Loan
Party’s corporate name, (ii) in the location of any Loan Party’s jurisdiction of incorporation or organization, or (iii) in
any Loan Party’s form of organization. The Borrower agrees not to effect or permit any change referred to in the preceding sentence
unless all filings have been made (or arrangements have been approved by the Administrative Agent, acting reasonably, for such filings
to be made) under the Uniform Commercial Code or otherwise that are required in order for the Senior Collateral Agent to continue at all
times following such change to have a valid, legal and perfected security interest in all the Collateral for the benefit of the Senior
Loan Secured Parties.
SECTION 5.04. Existence;
Conduct of Business. Except as otherwise permitted by this Agreement, the Borrower will continue, and will cause each Subsidiary to
continue, to engage in business of the same general type as now conducted by the Borrower and including any related or supplemental business.
The Borrower will, and will cause each of the Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep
in full force and effect its legal existence and the rights, licenses, permits, privileges, and franchises, in each case material to the
conduct of its business; provided that the foregoing shall not prohibit any merger, consolidation, liquidation, dissolution or
sale of assets permitted under Section 6.03.
SECTION 5.05. Payment
of Obligations. The Borrower will, and will cause each of the Subsidiaries to, pay its Indebtedness and other obligations, including
Tax liabilities, which, if unpaid, could result in a material Lien on any of their properties or assets, before the same shall become
delinquent or in default, except where (a) (i) the validity or amount thereof is being contested in good faith by appropriate
proceedings, and (ii) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance
with GAAP, (b) enforcement of the non-payment thereof is or would be subject to the Automatic Stay, or (c) the failure to make
payment could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.06. Maintenance
of Properties. The Borrower will, and will cause each of the Subsidiaries to, keep and maintain all property used in the conduct of
its business in good working order and condition, ordinary wear and tear excepted, except where failure to do so, individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.07. Insurance.
(a) The
Borrower will, and will cause each of the Subsidiaries to, maintain (either in the name of the Borrower or in such Subsidiary’s
own name), with financially sound and reputable insurance companies insurance in such amounts (with no greater risk retention) and against
such risks as are customarily maintained by companies of established repute engaged in the same or similar businesses operating in the
same or similar locations. The Borrower will furnish to the Lenders, upon request of the Agents, information in reasonable detail as to
the insurance so maintained.
(b) The
Borrower will, and will cause each of the Subsidiary Loan Parties to, (i) cause all such policies to be endorsed or otherwise amended
to include a “standard” or “New York” lender’s loss payable endorsement, in form and substance satisfactory
to the Agents, which endorsement shall provide that, if the insurance carrier shall have received written notice from the Administrative
Agent of the occurrence of an Event of Default, the insurance carrier shall pay all proceeds otherwise payable to the Borrower and any
other Loan Party under such policies directly to the Senior Collateral Agent for application to the Senior Obligations (in accordance
with the terms of this Agreements and the Intercreditor Agreements, if applicable); (ii) cause all such policies to provide that
none of the Borrower, the Subsidiary Loan Parties, the Administrative Agent, the Collateral Agent, the Senior Collateral Agent or any
other party shall be a coinsurer thereunder and to contain a “Replacement Cost Endorsement”, without any deduction for depreciation,
and such other provisions as the Agents may reasonably require from time to time to protect their interests; (iii) deliver broker’s
certificates to the Senior Collateral Agent naming it as “additional insured” under the applicable policy; and (iv) cause
each such policy to provide that it shall not be canceled or not renewed by reason of nonpayment of premium upon not less than 10 days’
prior written notice thereof by the insurer to the Senior Collateral Agent (giving 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 Collateral Agent, in each case with such modifications as the Administrative Agent may approve, acting reasonably.
(c) In
connection with the covenants set forth in this Section, it is agreed that:
(i) none
of the Agents, the Lenders, or their agents or employees shall be liable for any payment of the premiums for such insurance policies or
any loss or damage insured by the insurance policies required to be maintained under this Section, and (A) the Borrower and each
Subsidiary Loan Party shall look solely to their insurance companies or any other parties other than the aforesaid parties for the recovery
of such loss or damage and (B) such insurance companies shall have no rights of subrogation against the Agents, the Lenders or their
agents or employees; provided, however, that if 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 (and, agrees to cause each
Subsidiary Loan Party to waive their respective) right of recovery, if any, against the Agents, the Lenders and their agents and employees;
and
(ii) the
designation of any form, type or amount of insurance coverage by the Agents or the Required Lenders under this Section shall in no
event be deemed a representation, warranty or advice by the Agents or the Lenders that such insurance is adequate for the purposes of
the business of the Borrower and the Subsidiaries or the protection of their properties.
(d) The
Borrower will, and will cause each of the Subsidiaries to, permit any representatives that are designated by the Administrative Agent
to inspect the insurance policies maintained by or on behalf of the Borrower and the Subsidiaries and inspect books and records related
thereto and any properties covered thereby.
SECTION 5.08. Books
and Records; Inspection and Audit Rights; Collateral and Borrowing Base Reviews.
(a) The
Borrower will, and will cause each of the Subsidiaries to, keep proper books of record and account in which full, true and correct entries
are made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of the Subsidiaries
to, permit any representatives designated by any Lender (at such Lender’s expense, unless a Default has occurred and is continuing,
in which case at the Borrower’s expense), and after such Lender has consulted the Administrative Agent with respect thereto, to
visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition
with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.
(b) The
Borrower will, and will cause each of the Subsidiaries to, permit any representatives designated by the Administrative Agent (including
any consultants (including the Lender Group Consultants), field examiners, accountants, lawyers and appraisers retained by the Administrative
Agent) to conduct (i) two field examinations of the Loan Parties and the Collateral in any twelve month period, (ii) two appraisals
of the Borrower’s and the Subsidiaries’ assets of the type (other than Prescription Files) that are included in the ABL Borrowing
Base Amount and the FILO Borrowing Base Amount in any twelve month period, (iii) two appraisals of the Borrower’s and the Subsidiaries’
Prescription Files in any twelve month period and (iv) other evaluations and appraisals of the Borrower’s computation of the
ABL Borrowing Base Amount and the FILO Borrowing Base Amount and the assets of the type included in therein, all at such reasonable times
and as often as reasonably requested or at any time if a Default shall have occurred and be continuing. The Borrower shall pay the reasonable
fees and expenses of any representatives retained by the Administrative Agent to conduct any such evaluation or appraisal (it being understood
that the third party representatives retained by the Administrative Agent shall conduct any such evaluation or appraisal on behalf of
the Administrative Agent); provided, however, that, notwithstanding the foregoing, the Administrative Agent may undertake
one such additional field examination, one such additional appraisal of Prescription Files and one such additional appraisal of other
assets of the type included in the ABL Borrowing Base Amount and the FILO Borrowing Base Amount in each fiscal year of the Borrower, at
the expense of the Lenders.
(c) The
Borrower will, and will cause each of the Subsidiaries to, in connection with any computation of the ABL Borrowing Base Amount and the
FILO Borrowing Base Amount, maintain such reserves in effect from time to time (for purposes of computing the ABL Borrowing Base Amount
and the FILO Borrowing Base Amount) in respect of Eligible Credit Card Accounts Receivable, Eligible Accounts Receivable, Eligible Script
Lists and Eligible Inventory and make such other adjustments to its parameters for including Eligible Credit Card Accounts Receivable,
Eligible Accounts Receivable, Eligible Inventory and Eligible Script Lists in the ABL Borrowing Base Amount and the FILO Borrowing Base
Amount as the Administrative Agent shall require based upon the results of such evaluation and appraisal in its commercially reasonable
judgment to reflect Borrowing Base Factors (it being understood and agreed that the amount of any such reserve adjustment shall have a
reasonable relationship to the event, condition or other matter that is the basis for such reserve or such adjustment).
(d) The
Borrower will, and will cause each of the Subsidiaries to, at the prior written request of the Administrative Agent from time to time,
and at the expense of the Borrower, cooperate with the Administrative Agent (including any consultants (including the Lender Group Consultants),
field examiners, accountants, lawyers and appraisers retained by the Administrative Agent) to (i) permit to be conducted monthly
“desktop” Collateral appraisals, including reviews of inventory levels and mix and Prescription Files; and (ii) deliver
any information reasonably requested in writing by the Administrative Agent or its representatives in connection with appraisals, collateral
audits, valuations of the Collateral for the purposes of a “stalking horse” bid, other Collateral reporting, or otherwise.
SECTION 5.09. Compliance
with Laws. Except to the extent non-compliance is permitted under the Bankruptcy Code or subject, as applicable, to the Automatic
Stay, the Borrower will, and will cause each of the Subsidiaries to, comply in all material respects with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or its property, including all Environmental Laws, HIPAA and all other material
healthcare laws and regulations, except where the necessity of compliance therewith is contested in good faith by appropriate proceedings
or to the extent that any failures so to comply, individually or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect. The Borrower will implement and maintain in effect and enforce policies and procedures designed to ensure compliance by
the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable
Sanctions and the Borrower and its Subsidiaries shall conduct their business in compliance with Anti-Corruption Laws and applicable Sanctions
in all material respects.
SECTION 5.10. Use
of Proceeds and Letters of Credit.
(a) The
proceeds of the Revolving Loans, FILO Loans, Swingline Loans, and Term Loans made on or after the Closing Date will be used by the Borrower
strictly in accordance with the Approved Budget (subject to Permitted Variance) for working capital needs and for general corporate purposes,
in each case to the extent expressly under applicable law and the Senior Loan Documents, including (i) to pay fees, expenses, and
costs incurred in connection with the Chapter 11 Case in accordance with the Approved Budget, as well as the payment of any adequate protection
payments approved in the Financing Order, and (ii) to fund the Carve Out.
(b) Letters
of Credit will be used solely to support payment obligations of the Borrower and the Subsidiaries incurred in the ordinary course of business.
(c) No
proceeds of Loans or Letters of Credit will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate,
of buying or carrying any Margin Stock. The Borrower will ensure that no such use of Loan proceeds or issuance of Letters of Credit will
entail any violation of Regulation T, U or X of the Board.
(d) The
Borrower will not request any Borrowing or issuance of any Letter of Credit, and the Borrower shall not use, and shall ensure that its
Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter
of Credit (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything
else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating
any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (C) in any manner that
would result in the violation of any Sanctions applicable to any party hereto.
SECTION 5.11. Additional
Subsidiaries. If any additional Domestic Subsidiary (other than any Excluded Subsidiary) is formed or acquired after the Closing Date,
the Borrower will, within five (5) days after such Subsidiary is formed or acquired (or such later date as the Administrative Agent
may agree) (or, with respect to any other Subsidiary, if the Borrower elects to cause such Subsidiary to become a Subsidiary Loan Party,
the Borrower will) notify the Administrative Agent thereof and cause the Collateral and Guarantee Requirement to be satisfied with respect
to such Subsidiary; provided that, the Borrower shall not form or acquire, or permit any Subsidiary to form or acquire, any additional
Subsidiaries after the Closing Date, unless the Administrative Agent shall have provided its prior written consent to the formation or
acquisition of such Subsidiary; and provided further that, no Subsidiary of any Loan Party that is not a Loan Party on the Closing
Date shall be joined to this Agreement or any other Loan Document unless and until such Subsidiary has delivered all documentation and
other information required by US Governmental Authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including the USA Patriot Act and, with respect to any such Subsidiary that qualifies as a “legal entity
customer” under the Beneficial Ownership Regulation, a Beneficial Ownership Certification with respect to such Subsidiary, and the
Administrative Agent has received confirmation from each Lender that such Lender has received all such documentation and other information.
SECTION 5.12. Further
Assurances. The Borrower will, and will cause each Subsidiary Loan Party to, execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings,
deeds of trust and other documents), which may be required under any applicable law, or which any Agent or the Required Lenders may reasonably
request, to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of the Loan Parties. The Borrower
also agrees to provide to each Agent, from time to time upon request by any of them, evidence reasonably satisfactory to Agents, as to
the perfection and priority of the Liens created or intended to be created by the Senior Collateral Documents in favor of the Senior Collateral
Agent in favor of the Senior Loan Secured Parties.
SECTION 5.13. [Reserved].
SECTION 5.14. Intercompany
Transfers. The Borrower shall maintain accounting systems capable of tracing intercompany transfers of funds and other assets.
SECTION 5.15. Inventory
Purchasing.
The
Borrower shall, and shall cause each Subsidiary party to the Intercompany Inventory Purchase Agreement to, at all times maintain in all
material respects the vendor inventory purchasing system and the intercompany inventory purchasing system in accordance in all
material respects with the terms of the Intercompany Inventory Purchase Agreement. The Borrower shall cause each Subsidiary which owns
or acquires any Collateral consisting of inventory to be party to the Intercompany Inventory Purchase Agreement.
SECTION 5.16. Cash
Management System. The Borrower will, and will cause each Subsidiary Loan Party to (a) at all times, maintain a Cash Management
System that complies with the Cash Management Order, Schedule 2 of the Senior Security Agreement and Section 5.17 and (b) comply
with each of such Loan Party’s obligations under the Cash Management System, and to use its best efforts to cause any applicable
third party to effectuate the Cash Management System.
SECTION 5.17. Specified
Elixir Assets. To the extent no Elixir Monetization Event is consummated on or prior to February 15, 2024 (provided that
this paragraph shall not apply if the 100% of the equity interests or substantially all of the assets of Elixir Insurance Company are
sold as a part of a Specified Elixir Sale prior to such date), or, if earlier, on the date that the Borrower has elected to no longer
pursue an Elixir Monetization Event, the Borrower shall promptly (and in any event, within ten (10) Business Days (or such longer
period as the Administrative Agent may agree in writing)) thereafter cause the intercompany payable(s) outstanding at such time and
owing by Elixir Insurance Company to one or more Loan Parties to be satisfied by causing a portion of the Specified Elixir Assets to be
purchased by, or otherwise transferred to, one or more Loan Parties in an amount equal to the fair market value (as determined by the
Borrower in good faith) of such Specified Elixir Assets equal to the amount of such intercompany payable(s) at the time of such purchase
or transfer (or otherwise on terms satisfactory to the Administrative Agent); provided that such purchase or transfer may be limited
to the extent required by applicable law, including insurance laws, regulations or orders applicable to Elixir Insurance Company.
SECTION 5.18. Company
Financial Advisors and Lender Group Consultants.
(a) The
Borrower will, and will cause each Subsidiary to,
(i) Timely
file motions with the Bankruptcy Court seeking to continue to retain the Company Financial Advisors that have been retained as of the
Petition Date.
(ii) Continue
to retain the Company Financial Advisors. The retention of each Company Financial Advisor shall be on terms and conditions (including
as to scope of engagement) reasonably satisfactory to the Administrative Agent; provided that the Administrative Agent hereby confirms
that, as of the Closing Date, the existing engagements of Alvarez & Marsal North America, LLC and Guggenheim Securities, LLC
as Financial Advisors satisfy the applicable requirements set forth in this Section 5.18(a).
(iii) Fully
cooperate with the Company Financial Advisors, including in connection with the preparation of the Approved Budget and other reporting
or information required to be delivered pursuant to this Agreement or that is requested by the Administrative Agent or any Lender from
time to time. The Loan Parties hereby (i) authorize the Administrative Agent (or its agents or advisors, including any Lender Group
Consultant) to communicate directly with the Company Financial Advisors regarding any and all matters related to the Loan Parties and
their Affiliates, including all financial reports and projections developed, reviewed or verified by any of the Company Financial Advisors
and all additional information, reports and statements requested by the Administrative Agent and (ii) authorize and direct each Company
Financial Advisor to provide the Administrative Agent (or their respective agents or advisors, including any Lender Group Consultant)
with copies of reports and other information or materials prepared or reviewed by any such Company Financial Advisor as the Administrative
Agent may request in writing.
(b) The
Borrower, on behalf of itself and each other Loan Party, hereby acknowledges that the Administrative Agent shall be permitted to engage
outside consultants and advisors (each, a “Lender Group Consultant” and collectively, the “Lender Group Consultants”)
to provide advice, analysis and reporting for the sole benefit of the Administrative Agent and the other Senior Loan Secured Parties,
which as of the Closing Date includes BRG. Each Loan Party covenants and agrees that (i) such Loan Party shall, and shall cause each
Company Financial Advisor to, cooperate with any Lender Group Consultant, (ii) all costs and expenses of any such Lender Group Consultant
shall be paid or reimbursed by the Borrower in accordance with Section 9.03, and (iii) all reports, determinations and
other written and verbal information provided by any Lender Group Consultant shall be confidential and no Loan Party shall be entitled
to have access to any such reports, determinations or information.
(c) From
time to time upon reasonable written request of the Administrative Agent, the Borrower will, and will cause each Subsidiary to, conduct
and cause the applicable Company Financial Advisor (or other appropriate Loan Party professionals) to participate, together with financial
officers of the Loan Parties, in bi-weekly (i.e., every two weeks) status calls with the Administrative Agent and the Lenders to discuss
(i) the Approved Budget or the Approved Budget Variance Reports and/or any other reports or information delivered pursuant to this
Agreement, (ii) the financial operations and performance of the Loan Parties’ business, (iii) the status of any Specified
Sale Transaction, the Specified Store Closing Sale, and/or the achievement of any Chapter 11 Case Milestones and/or (iv) such other
matters relating to the Loan Parties and their business and operations as the Administrative Agent (or its agents, consultants, or advisors)
shall reasonably request.
SECTION 5.19. Approved
Budget.
(a) The
Borrower will, and will cause each Subsidiary to, use the Loans and other extensions of credit to the Loan Parties under this Agreement
and the other Senior Loan Documents and use “cash collateral” (as defined in Section 363(a) of the Bankruptcy Code)
solely in accordance with the Approved Budget (subject to the Permitted Variance) and Section 5.10.
(b) The
Approved Budget may be updated, modified or supplemented from time to time by the Borrower with the prior written consent of the Administrative
Agent, and shall be updated from time to time upon the written request of the Administrative Agent; provided that, on or before
the fourth Business Day of the first week (but in any event not later than Friday of such week) of each successive four-week period following
the Closing Date (i.e., commencing with the week of November 12, 2023), the Borrower shall submit an updated budget for the next
successive thirteen-week period (it being understood that, unless otherwise agreed by the Administrative Agent, each updated budget shall
only add projections for periods not previously covered by any Approved Budget and shall not modify any prior periods). Each such updated,
modified or supplemented budget shall be approved by, and in form and substance satisfactory to, the Administrative Agent (which approval
or disapproval, as the case may be, the Administrative Agent shall provide in writing within five (5) Business Days after receipt
of such updated budget (together with all supporting documentation and information that has been reasonably requested by the Administrative
Agent)) and no such updated, modified or supplemented budget shall be effective until so approved in writing and once so approved shall
be deemed an Approved Budget; provided that, in the event the Administrative Agent and the Borrower cannot (while acting in good
faith) agree as to an updated, modified or supplemented budget, such disagreement shall give rise to an Event of Default hereunder once
the period covered by the most recent Approved Budget has terminated. Each Approved Budget delivered to the Administrative Agent shall
be accompanied by such supporting documentation as reasonably requested by the Administrative Agent. Each Approved Budget shall be prepared
in good faith, with due care, and based upon assumptions which the Borrower believes to be reasonable.
(c) The
Loan Parties shall perform in accordance with the Approved Budget, subject to the following to be tested commencing with the fourth calendar
week following the Closing Date (i.e., commencing with the Cumulative Four-Week Period ending on November 11, 2023) (the “Permitted
Variance”): (i) the Actual Cash Receipts for any Cumulative Four-Week Period shall not be less than 85.0% of the Budgeted
Cash Receipts for such Cumulative Four-Week Period, as set forth in the most recent Approved Budget, and (ii) the Actual Operating
Disbursement Amounts for any Cumulative Four-Week Period shall not be greater than 112.5% of the Budgeted Operating Disbursement Amounts
for such Cumulative Four-Week Period, as set forth in the most recent Approved Budget.
(d) The
Borrower shall deliver to the Administrative Agent, by not later than 5:00 p.m., on the fourth Business Day of each week (but in any event
not later than Friday of such week) (commencing with the first such day of the first full calendar week following the entry of the Interim
Financing Order), a Compliance Certificate, which shall, among other things, (i) certify as to whether a Default or Event of Default
(including with respect to the covenants contained in Section 5.19(c)) has occurred and, if a Default or Event of Default
has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) attach an Approved
Budget Variance Report, and (iii) on a bi-weekly basis (i.e., every two weeks), include a report listing
the Stores subject to Specified Store Closing Sales and the other remaining Stores and confirming the lease assumption/rejection status
and lease expiration date of each Store location and each leased warehouse or distribution center location of any Loan Party.
(e) The
Administrative Agent and the Lenders (i) may assume that the Loan Parties will comply with the Approved Budget, (ii) shall have
no duty to monitor such compliance and (iii) shall not be obligated to pay (directly or indirectly from proceeds of Collateral) any
unpaid expenses incurred or authorized to be incurred pursuant to any Approved Budget. The line items in the Approved Budget for payment
of the Senior Obligations and Pre-Petition Obligations, including any expenses payable pursuant to Section 9.05, are estimates
only, and the Loan Parties shall remain obligated to pay any and all Obligations or Pre-Petition Senior Obligations in accordance with
the terms of the Senior Loan Documents and the Financing Order regardless of whether such amounts exceed such estimates. Nothing in any
Approved Budget (including any estimates of a loan balance in excess of borrowing base restrictions) shall constitute an amendment or
other modification of any Senior Loan Document or any of the borrowing base restrictions or other lending limits set forth therein.
SECTION 5.20. Chapter
11 Case Milestones.
(a) The
Borrower will, and will cause each of the Subsidiaries to, comply with each of the covenants contained on Schedule 5.20 (collectively,
the “Chapter 11 Case Milestones”), upon the terms and at the times provided for therein; provided that the Administrative
Agent may, in its sole and absolute discretion, extend any of the Chapter 11 Case Milestones for a period of not more than ten (10) Business
Days in the aggregate for any particular Chapter 11 Case Milestone or for such longer period with the consent of the Required Lenders
(in their sole and absolute discretion).
(b) The
Borrower will, and will cause each of the Subsidiaries to, provide the Administrative Agent with a status report and such other updated
information relating to the achievement of any Chapter 11 Case Milestone as may be reasonably requested by the Administrative Agent or
the Required Lenders, in form and substance reasonably acceptable to the Administrative Agent.
SECTION 5.21. Compliance
with Bankruptcy Court Orders, Bankruptcy Code, Etc. The Borrower will, and will cause each Subsidiary to, comply with (a) the
Financing Order and the Cash Management Order, in all respects, and shall not seek any reversal, vacatur, stay, amendment or modification
thereto, without the prior written consent of the Administrative Agent, (b) all other orders of the Bankruptcy Court, and (c) all
other obligations and responsibilities as debtors-in-possession under the Bankruptcy Code and the Bankruptcy Rules.
SECTION 5.22. Real
Estate Leases. The Borrower will, and will cause each of the Subsidiaries to:
(a) subject
to Section 365(d)(3) of the Bankruptcy Code, (i) make all required payments under all Real Estate Leases for Store locations
and leased warehouse or distribution center locations of any Loan Party as required by the Bankruptcy Court and otherwise in accordance
with the Approved Budget (subject to the Permitted Variance) and (ii) perform, in all material respects, and within any applicable
notice or cure period set forth therein, all other obligations in respect of all Real Estate Leases for Store locations and leased warehouse
or distribution center locations of any Loan Party as required by the Bankruptcy Court;
(b) keep
all Real Estate Leases for Store locations and leased warehouse or distribution center locations of any Loan Party in full force and effect
and not allow such Real Estate Leases to lapse or be terminated or any rights to renew such Real Estate Leases to be forfeited or cancelled;
and
(c) promptly
notify the Administrative Agent of any material default beyond the applicable notice and cure period set forth in such Real Estate Lease
by any party thereto with respect to Real Estate Leases for Store locations and leased warehouse or distribution center locations of any
Loan Party, and reasonably cooperate with the Administrative Agent in all respects to cure any such material default then continuing;
in
each case of clause (a), (b) and (c), other than with respect to (i) any Real Estate Lease relating
to a Store or other real property location subject to a Specified Sale Transaction or the Specified Store Closing Sale after (x) the
completion of such Specified Sale Transaction or the Specified Store Closing Sale at such location and (y) the effective date of
the rejection of the applicable Real Estate Lease or (ii) any Real Estate Lease rejected in accordance with the procedures set forth
in Section 5.23.
SECTION 5.23. Assumption
and Rejection of Contracts and Real Estate Leases. The Borrower will, and will cause each of the Subsidiaries to, provide to the Administrative
Agent and to BRG (or any other Lender Group Consultant designated by the Administrative Agent in writing to the Borrower as a required
recipient of such notice) prior written notice of the filing any motion or notice to assume or reject, pursuant to Section 365 of
the Bankruptcy Code, any of the Borrower’s or any Subsidiary’s material contracts or any of the Borrower’s or any Subsidiary’s
Real Estate Leases for Store locations or leased warehouse or distribution center locations, in each case, as soon as reasonably practicable
and at least three (3) Business Days (or such shorter notice reasonably acceptable to the Administrative Agent) prior to the filing
of any such motion, and no such contract or Real Estate Lease shall be assumed or rejected, if such assumption or rejection could be expected
to adversely impact the ABL Priority Collateral or any Lien of the Senior Collateral Agent thereon (in the determination of the Administrative
Agent, in its commercially reasonable judgment, which determination is delivered to the Borrower in writing not later than two (2) Business
Days after receipt of the Borrower’s applicable notice delivered pursuant to this Section 5.23). Notwithstanding the
foregoing, this Section 5.23 shall not apply with respect to Real Estate Leases for any Specified Stores.
SECTION 5.24. Post-Closing
Obligations. The Borrower shall, and shall cause each Subsidiary to, complete each of the post-closing
obligations and/or deliver to the Administrative Agent or the Collateral Agent, as applicable, each of the documents, instruments, agreements
and information listed on Schedule 5.24, on or before the date set forth for each such item on Schedule 5.24 (as may be
extended by such Agent in writing in its sole discretion), each of which shall be completed
or provided in form and substance reasonably satisfactory to such Agent.
ARTICLE VI
Negative Covenants
Until the Senior Loan Obligation
Payment Date, the Borrower covenants and agrees with the Lenders that:
SECTION 6.01. Indebtedness;
Certain Equity Securities.
(a) The
Borrower will not, and will not permit any Subsidiary to, create, issue, incur, assume or permit to exist any Indebtedness, any Attributable
Debt in respect of any Sale and Leaseback Transaction, any Disqualified Preferred Stock except:
(i) (A) Indebtedness
under the Senior Loan Documents (including Indebtedness incurred pursuant to any Refinancing Amendment executed in accordance with Section 6.01(c))
and, in each case, Refinancing Indebtedness in respect thereof (including (x) Refinancing Indebtedness in respect of Revolving Commitments
(including any Other Revolving Commitments) and (y) Refinancing Indebtedness consisting of Permitted First Priority Debt) and (B) Permitted
First Priority Debt and Refinancing Indebtedness in respect thereof (including Indebtedness under an Incremental Senior Debt Refinancing
Facility incurred pursuant to an Incremental Facility Amendment entered into pursuant to Section 2.21); provided that,
immediately after giving effect to the incurrence of any such Indebtedness permitted by this clause (i), the Total ABL Outstandings
shall not exceed the result of (x) ABL Loan Cap minus (y) the amount of ABL Availability required to be maintained pursuant
to Section 6.12;
(ii) the
Pre-Petition Senior Obligations;
(iii) Indebtedness
of the Borrower and the Subsidiaries in respect of intercompany Investments permitted under Section 6.04; provided
that any such Indebtedness owing by the Borrower or a Subsidiary Loan Party to a Subsidiary that is not a Loan Party is subordinated to
the Senior Loan Obligations pursuant to terms substantially the same as those forth on Annex I of the ABL Pre-Petition Credit Agreement;
provided, further, that any references therein to the ABL Pre-Petition Senior Obligations, the ABL Pre-Petition Credit Agreement
or the Pre-Petition Agent shall refer to the Senior Obligations hereunder, this Agreement and the Administrative Agent, respectively;
(iv) the
Existing Non-Guaranteed Indebtedness, to the extent subject to terms of the Financing Order;
(v) Indebtedness
incurred pursuant to the ABL Term Loan Documents in an aggregate principal amount not to exceed the result of (A) $220,000,000 minus
(B) the amount of all repayments of principal of the ABL Term Loans made after the Closing Date, to the extent subject to the ABL
Intercreditor Agreement and the terms of the Financing Order;
(vi) Indebtedness
of Elixir Insurance Company incurred in connection with any Elixir Monetization Event; provided that (A) no Loan Party shall
be an obligor (or subject to any right of recourse) in respect of such Indebtedness, (B) the Net Cash Proceeds of any such Elixir
Monetization Event are received by a Loan Party, and (C) the existence of such Indebtedness (or the rights conferred to the holders
of such Indebtedness) could not reasonably be expected to impair or limit the ability of the Loan Parties to the consummate a Specified
Elixir Sale or the anticipated consideration to be received by the Loan Parties in connection with a Specified Elixir Sale;
(vii) the
Existing Split-Priority Indebtedness, to the extent subject to the Split-Priority Intercreditor Agreement and the terms of the Financing
Order;
(viii) to
the extent constituting Indebtedness, any superpriority administrative claims granted pursuant to the Financing Order;
(ix) [reserved];
(x) [reserved];
(xi) endorsements
of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;
(xii) Indebtedness
consisting of Capital Lease Obligations (not otherwise permitted pursuant to this Section 6.01(a)), to the extent (A) existing
on the Closing Date and set forth on Schedule 6.01(a)(xii) and (B) permitted to be incurred by the Pre-Petition Credit
Agreement as of the date of incurrence thereof, but not any extensions, renewals, refinancings or replacements of such Indebtedness;
(xiii) [reserved];
(xiv) Indebtedness
(including Capital Lease Obligations) and Attributable Debt in respect of Sale and Leaseback Transactions, equipment financing or leasing
in the ordinary course of business of the Borrower and the Subsidiaries consistent with past practices;
(xv) [reserved];
(xvi) [reserved];
(xvii) [reserved];
(xviii) [reserved];
(xix) Guarantees
of any Indebtedness under clauses (i), (ii) and (vii) of this Section 6.01(a);
(xx) to
the extent constituting Indebtedness, the Carve Out; and
(xxi) Escrow
Notes issued by an Escrow Notes Issuer and Guarantees of interest and redemption premiums and expense reimbursement and indemnification
obligations owing in respect of Escrow Notes issued by an Escrow Notes Issuer.
Notwithstanding any
of the foregoing, and except for the Carve Out, no Indebtedness permitted under this Section 6.01(a) shall be permitted
to have an administrative expense claim status under the Bankruptcy Code senior to or pari passu with the superpriority administrative
expense claims of (i) the Agents and the Lenders and (ii) the Pre-Petition Agent and the Pre-Petition Lenders, in each case,
as set forth herein and in the Financing Order, other than (A) solely with respect to the Split-Lien Priority Collateral, the Existing
Split-Priority Indebtedness permitted under Section 6.01(a)(vii), (ii) solely with respect to the ABL Term Loan Exclusive
Collateral, the Indebtedness incurred pursuant to the ABL Term Loan Documents permitted under Section 6.01(a)(v), and (iii) solely
with respect to the ABL Priority Collateral or the Split-Lien Priority Collateral and solely to the extent such administrative expense
claim status ranks pari passu with the superpriority administrative expense claims of (x) the Agents and the Lenders and (y) the
Pre-Petition Agent and the Pre-Petition Lenders, the Indebtedness incurred pursuant to the ABL Term Loan Documents permitted under Section 6.01(a)(v).
(b) The
Borrower will not, nor will it permit any Subsidiary to, issue any Preferred Stock or other preferred Equity Interests, other than (i) Qualified
Preferred Stock of the Borrower, (ii) Disqualified Preferred Stock of the Borrower permitted by Section 6.01(a), (iii) [reserved],
(iv) Preferred Stock of a Subsidiary issued to the Borrower or a Subsidiary Loan Party or, in the case of a Subsidiary that is not
a Subsidiary Loan Party, to another Subsidiary that is not a Subsidiary Loan Party, and (v) other preferred Equity Interests issued
and outstanding on the Closing Date and set forth on Schedule 6.01(b).
(c) At
any time after the Closing Date, with the prior written consent of the Administrative Agent and the Required Lenders, the Borrower may
obtain from any Lender or Additional Lender Refinancing Indebtedness in respect of any Indebtedness outstanding under this Agreement (including
any outstanding Revolving Commitments), in the form of term loans (“Refinancing Term Loans”) and/or replacement revolving
commitments (“Refinancing Revolving Commitments”) (or, if all then outstanding Revolving Commitments are to be replaced
at such time, in the form of new Revolving Commitments), in each case pursuant to a Refinancing Amendment; provided that (i) such
Refinancing Indebtedness (A) will rank pari passu in right of payment and of security (but without regard to control of remedies)
with the other Loans (provided, that any such Refinancing Indebtedness incurred in respect of the FILO Loans shall have the same
relative priority of payment as the FILO Loans), (B) if such Refinancing Indebtedness is Refinancing Terms Loans, such Refinancing
Terms Loans shall amortize in a manner, and be subject to mandatory prepayments (if any) on terms, reasonably acceptable to the Administrative
Agent, (C) have such pricing (other than interest rate, which shall comply with the requirements set forth in the definition of the
term “Refinancing Indebtedness”) as may be agreed by the Borrower and the Administrative Agent and (D) otherwise be treated
hereunder no more favorably than, in the case of Refinancing Revolving Commitments, the Revolving Loans and Revolving Commitments, and,
in the case of Refinancing Term Loans, any outstanding FILO Loans and the FILO Facility and any other Refinancing Term Loans; provided
that the terms and provisions applicable to such Refinancing Indebtedness may provide for additional or different financial or other covenants
applicable only during periods after the Latest Maturity Date that is in effect on the date such Refinancing Indebtedness is issued, incurred
or obtained, and (ii) immediately after giving effect to the incurrence of any such Refinancing Indebtedness permitted by this Section 6.01(c),
the Total ABL Outstandings shall not exceed the ABL Loan Cap. The effectiveness of any Refinancing Amendment shall be subject to the satisfaction
on the date thereof of each of the conditions set forth in Section 4.02. The Administrative Agent shall promptly notify each
Lender as to the effectiveness of each Refinancing Amendment. Each of the parties hereto hereby agrees that, upon the effectiveness of
any Refinancing Amendment, this Agreement shall be deemed amended to the extent (but only to the extent) necessary to reflect the existence
and terms of the Refinancing Indebtedness incurred pursuant thereto (including any amendments necessary to treat the Loans and Commitments
subject thereto as FILO Loans, FILO Commitments, Revolving Loans, Revolving Commitments, Term Loans and Term Loan Commitments, as applicable).
Notwithstanding the foregoing, no Refinancing Amendment shall become effective under this Section 6.01(c) unless the
Administrative Agent, to the extent so reasonably requested by the Administrative Agent, shall have received legal opinions, board resolutions
and/or officers’ certificates consistent with those delivered on the Closing Date under Section 4.01 other than changes
to such legal opinions resulting from a change in law, change in fact or change to counsel’s form of opinion reasonably acceptable
to the Administrative Agent.
SECTION 6.02. Liens.
(a) The
Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now
owned or hereafter acquired by it, except:
(i) Liens
created under the Senior Loan Documents to secure the Senior Obligations and the Pre-Petition Senior Loan Documents to secure the Pre-Petition
Senior Obligations;
(ii) Permitted
Encumbrances;
(iii) Liens
created under the ABL Term Loan Documents to secure Indebtedness permitted under Section 6.01(a)(v) and other ABL Term
Loan Obligations, to the extent such Liens are subject to the ABL Intercreditor Agreement and the Financing Order;
(iv) Liens
on the Collateral (or on assets that, substantially concurrently with the creation of such Lien, become Collateral on which a Lien is
granted to the Senior Collateral Agent pursuant to a Senior Collateral Document) securing the Existing Split-Priority Indebtedness, to
the extent such Liens are subject to the Split-Priority Intercreditor Agreement and the Financing Order;
(v) any
Lien securing Indebtedness of a Subsidiary owing to a Subsidiary Loan Party;
(vi) any
Lien securing Attributable Debt and other payment obligations under leases incurred in connection with a Sale and Leaseback Transaction
permitted pursuant to Section 6.01(a)(xiv) and Section 6.06; provided that such Liens attach only
to the equipment, real property or other assets subject to such Sale and Leaseback Transaction;
(vii) adequate
protection Liens and superpriority administrative claims, in each case, granted pursuant to the Financing Order;
(viii) Liens
securing Indebtedness incurred in connection with any Elixir Monetization Event permitted pursuant to Section 6.01(a)(vi) or
otherwise attaching to the Specified Elixir Assets in connection with an Elixir Monetization Event; provided that (A) such
Liens do not attach to any assets of a Loan Party or any assets of a Subsidiary (other than the Specified Elixir Assets) and (B) the
existence of such Liens or related Indebtedness (or the rights conferred to the holders of such Liens or Indebtedness) could not reasonably
be expected to impair or limit the ability of the Loan Parties to consummate a Specified Elixir Sale or the anticipated consideration
to be received by the Loan Parties in connection with a Specified Elixir Sale;
(ix) any
Lien on equipment securing Indebtedness incurred to finance such equipment pursuant to Section 6.01(a)(xiv);
(x) Permitted
Prior Liens;
(xi) Liens
existing on the Petition Date and identified on Schedule 6.02(a)(xi); provided that such Liens do not attach to any
property other than the property identified on Schedule 6.02(a)(xi) and secure only the Pre-Petition obligations they secured
on the Petition Date;
(xii) any
Lien on Net Cash Proceeds that are required to be applied to the repayment of Second Priority Debt Obligations in accordance with the
Junior Lien Intercreditor Agreement or to the Existing Split-Priority Indebtedness in accordance with the applicable Split-Priority Implementing
Agreements;
(xiii) Liens
relating to or in connection with any Plan or Multiemployer Plan; provided that any such Lien is at all times unperfected and perfection
of such Lien is subject to the Automatic Stay;
(xiv) [reserved];
(xv) put
and call agreements, described on Schedule 6.02(a)(xi), with respect to Equity Interests acquired or created prior to the Petition
Date in connection with Joint Ventures existing as of the Petition Date; provided that the exercise of any such put or call agreements
against the Borrower or its Subsidiaries is subject to the Automatic Stay; and
(xvi) Liens
in favor of the ABL Term Loan Agent on any ABL Term Loan Exclusive Collateral Account (and any funds therein), to the extent such Liens
are subject to the Financing Order;
(xvii) Liens
(other than Liens securing Indebtedness) that are not otherwise permitted under any other provision of this Section 6.02(a);
provided, that (A) the aggregate amount of liabilities secured by such Liens shall not at any time exceed $5,000,000 and (B) such
Liens shall not attach to any ABL Priority Collateral, unless such Lien shall rank junior to the Liens of the Senior Collateral Agent
and of the ABL Term Loan Agent on such ABL Priority Collateral;
(xviii) Liens
on, or the deposit in escrow of, the cash proceeds of Escrow Notes issued by an Escrow Notes Issuer to secure the obligations of the Escrow
Notes Issuer in the event that the conditions to release of such proceeds are not satisfied or waived.
(b) Notwithstanding
anything to the contrary herein, Liens permitted under Section 6.02(a), other than (i) solely with respect to Split-Lien
Priority Collateral, the Liens permitted under Section 6.02(a)(iv), (ii) solely with respect to ABL Term Loan Exclusive
Collateral, the Liens permitted under Section 6.02(a)(iii) and (iii) solely with respect to the ABL Priority Collateral
and the Split-Lien Priority Collateral and solely to the extent such Liens rank pari passu with the Liens securing the Senior Obligations,
the Liens permitted under Section 6.02(a)(iii), shall at all times be junior and subordinate to the Liens under the Senior
Collateral Documents (including the Financing Order) securing the Senior Obligations.
(c) The
prohibition provided for in this Section 6.02 specifically includes any effort by any Loan Party or Subsidiary, any Statutory
Committee or any other party in interest in the Chapter 11 Case to prime or create pari passu to any claims, Liens or interests
of (i) the Agents and the Lenders or (ii) for so long as the Pre-Petition Senior Obligations have not been indefeasibly paid
in full in cash, the Pre-Petition Agent and the Pre-Petition Lenders, any Lien, in each case, other than as set forth in the Financing
Order and irrespective of whether such claims, Liens or interests may be “adequately protected.”
SECTION 6.03. Fundamental
Changes. Without limiting the restrictions on Business Acquisitions set forth in Section 6.04, the Borrower will not,
and will not permit any Subsidiary Loan Party to, merge into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto
(in the case of clause (iii) below) no Default shall have occurred and be continuing (i) any Person may merge or consolidate
into the Borrower in a transaction in which the Borrower is the surviving corporation, provided that, if such other Person is a
Subsidiary Loan Party, it shall have no assets that constitute Collateral, (ii) any Person may merge into or consolidate with a Subsidiary
Loan Party in a transaction in which such Subsidiary Loan Party is the surviving Person or the surviving Person is or concurrently with
such merger or consolidation becomes a Subsidiary Loan Party, (iii) any Subsidiary Loan Party may liquidate or dissolve with the
prior written consent of the Administrative Agent, provided that at the time of such liquidation or dissolution, no assets of such
Subsidiary Loan Party shall be included in the determination of the ABL Borrowing Base Amount or the FILO Borrowing Base Amount, (iv) any
Asset Sale of the Equity Interests in any Subsidiary Loan Party that is permitted under Section 6.05 may be effected through
a merger, consolidation, liquidation or dissolution of such Subsidiary Loan Party; provided that (A) any such merger involving
a Person that is not a wholly-owned Subsidiary immediately prior to such merger shall not be permitted to engage in such merger unless
also permitted by Section 6.04 and (B) the Borrower and the applicable Subsidiary Loan Party shall comply with the provisions
of Section 5.11 with respect to any Subsidiary acquired pursuant to this Section 6.03, to the extent applicable.
SECTION 6.04. Investments,
Loans, Advances, Guarantees and Acquisitions. The Borrower will not, and will not permit any of the Subsidiaries to, make any Investment
except:
(a) Permitted
Investments;
(b) Investments
of the Borrower and the Subsidiary Loan Parties and set forth on Schedule 6.04;
(c) Guarantees
of Indebtedness and/or Guarantees consisting of Indebtedness permitted by Section 6.01;
(d) Investments
received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and
suppliers, in each case in the ordinary course of business;
(e) Investments
by the Borrower or any Subsidiary Loan Party in Subsidiary Loan Parties; provided that the Borrower and such Subsidiary Loan Party,
as the case may be, shall comply with the applicable provisions of Section 5.11 with respect to any newly formed Subsidiary;
(f) Investments
consisting of non-cash consideration received in connection with any Asset Sale permitted by Section 6.05(a) (other than
with respect to any sale of inventory at retail in the ordinary course of business);
(g) Investments
by the Subsidiaries in the Borrower; provided that the proceeds of such Investments are used for a purpose set forth in Section 5.10;
(h) [reserved];
(i) usual
and customary loans and advances to employees, officers and directors of the Borrower and the Subsidiaries, in the ordinary course of
business; provided that aggregate amount of such loans and advances outstanding at any time shall not exceed $1,000,000;
(j) [reserved];
(k) to
the extent contemplated by the Approved Budget, Investments in charitable foundations organized under Section 501(c) of
the Code in an amount not to exceed $3,000,000 in the aggregate in any calendar year; provided that amounts raised from customers
or vendors for purposes of making Investments in charitable foundations organized under Section 501(c) of the Code shall not
be subject to such calendar year cap;
(l) any
Investment consisting of a Hedging Agreement permitted by Section 6.07;
(m) [reserved];
(n) [reserved];
(o) [reserved];
(p) Investments
by any Subsidiary that is not a Subsidiary Loan Party in any other Subsidiary that is not a Subsidiary Loan Party or in any Subsidiary
Loan Party;
(q) Investments
held by any Person that becomes a Subsidiary at the time such Person becomes a Subsidiary; provided that no such Investment was
made in contemplation of such Person becoming a Subsidiary;
(r) Investments
in any Escrow Notes Issuer related to any interest, premiums or other amounts payable in connection with any Escrow Notes issued by such
Escrow Notes Issuer;
(s) Investments
consisting of Guarantees by the Borrower or any of its Subsidiaries of obligations of the Borrower or any of its Subsidiaries to the extent
not constituting Indebtedness and incurred in the ordinary course of business; and
(t) as
contemplated by the Approved Budget, Investments in the form of intercompany loans to Elixir Insurance Company consistent with past
practices.
SECTION 6.05. Asset
Sales. The Borrower will not, and will not permit any of the Subsidiaries to, conduct any Asset Sale, including any sale of any Equity
Interest owned by it, nor will the Borrower permit any of the Subsidiaries to issue any additional Equity Interest in such Subsidiary,
except:
(a) Permitted
Dispositions;
(b) any
Specified Sale Transaction;
(c) any
disposition of the Specified Elixir Assets on market terms (as determined by the Borrower in good faith), in connection with any Elixir
Monetization Event; provided that (i) no Loan Party shall be an obligor (or subject to any right of recourse or repurchase
obligation) pursuant to the terms of such disposition and (ii) the Net Cash Proceeds of any such disposition are received by a Loan
Party;
(d) any
issuance of Equity Interests of any Subsidiary by such Subsidiary to the Borrower or any other Subsidiary Loan Party;
(e) any
Sale and Leaseback Transaction permitted pursuant to Section 6.01(a)(xiv) and Section 6.06;
(f) the
Specified Store Closing Sales; and
(g) any
Permitted Real Estate Disposition;
provided
that, (i) with respect to sales, transfers or dispositions under Section 6.05(b), (e), (f) or (g),
100% of the consideration therefor shall consist of cash, (ii) prior to any sales, transfers or dispositions or series of related
sales, transfers or dispositions of assets of the type included in the determination of the ABL Borrowing Base Amount or the FILO Borrowing
Base Amount (other than pursuant to the Specified Store Closing Sales) or of the Equity Interests of any Subsidiary Loan Party with assets
of the type included in the determination of the ABL Borrowing Base Amount or the FILO Borrowing Base Amount, in each case pursuant to
this Section 6.05 and with a value in excess of $5,000,000, (1) the Borrower shall have delivered to Administrative Agent
at least two (2) Business Days prior to the consummation of any such sales, transfers or dispositions, an updated Borrowing Base
Certificate giving pro forma effect to such sales, transfers or dispositions (as if such sales, transfers or dispositions occurred on
such date of delivery of the Borrowing Base Certificate) and demonstrating that, on a pro forma basis, each of the Credit Extension Conditions
shall be satisfied after giving effect to such transaction and (2) no Event of Default shall have occurred and be continuing and
(iii) any sale, transfer or disposition of Intellectual Property pursuant to this Section 6.05 that is reasonably necessary
in connection with the enforcement of any rights or remedies with respect to ABL Priority Collateral, shall be made expressly subject
to the ABL License and any purchaser, assignee or other transferee thereof shall agree in writing (pursuant to an agreement in form and
substance reasonably satisfactory to Senior Collateral Agent) to be bound by the ABL License. Other than in connection with a Specified
Elixir Sale or an Elixir Monetization Event, neither the Loan Parties nor any of their Subsidiaries (including Elixir Insurance Company)
shall be permitted to conduct any Asset Sale consisting of the Specified Elixir Assets or any other assets of Elixir Insurance Company,
without the prior written consent of the Administrative Agent.
SECTION 6.06. Sale
and Leaseback Transactions. The Borrower will not, and will not permit any of the Subsidiaries to, enter into any Sale and Leaseback
Transaction, except (a) to the extent constituting a Permitted Real Estate Disposition and (b) for Sale and Leaseback Transactions
permitted by and effected pursuant to Section 6.01(a)(xiv) which do not result in Liens other than Liens permitted pursuant
to Section 6.02(a).
SECTION 6.07. Hedging
Agreements. The Borrower will not, and will not permit any of the Subsidiaries to, incur or at any time be liable with respect to
any monetary liability under any Hedging Agreements, unless such Hedging Agreements (a) are entered into for bona fide hedging purposes
of the Borrower, any Subsidiary Loan Party (as determined in good faith by a member of the senior management of the Borrower at the time
such Hedging Agreement is entered into), (b) correspond in terms of notional amount, duration, currencies and interest rates, as
applicable, to Indebtedness of the Borrower or any Subsidiary Loan Party permitted to be incurred under Section 6.01(a) or
to business transactions of the Borrower and the Subsidiary Loan Parties on customary terms entered into in the ordinary course of business
and (c) do not exceed an amount equal to the aggregate principal amount of the Senior Obligations.
SECTION 6.08. Restricted
Payments; Certain Payments of Indebtedness.
(a) The
Borrower will not, nor will it permit any Subsidiary to, declare or make, directly or indirectly, any Restricted Payment, except (i) the
Borrower may declare and pay dividends with respect to its common stock or Qualified Preferred Stock payable solely in additional shares
of its common stock or Qualified Preferred Stock, and (ii) Subsidiaries (other than those directly owned, in whole or part, by the
Borrower) may declare and pay dividends ratably with respect to their common stock.
(b) The
Borrower will not, nor will it permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any Indebtedness (which, for purposes of this Section 6.08(b),
shall include any Indebtedness incurred pursuant to Section 6.01(a)), except:
(i) payments
or prepayments or exchanges of Indebtedness (including Refinancing Indebtedness) created under the Senior Loan Documents (including any
Refinancing Amendment executed in accordance with Section 6.01(c)); provided that the FILO Loans shall not be paid
or prepaid except in accordance with Section 2.11 or Section 7.02;
(ii) to
the extent contemplated by the Approved Budget and permitted by the Financing Order, regularly scheduled payments as and when due in respect
of any Indebtedness permitted pursuant to clause (xii) or (xiv) of Section 6.01(a);
(iii) payments
and refinancing of the Pre-Petition Senior Obligations in accordance with Sections 2.01(d) and (e) and Section 7.02
of this Agreement and the Financing Order;
(iv) (A) to
the extent paid with proceeds of Split-Lien Priority Collateral or to the extent contemplated by the Approved Budget, payments of regularly
scheduled interest as and when due in respect of the Existing Split-Priority Indebtedness and (B) solely to the extent and in the
manner permitted by the Financing Order (and, if applicable, as otherwise contemplated on Exhibit I), payments of the Existing
Split-Priority Indebtedness with certain Net Cash Proceeds of a Specified Elixir Sale or Elixir Monetization Event;
(v) (A) regularly
scheduled interest payments as and when due in respect of the ABL Term Loans, and (B) payments or prepayments of the ABL Term Loans
with proceeds of ABL Term Loan Exclusive Collateral; and
(vi) repurchases,
exchanges, redemptions or prepayments of Indebtedness for consideration consisting solely of common stock of the Borrower or Qualified
Preferred Stock or with Net Cash Proceeds from the substantially contemporaneous issuance of common stock or Qualified Preferred Stock
of the Borrower.
SECTION 6.09. Transactions
with Affiliates. The Borrower will not, and will not permit any Subsidiary to, directly or indirectly, sell, lease or otherwise transfer
any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions
with, any of its Affiliates, except:
(a) payment
of compensation to directors, officers, and employees of the Borrower or any of the Subsidiaries in the ordinary course of business;
(b) except
pursuant to the Approved Budget, without the express prior written consent of the Administrative Agent and an order of the Bankruptcy
Court (including the Financing Order) after notice and hearing, payments in respect of transactions required to be made pursuant to agreements
or arrangements in effect on the Closing Date and set forth on Schedule 6.09;
(c) transactions
involving the acquisition of inventory in the ordinary course of business; provided that (i) the terms of such transaction
are (A) set forth in writing, (B) in the best interests of the Borrower or such Subsidiary, as the case may be, and (C) no
less favorable to the Borrower or such Subsidiary, as the case may be, than those that could be obtained in a comparable arm’s length
transaction with a Person that is not an Affiliate of the Borrower or a Subsidiary and, (ii) if such transaction involves aggregate
payments or value in excess of $7,500,000, the board of directors of the Borrower (including a majority of the disinterested members of
the board of directors) approves such transaction and, in its good faith judgment, believes that such transaction complies with clauses
(i)(B) and (C) of this Section 6.09(c);
(d) [reserved];
(e) [reserved];
and
(f) any
other Affiliate transaction not otherwise permitted pursuant to this Section 6.09; provided that (i) the terms
of such transaction are (A) set forth in writing, (B) in the best interests of the Borrower or such Subsidiary, as the case
may be, and (C) no less favorable to the Borrower or such Subsidiary, as the case may be, than those that could be obtained in a
comparable arm’s length transaction with a Person that is not an Affiliate of the Borrower or a Subsidiary, (ii) if such transaction
involves aggregate payments or value in excess of $2,500,000 in any consecutive 12-month period, the board of directors of the Borrower
(including a majority of the disinterested members of the board of directors) approves such transaction and, in its good faith judgment,
believes that such transaction complies with clauses (i)(B) and (C) of this Section 6.09(f) and
(iii) if such transaction involves aggregate payments or value in excess of $5,000,000 in any consecutive 12-month period, the Borrower
obtains a written opinion from an independent investment banking firm or appraiser of national prominence, as appropriate, to the effect
that such transaction is fair to the Borrower or such Subsidiary, as the case may be, from a financial point of view.
SECTION 6.10. Restrictive
Agreements.
(a) The
Borrower will not, and will not permit any Subsidiary to, enter into any agreement which imposes a limitation on the incurrence by the
Borrower and the Subsidiaries of Liens that (i) would restrict any Subsidiary from granting Liens on any of its assets (including
assets in addition to the then-existing Collateral, to secure the Senior Obligations and the Second Priority Obligations) or (ii) is
more restrictive, taken as a whole, than the limitation on Liens set forth in this Agreement except, in each case, (A)(t) the Senior
Loan Documents and Pre-Petition Senior Loan Documents, (u) the ABL Term Loan Documents, (v) agreements with respect to Indebtedness
secured by Liens permitted by Section 6.02(a) restricting the ability to transfer or grant Liens on the assets securing
such Indebtedness, (w) agreements with respect to Second Priority Debt (1) containing provisions described in clauses (i) and/or
(ii) above that are not materially more restrictive, taken as whole, than those of this Agreement (2) requiring that
such Indebtedness be secured by assets in respect of which Liens are granted to secure other Indebtedness (provided that in the
case of any such assets subject to a Senior Lien, such Indebtedness will be required to be secured only with a Second Priority Lien);
provided, however, that the Second Priority Debt Documents relating to any such Indebtedness may not contain terms requiring
any Liens be granted with respect to Collateral consisting of cash or Permitted Investments pledged pursuant to Section 2.05(n) of
this Agreement or Section 8 of the Senior Subsidiary Guarantee Agreement or otherwise required to be provided upon the occurrence
of a default under any bank credit facility to secure obligations in respect of letters of credit issued thereunder, (x) agreements
with respect to Additional Senior Debt (1) containing provisions described in clauses (i) and/or (ii) above
that are not materially more restrictive, taken as a whole, than those of this Agreement or (2) requiring that such Indebtedness
be secured by assets in respect of which Liens are granted to secure other Indebtedness; provided, however, that the Additional
Senior Debt Documents relating to any such Indebtedness may not contain terms requiring any Liens be granted with respect to Collateral
consisting of cash or Permitted Investments pledged pursuant to Section 2.05(n) of this Agreement or Section 8 of
the Senior Subsidiary Guarantee Agreement or otherwise required to be provided upon the occurrence of a default under any bank credit
facility to secure obligations in respect of letters of credit issued thereunder, (y) agreements with respect to unsecured Indebtedness
governed by indentures or by credit agreements or note purchase agreements with institutional investors permitted by this Agreement containing
terms that are not materially more restrictive, taken as a whole, than those of this Agreement, and (z) agreements with respect to
Split-Priority Term Loan Debt permitted by this Agreement containing terms no more restrictive, taken as a whole, than those of this Agreement,
(B) customary restrictions contained in purchase and sale agreements limiting the transfer of or granting of Liens on 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 Closing Date and not entered into in contemplation
of the transactions effected on such date hereunder, (F) the Existing Non-Guaranteed Indentures, in each case when originally entered
into, (G) any restriction existing under agreements relating to assets acquired by the Borrower or a Subsidiary in a transaction
permitted hereby; provided that such agreements existed at the time of such acquisition, were not put into place in anticipation
of such acquisition and are not applicable to any assets other than assets so acquired, (H) [reserved], (I) customary restrictions
and conditions contained in agreements relating to an Elixir Monetization Event permitted hereunder, provided that such restrictions
and conditions apply only to the Specified Elixir Assets that are subject to such Elixir Monetization Event, (J) [reserved] and (K) restrictions
under the documentation governing any Escrow Notes issued by an Escrow Notes Issuer on the ability of an Escrow Notes Issuer to grant
Liens on, or otherwise encumber, the proceeds of such Escrow Notes after issuance thereof and prior to the earlier to occur of (i) the
satisfaction or waiver of the conditions under such documentation as contemplated in clause (i) of the definition of “Escrow
Notes” or (ii) the mandatory redemption or prepayment of such Escrow Notes as contemplated in clause (ii) of the definition
of “Escrow Notes” if such conditions are not satisfied by the date specified in such documentation.
(b) The
Borrower will not, and will not permit any Subsidiary to, enter into or suffer to exist or become effective any consensual encumbrance
or restriction on the ability of any Subsidiary to (i) make Restricted Payments in respect of any Equity Interests of such Subsidiary
held by, or pay any Indebtedness owed to, the Borrower or any other Subsidiary, (ii) make any Investment in the Borrower or any other
Subsidiary, or (iii) transfer any of its assets to the Borrower or any other Subsidiary, except for (A) any restriction existing
under (1) the Senior Loan Documents or the Pre-Petition Senior Loan Documents, the ABL Term Loan Documents or, to the extent applicable,
existing on the Closing Date under the Existing Non-Guaranteed Indentures, (2) the indenture or agreement governing any Refinancing
Indebtedness in respect of Indebtedness set forth in clause (1) above or (3) agreements with respect to Indebtedness
permitted by this Agreement containing provisions described in clauses (i), (ii) and (iii) above that are
not materially more restrictive, taken as a whole, than those of this Agreement, (B) customary non-assignment provisions in leases
and other contracts entered into in the ordinary course of business, (C) as required by applicable law, (D) customary restrictions
contained in purchase and sale agreements limiting the transfer of the subject assets pending closing, (E) any restriction existing
under agreements relating to assets acquired by the Borrower or a Subsidiary in a transaction permitted hereby; provided that such
agreements existed at the time of such acquisition, were not put into place in anticipation of such acquisition and are not applicable
to any assets other than assets so acquired, (F) [reserved], (G) agreements with respect to Indebtedness secured by Liens permitted
by Section 6.02 that restrict the ability to transfer the assets securing such Indebtedness, (H) customary restrictions
and conditions contained in agreements relating to any Elixir Monetization Event permitted hereunder, provided that such restrictions
and conditions apply only to the Specified Elixir Assets that are subject to such Elixir Monetization Event, (I) [reserved] and (J) restrictions
under the documentation governing any Escrow Notes issued by an Escrow Notes Issuer on the ability of an Escrow Notes Issuer to make Restricted
Payments or Investments with, or transfers of, the proceeds of such Escrow Notes after issuance thereof and prior to the earlier to occur
of (i) the satisfaction or waiver of the conditions under such documentation as contemplated in clause (i) of the definition
of “Escrow Notes” or (ii) the mandatory redemption or prepayment of such Escrow Notes as contemplated in clause (ii) of
the definition of “Escrow Notes” if such conditions are not satisfied by the date specified in such documentation.
SECTION 6.11. Amendment
of Material Documents.
(a) The
Borrower will not, nor will it permit any Subsidiary to, amend or modify (or waive any of its rights under) any Second Priority Collateral
Document without the consent of the Administrative Agent, other than modifications to such agreements in connection with (i) the
joinder of additional Subsidiary Loan Parties effected by the execution of supplements to such agreements, (ii) the inclusion of
(A) additional Second Priority Debt permitted pursuant to Section 6.01(a)(vii) constituting Secured Obligations
(as defined in the form of Second Priority Subsidiary Security Agreement attached to the Pre-Petition Credit Agreement as of the Closing
Date), or (B) Additional Senior Debt Obligations under such agreements and (iii) amendments required to permit the security
arrangements relating to Permitted Split-Priority Term Loan Debt (including the priority of Liens securing obligations with respect to
Split-Priority Term Loan Debt) that are not materially adverse to the Agents or the Lenders. The Borrower will not, nor will it permit
any Subsidiary to, amend, modify or waive any instrument governing any Additional Senior Debt Obligations or any related security documents,
or any of its rights under any of the foregoing, in each case without the consent of the Administrative Agent, other than amendments,
modifications and waivers that are not materially adverse to the interests of the Agents or the Lenders or amendments or other modifications
to implement any Refinancing Indebtedness and Split-Priority Implementing Agreements, in each case otherwise permitted by this Agreement.
(b) The
Borrower will not, nor will it permit any Subsidiary to, amend or modify (or to waive any of its rights under) any ABL Term Loan Documents
without the consent of the Administrative Agent, other than (i) modifications to such ABL Term Loan Documents in connection with
the joinder of additional Subsidiary Loan Parties effected by the execution of supplements to such ABL Term Loan Documents, (ii) modifications
to such ABL Term Loan Documents conforming to corresponding modifications to the Senior Loan Documents, or (iii) amendments or modifications
of, or waivers under, such ABL Term Loan Documents that are not materially adverse to the Agents or the Lenders.
(c) The
Borrower will not, and will not permit any Subsidiary party to the Intercompany Inventory Purchase Agreement to, amend, terminate, or
otherwise modify the Intercompany Inventory Purchase Agreement in any manner materially adverse to the Lenders or their interests under
the Senior Loan Documents without the prior written approval of the Administrative Agent; provided, however, that the foregoing
shall not limit the Borrower’s responsibilities pursuant to Section 3.2 of the Intercompany Inventory Purchase Agreement.
(d) After
the effective date of the Restructuring Support Agreement, the Borrower will not, and will not permit any Subsidiary party to the Restructuring
Support Agreement to, amend or otherwise modify the Restructuring Support Agreement in a manner adverse to the interests of the Agents
or the Lenders (in their capacities as such) or their interests under the Senior Loan Documents without the prior written approval of
the Administrative Agent. It is acknowledged and agreed that the Administrative Agent shall have consent or consultation rights, as applicable,
with respect to the matters described in Exhibit B to the Restructuring Support Agreement, in each case, as in effect on the effective
date of the Restructuring Support Agreement.
SECTION 6.12. Minimum
ABL Availability. The Borrower will not permit, at any time, ABL Availability to be less than $200,000,000.
SECTION 6.13. Restrictions
on Asset Holdings by the Borrower. The Borrower will not at any time:
(a) make
or hold any Investments other than investments in the Equity Interests of the Subsidiaries (including any distributions or other assets
received in respect thereto), intercompany advances to Subsidiaries and Investments permitted by Section 6.13(c) and
Investments consisting of any unsecured Guarantee of any obligations of any Subsidiary in the ordinary course of business (to the extent
such obligations of such Subsidiary are not prohibited from being incurred hereunder);
(b) acquire
or hold any Stores, other capital assets, inventory or accounts receivable, other than (x) any real estate which the Borrower holds
only as lessor and which is leased and operated by another Person and (y) de minimis business assets maintained in the ordinary course
of business;
(c) acquire
or hold cash, cash equivalents, Permitted Investments or balances in bank accounts, other than such amounts as are reasonably anticipated
(at the time so acquired or held) to be utilized within five Business Days for any purpose not prohibited under this Agreement; or
(d) grant
any Lien on any of its assets to secure any Indebtedness (other than, to the extent otherwise permitted to be granted pursuant to Section 6.02,
(i) the Senior Obligations, (ii) the Pre-Petition Senior Obligations, (iii) the Existing Split-Priority Indebtedness, and
(iv) as otherwise contemplated by the Financing Order).
SECTION 6.14. Corporate
Separateness. The Borrower will, and will cause each Subsidiary to, take all necessary steps to maintain its identity as a separate
legal entity from other Persons and to make it manifest to third parties that it is an entity with assets and liabilities distinct from
those of each of other Person.
SECTION 6.15. Cash
Management. At any time any Revolving Loans or Pre-Petition Revolving Loans are outstanding, the Borrower shall not, and shall not
permit any Subsidiary to, permit cash on hand (including the proceeds of any Loans) in an aggregate amount in excess of $5,000,000 to
accumulate and be maintained in the Deposit Accounts of the Borrower and its Subsidiaries, provided, that, for purposes
hereof, “cash on hand” shall exclude the following: (i) “store” cash, cash in transit between stores and
local Deposit Accounts and cash receipts from sales in the process of inter-account transfers, in each case as a result of the ordinary
course operations of the Loan Parties, (ii) cash necessary for the Loan Parties and their Subsidiaries to satisfy the current liabilities
incurred by such Loan Parties and their Subsidiaries in the ordinary course of their businesses and without acceleration of the satisfaction
of such current liabilities within the next three (3) Business Days, (iii) [reserved], (iv) cash proceeds of ABL Term Loan
Exclusive Collateral held in any ABL Term Loan Exclusive Collateral Account prior to application thereof in accordance with the ABL Term
Loan Documents or the Financing Order, (v) cash proceeds of Refinancing Indebtedness to the extent that the applicable Refinanced
Debt consists of unused Revolving Commitments that have been terminated in connection with the issuance of such Refinancing Indebtedness,
(vi) cash held in any Deposit Account relating to any Elixir Monetization Event, (vii) cash collateral required to be deposited
pursuant to Section 2.05(n) or otherwise to cash collateralize letters of credit in accordance with the applicable loan
or letter of credit documents, and (viii) cash held in any Deposit Account of the Loan Parties which is under the sole dominion and
control of the Collateral Agent if the Collateral Agent has exclusive rights of withdrawal with respect to such Deposit Accounts.
SECTION 6.16. Use
of Proceeds. The Borrower shall not, and shall not permit any Subsidiary to, (x) use the proceeds of any Loan or Letter of Credit,
or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, to fund any activities
of or business with any Sanctioned Person or Sanctioned Entity that, at the time of such funding, is the target of Sanctions, or in any
other manner that will result in a violation by any party hereto (including any Person participating in the transaction, whether as Lender,
an Arranger, Administrative Agent, Issuing Bank, Swingline Lender, or otherwise) of Sanctions or (y) use the proceeds of any
Loan or Letter of Credit in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything
else of value, to any Person in violation of any Sanctions or Anti-Corruption Laws or an any other manner that would violate any Anti-Corruption
Laws.
SECTION 6.17. Intellectual
Property Collateral. The Borrower shall not, and shall not permit any Subsidiary to, designate any Intellectual Property that constitutes
Collateral as Split-Lien Priority Collateral pursuant to the definition of “Collateral Designation Date” or otherwise at any
time prior to the Senior Loan Obligation Payment Date (it being acknowledged and agreed that, for purposes of the definition of “Collateral
Designation Date”, an Event of Default shall be deemed to be continuing as a result of the commencement of the Chapter 11 Case).
SECTION 6.18. Elixir
Monetization Event. Without limiting any of the other provisions of this Article VI applicable to Elixir Monetization
Events, Elixir Insurance Company shall not consummate or participate in any Elixir Monetization Event, unless the Net Cash Proceeds of
such Elixir Monetization Event are received by a Loan Party and are applied in accordance with Section 2.11(d).
ARTICLE VII
Events of Default
SECTION 7.01. Events
of Default.
If any of the following events (each, an “Event
of Default”) shall occur:
(a) the
Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at the date fixed for prepayment thereof;
(b) the
Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement or any other Senior Loan Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of two (2) Business Days;
(c) any
representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary Loan Party in or in connection with any
Senior Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement
or other document furnished pursuant to or in connection with any Senior Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any material respect when made or deemed made;
(d) the
Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.01 (Financial Statements
and Other Information), 5.02 (Notices of Material Events), 5.08 (Books and Records; Inspection and Audit Rights; Collateral
and Borrowing Base Reviews), 5.10 (Use of Proceeds and Letters of Credit), 5.11 (Additional Subsidiaries), 5.15 (Inventory
Purchasing), 5.16 (Cash Management System), 5.17 (Specified Elixir Assets), 5.18 (Company Financial Advisors and
Lender Group Consultants), 5.19 (Approved Budget), 5.20 (Chapter 11 Case Milestones), 5.21 (Compliance with Bankruptcy
Court Orders, Bankruptcy Code, Etc.), 5.22 (Real Estate Leases), 5.23 (Assumption and Rejection of Contracts and Real Estate
Leases), 5.24 (Post-Closing Obligations), or in Article VI;
(e) any
Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Senior Loan Document (other than those
specified in clause (a), (b) or (d) of this Article), and such failure shall continue unremedied for a
period of 20 days after the earlier of (x) notice thereof has been delivered by the Administrative Agent to the Borrower (which notice
shall be given promptly at the request of the Required Lenders) and (y) any Financial Officer or senior executive Responsible Officer
of any Loan Party obtaining actual knowledge of such failure;
(f) the
Borrower or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness (other than any Material Indebtedness the payment or enforcement of which is subject to the Automatic Stay), including
any obligation to reimburse letter of credit obligations or to post cash collateral with respect thereto, when and as the same shall become
due and payable or within any applicable grace period;
(g) except
for the filing of the Chapter 11 Case, any event or condition occurs that results in any Material Indebtedness (other than any Material
Indebtedness the payment or enforcement of which is subject to the Automatic Stay) becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any such Material Indebtedness
or any trustee or agent on its or their behalf to cause any such Material Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to
any such Material Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such
Material Indebtedness; provided, further that this clause (g) shall not apply to any mandatory repurchase offer
or other mandatory repurchase, redemption or prepayment obligation of the Borrower or any Escrow Notes Issuer that may arise under (x) Convertible
Debt to the extent that the making of such mandatory repurchase by the Borrower is otherwise permitted under this Agreement or (y) the
Escrow Notes to the extent required in connection with a failure to satisfy the conditions to release of the proceeds of such Escrow Notes;
(h) [reserved];
(i) the
Borrower or any Subsidiary shall, except as contemplated by the applicable bid procedures, (i) fail to comply, in any material respect,
with the terms of any binding agreement for a Specified Sale Transaction or any of the documents or agreements executed in connection
therewith, (ii) fail to consummate a Specified Sale Transaction in accordance with the terms of the definitive documents or agreements
executed in connection therewith and the related Bankruptcy Court orders authorizing such Specified Sale Transaction (in each case of
clauses (i) and (ii), (x) without any waiver or amendment to such documents, agreements or Bankruptcy Court orders,
unless consented to in writing by the Administrative Agent and (y) other than as a result of a consummation of a higher or better
transaction as contemplated by the applicable bid procedures), or (iii) take any action which would reasonably be expected to result
in a decrease in proceeds from a Specified Sale Transaction of more than $15,000,000 or to adversely affect the Borrower’s or any
Subsidiary’s ability to comply with the terms of any definitive documents or agreements executed in connection with such Specified
Sale Transaction;
(j) after
entry into the Restructuring Support Agreement, the Restructuring Support Agreement is terminated for any reason and, at the time of or
following such termination, any holder of the Existing Split-Priority Indebtedness shall be granted relief from the Automatic Stay to
proceed to execute upon or enforce their Lien on any Collateral;
(k) one
or more judgments for the payment of money in an aggregate amount in excess of $20,000,000 (other than any such judgment or judgments
the payment or enforcement of which is subject to the Automatic Stay) shall be rendered against the Borrower, any Subsidiary or any combination
thereof (to the extent not covered by insurance as to which the insurer has been notified of such judgment or order and has not denied
coverage) and the same shall not have been satisfied, vacated, discharged or stayed or bonded pending an
appeal for a period of 30 consecutive days, or any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of the Borrower or any Subsidiary to enforce any such judgment;
(l) any
ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, has resulted or could reasonably
be expected to result in a Material Adverse Effect;
(m) (i) any
Lien purported to be created under any Senior Collateral Document shall cease to be a valid and perfected Lien on any material portion
of the Collateral, with the priority required by the Senior Loan Documents or the Borrower or any Subsidiary shall so assert in writing,
except as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Senior Loan Documents,
or (ii) any Senior Loan Document or Pre-Petition Senior Loan Document shall become invalid, or the Borrower or any Subsidiary shall
so assert in writing;
(n) a
Change in Control shall occur;
(o) any
Subsidiary Loan Party shall amend or revoke any instruction in the Government Lockbox Account Agreement to any Government Lockbox Account
Bank in respect of a Government Lockbox Account unless (i) the Administrative Agent shall have given its prior written consent or
(ii) the Government Lockbox Account is then under the control of any other Person pursuant to Section 5.16; or
(p) the
occurrence of any of the following in the Chapter 11 Case:
(i) the
bringing of a motion, taking of any action or the filing of any plan of reorganization or disclosure statement attendant thereto by any
of the Borrower or any Subsidiary, or any Person claiming by or through the Borrower or any Subsidiary, in the Chapter 11 Case: (A) to
obtain additional financing under Section 364(c) or Section 364(d) of the Bankruptcy Code not otherwise permitted
pursuant to the Senior Loan Documents, (B) to grant any Lien (other than Liens expressly permitted by Section 6.02) upon
or affecting any Collateral, (C) except as provided in the Financing Order, to use “cash collateral” (as defined in Section 363(a) of
the Bankruptcy Code) under Section 363(c) of the Bankruptcy Code without the prior written consent of the Administrative Agent,
(D) that seeks to prohibit the Senior Collateral Agent from credit bidding on any or all of the Loan Parties’ assets during
the pendency of the Chapter 11 Case, or (E) any other action or actions materially adverse to (x) the Administrative Agent,
the Senior Collateral Agent and the Lenders or their rights and remedies under the Senior Loan Documents or their interest in the Collateral,
or (y) the Pre-Petition Agent and Pre-Petition Lenders or their rights under the Pre-Petition Senior Loan Documents or their interest
in the Collateral (as defined in the Pre-Petition Credit Agreement), other than, in the case of clause (C) or (D) above,
in connection with the indefeasible payment in full in cash (including pursuant to a refinancing) of the Senior Obligations and the Pre-Petition
Senior Obligations;
(ii) (A) the
filing of any plan of reorganization or disclosure statement attendant thereto, or any direct or indirect amendment to such plan or disclosure
statement, by any Loan Party that does not propose to indefeasibly repay in full in cash the Senior Obligations and the Pre-Petition Senior
Obligations on the effective date of such plan, or by any other Person, in each case, without the prior written consent of the Administrative
Agent, or the Borrower or any Subsidiary shall seek, support or fail to contest in good faith the filing or confirmation of any such plan
of reorganization or entry of any such order, (B) the entry of any order terminating any Loan Party’s exclusive right to file
a plan of reorganization, or (C) the expiration of any Loan Party’s exclusive right to file a plan of reorganization;
(iii) the
entry of an order in the Chapter 11 Case confirming a plan of reorganization that (A) is not acceptable to the Administrative Agent
in its discretion (it being understood that a plan of reorganization that provides for the indefeasible repayment in full in cash of the
Senior Obligations and the Pre-Petition Senior Obligations on the effective date thereto shall be deemed to be acceptable to the Administrative
Agent) or (B) does not contain a provision for termination of the Commitments and the indefeasible repayment in full in cash of all
of the Senior Obligations and the Pre-Petition Senior Obligations on or before the effective date of such plan or plans or reorganization;
(iv) (A) the
entry of an order amending, supplementing, staying, vacating or otherwise modifying the Senior Loan Documents (including the Financing
Order) or the Cash Management Order, in each case, without the prior written consent of the Administrative Agent, (B) the filing
of a motion for reconsideration with respect to the Financing Order or the Cash Management Order, or (C) the Financing Order or the
Cash Management Order shall otherwise not be in full force and effect;
(v) except
as set forth in any motions which have been delivered to and are acceptable to the Administrative Agent or as set forth in the Financing
Order, the payment of, or application for authority to pay, any Pre-Petition claim without the prior written consent of the Administrative
Agent;
(vi) the
allowance of any claim or claims under Section 506(c) of the Bankruptcy Code or otherwise against the Administrative Agent,
the Senior Collateral Agent any Lender or any of the Collateral or against the Pre-Petition Agent, any Pre-Petition Lender or any Collateral
(as defined in the Pre-Petition Credit Agreement);
(vii) the
filing of a motion by the Borrower or any of its Affiliates for, or the entry or any order directing, the appointment of an interim or
permanent trustee in the Chapter 11 Case or the appointment of a trustee, receiver, or an examiner in the Chapter 11 Case with expanded
powers to operate or manage the financial affairs, the business, or reorganization of the Loan Parties;
(viii) other
than pursuant to any Specified Sale Transaction or with the prior written consent of the Administrative Agent, the sale of all or substantially
all of the Loan Parties’ assets either through a sale under Section 363 of the Bankruptcy Code, through a confirmed plan of
reorganization in the Chapter 11 Case or otherwise that does not result in the indefeasible repayment in full in cash of the Senior Obligations
and the Pre-Petition Senior Obligations upon the closing of such sale or initial payment of the purchase price or effectiveness of such
plan of reorganization;
(ix) the
dismissal of the Chapter 11 Case, or the conversion of the Chapter 11 Case from one under Chapter 11 of the Bankruptcy Code to one under
Chapter 7 of the Bankruptcy Code or the Borrower or any Subsidiary shall file a motion or other pleading seeking the dismissal of the
Chapter 11 Case under Section 1112 of the Bankruptcy Code or otherwise or the conversion of the Chapter 11 Case from one under Chapter
11 of the Bankruptcy Code to one under Chapter 7 of the Bankruptcy Code;
(x) the
filing of a motion by the Borrower or any Subsidiary or any of their respective Affiliates seeking, or the Bankruptcy Court shall enter
an order granting, relief from or modifying the Automatic Stay (A) to allow any creditor (other than the Administrative Agent, the
Senior Collateral Agent or the Pre-Petition Agent) to execute upon or enforce a Lien on any Collateral having a value in excess of $20,000,000
(or any ABL Priority Collateral having a value in excess of $5,000,000), (B) approving any settlement or other stipulation not approved
by the Administrative Agent with any secured creditor of any Loan Party providing for payments as adequate protection or otherwise to
such secured creditor, or (C) with respect to any Lien of or the granting of any Lien on any Collateral to any federal, state or
local environmental or regulatory agency or authority, which in either case involves a claim of $20,000,000;
(xi) the
commencement of a suit or an action against the Administrative Agent, the Senior Collateral Agent or any Lender or the Pre-Petition Agent
or any Pre-Petition Lender (in each case, in their capacities as such) by or on behalf of the Borrower or any Subsidiary (or their estates)
or by their Affiliates;
(xii) the
entry of an order in the Chapter 11 Case avoiding or permitting recovery of any portion of the payments made on account of the Senior
Obligations or the Pre-Petition Senior Obligations;
(xiii) other
than with the prior written consent of the Administrative Agent, the filing of a motion by any Loan Party or any of their respective Affiliates
seeking, or the Bankruptcy Court shall enter an order granting, a change in venue with respect to the Chapter 11 Case;
(xiv) other
than in respect of the Carve Out or the Senior Obligations, or as otherwise permitted under the Senior Loan Documents (including the Financing
Order), the existence (or the entry of) any order of the Bankruptcy Court authorizing (x) any claims or charges, entitled to superpriority
administrative expense claim status in the Chapter 11 Case having a priority that is pari passu with or senior to the claims of
the Administrative Agent, the Senior Collateral and the Lenders under the Senior Loan Documents or (y) any Lien on the Collateral
having a priority that is pari passu with or senior to the Liens of the Senior Collateral Agent securing the Senior Obligations;
(xv) the
filing of a motion by the Borrower, any Subsidiary or any of their respective Affiliates seeking to limit, or the Bankruptcy Court shall
enter an order limiting, the extension under Section 552(b) of the Bankruptcy Code of the Liens of the Pre-Petition Agent on
the Collateral (as defined in the Pre-Petition Credit Agreement) to any proceeds, products, offspring, or profits of the Collateral (as
defined in the Pre-Petition Credit Agreement) acquired by any Loan Party after the Petition Date; or
(xvi) the
Borrower or any Subsidiary shall take any action in support of any matter prohibited by this Section 7.01(p) or any other
Person shall do so and such application is not contested in good faith by the Borrower and the relief requested is granted in an order
that is not stayed pending appeal;
then, in the case of any such Event of Default,
and at any time thereafter during the continuance of such Event of Default, subject to the Financing Order
and the terms thereof, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower,
take any of the following actions, at the same or different times:
(i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately;
(ii) declare
the Senior Obligations then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Senior Obligations so declared to
be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall
become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower;
(iii) terminate,
reduce or restrict any right or ability of the Loan Parties to use any “cash collateral” (within the meaning of Section 363(c) of
the Bankruptcy Code) of the Senior Secured Parties or the “Senior Secured Parties” under, and as defined in, the Pre-Petition
Credit Agreement, other than to the extent expressly permitted in the Financing Order;
(iv) declare
that the application of the Carve Out has occurred through the delivery of a Carve Out Trigger Notice in accordance with the Financing
Order;
(v) subject
to the Remedies Notice Period, (A) direct any or all of the Loan Parties to sell or otherwise dispose of any or all of the Collateral
on terms and conditions acceptable to the Administrative Agent pursuant to Section 363, Section 365 and other applicable provisions
of the Bankruptcy Code (and, without limiting the foregoing, direct any Loan Party to assume and assign any lease or executory contract
included in the Collateral to the Administrative Agent’s designees in accordance with and subject to Section 365 of the Bankruptcy
Code) and (B) if applicable, implement (or require implementation of) the actions specified in the Financing Order in
connection with the occurrence of any Specified Sale Process Default; and/or
(vi) subject
to the Remedies Notice Period, whether or not the maturity of the Senior Obligations shall have been accelerated pursuant hereto, proceed
to protect, enforce and exercise all rights and remedies of the Senior Secured Parties under this Agreement or any of the other Senior
Loan Documents (including the Financing Order), under the Pre-Petition Credit Agreement or any of the other Pre-Petition Senior Loan Documents,
or under applicable law (including the Uniform Commercial Code).
SECTION 7.02. Application
of Proceeds. Subject to the provisions of the Financing Order, the applicable Intercreditor Agreements, and the provisions of Section 2.11
directing the application of payments required thereby, after the occurrence and during the continuance of (i) any Cash Sweep Period,
or (ii) any Event of Default and acceleration of the Senior Loan Obligations, all proceeds realized from any Loan Party or on account
of any Collateral owned by a Loan Party or any payments in respect of any Senior Loan Obligations and all proceeds of the Collateral,
shall be applied in the following order:
(a) FIRST,
to permanently reduce the Pre-Petition Revolving Obligations (if any) in accordance with clauses FIRST through SEVENTH of Section 7.02
of the Pre-Petition Credit Agreement, until paid in full;
(b) SECOND,
ratably to pay the Senior Loan Obligations in respect of any fees, expenses, indemnities and other amounts (including (x) fees, expenses,
indemnities and other amounts accrued after the commencement of any Bankruptcy Proceeding, whether or not allowed in such Bankruptcy Proceeding,
(y) fees, charges and disbursements of counsel to the Administrative Agent, and (z) Protective Advances and any interest in
respect thereof) then due to the Administrative Agent, Collateral Agent and Senior Collateral Agent and their Affiliates until paid in
full;
(c) THIRD,
to payment of that portion of the Senior Loan Obligations constituting fees, expenses, indemnities and other amounts (other than principal,
interest, and Letter of Credit fees owed to the Lenders in their capacity as such) payable to the Lenders and the Issuing Banks (including
(x) such fees, expenses, indemnities and other amounts accrued after the commencement of any Bankruptcy Proceeding, whether or not
allowed in such Bankruptcy Proceeding and (y) fees, charges and disbursements of counsel to the respective Lenders and Issuing Banks
arising under the Senior Loan Documents), ratably among the applicable Lenders (including the Swingline Lender) and the Issuing Banks
in proportion to the respective amounts described in this clause THIRD payable to them;
(d) FOURTH,
ratably to pay fees and interest (including default interest and Letter of Credit fees and specifically including interest and Letter
of Credit fees accrued after the commencement of any Bankruptcy Proceeding, whether or not allowed in such Bankruptcy Proceeding) accrued
in respect of the Senior Loan Obligations (other than (x) the FILO Loans and (y) to the extent interest thereon is paid under
clause SECOND above, Protective Advances) until paid in full, ratably among the applicable Lenders in proportion to the respective amounts
described in this clause FOURTH payable to them;
(e) FIFTH,
ratably to pay interest (including default interest and specifically including interest accrued after the commencement of any Bankruptcy
Proceeding, whether or not allowed in such Bankruptcy Proceeding) accrued in respect of the FILO Loans, until paid in full, ratably among
the applicable Lenders in proportion to the respective amounts described in this clause FIFTH payable to them;
(f) SIXTH,
to pay principal due in respect of the Swingline Loans until paid in full;
(g) SEVENTH,
ratably to pay principal due in respect of the Loans (other than FILO Loans or, for the avoidance of doubt, the Pre-Petition FILO Loans),
until paid in full, ratably among the applicable Lenders in proportion to the respective amounts described in this clause SEVENTH payable
to them;
(h) EIGHTH,
to the Administrative Agent, to be held by the Administrative Agent, for the ratable benefit of the Issuing Banks and the Revolving Lenders,
as cash collateral in such amounts as required by the terms of this Agreement until paid in full;
(i) NINTH,
ratably to pay principal due in respect of FILO Loans, until paid in full, ratably among the applicable Lenders in proportion to the respective
amounts described in this clause NINTH payable to them;
(j) TENTH,
to pay the ABL Term Loan Obligations in accordance with Section 7.02 of the ABL Term Loan Agreement;
(k) ELEVENTH,
ratably to pay outstanding Senior Loan Obligations in respect of Senior Cash Management Services (x) provided by the Administrative
Agent or its Affiliates or (y) provided by any other Person, provided that such Person has complied with the requirements
set forth in the definition of “Senior Loan Bank Product Liabilities”, ratably among the applicable Senior Loan Secured Parties
in proportion to the respective amounts described in this clause ELEVENTH payable to them;
(l) TWELFTH,
ratably to pay outstanding Senior Loan Obligations in respect of Senior Bank Products and other outstanding Senior Loan Bank Product Liabilities
(other than Senior Cash Management Services) (x) provided by the Administrative Agent or its Affiliates or (y) provided by any
other Person, provided that such Person has complied with the requirements set forth in the definition of “Senior Loan Bank
Product Liabilities”, ratably among the applicable Senior Loan Secured Parties in proportion to the respective amounts described
in this clause TWELFTH payable to them;
(m) THIRTEENTH,
ratably to pay any remaining outstanding Senior Loan Obligations in respect of Senior Cash Management Services, Senior Bank Products and
other outstanding Senior Loan Bank Product Liabilities, ratably among the applicable Senior Loan Secured Parties in proportion to the
respective amounts described in this clause THIRTEENTH payable to them;
(n) FOURTEENTH,
to pay any other Senior Loan Obligations due to the Secured Loan Parties, until paid in full, ratably among the applicable Senior Loan
Secured Parties in proportion to the respective amounts described in this clause FOURTEENTH payable to them; and
(o) FIFTEENTH,
the balance, if any, after all of the Senior Loan Obligations and the Pre-Petition Senior Obligations have been indefeasibly paid in full,
to the Borrower or as otherwise required by applicable law;
provided
that, notwithstanding the foregoing, (i) all adequate protection payments in respect of the Pre-Petition Senior Loan Obligations
contemplated by the Financing Order shall be paid to the Pre-Petition Agent or the Pre-Petition Lenders entitled to such adequate protection
payments, as applicable, all in the manner contemplated by the Financing Order and (ii) the “DIP Prepetition Indemnity Account”,
if applicable, and the “DIP ABL Indemnity Account” (each as defined in the Financing Order), if applicable, shall be funded
at the time and in the manner contemplated by the Financing Order.
Notwithstanding anything in the foregoing to the
contrary, Excluded Swap Obligations with respect to any Loan Party shall not be paid with proceeds received from such Loan Party or its
assets, but appropriate adjustments shall be made with respect to proceeds received from other Loan Parties to preserve the allocations
to the Senior Loan Obligations otherwise set forth in this Section 7.02. Amounts used to provide cash collateral pursuant
to clause EIGHTH above shall be applied to satisfy amounts owing in respect of the obligations so Cash Collateralized and any amounts
that remain on deposit as cash collateral after all such obligations have been satisfied shall be applied to the other Senior Loan Obligations,
if any, in the order set forth above.
ARTICLE VIII
Rights of Agents
SECTION 8.01. Appointment
and Authority of Agents.
(a) Each
of the Lenders and the Issuing Banks hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder
and under the other Senior Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably
incidental thereto. The provisions of this Article VIII are solely for the benefit of the Administrative Agent, the
other Agents, the Lenders, the Swingline Lender and the Issuing Banks, and the Borrower shall not have rights as a third party beneficiary
of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Senior
Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any applicable law. Instead such term is used as a matter of market
custom, and is intended to create or reflect only an administrative relationship between contracting parties.
(b) Bank
of America shall also act as the Collateral Agent and Senior Collateral Agent under the Senior Loan Documents, and each of the Lenders
(including in its capacities as a potential counterparty to a Senior Cash Management Agreement and/or provider of Senior Bank Products)
and the Issuing Banks hereby irrevocably appoints and authorizes Bank of America to act as the agent of such Lender and the Issuing Banks
in such capacities for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties
to secure any of the Senior Loan Obligations, together with such powers and discretion as are reasonably incidental thereto. In
this connection, Bank of America in its capacities as Collateral Agent and Senior Collateral Agent and any co-agents, sub-agents and attorneys-in-fact
appointed by the Collateral Agent or Senior Collateral Agent pursuant to the terms hereof for purposes of holding or enforcing any Lien
on the Collateral (or any portion thereof granted under the Senior Collateral Documents, or for exercising any rights and remedies thereunder
at the direction of the Collateral Agent or the Senior Collateral Agent, as applicable), shall be entitled to the benefits of all provisions
of this Article VIII and Article IX (including Section 9.03(c), as though such co-agents, sub-agents
and attorneys-in-fact were the “Collateral Agent” and/or the “Senior Collateral Agent” under the Senior Loan Documents)
as if set forth in full herein with respect thereto.
(c) Without
limiting the generality of the foregoing, each Secured Loan Secured Party hereby authorizes the Agents to consent, on behalf of each Secured
Loan Secured Party, to the Financing Order, each to be negotiated between the Loan Parties, the Agents, and the Statutory Committee.
SECTION 8.02. Rights
as a Lender. Each financial institution serving as an Agent hereunder shall have the same rights and powers in its capacity as a Lender
as any other Lender and may exercise the same as though it were not an Agent, and such financial institutions and their Affiliates may
accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally
engage in any kind of business with the Borrower or any Subsidiary or any Affiliate of any of the foregoing as if they were not Agents
hereunder and without any duty to account therefor to the Lenders.
SECTION 8.03. Exculpatory
Provisions. No Agent shall have any duties or obligations except those expressly set forth in the Senior Loan Documents. Without limiting
the generality of the foregoing, (a) no Agent shall be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) no Agent shall have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by the Senior Loan Documents that such Agent is required to exercise
in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02); provided that no Agent shall be required to take any action that, in its opinion or the
opinion of its counsel, may expose such Agent to liability or that is contrary to any Senior Loan Document or applicable law, including
for the avoidance of doubt any action that may be in violation of the Automatic Stay or any similar stay under any Debtor Relief Law or
that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law and
(c) except as expressly set forth in the Senior Loan Documents, no Agent shall have any duty to disclose, and no Agent shall be liable
for the failure to disclose, any information relating to the Borrower or any of the Subsidiaries that is communicated to or obtained by
the financial institution serving as such Agent or any of its Affiliates in any capacity. No Agent shall be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or willful
misconduct (as determined by a court of competent jurisdiction by final and non-appealable judgment). No Agent shall be deemed to have
knowledge of any Default unless and until written notice thereof is given to such Agent by the Borrower, a Lender or an Issuing Bank,
as applicable, and no Agent shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Senior Loan Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other
terms or conditions set forth in any Senior Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Senior Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV
or elsewhere in any Senior Loan Document, other than to confirm receipt of items expressly required to be delivered to such Agent.
SECTION 8.04. Reliance
by the Agents. Each Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by
the proper Person. Each Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the
proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making
of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction
of a Lender or an Issuing Bank, the Administrative Agent may presume that such condition is satisfactory to such Lender or such Issuing
Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or such Issuing Bank prior to the making
of such Loan or the “issuance” (as such term is defined in Section 4.02) of such Letter of Credit. Any Agent may
consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
SECTION 8.05. Delegation
of Duties. Each Agent may perform any and all of its duties and exercise any and all of its rights and powers by or through any one
or more sub-agents appointed by such Agent. Any Agent and any such sub-agent may perform any and all of its duties and exercise any and
all of its rights and powers through their Related Parties. The exculpatory provisions of this Article VIII shall apply to
any such sub-agent and to the Related Parties of any Agent and any such sub-agent, and shall apply to their activities in connection with
the syndication of the credit facilities provided for herein as well as activities as an Agent. No Agent shall be responsible for the
negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable
judgment that such Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.
SECTION 8.06. Resignation
or Removal of an Agent.
(a) Subject
to any limitations and requirements set forth in the Senior Collateral Documents, any Agent may at any time give notice of its resignation
to the Lenders, the Issuing Banks and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with the Borrower and with the consent of the Required FILO Lenders (to the extent any FILO Loans shall be outstanding
at such time), to appoint a successor acting in the same capacity as the resigning Agent, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed
and shall have accepted such appointment within thirty (30) days after the retiring Agent gives notice of its resignation (or such earlier
day as shall be agreed by the Required Lenders, and, if applicable the Required FILO Lenders) (the “Resignation Effective Date”),
then the retiring Agent may (but shall not be obligated to) on behalf of the Lenders and the Issuing Banks, appoint a successor Agent
meeting the qualifications set forth above; provided that in no event shall any such successor Agent be a Defaulting Lender. Whether
or not a successor has been appointed, such resignation shall become effective with such notice on the Resignation Effective Date.
(b) If
the Person serving as an Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required
Lenders may (with the consent of the Required FILO Lenders (to the extent any FILO Loans shall be outstanding at such time)), to the extent
permitted by applicable law, by notice in writing to the Borrower and such Person remove such Person as an Agent and, in consultation
with the Borrower and with the consent of the FILO Lenders (to the extent any FILO Loans shall be outstanding at such time), appoint a
successor. If no such successor shall have been so appointed and shall have accepted such appointment within thirty (30) days (or such
earlier day as shall be agreed by the Required Lenders, and, if applicable the Required FILO Lenders) (the “Removal Effective
Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.
(c) With
effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed Agent shall
be discharged from its duties and obligations hereunder and under the other Senior Loan Documents (except that in the case of any collateral
security held by any Agent on behalf of any of the Senior Secured Parties under any of the Senior Loan Documents, the retiring or removed
Agent shall continue to hold such collateral security until such time as a successor Agent is appointed to act in such capacity) and (ii) except
for any indemnity payments or other amounts then owed to the retiring or removed Agent, all payments, communications and determinations
provided to be made by, to or through such Agent shall instead be made by or to each Lender and each Issuing Bank directly, until such
time, if any, as the Required Lenders (and, if applicable the FILO Lenders) appoint a successor Agent as provided for above. Upon the
acceptance of a successor’s appointment as Agent hereunder, such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring (or removed) Agent (other than as provided in Section 2.17 and other than any
rights to indemnity payments or other amounts owed to the retiring or removed Agent as of the Resignation Effective Date or the Removal
Effective Date, as applicable), and the retiring or removed Agent shall be discharged from all of its duties and obligations hereunder
or under the other Senior Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by
the Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and
such successor. After the retiring or removed Agent’s resignation or removal hereunder and under the other Senior Loan Documents,
the provisions of this Article VIII and Section 9.03 shall continue in effect for the benefit of such retiring
or removed Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of
them (i) while the retiring or removed Agent was acting as Agent and (ii) after such resignation or removal for as long as any
of them continues to act in any capacity hereunder or under the other Senior Loan Documents, including (a) acting as collateral agent
or otherwise holding any collateral security on behalf of any of the Lenders and (b) in respect of any actions taken in connection
with transferring the agency to any successor Agent. Notwithstanding anything to the contrary contained herein, any resignation or removal
of the Senior Collateral Agent pursuant to the terms hereof shall be subject to the terms, conditions and limitations set forth in the
Senior Collateral Documents and no such resignation or removal shall be effective except to the extent made in compliance with the terms
of such Senior Collateral Documents.
(d) Any
resignation or removal by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation
as an Issuing Bank and as Swingline Lender. If Bank of America resigns as an Issuing Bank, it shall retain all the rights, powers, privileges
and duties of an Issuing Bank hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation
as an Issuing Bank and all Senior Loan Obligations in respect of Letters of Credit, including the right to require the Revolving Lenders
to make Revolving Loans or fund risk participations in unreimbursed drawing under any Letter of Credit pursuant to Section 2.05.
If Bank of America resigns as Swingline Lender, it shall retain all the rights of the Swingline Lender provided for hereunder with respect
to Swingline Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Revolving
Lenders to make Revolving Loans or fund risk participations in outstanding Swingline Loans pursuant to Section 2.04. Upon
the appointment by the Borrower of a successor Issuing Bank or Swingline Lender hereunder (which successor shall in all cases be a Lender
other than a Defaulting Lender), (i) such successor shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring Issuing Bank or Swingline Lender, as applicable, (ii) the retiring Issuing Bank and Swingline Lender shall
be discharged from all of their respective duties and obligations hereunder or under the other Senior Loan Documents, and (iii) the
successor Issuing Bank shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect
to such Letters of Credit.
SECTION 8.07. Reports
and Financial Statements. By signing this Agreement, each Lender (and with respect to clause (a), each Senior Loan Secured
Party):
(a) agrees
to furnish the Administrative Agent at its written request, and at such frequency as the Administrative Agent may reasonably request in
writing, with a summary of all Senior Loan Bank Product Liabilities due or to become due to such Lender or its Affiliates;
(b) is
deemed to have requested that the Administrative Agent furnish such Lender, promptly after they become available, copies of (i) all
financial statements (and other information) required to be delivered by the Borrower under Section 5.01, (ii) all commercial
finance examinations and appraisals of the Loan Parties and the Collateral, as applicable, received by the Administrative Agent, (iii) all
Borrowing Base Certificates and Compliance Certificates (including those attaching Approved Budget Variance Reports) received by the Administrative
Agent (collectively, the “Reports”), and (iv) the notices delivered by the Borrower under Section 5.02,
and the Administrative Agent agrees to furnish the same promptly to the Lenders (which Reports may be furnished in accordance with the
final paragraph of Section 5.01);
(c) expressly
agrees and acknowledges that the Administrative Agent makes no representation or warranty as to the accuracy of the Reports, and shall
not be liable for any information contained in any Report;
(d) expressly
agrees and acknowledges that the Reports are not comprehensive audits or examinations, that the Administrative Agent or any other party
performing any audit or examination will inspect only specific information regarding the Loan Parties and will rely significantly upon
the Loan Parties’ books and records, as well as on representations of the Loan Parties’ personnel; and
(e) without
limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold the Administrative
Agent and any such other Lender preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying
Lender may reach or draw from any Report in connection with any credit extensions that the indemnifying Lender has made or may make to
the Borrower, or the indemnifying Lender’s participation in Swingline Loans and Letters of Credit, or the indemnifying Lender’s
purchase of, Loans of the Borrower; and (ii) to pay and protect, and indemnify, defend, and hold the Administrative Agent and any
such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other
amounts (including Attorney Costs) incurred by the Administrative Agent and any such other Lender preparing a Report as the direct or
indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender in violation of the terms
hereof.
SECTION 8.08. Non-Reliance
on Agents and Other Lenders. Each Lender acknowledges that it has, independently and without reliance upon any Agent or any other
Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon any Agent or any other Lender and
based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Senior Loan Document or related agreement or any document furnished hereunder
or thereunder.
SECTION 8.09. [Reserved].
SECTION 8.10. Split-Priority
Implementing Agreements. The Senior Loan Secured Parties irrevocably authorize each of the Agents, at its option and in its discretion,
but subject to the applicable provisions of this Agreement, to negotiate, execute and deliver (a) Split-Priority Implementing Agreements
and/or a Split-Priority Intercreditor Agreement, which, among other things, will subordinate any Lien on any Split-Lien Priority Collateral
granted to or held by the Senior Collateral Agent under any Senior Collateral Documents, or otherwise securing any Senior Obligations,
to the Liens on such Split-Lien Priority Collateral securing Permitted Split-Priority Term Loan Debt, and will permit Liens on ABL Priority
Collateral to secure, on a subordinated basis to the Liens securing Senior Obligations, obligations in respect of Permitted Split-Priority
Term Loan Debt and (b) any amendments to this Agreement or the other Senior Loan Documents deemed appropriate by the Agents, as the
case may be, to reflect and accommodate the incurrence of Permitted Split-Priority Term Loan Debt, including amendments contemplated by
Section 9.02(d) and Section 9.19.
SECTION 8.11. No
Other Duties. Anything herein to the contrary notwithstanding, none of the Arrangers, Co-Syndication Agents or Co-Documentation Agents
listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any other Senior Loan Documents,
except in its capacity, as an Agent, a Lender, an Issuing Bank or the Swingline Lender hereunder.
SECTION 8.12. Agents
May File Proofs of Claim; Credit Bidding. In case of the pendency of any Bankruptcy Proceeding or any other judicial proceeding
relative to any Loan Party, each Agent (irrespective of whether the principal of any Loan or LC Exposure shall then be due and payable
as herein expressed or by declaration or otherwise and irrespective of whether any Agent shall have made any demand on the Borrower) shall
be entitled and empowered, by intervention in such Bankruptcy Proceeding or otherwise:
(a) to
file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, LC Exposure and all
other Senior Loan Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to
have the claims of the Senior Loan Secured Parties (including any claim for the reasonable compensation, expenses, disbursements and advances
of the Senior Loan Secured Parties and their respective Related Parties and counsel and all other amounts due the Senior Loan Secured
Parties, including under Section 2.12 and Section 9.03) allowed in such judicial proceeding; and
(b) to
collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Senior
Loan Secured Party to make such payments to any Agent and, if the Agents shall consent to the making of such payments directly to the
Senior Loan Secured Parties, to pay to each Agent any amount due for the reasonable compensation, expenses, disbursements and advances
of such Agent and its agents and counsel, and any other amounts due such Agent under the Senior Loan Documents, including under Section 2.12
and Section 9.03.
Nothing contained herein shall
be deemed to authorize any Agent to authorize or consent to or accept or adopt on behalf of any Senior Loan Secured Party any plan of
reorganization, arrangement, adjustment or composition affecting the Senior Loan Obligations or the rights of any Senior Loan Secured
Party to authorize any Agent to vote in respect of the claim of any Senior Loan Secured Party or in any such Bankruptcy Proceeding.
The Senior Loan Secured Parties
hereby irrevocably authorize each Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Senior Loan
Obligations (including accepting some or all of the Collateral in satisfaction of some or all of the Senior Loan Obligations pursuant
to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles)
all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code, including under
Sections 363, 1123 or 1129 of the Bankruptcy Code, or any similar Debtor Relief Law in any other jurisdictions to which a Loan Party is
subject, (b) at any other sale or foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at
the direction of) any Agent (whether by judicial action or otherwise) in accordance with any applicable law. In connection with any such
credit bid and purchase, the Senior Loan Obligations owed to the Senior Loan Secured Parties shall be entitled to be, and shall be, credit
bid on a ratable basis (with Senior Loan Obligations with respect to contingent or unliquidated claims receiving contingent interests
in the acquired assets on a ratable basis that would vest upon the liquidation of such claims in an amount proportional to the liquidated
portion of the contingent claim amount used in allocating the contingent interests) in the asset or assets so purchased (or in the Equity
Interests or debt instruments of the acquisition vehicle or vehicles that are used to consummate such purchase). In connection with
any such bid (i) each Agent shall be authorized to form one or more acquisition vehicles to make a bid, (ii) to adopt documents
providing for the governance of the acquisition vehicle or vehicles (provided that any actions by the Agents with respect to such
acquisition vehicle or vehicles, including any disposition of the assets or Equity Interests thereof shall be governed, directly or indirectly,
by the vote of the Required Lenders, irrespective of the termination of this Agreement and without giving effect to the limitations on
actions by the Required Lenders contained in clauses (i) through (xiv) of Section 9.02(b)), (iii) each
Agent shall be authorized to assign the relevant Senior Loan Obligations to any such acquisition vehicle pro rata by the Lenders, as a
result of which each of the Lenders shall be deemed to have received a pro rata portion of any Equity Interests and/or debt instruments
issued by such an acquisition vehicle on account of the assignment of the Senior Loan Obligations to be credit bid, all without the need
for any Senior Loan Secured Party or acquisition vehicle to take any further action, and (iv) to the extent that Senior Loan Obligations
that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher
or better, because the amount of Senior Loan Obligations assigned to the acquisition vehicle exceeds the amount of debt credit bid by
the acquisition vehicle or otherwise), such Senior Loan Obligations shall automatically be reassigned to the Lenders pro rata and the
Equity Interests and/or debt instruments issued by any acquisition vehicle on account of the Senior Loan Obligations that had been assigned
to the acquisition vehicle shall automatically be cancelled, without the need for any Senior Loan Secured Party or any acquisition vehicle
to take any further action.
SECTION 8.13. Collateral
and Guaranty Matters. Without limiting the provisions of Section 8.12, the Secured Loan Secured Parties hereby irrevocably
authorize the Agents, at their option and in their discretion (subject to the terms and conditions set forth in any applicable Senior
Collateral Documents):
(a) to
release any Lien on any property granted to or held by the Agents under any Senior Loan Document (i) upon the Senior Loan Obligation
Payment Date, (ii) constituting property being sold, transferred or disposed of in a transaction permitted under Section 6.05(a),
(b), (e) or (f) (other than any such transaction constituting a sale, disposition or transfer to a Person
required to grant a Lien to an Agent under the Senior Loan Documents), subject to the conditions thereof; provided that (A) the
Liens of the ABL Term Loan Agent on such property is released substantially concurrently with the release of any Lien of the Agents on
such property and (B) the release of any such Lien shall not constitute a release by the Agents of any Lien on the proceeds received
by any Loan Party in connection with the applicable sale, transfer or other disposition, or (iii) if approved, authorized or ratified
in writing in accordance with Section 9.02 of this Agreement;
(b) (i) to
release any Subsidiary Loan Party from its obligations under the Senior Subsidiary Guarantee Agreement if such Person ceases to be a Subsidiary
as a result of a transaction permitted hereunder, (ii) to release any Subsidiary Loan Party from its obligations under the Senior
Subsidiary Guarantee Agreement in connection with a transaction permitted under Section 6.03, or (iii) to terminate this
Agreement and the other Senior Loan Documents upon the occurrence of the Senior Loan Obligation Payment Date; provided that, in
the case of clause (i) or (ii) above, such Subsidiary Loan Party is released from its Guarantee of the ABL Term
Loan Obligations substantially concurrently with such Subsidiary Loan Party’s release from its obligations under the Senior Subsidiary
Guarantee Agreement; or
(c) to
subordinate any Lien on any property granted to or held by any Agent under any Senior Loan Document to the holder of any Lien on such
property that is permitted by Section 6.02(a)(vi) or (ix).
Upon request by the Administrative
Agent at any time, the Required Lenders (or, where expressly required by the terms of this Agreement, a greater proportion of the Lenders
or other parties hereto as required herein) will confirm in writing each Agent’s authority to release or subordinate its interest
in particular types or items of property, or to release any Subsidiary Loan Party from its obligations under the Senior Subsidiary Guarantee
Agreement pursuant to this Section 8.13. In each case as specified in this Section 8.13, each Agent will, subject
to the terms and conditions set forth in the Senior Collateral Documents, at the Borrower’s expense, execute and deliver to the
applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from
the assignment and security interest granted under the Senior Collateral Documents or to subordinate its interest in such item, or to
release such Subsidiary Loan Party from its obligations under the Senior Subsidiary Guarantee Agreement, in each case in accordance with
the terms of the Senior Loan Documents and this Section 8.13; provided that the Borrower shall have delivered to the
Administrative Agent, at least five (5) Business Days prior to the date of the proposed execution of any document evidencing such
release or subordination (or such shorter period as the Administrative Agent may agree in writing in its reasonable discretion), a written
request therefor identifying the relevant Collateral or Loan Party, together with a certification by the Borrower stating that such transaction
is in compliance with this Agreement and the other Senior Debt Documents and otherwise in form and substance satisfactory to the Administrative
Agent. No Agent shall be required to execute any such document on terms which, in its reasonable opinion, would, under applicable law,
expose such Agent to liability or create any obligation or entail any adverse consequence other than the release of such Liens without
recourse or warranty, and such release shall not in any manner discharge, affect or impair the Senior Loan Obligations or any Liens (other
than those expressly being released) upon (or obligations of any Loan Party in respect of) all interests retained by any Loan Party, including
(without limitation) the proceeds of any sale, all of which shall continue to constitute part of the Collateral.
No Agent shall be responsible
for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the
Collateral, the existence, priority or perfection of any Agent’s Lien thereon, or any certificate prepared by any Loan Party in
connection therewith, nor shall any Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of
the Collateral.
SECTION 8.14. Additional
Secured Parties. The benefit of the provisions of the Senior Loan Documents directly relating to the Collateral or any Lien granted
thereunder shall extend to and be available to any Senior Loan Secured Party that is not an Agent, a Lender or an Issuing Bank party hereto
as long as, by accepting such benefits, such Senior Loan Secured Party agrees, as among Agents and all other Senior Loan Secured Parties,
that such Senior Loan Secured Party is bound by (and, if requested by the Administrative Agent, shall confirm such agreement in a writing
in form and substance reasonably acceptable to the Administrative Agent) this Article VIII and Section 2.17, Section 7.02,
Section 9.02(a), Section 9.03(c), Section 9.08, Section 9.09, Section 9.13,
and Section 9.20 and the Intercreditor Agreements, and the decisions and actions of the Agents and the Required Lenders (or,
where expressly required by the terms of this Agreement, a greater proportion of the Lenders or other parties hereto as required herein)
to the same extent a Lender is bound; provided, however, that, notwithstanding the foregoing, (a) such Senior Loan
Secured Party shall be bound by Section 9.03(c) only to the extent of liabilities, reimbursement obligations, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, or disbursements with respect to or otherwise relating to the
Liens and Collateral held for the benefit of such Senior Loan Secured Party, in which case the obligations of such Senior Loan Secured
Party thereunder shall not be limited by any concept of pro rata share or similar concept, (b) each of the Agents, the Lenders and
the Issuing Banks party hereto shall be entitled to act at its sole discretion, without regard to the interest of such Senior Loan Secured
Party, regardless of whether any Senior Loan Obligation to such Senior Loan Secured Party thereafter remains outstanding, is deprived
of the benefit of the Collateral, becomes unsecured or is otherwise affected or put in jeopardy thereby, and without any duty or liability
to such Senior Loan Secured Party or any such Obligation and (c) except as otherwise set forth herein and in the other Senior Loan
Documents, such Senior Loan Secured Party shall not have any right to be notified of, consent to, direct, require or be heard with respect
to, any action taken or omitted in respect of the Collateral or under any Senior Loan Document. Notwithstanding any other provision of
this Article VIII to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other
satisfactory arrangements have been made with respect to, any Senior Loan Bank Product Liabilities.
SECTION 8.15. Certain
ERISA Matters.
(a) Each
Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the
date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative
Agent and not, for the avoidance of doubt, to or for the benefit of the Borrower or any Subsidiary Loan Party, that at least one of the
following is and will be true:
(i) such
Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit
Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters
of Credit, the Commitments or this Agreement,
(ii) the
transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent
qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts),
PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption
for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined
by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this Agreement,
(iii) (1) such
Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE
84-14), (2) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate
in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (3) the entrance into, participation
in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements
of sub-sections (b) through (g) of Part I of PTE 84-14 and (4) to the best knowledge of such Lender, the requirements
of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in,
administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or
(iv) such
other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and
such Lender.
(b) In
addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to
a Lender or (2) a Lender has provided another representation, warranty and covenant in accordance with sub-clause (iv) in
the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became
a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases
being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of
the Borrower or any other Subsidiary Loan Party, that the Administrative Agent is not a fiduciary with respect to the assets of such Lender
involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit,
the Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent
under this Agreement, any Senior Loan Document or any documents related hereto or thereto).
SECTION 8.16. Recovery
of Erroneous Payments. Without limitation of any other provision in this Agreement, if at any time the Administrative Agent makes
a payment hereunder in error to any Lender, any Issuing Bank of the Swingline Lender (the “Applicable Credit Party”),
whether or not in respect of an Obligation due and owing by the Borrower at such time, where such payment is a Rescindable Amount, then
in any such event, each Applicable Credit Party receiving a Rescindable Amount severally agrees to repay to the Administrative Agent forthwith
on demand the Rescindable Amount received by such Applicable Credit Party in immediately available funds in the currency so received,
with interest thereon, for each day from and including the date such Rescindable Amount is received by it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation. Each Applicable Credit Party irrevocably waives any and all
defenses, including any “discharge for value” (under which a creditor might otherwise claim a right to retain funds mistakenly
paid by a third party in respect of a debt owed by another) or similar defense to its obligation to return any Rescindable Amount. The
Administrative Agent shall inform each Applicable Credit Party promptly upon determining that any payment made to such Applicable Credit
Party comprised, in whole or in part, a Rescindable Amount.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices.
(a) Except
in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in clause (b) below),
all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile or electronic mail as follows, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:
(i) if
to the Borrower, any Agent, Bank of America, in its capacity as Issuing Bank or the Swingline Lender, to the address, facsimile number,
electronic mail address or telephone number specified for such Person on Schedule 9.01; and
(ii) if
to any other Lender or any other Issuing Bank, to the address, facsimile number, electronic mail address or telephone number specified
in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a Lender on its Administrative
Questionnaire then in effect for the delivery of notices that may contain material non-public information relating to the Borrower).
Notices and other communications
sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received;
notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal
business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient).
Notices and other communications delivered through electronic communications to the extent provided in sub clause (b) below
shall be effective as provided in clauses (b) and (c) below.
(b) Electronic
Communications. Notices and other communications to the Lenders and the Issuing Banks hereunder may be delivered or furnished by electronic
communication (including e-mail, FpML messaging, and Internet or intranet websites) pursuant to procedures approved by the Administrative
Agent, provided that the foregoing shall not apply to notices to any Lender or any Issuing Bank pursuant to Article II
if such Lender or such Issuing Bank, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under
such Article II by electronic communication. Any Agent, the Swingline Lender, any Issuing Bank or the Borrower may each, in
its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved
by it, provided that approval of such procedures may be limited to particular notices or communications.
(c) Unless
the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received
upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested”
function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet
or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the
foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor;
provided that, for both clauses (i) and (ii), if such notice, email or other communication is not sent during
the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business
on the next Business Day for the recipient.
(d) The
Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO
NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR
ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS
MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall any Agent or any of its Related Parties
(collectively, the “Agent Parties”) have any liability to the Borrower, any Lender, any Issuing Bank or any other Person
for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s,
any Subsidiary Loan Party’s or any Agent’s transmission of Borrower Materials or notices through the Platform, any other electronic
platform or electronic messaging service, or through the Internet other than losses, claims, liabilities or expenses that are determined
by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct
of such Agent Party.
(e) Change
of Address, Etc. Each of the Borrower, each Agent, each Issuing Bank and the Swingline Lender may change its address, facsimile, electronic
mail address or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender
may change its address, facsimile, electronic mail address or telephone number for notices and other communications hereunder by notice
to the Borrower, the Administrative Agent, each Issuing Bank and the Swingline Lender. In addition, each Lender agrees to notify the Administrative
Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number,
facsimile number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions
for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all
times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform
in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable
law, including United States Federal and state securities Laws, to make reference to Borrower Materials that are not made available through
the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to
the Borrower or its securities for purposes of United States Federal or state securities laws.
(f) Reliance
by Agents, Issuing Banks and Lenders. The Agents, the Issuing Banks and the Lenders shall be entitled to rely and act upon any
notices (including telephonic notices, Borrowing Requests, Interest Election Requests, letter of credit applications and requests
for swingline loans) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof,
as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify the Administrative Agent, each Issuing
Bank, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance
by such Person on each notice purportedly given by or on behalf of the Borrower provided, however, such indemnity will not
be available for losses, costs, expenses and liabilities that are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of the Administrative Agent, the Issuing Bank, the Lender or
its respective Related Party. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded
by the Administrative Agent, and each of the parties hereto hereby consents to such recording.
SECTION 9.02. Waivers;
Amendments.
(a) No
failure or delay by any Agent, any Issuing Bank or any Lender in exercising any right, remedy, privilege or power hereunder or under any
other Senior Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right, remedy, privilege or power, preclude any other or further exercise
thereof or the exercise of any other right, remedy, privilege or power. The rights, remedies, powers and privileges of the Agents, the
Issuing Banks and the Lenders hereunder and under the other Senior Loan Documents are cumulative and are not exclusive of any rights,
remedies, powers or privileges that they would otherwise have (including under applicable law).
Notwithstanding anything to
the contrary contained herein or in any other Senior Loan Document, the authority to enforce rights and remedies hereunder and under the
other Senior Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at
law in connection with such enforcement shall be instituted and maintained exclusively by, the Senior Collateral Agent in accordance with
the Senior Security Agreement and the other Senior Collateral Documents for the benefit of all the Senior Loan Secured Parties; provided,
however, that the foregoing shall not prohibit (a) any Agent from exercising on its own behalf the rights and remedies that
inure to its benefit (solely in its capacity as an Agent) hereunder and under the other Senior Loan Documents, (b) any Issuing Bank
or the Swingline Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as an Issuing Bank or
Swingline Lender, as the case may be) hereunder and under the other Senior Loan Documents, (c) any Lender from exercising setoff
rights in accordance with Section 9.08 (subject to the terms of Section 2.18), or (d) any Lender from filing
proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a Bankruptcy Proceeding relative to any Loan
Party; and provided, further, that if at any time there is no Person acting as the Senior Collateral Agent hereunder and
under the other Senior Loan Documents, then (i) the Administrative Agent or, if there shall be no Administrative Agent, the Required
Lenders shall, to the fullest extent permitted by law, have the rights otherwise ascribed to the Senior Collateral Agent pursuant to the
Senior Security Agreement the other Senior Collateral Documents and (ii) in addition to the matters set forth in clauses (b),
(c) and (d) of the preceding proviso and subject to Section 2.18, any Lender may, with the consent
of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.
No waiver of any provision of
any Senior Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall
be permitted by Section 9.02(b), and then such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit
shall not be construed as a waiver of any Default, regardless of whether any Agent, any Lender or any Issuing Bank may have had notice
or knowledge of such Default at the time.
(b) Subject
to Section 2.07(g) and 2.14(b), neither this Agreement nor any other Senior Loan Document nor any provision hereof
or thereof may be waived, amended or modified except, (I) in the case of this Agreement, pursuant to an agreement or agreements in
writing entered into by the Borrower, the Administrative Agent and the Required Lenders (or the Administrative Agent with the consent
(and on behalf) of the Required Lenders) or, (II) in the case of any other Senior Loan Document, pursuant to an agreement or agreements
in writing entered into by the Administrative Agent, the Agent or Agents that are parties thereto, in each case with the consent of the
Required Lenders, and the Loan Party or Loan Parties that are parties thereto; provided that (i) no such agreement shall change
any provision of any Senior Loan Document in a manner that by its terms adversely affects the rights of Lenders holding Loans of any Class differently
than those holding Loans of any other Class, without the written consent of Lenders holding a majority in interest of the outstanding
Loans and unused Commitments of each adversely affected Class and (ii) any waiver, amendment or modification of this Agreement
that by its terms affects the rights or duties under this Agreement of one or more Classes of Lenders (but not the other Class or
Classes of Lenders) may be effected by an agreement or agreements in writing entered into by the Borrower and the Administrative Agent
acting with the consent of the requisite percentage in interest of the affected Class or Classes of Lenders that would be required
to consent thereto under this Section if such Class or Classes of Lenders were the only Class or Classes of Lenders hereunder
at the time; and provided further that no such agreement shall (1) increase, extend or reinstate the Commitment of any Lender
without the written consent of such Lender (it being understood that, subject to clause (ii) above, a waiver of any condition
precedent set forth in Section 4.02 or the waiver of any Default, mandatory prepayment shall not constitute an extension or
increase of any Commitment of any Lender), (2) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the
rate of interest thereon, or reduce or forgive any fees payable hereunder, without the written consent of each Lender affected thereby;
provided that only the consent of the requisite percentage in interest of the affected Class or Classes of Lenders that would
be required to consent thereto under this Section if such Class or Classes of Lenders were the only Class or Classes of
Lenders hereunder at the time shall be necessary to (x) amend the rate of default interest set out in Section 2.13(c) or
(y) waive any obligation of the Borrower to pay default interest under Section 2.13(c), in each case, as it relates to
Senior Loan Obligations in respect of such Class of Lenders, (3) postpone the maturity of any Loan, or the required date of
reimbursement of any LC Disbursement, or any date for the payment of any principal, interest or fees payable hereunder, or reduce the
amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent
of each Lender affected thereby; provided that (A) only the consent of the requisite percentage in interest of the affected
Class or Classes of Lenders that would be required to consent thereto under this Section if such Class or Classes of Lenders
were the only Class or Classes of Lenders hereunder at the time shall be necessary to (x) amend the rate of default interest
set out in Section 2.13(c) or (y) waive any obligation of the Borrower to pay default interest under Section 2.13(c),
in each case, as it relates to Senior Loan Obligations in respect of such Class of Lenders (including, with respect to the Revolving
Facility, the Required Revolving Lenders, with respect to the FILO Facility, the FILO Lenders with respect to the Term Facility, the Term
Lenders) and (B) only the consent of the Required Lenders shall be necessary to waive any mandatory prepayment), (4) amend Section 7.02,
Section 2.18(b) or (c) in a manner that would alter the pro rata sharing or application of payments
required thereby, as applicable, without the written consent of each Lender, (5) except as expressly permitted by this Agreement
or the other Senior Loan Documents and the Additional Senior Debt Documents, subordinate the Lien of the Senior Collateral Agent securing
the Senior Loan Obligations on all or substantially all of the Collateral in any transaction or series of related transactions (or modify
any Senior Loan Document to permit any such subordination), without the prior written consent of all Lenders, (6) change any of the
provisions of this Section or the percentage set forth in the definition of “Required Lenders”, “Required FILO
Lenders”, “Required Revolving Lenders”, the “Required Term Lenders” or any other provision of any Senior
Loan Document specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any rights thereunder
or make any determination or grant any consent thereunder, without the written consent of each Lender (or each Lender of such Class, as
the case may be), (7) release the Borrower from its obligations under the Senior Loan Documents or release any Subsidiary Loan Party
from its Guarantee under the Senior Subsidiary Guarantee Agreement or limit its liability in respect of such Guarantee (except as expressly
provided in the Senior Subsidiary Guarantee Agreement or in Section 8.13), without the written consent of each Lender, (8) subordinate
to the prior payment of any other Indebtedness, the Senior Loan Obligations, without the prior written consent of all Lenders, (9) except
to the extent the release of any Collateral is permitted pursuant to the Senior Loan Documents, release all or substantially all of the
Collateral from the Liens under the Senior Collateral Documents, without the written consent of each Lender, (10) amend, modify or
waive any condition set forth in Section 4.02 as to any Borrowing or any issuance of any Letter of Credit under a particular
class of Commitments and Loans, without the requisite percentage in interest of the affected Class or Classes of Lenders that would
be required to consent thereto under this Section if such Class or Classes of Lenders were the only Class or Classes of
Lenders hereunder at the time (including, with respect to the Revolving Facility, the Required Revolving Lenders); (11) increase
“Accounts Receivable Advance Rate”, “Credit Card Receivable Advance Rate”, “Pharmaceutical Inventory Advance
Rate”, “Other Inventory Advance Rate” or “Script Lists Advance Rate” without the written consent of each
Lender; provided, however, that only the consent of the FILO Lenders shall be required to increase “Accounts Receivable Advance
Rate”, “Credit Card Receivable Advance Rate”, “Pharmaceutical Inventory Advance Rate”, “Other Inventory
Advance Rate” or “Script Lists Advance Rate” with respect to determination of the FILO Borrowing Base Amount, (12) (i) without
the prior written consent of each Lender, change the definition of the term “ABL Borrowing Base Amount” (or any component
definition of any such terms (including any applicable advance rates)) if as a result thereof the “ABL Borrowing Base Amount”
would be increased, or (ii) without the prior written consent of all FILO Lenders, (A) change the definition of the term “FILO
Borrowing Base Amount” (or any component definition of such term (including any applicable advance rates)) if as a result thereof
the “FILO Borrowing Base Amount” would be increased, or (B) change the definition of “FILO Push-Down Reserve”
(or any component definition of such term) or (C) cease to deduct from the ABL Borrowing Base Amount (or fail to establish or maintain)
the FILO Push-Down Reserve; provided, however, that the foregoing clause (12) shall not limit the discretion of the
Administrative Agent to change, establish or eliminate any reserves or to exercise any other discretion that the Administrative Agent
may have in respect of any of the provisions referenced in this clause (12)), (13) without the prior written consent of all Lenders,
modify the definition of “Protective Advance” so as to increase the amount thereof, or to cause the Total ABL Commitments
(or the Revolving Commitment of any Revolving Lender) to be exceeded as a result thereof, or, except as provided in such definition, the
time period for a Protective Advance; or (14) amend the definition of “Applicable Percentage” without the written consent
of each affected Lender; and provided further, that no such agreement shall amend, modify or otherwise affect the rights or duties
of any Agent, the Issuing Banks or the Swingline Lender without the prior written consent of such Agent, the Issuing Banks or the Swingline
Lender, as the case may be. Notwithstanding the foregoing, any provision of this Agreement may be amended by an agreement in writing entered
into by the Borrower, the Required Lenders and the Administrative Agent (and, if their rights or obligations are affected thereby, the
Issuing Banks and the Swingline Lender) if (i) by the terms of such agreement the Commitment of each Lender not consenting to the
amendment provided for therein shall terminate upon the effectiveness of such amendment and (ii) at the time such amendment becomes
effective, each Lender not consenting thereto receives payment in full of the principal of and interest accrued on each Loan made by it
and all other amounts owing to it or accrued for its account under this Agreement. Notwithstanding the foregoing, no consent with respect
to any amendment, waiver or other modification of this Agreement or any other Senior Loan Document shall be required of any Defaulting
Lender, except with respect to any amendment, waiver or other modification referred to in clause (1), (2) or (3) of
the second proviso of this Section 9.02(b) and then only in the event such Defaulting Lender shall be affected by such
amendment, waiver or other modification. Notwithstanding the foregoing, any provision of this Agreement or any other Senior Debt Document
may be amended by an agreement in writing entered into by the Borrower and the Administrative Agent to cure any ambiguity, omission, mistake,
defect or inconsistency so long as, in each case, the Lenders shall have received at least five Business Days’ prior written notice
thereof and the Administrative Agent shall not have received, within five (5) Business Days of the date of such notice to the Lenders,
a written notice from (x) the Required Lenders stating that the Required Lenders object to such amendment or (y) if affected
by such amendment, any Agent, Issuing Bank or the Swingline Lender stating that it objects to such amendment.
(c) Notwithstanding
the foregoing, (i) Collateral shall be released from the Lien under the Senior Collateral Documents from time to time as necessary
to effect any sale of Collateral permitted by the Senior Loan Documents, and the Senior Collateral Agent shall execute and deliver all
release documents reasonably requested to evidence such release; provided that arrangements satisfactory to the Administrative
Agent shall have been made for application of the cash proceeds thereof in accordance with Section 2.11, if required, and
for the pledge of any non-cash proceeds thereof pursuant to the Senior Collateral Documents, and (ii) if a Subsidiary Loan Party
ceases to be a Subsidiary in accordance with this Agreement, or ceases to own any property that constitutes Collateral, at the request
of and at the expense of the Borrower, such Subsidiary Loan Party shall be released from the Senior Subsidiary Guarantee Agreement, the
Senior Security Agreement and each other Senior Loan Document to which it is a party, subject to the provisions of Section 8.13
(and each Agent shall, upon the request and at the expense of the Borrower, execute such documents evidencing such release as may be reasonably
requested by the Borrower).
(d) Notwithstanding
anything herein (including this Section 9.02) to the contrary:
(i) In
connection with any incurrence of any Permitted Split-Priority Term Loan Debt, this Agreement, the Senior Security Agreement and the other
Senior Loan Documents may be amended or supplemented with additional agreements pursuant to an agreement or agreements in writing entered
into by the Borrower, the Subsidiary Loan Parties and the Administrative Agent and/or the Senior Collateral Agent (A) to subject
to the Liens of the Senior Collateral Documents assets or categories of assets of the Subsidiary Loan Party that previously did not constitute
Collateral (and, in connection therewith, to modify the definition of the term “Collateral and Guarantee Requirement” and
the form of Information Certificate and to make such other modifications to this Agreement and the other Senior Loan Documents (and to
enter into new Senior Collateral Documents) as the Administrative Agent or the Senior Collateral Agent determines to be necessary, appropriate
or desirable in order to give effect to, or in connection with, the inclusion of new assets or categories of assets as Collateral), (B) to
reflect subordination, pursuant to a Split-Priority Implementing Agreement (including a Split-Priority Intercreditor Agreement), of Liens
on any Split-Lien Priority Collateral securing the Senior Obligations to the Liens on such Split-Lien Priority Collateral securing Permitted
Split-Priority Term Loan Debt and to permit Liens on ABL Priority Collateral to secure, on a subordinated basis to the Liens securing
Senior Obligations, obligations in respect of Permitted Split-Priority Term Loan Debt, (C) to reflect such other intercreditor arrangements
between the Senior Secured Parties and the Split-Priority Debt Parties as are customary for intercreditor agreements or intercreditor
arrangements for similar cross-collateralized asset- based credit facilities and “tranche B” term loan credit facilities,
including a royalty free license to the Administrative Agent and the Senior Collateral Agent to use Split-Lien Priority Collateral in
connection with the sale or other disposition of ABL Priority Collateral and (D) to modify the mandatory prepayment provisions of
this Agreement to provide for the prepayment of Permitted Split-Priority Term Loan Debt in a customary manner in connection with certain
Prepayment Events, including customary provisions for the application of Net Cash Proceeds from sales or dispositions received other than
during a Cash Sweep Period to the Senior Loan Obligations in an amount at least equal to, with respect to ABL Priority Collateral that
are taken into account when determining the ABL Borrowing Base Amount and/or the FILO Borrowing Base Amount, an amount equal to the amount
of the ABL Borrowing Base Amount and/or the FILO Borrowing Base Amount attributable to such ABL Priority Collateral and the book value
of the other ABL Priority Collateral sold or otherwise disposed of in connection therewith; provided that no such modification
will affect the application of funds contemplated by Section 2.11(c) during a Cash Sweep Period;
(ii) Split-Priority
Intercreditor Agreements and Split-Priority Implementing Agreements may be entered into an amended, supplemented or otherwise modified
as provided in Section 9.18;
(iii) (A) the
Interim Financing Order and the Final Financing Order may be amended or modified, in each case, in the manner contemplated in the definition
thereof; (B) the ABL Intercreditor Agreement may be amended or modified in accordance with the terms of the ABL Intercreditor Agreement;
and (C) any Senior Loan Document may be amended and waived with the written consent of the Administrative Agent at the request of
the Borrower, without the need to obtain the consent of any Lender, if such amendment or waiver is delivered in order to comply with the
Financing Order or any other order of the Bankruptcy Court; provided, however, that any such amendment or modification contemplated
by clause (A) or (B) above (each, a “Subject Modification”) that has the effect of amending
or modifying (or waiving the provisions of) any Senior Loan Document (including the Financing Order or the ABL Intercreditor Agreement)
in a manner that would otherwise require consent of any one or more Lenders pursuant to any of clauses (1) through (14)
of the second proviso to Section 9.02(b), such Subject Modification may be made only with the prior written consent of such
Lenders as may be required by the applicable clauses of the second proviso to Section 9.02(b);
(iv) after
the Closing Date, the Fee Letter may be amended or modified, or rights or privileges thereunder waived, in a writing executed only by
the parties thereto; and
(v) any
Senior Collateral Document and any other documents executed by any Loan Party or any Subsidiary in connection with this Agreement or any
other Senior Loan Document may be in a form reasonably determined by the Administrative Agent and may be, together with this Agreement,
waived, amended or modified solely with the consent of the Administrative Agent at the request of the Borrower without the need to obtain
the consent of any other Lender if such waiver, amendment or modification is delivered to effect the granting, perfection, protection,
expansion or enhancement of any security interest in any Collateral or additional property to become Collateral for the benefit of the
Senior Secured Parties or to cause any Senior Collateral Document to be consistent with this Agreement and the other Senior Loan Documents;
provided, that, notification of any such waiver, amendment or modification of any Senior Loan Document shall be made by
the Administrative Agent to the Lenders promptly upon such amendment becoming effective.
SECTION 9.03. Expenses;
Indemnity; Damage Waiver.
(a) The
Borrower shall pay (i) all reasonable and documented out-of-pocket expenses incurred by the Agents and their Affiliates (including
Attorney Costs and reasonable and documented fees, expenses and disbursements of the Lender Group Consultants), in connection with the
syndication of the credit facilities provided for herein, the preparation and administration of the Senior Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated)
(limited, in the case of legal fees, expenses and disbursements, to the Attorney Costs of one counsel to the Agents and, if necessary,
of one local counsel in each relevant jurisdiction and of one special counsel for each relevant specialty, in each case to the Agents),
(ii) all and documented reasonable out-of-pocket expenses incurred by any Issuing Bank in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable and documented out-of-pocket
expenses incurred by any Agent, any Issuing Bank or any Lender (including Attorney Costs), in connection with the enforcement or protection
of its rights under or in connection with the Senior Loan Documents, including its rights under this Section, or in connection with the
Loans made, Letters of Credit issued, or other extensions of credit made available hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit (limited, in the case of legal
fees, expenses and disbursements, to the Attorney Costs of (x) one counsel to the Agents, the Lenders, and the Issuing Banks (taken
as a whole), (y) one counsel in the jurisdiction of the Bankruptcy Court and, if necessary, one local counsel in each relevant jurisdiction
and of one special counsel for each relevant specialty, in each case, to the Agents, the Lenders, and the Issuing Banks (taken as a whole),
and (z) in the event of an actual or potential conflict of interest between the Agents, the Lenders, or the Issuing Banks, where
the Person or Persons affected by such conflict of interest inform the Borrower in writing of such conflict of interest, one additional
counsel in the jurisdiction of the Bankruptcy Court and one additional local counsel in each other relevant jurisdiction, in each case,
to each group of affected Persons similarly situated (taken as a whole)). For the avoidance of doubt and subject to the limitations set
forth above with respect to Attorney Costs, the Borrower shall reimburse the Agents for all reasonable and documented legal, accounting,
appraisal, consulting, and other fees, costs and expenses incurred in connection with the negotiation, preparation and administration
of the Senior Loan Documents (including the Financing Order) and incurred in connection with:
(i) obtaining
of approval of the Senior Loan Documents (including the Financing Order) by the Bankruptcy Court;
(ii) the
preparation and review of pleadings, documents and reports related to the Chapter 11 Case, attendance at meetings, court hearings or conferences
related to the Chapter 11 Case, and general monitoring of the Chapter 11 Case; and
(iii) efforts
of any Agent (or its external counsel or the Lender Group Consultants) to (A) monitor the Loans or any of the other Senior Obligations,
(B) evaluate, observe or assess any of the Loan Parties or their respective affairs, and (C) verify, protect, evaluate, assess,
appraise, collect, sell, liquidate or otherwise dispose of any of the Collateral.
(b) The
Borrower shall indemnify each Agent (and any sub-agent thereof), the Arrangers, each Issuing Bank and each Lender, and each Related Party
of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses (including Attorney Costs) incurred by or asserted against
any Indemnitee (but limited, in the case of legal fees, expenses and disbursements, to the Attorney Costs of (x) one counsel to all
Indemnitees (taken as a whole), (y) one counsel in the jurisdiction of the Bankruptcy Court and, if necessary, one local counsel
in each relevant jurisdiction and of one special counsel for each relevant specialty, in each case, to all Indemnitees (taken as a whole),
and (z) and, in the event of an actual or potential conflict of interest between Indemnitees, where the Person or Persons affected
by such conflict of interest inform the Borrower in writing of such conflict of interest, one additional counsel in the jurisdiction of
the Bankruptcy Court and one additional local counsel in each other relevant jurisdiction, in each case, to each group of affected Indemnitees
similarly situated (taken as a whole)) arising out of, in connection with, or as a result of (i) the execution or delivery of any
Senior Loan Document, the performance by the parties to the Senior Loan Documents of their respective obligations thereunder or the consummation
of the Transactions or any other transactions contemplated hereby or thereby, or, in the case of any Agent (and any sub agent thereof)
and its Related Parties only, the administration of this Agreement and the other Senior Loan Documents (including in respect of matters
addressed in Section 2.17), (ii) any Loan, Letter of Credit or other extension of credit hereunder or the use of the
proceeds therefrom (including any refusal by an Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented
in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property currently or formerly owned or operated by the Borrower or any of the Subsidiaries,
or any Environmental Liability related in any way to the Borrower or any of the Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Borrower or any other Subsidiary Loan Party, and regardless of whether any Indemnitee is a party thereto, IN
ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE
INDEMNITEE; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee. In no event shall any Loan Party have any liability for indemnification
under this Section 9.03(b) for any special, indirect, consequential or punitive damages, except for claims made by third
parties for which an Indemnitee is otherwise entitled to indemnity pursuant to this Section 9.03(b). Without limiting the
provisions of Section 2.17(c), this Section 9.03(b) shall not apply with respect to Taxes other than any
Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.
(c) To
the extent that the Borrower for any reason fails to indefeasibly pay any amount required to be paid by it to any Agent (or any sub agent
thereof), any Issuing Bank, the Swingline Lender or any Related Party of any of the foregoing under Section 9.03(a) or
(b), each Lender severally agrees to pay to such Agent (or any such sub agent), such Issuing Bank, the Swingline Lender or such
Related Party, as the case may be, such Lender’s pro rata share of such unpaid amount (including any such unpaid amount in
respect of a claim asserted by such Lender), determined as of the time that the applicable unreimbursed expense or indemnity payment is
sought; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against such Agent (or any such sub agent), such Issuing Bank, or the Swingline Lender in its capacity
as such in its capacity as such, or against any Related Party of any of the foregoing, acting for any Agent (any such sub agent), any
Issuing Bank or the Swingline Lender in connection with such capacity. The obligations of the Lenders under this Section 9.03(c) are
subject to the provisions of Section 2.06(d). For purposes hereof, a Lender’s “pro rata share” shall
be determined based upon its share of the sum of the Total Revolving Exposures, outstanding FILO Loans and other Loans and unused Commitments
at the time.
(d) To
the extent permitted by applicable law, each party hereto (each for itself and on behalf of its Subsidiaries) hereby waives, releases
and agrees not to assert any claim against any Indemnitee or the Borrower (or any of its Subsidiaries), on any theory of liability, for
any special, indirect, consequential or punitive damages (as opposed to direct or actual damages), whether or not accrued and whether
or not known or suspected to exist in its favor, arising out of, in connection with, or as a result of, this Agreement, any other Senior
Loan Document or any other agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the
use of the proceeds thereof; provided that the foregoing shall not limit the Borrower’s liability under Section 9.03(b) in
respect of claims made by third parties for which an Indemnitee is otherwise entitled to indemnity pursuant to Section 9.03(b).
No Indemnitee shall be liable for any damages arising from the use by any unintended recipients of any information or other materials
distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission
systems in connection with this Agreement or the other Senior Loan Documents or the Transactions, other than for direct and actual damages
(as opposed to special, indirect, consequential or punitive damages) that a court of competent jurisdiction determines in a final and
nonappealable judgment to have resulted from the gross negligence or willful misconduct of such indemnitee.
(e) All
amounts due under this Section shall be payable not later than five (5) Business Days after written demand therefor, or after
any Event of Default, upon written demand therefor. If the Borrower fails to pay when due any amounts payable
by it pursuant to this Section 9.03, such amount may be paid on behalf of the Borrower by the Administrative Agent in its
sole discretion, without notice to or consent from the Borrower, all as contemplated in Section 2.18(f).
(f) The
Agreements in this Section 9.03 and the indemnity provisions of Section 9.01(f) shall survive the resignation
of any Agent, any Issuing Bank and the Swingline Lender, the replacement of any Lender, the termination of the aggregate Commitments and
the repayment, satisfaction or discharge of all the other Senior Loan Obligations.
SECTION 9.04. Successors
and Assigns.
(a) The
provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of any Issuing Bank that issues any Letter of Credit), except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent
and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except to an assignee in accordance
with the provisions of Section 9.04(b) (and any attempted assignment or transfer by the Borrower without such consent
shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the
parties hereto, their successors and assigns permitted hereby (including any Affiliate of any Issuing Bank that issues any Letter of Credit)
and, to the extent expressly contemplated hereby, the Related Parties of each of the Agents, the Issuing Banks and the Lenders) any legal
or equitable right, remedy or claim under or by reason of this Agreement.
(b) (i)
Subject to the conditions set forth in Section 9.04(b)(ii), any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it),
with the prior written consent of:
(A) the
Borrower (such consent not to be unreasonably withheld or delayed); provided that (1) no consent of the Borrower shall be
required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing,
any other assignee and (2) the Borrower shall be deemed to have consented to any such assignment unless it shall have objected thereto
within 10 Business Days after having received notice thereof;
(B) the
Administrative Agent; provided that no consent of the Administrative Agent shall be required for an assignment (x) in respect
of the Revolving Facility, if such assignment is to a Person that is a Lender with a Revolving Commitment, an Affiliate of such Lender
or an Approved Fund with respect to such Lender or (y) in respect of the FILO Facility or Term Facility, if such assignment is to
a Lender, an Affiliate of a Lender or an Approved Fund; and
(C) the
consent of each Issuing Bank and the Swingline Lender (such consent not to be unreasonably withheld or delayed) shall be required for
any assignment in respect of the Revolving Facility.
(ii) Assignments
shall be subject to the following additional conditions:
(A) except
in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered
to the Administrative Agent) shall not be less than (1) with respect to Revolving Commitments and Revolving Loans, and commitments
and Loans under any Incremental Facility, $5,000,000 and (2) with respect to FILO Commitments, FILO Loans and Term Loans, $1,000,000
or, in each case, if smaller, the entire remaining amount of the assigning Lender’s Commitment or Loans, unless the Administrative
Agent shall otherwise consent; provided that in the event of concurrent assignments to two or more assignees that are Affiliates
of one another, or to two or more Approved Funds managed by the same investment advisor or by affiliated investment advisors, all such
concurrent assignments shall be aggregated in determining compliance with this subsection;
(B) each
partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under
this Agreement with respect to the Loans or the Commitment assigned, except that this clause (B) shall not (1) apply
to the Swingline Lender’s rights and obligations in respect of Swingline Loans or (2) prohibit any Lender from assigning all
or a portion of its rights and obligations among the revolving credit facility provided hereunder and any separate revolving credit or
term loan facilities provided pursuant to the this Agreement on a non-pro rata basis;
(C) the
parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500; provided that the Administrative Agent may, in its sole discretion, elect to waive such processing
and recordation fee in the case of any assignment;
(D) the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire;
(E) no
such assignment shall be made (1) to the Borrower or any of the Borrower’s Affiliates or Subsidiaries, as applicable, (2) to
any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing
Persons described in this clause (2), (3) to a natural Person (or a holding company, investment vehicle or trust for, or owned
and operated by or for the primary benefit of a natural Person), (4) to any Disqualified Institution, or (5) to any holder of
the Existing Split-Priority Indebtedness (or any such holder’s Affiliates) (any such Person described in this clause (E),
an “Ineligible Person”); and
(F) in
connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless
and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments
to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment,
purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of
the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each
of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent, any Issuing Bank or any Lender hereunder (and interest accrued thereon)
and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swingline
Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations
of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this clause
(F), then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance
occurs.
(iii) Subject
to acceptance and recording thereof pursuant to Section 9.04(b)(iv), from and after the effective date specified in each Assignment
and Acceptance the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03 with respect
to facts and circumstances occurring prior to the effective date of such assignment; provided that, except to the extent otherwise
expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any
party hereunder arising from that Lender’s having been a Defaulting Lender). Upon request, the Borrower (at its expense) shall execute
and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation
in such rights and obligations in accordance with Section 9.04(c).
(iv) The
Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower (and such agency being solely for Tax purposes),
shall maintain at one of its offices a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the
names and addresses of the Lenders, and the Commitment of, and principal amount (and stated interest) of the Loans and LC Disbursements
owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive absent manifest error and the Borrower, the Agents, the Issuing Banks and the Lenders shall treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the Borrower, any other Agent, any Issuing Bank and any Lender
at any reasonable time and from time to time upon reasonable prior notice.
(v) Upon
its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to
in Section 9.04(b) and any written consent to such assignment required by Section 9.04(b), the Administrative
Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the Register as provided in this Section 9.04(b)(v).
(vi) By
executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows: (A) such assigning Lender warrants that it is the legal
and beneficial owner of the interest being assigned thereby free and clear of any adverse claim and that its Commitment and the outstanding
balances of its Loans, in each case without giving effect to assignments thereof that have not become effective, are as set forth in such
Assignment and Acceptance; (B) except as set forth in clause (A) above, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with
this Agreement or any other Senior Loan Document or any other instrument or document furnished pursuant hereto or thereto, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of any of the foregoing, or the financial condition of the Loan
Parties or the performance or observance by the Loan Parties of any of their obligations under this Agreement or under any other Senior
Loan Document or any other instrument or document furnished pursuant hereto or thereto; (C) each of the assignee and the assignor
represents and warrants that it is legally authorized to enter into such Assignment and Acceptance; (D) such assignee confirms that
it has received a copy of this Agreement, together with copies of any amendments or consents entered into prior to the date of such Assignment
and Acceptance and copies of the most recent financial statements delivered pursuant to Section 5.01 and such other documents
and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance;
(E) such assignee will independently and without reliance upon the Agents, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (F) such assignee appoints and authorizes the Agents to take such action as agents on its behalf and
to exercise such powers under this Agreement and the other Senior Loan Documents as are delegated to them by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto; and (G) such assignee agrees that it will perform in accordance with
their terms all the obligations that by the terms of this Agreement are required to be performed by it as a Lender.
(c) (i)
Any Lender may, without the consent of or notice to the Borrower, the Agents, the Issuing Banks or the Swingline Lender, sell participations
to one or more banks or other entities (other than any Ineligible Person) (a “Participant”) in all or a portion of
such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including
such Lender’s participations in LC Disbursements and/or Swingline Loans) owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations and (C) the Borrower, the Agents, the Issuing Banks and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the
avoidance of doubt, each Lender shall be responsible for the indemnity under Section 9.03(c) without regard to the existence
of any participation. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement;
provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the second proviso to Section 9.02(b)(1), (2) or (3) that
affects such Participant. Subject to Section 9.04(c)(ii), the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to Section 9.04(b) (it being understood that the documentation required under Section 2.17(e) shall
be delivered to the Lender who sells the participation). To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as
though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the
Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest)
of each Participant’s interest in the Loans or other obligations under the Senior Loan Documents (the “Participant Register”);
provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity
of any Participant or any information relating to a Participant's interest in any Commitments, Loans, Letters of Credit or its other obligations
under any Senior Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitments,
Loans, Letters of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.
The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name
is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice
to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility
for maintaining a Participant Register.
(ii) A
Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender
would have been entitled to receive with respect to the participation sold to such Participant. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.17(f) as
though it were a Lender.
(d) Any
Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or any central bank having jurisdiction
over such Lender, and this Section shall not apply to any such pledge or assignment of a security interest; provided that
no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.
(e) In
the case of any Lender that is a fund that invests in bank loans, such Lender may, without the consent of the Borrower or the Administrative
Agent, assign or pledge all or any portion of its rights under the Senior Loan Documents, including the Loans and promissory notes or
any other instrument evidencing its rights as a Lender under the Senior Loan Documents, to any holder of, trustee for, or any other representative
of holders of obligations owed or securities issued by such fund, as security for such obligations or securities; provided that
any foreclosure or similar action by such trustee or representative shall be subject to the provisions of this Section 9.04
concerning assignments.
(f) Notwithstanding
anything to the contrary in this Agreement or any other Senior Loan Document, no Disqualified Institution that purports to become a Lender
hereunder (notwithstanding the provisions of this Agreement that prohibit Disqualified Institutions from becoming Lenders) shall be entitled
to any of the rights or privileges enjoyed by the other Lenders with respect to voting, information and lender meetings. In addition,
if any assignment or participation is made to any Disqualified Institution without the Borrower’s express prior written consent,
the Borrower may, in addition to any other rights and remedies that it may have against such Disqualified Institution, at its sole expense
and effort, upon notice to the applicable Disqualified Institution and the Administrative Agent, require such Disqualified Institution
to assign, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all of its interest,
rights and obligations under this Agreement to one or more Persons that meet the requirements for an assignee under Section 9.04(b) at
the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified Institution paid to acquire such interests,
rights and obligations, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable
to it hereunder.
(g) Notwithstanding
anything to the contrary in this Agreement or any other Senior Loan Document, the Administrative Agent shall not be responsible (or have
any liability) for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions thereof relating to
Disqualified Institutions. The Administrative Agent may make the list of Disqualified Institutions available to all Lenders on the Platform
or to any Lender, Participant, or any prospective Lender or Participant, upon any such Person’s written request therefor. Without
limiting the generality of the foregoing, the Administrative Agent shall not (i) be obligated to ascertain, monitor or inquire as
to whether any Lender or Participant or prospective Lender or Participant is a Disqualified Institution or (ii) have any liability
with respect to or arising out of any assignment or participation of Loans or Commitments, or disclosure of confidential information,
to any Disqualified Institution.
SECTION 9.05. Survival.
All covenants, agreements, representations and warranties made by the Loan Parties in the Senior Loan Documents and in the certificates
or other instruments delivered in connection with or pursuant to this Agreement or any other Senior Loan Document shall be considered
to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Senior Loan Documents and the
making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf
and notwithstanding that any Agent, any Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation
or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17
and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination
of this Agreement or any provision hereof.
SECTION 9.06. Integration;
Effectiveness. This Agreement, the other Senior Loan Documents and any separate letter agreements with respect to fees payable to
the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and
all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective
as provided in Section 4.01.
SECTION 9.07. Severability.
Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any
other jurisdiction. Without limiting the foregoing provisions of this Section 9.07, if and to the extent that the enforceability
of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith
by the Administrative Agent, any Issuing Bank or the Swingline Lender, as applicable, then such provisions shall be deemed to be in effect
only to the extent not so limited.
SECTION 9.08. Right
of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, each Issuing Bank, and each of their Affiliates
is hereby authorized at any time and from time to time, to the fullest extent permitted by law (notwithstanding the provisions of the
Automatic Stay and without notice, application or motion, hearing before, or order of the Bankruptcy Court, but subject to the terms of
the Financing Order), to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time
held and other obligations at any time owing by such Lender, Issuing Bank, or Affiliate to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement or any other Senior Loan
Document held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other
Senior Loan Document and although such obligations may be unmatured; provided that, in the event that any Defaulting Lender shall
exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further
application in accordance with the provisions of Section 7.02 and, pending such payment, shall be segregated by such Defaulting
Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders, and (y) the Defaulting
Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Senior Obligations owing to
such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender under this Section are in addition
to other rights and remedies (including other rights of setoff) which such Lender may have. Each Lender and each Issuing Bank agrees to
notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give
such notice shall not affect the validity of such setoff and application. Notwithstanding the provisions of this Section 9.08,
if at any time any Lender, any Issuing Bank or any of their respective Affiliates maintains one or more deposit accounts for the Borrower
or any other Loan Party into which Medicare and/or Medicaid receivables are deposited, such Person shall waive the right of setoff set
forth herein.
SECTION 9.09. Governing
Law; Jurisdiction; Consent to Service of Process.
(a) This
Agreement shall be construed in accordance with and governed by the law of the State of New York and, to the extent applicable, the Bankruptcy
Code.
(b) Subject
to the jurisdiction of the Bankruptcy Court (and of the related Federal courts), the Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and
of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Senior Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law. Nothing in this Agreement or any other Senior Loan Document shall affect any right that any Agent, the
Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Senior Loan Document
against the Borrower or its properties in any other court of competent jurisdiction to the extent necessary or required as a matter of
law to assert such claim, action or proceeding against any assets of any Loan Party or any of their Subsidiaries or to enforce any judgment
arising out of any such claim, action or proceeding.
(c) The
Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or
any other Senior Loan Document in any court referred to in Section 9.09(b). Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in
any such court.
(d) Each
party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Senior Loan Document will affect the right of any party to this Agreement to serve process in any other
manner permitted by law.
SECTION 9.10. WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER SENIOR LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. [Reserved].
SECTION 9.12. Headings.
Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 9.13. Confidentiality.
Each of the Agents, the Issuing Banks and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its and its Affiliates’, auditors and Related Parties (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar
legal process (including any Federal Reserve Bank or central bank pursuant to Section 9.04(d)), (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this
Agreement or any other Senior Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement, (g) with the consent of the Borrower, (h) to (x) any Additional
Lender invited to be a Lender pursuant to Section 2.21 or (y) to any pledgee referred to in Section 9.04(e) or
any direct or indirect contractual counterparty in any Hedging Agreement (or to any such contractual counterparty’s professional
advisor), so long, in each such case, as such Person agrees to be bound by the provisions of this Section 9.13, (i) on
a confidential basis to (x) any rating agency in connection with rating the Borrower or its Subsidiaries or the credit facilities
provided hereunder or (y) the CUSIP Service Bureau or any similar agency in connection with the application, issuance, publishing
and monitoring of CUSIP numbers of other market identifiers with respect to the credit facilities provided hereunder or (j) to the
extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes
available to any Agent, any Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrower. In addition,
the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry and service providers to the Agents and the Lenders in connection with the
administration of this Agreement, the other Senior Loan Documents, and the Commitments. For the purposes of this Section, “Information”
means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available
to any Agent, any Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the Borrower. Any Person required to maintain
the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to
its own confidential information. Each of the Administrative Agent, the Lenders and the Issuing Banks acknowledges that (a) the Information
may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance
procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance
with applicable law, including United States Federal and state securities laws.
SECTION 9.14. Interest
Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”),
shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or
reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and
Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall
be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
SECTION 9.15. Certain
Intercreditor Agreements and Financing Order. Each Lender, each Issuing Bank and each other Senior Loan Secured Party hereby authorizes
each Agent to enter into (I) (a) the Senior Lien Intercreditor Agreement effective upon the date of the first incurrence of
Additional Senior Debt Obligations in compliance with this Agreement, (b) amendments to the Senior Lien Intercreditor Agreement to
the extent necessary to reflect the incurrence of any Additional Senior Debt Obligations, in compliance with this Agreement, (c) any
supplements to any agreements referred to in the foregoing subclauses (a) and (b) of clause (I) in
compliance with such documents and (d) each other Senior Collateral Document on its behalf, and agrees that each Agent may enforce
the rights and remedies of the Lenders under each Senior Loan Document to the extent provided in the Senior Lien Intercreditor Agreement
and each other Senior Collateral Document, (II) (a) the Junior Lien Intercreditor Agreement effective upon the date of the first
incurrence of Second Priority Debt Obligations in compliance with this Agreement, (b) amendments to the Junior Lien Intercreditor
Agreement to the extent necessary to reflect the incurrence of any Second Priority Debt Obligations or any Additional Senior Debt Obligations,
in compliance with this Agreement and (c) any supplements to any agreements referred to in the foregoing subclauses (a) and
(b) of clause (II) in compliance with such documents, (III) (a) the ABL Intercreditor Agreement on the
Closing Date, and (b) amendments or supplements to the ABL Intercreditor Agreement to the extent permitted by this Agreement and
made in accordance with the ABL Intercreditor Agreement, and (IV) (a) the Interim Financing Order and the Final Financing Order,
and (b) amendments or supplements to the Interim Financing Order or the Final Financing Order, in each case, to the extent permitted
by this Agreement and made in accordance with the Interim Financing Order or the Final Financing Order, as applicable. Bank of America
agrees, subject to the applicable terms and conditions set forth herein and in the other Senior Collateral Documents, to act as Senior
Collateral Agent under the Senior Collateral Documents for the benefit of the Senior Secured Parties (and to execute and deliver any such
Senior Collateral Documents (including the Senior Lien Intercreditor Agreement) in connection with the incurrence of Permitted First Priority
Debt permitted under this Agreement, upon the reasonable request of the Borrower, provided that any Senior Representative under any such
Additional Senior Debt Documents shall be reasonably satisfactory to the Senior Collateral Agent (it being understood and agreed that
any Senior Representative that is a Lender, an Affiliate of a Lender or an Approved Fund hereunder shall be reasonably acceptable to the
Senior Collateral Agent). Bank of America agrees, subject to the applicable terms and conditions set forth herein and in the other Senior
Collateral Documents, to act as Senior Collateral Agent under the Junior Lien Intercreditor Agreement in connection with the incurrence
of Second Priority Debt permitted under this Agreement, upon the reasonable request of the Borrower. Bank of America agrees, subject to
the applicable terms and conditions set forth herein and in the other Senior Collateral Documents, to act as Senior Collateral Agent under
the ABL Intercreditor Agreement in connection with the incurrence of the Indebtedness under the ABL Term Loan Documents permitted under
this Agreement.
SECTION 9.16. Cash
Sweep. At all times after the Closing Date, a Cash Sweep Period shall be in effect.
SECTION 9.17. USA
Patriot Act. Each Lender, each Issuing Bank and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies
the Borrower that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender, Issuing
Bank or the Administrative Agent, as applicable, to identify the Borrower in accordance with its requirements. The Borrower shall promptly,
following a request by the Administrative Agent, any Lender or any Issuing Bank, provide all documentation and other information that
the Administrative Agent, such Lender or such Issuing Bank reasonably requests in order to comply with its ongoing obligations under applicable
“know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act.
SECTION 9.18. Certain
Permitted Intercreditor Arrangements.
(a) Each
of the Lenders, the Issuing Banks and the other Senior Loan Secured Parties acknowledges that obligations of the Borrower and the other
Loan Parties under the Permitted Split-Priority Term Loan Debt and Second Priority Debt, in each case, upon incurrence thereof, may be
secured by Liens on assets of the Borrower and the other Loan Parties that constitute Collateral, and that the relative Lien priority
and other creditor rights of the Senior Loan Secured Parties and the Split-Priority Debt Parties or, as applicable, Senior Loan Secured
Parties and the Second Priority Debt Parties will be set forth in or pursuant to (x) Split-Priority Implementing Agreements and/or
a Split-Priority Intercreditor Agreement, in the case of Permitted Split-Priority Term Loan Debt and (y) a Junior Lien Intercreditor
Agreement, in the case of Second Priority Debt. Each of the Lenders, the Issuing Banks and the other Senior Loan Secured Parties hereby
irrevocably authorizes and directs each of the Agents to execute and deliver, in each case on behalf of such Senior Loan Secured Party
and without any further consent, authorization or other action by such Senior Loan Secured Party, (i) from time to time upon the
request of the Borrower, in connection with the establishment, incurrence, amendment, refinancing or replacement of any (A) Permitted
Split-Priority Term Loan Debt, any (x) Split-Priority Implementing Agreements and/or Split-Priority Intercreditor Agreement (it being
understood and agreed that each Agent is hereby authorized and directed to determine the terms and conditions of any such Split-Priority
Implementing Agreements and/or Split-Priority Intercreditor Agreement as contemplated by the definitions of those terms herein and that
notwithstanding anything herein to the contrary, no Agent shall be liable or responsible for any loss, cost or expense suffered by any
Lender, any Issuing Bank or any other Senior Loan Secured Party, or by any Loan Party, as a result of, any such determination) and (y) any
documents relating thereto and (B) Second Priority Debt, any (x) Junior Lien Intercreditor Agreement (it being understood and
agreed that each Agent is hereby authorized and directed to determine the terms and conditions of any such Junior Lien Intercreditor Agreement
as contemplated by the definitions of such term herein and that notwithstanding anything herein to the contrary, no Agent shall be liable
or responsible for any loss, cost or expense suffered by any Lender, any Issuing Bank or any other Senior Loan Secured Party, or by any
Loan Party, as a result of, any such determination) and (y) any documents relating thereto.
(b) Each
of the Lenders, the Issuing Banks and the other Senior Loan Secured Parties hereby irrevocably (i) consents, in the case of any Permitted
Split-Priority Term Loan Debt, to the subordination of the Liens on the Split-Lien Priority Collateral securing the Senior Loan Secured
Obligations on the terms set forth in each Split-Priority Implementing Agreement, including any Split-Priority Intercreditor Agreement,
(ii) agrees that, upon the execution and delivery thereof, such Senior Loan Secured Party will be bound by the provisions of each
Split-Priority Implementing Agreement and each Applicable Intercreditor Agreement as if it were a signatory thereto and will take no actions
contrary to the provisions thereof, (iii) agrees that no Senior Loan Secured Party shall have any right of action whatsoever against
any Agent as a result of any action taken by such Agent pursuant to this Section or any other provision of this Agreement relating
to the negotiation, execution or delivery of Split-Priority Implementing Agreements or any Applicable Intercreditor Agreement or taken
in accordance with the terms of any such Split-Priority Implementing Agreement or any Applicable Intercreditor Agreement and (iv) authorizes
and directs each Agent to carry out the provisions and intent of each such document.
(c) Each
of the Lenders, the Issuing Banks and the other Senior Loan Secured Parties hereby irrevocably further authorizes and directs each of
Agent to execute and deliver, in each case on behalf of such Senior Secured Party and without any further consent, authorization or other
action by such Senior Secured Party, any amendments, supplements or other modifications of each Split-Priority Implementing Agreement
and each Applicable Intercreditor Agreement that the Borrower may from time to time request (i) to give effect to any establishment,
incurrence, amendment, extension, renewal, refinancing or replacement of any Permitted Split-Priority Term Loan Debt and/or Second Priority
Debt, (ii) to confirm for any party that a Split-Priority Implementing Agreement and/or Applicable Intercreditor Agreement is effective
and binding upon the Agents, as the case may be, on behalf of the Senior Loan Secured Parties or (iii) to effect any other amendment,
supplement or modification so long as the resulting agreement would constitute a Split-Priority Implementing Agreement and/or Applicable
Intercreditor Agreement if executed at such time as a new agreement.
(d) Each
of the Lenders, the Issuing Banks and the other Senior Loan Secured Parties acknowledges and agrees that Bank of America, or one or more
of its Affiliates may (but is not obligated to) act as administrative agent, collateral agent or a similar representative for the Split-Priority
Debt Parties and/or the Second Priority Debt Parties and, in such capacity, may be a party to any Split-Priority Implementing Agreement
and/or Applicable Intercreditor Agreement. Each of the Lenders, the Issuing Banks and the other Senior Loan Secured Parties waives any
conflict of interest in connection therewith and agrees not to assert against Bank of America or any of its Affiliates any claims, causes
of action, damages or liabilities of whatever kind or nature relating thereto.
(e) Each
Agent shall have the benefit of the provisions of Article VIII and Section 9.03 with respect to all actions taken
by it pursuant to this Section or in accordance with the terms of any Split-Priority Implementing Agreement to the full extent thereof.
(f) Each
Senior Loan Secured Party, whether or not a party hereto, will be deemed, by its acceptance of the benefits of the Collateral and of the
Guarantees of the Secured Loan Obligations provided under the Senior Loan Documents, to have agreed to the provisions of this Section 9.18.
(g) Each
Lender, each Issuing Bank and each other Senior Loan Secured Party hereby authorizes each Agent to enter into (i) amendments to the
Applicable Intercreditor Agreements to the extent necessary to reflect the incurrence of any additional Permitted Split-Priority Term
Loan Debt and Second Priority Debt, in compliance with this Agreement, (ii) any supplements to any agreements referred to in the
foregoing clause (i) in compliance with such documents and (iii) each other Senior Collateral Document on its behalf,
and agrees that each Agent may enforce the rights and remedies of the Lenders under each Senior Loan Document to the extent provided in
the Applicable Intercreditor Agreements and each other Senior Collateral Document.
SECTION 9.19. Loan
Modification Offers.
(a) With
the consent of the Administrative Agent, the Borrower may, by written notice to the Administrative Agent from time to time, make one or
more offers (each, a “Loan Modification Offer”) to all the Lenders of one or more Classes of Loans and/or Commitments
(each Class subject to such a Loan Modification Offer, an “Affected Class”) to make one or more Permitted Amendments
(as defined in Section 9.19(c)) pursuant to procedures reasonably specified by the Administrative Agent and reasonably acceptable
to the Borrower. Such notice shall set forth (i) the terms and conditions of the requested Permitted Amendment and (ii) the
date on which such Permitted Amendment is requested to become effective (which shall not be less than five Business Days nor more than
thirty (30) Business Days after the date of such notice). Permitted Amendments shall become effective only with respect to the Loans and
Commitments of the Lenders of the Affected Class that, at their discretion, accept the applicable Loan Modification Offer (such Lenders,
the “Accepting Lenders”) and, in the case of any Accepting Lender, only with respect to such Lender’s Loans and
Commitments of such Affected Class as to which such Lender's acceptance has been made.
(b) The
Borrower and each Accepting Lender shall execute and deliver to the Administrative Agent a Loan Modification Agreement and such other
documentation as the Administrative Agent shall reasonably specify to evidence the acceptance of the Permitted Amendments and the terms
and conditions thereof. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Loan Modification Agreement.
Each of the parties hereto hereby agrees that, upon the effectiveness of any Loan Modification Agreement, this Agreement shall be deemed
amended to the extent (but only to the extent) necessary to reflect the existence and terms of the Permitted Amendments evidenced thereby
and only with respect to the Loans and Commitments of the Accepting Lenders of the Affected Class (including any amendments necessary
to treat the Loans and Commitments of the Accepting Lenders of the Affected Class as Term Loans, Revolving Loans and/or Revolving
Commitments). Notwithstanding the foregoing, no Permitted Amendment shall become effective under this Section 9.19 unless
the Administrative Agent, to the extent so reasonably requested by the Administrative Agent, shall have received legal opinions, board
resolutions and/or officers’ certificates consistent with those delivered on the Closing Date under Section 4.01, other
than changes to such legal opinions resulting from a change in law, change in fact or change to counsel’s form of opinion that are
reasonably acceptable to the Administrative Agent.
(c) “Permitted
Amendments” means (i) an extension of the final maturity date of the applicable Loans and/or Commitments of the Accepting
Lenders, (ii) a reduction or elimination of the scheduled amortization of the applicable Loans of the Accepting Lenders, (iii) an
increase in the Applicable Rate with respect to the applicable Loans and/or Commitments of the Accepting Lenders and the payment of additional
fees to the Accepting Lenders (such increase and/or payments to be in the form of cash, Equity Interests or other property to the extent
not prohibited by this Agreement); and (iv) the conversion of Revolving Loans to term loans (each such term loan, together with any
other Term Loans of an Affected Class that is subject effected pursuant to any such Permitted Amendment, each a “Loan Modification
Term Loan”); provided that any such conversion will constitute a Permitted Amendment only if such Loan Modification Term
Loan could be incurred as Refinancing Indebtedness in respect of such Revolving Loans pursuant to Section 6.01(c).
SECTION 9.20. No
Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection
with any amendment, waiver or other modification hereof or of any other Senior Loan Document), the Borrower acknowledges and agrees, and
acknowledges its Subsidiaries’ understanding, that: (i) (A) the arranging and other services regarding this Agreement
provided by the Administrative Agent, the Arrangers, and the Lenders are arm’s-length commercial transactions between the Borrower
and its Subsidiaries, on the one hand, and the Administrative Agent, the Arrangers, and the Lenders, on the other hand, (B) the Borrower
has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower
is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by
the other Senior Loan Documents; (ii) (A) the Administrative Agent, the Arrangers and the Lenders each is and has been acting
solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting
as an advisor, agent or fiduciary for the Borrower or any of its Subsidiaries, or any other Person and (B) neither the Administrative
Agent, nor any Arranger, nor any Lender has any obligation to the Borrower or any of its Subsidiaries with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in the other Senior Loan Documents; and (iii) the Administrative
Agent, the Arrangers, the Lenders, and their respective Affiliates may be engaged in a broad range of transactions that involve interests
that differ from those of the Borrower and its Subsidiaries, and neither the Administrative Agent, nor any Arranger nor any Lender has
any obligation to disclose any of such interests to the Borrower and its Subsidiaries. To the fullest extent permitted by law, the Borrower
hereby waives and releases any claims that it may have against the Administrative Agent, the Arrangers, and the Lenders with respect to
any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
SECTION 9.21. Electronic
Execution; Electronic Records. This Agreement, any Senior Loan Document and any other Communication, including Communications required
to be in writing, may be in the form of an Electronic Record and may be executed using Electronic Signatures. Each of the Loan Parties
and each of the Senior Loan Secured Parties agrees that any Electronic Signature on or associated with any Communication shall be valid
and binding on such Person to the same extent as a manual, original signature, and that any Communication entered into by Electronic Signature,
will constitute the legal, valid and binding obligation of such Person enforceable against such Person in accordance with the terms thereof
to the same extent as if a manually executed original signature was delivered. Any Communication may be executed in as many
counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same
Communication. For the avoidance of doubt, the authorization under this Section 9.21 may include, without limitation,
use or acceptance of a manually signed paper Communication which has been converted into electronic form (such as scanned into PDF format),
or an electronically signed Communication converted into another format, for transmission, delivery and/or retention. The Administrative
Agent and each of the Senior Loan Secured Parties may, at its option, create one or more copies of any Communication in the form of an
imaged Electronic Record (“Electronic Copy”), which shall be deemed created in the ordinary course of such Person’s
business, and destroy the original paper document. All Communications in the form of an Electronic Record, including an Electronic
Copy, shall be considered an original for all purposes, and shall have the same legal effect, validity and enforceability as a paper record.
Notwithstanding anything contained herein to the contrary, neither the Administrative Agent, the Issuing Banks nor the Swingline Lender
is under any obligation to accept an Electronic Signature in any form or in any format unless expressly agreed to by such Person pursuant
to procedures approved by it; provided, further, that without limiting the foregoing, (a) to the extent the Administrative
Agent, the Issuing Banks and/or the Swingline Lender has agreed to accept such Electronic Signature, the Administrative Agent and each
of the Senior Loan Secured Parties shall be entitled to rely on any such Electronic Signature purportedly given by or on behalf of any
Loan Party and/or any Senior Loan Secured Party without further verification and regardless of the appearance or form of such Electronic
Signature, and (b) upon the request of the Administrative Agent or any Senior Loan Secured Party, any Communication executed using
an Electronic Signature shall be promptly followed by a manually executed counterpart.
Neither the Administrative
Agent, the Issuing Banks nor the Swingline Lender shall be responsible for or have any duty to ascertain or inquire into the sufficiency,
validity, enforceability, effectiveness or genuineness of any Senior Loan Document or any other agreement, instrument or document (including,
for the avoidance of doubt, in connection with the Administrative Agent’s, the Issuing Banks’ or the Swingline Lender’s
reliance on any Electronic Signature transmitted by telecopy, emailed .pdf or any other electronic means). The Administrative Agent, the
Issuing Banks and the Swingline Lender shall be entitled to rely on, and shall incur no liability under or in respect of this Agreement
or any other Senior Loan Document by acting upon, any Communication or any statement made to it orally or by telephone and believed by
it to be genuine and signed or sent or otherwise authenticated (whether or not such Person in fact meets the requirements set forth in
the Senior Loan Documents for being the maker thereof).
Each of the Loan Parties and
each Senior Loan Secured Party hereby waives (i) any argument, defense or right to contest the legal effect, validity or enforceability
of this Agreement, any other Senior Loan Document based solely on the lack of paper original copies of this Agreement, such other Senior
Loan Document, and (ii) any claim against the Administrative Agent, each other Senior Loan Secured Party and each of their respective
Related Parties for any liabilities arising solely from the Administrative Agent’s and/or any such other Senior Loan Secured Party’s
reliance on or use of Electronic Signatures, including any liabilities arising as a result of the failure of the Loan Parties to use any
available security measures in connection with the execution, delivery or transmission of any Electronic Signature.
SECTION 9.22. Acknowledgement
and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Senior Loan Document or
in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any
Lender that is an Affected Financial Institution arising under any Senior Loan Document, to the extent such liability is unsecured, may
be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges
and agrees to be bound by:
(a) the
application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which
may be payable to it by any Lender or any Issuing Bank that is an Affected Financial Institution; and
(b) the
effects of any Bail-In Action on any such liability, including, if applicable:
(i) a
reduction in full or in part or cancellation of any such liability;
(ii) a
conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution,
its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments
of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Senior
Loan Document; or
(iii) the
variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution
Authority.
SECTION 9.23. Acknowledgement
Regarding Any Supported QFCs. To the extent that the Senior Loan Documents provide support, through a guarantee or otherwise, for
any Hedging Agreement or any other agreement or instrument that is a QFC (such support, “QFC Credit Support”, and each
such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of
the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform
and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”)
in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Senior Loan Documents
and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other
state of the United States):
(a) In
the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding
under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest
and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such
QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special
Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed
by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party
becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Senior Loan Documents that might otherwise
apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to
no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Senior
Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it
is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights
of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
(b) As
used in this Section 9.23, the following terms have the following meanings:
“BHC Act
Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. §1841(k))
of such party.
“Covered
Entity” means any of the following: (a) a “covered entity” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 252.82(b); (b) a “covered bank” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 47.3(b); or (c) a “covered FSI” as that term is defined in, and interpreted
in accordance with, 12 C.F.R. § 382.2(b).
“Default
Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81,
47.2 or 382.1, as applicable.
“QFC”
has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. §
5390(c)(8)(D).
[Signature Pages Follow]
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.
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RITE AID CORPORATION, |
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as Borrower |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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BANK OF AMERICA, N.A.,
as the Administrative Agent |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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BANK
OF AMERICA, N.A.,
as a Lender and an Issuing Bank |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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WELLS FARGO BANK, NATIONAL ASSOCIATION,
as a Lender and an Issuing Bank |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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CAPITAL
ONE, NATIONAL ASSOCIATION,
as a Lender and an Issuing Bank |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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BMO
BANK N.A.,
as a Lender and an Issuing Bank |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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FIFTH
THIRD BANK,
as a Lender and an Issuing Bank |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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MUFG
UNION BANK, N.A.,
as a Lender and an Issuing Bank |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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PNC
BANK, NATIONAL ASSOCIATION,
as a Lender and an Issuing Bank |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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TRUIST
BANK, as a Lender and an Issuing Bank |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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ING
CAPITAL LLC,
as a Lender and an Issuing Bank |
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By: |
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Name: |
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Title: |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Credit Agreement]
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CITIZENS
BANK, N.A., as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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TD BANK,
N.A., as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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THE
HUNTINGTON NATIONAL BANK,
as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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FIRST-CITIZENS
BANK & TRUST COMPANY, N.A., as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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U.S.
BANK NATIONAL ASSOCIATION,
as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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UBS
AG, STAMFORD BRANCH,
as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Credit Agreement]
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SIEMENS
FINANCIAL SERVICES, INC.,
as a Lender |
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By: |
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Name: |
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Title: |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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WEBSTER
BUSINESS CREDIT CORPORATION, as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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KEYBANK
NATIONAL ASSOCIATION,
as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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NYCB
SPECIALTY FINANCE COMPANY, LLC, a wholly owned subsidiary of New York Community Bank, as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP ABL Credit Agreement]
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ATLANTIC
UNION BANK, as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Credit Agreement]
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CATHAY
BANK, as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Credit Agreement]
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APPLE
BANK FOR SAVINGS,
as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Credit Agreement]
Exhibit 10.3
FINANCING MOTION
DEBTOR-IN-POSSESSION
TERM LOAN AGREEMENT
dated as of October [●],
2023,
among
RITE
AID CORPORATION,
as the Borrower
THE
LENDERS PARTY HERETO,
and
bank
of america, n.a.,
as Administrative
Agent and Collateral Agent
BofA
SECURITIES, INC.,
CAPITAL
ONE, NATIONAL ASSOCIATION,
WELLS FARGO BANK, NATIONAL ASSOCIATION,
PNC CAPITAL MARKETS LLC,
BMO BANK, N.A.,
and
TRUIST
SECURITIES, INC.,
as Joint Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
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Page |
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ARTICLE I Definitions |
2 |
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SECTION 1.01. |
Defined Terms |
2 |
SECTION 1.02. |
Classification of Loans and Borrowings |
49 |
SECTION 1.03. |
Terms Generally |
49 |
SECTION 1.04. |
Accounting Terms; GAAP |
49 |
SECTION 1.05. |
Divisions |
50 |
SECTION 1.06. |
[Reserved] |
50 |
SECTION 1.07. |
Times of Day |
50 |
SECTION 1.08. |
[Reserved] |
50 |
SECTION 1.09. |
Interest Rates |
50 |
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ARTICLE II The Credits |
51 |
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SECTION 2.01. |
Commitments |
51 |
SECTION 2.02. |
Loans and Borrowings |
51 |
SECTION 2.03. |
Requests for Borrowings |
51 |
SECTION 2.04. |
[Reserved] |
52 |
SECTION 2.05. |
[Reserved] |
52 |
SECTION 2.06. |
Funding of Borrowings |
52 |
SECTION 2.07. |
Interest Elections |
52 |
SECTION 2.08. |
Termination of Commitments |
54 |
SECTION 2.09. |
Repayment of Loans; Evidence of Indebtedness |
54 |
SECTION 2.10. |
[Reserved] |
55 |
SECTION 2.11. |
Prepayment of Loans |
55 |
SECTION 2.12. |
Fees |
57 |
SECTION 2.13. |
Interest |
58 |
SECTION 2.14. |
Alternate Rate of Interest; Illegality |
58 |
SECTION 2.15. |
Increased Costs |
61 |
SECTION 2.16. |
Break Funding Payments |
63 |
SECTION 2.17. |
Taxes |
63 |
SECTION 2.18. |
Payments Generally; Pro Rata Treatment; Sharing of Setoffs |
67 |
SECTION 2.19. |
Mitigation Obligations; Replacement of Lenders |
69 |
SECTION 2.20. |
Reserves |
70 |
SECTION 2.21. |
[Reserved] |
71 |
SECTION 2.22. |
Defaulting Lenders |
71 |
SECTION 2.23. |
Protective Advances |
71 |
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ARTICLE III Representations and Warranties |
72 |
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SECTION 3.01. |
Organization; Powers |
72 |
SECTION 3.02. |
Authorization; Enforceability |
72 |
SECTION 3.03. |
Governmental Approvals; No Conflicts |
72 |
SECTION 3.04. |
Financial Condition; No Material Adverse Effect; Approved
Budget |
73 |
SECTION 3.05. |
Properties |
73 |
SECTION 3.06. |
Litigation and Environmental Matters |
74 |
SECTION 3.07. |
Compliance with Laws and Agreements |
75 |
SECTION 3.08. |
Investment and Holding Company Status |
75 |
SECTION 3.09. |
Taxes |
75 |
SECTION 3.10. |
ERISA |
75 |
SECTION 3.11. |
Disclosure; Accuracy of Information |
75 |
SECTION 3.12. |
Subsidiaries |
76 |
SECTION 3.13. |
Insurance |
76 |
SECTION 3.14. |
Labor Matters |
76 |
SECTION 3.15. |
Real Estate Leases |
76 |
SECTION 3.16. |
Federal Reserve Regulations |
77 |
SECTION 3.17. |
Security Interests |
77 |
SECTION 3.18. |
Use of Proceeds |
77 |
SECTION 3.19. |
Anti-Corruption Laws and Sanctions |
77 |
SECTION 3.20. |
Affected Financial Institutions; Covered Entities |
77 |
SECTION 3.21. |
Chapter 11 Case Matters |
77 |
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ARTICLE IV Conditions |
78 |
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SECTION 4.01. |
Conditions Precedent to Effectiveness |
78 |
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ARTICLE V Affirmative Covenants |
82 |
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SECTION 5.01. |
Financial Statements and Other Information |
82 |
SECTION 5.02. |
Notices of Material Events |
86 |
SECTION 5.03. |
Information Regarding Collateral |
87 |
SECTION 5.04. |
Existence; Conduct of Business |
87 |
SECTION 5.05. |
Payment of Obligations |
87 |
SECTION 5.06. |
Maintenance of Properties |
87 |
SECTION 5.07. |
Insurance |
87 |
SECTION 5.08. |
Books and Records; Inspection and Audit Rights; Collateral and Borrowing Base Reviews |
89 |
SECTION 5.09. |
Compliance with Laws |
90 |
SECTION 5.10. |
Use of Proceeds |
90 |
SECTION 5.11. |
Additional Subsidiaries |
91 |
SECTION 5.12. |
Further Assurances |
91 |
SECTION 5.13. |
[Reserved] |
92 |
SECTION 5.14. |
Intercompany Transfers |
92 |
SECTION 5.15. |
Inventory Purchasing |
92 |
SECTION 5.16. |
Cash Management System |
93 |
SECTION 5.18. |
Company Financial Advisors and Lender Group Consultants |
93 |
SECTION 5.19. |
Approved Budget |
94 |
SECTION 5.20. |
Chapter 11 Case Milestones |
96 |
SECTION 5.21. |
Compliance with Bankruptcy Court Orders, Bankruptcy Code, Etc. |
96 |
SECTION 5.22. |
Real Estate Leases |
96 |
SECTION 5.23. |
Assumption and Rejection of Contracts and Real Estate Leases |
97 |
SECTION 5.24. |
Term Loan Exclusive Collateral Accounts |
97 |
SECTION 5.25. |
Post-Closing Obligations |
98 |
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ARTICLE VI Negative Covenants |
98 |
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SECTION 6.01. |
Indebtedness; Certain Equity Securities |
98 |
SECTION 6.02. |
Liens |
100 |
SECTION 6.03. |
Fundamental Changes |
102 |
SECTION 6.04. |
Investments, Loans, Advances, Guarantees and Acquisitions |
102 |
SECTION 6.05. |
Asset Sales |
103 |
SECTION 6.06. |
Sale and Leaseback Transactions |
105 |
SECTION 6.07. |
Hedging Agreements |
105 |
SECTION 6.08. |
Restricted Payments; Certain Payments of Indebtedness |
105 |
SECTION 6.09. |
Transactions with Affiliates |
106 |
SECTION 6.10. |
Restrictive Agreements |
107 |
SECTION 6.11. |
Amendment of Material Documents |
108 |
SECTION 6.12. |
Minimum ABL DIP Availability |
108 |
SECTION 6.13. |
Restrictions on Asset Holdings by the Borrower |
109 |
SECTION 6.14. |
Corporate Separateness |
109 |
SECTION 6.15. |
Cash Management |
109 |
SECTION 6.16. |
Use of Proceeds |
110 |
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ARTICLE VII Events of Default |
110 |
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SECTION 7.01. |
Events of Default |
110 |
SECTION 7.02. |
Application of Proceeds |
116 |
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ARTICLE VIII Rights of Agents |
117 |
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SECTION 8.01. |
Appointment and Authority of Agents |
117 |
SECTION 8.02. |
Rights as a Lender |
118 |
SECTION 8.03. |
Exculpatory Provisions |
118 |
SECTION 8.04. |
Reliance by the Agents |
119 |
SECTION 8.05. |
Delegation of Duties |
119 |
SECTION 8.06. |
Resignation or Removal of an Agent |
119 |
SECTION 8.07. |
Reports and Financial Statements |
120 |
SECTION 8.08. |
Non-Reliance on Agents and Other Lenders |
121 |
SECTION 8.09. |
[Reserved] |
121 |
SECTION 8.10. |
[Reserved] |
121 |
SECTION 8.11. |
No Other Duties |
121 |
SECTION 8.12. |
Agents May File Proofs of Claim; Credit Bidding |
121 |
SECTION 8.13. |
Collateral and Guaranty Matters |
123 |
SECTION 8.14. |
Additional Secured Parties |
124 |
SECTION 8.15. |
Certain ERISA Matters |
125 |
SECTION 8.16. |
Recovery of Erroneous Payments |
126 |
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ARTICLE IX Miscellaneous |
126 |
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SECTION 9.01. |
Notices |
126 |
SECTION 9.02. |
Waivers; Amendments |
128 |
SECTION 9.03. |
Expenses; Indemnity; Damage Waiver |
132 |
SECTION 9.04. |
Successors and Assigns |
134 |
SECTION 9.05. |
Survival |
140 |
SECTION 9.06. |
Integration; Effectiveness |
140 |
SECTION 9.07. |
Severability |
140 |
SECTION 9.08. |
Right of Setoff |
140 |
SECTION 9.09. |
Governing Law; Jurisdiction; Consent to Service of Process |
141 |
SECTION 9.10. |
WAIVER OF JURY TRIAL |
142 |
SECTION 9.11. |
[Reserved] |
142 |
SECTION 9.12. |
Headings |
142 |
SECTION 9.13. |
Confidentiality |
142 |
SECTION 9.14. |
Interest Rate Limitation |
143 |
SECTION 9.15. |
ABL DIP Intercreditor Agreement and Financing Order |
143 |
SECTION 9.16. |
Cash Sweep |
143 |
SECTION 9.17. |
USA Patriot Act |
143 |
SECTION 9.18. |
[Reserved] |
144 |
SECTION 9.19. |
[Reserved] |
144 |
SECTION 9.20. |
No Advisory or Fiduciary Responsibility |
144 |
SECTION 9.21. |
Electronic Execution; Electronic Records |
145 |
SECTION 9.22. |
Acknowledgement and Consent to Bail-In of Affected Financial Institutions |
145 |
SECTION 9.23. |
Acknowledgement Regarding Any Supported QFCs |
146 |
ANNEXES:
Annex I – Approved Budget
Annex II –
Real Property Collateral Support Documents
SCHEDULES:
Schedule 1.01(a) |
- |
Excluded Subsidiaries |
Schedule 1.01(b) |
- |
Specified Prescription File Stores |
Schedule 2.01 |
- |
Commitments and Applicable Percentage |
Schedule 3.04 |
- |
Undisclosed Liabilities |
Schedule 3.05(a)(1) |
- |
Properties |
Schedule 3.05(a)(2) |
- |
Owned Real Property |
Schedule 3.05(a)(3) |
- |
Ground-Leased Real Property |
Schedule 3.05(c) |
- |
Stores, Warehouses and Distribution Centers |
Schedule 3.06(a) |
- |
Litigation |
Schedule 3.06(b) |
- |
Environmental Matters |
Schedule 3.06(c) |
- |
Hazardous Materials |
Schedule 3.12 |
- |
Subsidiaries |
Schedule 3.13 |
- |
Insurance |
Schedule 3.14 |
- |
Labor |
Schedule 3.15 |
- |
Real Estate Matters |
Schedule 5.20 |
- |
Chapter 11 Case Milestones |
Schedule 5.25 |
- |
Post-Closing Obligations |
Schedule 6.01(a)(xii) |
- |
Existing Indebtedness |
Schedule 6.01(b) |
- |
Equity Issuances |
Schedule 6.02(a)(xi) |
- |
Liens |
Schedule 6.04 |
- |
Investments |
Schedule 6.08(a) |
- |
Restricted Payments |
Schedule 6.09 |
- |
Affiliate Transactions |
Schedule 9.01 |
- |
Notices |
EXHIBITS: |
|
(form of) |
|
Exhibit A |
- |
Term Note |
Exhibit B |
- |
Assignment and Acceptance Agreement |
Exhibit C |
- |
Borrowing Base Certificate |
Exhibit D |
- |
Borrowing/Interest Election Request |
Exhibit E |
- |
Compliance Certificate |
Exhibit F-1 – F-4 |
- |
U.S. Tax Compliance Certificates |
Exhibit G |
- |
Interim Financing Order |
Exhibit H |
- |
Cash Management Order |
Exhibit I |
- |
Owned Property Master List |
DEBTOR-IN-POSSESSION
TERM LOAN AGREEMENT
This
DEBTOR-IN-POSSESSION TERM LOAN AGREEMENT, dated as of October [●], 2023, is among RITE AID CORPORATION, a Delaware
corporation (the “Borrower”), each lender from time to time party hereto (each a “Lender”, and collectively,
the “Lenders”), and BANK OF AMERICA, N.A., as administrative agent (in such capacity, including any successor
thereto, the “Administrative Agent”) and collateral agent (in such capacity, including any successor thereto, the “Collateral
Agent”) for the Secured Parties (as hereinafter defined), with BofA SECURITIES, INC., CAPITAL
ONE, NATIONAL ASSOCIATION, WELLS FARGO BANK, NATIONAL ASSOCIATION, PNC CAPITAL MARKETS LLC, BMO BANK, N.A. and TRUIST
SECURITIES, INC., as joint lead arrangers and joint bookrunners hereunder (in such capacities, the “Arrangers”).
PRELIMINARY STATEMENTS
A. On
October [●], 2023 (the “Petition Date”), the Borrower and the Subsidiary Loan Parties commenced cases under
Chapter 11 of the Bankruptcy Code, 11 U.S.C. 101 et seq. (the “Bankruptcy Code”), case numbers [●] through [●]
(collectively, the “Chapter 11 Case”) by filing voluntary petitions for relief under Chapter 11 with the United States
Bankruptcy Court for the District of New Jersey (the “Bankruptcy Court”).
B. The
Borrower and the other Loan Parties continue to operate their businesses and manage their properties as debtors and debtors-in-possession
pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code.
C. The
Borrower has requested, and the Lenders have agreed, upon the terms and conditions set forth in this Agreement, to make available to the
Borrower a $200,000,000 senior secured term loan facility in order to (a) fund the Chapter 11 Case in accordance with the Approved
Budget (subject to the Permitted Variance) as provided herein, (b) make certain other payments on the Closing Date as more fully
provided herein, and (c) provide working capital for the Borrower and the Subsidiary Loan Parties during the pendency of the Chapter
11 Case in accordance with the Approved Budget (subject to the Permitted Variance) and as provided herein.
D. The
Borrower and the Subsidiary Loan Parties desire to secure the Obligations under the Loan Documents by granting to the Collateral Agent,
on behalf of itself and the other Secured Parties, a security interest in and liens upon substantially all of their assets, whether now
existing or hereafter acquired, in each instance as more fully set forth in the Loan Documents and in the Financing Order.
E. All
Obligations of the Borrower and the Subsidiary Loan Parties to the Lenders and other Secured Parties under this Agreement and under the
other Loan Documents shall be full recourse to each of the Borrower and the Subsidiary Loan Parties, secured by the Collateral Agent’s
security interest in and liens on all or substantially all of the assets of the Borrower and the other Loan Parties included in the Collateral
and entitled to super-priority administrative claim status under the Bankruptcy Code as provided herein and in the Financing Order.
F. Accordingly,
in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01.
Defined Terms. As used in this Agreement, the following terms have the meanings specified below:
“2025 7.500% Note Indenture”
means the Indenture dated as of February 5, 2020, as supplemented prior to the date hereof, among the Borrower, the Subsidiary Loan
Parties party thereto and The Bank of New York Mellon Trust Company, as trustee, relating to the 2025 7.500% Notes.
“2026 8.000% Note Indenture”
means the Indenture dated as of July 27, 2020, as supplemented prior to the date hereof,
among the Borrower, the Subsidiary Loan Parties party thereto and The Bank of New York Mellon Trust Company, as trustee, relating to the
2026 8.000% Notes.
“2027 7.70% Note Indenture”
means the Indenture dated as of August 1, 1993, as supplemented prior to the date hereof, between the Borrower and U.S. Bank Trust
National Association (as successor to Morgan Guaranty Trust Company of New York), as trustee, relating to the 2027 7.70% Notes.
“2028 6.875% Note Indenture”
means the Indenture dated as of December 21, 1998, as supplemented prior to the date hereof, between the Borrower and The Bank of
New York Mellon Trust Company (as successor to Harris Trust and Savings Bank), as trustee, relating to the 2028 6.875% Notes.
“ABL DIP Agent”
means Bank of America, as applicable and as the context may require, in its capacity as “Administrative Agent”, “Collateral
Agent” and/or “Senior Collateral Agent”, as such terms are defined in the ABL DIP Loan Agreement.
“ABL DIP Availability”
means “ABL Availability” as defined in the ABL DIP Loan Agreement as in effect on the date hereof (or as otherwise amended
after the date hereof as may be permitted pursuant to the terms of the ABL DIP Intercreditor Agreement).
“ABL DIP Borrowing
Base Amount” means the “ABL Borrowing Base Amount” as defined in the ABL DIP Loan Agreement as in effect on the
date hereof (or as otherwise amended after the date hereof as may be permitted pursuant to the terms of the ABL DIP Intercreditor Agreement).
“ABL DIP Collateral”
means all assets of the Loan Parties of the type that constitutes “ABL Collateral” (as defined in the Split-Priority Intercreditor
Agreement) immediately prior to the Petition Date. For the avoidance of doubt, ABL DIP Collateral shall not include any Term Loan
Exclusive Collateral.
“ABL DIP FILO Borrowing
Base Amount” means the “FILO Borrowing Base Amount” as defined in the ABL DIP Loan Agreement as in effect on the
date hereof (or as otherwise amended after the date hereof as may be permitted pursuant to the terms of the ABL DIP Intercreditor Agreement).
“ABL DIP FILO Suppressed
Availability” means, at any time of determination, the result (if a positive number) of (i) the ABL DIP FILO Borrowing
Base Amount, minus (ii) the Total FILO Outstandings (as defined in the ABL DIP Loan Agreement). For the avoidance of doubt,
if the result of the foregoing is less than zero, then the ABL DIP FILO Suppressed Availability shall be zero.
“ABL DIP Intercreditor
Agreement” means the Pari Passu Intercreditor Agreement, dated as of the Closing Date, by and among the Collateral Agent and
the ABL DIP Agent, as acknowledged by the Loan Parties, as may be amended, restated, amended and restated, supplemented or otherwise modified
from time to time.
“ABL DIP Lenders”
means those certain lenders and other financial institutions from time to time party to the ABL DIP Loan Agreement as lenders.
“ABL DIP Loan Agreement”
means that certain Debtor-in-Possession Credit Agreement, dated as of the Closing Date, by and among the Loan Parties party thereto, the
ABL DIP Lenders, the ABL DIP Agent and the other parties thereto, as amended, restated, amended and restated, supplemented or otherwise
modified from time to time.
“ABL DIP Loan Documents”
means, the “Senior Debt Documents” as defined in the ABL DIP Loan Agreement.
“ABL DIP Loans”
means the “Loans” as defined in the ABL DIP Loan Agreement.
“ABL DIP Obligations”
means all “Senior Obligations” as defined in the ABL DIP Loan Agreement.
“ABL DIP Security Agreement”
means the Senior Security Agreement, dated as of the Closing Date, among the Borrower, the Subsidiary Loan Parties (including additional
Subsidiary Loan Parties that become parties thereto in accordance with the terms thereof) and the ABL DIP Agent, for the benefit of the
Senior Secured Parties (as defined in the ABL DIP Loan Agreement), as such agreement may be amended, supplemented or otherwise modified
from time to time.
“ABL Pre-Petition Agent”
shall mean, as applicable and as the context may require, the “Administrative Agent”, “Collateral Agent” and “Senior
Collateral Agent”, as such terms are defined in the ABL Pre-Petition Credit Agreement.
“ABL Pre-Petition Credit
Agreement” means that certain Credit Agreement, dated as of December 20, 2018, among the Borrower, the ABL Pre-Petition
Lenders, Bank of America, as the ABL Pre-Petition Agent, and the other agents and arrangers party thereto, as amended, restated, supplemented
or otherwise modified prior to the Closing Date.
“ABL Pre-Petition Lenders”
means the “Lenders” from time to time party to the ABL Pre-Petition Credit Agreement.
“ABL Pre-Petition Senior
Obligations” means all “Senior Obligations” as such term is defined in the ABL Pre-Petition Credit Agreement.
“ABL Pre-Petition Senior
Loan Documents” means the “Senior Debt Documents” as such term is defined in the ABL Pre-Petition Credit Agreement.
“ABL Priority Collateral”
means all ABL DIP Collateral of the type that constitutes “ABL Priority Collateral” (as defined in the Split-Priority Intercreditor
Agreement). Notwithstanding the foregoing to the contrary, Collateral consisting of any Intellectual Property shall only be deemed
ABL Priority Collateral until the occurrence of the Collateral Designation Date (as defined in the ABL DIP Loan Agreement). Thereafter,
such Collateral consisting of any Intellectual Property shall be deemed to be Split-Lien Priority Collateral. For the avoidance of doubt,
ABL Priority Collateral shall not include any Term Loan Exclusive Collateral.
“ABR”, when
used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
“Account”
means (a) “accounts” as defined in the UCC, (b) all Payment Intangibles consisting of amounts owing from credit
card and debit card issuers and processors and all rights under contracts relating to the creation or collection of such Payment Intangibles
and (c) all rights to payment of a monetary obligation, whether or not earned by performance, (x) for property that has been
or is to be sold, leased, licensed, assigned, or otherwise disposed of, (y) for services rendered or to be rendered, or (z) arising
out of the use of a credit or charge card or information contained on or for use with the card. The term “Account” does not
include (i) rights to payment evidenced by “chattel paper” or an “instrument,” (ii) commercial tort
claims, (iii) deposit accounts, (iv) investment property, or (v) letter-of-credit rights or letters of credit.
“Account Debtor”
means an “account debtor” as such term is defined in the UCC, including a credit card or debit card issuer and a credit card
or debit card processor.
“Accounts Receivable
Advance Rate” means five percent (5.0%).
“Actual Cash Receipts”
means, for any period of determination, the amount of all cash receipts actually received by the Loan Parties and their Subsidiaries (excluding,
for the avoidance of doubt, any borrowings under this Agreement) from the operations of the Loan Parties and their Subsidiaries (including
from any Asset Sales) during such period, which corresponds to the sum of (a) the cash receipts aggregated in the line items “Total
Receipts” (or words of similar import) and “Script Sales” (or words of similar import) for such period in the “WCF”
tab of the “Retail & Corp Bank TWCF” portion of the Approved Budget, (b) the cash receipts aggregated in the
line item “Total Receipts” (or words of similar import) for such period in the “TWCF – PBM” tab of the “Elixir
TWCF” portion of the Approved Budget, all as determined in a manner consistent with the Approved Budget and (c) the cash receipts
aggregated in the line item “Total Receipts” (or words of similar import) for such period in the “TWCF – EIC”
tab of the “Elixir TWCF” portion of the Approved Budget, all as determined in a manner consistent with the Approved Budget.
“Actual
Net Cash Flow” means, the sum of (a) for any period of determination with respect to the Loan Parties and their Subsidiaries
(other than, in each case, the Elixir Subsidiaries), the actual net cash flow of such Loan Parties and Subsidiaries for such period, which
corresponds to the line item “Net Cash Flow” (or words of similar import) for such period in the “WCF” tab of
the “Retail & Corp Bank TWCF” portion of the Approved Budget, (b) for any period of determination with
respect to the Elixir Subsidiaries (other than Elixir Insurance Company), the actual net cash flow of the Elixir Subsidiaries (other than
Elixir Insurance Company) for such period, which corresponds to the line item “Net Operating Cash Flow” (or words of similar
import) for such period in the “TWCF– PBM” tab of the “Elixir TWCF” portion of the Approved Budget, all
as determined in a manner consistent with the Approved Budget, and (c) for any period of determination with respect to the Elixir
Subsidiaries, the actual net cash flow of Elixir Insurance Company for such period, which corresponds to the line item “Net Operating
Cash Flow” (or words of similar import) for such period in the “TWCF – EIC” tab of the “Elixir TWCF”
portion of the Approved Budget, all as determined in a manner consistent with the Approved Budget.
“Actual
Non-Operating Disbursement Amounts” means, for any period of determination, the amount of all non-operating disbursements
actually paid by the Loan Parties and their Subsidiaries during such period, which corresponds to the disbursements described under the
headings “Interest & Fees”, “Normal Course Professional Fees”, “Restructuring Professional Fees”,
and “Other Non-Operating” (or words of similar import) for such period in the Approved Budget, all as determined in a manner
consistent with the Approved Budget.
“Actual
Operating Disbursement Amounts” means, for any period of determination, the amount of all operating disbursements actually
paid by the Loan Parties and their Subsidiaries during such period, which corresponds to the sum of (a) the disbursements aggregated
in the line item “Total Operating Disbursements” (or words of similar import) for such period in the “WCF” tab
of the “Retail & Corp Bank TWCF” portion of the Approved Budget, (b) the disbursements aggregated in the line
item “Total Operating Disbursements” (or words of similar import) for such period in the “TWCF – PBM” tab
of the “Elixir TWCF” portion of the Approved Budget, all as determined in a manner consistent with the Approved Budget, and
(c) the disbursements aggregated in the line item “Total Operating Disbursements” (or words of similar import) for such
period in the “TWCF – EIC” tab of the “Elixir TWCF” portion of the Approved Budget, all as determined in
a manner consistent with the Approved Budget.
“Actual Other Inventory
Levels” means, as of any date of determination, the actual aggregate consolidated ledger Other Inventory levels of the Loan
Parties as of such date, which corresponds to the budgeted consolidated ledger levels with respect to Other Inventory levels of the Loan
Parties for such date set forth in the “Borrowing Base Summary” tab of the “Retail & Corp Bank TWCF”
portion of the Approved Budget opposite the heading “Other Inventory Balance” (or words of similar import), all as determined
in a manner consistent with the Approved Budget.
“Actual Other Inventory
Receipts” means, for any period of determination, the aggregate amount of the value, determined at cost, of all Other Inventory
actually received by the Loan Parties during such period, which corresponds to the Other Inventory receipts during such period set forth
in the “Inventory Purchases Summary” tab of the “Retail & Corp Bank TWCF” portion of the Approved Budget
opposite the heading “DSD Other & Warehouse Purchases” (or words of similar import), all as determined in a manner
consistent with the Approved Budget.
“Actual Pharmaceutical
Inventory Levels” means, as of any date of determination, the actual aggregate consolidated ledger Pharmaceutical Inventory
levels of the Loan Parties as of such date, which corresponds to the budgeted consolidated ledger levels with respect to Pharmaceutical
Inventory levels of the Loan Parties for such date set forth in the “Borrowing Base Summary” tab of the “Retail &
Corp Bank TWCF” portion of the Approved Budget opposite the heading “Pharmacy Inventory Balance” (or words of similar
import), all as determined in a manner consistent with the Approved Budget.
“Actual Pharmaceutical
Inventory Receipts” means, for any period of determination, the aggregate amount of the value, determined at cost, of all Pharmaceutical
Inventory actually received by the Loan Parties during such period, which corresponds to the Pharmaceutical Inventory receipts during
such period set forth in the “Inventory Purchases Summary” tab of the “Retail & Corp Bank TWCF” portion
of the Approved Budget opposite the heading “Purchases [DSD McKesson]” (or words of similar import), all as determined in
a manner consistent with the Approved Budget.
“Administrative Agent”
shall have the meaning assigned to such term in the preamble to this Agreement.
“Administrative Questionnaire”
means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affected Financial
Institution” means (a) any EEA Financial Institution or (b) any U.K. Financial Institution.
“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.
“Agent Parties”
has the meaning assigned to such term in Section 9.01(d).
“Agents”
means, collectively, the Administrative Agent and the Collateral Agent, in each case, in their respective capacities as such.
“Agreement”
means this Debtor-In-Possession Term Loan Agreement, as amended, amended and restated, restated, supplemented or otherwise modified and
in effect from time to time.
“Alternate Base Rate”
means, for any day, a fluctuating rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the
Federal Funds Effective Rate in effect on such day plus ½ of 1% and (c) Term SOFR plus 1.00%; and if the Alternate
Base Rate as so determined shall be less than one percent, then the Alternate Base Rate shall be deemed to be one percent for purposes
of this Agreement. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 2.14 hereof,
then the Alternate Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without
regard to clause (c) of the first sentence of this definition until the circumstances giving rise to such circumstance no
longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or Term SOFR shall
be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or Term SOFR, as
the case may be.
“Annualized Transitioned
Prescription File Amount” means, without duplication, with respect to any Specified Prescription File Store, as of any date
of determination, an amount equal to (a) the aggregate number of Transitioned Prescription Files (if any) included as Eligible Script
Lists during the twelve (12) fiscal months ended immediately prior to the closing of such Specified Prescription File Store multiplied
by (b) solely to the extent that a period of 12 full fiscal months have not elapsed since the closure of any such Specified Prescription
File Store, the Remaining Annualized Period multiplied by (c) the Applicable Retention Rate.
“Anti-Corruption Laws”
means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Subsidiaries concerning or relating
to bribery, corruption or money laundering (and including any predicate crime to money laundering, or any financial record keeping and
reporting requirements related thereto), including the U.S. Foreign Corrupt Practices Act of 1977 and the UK Bribery Act 2010.
“Applicable Credit
Party” has the meaning set forth in Section 8.16.
“Applicable Excess”
has the meaning set forth in Section 2.11(b).
“Applicable Percentage”
means, (a) with respect to the Facility and any Lender at any time, the percentage (carried out to the ninth decimal place) of the
Facility represented by (i) on or prior to the Closing Date, such Lender’s Commitment at such time and (ii) thereafter,
the principal amount of such Lender’s Term Loans and (b) with respect to outstanding Protective Advances of any Lender at any
time, the percentage (carried out to the ninth decimal place) equal to (i) the amount of such outstanding Protective Advances funded
by such Lender divided by (ii) the total outstanding amount of Protective Advances at such time. The Applicable Percentage of each
Lender in respect of the Facility is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable.
“Applicable Rate”
means, on any day, a rate per annum equal to 6.50% in the case of any ABR Loan and 7.50% in the case of any Term SOFR Loan.
“Applicable Retention
Rate” means, with respect to the Transitioned Prescription Files of any Specified Prescription File Store, a percentage equal
to the lesser of (a) 32.3% and (b) 0.75 multiplied by the Average Weekly Retention Rate; provided, however, that in the
event that the Borrower shall not, at the reasonable request of the Administrative Agent, be able to provide reasonably detailed information
as may be required to evidence the Average Weekly Retention Rate (or any subcomponent thereof), the Applicable Retention Rate with respect
to any such Specified Prescription File Store (or the aggregate of all such Specified Prescription File Stores) shall be deemed to be
zero (0).
“Approved Budget”
means the debtor-in-possession thirteen (13) week budget prepared by the Borrower, in the form of Annex I hereto, and initially
furnished to the Administrative Agent on or before the Closing Date and which is approved by, and in form and substance satisfactory to,
the Administrative Agent, in its sole discretion, as the same may or shall, as applicable, thereafter be updated, modified and/or supplemented
from time to time as provided in Section 5.19. The initial Approved Budget shall commence as of the week of October 15,
2023. The Approved Budget shall include a weekly cash budget, including information on a line item basis as to (a) projected cash
receipts, including from Asset Sales (corresponding to Budgeted Cash Receipts), (b) projected operating and non-operating disbursements
(including separate line items for ordinary course operating expenses, capital expenditures, bankruptcy-related expenses (including a
line item for professional fees and expenses budgeted for the Case Professionals on a weekly basis), and any other fees and expenses relating
to the Loan Documents) (corresponding to Budgeted Operating Disbursement Amounts and Budgeted Non-Operating Disbursement Amounts, as applicable),
(c) projected net cash flow (corresponding to Budgeted Net Cash Flow), (d) projected Other Inventory and Pharmaceutical Inventory
receipts (corresponding to Budgeted Other Inventory Receipts and Budgeted Pharmaceutical Inventory Receipts, respectively), (e) projected
Other Inventory and Pharmaceutical Inventory levels (corresponding to Budgeted Other Inventory Levels and Budgeted Pharmaceutical Inventory
Levels, respectively), and (f) projected total liquidity (including ABL DIP Availability) and projected calculations of the ABL DIP
Borrowing Base Amount, the ABL DIP FILO Borrowing Base Amount and the Borrowing Base Amount. Notwithstanding anything to the contrary
herein, the Approved Budget shall consist of files separately presenting the performance of (i) the Loan Parties and the Subsidiaries
(in each other than any Elixir Subsidiaries), (ii) the Elixir Subsidiaries (other than Elixir Insurance Company) and (iii) Elixir
Insurance Company (it being understood and agreed that the Administrative Agent may consent to the modification of such presentation in
connection with any Specified Elixir Sale).
“Approved Budget Variance
Report” means a weekly report, prepared by the Borrower (after consultation with the Company Financial Advisors) and provided
by the Borrower to the Administrative Agent in accordance with Section 5.19(d), (a) showing by line item (i) Actual
Cash Receipts, (ii) Actual Operating Disbursement Amounts, (iii) Actual Non-Operating Disbursement Amounts, (iv) Actual
Net Cash Flow, (v) Actual Other Inventory Receipts, (vi) Actual Pharmaceutical Inventory Receipts, (vii) intercompany balances
among Elixir Insurance Company and the Loan Parties, (viii) Actual Other Inventory Levels, (ix) Actual Pharmaceutical Inventory
Levels, and (x) actual total liquidity (including ABL DIP Availability) (in each case of clauses (i) through (vii) above,
for the Prior Week, the most recent Cumulative Four-Week Period and the most recent Cumulative Period, and in each case of clauses
(viii) through (x), as of the last day of the Prior Week), noting therein all variances, on a line-item basis, from amounts
set forth for such period (or such date, as applicable) in the Approved Budget, and shall include or be accompanied by explanations for
all material variances and (b) determining compliance with the covenants set forth in Section 5.19(c). The Approved Budget
Variance Report shall be in a form, and shall contain supporting information, satisfactory to the Administrative Agent.
“Approved Fund”
means a CLO managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers
or manages a Lender.
“Arrangers” as defined
in the preamble of this Agreement.
“Asset Sale”
means any sale, lease, assignment, transfer or other disposition (including pursuant to a Sale and Leaseback Transaction) of any property
or asset (whether now owned or hereafter acquired, whether in one transaction or a series of related transactions and whether by way of
merger or otherwise) of the Borrower or any Subsidiary (including of any Equity Interest in a Subsidiary).
“Assignment and Acceptance”
means an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by
Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit B, or any other form (including
electronic documentation generated by use of an electronic platform) approved by the Administrative Agent.
“Attorney Costs”
means the reasonable and documented fees, expenses and disbursements of the applicable law firm or external legal counsel.
“Attributable Debt”
means, as to any particular Capital Lease or Sale and Leaseback Transaction under which the Borrower or any Subsidiary is at the time
liable, as of any date as of which the amount thereof is to be determined (a) in the case of a transaction involving a Capital Lease,
the amount as of such date of Capital Lease Obligations with respect thereto and (b) in the case of a Sale and Leaseback Transaction
not involving a Capital Lease, the then present value of the minimum rental obligations under such Sale and Leaseback Transaction during
the remaining term thereof (after giving effect to any extensions at the option of the lessor) computed by discounting the rental payments
at the actual interest factor included in such payments or, if such interest factor cannot be readily determined, at the rate per annum
that would be applicable to a Capital Lease of the Borrower having similar payment terms. The amount of any rental payment required to
be made under any such Sale and Leaseback Transaction not involving a Capital Lease may exclude amounts required to be paid by the lessee
on account of maintenance and repairs, insurance, taxes, assessments, utilities, operating and labor costs and similar charges, whether
or not characterized as rent. Any determination of any rate implicit in the terms of a Capital Lease or a lease in a Sale and Leaseback
Transaction not involving a Capital Lease made in accordance with generally accepted financial practices by the Borrower shall be binding
and conclusive absent manifest error.
“Automatic Stay”
shall mean the automatic stay imposed under Section 362 of the Bankruptcy Code.
“Average Weekly Transitioned
Prescription File Count” means, with respect to any Specified Prescription File Store, an amount equal to (a) the aggregate
number of Transitioned Prescription Files (if any) included as Eligible Script Lists during the twelve (12) fiscal months ended immediately
prior to the closing of such Specified Prescription File Store divided by (b) fifty-two (52).
“Average Weekly Retention
Rate” means, for any applicable period, with respect to the aggregate amount of Transitioned Prescription Files from any Specified
Prescription File Store, the percentage derived by dividing (a) the average weekly number of Transitioned Prescription Files
of such Specified Prescription File Store that are utilized by customers in another Store of a Subsidiary Loan Party (other than a Specified
Prescription File Store) for such period by (b) the Average Weekly Transitioned Prescription File Count of such Specified
Prescription File Store.
“Bail-In Action”
means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected
Financial Institution.
“Bail-In Legislation”
means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament
and of the Council of the European Union, the implementing law, rule, regulation or requirement for such EEA Member Country from time
to time which is described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, Part I of the
United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom
relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than
through liquidation, administration or other insolvency proceedings).
“Bank of America”
means Bank of America, N.A. and its successors.
“Bankruptcy Code”
means Title 11 of the United States Code (11 U.S.C. Section 101 et seq.) as now or hereafter in effect, or any successor thereto.
“Bankruptcy Court”
shall have the meaning assigned to such term in the preliminary statements hereto.
“Bankruptcy Proceeding”
means any proceeding under any Debtor Relief Law.
“Bankruptcy Rules”
means the Federal Rules of Bankruptcy Procedure as in effect from time to time and applicable to the Chapter 11 Case.
“Beneficial
Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.
“Beneficial Ownership
Regulation” means 31 C.F.R. § 1010.230.
“Benefit Plan”
means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan”
as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42)
or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan”
or “plan”.
“Board” means
the Board of Governors of the Federal Reserve System of the United States of America.
“Borrower”
shall have the meaning assigned to such term in the preamble to this Agreement.
“Borrower Materials”
has the meaning specified in Section 5.01.
“Borrowing”
means a Loan of the same Type made, converted or continued on the same date and, in the case of a Term SOFR Loan, as to which a single
Interest Period is in effect.
“Borrowing Base Amount”
means an amount equal to the sum, without duplication, of the following:
(a) the
Accounts Receivable Advance Rate multiplied by the face amount of Eligible Accounts Receivable; plus
(b) the
Scripts Availability; plus
(c) the
ABL DIP FILO Suppressed Availability; minus
(d) Realty
Reserves established by the Administrative Agent, in accordance with Section 2.20, in the exercise of its commercially reasonable
judgment; minus
(e) any
other reserves established by the Administrative Agent, in accordance with Section 2.20, in the exercise of its commercially
reasonable judgment.
The Borrowing Base Amount shall
be computed and reported weekly with respect to Eligible Accounts Receivable and Eligible Script Lists, in each case in accordance with
Sections 2.20 and 5.01(f). The Borrowing Base Amount at any time in effect shall be determined by reference to the Borrowing
Base Certificate most recently delivered pursuant to Section 5.01(f), giving effect to reserves effected pursuant to Section 2.20
after the date of delivery thereof.
“Borrowing Base Certificate”
means a certificate, substantially in the form of Exhibit C or in such other form as the Administrative Agent may approve,
which shall be certified as complete and correct by a Financial Officer of the Borrower.
“Borrowing Base Factors”
means (a) [reserved], (b) factors affecting the saleability or collectability of Eligible Accounts Receivable or Eligible Script
Lists, including in a liquidation, (c) factors affecting the market value of Eligible Accounts Receivable or Eligible Script Lists,
(d) other impediments to the Collateral Agent’s ability to realize upon the Eligible Accounts Receivable or the Eligible Script
Lists, (e) other factors affecting the credit value to be afforded the Eligible Accounts Receivable and the Eligible Script Lists,
and (f) such other factors as the Administrative Agent from time to time determines in its commercially reasonable discretion as
being appropriate to reflect criteria, events, conditions, contingencies or risks that adversely affect any component of the Borrowing
Base Amount or to reflect that a Default or an Event of Default then exists. Without limiting the generality of the foregoing, such Borrowing
Base Factors may include, in the Administrative Agent’s commercially reasonable judgment acting in good faith (but are not limited
to): (i) rent; (ii) [reserved]; (iii) outstanding taxes and other governmental charges, including ad valorem, real estate,
personal property, sales and other taxes that may have priority over (or that is pari passu in priority to) the interests of the
Collateral Agent in the Collateral; (iv) if a Default or an Event of Default then exists, salaries, wages and benefits due to employees
of the Borrower or any Subsidiary, (v) customer credit liabilities (including in respect of customer deposits, gift cards, merchandise
credit and loyalty rewards programs), (vi) [reserved], (vii) [reserved] and (viii) any administrative claims and priority
claims in the Chapter 11 Case.
“Borrowing Request”
means a notice of Borrowing pursuant to Section 2.03, which shall be substantially in the form of Exhibit D or
such other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission
system as shall be approved by the Administrative Agent) appropriately completed and signed by a Responsible Officer of the Borrower.
“BRG” means
Berkeley Research Group, LLC.
“Budgeted Cash Receipts”
means, for any period of determination, an amount equal to the sum of (a) the budgeted cash receipts aggregated in the line items
“Total Receipts” (or words of similar import) and “Script Sales” (or words of similar import) for such period
in the “WCF” tab of the “Retail & Corp Bank TWCF” portion of the Approved Budget, (b) the budgeted
cash receipts aggregated in the line item “Total Receipts” (or words of similar import) for such period in the “TWCF
– PBM” tab of the “Elixir TWCF” portion of the Approved Budget, and (c) the budgeted cash receipts aggregated
in the line item “Total Receipts” (or words of similar import) for such period in the “TWCF – EIC” tab of
the “Elixir TWCF” portion of the Approved Budget.
“Budgeted
Net Cash Flow” means the sum of (a) for any period of determination with respect to the Loan Parties and their Subsidiaries
(other than, in each case, the Elixir Subsidiaries), an amount equal to the budgeted net cash flow shown on the line item “Net Cash
Flow” (or words of similar import) for such period in the “WCF” tab of the “Retail & Corp Bank TWCF”
portion of the Approved Budget, (b) for any period of determination with respect to the Elixir Subsidiaries, the budgeted
net cash flow of the Elixir Subsidiaries (other than Elixir Insurance Company) for such period, which corresponds to the line item “Net
Operating Cash Flow” (or words of similar import) for such period in the “TWCF – PBM” tab of the “Elixir
TWCF” portion of the Approved Budget, and (c) for any period of determination with respect to the Elixir Subsidiaries, the
budgeted net cash flow of Elixir Insurance Company for such period, which corresponds to the line item “Net Operating Cash Flow”
(or words of similar import) for such period in the “TWCF – EIC” tab of the “Elixir TWCF” portion of the
Approved Budget.
“Budgeted
Non-Operating Disbursement Amounts” means, for any period of determination, an amount equal to the sum of the budgeted
non-operating disbursements described under the headings “Interest & Fees”, “Normal Course Professional Fees”,
“Restructuring Professional Fees”, and “Other Non-Operating” (or words of similar import) for such period in the
Approved Budget.
“Budgeted
Operating Disbursement Amounts” means, for any period of determination, an amount equal to the sum of (a) the budgeted
operating disbursements aggregated in the line item “Total Operating Disbursements” (or words of similar import) for such
period in the “WCF” tab of the “Retail & Corp Bank TWCF” portion of the Approved Budget, (b) the
budgeted operating disbursements aggregated in the line item “Total Operating Disbursements” (or words of similar import)
for such period in the “TWCF – PBM” tab of the “Elixir TWCF” portion of the Approved Budget, and (c) the
budgeted operating disbursements aggregated in the line item “Total Operating Disbursements” (or words of similar import)
for such period in the “TWCF – EIC” tab of the “Elixir TWCF” portion of the Approved Budget.
“Budgeted
Other Inventory Levels” means, as of any date of determination, the budgeted aggregate consolidated Other Inventory levels
of the Loan Parties as of such date, as set forth in the “Borrowing Base Summary” tab of the “Retail & Corp
Bank TWCF” portion of the Approved Budget opposite the heading “Other Inventory Balance” (or words of similar import).
“Budgeted
Other Inventory Receipts” means, for any period of determination, the budgeted amount of the value, determined at cost,
of all Other Inventory to be received by the Loan Parties during such period, as set forth in the “Inventory Purchases Summary”
tab of the “Retail & Corp Bank TWCF” portion of the Approved Budget opposite the heading “DSD Other &
Warehouse Purchases” (or words of similar import).
“Budgeted
Pharmaceutical Inventory Levels” means, as of any date of determination, the budgeted aggregate consolidated Pharmaceutical
Inventory levels of the Loan Parties as of such date, as set forth in the “Borrowing Base Summary” tab of the “Retail &
Corp Bank TWCF” portion of the Approved Budget opposite the heading “Pharmacy Inventory Balance” (or words of similar
import).
“Budgeted
Pharmaceutical Inventory Receipts” means, for any period of determination, the budgeted amount of the value, determined
at cost, of all Pharmaceutical Inventory to be received by the Loan Parties during such period, as set forth in the “Inventory Purchases
Summary” tab of the “Retail & Corp Bank TWCF” portion of the Approved Budget opposite the heading “Purchases
[DSD McKesson]” (or words of similar import).
“Business Acquisition”
means (a) an Investment by the Borrower or any of the Subsidiaries in any other Person (including an Investment by way of acquisition
of debt or equity securities of any other Person) pursuant to which such Person shall become a Subsidiary or shall be merged into or consolidated
with the Borrower or any of the Subsidiaries or (b) an acquisition by the Borrower or any of the Subsidiaries of the property and
assets of any Person (other than the Borrower or any of the Subsidiaries) that constitute substantially all of the assets of such Person
or any division or other business unit of such Person.
“Business Day”
means any day other than a Saturday, Sunday or day on which commercial banks in New York City or Boston, Massachusetts are authorized
or required by law to close.
“Capital Lease”
means any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which, in accordance
with GAAP, should be capitalized on the lessee’s balance sheet; provided, that notwithstanding the foregoing, only
those leases (assuming for purposes hereof that such leases were in existence prior to giving effect to the adoption of ASU No. 2016-02
“Leases (Topic 842)” and ASU No. 2018-11 “Leases (Topic 842)”) that would have constituted Capitalized Leases
or financing leases in conformity with GAAP as in effect prior to giving effect to the adoption of ASU No. 2016-02 “Leases
(Topic 842)” and ASU No. 2018-11 “Leases (Topic 842)”, shall be considered Capitalized Leases or financing leases
hereunder, and all calculations and deliverables under this Agreement or any other Loan Document shall be made or delivered, as applicable,
in accordance therewith (other than the financial statements delivered pursuant to Section 5.01 of this Agreement).
“Capital Lease Obligations”
of any Person means the obligations of such Person to pay rent or other amounts under any Capital Lease, which obligations should be classified
and accounted for as Capital Leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized
amount thereof determined in accordance with GAAP.
“Carve Out”
has the meaning assigned to the term “Carve Out” in the Financing Order.
“Carve Out Trigger
Notice” has the meaning assigned to such term in the Financing Order.
“Case Professionals”
means the Loan Parties’ and any Statutory Committee’s professionals, including the Company Financial Advisors, retained by
any of them by final order of the Bankruptcy Court (which order has not been reversed, vacated or stayed unless such stay is no longer
effective) under Section 327, 330 or 1103(a) of the Bankruptcy Code.
“Cash Management Order”
means the order of the Bankruptcy Court entered in the Chapter 11 Case, substantially in the form of Exhibit H and/or otherwise
in form and satisfactory to the Loan Parties and the Administrative Agent, together with all extensions, modifications and amendments
that are in form and substance acceptable to the Loan Parties and the Administrative Agent, which, among other matters, authorizes the
Loan Parties to use their cash management system and treasury arrangements.
“Cash Management System”
shall have the meaning assigned to such term in the Security Agreement.
“Cash Sweep Period”
shall have the meaning assigned to such term in the Security 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 properties or
assets of the Borrower or the Subsidiaries; and
(b) any
proceeds received by the Borrower or any Subsidiary in connection with any action or proceeding for the taking of any properties or assets
of the Borrower or the Subsidiaries, or any part thereof or interest therein, for public or quasi-public use under the power of eminent
domain, by reason of any similar public improvement or condemnation proceeding;
minus,
in each case (i) any fees, commissions and expenses (including the costs of adjustment and condemnation proceedings) and other costs
paid or incurred by the Borrower or any Subsidiary in connection therewith and (ii) the amount of any Indebtedness (or Attributable
Debt), other than the Obligations, together with premium or penalty, if any, and interest thereon (or comparable obligations in respect
of Attributable Debt), that is secured by a Lien on (or if Attributable Debt, the lease of) the properties or assets in question with
priority (with respect to such properties or assets) over the Term Loan Lien, any applicable Lien of the ABL DIP Agent created under the
ABL DIP Loan Documents and any applicable Lien of the holders of the Existing Split-Priority Indebtedness (or their debt representative),
that is, subject to the terms of the Financing Order, required to be repaid as a result of the receipt by the Borrower or a Subsidiary
of such payments or proceeds.
“Change in Control”
means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning
of the Securities Exchange Act of 1934, as amended, and the rules of the SEC thereunder as in effect on the Closing Date) of 40%
or more of the outstanding shares of common stock of the Borrower; (b) at the end of any period of 12 consecutive calendar months,
the occupation of a majority of the seats on the board of directors of the Borrower by Persons who were not members of the board of directors
of the Borrower on the first day of such period (other than any new directors whose election or appointment by such board of directors
or whose nomination for election by the stockholders of the Borrower was approved by a vote of not less than three-fourths of the directors
then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously
so approved); or (c) the occurrence of a “Change of Control”, as defined in any indenture or other agreement that governs
the terms of any Material Indebtedness.
“Change in Law”
means the occurrence, after the Closing Date, of any of the following: (a) the adoption of any law, rule, regulation or treaty, (b) any
change in any law, rule, regulation or treaty or in the interpretation or application thereof by any Governmental Authority or (c) compliance
by any Lender (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s holding
company, if any) with any request, rule, guideline or directive (whether or not having the force of law) of any Governmental Authority
made or issued after the Closing Date; provided, however, that notwithstanding anything herein to the contrary, (x) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and each request, rule, guideline or directive thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each
case pursuant to Basel III, shall in each case under clauses (x) and (y) above be deemed to be a “Change
in Law”, regardless of the date enacted, adopted, implemented or issued.
“Chapter 11 Case”
shall have the meaning assigned to such term in the preliminary statements hereto.
“Chapter 11 Case Milestones”
shall have the meaning assigned to such term in Section 5.20.
“Charges”
has the meaning assigned to such term in Section 9.14.
“CLO” means
any Person (other than a natural Person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business.
“Closing Date”
means October [●], 2023.
“CME” means
CME Group Benchmark Administration Limited.
“Code” means
the Internal Revenue Code of 1986, as amended from time to time.
“Collateral”
means all of the “Collateral” and “Mortgaged Property” or other similar terms referred to in the
Collateral Documents and all of the other property of the Loan Parties that is or is intended under the terms of the Collateral Documents
to be subject to Liens in favor of the Collateral Agent for the benefit of the Secured Parties; provided that, without limiting
the foregoing, (a) all of the property constituting (i) ABL DIP Collateral and/or (ii) Split-Lien Collateral, shall,
in each case, be subject to Liens in favor of the Collateral Agent for the benefit of the Secured Parties and (b) such term shall
also include all “DIP Shared Collateral” and “DIP Term Loan Exclusive Collateral” under and as defined in the
Financing Order.
“Collateral Agent”
shall have the meaning assigned to such term in the preamble to this Agreement.
“Collateral and Guarantee
Requirement” means the requirement that:
(a) the
Collateral Agent shall have received from the Borrower and each Subsidiary Loan Party either (i) a counterpart of, or a supplement
to, each Collateral Document duly executed and delivered on behalf of such Loan Party or (ii) in the case of any Person that becomes
a Subsidiary Loan Party after the Closing Date, a supplement to each applicable Collateral Document, in the form specified therein, duly
executed and delivered on behalf of such Subsidiary Loan Party;
(b) (i) the
Administrative Agent shall be satisfied that, subject to the Financing Order and terms thereof, the Collateral Documents (including the
Financing Order) shall be effective to create in favor of the Collateral Agent a legal, valid and enforceable security interest and Lien
upon the Collateral, with the priority set forth in the Financing Order, (ii) all documents and instruments, including Uniform Commercial
Code financing statements, required by law or reasonably requested by the Agents to be filed, registered or recorded to create the Liens
intended to be created by the Collateral Documents and perfect such Liens to the extent required by, and with the priority required by,
this Agreement and the Collateral Documents (including the Financing Order), shall have been filed, registered or recorded or delivered
to the Collateral Agent for filing, registration or recording, and (iii) the Agents shall have been provided with all authorizations,
consents and approvals from each Loan Party, Governmental Authority and other Person reasonably requested by it to file, record or register
all documents and instruments referred to in clause (b)(ii) of this definition; and
(c) each
Loan Party shall have obtained all consents and approvals required to be obtained by it in connection with the execution and delivery
of all Collateral Documents to which it is a party and the granting by it of the Liens thereunder.
“Collateral Documents”
means the Financing Order, the Security Agreement, the Guarantee Agreement and the Indemnity, Subrogation and Contribution Agreement (upon
and after the initial execution and delivery thereof by the initial parties thereto), the Real Property Collateral Deliverables, and each
of the security agreements and other instruments and documents executed and delivered by any Subsidiary Loan Party pursuant to any of
the foregoing or pursuant to any Loan Document for purposes of providing collateral security or credit support for any Obligation or obligation
under the Guarantee Agreement.
“Commitment”
means, with respect to each Lender, the commitment of such Lender to make Term Loans on the Closing Date to the Borrower pursuant to Section 2.01(b),
in an aggregate principal amount not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the
caption “Commitment”.
“Communication”
means this Agreement, any Loan Document and any document, amendment, approval, consent, information, notice, certificate, request, statement,
disclosure or authorization related to any Loan Document.
“Company Financial
Advisors” means (a) Alvarez & Marsal North America, LLC, as financial and restructuring advisor to the Loan Parties,
or any other financial/restructuring advisor reasonably acceptable to the Administrative Agent and (b) Guggenheim Securities, LLC,
as investment banker to the Loan Parties, or any other investment banker reasonably acceptable to the Administrative Agent.
“Compliance Certificate”
means a certificate, substantially in the form of Exhibit E or in such other form as the Administrative Agent may approve,
which shall be certified as complete and correct by a Financial Officer of the Borrower.
“Conforming Changes”
means, with respect to the use, administration of or any conventions associated with SOFR or any proposed Successor Rate or Term SOFR,
as applicable, any conforming changes to the definitions of “Alternate Base Rate”, “SOFR”, “Term SOFR”
and “Interest Period”, timing and frequency of determining rates and making payments of interest and other technical, administrative
or operational matters (including, for the avoidance of doubt, the definitions of “Business Day” and “U.S. Government
Securities Business Day”, timing of borrowing requests or prepayment, conversion or continuation notices and length of lookback
periods) as may be appropriate, in the reasonable discretion of the Administrative Agent, to reflect the adoption and implementation of
such applicable rate(s) and to permit the administration thereof by the Administrative Agent in a manner substantially consistent
with market practice (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively
feasible or that no market practice for the administration of such rate exists, in such other manner of administration as the Administrative
Agent determines is reasonably necessary, after consultation with the Borrower, in connection with the administration of this Agreement
or any other Loan Document); provided that, notwithstanding anything herein to the contrary, no “Conforming Changes”
shall result in any material effect on the timing or amount of payments or borrowings.
“Consolidated Subsidiary”
means, with respect to any Person, at any date, any Subsidiary or other entity the accounts of which would, in accordance with GAAP, be
consolidated with those of such Person in its consolidated financial statements if such statements were prepared as of such date.
“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.
“Convertible Debt”
means any debt security of the Borrower issued in the capital markets which, by its terms, may be converted or exchanged, in whole or
part, at the option of the holder thereof into common Equity Interests of the Borrower.
“Covered Party”
has the meaning assigned to such term in Section 9.23(a).
“Credit Card Accounts
Receivable” means any Account due to any Subsidiary Loan Party from a credit card or debit card issuer or processor arising
from purchases made on the following credit cards or debit cards: Visa, MasterCard, American Express, Diners Club, Discover, JCB, Carte
Blanche and such other credit cards or debit cards as the Administrative Agent shall approve in its commercially reasonable judgment from
time to time, in each case which have been earned by performance by such Subsidiary Loan Party but not yet paid to such Subsidiary Loan
Party by the credit card or debit card issuer or the credit card or debit card processor, as applicable.
“Cumulative Four-Week
Period” means, as of any date of determination thereof, the four-week period up to and through the Saturday of the most recent
week then ended, or if a four-week period has not then elapsed from the Petition Date, such shorter period since the Petition Date through
the Saturday of the most recent week then ended.
“Cumulative Period”
means, as of any date of determination thereof, the period from the Petition Date through the Saturday of the most recent week ended.
“Daily Simple SOFR”
with respect to any applicable determination date means the SOFR published on such date by the SOFR Administrator on the SOFR Administrator’s
Website.
“Debtor Relief Laws”
means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions
from time to time in effect.
“Default”
means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
“Defaulting Lender”
means, subject to Section 2.22(b), any Lender that has failed to pay to the Administrative Agent or any other Lender any other
amount required to be paid by it hereunder, in either case, within two (2) Business Days of the date required to be funded or paid.
Any determination by the Administrative Agent that a Lender is a Defaulting Lender shall be conclusive and binding absent manifest error,
and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.22(b)) upon delivery of written notice of
such determination to the Borrower and each Lender.
“Deposit Account”
shall have the meaning assigned to such term in the Security Agreement.
“Disqualified Institution”
means:
(a) any
Person that is a competitor of the Borrower and identified by legal name by the Borrower in good faith in writing to the Administrative
Agent from time to time after the Closing Date; and
(b) any
Affiliate of any Person described in clause (a) that is readily identifiable as such solely on the basis of its names (other
than, solely in the case of Affiliates of any Person described in the foregoing clause (a), any such Affiliate that is a bank,
financial institution or debt fund that regularly invest in commercial loans or similar extensions of credit in the ordinary course of
business and for which no personnel involved with the relevant competitor make investment decisions);
provided
that in no event shall any update to the list of Disqualified Institutions (i) be effective prior to two (2) Business Days after
receipt thereof by the Administrative Agent or (ii) apply retroactively to disqualify any Persons that have previously acquired an
assignment or participation interest under this Agreement or that is party to a pending trade; provided, however, that such
Persons shall be prohibited from acquiring any additional assignment or participation interest under this Agreement following the effectiveness
of such Person’s designation as a Disqualified Institution.
“Disqualified Preferred
Stock” means Preferred Stock of the Borrower that is not Qualified Preferred Stock.
“dollars”
and “$” each refer to lawful money of the United States of America.
“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.
“EEA Financial Institution”
means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of
an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in
clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a Subsidiary
of an institution described in clause (a) or (b) of this definition and is subject to consolidated supervision
with its parent.
“EEA Member Country”
means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority”
means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including
any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Electronic Copy”
shall have the meaning set forth in Section 9.21.
“Electronic Record”
and “Electronic Signature” have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended
from time to time.
“Eligible Accounts
Receivable” means, at any date of determination, all Accounts (other than Credit Card Accounts Receivable) of the Subsidiary
Loan Parties that satisfy at the time of creation and continue to meet the same at the time of such determination the usual and customary
eligibility criteria established from time to time by the Administrative Agent (after consultation with the Borrower) in its commercially
reasonable judgment. On the Closing Date, those criteria are:
(a) such
Account constitutes an “Account” within the meaning of the UCC;
(b) all
payments on such Account are by the terms of such Account due not later than 90 days after the date of service (i.e., the
transaction date) and are otherwise on terms that are normal and customary in the business of the Borrower and the Subsidiaries;
(c) such
Account has been billed and has not remained unpaid for more than 120 days following the date of service;
(d) such
Account is denominated in dollars;
(e) such
Account arose from a completed, outright and lawful sale of goods or the completed performance of services by the applicable Subsidiary
Loan Party and accepted by the applicable Account Debtor, and the amount of such Account has been properly recognized as revenue on the
books of the applicable Subsidiary Loan Party;
(f) such
Account is owned solely by a Subsidiary Loan Party;
(g) the
proceeds of such Account are payable solely to a Deposit Account which (i) is under the control of the Collateral Agent or the ABL
DIP Agent and (ii) has not been released or transferred in accordance with Section 5.16 or otherwise;
(h) such
Account arose in the ordinary course of business of the applicable Subsidiary Loan Party;
(i) not
more than 50% of the aggregate amount of Accounts from the same Account Debtor and any Affiliates thereof remain unpaid for more than
120 days following the date of service;
(j) such
Account (i) does not arise under any (x) Medicare program or (y) any Medicaid program of any State which may limit recovery
upon any such Account upon any Bankruptcy Proceeding related to a Subsidiary Loan Party (including Hawaii, Illinois, Minnesota, Montana,
New Mexico and Ohio) and (ii) is not due from any Governmental Authority (other than from any Medicaid program of any State, except
to the extent excluded pursuant to clause (j)(y) above);
(k) to
the knowledge of the Borrower and the Subsidiaries, no event of death, bankruptcy, insolvency or inability to pay creditors generally
of the Account Debtor of such Account has occurred, and no notice thereof has been received;
(l) payment
of such Account is not being disputed by the Account Debtor thereof and is not subject to any material bona fide claim, counterclaim,
offset or chargeback;
(m) 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;
(n) 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 Administrative Agent in favor of the applicable Subsidiary
Loan Party), and (ii) is not an Affiliate or Subsidiary or an Affiliate of any of the Loan Parties;
(o) such
Account (i) is subject to a perfected first-priority security interest in favor of the Collateral Agent pursuant to the Collateral
Documents (subject to any Permitted Encumbrances; provided that the Administrative Agent shall have established appropriate reserves
against the Borrowing Base Amount (as determined by the Administrative Agent in the exercise of its commercially reasonable judgment)
with respect to any Permitted Encumbrances ranking senior to or pari passu with the Liens of the Collateral Agent, in an amount
not to exceed the claims secured by such Permitted Encumbrances) and (ii) is not subject to any other Lien (other than (x) any
Lien created pursuant to the Loan Documents, the ABL DIP Loan Documents, the ABL Pre-Petition Senior Loan Documents, documents evidencing
the Existing Split-Priority Indebtedness or (y) Permitted Encumbrances (provided that the Administrative Agent may establish
appropriate reserves against the Borrowing Base Amount (as determined by the Administrative Agent in the exercise of its commercially
reasonable judgment) with respect to any Permitted Encumbrances, in an amount not to exceed the claims secured by such Permitted Encumbrances));
(p) with
respect to any such Account for an amount greater than $5,000,000, the Account Debtor has not been disapproved by the Required Lenders
(based, on the Required Lenders’ reasonable judgment, upon the creditworthiness of such Account Debtor);
(q) the
representations and warranties contained in the Loan Documents with respect to such Account are true and correct in all material respects;
(r) such
Account does not consist of amounts due from vendors as rebates or allowances or reflect finance charges;
(s) such
Account is not due from an Account Debtor which is the subject of a Bankruptcy Proceeding or that is a Sanctioned Person; and
(t) such
Account is in full force and effect and constitutes a legal, valid and binding obligation of the Account Debtor, enforceable against such
Account Debtor in accordance with its terms and the applicable Subsidiary Loan Party’s right to receive payment in respect of such
Account is not contingent upon the fulfillment of any condition whatsoever.
“Eligible Script Lists”
means, at any date of determination, all Prescription Files owned and maintained on such date by the Subsidiary Loan Parties setting forth
Persons (and addresses, telephone numbers or other contact information therefor) who currently purchase or otherwise obtain, in any Store
owned or operated by any Subsidiary Loan Party, medication required to be dispensed by a licensed professional; provided that Eligible
Script Lists shall not include any Prescription File if:
(a) such
Prescription File is located or otherwise maintained at premises other than those owned, leased or licensed and, in each case, controlled
by a Subsidiary Loan Party;
(b) such
Prescription File (i) is not subject to a perfected first-priority security interest in favor of the Collateral Agent pursuant to
the Collateral Documents (subject to any Permitted Encumbrances; provided that the Administrative Agent shall have established
appropriate reserves (as determined by the Administrative Agent in the exercise of its commercially reasonable judgment) with respect
to any Permitted Encumbrances ranking senior to or pari passu with the Liens of the Collateral Agent, in an amount not to exceed
the claims secured by such Permitted Encumbrances), or (ii) is subject to any Lien whatsoever (other than (x) any Lien created
pursuant to the Loan Documents, the ABL DIP Loan Documents, the ABL Pre-Petition Senior Loan Documents, documents evidencing the Existing
Split-Priority Indebtedness or (y) Permitted Encumbrances (provided that the Administrative Agent may establish appropriate
reserves (as determined by the Administrative Agent in the exercise of its commercially reasonable judgment) with respect to any Permitted
Encumbrances, in an amount not to exceed the claims secured by such Permitted Encumbrances));
(c) such
Prescription File is related to a location referred to in clause (a) that has closed for business, except to the extent such
Prescription File (x) has been utilized by the applicable customer at another operating Store location or (y) such Prescription
File constitutes a Transitioned Prescription File;
(d) Transitioned
Prescription Files; provided that, until a period of twelve (12) fiscal months has elapsed since the closure of any Specified Prescription
File Store, the Annualized Transitioned Prescription File Amount for such Specified Prescription File Store may be included as Eligible
Script Lists (subject to compliance with the other requirements of this definition (other than clause (c) hereof));
(e) such
Prescription File is not of a type included in an appraisal of Prescription Files received by the Administrative Agent from time to time
in accordance with this Agreement; or
(f) such
Prescription File is not in a form that may be sold or otherwise transferred or is subject to regulatory restrictions prohibiting the
sale or transfer thereof.
For the avoidance of any doubt,
Eligible Script Lists shall not include (x) any Prescription Files previously sold or disposed of or (y) any Prescription Files
maintained at a Specified Prescription File Store (except to the extent constituting a Transitioned Prescription File, limited in all
cases to the Transitioned Prescription Files Amount).
“Eligible Script Lists
Value” means, at any date of determination, the product of (a) the average, orderly liquidation value of such Eligible
Script Lists, on a per Prescription File basis, net of (to the extent not given effect in the ordinary liquidation value) operating expenses,
liquidation expenses and commissions reasonably anticipated in the disposition of such assets, as reasonably determined from time to time
by reference to the most recent appraisal of Prescription Files received by the Administrative Agent that is conducted by an independent
appraiser satisfactory to the Administrative Agent, multiplied by (b) the number of Prescription Files in such Eligible Script
Lists for the twelve (12) fiscal months most recently ended; provided, however, that the amount of Transitioned Prescription Files included
in the determination of Eligible Scripts Lists Value shall equal Transitioned Prescription Files Amount.
“Elixir Business Segment”
means the business segment owned and operated by the Elixir Subsidiaries.
“Elixir Insurance Company”
means Elixir Insurance Company, an Ohio corporation.
“Elixir Monetization
Event” means a factoring transaction or securitization arrangement with respect to, or a financing secured by, the Specified
Elixir Assets.
“Elixir Subsidiaries”
means, collectively, Hunter Lane, LLC and its direct and indirect Subsidiaries.
“Environmental Laws”
means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way to pollution or protection of the environment, preservation
or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters
(regarding exposure to Hazardous Materials).
“Environmental Liability”
means all liabilities, obligations, damages, losses, claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and costs,
(including administrative oversight costs, natural resource damages and remediation costs), whether contingent or otherwise, arising out
of or relating to: (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release of any Hazardous
Materials or (e) any contract, agreement or other consensual arrangement to the extent liability is assumed or imposed with respect
to any of the foregoing.
“Equity Interests”
means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust
or other equity ownership interests in a Person.
“ERISA” means
the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate”
means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or
(c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer
under Section 414(m) or (o) of the Code.
“ERISA Event”
means (a) any “reportable event”, as defined in Section 4043(c) of ERISA or the regulations issued thereunder
with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any
Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether
or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates
of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any
ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint
a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect
to its withdrawal or partial withdrawal from any Multiemployer Plan; (g) the receipt by the Borrower or any ERISA Affiliate of any
notice concerning the imposition of Withdrawal Liability on it or a determination that a Multiemployer Plan is, or is expected to be,
insolvent within the meaning of Title IV of ERISA; or (h) the existence of any event or condition that could reasonably be expected
to constitute grounds under ERISA for the termination by the PBGC of, or the appointment of a trustee to administer, any Plan.
“EU Bail-In Legislation
Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in
effect from time to time.
“Event of Default”
has the meaning assigned to such term in Section 7.01.
“Excluded Subsidiary”
means each Subsidiary listed on Schedule 1.01(a) hereto; provided that (a) any Subsidiary that Guarantees any
other Material Indebtedness of the Borrower shall not be deemed to be an “Excluded Subsidiary”, and (b) any Subsidiary
that incurs Material Indebtedness (other than Indebtedness owing to the Borrower or any of its Subsidiaries) shall not be deemed to be
an “Excluded Subsidiary”, to the extent any such Material Indebtedness is guaranteed by the Borrower or any Subsidiary Loan
Party.
“Excluded Taxes”
means, with respect to any Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the
Borrower hereunder, (a) income Taxes imposed on (or measured by) its net income (however denominated) or franchise Taxes, in each
case, (i) imposed by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or
in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or (ii) that
are Other Connection Taxes, (b) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any
other jurisdiction described in clause (a) above, (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrower under Section 2.19(b)), any U.S. Federal withholding Tax that (i) is in effect and would
apply to amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new
lending office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the Borrower with respect to any withholding Tax pursuant to Section 2.17(a),
or (ii) is attributable to such Foreign Lender’s failure to comply with Section 2.17(f) and (d) any
U.S. Federal withholding Taxes imposed under FATCA.
“Existing Non-Guaranteed
Indebtedness” means Indebtedness outstanding as of the Petition Date under the Existing Non-Guaranteed Indentures.
“Existing Non-Guaranteed
Indentures” means, collectively, (a) the 2027 7.70% Note Indenture and (b) the 2028 6.875% Note Indenture.
“Existing Split-Priority
Indebtedness” means Indebtedness outstanding as of the Petition Date under the Existing Split-Priority Indentures.
“Existing Split-Priority
Indentures” means, collectively, (a) the 2025 7.500% Note Indenture and (b) the 2026 8.000% Note Indenture.
“Facility”
means, at any time (a) prior to the funding of the Term Loans on the Closing Date, the Total Commitments of the Lenders at such time
and (b) the aggregate outstanding principal amount of the Term Loans made to the Borrower by the Lenders at such time. The
aggregate principal amount of the Facility as of the Closing Date is $200,000,000.
“FATCA” means
Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements
entered into pursuant to Section 1471(b) of the Code.
“Federal Funds Effective
Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate
on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate
is so published on such next succeeding Business Day, the Federal Funds Effective Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by
the Administrative Agent.
“Fee Letter”
means the Fee Letter, dated as of the Closing Date, among the Borrower, the Administrative Agent and the other parties thereto.
“Final Financing Order”
means, the order of the Bankruptcy Court entered in the Chapter 11 Case after a final hearing under Bankruptcy Rule 4001(c)(2) or
such other procedures as approved by the Bankruptcy Court, which order shall be in form and substance satisfactory to the Loan Parties
and the Administrative Agent, and from which no appeal or motion to reconsider has been filed, together with all extensions, modifications
and amendments thereto, in form and substance satisfactory to the Loan Parties and the Administrative Agent.
“Final Order Entry
Date” means the date on which the Bankruptcy Court enters the Final Financing Order.
“Financial Officer”
means with respect to any Person, the chief financial officer, principal accounting officer, treasurer, vice president of financial accounting,
vice president (or more senior level officer) of finance or accounting, senior director of treasury or controller of such Person. Any
document delivered hereunder that is signed by a Financial Officer of a Loan Party shall be conclusively presumed to have been authorized
by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Financial Officer, shall be conclusively
presumed to have acted on behalf of such Loan Party.
“Financing Order”
means, as the context may require, the Interim Financing Order or the Final Financing Order, whichever is then applicable.
“Foreign Lender”
means (a) if the Borrower is a U.S. Person, any Lender, with respect to such Borrower, that is not a U.S. Person, and (b) if
the Borrower is not a U.S. Person, any Lender, with respect to such Borrower, that is resident or organized under the laws of a jurisdiction
other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
“GAAP” means
generally accepted accounting principles in the United States of America.
“Government Lockbox
Account” shall have the meaning assigned to such term in the Security Agreement.
“Government Lockbox
Account Agreement” shall have the meaning assigned to such term in the Security Agreement.
“Government Lockbox
Account Bank” shall have the meaning assigned to such term in the Security Agreement.
“Governmental Authority”
means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national body exercising
such powers or functions, such as the European Union or the European Central Bank).
“Ground-Leased Real
Property” means real property that is ground leased by a Loan Party pursuant to a Real Estate Lease and a Loan Party owns the
improvements on such real property, including all such real property described on Schedule 3.05(a)(3).
“Guarantee”
of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing
or having the economic effect of guaranteeing any Indebtedness or other monetary obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation
or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease
property, securities or services for the purpose of assuring the owner of such Indebtedness or other monetary obligation of the payment
thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor
so as to enable the primary obligor to pay such Indebtedness or other monetary obligation or (d) as an account party in respect of
any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee
shall not include endorsements for collection or deposit in the ordinary course of business.
“Guarantee Agreement”
means that certain Debtor-In-Possession Subsidiary Guarantee Agreement, dated as of the Closing Date, made by the Loan Parties (including
additional Loan Parties that become parties thereto in accordance with the terms thereof) in favor of the Collateral Agent, for the benefit
of the Secured Parties, as such agreement may be amended, supplemented or otherwise modified from time to time.
“Hazardous Materials”
means (a) petroleum products and byproducts, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, radon gas, chlorofluorocarbons
and all other ozone-depleting substances, or (b) any chemical, material, substance, waste, pollutant or contaminant that is prohibited,
limited or regulated by or pursuant to any Environmental Law.
“Hedging Agreement”
means any interest rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index
swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction,
collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction
(including any option with respect to any of the foregoing transactions) or any combination of the foregoing transactions.
“HIPAA” means
the Health Insurance Portability and Accountability Act of 1996, as amended.
“Indebtedness”
of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (e) all
Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed by
such Persons, provided that the amount of such Indebtedness will be the lesser of the fair market value of such property and the amount
of Indebtedness of such other Person, (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations
of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty, (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances and
(j) all Disqualified Preferred Stock valued, as of the date of determination, at the greater of (i) the maximum aggregate amount
that would be payable upon maturity, or upon the mandatory redemption, repayment or repurchase thereof and (ii) the maximum liquidation
preference of such Disqualified Preferred Stock. The Indebtedness of any Person shall include the Indebtedness of any other entity (including
any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s
ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person
is not liable therefor.
“Indemnified Taxes”
means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of
the Borrower under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.
“Indemnitee”
has the meaning assigned to such term in Section 9.03(b).
“Indemnity, Subrogation
and Contribution Agreement” means the Debtor-In-Possession Indemnity, Subrogation and Contribution Agreement, dated as of the
Closing Date, among the Borrower, the Subsidiary Loan Parties (including additional Subsidiary Loan Parties becoming party thereto in
accordance with the terms thereof) and the Collateral Agent.
“Ineligible Person”
has the meaning assigned to such term in Section 9.04(b)(ii)(E).
“Information”
has the meaning assigned to such term in Section 9.13.
“Information Certificate”
means a certificate in the form of Schedule 4 to the Security Agreement or any other form approved by the Agents.
“Intellectual Property”
shall have the meaning set forth in the Security Agreement.
“Intercompany Inventory
Purchase Agreement” means the Intercompany Inventory Purchase Agreement dated as of December 18, 2018 (as amended), among
the Borrower, Rite Aid Hdqtrs. Corp., the Distribution Subsidiaries as defined and named therein and the Operating Subsidiaries as defined
and named therein.
“Interest Election
Request” means a notice of (a) a conversion of Term Loans from one Type to the other or (b) a continuation of Term
SOFR Loans, in each case, pursuant to Section 2.07, which shall be substantially in the form of Exhibit D or such
other form as may be approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system
as shall be approved by the Administrative Agent) appropriately completed and signed by a Responsible Officer of the Borrower.
“Interest Payment Date”
means (a) with respect to any ABR Loan, the first day of each calendar month and (b) with respect to any Term SOFR Loan, the
last day of the Interest Period applicable to the Borrowing of which such Term Loan is a part.
“Interest Period”
means, with respect to any Term SOFR Borrowing, the period commencing on the date such Term SOFR Borrowing is disbursed or converted or
continued as a Term SOFR Borrowing and ending on the date that is one month thereafter; provided that (i) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day (unless
such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding
Business Day), (ii) any Interest Period of one month that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period, and (iii) no Interest Period shall extend beyond the Maturity Date. For purposes
hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date
of the most recent conversion or continuation of such Borrowing.
“Interim Financing
Order” means the order of the Bankruptcy Court entered in the Chapter 11 Case after an interim hearing, substantially in the
form attached hereto as Exhibit G and/or otherwise in form and substance satisfactory to the Loan Parties and the Administrative
Agent, together with all extensions, modifications, and amendments thereto approved by the Borrower and the Administrative Agent.
“Investment”
by any Person in any other Person means (a) any direct or indirect loan, advance or other extension of credit, assumption of debt,
or capital contribution to or for the account of such other Person (by means of any transfer of cash or other property to any Person or
any payment for property or services for the account or use of any Person, or otherwise), (b) any direct or indirect purchase or
other acquisition of any Equity Interests, bond, note, debenture or other debt or equity security or evidence of Indebtedness, or any
other ownership interest (including, any option, warrant or any other right to acquire any of the foregoing), issued by such other Person,
whether or not such acquisition is from such or any other Person, (c) any direct or indirect payment by such Person on a Guarantee
of or for the account of such other Person or any direct or indirect issuance by such Person of such a Guarantee (provided, however,
that for purposes of Section 6.04, payments under Guarantees not exceeding the amount of the Investment attributable to the
issuance of such Guarantee will not be deemed to result in an increase in the amount of such Investment), or (d) any Business Acquisition.
Any repurchase by the Borrower of its own Equity Interests or Indebtedness shall not constitute an Investment for purposes of this Agreement.
The amount of any Investment shall be the original principal or capital amount thereof less all returns of principal or equity thereon
(and without adjustment by reason of the financial condition of such other Person) and shall, if made by the transfer or exchange of property
other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such property
at the time of such transfer or exchange.
“Joint Venture”
means, with respect to any Person, at any date, any other Person in whom such Person directly or indirectly holds an Investment consisting
of an Equity Interest, and whose financial results would not be consolidated under GAAP with the financial results of such Person on the
consolidated financial statements of such Person, if such statements were prepared in accordance with GAAP as of such date.
“Lender Group Consultants”
has the meaning assigned to such term in Section 5.18(b).
“Lenders”
shall have the meaning assigned to such term in the preamble to this Agreement and shall include any other Person that shall have become
a party hereto pursuant to an Assignment and Acceptance, other than any such Person that ceases to be a party hereto pursuant to an Assignment
and Acceptance or otherwise in accordance with the terms of this Agreement.
“Lien” means,
with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, Capital Lease or title retention
agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in
the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
“Liquidation”
means the exercise by any Agent of those rights and remedies of the Agents under the Loan Documents and applicable law as a creditor of
the Loan Parties, including (after the occurrence and during the continuation of an Event of Default) the conduct by any or all of the
Loan Parties, acting with the consent of the Agents, of any public, private or “Going-Out-Of-Business Sale” or other disposition
of Collateral for the purpose of liquidating the Collateral. Derivations of the word “Liquidation” (such as “Liquidate”)
are used with like meaning in this Agreement.
“Loan Documents”
means this Agreement, the Fee Letter, the ABL DIP Intercreditor Agreement, all Borrowing Base Certificates, all Compliance Certificates
(including all Approved Budget Variance Reports attached thereto), the Information Certificate, any promissory notes issued to any Lender
pursuant to this Agreement, the Collateral Documents, and any other agreement now or hereafter executed and delivered in connection herewith,
each as amended and in effect from time to time.
“Loan Parties”
means the Borrower and the Subsidiary Loan Parties.
“Loans” means
the Term Loans and the Protective Advances.
“Lockbox Account”
shall have the meaning assigned to such term in the Security Agreement.
“Margin Stock”
means “margin stock”, as such term is defined in Regulation U of the Board.
“Material Adverse Effect”
means a material adverse effect on (a) the business, assets, operations, properties or condition (financial or otherwise) of the
Borrower and the Subsidiaries, taken as a whole, (b) the ability of any Loan Party to perform any of its material obligations under
any Loan Document to which it is a party or (c) the legality, validity or enforceability of the Loan Documents (including the validity,
enforceability or priority of security interests granted thereunder) or the rights of or benefits or remedies available to the Lenders
under any Loan Document. Notwithstanding the foregoing, (i) the filing of the Chapter 11 Case (and any defaults under pre-petition
agreements, so long as the exercise of remedies as a result of such defaults are subject to the Automatic Stay or such agreements are
voided or invalidated by the Bankruptcy Court) and (ii) the incurrence of any Pre-Petition claim or liability that is unsecured and
junior in priority to the Obligations, will, individually and collectively, each not be deemed to have a Material Adverse Effect.
“Material Indebtedness”
means (a) the Indebtedness of the Borrower or the Subsidiaries arising under the ABL DIP Loan Documents and (b) Indebtedness
(other than the Loans), or obligations in respect of one or more Hedging Agreements, of any one or more of the Borrower or the Subsidiaries
in an aggregate principal amount exceeding $5,000,000. For purposes of this definition, the “principal amount” of the obligations
of the Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect
to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.
“Maturity Date”
means the earliest of (x) October [●], 20241; provided that, if any such date is not a Business Day,
the Maturity Date shall be deemed to be the next preceding Business Day, (y) the Maturity Date under and as defined in the ABL DIP
Loan Agreement and (z) the date that the “Obligation Payment Date” under (and as defined in) the ABL DIP Loan Agreement
has occurred.
“Maximum Rate”
has the meaning assigned to such term in Section 9.14.
“Medicaid”
means that government-sponsored entitlement program under Title XIX, P.L. 89-97 of the Social Security Act, which provides federal grants
to states for medical assistance based on specific eligibility criteria, as set forth on Section 1396, et seq. of Title 42 of the
United States Code.
1 Note to Draft – One year from Closing Date.
“Medicare”
means that government-sponsored insurance program under Title XVIII, P.L. 89-97, of the Social Security Act, which provides for a health
insurance system for eligible elderly and disabled individuals, as set forth at Section 1395, et seq. of Title 42 of the United States
Code.
“Moody’s”
means Moody’s Investors Service, Inc., or any successor to its business of rating debt securities.
“Mortgage”
or “Mortgages” means, individually and collectively, as the context requires, each of the fee mortgages, deeds of trust,
deeds and other similar security documents executed by a Loan Party that purport to grant a Lien to the Collateral Agent (or a trustee
for the benefit of the Collateral Agent) for the benefit of the Secured Parties in any real estate, in form and substance reasonably satisfactory
to the Administrative Agent.
“Multiemployer Plan”
means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“Net Cash Proceeds”
means:
(a) with
respect to any Asset Sale (other than in connection with an Elixir Monetization Event), an amount equal to the cash proceeds received
by the Borrower or any of the Subsidiaries from or in respect of such Asset Sale (including, when received, any cash proceeds received
in respect of any noncash proceeds of any Asset Sale), less the sum of the following:
(i) reasonable
costs and expenses paid or incurred in connection with such transaction, including any underwriting brokerage or other customary selling
commissions and reasonable legal, advisory and other fees and expenses (including title and recording expenses, associated therewith);
and
(ii) the
amount of any Indebtedness (or Attributable Debt), together with premium or penalty, if any, and accrued interest thereon (or comparable
obligations in respect of Attributable Debt) secured by a Lien on (or if Attributable Debt, the lease of) any asset disposed of in such
Asset Sale and discharged from the proceeds thereof, but only to the extent such Lien has priority over the Term Loan Lien with respect
to such assets;
(b) with
respect to the proceeds received by the Borrower or a Subsidiary from or in respect of an issuance of Indebtedness for borrowed money,
of equity securities, or of equity-linked (e.g., trust preferred) securities (other than, in any event, the proceeds of any Elixir Monetization
Event), an amount equal to the cash proceeds received by the Borrower or any of the Subsidiaries from or in respect of such issuance,
less any reasonable transaction costs, including investment banking and underwriting fees, discounts and commissions and any other expenses
(including legal fees and expenses) reasonably incurred by such Person in respect of such issuance;
(c) with
respect to a Casualty/Condemnation, the amount of Casualty/Condemnation Proceeds; and
(d) with
respect to any Elixir Monetization Event (whether by Asset Sale, incurrence of Indebtedness or otherwise), an amount equal to the cash
proceeds received by the Borrower or any of the Subsidiaries from or in respect of such Elixir Monetization Event, less the sum of the
following:
(i) reasonable
transaction costs and expenses paid or incurred in connection with such Elixir Monetization Event, including (A) investment banking
and underwriting fees, discounts and commissions, (B) brokerage or other customary selling commissions, and (C) any other expenses
(including legal and advisory fees and expenses) reasonably incurred; and
(ii) an
amount of proceeds reasonably acceptable to the Administrative Agent permitted to remain at Elixir Insurance Company.
“Non-Defaulting Lender”
means, at any time, each Lender that is not a Defaulting Lender at such time.
“Obligation Payment
Date” means the date on which (a) the Obligations have been indefeasibly paid in full in cash (other than contingent indemnification
obligations and other obligations of the Loan Parties that expressly survive the termination of the Loan Documents for which no claim
has been asserted) and (b) all lending commitments under this Agreement and the other Loan Documents have been terminated.
“Obligations”
means (a) the principal of each Loan made under this Agreement, (b) all interest on the loans, fees, indemnification and other
obligations under this Agreement, (including any interest, fees and other amounts which accrue after the commencement of any case, proceeding
or other action relating to a Bankruptcy Proceeding of the Borrower or any Subsidiary Loan Party, whether or not allowed or allowable,
in whole or in part, as a claim in such Bankruptcy Proceeding), (c) all other amounts payable by the Borrower or any Subsidiary under
the Loan Documents and (d) all increases, renewals, extensions and Refinancings of the foregoing.
“OFAC” means
the Office of Foreign Assets Control of the U.S. Department of the Treasury.
“Other Connection Taxes”
means, with respect to any Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the
Borrower hereunder, Taxes imposed as a result of a present or former connection between such recipient and the jurisdiction imposing such
Tax (other than connections arising from such recipient having executed, delivered, become a party to, performed its obligations under,
received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Inventory”
means all inventory other than Pharmaceutical Inventory.
“Other Taxes”
means any and all present or future recording, filing, stamp, court or documentary, excise, transfer, sales, property or similar Taxes,
charges or levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other
than an assignment made pursuant to Section 2.19).
“Owned
Real Property” means real property that a Loan Party owns in fee simple absolute, including all such real property described
on Schedule 3.05(a)(2).
“Participant”
has the meaning assigned to such term in Section 9.04(c)(i).
“Participant Register”
has the meaning assigned to such term in Section 9.04(c)(i).
“PBGC” means
the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
“Permitted Disposition”
means any of the following:
(a) dispositions
of inventory at retail, cash, cash equivalents and other cash management investments and obsolete, unused, uneconomic or unnecessary equipment
or inventory, or other assets, in each case in the ordinary course of business;
(b) a
disposition to a Subsidiary Loan Party (other than a disposition of real estate), provided that if the property subject to such
disposition constitutes Collateral immediately before giving effect to such disposition, such property continues to constitute Collateral
subject to the Term Loan Lien;
(c) a
sale or discount, in each case without recourse and in the ordinary course of business, of overdue Accounts arising in the ordinary course
of business, but only to the extent such Accounts are no longer Eligible Accounts Receivable 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); and
(d) non-exclusive
licenses of Intellectual Property of the Borrower or any Subsidiary in the ordinary course of business, which do not interfere, individually
or in the aggregate in any material respect with the conduct of the business of the Loan Parties and their Subsidiaries, taken as a whole,
and leases, assignments or subleases in the ordinary course of business.
“Permitted Encumbrances”
means:
(a) Liens
imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.05;
(b) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more than sixty (60) days or are being contested in compliance with
Section 5.05;
(c) subject
to the Financing Order and the terms thereof, pledges and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or regulations;
(d) subject
to the Financing Order and the terms thereof, deposits to secure the performance of bids, trade contracts, leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;
(e) judgment
liens in respect of Post-Petition judgments that do not constitute an Event of Default under Section 7.01(k);
(f) easements,
zoning restrictions, rights-of-way, encroachments and similar encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not (i) materially detract from the value of the affected property
or (ii) materially interfere with the ordinary conduct of business of the Borrower or any Subsidiary;
(g) any
zoning, land use, environmental or similar law or right reserved to or vested in any Governmental Authority to control or regulate the
use of any real property that does not (i) materially detract from the value of the affected property or (ii) materially interfere
with the ordinary conduct of the business of the Borrower or any of the Subsidiaries;
(h) licenses,
sublicenses, leases or subleases granted in the ordinary course of business with respect to real property and, to the extent constituting
a Lien, the Real Estate Leases for Ground-Leased Real Property;
(i) landlord
Liens arising by law securing obligations that are not overdue by more than sixty (60) days or that are being contested in good faith
by appropriate proceedings;
(j) Liens
arising from precautionary UCC filings regarding operating leases or the consignment of goods to the Borrower or any Subsidiary;
(k) Liens
arising by virtue of statutory or common law provisions relating to banker’s Liens, Liens in favor of securities intermediaries,
rights of set off or similar rights and remedies with respect to deposit accounts or securities accounts or other funds or assets maintained
with depository institutions and securities intermediaries;
(l) Liens
in favor of a credit card or debit card processor arising in the ordinary course of business under any processor agreement and relating
solely to the amounts paid or payable by, or customary deposits or reserves held by, such credit card or debit card processor;
(m) Liens
in favor of customs and revenues authorities imposed by applicable laws arising in the ordinary course of business in connection with
the importation of goods and securing obligations (i) that are not overdue by more than thirty (30) days, or (ii)(A) that are
being contested in good faith by appropriate proceedings, (B) the applicable Loan Party or Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP and (C) such contest effectively suspends collection of the contested
obligation and enforcement of any Lien securing such obligation;
(n) Liens
arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary
course of business;
(o) any
interest or title of a lessor, sublessor, licensor or sublicensor under leases, subleases, licenses or sublicenses (including software
and other technology licenses) entered into by the Borrower or any of its Subsidiaries in the ordinary course of business; and
(p) to
the extent existing as of the Petition Date, any encumbrance or restriction (including put and call arrangements) contained in the applicable
organizational documents with respect to Equity Interests of any Joint Venture or similar arrangement pursuant to any Joint Venture or
similar arrangement;
provided
that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.
“Permitted Investments”
means any investment by any Person in (a) direct obligations of the United States or any agency thereof, or obligations guaranteed
by the United States or any agency thereof, (b) commercial paper rated at least A-1 by S&P and P-1 by Moody’s at the time
of acquisition thereof, (c) time deposits with, including certificates of deposit issued by, any office located in the United States
of any bank or trust company which is organized or licensed under the laws of the United States or any state thereof and at the time such
deposit is made or certificate of deposit issued, has capital, surplus and undivided profits aggregating at least $500,000,000, (d) repurchase
agreements with respect to securities described in clause (a) above entered into with an office of a bank or trust company meeting
the criteria specified in clause (c) above at the time such repurchase agreement is entered into, provided in each case that
such investment matures within one year from the date of acquisition thereof by such Person or (e) money market mutual funds at least
80% of the assets of which are held in investments referred to in clauses (a) through (d) above determined at
the time of such investment (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).
“Permitted Prior Lien”
means any Lien permitted by the ABL Pre-Petition Credit Agreement, to the extent any such permitted Lien is valid, binding, enforceable,
properly perfected, non-avoidable and senior in priority to the Liens securing the ABL Pre-Petition Senior Obligations as of the Petition
Date.
“Permitted Real Estate
Disposition” means (a) the sale of the Owned Real Property located at (i) 1426 Mount Ephraim Avenue, Camden, NJ, (ii) 7796
Munson Road, Mentor, OH, (iii) 5272 Torresdale Avenue, Philadelphia, PA and (iv) 7301-7303 Frankford Avenue, Philadelphia, PA,
in each case, in accordance with and as set forth in the applicable sale agreements for each property in the forms delivered to the Administrative
Agent prior to the Closing Date (and without any material amendments thereto unless otherwise approved by the Administrative Agent in
its reasonable discretion) and only so long as the Net Cash Proceeds thereof are used to prepay the Loans as required under Section 2.11(d) and
(b) the sale or other transfer of other real property and related improvements, including Sale and Leaseback Transactions, so long
as (i) the consideration for such sale is at least equal to the greater of (x) the fair market value of such real property (measured
at the time of contractually agreeing to such sale) or (y) the value corresponding to such real property as shown in the column titled
“Est. Property Value AS IS Occupied” on the tab titled “Summary” on Exhibit I (it being understood
and agreed that if there is no value corresponding to such real property on Exhibit I, then the consideration for such sale
must be at least the fair market value of such real property), (ii) 100% of the consideration therefor shall consist of cash, (iii) such
sale is to a non-affiliated third party, (iv) to the extent constituting a Sale and Leaseback Transaction, the applicable lease back
to the relevant Loan Party in such Sale and Leaseback Transaction is on market terms (as reasonably determined by the Borrower in good
faith), (v) the Net Cash Proceeds thereof are used to prepay the Loans as required under Section 2.11(d) and (vi) the
terms and conditions applicable to such sale are reasonably acceptable to the Administrative Agent.
“Permitted Variance”
has the meaning assigned to such term in Section 5.19(c).
“Person”
means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
“Petition Date”
shall have the meaning assigned to such term in the preliminary statements hereto.
“Pharmaceutical Inventory”
means all inventory consisting of products that can be dispensed only on order of a licensed professional.
“Plan” means
any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412
of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate has any liability or is (or, if
such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.
“Platform”
has the meaning assigned to such term in Section 5.01(k).
“Post-Petition”
means the time period commencing immediately upon the filing of the Chapter 11 Case.
“Preferred Stock”
means, with respect to any corporation, capital stock issued by such corporation that is entitled to a preference or priority, in respect
of dividends or distributions upon liquidation, over some other class of capital stock issued by such corporation.
“Prepayment Event”
means:
(a) any
sale, transfer or other disposition (including pursuant to a Sale and Leaseback Transaction) of any property or asset of the Borrower
or any Subsidiary (including in connection with any Specified Sale Transaction and any Elixir Monetization Event), but excluding any sales,
transfers or other dispositions described in clauses (a) and (d) of Section 6.05; or
(b) any
casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property
or asset of the Borrower or any Subsidiary (including any Casualty/Condemnation); or
(c) the
incurrence by the Borrower or any Subsidiary of (i) any Indebtedness pursuant to an Elixir Monetization Event or (ii) any Indebtedness
not permitted to be incurred under Section 6.02(a); or
(d) without
limiting or duplicating any of the foregoing, any other Elixir Monetization Event;
provided, however, “Prepayment
Event” shall not include a Term Loan Exclusive Collateral Prepayment Event.
“Pre-Petition”
means the time period ending immediately prior to the filing of the Chapter 11 Case.
“Prescription File”
has the meaning specified in the Security Agreement.
“Prime Rate”
means the rate of interest announced by Bank of America from time to time as its prime rate. Such rate is set by Bank of America on the
basis of various factors, including its costs and desired return, general economic conditions and other factors, and is used as a reference
point for pricing some loans, which may be priced at, above or below such rate. Any change in such rate publicly announced by Bank of
America shall take effect at the opening of business on the day specified in the announcement.
“Prior Week”
means, as of any date of determination, the immediately preceding week ended on a Saturday and commencing on the prior Sunday.
“Protective Advance”
means any extension of credit hereunder that is made by the Administrative Agent, in its sole discretion, to:
(a) maintain,
protect or preserve the value of the Collateral and/or the Administrative Agent’s, Collateral Agent’s and the Secured Parties’
rights therein, including to preserve the Loan Parties’ business assets and infrastructure (such as the payment of insurance premiums,
taxes, necessary suppliers, rent and payroll and to remediate Environmental Liabilities);
(b) commence
the exercise of remedies (such as in connection with foreclosing on a Mortgage);
(c) fund
an orderly liquidation or wind-down of the Loan Parties’ assets or business or a Bankruptcy Proceeding (including the Chapter 11
Case) (whether or not occurring prior to or after the commencement of any such Bankruptcy Proceeding);
(d) enhance
the likelihood of, or maximize, the repayment of the Obligations; or
(e) pay
any other amount chargeable to the Borrower or the other Loan Parties hereunder or under any other Loan Document;
provided
that, at the time the Administrative Agent shall elect to make, or permit such Protective Advance to remain outstanding, such Protective
Advance, together with all other Protective Advances then outstanding, shall not exceed $20,000,000.
“PTE” means
a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“Public Lender”
has the meaning assigned to such term in Section 5.01(k).
“QFC Credit Support”
has the meaning assigned to such term in Section 9.23.
“Qualified Preferred
Stock” means Preferred Stock of the Borrower that does not require any cash payment (including in respect of redemptions or
repurchases), other than in respect of cash dividends, before the date that is six months after the Maturity Date.
“Real Estate Lease”
means any agreement, whether written or oral, and all amendments, guaranties and other agreements relating thereto, pursuant to which
a Loan Party is party for the purpose of using or occupying any real property for any period of time.
“Real Property Collateral
Deliverables” means, collectively, each Mortgage and each Real Property Collateral Support Document.
“Real Property Collateral
Support Documents” means, with respect to any real estate subject to a Lien in favor of the Collateral Agent pursuant to the
Security Agreement, a Mortgage, or another Collateral Document, the deliveries and documents described on Annex II attached hereto,
to the extent reasonably requested in writing by the Collateral Agent.
“Realty Reserves”
means such reserves as may be established from time to time by the Administrative Agent in the exercise of its commercially reasonable
judgment (a) to reflect the impediments to the Administrative Agent’s ability to realize upon any Owned Real Property, (b) to
reflect claims, liabilities, costs and expenses that the Administrative Agent determines may need to be satisfied in connection with the
realization upon any Owned Real Property (including, without limitation, maintenance, utilities, and insurance), or (c) to reflect
the adverse impacts of any event or condition (including, without limitation, contractual arrangements that any Owned Real Property is
subject to) which impair the value of such applicable Owned Real Property. Without limiting the generality of the foregoing, Realty Reserves
may include (but are not limited to) (i) reserves in respect of Environmental Liabilities, (ii) reserves for (A) municipal
and state taxes and assessments, (B) repairs, and (C) remediation of title defects and (iii) reserves for Indebtedness
secured by Liens having priority over the Lien of the Collateral Agent.
“Refinance”
means, with respect to any issuance of Indebtedness, to replace, renew, extend, refinance, repay, refund, repurchase, redeem, defease
or retire, or to issue Indebtedness in exchange or as a replacement therefor, including any successive Refinancing. “Refinanced”
and “Refinancing” shall have correlative meanings.
“Register”
has the meaning set forth in Section 9.04(b).
“Related Parties”
means, with respect to any specified Person, such Person’s Affiliates and the partners, directors, officers, employees, agents,
trustees, administrators, managers, consultants (including, in the case of the Administrative Agent, the Lender Group Consultants), service
providers, representatives and advisors of such Person and such Person’s Affiliates.
“Remaining
Annualized Period” means, with respect to any Specified Prescription File Store, for purposes of determining the Annualized
Transitioned Prescription File Amount for such Specified Prescription File Store, the result of (a)(x) fifty-two (52) minus
(y) the number of weeks that have elapsed since the date that such Specified Prescription File Store closed, divided by (b) fifty-two
(52).
“Remedies
Notice Period” means the “Remedies Notice Period” as such term is defined in the Financing Order.
“Reports”
has the meaning assigned to such term in Section 8.07(b).
“Required Lenders”
means, at any time (a) prior to the funding of the Term Loans on the Closing Date, Lenders holding Commitments aggregating more than
fifty percent (50%) of the Total Commitments and (b) thereafter, Lenders whose percentage of the Total Outstandings aggregate more
than fifty percent (50%) of such Total Outstandings; provided that, if at any time there are (x) two (2) Lenders that
are unaffiliated, then Required Lenders shall also include both of such Lenders that are unaffiliated and (y) three (3) or more
Lenders that are unaffiliated, then Required Lenders shall also include at least three (3) such Lenders that are unaffiliated.
“Rescindable
Amount” has the meaning as defined in Section 2.18(d).
“Resignation Effective
Date” has the meaning assigned to such term in Section 8.06(a).
“Resolution Authority”
means an EEA Resolution Authority or, with respect to any UK Financial Institution, a U.K. Resolution Authority.
“Responsible Officer”
means the chief executive officer, president, each executive vice president, each vice president, each Financial Officer, or other similar
officer of a Loan Party (or, solely in the case of Health Dialog Services Corporation, secretary) and, solely for purposes of the delivery
of secretary’s certificates and incumbency certificates pursuant to Section 4.01, each secretary or any assistant secretary
of a Loan Party and, solely for purposes of notices given pursuant to Article II, any other officer or employee of the applicable
Loan Party so designated by any of the foregoing officers in a notice or other certificate to the Administrative Agent or any other officer
or employee of the applicable Loan Party designated in or pursuant to an agreement between the applicable Loan Party and the Administrative
Agent or with the consent of the Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer
of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on
the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.
“Restricted Payment”
means any dividend or other distribution (whether in cash, securities or other property, except dividends payable solely in shares of
the Borrower’s common stock or Qualified Preferred Stock) with respect to any Equity Interests in the Borrower or any Subsidiary,
or any payment (whether in cash, securities or other property, except payments made solely with common equity), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests
in the Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Borrower or any Subsidiary.
“Restructuring Support
Agreement” means a restructuring support agreement, by and among the Loan Parties, certain holders of the Existing Split-Priority
Indebtedness and the other parties thereto, entered into after the Closing Date, which is upon terms and conditions acceptable to the
Administrative Agent, as amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with
this Agreement.
“S&P”
means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor to its business
of rating debt securities.
“Sale and Leaseback
Transaction” means any arrangement whereby the Borrower or a Subsidiary shall sell or transfer any office building (including
its headquarters), distribution center, manufacturing plant, warehouse, Store, equipment or other property, real or personal, now or hereafter
owned by the Borrower or a Subsidiary with the intention that the Borrower or any Subsidiary rent or lease the property sold or transferred
(or other property of the buyer or transferee substantially similar thereto).
“Sanctioned Entity”
means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly
or indirectly controlled by a country or its government, or (d) a Person resident in or determined to be resident in a country, in
each case of clauses (a) through (d) above that is a target of Sanctions, including a target of any country or
territory sanctions program administered and enforced by OFAC.
“Sanctioned Person”
means, at any time, (a) any Person listed in any Sanctions-related list of designated or blocked Persons maintained by OFAC, the
U.S. Department of State, the United Nations, the United Kingdom or the European Union, (b) any Person operating, organized or resident
in a Sanctioned Country, or (c) any Person owned 50% or more directly or indirectly owned or controlled (individually or in the aggregate)
by, or acting on behalf of, any such Person or Persons described in the foregoing clauses (a) or (b) above.
“Sanctions”
means individually and collectively, respectively, any and all economic sanctions, trade sanctions, financial sanctions, sectoral sanctions,
secondary sanctions, trade embargoes anti-terrorism laws and other sanctions laws, regulations or embargoes, including those imposed,
administered or enforced from time to time by: (a) the United States of America, including those administered by OFAC, the U.S. Department
of State, the U.S. Department of Commerce, or through any existing or future executive order, (b) the United Nations, (c) His
Majesty’s Treasury of the United Kingdom, or (d) the European Union.
“Scheduled Unavailability
Date” has the meaning specified in Section 2.14(b)(ii).
“Script Lists Advance
Rate” means 7.5%.
“Scripts Availability”
means, at any time of determination of the Borrowing Base Amount, the product of (a) the Script Lists Advance Rate multiplied
by (b) the Eligible Script Lists Value.
“SEC” means
the United States Securities and Exchange Commission and any successor agency thereto.
“Secured Parties”
means collectively, the Administrative Agent, the Collateral Agent, the Lenders, each co-agent or sub-agent of any Agent, each other party
to this Agreement other than any Loan Party, the beneficiaries of each indemnification or expense reimbursement obligation undertaken
by the Borrower or any other Loan Party under any Loan Document, and the successors and permitted assigns of each of the foregoing.
“Security Agreement”
means the Debtor-In-Possession Security Agreement, dated as of the Closing Date, among the Borrower, the Subsidiary Loan Parties (including
additional Subsidiary Loan Parties that become parties thereto in accordance with the terms thereof) and the Collateral Agent, for the
benefit of the Secured Parties, as such agreement may be amended, supplemented or otherwise modified from time to time.
“SOFR” means
the Secured Overnight Financing Rate as administered by the SOFR Administrator.
“SOFR Adjustment”
means 0.10% (10 basis points).
“SOFR Administrator”
means the Federal Reserve Bank of New York (or a successor administrator of SOFR).
“SOFR Administrator’s
Website” means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor
source for SOFR identified as such by the SOFR Administrator from time to time.
“Specified Elixir Assets”
means Medicare Part D payments owing to Elixir Insurance Company from the Center for Medicare & Medicaid Services (other
than, for the avoidance of doubt, any such payments purchased prior to the Petition Date pursuant to Elixir Insurance Company’s
existing receivables purchase arrangement).
“Specified Elixir Sale”
means any sale or other disposition of (a) all or any portion of the Elixir Business Segment and/or (b) all or any of the Equity
Interests of the Elixir Subsidiaries as a going concern under Section 363 of the Bankruptcy Code or otherwise. Any Specified Elixir
Sale shall be conducted pursuant to bidding procedures, sales procedures, approval orders, purchase agreements, agency documents or other
agreements, documents or instruments, as applicable, in form and substance and on terms satisfactory to the Administrative Agent.
“Specified Going Concern
Sale” means a sale, in one or a series of related transactions, of all or substantially all of (or, if approved in writing by
the Administrative Agent, certain of) the assets of the Loan Parties as a going concern under Section 363 of the Bankruptcy Code
or otherwise. The Specified Going Concern Sale shall be conducted pursuant to bidding procedures, sales procedures, approval orders, purchase
agreements, agency documents or other agreements, documents or instruments, as applicable, in form and substance and on terms satisfactory
to the Administrative Agent.
“Specified Non-Going
Concern Sale” means the sale or other disposition on an equity basis (or, if approved by the Administrative Agent in its sole
discretion, on a fee basis) of the entire chain of Stores (or the entire chain of Stores remaining after completion of, or not contemplated
to be included in, the Specified Going Concern Sale) and all of the assets relating thereto on a non-going concern basis under Section 363
of the Bankruptcy Code or otherwise. The Specified Non-Going Concern Sale shall be conducted pursuant to bidding procedures, sales procedures,
approval orders, purchase agreements, agency documents or other agreements, documents or instruments, as applicable, in form and substance
and on terms satisfactory to the Administrative Agent.
“Specified
Other Assets Sale” means a sale, in one or a series of related transactions, of all remaining assets of the Loan Parties
under Section 363 of the Bankruptcy Code or otherwise, to the extent such assets are not otherwise included in any other Specified
Sale Transaction. The Specified Other Assets Sale shall be conducted pursuant to bidding procedures, sales procedures, approval orders,
purchase agreements, agency documents or other agreements, documents or instruments, as applicable, in form and substance and on terms
satisfactory to the Administrative Agent.
“Specified Prescription
File Stores” means the Specified Stores set forth on Schedule 1.01(b) that have closed for business and, as to which,
the Borrower (or other applicable Loan Party) has elected to transition (all or a portion of) the Prescription Files located at such Specified
Store to another operating Store location (any such Prescription File subject to such transition, a “Transitioned Prescription
File”).
“Specified
Sale Process Default” means any Event of Default under and as arising under the following Sections of this Agreement: (a) Section 7.01(a) or
Section 7.01(b) (Non-Payment Events), (b) Section 7.01(c) (Incorrect Information), solely to the
extent relating to information, or representations and warranties made in, any Approved Budget Variance Report, any Borrowing Base Certificate,
any Compliance Certificate, or any reporting or information delivered with respect to achievement of any Chapter 11 Case Milestone, or
(c) Section 7.01(d) with respect to a breach of (i) Section 5.01(f) (Borrowing Base Certificates),
(ii) Section 5.19(c) (Approved Budget Covenant Compliance), (iii) Section 5.19(d) (Approved
Budget Variance Reports), (iv) Section 5.20 (Chapter 11 Case Milestones) and (v) Section 6.12 (Minimum
ABL DIP Availability) (solely in the case of this clause (c), which Event of Default has occurred and is continuing for two (2) Business
Days or more).
“Specified Sale Transaction”
means any or all of a Specified Going Concern Sale, a Specified Non-Going Concern Sale, a Specified Elixir Sale, or a Specified Other
Assets Sale.
“Specified Stores”
means the Stores identified to the Administrative Agent, the Lenders, the ABL DIP Agent and the ABL DIP Lenders prior to the Petition
Date; provided that the Loan Parties may adjust the identity and number of Specified Stores, in consultation with the Administrative Agent,
except that any upward or downward adjustment of the total number of Specified Stores of greater than 75 Stores shall be subject to (a) the
prior written consent of the Administrative Agent and (b) solely in the case of such an upward adjustment, the Borrower’s retention
of a store closing consultant reasonably satisfactory to the Administrative Agent and the Borrower.
“Specified Store Closing
Sale” means the closure of any Specified Stores and any related sale(s) of assets conducted pursuant to the Store Closing
Order.
“Split-Lien Collateral”
means all assets of the Loan Parties of the type that constitutes “Split-Lien Collateral” (as defined in the Split-Priority
Intercreditor Agreement) immediately prior to the Petition Date. For the avoidance of doubt, the term “Split-Lien Collateral”
shall not include any Term Loan Exclusive Collateral.
“Split-Lien Priority
Collateral” means all Split-Lien Collateral that constitutes “Split-Lien Priority Collateral” as defined in the
Split-Priority Intercreditor Agreement.
“Split-Priority Intercreditor
Agreement” means that certain Intercreditor Agreement, dated as of February 5, 2020, by and between the ABL DIP Agent (in
its capacity as “Senior Collateral Agent”) and The Bank of New York Mellon Trust Company (in its capacity as “Initial
Split-Lien Collateral Agent and Trustee”), as the same may be amended, amended and restated, restated supplemented or otherwise
modified from time to time (including pursuant to the joinder dated as of July 27, 2020).
“Statutory Committee”
means any official committee of unsecured creditors in the Chapter 11 Case pursuant to Section 1102 of the Bankruptcy Code.
“Store” means
any retail store (which may include any real property, fixtures, equipment, inventory and Prescription Files related thereto) operated,
or to be operated, by any Subsidiary Loan Party.
“Store Closing Order”
means any order of the Bankruptcy Court entered in the Chapter 11 Case approving the Loan Parties’ closure of Stores and sales of
assets related thereto, which order shall be in form and substance satisfactory to the Loan Parties and the Administrative Agent, and
from which no appeal or motion to reconsider has been filed, together with all extensions, modifications and amendments thereto, in form
and substance satisfactory to the Loan Parties and the Administrative Agent.
“Subject Modification”
has the meaning set forth in Section 9.02(d)(ii).
“subsidiary”
means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50%
of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date,
owned, controlled or held by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
“Subsidiary”
means any subsidiary of the Borrower.
“Subsidiary Loan Party”
means each Subsidiary of the Borrower that becomes party to the Guarantee Agreement on or after the Closing Date. Notwithstanding any
provision in the Loan Documents to the contrary, no Excluded Subsidiary shall be required to become a Subsidiary Loan Party.
“Successor Rate”
has the meaning specified in Section 2.14(b).
“Supported QFC”
has the meaning assigned to such term in Section 9.23.
“Taxes” means
any and all present or future taxes, levies, imposts, duties, deductions, charges, assessments, fees or withholdings imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable thereto.
“Term Loan Exclusive
Collateral” means all assets of the Loan Parties consisting of: (a) all real estate and all right, title, and interests
therein (including both fee and leasehold interests); (b) all proceeds of leasehold interests; (c) all Equity Interests in Subsidiaries;
(d) all other assets of the Loan Parties, other than to the extent constituting DIP Shared Collateral (as defined in the Financing
Order); (e) the Term Loan Exclusive Collateral Accounts; (f) all Commercial Tort Claims related to the foregoing; (g) all
insurance policies relating to the foregoing; (h) except to the extent constituting DIP Shared Collateral (as defined in the Financing
Order), all Documents, all General Intangibles, all Instruments and all Letter of Credit Rights related to the foregoing; (i) all
collateral and guarantees given by any other Person with respect to any of the foregoing, and all Supporting Obligations (including Letter-of-Credit
Rights) with respect to any of the foregoing; (j) all books and Records to the extent relating to any of the foregoing; (k) all
products and Proceeds of the foregoing; (l) upon entry of the Final Financing Order, proceeds of Avoidance Actions (as defined in
the Final Financing Order) with respect to assets of the type referred to in clauses (a) through (d) of this definition; and
(m) for the avoidance of any doubt, such term shall also include all “DIP Term Loan Exclusive Collateral” under and as
defined in the Financing Order. Capitalized terms used in this definition but not defined herein have the meanings assigned to them
in the Security Agreement or the UCC, as applicable.
“Term Loan Exclusive
Collateral Accounts” means one or more Deposit Accounts of the Borrower or a Subsidiary Loan Party, established at Bank of America,
for the purpose (and solely for the purpose) of holding proceeds of Term Loan Exclusive Collateral.
“Term Loan Exclusive
Collateral Prepayment Event” means:
(a) any
sale, transfer or other disposition (including pursuant to a Sale and Leaseback Transaction) of any Term Loan Exclusive Collateral of
the Borrower or any Subsidiary (including in connection with any Permitted Real Estate Disposition); or
(b) any
casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any Term
Loan Exclusive Collateral of the Borrower or any Subsidiary (including any Casualty/Condemnation).
“Term Loan License”
means the irrevocable license granted by the Loan Parties to the Collateral Agent for the benefit of the Secured Parties pursuant to Section 7.05
of the Security Agreement.
“Term Loan Lien”
means the Liens on the Collateral in favor of the Collateral Agent, on behalf of the Secured Parties, under the Collateral Documents.
“Term Loan Push-Down
Reserve” means, at any time of determination, a reserve established against the ABL DIP Borrowing Base Amount by the ABL DIP
Agent at such time in an amount equal to the amount (if any) by which the aggregate outstanding principal amount of the Loans exceeds
the Borrowing Base Amount.
“Term Loans”
means the loans made by the Lenders to the Borrower pursuant to Section 2.01(b) of this Agreement.
“Term SOFR”
means:
(a) for
any Interest Period with respect to a Term SOFR Loan, the rate per annum equal to the Term SOFR Screen Rate two (2) U.S. Government
Securities Business Days prior to the commencement of such Interest Period with a term equivalent to such Interest Period; provided
that if the rate is not published prior to 11:00 a.m. on such determination date then Term SOFR means the Term SOFR Screen rate on
the first U.S. Government Securities Business Day immediately prior thereto, in each case, plus the SOFR Adjustment for such Interest
Period; and
(b) for
any interest calculation with respect to an ABR Loan on any date, the rate per annum equal to the Term SOFR Screen Rate with a term of
one month commencing that day;
provided
that, if the Term SOFR determined in accordance with either of the foregoing provisions clause (a) or (b) of this
definition would otherwise be less than one percent, the Term SOFR shall be deemed to be one percent for purposes of this Agreement.
“Term SOFR Loan”
means a Loan that bears interest based on clause (a) of the definition of “Term SOFR.”
“Term SOFR Replacement
Date” has the meaning specified in Section 2.14(b).
“Term SOFR Screen Rate”
means the forward-looking SOFR term rate administered by CME (or any successor administrator satisfactory to the Administrative Agent)
and published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may
be designated by the Administrative Agent from time to time).
“Total Commitments”
means, at any time, the aggregate of the Commitments of all Lenders at such time.
“Total Outstandings”
means, at any time, the aggregate outstanding amount of all Term Loans at such time.
“Transaction Expenses”
means any fees or expenses (including without limitation arrangement or underwriting or similar fees as well as upfront fees or original
issue discount) incurred or paid by the Borrower or any of the Subsidiaries in connection with the Transactions (including in connection
with this Agreement and the other Loan Documents).
“Transaction Funds
Flow” has the meaning set forth in Section 4.01(g).
“Transactions”
means, collectively, (a) the execution and delivery by the Loan Parties of the Loan Documents to which they are a party and the making
of the Term Loans on the Closing Date, (b) the execution and delivery by the Loan Parties of the ABL DIP Loan Documents to which
they are a party, (c) the payment of the Transaction Expenses, and (d) the undertaking of the transactions and obligations related
to any of the foregoing.
“Transitioned Prescription
File” has the meaning set forth in the definition of “Specified Prescription File Store”.
“Transitioned Prescription
Files Amount” means, for all Specified Stores that have closed for business, an amount equal to the aggregate Annualized Transitioned
Prescription File Amounts for all such Specified Stores; provided, however, that in no event shall the aggregate amount
of all Transitioned Prescriptions Files included in determining the Annualized Transitioned Prescription File Amounts exceed the initial
8,500,000 of Transitioned Prescriptions Files since the Closing Date.
“Type”, when
used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing,
is determined by reference Term SOFR or the Alternate Base Rate.
“U.K. Financial Institution”
means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom
Prudential Regulation Authority) or any person subject to IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by
the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates
of such credit institutions or investment firms.
“U.K. Resolution Authority”
means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Undisclosed Administration”
means in relation to any Person, the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian
or other similar official by a supervisory authority or regulator under or based on the law in the country where such Person is subject
to home jurisdiction supervision if applicable law requires that such appointment is not to be publicly disclosed.
“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.
“USA Patriot Act”
means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.
“U.S. Government Securities
Business Day” means any Business Day, except any Business Day on which any of the Securities Industry and Financial Markets
Association, the New York Stock Exchange or the Federal Reserve Bank of New York is not open for business cause such day is a legal holiday
under the federal laws of the United States or the laws of the State of New York, as applicable.
“U.S. Person”
means a “United States person” within the meaning of Section 7701(a)(30) of the Code.
“U.S. Tax Compliance
Certificate” has the meaning specified in Section 2.17(e)(ii)(B)(3).
“U.S. Trustee”
shall mean the United State Trustee applicable to the Chapter 11 Case.
“Withdrawal Liability”
means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Sections 4203 and 4205, respectively, of ERISA.
“Write-Down and Conversion
Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution
Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers
are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution
Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or
any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations
of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised
under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related
to or ancillary to any of those powers.
SECTION 1.02.
Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to Type (e.g.,
a “Term SOFR Loan”). Borrowings also may be classified and referred to by Type (e.g., a “Term SOFR Borrowing”).
SECTION 1.03.
Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions
on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”,
and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof,
(d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed
to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
SECTION 1.04.
Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative
Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing
Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that
the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before
or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect
and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended
in accordance herewith; provided, further, that, all terms of an accounting or financial nature used herein shall be construed,
and all computations of amounts and ratios referred to herein shall be made without giving effect to (i) any election under Accounting
Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards 159) (or any other Accounting
Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities
of the Borrower or any Subsidiary at “fair value,” as defined therein and (ii) any treatment of Indebtedness in respect
of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial
Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein,
and such Indebtedness shall at all times be valued at the full stated principal amount thereof.
SECTION 1.05.
Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware
law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any
Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from
the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to
have been organized on the first date of its existence by the holders of its Equity Interests at such time.
SECTION 1.06.
[Reserved].
SECTION 1.07.
Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight
or standard, as applicable).
SECTION 1.08.
[Reserved].
SECTION 1.09.
Interest Rates. The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative Agent
have any liability with respect to the administration, submission or any other matter related to any reference rate referred to herein
or with respect to any rate (including, for the avoidance of doubt, the selection of such rate and any related spread or other adjustment)
that is an alternative or replacement for or successor to any such rate (including any Successor Rate) (or any component of any of the
foregoing) or the effect of any of the foregoing, or of any Conforming Changes. Any Person acting as the Administrative Agent and its
affiliates or other related entities may engage in transactions or other activities unrelated to this Agreement that affect any reference
rate referred to herein, or any alternative, successor or replacement rate (including any Successor Rate) (or any component of any of
the foregoing) or any related spread or other adjustments thereto, in each case, in a manner adverse to the Borrower. The Administrative
Agent may select information sources or services in its reasonable discretion to ascertain any reference rate referred to herein or any
alternative, successor or replacement rate (including any Successor Rate) (or any component of any of the foregoing), in each case pursuant
to the terms of this Agreement, and shall have no liability to the Borrower, any Lender or any other Person for damages of any kind, including
direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise
and whether at law or in equity), for the selection of any such information source or service made by the Administrative Agent in its
reasonable discretion or for any error or any other action or omission by such information source or service or calculation of any such
rate (or component thereof) provided by any such information source or service.
ARTICLE II
The Credits
SECTION 2.01.
Commitments.
(a) [Reserved].
(b) Subject
to the terms and conditions set forth herein, each Lender, severally and not jointly with any other Lender, shall make a single Term Loan
denominated in dollars to the Borrower on the Closing Date in the amount of such Lender’s Commitment. The Borrowing on the Closing
Date shall consist of Term Loans made simultaneously by the Lenders in accordance with their respective Commitments. Loans made to the
Borrower that are repaid or prepaid may not be reborrowed.
(c) Notwithstanding
anything to the contrary in this Agreement, any Lender may exchange, continue or rollover all of the portion of its Loans in connection
with any refinancing permitted by the terms of this Agreement, pursuant to a cashless settlement mechanism approved by the Borrower, the
Administrative Agent, and such Lender.
SECTION 2.02.
Loans and Borrowings.
(a) Each
Borrowing shall be made as part of a Borrowing consisting of Loans of the same Type made by the Lenders ratably in accordance with the
amounts of their Applicable Percentages.
(b) Subject
to Section 2.14, each Borrowing shall be comprised entirely of ABR Loans or Term SOFR Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Term SOFR Loan by causing any branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligations of the Borrower to repay such Loan in accordance
with the terms of this Agreement.
(c) [Reserved].
(d) Notwithstanding
any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing
if the Interest Period requested with respect thereto would end after the Maturity Date.
SECTION 2.03.
Requests for Borrowings. The Borrowing on the Closing Date shall be made upon the Borrower’s irrevocable notice to
the Administrative Agent, which shall be made by submission of a Borrowing Request (including by electronic mail or facsimile), provided
that such Borrowing Request shall be submitted (a) in the case of a Borrowing of Term SOFR Loans, not later than 11:00 a.m. two
(2) Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 1:00 p.m. on
the Business Day of the proposed Borrowing. The Borrowing Request shall specify the following information:
(a) the
aggregate principal amount of the Borrowing;
(b) the
date of the Borrowing, which shall be a Business Day;
(c) whether
the Borrowing is to be an ABR Borrowing or a Term SOFR Borrowing;
(d) in
the case of a Term SOFR Borrowing, the Interest Period (which, whether or not designated, shall be a period of one month, as contemplated
by the definition of “Interest Period”); and
(e) the
location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06.
If no election as to the Type
of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s
Loan to be made as part of the requested Borrowing.
SECTION 2.04.
[Reserved].
SECTION 2.05.
[Reserved].
SECTION 2.06.
Funding of Borrowings.
(a) Each
Lender shall make the Term Loan to be made by it hereunder on the Closing Date by wire transfer of immediately available funds by 12:00
p.m. to the account of the Administrative Agent designated by it for such purpose by notice to the Lenders. The Administrative Agent
will promptly thereafter make the Term Loan available to the Borrower by wire transfer, in like funds, to an account designated by the
Borrower in the applicable Borrowing Request and to be used in accordance with Section 5.10.
(b) If
any Lender makes available to the Administrative Agent funds for any Term Loan to be made by such Lender as provided herein, and such
funds are not made available to the Borrower by the Administrative Agent because the conditions to any applicable extension of credit
set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall promptly
return such funds (in like funds as received from such Lender) to such Lender, without interest.
(c) The
obligations of the Lenders hereunder to make Loans and to make payments pursuant to Section 9.03(c) are several and not
joint. The failure of any Lender to make any Loan or to make any payment under Section 9.03(c) on any date required hereunder
shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure
of any other Lender to so make its Loan or to make its payment under Section 9.03(c).
(d) Nothing
herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation
by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
SECTION 2.07.
Interest Elections.
(a) The
Borrowing on the Closing Date shall be of the Type specified in the applicable Borrowing Request. Thereafter, the Borrower may elect to
convert such Borrowing to a different Type or to continue such Borrowing (in the case of Term SOFR Borrowings) all as provided in this
Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the Term Loans comprising such Borrowing, and the Term Loans comprising each
such portion shall be considered a separate Borrowing.
(b) To
make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by (i) telephone,
or (ii) submission of an Interest Election Request (including by electronic mail or facsimile) by the time that a Borrowing Request
would be required to be made under Section 2.03. Each such notice and Interest Election Request shall be irrevocable and,
in the case of an Interest Election Request, signed by the Borrower.
(c) Each
Interest Election Request shall specify the following information in compliance with Section 2.02 and this Section 2.07(c):
(i) the
Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and
(iv) below shall be specified for each resulting Borrowing);
(ii) the
effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day; and
(iii) whether
the resulting Borrowing is to be an ABR Borrowing or a Term SOFR Borrowing.
(d) Promptly
following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.
(e) If
the Borrower fails to deliver a timely Interest Election Request with respect to a Term SOFR Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing
and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is
continuing (i) no outstanding Borrowing may be converted to or continued as a Term SOFR Borrowing and (ii) unless repaid, each
Term SOFR Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto. Except as otherwise provided
herein, a Term SOFR Loan may be continued or converted only on the last day of an Interest Period for such Term SOFR Loan.
(f) With
respect to SOFR or Term SOFR, the Administrative Agent, in consultation with the Borrower, will have the right to make Conforming Changes
from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such
Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan
Document; provided, that, with respect to any such amendment effected, the Administrative Agent shall post each such amendment implementing
such Conforming Changes to the Borrower and the Lenders reasonably promptly after such amendment becomes effective. Notwithstanding anything
herein or in any other Loan Document to the contrary, the Administrative Agent and the Borrower shall cooperate in good faith and use
commercially reasonable efforts to satisfy any applicable requirements under proposed or final United
States Treasury Regulations or other regulatory guidance such that any amendments implementing such Conforming Changes shall not result
in a deemed exchange of any Loan under Section 1001 of the Code.
(g) With
respect to any election pursuant to this Section for any Term SOFR Borrowing, at the commencement of the Interest Period for such
Term SOFR Borrowing, such Borrowing shall be in an aggregate principal amount that is an integral multiple of $1,000,000 and not less
than $5,000,000. With respect to any election pursuant to this Section for any Term ABR Borrowing, such Borrowing shall be in an
aggregate principal amount that is an integral multiple of $1,000,000 (or such lesser amount of the Total Outstandings) and not less than
$5,000,000 (or such lesser amount of the Total Outstandings). Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of five (5) separate Interest Periods outstanding.
SECTION 2.08.
Termination of Commitments. The Commitments shall terminate upon the funding of the Term Loans on the Closing Date by the
Lenders.
SECTION 2.09.
Repayment of Loans; Evidence of Indebtedness.
(a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent, for its own account and the account of each Lender, as applicable,
(i) on the Maturity Date, the then unpaid principal amount of the Loans and all other Obligations (other than contingent indemnification
obligations and other obligations of the Loan Parties that expressly survive the termination of the Loan Documents for which no claim
has been asserted) and (ii) upon the occurrence of either of the following: (A) the effective date of any plan of reorganization
under Section 1129 of the Bankruptcy Code or (B) the closing of a sale of all or substantially all of the working capital assets
of the Loan Parties pursuant to Section 363 of the Bankruptcy Code, all outstanding Obligations (other than contingent indemnification
obligations and other obligations of the Loan Parties that expressly survive the termination of the Loan Documents for which no claim
has been asserted). Each repayment of a Borrowing shall be applied ratably to the Loans included in the repaid Borrowing. Repayments of
Borrowings shall be accompanied by accrued interest on the amount repaid.
(b) Each
Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from
time to time under this Agreement.
(c) The
Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof
and the Interest Period, if any, applicable thereto, (ii) the amount of any principal or interest due and payable or to become due
and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder
for the account of the Lenders and each Lender’s share thereof.
(d) The
entries made in the accounts maintained pursuant to Section 2.09(b) or (c) shall be prima facie evidence
of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative
Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans
in accordance with the terms of this Agreement.
(e) Any
Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and
in the form attached hereto as Exhibit A, as applicable, or in such other form approved by the Administrative Agent and the
Borrower. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment
pursuant to Section 9.04(b)) be represented by one or more promissory notes in such form payable to the payee named therein
(or, if such promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.10.
[Reserved].
SECTION 2.11.
Prepayment of Loans.
(a) The
Borrower shall have the right, at any time and from time to time, to prepay the Loans in whole or in part, subject to the requirements
of this Section; provided, however, that any partial prepayment of the Term Loans made pursuant to this Section 2.11(a) shall
be in a principal amount that is a multiple of $1,000,000 and not less than $5,000,000.
(b) If
at any time the Total Outstandings plus any outstanding Protective Advances exceeds the sum of (i) the Borrowing Base Amount plus
(ii) the Term Loan Push-Down Reserve maintained against the ABL Borrowing Base Amount at such time (such excess amount, the “Applicable
Excess”), then the Borrower shall immediately prepay the Obligations in an amount equal to such Applicable Excess. Any such
required payment shall be applied first, to the extent not funded by the Lenders, any Protective Advances extended by the Administrative
Agent that may be outstanding; second, to the extent that one or more Lenders have funded in cash to the Administrative Agent a
participation in outstanding Protective Advances, to such Protective Advances so funded by such applicable Lenders ratably in accordance
with their Applicable Percentage; and third, to the outstanding Term Loans of the Lenders ratably in accordance with their Applicable
Percentage.
(c) During
the continuance of a Cash Sweep Period, the Loans shall be repaid daily in accordance with (and to the extent required under) the provisions
of the Security Agreement and Section 7.02 (without regard to minimum and integral amounts) (it being understood and agreed
that prior to the occurrence of the “Obligation Payment Date” under, and as defined in, the ABL DIP Loan Agreement, any such
payments by the Borrower shall be applied first, in accordance with (and to the extent required under) the provisions of the ABL DIP Security
Agreement and Section 7.02 of the ABL DIP Loan Agreement, and second, in accordance with (and to the extent required under)
the provisions of the Security Agreement and Section 7.02 (without regard to minimum and integral amounts)). Notwithstanding
the foregoing, (i) the Net Cash Proceeds of Prepayment Events shall be applied as set forth in Section 2.11(d) and
(ii) any payment required by Section 2.11(b) shall be applied as set forth in such Section.
(d) Subject
to the terms of the Financing Order and the ABL DIP Intercreditor Agreement (x) in the event and on each occasion that any Net Cash
Proceeds are to be received by or on behalf of the Borrower or any Subsidiary in respect of any Term Loan Exclusive Collateral Prepayment
Event, the Borrower shall direct the applicable payor of such Net Cash Proceeds to remit 100% of such Net Cash Proceeds directly to the
Administrative Agent, for application to the Total Outstandings in the manner set forth in Section 2.11(d)(i) below,
(y) in the event and on each occasion that any Net Cash Proceeds are received by or on behalf of the Borrower or any Subsidiary in
respect of any Prepayment Event (other than any Prepayment Event resulting from the Specified Elixir Sale or an Elixir Monetization Event),
the Borrower shall promptly (and in any event within one (1) Business Day) after such Net Cash Proceeds are received, repay the Obligations
and the ABL DIP Obligations in an aggregate amount equal to 100% of the Net Cash Proceeds resulting from such Prepayment Event to be applied
in the manner set forth in Section 2.11(d)(ii) below and (z) in the event and on each occasion that any Net Cash
Proceeds are received by or on behalf of the Borrower or any Subsidiary in respect of any Prepayment Event resulting from the Specified
Elixir Sale or an Elixir Monetization Event, the Borrower shall promptly (and in any event within one (1) Business Day) after such
Net Cash Proceeds are received, deliver to the Administrative Agent, for application to the Obligations and the ABL DIP Obligations, in
each case in the manner set forth in in Section 2.11(d)(iii) below, an aggregate amount equal to 100% of the Net Cash
Proceeds resulting from such Prepayment Event (it being understood and agreed that amounts jointly determined by the Borrower and the
Administrative Agent to be due to any Person (other than any Secured Party), in accordance with this Section 2.11(d), may
at the Administrative Agent’s option, be delivered directly to such Person). The Net Cash Proceeds received by or on behalf of the
Borrower or any Subsidiary in respect of Term Loan Exclusive Collateral Prepayment Events and Prepayment Events shall be applied as follows:
(i) each
prepayment of the Obligations pursuant to this Section 2.11(d) in connection with a Term Loan Exclusive Collateral Prepayment
Event, shall be applied first, to the extent not funded by the Lenders, any Protective Advances extended by the Administrative
Agent that may be outstanding; second, to the extent that one or more Lenders have funded in cash to the Administrative Agent a
participation in outstanding Protective Advances, to such Protective Advances so funded by such applicable Lenders ratably in accordance
with their Applicable Percentage; third, to the outstanding Term Loans of the Lenders ratably in accordance with their Applicable
Percentage; and fourth, ratably to any other Obligations that are then due and owing;
(ii) each
prepayment of the Obligations pursuant to this Section 2.11(d) in connection with a Prepayment Event (other than, except
as expressly set forth clause (iii) below, any Prepayment Event arising from any Specified Elixir Sale or Elixir Monetization Event),
shall be applied first, in the manner set forth in Section 2.11(d) of the ABL DIP Loan Agreement; second, to the
extent not funded by the Lenders, any Protective Advances extended by the Administrative Agent that may be outstanding; third,
to the extent that one or more Lenders have funded in cash to the Administrative Agent a participation in outstanding Protective Advances,
to such Protective Advances so funded by such applicable Lenders ratably in accordance with their Applicable Percentage; fourth,
to the outstanding Term Loans of the Lenders ratably in accordance with their Applicable Percentage; and fifth, ratably to any
other Obligations that are then due and owing; and
(iii) the
Net Cash Proceeds of any Specified Elixir Sale and any Elixir Monetization Event shall be applied first, in the manner set forth
in Section 2.11(d) of the ABL DIP Loan Agreement; second, to the extent not funded by the Lenders, any Protective Advances
extended by the Administrative Agent that may be outstanding; third, to the extent that one or more Lenders have funded in cash
to the Administrative Agent a participation in outstanding Protective Advances, to such Protective Advances so funded by such applicable
Lenders ratably in accordance with their Applicable Percentage; fourth, to the outstanding Term Loans of the Lenders ratably in
accordance with their Applicable Percentage; and fifth, ratably to any other Obligations that are then due and owing.
(e) In
connection with any optional or mandatory prepayment of Loans, outstanding ABR Loans subject to such prepayment shall be repaid before
outstanding Term SOFR Loans are repaid.
(f) The
Borrower shall notify the Administrative Agent of any optional or mandatory prepayment of Loans (other than pursuant to Section 2.11(b) or
(c)) by (x) telephone or (y) in writing (including by electronic mail or facsimile). Such written notice of prepayment
shall be delivered (i) in the case of prepayment of a Term SOFR Loan, not later than 1:00 p.m. one (1) Business Day before
the date of prepayment or (ii) in the case of prepayment of an ABR Borrowing, not later than 1:00 p.m. on the Business Day of
such prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and, in the case of a mandatory prepayment,
a reasonably detailed calculation of the amount of such prepayment; provided that a notice of optional prepayment delivered by
the Borrower pursuant to this Section may state that it is conditioned on the effectiveness of other credit facilities or other financing,
in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective
date) if such condition is not satisfied. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders
of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance
of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory
prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall
be accompanied by accrued interest to the extent required by Section 2.13. Payments shall be without premium or penalty; provided
that the Borrower shall reimburse the Lenders for funding losses in accordance with Section 2.16.
SECTION 2.12.
Fees.
(a) [Reserved].
(b) [Reserved].
(c) The
Borrower agrees to pay to the Administrative Agent and the Collateral Agent, for their own accounts, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative Agent or the Collateral Agent, as the case may be.
(d) All
fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent. Fees paid shall not
be refundable under any circumstances.
SECTION 2.13.
Interest.
(a) The
Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) The
Loans comprising each Term SOFR Borrowing shall bear interest at Term SOFR for the Interest Period in effect for such Borrowing plus
the Applicable Rate.
(c) Notwithstanding
the foregoing, upon the occurrence and during the continuation of an Event of Default, at the option of the Administrative Agent or at
the request of the Required Lenders (or, immediately (without any further act of any Person), upon the occurrence of an Event of Default
under clause (a) or clause (b) of Section 7.01), the Borrower shall pay interest on all of the Obligations
to but excluding the date of actual payment, after as well as before judgment, (i) in the case of principal, at a rate per annum
equal to 2.00% plus the rate otherwise applicable to such Loan as provided in the preceding sub-sections of this Section and
(ii) in the case of any other amount, at a rate per annum equal to 2.00% plus the rate applicable to ABR Loans as provided in Section 2.13(a).
(d) Accrued
interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and on the Maturity Date; provided
that (i) interest accrued pursuant to Section 2.13(c) shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment
or prepayment, (iii) in the event of any conversion of any Term SOFR Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such conversion, together with any amounts due and payable pursuant
to Section 2.16, and (iv) interest accrued on Protective Advances shall be payable on demand.
(e) All
interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base
Rate (including ABR Loans determined by reference to Term SOFR) shall be computed on the basis of a year of 365 days (or 366 days in a
leap year), and in each case shall be payable for the actual number of days elapsed. Each determination by the Administrative Agent of
an interest rate or fee hereunder shall be conclusive absent manifest error.
SECTION 2.14.
Alternate Rate of Interest; Illegality.
(a) If
in connection with any request for a Term SOFR Loan or a conversion of ABR Loans to Term SOFR Loans or continuation of any such Loans,
as applicable,
(i) the
Administrative Agent determines that (A) no Successor Rate has been determined in accordance with Section 2.14(b) and
the circumstances under clause (i) of Section 2.14(b) or the Scheduled Unavailability Date has occurred,
or (B) adequate and reasonable means do not exist for determining Term SOFR for any requested Interest Period with respect to a proposed
Term SOFR Loan or in connection with an existing or proposed ABR Loan; or
(ii) the
Administrative Agent is advised by the Required Lenders that Term SOFR for such Interest Period will not adequately and fairly reflect
the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice
thereof to the Borrower and the Lenders by telephone, electronic mail or facsimile as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) the
obligation of the Lenders to make or maintain Term SOFR Loans shall be suspended, (to the extent of the affected Term SOFR Loans or Interest
Periods), (ii) in the event of a determination described in the preceding sentence with respect to the Term SOFR component of the
Alternate Base Rate, the utilization of the Term SOFR component in determining the Alternate Base Rate shall be suspended, (iii) any
Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Term SOFR Borrowing
shall be ineffective and (iv) if any Borrowing Request requests a Term SOFR Borrowing, such Borrowing shall be made as an ABR Borrowing.
(b) Replacement
of Term SOFR or Successor Rate. Notwithstanding anything to the contrary in this Agreement or any other Loan Document, if the Administrative
Agent determines (which determination shall be conclusive absent manifest error), or the Borrower or Required Lenders notify the Administrative
Agent (with, in the case of the Required Lenders, a copy to the Borrower) that the Borrower or Required Lenders, as applicable, have determined
that:
(i) adequate
and reasonable means do not exist for ascertaining a one month interest period of Term SOFR, including because the Term SOFR Screen Rate
is not available or published on a current basis and such circumstances are unlikely to be temporary; or
(ii) CME
or any successor administrator of the Term SOFR Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent
or such administrator with respect to its publication of Term SOFR, in each case, acting in such capacity, has made a public statement
identifying a specific date after which one month interest periods of Term SOFR or the Term SOFR Screen Rate shall or will no longer be
made available, or permitted to be used for determining the interest rate of U.S. dollar denominated syndicated loans, or shall or will
otherwise cease; provided that, at the time of such statement, there is no successor administrator that is satisfactory to the Administrative
Agent, that will continue to provide such interest periods of Term SOFR after such specific date (the latest date on which one month interest
periods of Term SOFR or the Term SOFR Screen Rate are no longer available permanently or indefinitely, the “Scheduled Unavailability
Date”);
then, on a date and time determined by the Administrative
Agent (in consultation with the Borrower) (any such date, the “Term SOFR Replacement Date”), which date shall be at
the end of an Interest Period or on the relevant interest payment date, as applicable, for interest calculated and, solely with respect
to clause (ii) above, no later than the Scheduled Unavailability Date, Term SOFR will be replaced hereunder and under any
Loan Document with Daily Simple SOFR plus the SOFR Adjustment, in each case, without any amendment to, or further action or consent of
any other party to, this Agreement or any other Loan Document (the “Successor Rate”).
If the Successor Rate is Daily Simple SOFR plus
the SOFR Adjustment, all interest payments will be payable on a monthly basis, on the first Business Day of each calendar month.
Notwithstanding anything to the contrary herein,
(i) if the Administrative Agent determines that Daily Simple SOFR is not available on or prior to the Term SOFR Replacement Date,
or if (ii) the events or circumstances of the type described in Section 2.14(b)(i) or (ii) have occurred
with respect to the Successor Rate then in effect, then in each case, the Administrative Agent and the Borrower may amend this Agreement
solely for the purpose of replacing Term SOFR or any then current Successor Rate in accordance with this Section 2.14 at the
end of any Interest Period, relevant interest payment date or payment period for interest calculated, as applicable, with an alternative
benchmark rate giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated credit facilities
syndicated and agented in the United States for such alternative benchmark, and, in each case, including any mathematical or other adjustments
to such benchmark giving due consideration to any evolving or then existing convention for similar U.S. denominated credit facilities
syndicated and agented in the United States for such benchmark. For the avoidance of doubt, any such proposed rate and adjustments shall
constitute a “Successor Rate”. Any such amendment shall become effective at 5:00 p.m. on the fifth Business Day after
the Administrative Agent shall have posted such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders
comprising the Required Lenders have delivered to the Administrative Agent written notice that such Required Lenders object to such amendment.
The Administrative Agent will promptly (in one
or more notices) notify the Borrower and each Lender of the implementation of any Successor Rate.
Any Successor Rate shall be applied in a manner
consistent with market practice; provided that to the extent such market practice is not administratively feasible for the Administrative
Agent, each Successor Rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent (after consultation
with the Borrower).
Notwithstanding anything else herein, if at any
time any Successor Rate as so determined would otherwise be less than one percent, the Successor Rate will be deemed to be one percent
for the purposes of this Agreement and the other Loan Documents.
In connection with the implementation and administration
of a Successor Rate, the Administrative Agent will have the right, after consultation with the Borrower, to make Conforming Changes from
time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming
Changes will become effective only after written notice thereof to the Borrower but otherwise without any further action or consent of
any other party to this Agreement; provided that, with respect to any such amendment effected, the Administrative Agent shall post each
such amendment implementing such Conforming Changes to the Borrower and the Lenders reasonably promptly after such amendment becomes effective.
Notwithstanding anything herein or in any other Loan Document to the contrary, the Administrative Agent and the Borrower shall cooperate
in good faith and use commercially reasonable efforts to satisfy any applicable requirements under
proposed or final United States Treasury Regulations or other regulatory guidance such that any amendments implementing such Conforming
Changes shall not result in a deemed exchange of any Loan under Section 1001 of the Code.
(c) Illegality.
If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any
Lender or its applicable lending office to make, maintain or fund Loans whose interest is determined by reference to SOFR or Term SOFR,
or to determine or charge interest rates based upon SOFR or Term SOFR, then, upon notice thereof by such Lender to the Borrower (through
the Administrative Agent), (a) any obligation of such Lender to make or continue Term SOFR Loans or to convert ABR Loans to Term
SOFR Loans shall be suspended, and (b) if such notice asserts the illegality of such Lender making or maintaining ABR Loans the interest
rate on which is determined by reference to the Term SOFR component of the Alternate Base Rate, the interest rate on which Base Rate Loans
of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Term SOFR
component of the Alternate Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances
giving rise to such determination no longer exist. Upon receipt of such notice, (i) the Borrower shall, upon demand from such Lender
(with a copy to the Administrative Agent), prepay or, if applicable, convert all Term SOFR Loans of such Lender to ABR Loans (the interest
rate on which ABR Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without
reference to the Term SOFR component of the Alternate Base Rate), either on the last day of the Interest Period therefor, if such Lender
may lawfully continue to maintain such Term SOFR Loan to such day, or immediately, if such Lender may not lawfully continue to maintain
such Term SOFR Loan and (ii) if such notice asserts the illegality of such Lender determining or charging interest rates based upon
SOFR, the Administrative Agent shall during the period of such suspension compute the Alternate Base Rate applicable to such Lender without
reference to the Term SOFR component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer
illegal for such Lender to determine or charge interest rates based upon SOFR. Upon any such prepayment or conversion, the Borrower shall
also pay accrued interest on the amount so prepaid or converted, together with any additional amounts required pursuant to Section 2.16.
SECTION 2.15.
Increased Costs.
(a) If
any Change in Law shall:
(i) impose,
modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Lender;
(ii) impose
on any Lender any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender; or
(iii) subject
any Agent or any Lender to any Taxes (other than (A) Indemnified Taxes and (B) Excluded Taxes) on its loans, loan principal,
commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;
and the result of any of the foregoing shall be
to increase the cost to such Agent or such Lender, as applicable, of making, converting to, continuing or maintaining any Loan (or of
maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Agent or such Lender
hereunder (whether of principal, interest or any other amount), then the Borrower will pay to such Agent or such Lender, as the case may
be, such additional amount or amounts as will compensate such Agent or such Lender, as the case may be, for such additional costs incurred
or reduction suffered to the extent notification thereof is delivered to the Borrower as set forth in this Section 2.15.
(b) If
any Lender determines that any Change in Law regarding capital requirements or liquidity has or would have the effect of reducing the
rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this
Agreement or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved
but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company
with respect to capital or liquidity adequacy), then from time to time the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered. Each Lender will promptly
notify the Borrower and the Administrative Agent of any event of which it has knowledge that will entitle such Lender to compensation
pursuant to this Section 2.15; provided that the failure to provide such notification will not affect such Lender’s
rights to compensation hereunder.
(c) A
certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may
be, as specified in Section 2.15(a) or (b) shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt
thereof.
(d) Failure
or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s
right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for
any increased costs or reductions incurred more than 270 days prior to the date that such Lender notifies the Borrower of the Change in
Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided,
further, that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred
to above shall be extended to include the period of retroactive effect thereof.
(e) Notwithstanding
anything contained herein to the contrary, no Lender shall be entitled to any compensation pursuant to this Section unless such Lender
certifies in its reasonable good faith determination that it is imposing such charges or requesting such compensation from borrowers (similarly
situated to the Borrower) under comparable syndicated credit facilities as a matter of general practice and policy.
SECTION 2.16.
Break Funding Payments. In the event of (a) the payment of any principal of any Loan other than on the last day of
an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Loan other than an
ABR Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay
any Loan other than an ABR Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.11(f) and is revoked in accordance therewith), or (d) the assignment of any Term SOFR Loan
other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19,
then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event, but excluding
any loss of margin. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to
this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender
the amount shown as due on any such certificate within ten (10) days after receipt thereof.
SECTION 2.17.
Taxes.
(a) Any
and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and
clear of and without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (determined in
the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by
a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay
the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified
Tax, then the sum payable by the Borrower shall be increased as necessary so that after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums payable under this Section) the Administrative Agent or Lender (as
the case may be) receives an amount equal to the sum it would have received had no such deductions or withholdings been made.
(b) In
addition, the Borrower shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of
the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(c) The
Borrower shall indemnify each Agent and each Lender, within 10 days after written demand therefor, for the full amount of any Indemnified
Taxes payable or paid by, or required to be deducted or withheld from a payment to, such Agent or such Lender, as the case may be, on
or with respect to any payment by or on account of any obligation of the Borrower hereunder or under any other Loan Document (including
Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender,
or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(d) As
soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e) (i) Any
Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative
Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit
such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by
the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested
by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two
sentences, the completion, execution and submission of such documentation (other than such documentation set forth in clauses (ii)(A),
(ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal
or commercial position of such Lender. Notwithstanding the foregoing, in the case of an applicable Borrower or any applicable Loan Party
that, in each case, is not a U.S. Person, the applicable Lender will not be subject to the requirements on this Section 2.17(e)(i) unless
it has received written notice from such Borrower or such other Loan Party advising it of the availability of an exemption or reduction
of withholding Tax under the laws of the jurisdiction in which such Borrower or such other Loan Party is located and containing all applicable
documentation (together, if requested by such Lender, with a certified English translation thereof) required to be completed by such Lender
in order to receive any such exemption or reduction, and such Lender is reasonably satisfied that it is legally able to provide such documentation
to such Borrower or such other Loan Party.
(ii) Without
limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,
(A) any
Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes
a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent),
executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax;
(B) any
Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number
of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following
is applicable:
(1) in
the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect
to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN or W-8BEN-E establishing an exemption from, or
reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect
to any other applicable payments under any Loan Document, IRS Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction
of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(2) executed
copies of IRS Form W-8ECI;
(3) in
the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code,
(x) a certificate substantially in the form of Exhibit F-1 to the effect that such Foreign Lender is not a “bank”
within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning
of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of
the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN or W-8BEN-E; or
(4) to
the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS
Form W-8BEN or W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit F-2 or Exhibit F-3, IRS
Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender
is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such
Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit F-4 on behalf of each such
direct and indirect partner.
(C) Any
Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number
of copies as shall be requested by the recipient), on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of any other
form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. Federal withholding Tax, duly completed,
together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made.
(D) If
a payment made to a Lender under any Loan Document (or a payment made to a Participant pursuant to a participation granted by any Lender)
would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender (or Participant) were to fail to comply with the applicable
reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Lender who granted the participation
only) at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent
(or, in the case of a Participant, the Lender who granted the participation) such documentation prescribed by applicable law (including
as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower
or the Administrative Agent (or, in the case of a Participant, the Lender who granted the participation) as may be necessary for the Borrower
and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s
obligations under FATCA or to determine the amount to deduct and withhold from such payment. Each Lender (or Participant) agrees that
if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form
or certification or promptly notify the Borrower and the Administrative Agent (or, in the case of the Participant, the Lender who granted
the participation) in writing of its legal inability to do so. Solely for purposes of this clause (D), “FATCA” shall
include any amendments made to FATCA after the date of this Agreement.
(f) Each
Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable
to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes
and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply
with the provisions of Section 9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded
Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document,
and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by
the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off
and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent
to the Lender from any other source against any amount due to the Administrative Agent under this Section 2.17(f).
(g) If
any Agent or Lender determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which
it has been indemnified pursuant to this Section 2.17 (including by the payment of additional amounts pursuant to this Section 2.17),
it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with
respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without
interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon
the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Section 2.17(g) (plus
any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required
to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 2.17(g), in
no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 2.17(g) the
payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been
in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification
payments or additional amounts with respect to such Tax had never been paid. This Section 2.17(g) shall not be construed
to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential)
to the indemnifying party or any other Person.
(h) Each
Party’s obligations under this Section shall survive the resignation or replacement of the Administrative Agent or any assignment
of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all
obligations under any Loan Document.
(i) For
purposes of this Section, the term “applicable law” includes FATCA.
SECTION 2.18.
Payments Generally; Pro Rata Treatment; Sharing of Setoffs.
(a) The
Borrower shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal, interest
or fees, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to the time expressly required
hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 2:00 p.m. on
the date when due), in immediately available funds, free and clear of and without condition or deduction for any counterclaim, defense,
recoupment or setoff. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to
have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to
the Administrative Agent at its office for payments from time to time notified in writing to the Borrower, except that payments pursuant
to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto and payments
pursuant to other Loan Documents shall be made to the Persons specified therein. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof, in the same form received.
If any payment under any Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such
extension. All payments under each Loan Document shall be made in dollars.
(b) If
at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest
and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second,
towards payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal
then due to such parties.
(c) If
any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest
on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate principal amount of its Loans
and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate relative amounts of principal of and accrued interest
on their Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest,
and (ii) the provisions of this Section 2.18(c) shall not be construed to apply to any payment made by the Borrower
pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment
of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate
thereof (as to which the provisions of this Section 2.18(c) shall apply). The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of the Borrower in the amount of such participation.
(d) Unless
the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders
the amount due. With respect to any payment that the Administrative Agent makes for the account of the Lenders hereunder as to which the
Administrative Agent determines (which determination shall be conclusive absent manifest error) that any of the following applies (such
payment referred to as the “Rescindable Amount”) and: (i) the Borrower or any other Loan Party has not in fact
made such payment; (ii) the Administrative Agent has made a payment in excess of the amount so paid by the Borrower or any other
Loan Party (whether or not then owed); or (iii) the Administrative Agent has for any reason otherwise erroneously made such payment;
then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the Rescindable Amount so distributed
to such Lender in immediately available funds with interest thereon, for each day from and including the date such amount is distributed
to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. A notice of the Administrative
Agent to any Lender or the Borrower with respect to any amount owing under this Section 2.18(d) shall be conclusive,
absent manifest error.
(e) If
any Lender shall fail to make any payment required to be made by it pursuant to Section 2.18(d) or 9.03(c), then
the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received
by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.19.
Mitigation Obligations; Replacement of Lenders.
(a) If
any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b) If
(i) any Lender requests compensation under Section 2.15, (ii) the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17 or (iii) any Lender
becomes a Defaulting Lender or (iv) any Lender refuses to consent to any amendment or waiver of any Loan Document requested by the
Borrower that requires the consent of all Lenders, and such amendment or waiver is consented to by the Required Lenders, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights
and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in
the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made
pursuant to Section 2.17, such assignment will result in a material reduction in such compensation or payments. A Lender shall
not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation cease to apply.
SECTION 2.20.
Reserves. The establishment or increase of any Realty Reserve or any other reserve against the Borrowing Base Amount based
on the Borrowing Base Factors or other factors that could reasonably be expected to impair the value of, or reflect impediments to the
Administrative Agent’s ability to realize upon, any Term Loan Exclusive Collateral will be limited to the exercise by the Administrative
Agent of its commercially reasonable judgment, and shall be made upon at least two (2) Business Days’ prior written notice
(which may be made by e-mail) to the Borrower (which written notice will include a reasonably detailed description of the reserve being
established or increased); provided that, notwithstanding the foregoing to the contrary, no such prior written notice shall be
required for changes to any reserves (including Realty Reserves) resulting solely by virtue of mathematical calculations of the amount
of the reserves in accordance with the methodology of calculation previously utilized or if an Event of Default is continuing; provided,
further, that, during such two (2) Business Day period, (i) the Borrower agrees that the Borrower shall not be entitled
to borrow ABL DIP Loans or request any issuance or increase of letters of credit in either case under the ABL DIP Loan Agreement that
(A) to the extent the making of any such ABL DIP Loans or the issuance of increase of any such letters of credit would cause the
Total Outstandings (as defined in the ABL DIP Loan Agreement) to exceed the ABL Borrowing Base Amount (determined as if such new or modified
reserves were in effect, including any Term Loan Push-Down Reserve resulting therefrom) or (B) to the extent a Default under Section 6.12
of the ABL DIP Loan Agreement (compliance therewith being determined as if such new or modified reserves were in effect, including the
resulting Term Loan Push-Down Reserve) would immediately result and (ii) the Administrative Agent shall be available to discuss any
such reserve or modification to a reserve with the Borrower, and the Borrower may take any action that may be required so that the event,
condition or matter that is the basis for such reserve or modification no longer exists or exists in a manner that would result in the
establishment of a lower reserve or result in a lesser increase in any existing reserve, in each case, in a manner and to the extent reasonably
satisfactory to the Administrative Agent. Notwithstanding anything to the contrary herein, (x) the amount of any Realty Reserve or
other reserve or change established in connection with the Borrowing Base Factors or other factors that could reasonably be expected to
impair the value of, or reflect impediments to the Administrative Agent’s ability to realize upon, any Term Loan Exclusive Collateral
shall have a reasonable relationship to the event, condition or other matter that is the basis for such reserve (including Realty Reserves)
or such change, (y) no reserves or changes shall be duplicative of reserves or changes already accounted for through eligibility
criteria or advance rates and (z) in no event shall reserves imposed and maintained by the Administrative Agent under this Agreement
with respect to the Borrowing Base Amount be duplicative of reserves imposed and maintained by the ABL DIP Agent against the ABL DIP Borrowing
Base Amount.
SECTION 2.21.
[Reserved].
SECTION 2.22.
Defaulting Lenders.
(a) Defaulting
Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender,
then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:
(i) [Reserved.]
(ii) Defaulting
Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of
such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or otherwise) or received by
the Administrative Agent from a Defaulting Lender pursuant to Section 9.08 shall be applied at such time or times as may be
determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the
Administrative Agent hereunder; second, to the payment of any amounts owing to the Lenders as a result of any judgment of a court
of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; and third, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction.
Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a
Defaulting Lender shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(b) Defaulting
Lender Cure. If the Administrative Agent agrees in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent
will so notify the parties hereto, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will
be made retroactively with respect to payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided,
further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender
to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting
Lender.
SECTION 2.23.
Protective Advances.
(a) Notwithstanding
anything to the contrary contained in this Agreement, the Administrative Agent may, in its sole discretion, elect to make any Protective
Advance. Each Lender shall have the right (but not the obligation) to participate in each Protective Advance (and in any portion of such
Protective Advance in which any other Lender declines to participate) in accordance with its Applicable Percentage of the Term Loans.
The making or sufferance of any such Protective Advance on any one occasion shall not obligate the Administrative Agent to make any Protective
Advance on any other occasion. From and after the date, if any, on which any Lender funds its optional participation in any Protective
Advance hereunder, the Administrative Agent shall promptly distribute to such Lender such Lender’s proportion (based on its Applicable
Percentage) of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of
such Protective Advance. No funding of a Protective Advance or sufferance of a Protective Advance shall constitute a waiver by the Administrative
Agent or the Lenders of any Event of Default caused thereby. In no event shall the Borrower or other Loan Party be deemed a beneficiary
of this Section 2.23 nor authorized to enforce any of its terms. The Required Lenders may, upon not less than five (5) Business
Days prior written notice, revoke the authority of the Administrative Agent to make further Protective Advances.
(b) [Reserved].
(c) Each
Protective Advance shall bear interest at the interest rate then-applicable to Loans that bear interest at the Alternate Base Rate plus
the Applicable Rate. All Protective Advances (including interest thereon) shall be payable by the Borrower on demand by the Administrative
Agent or the Required Lenders. All Protective Advances shall constitute Obligations secured by the Collateral and entitled to all benefits
of the Loan Documents.
ARTICLE III
Representations and Warranties
The Borrower represents and
warrants to the Lenders that:
SECTION 3.01.
Organization; Powers. Each of the Borrower and the Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted
and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.
SECTION 3.02.
Authorization; Enforceability. Subject to entry by the Bankruptcy Court of the Financing Order and any other applicable
order of the Bankruptcy Court, the Transactions to be entered into by each Loan Party are within such Loan Party’s corporate powers
and have been duly authorized by all necessary corporate, limited liability company or similar action and, if required, stockholder, member
or similar action. Upon entry by the Bankruptcy Court of the Financing Order, this Agreement will have been duly executed and delivered
by the Borrower and will constitute, and each other Loan Document to which any Loan Party is to be a party, when executed and delivered
by such Loan Party, will constitute, a legal, valid and binding obligation of the Borrower or such Subsidiary Loan Party (as the case
may be), enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered
in a proceeding in equity or at law.
SECTION 3.03.
Governmental Approvals; No Conflicts. Except for the entry by the Bankruptcy Court of the Financing Order, the Transactions
(a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except
such as have been obtained or made and are in full force and effect and except filings necessary to perfect Liens created under the Loan
Documents, (b) will not violate any applicable law or regulation or any order of any Governmental Authority, except for such violations
that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, (c) will not violate
the charter, by-laws or other organizational documents of the Borrower or any of the Subsidiaries, (d) will not violate or result
in a default under any indenture, agreement or other instrument evidencing or governing Indebtedness or any other material agreement binding
upon the Borrower or any Subsidiary or its assets, or give rise to a right thereunder to require any payment to be made by the Borrower
or any Subsidiary, and (e) will not result in the creation or imposition of any Lien on any asset of the Borrower or any Subsidiary,
except Liens created under the Loan Documents.
SECTION 3.04.
Financial Condition; No Material Adverse Effect; Approved Budget.
(a) The
Borrower has heretofore furnished to the Lenders its consolidated balance sheet and statements of income, stockholders equity and cash
flows as of and for the fiscal year ended March 4, 2023, reported on by Deloitte & Touche LLP. Such financial statements
present fairly the financial position and results of operations and cash flows of the Borrower and its Consolidated Subsidiaries as of
such dates and for such periods in accordance with GAAP.
(b) Except
as disclosed (i) in the financial statements referred to in Section 3.04(a) or the notes thereto, (ii) in the
Borrower’s report or Form 10-K for the fiscal year ended March 4, 2023 or (iii) on Schedule 3.04, after
giving effect to the Transactions, none of the Borrower or the Subsidiaries has, as of the Closing Date, any material contingent liabilities,
unusual long-term loan commitments or unrealized losses.
(c) Since
the Petition Date, other than those events or circumstances customarily resulting from the commencement of the Chapter 11 Case, no event
or condition has occurred that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse
Effect.
(d) The
initial Approved Budget is attached to this Agreement as Annex I, which was furnished to the Administrative Agent on or prior to
the Closing Date, and each subsequent Approved Budget delivered in accordance with Section 5.19, has been (or when delivered,
will be) prepared by the Borrower (after consultation with the Company Financial Advisors) in good faith, with due care and based upon
assumptions the Borrower believed to be reasonable assumptions on the date of delivery of the then applicable Approved Budget. To the
knowledge of the Borrower, as of the Closing Date, no facts exist that, individually or in the aggregate, would result in any material
change to the Approved Budget for the period covered thereby.
SECTION 3.05.
Properties.
(a)
(i) Each
of the Borrower and the Subsidiaries has good and marketable title to, or valid leasehold interests in, all its real and personal property
material to its business, except (A) for minor defects in title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes and (B) as set forth on Schedule 3.05(a)(1).
(ii) Schedule
3.05(a)(2) sets forth (A) the address (including street address and state) of all Owned Real Property and (B) the nature
of use of such Owned Real Property. None of the Owned Real Property is subject to any lease, license, sublease, assignment of leases or
deed of trust, except as otherwise set forth on such Schedule 3.05(a)(2).
(iii) Schedule
3.05(a)(3) sets forth (A) the address (including street address and state) of all Ground-Leased Real Property and (B) the
nature of use of such Ground-Leased Real Property. No default by and Loan Party or any Subsidiary thereof has occurred and is continuing
under any lease pursuant to which a Loan Party leases Ground-Leased Real Property beyond any applicable notice or cure period, the result
of which default would result in termination of such lease, or otherwise permit the ground lessor to terminate such ground lease, except
to the extent set forth on Schedule 3.05(a)(3).
All such real and
personal property are free and clear of all Liens, other than Liens permitted by Section 6.02.
(b) Each
of the Borrower and the Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and the Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
(c) Schedule
3.05(c) sets forth the address of every Store, warehouse or distribution center of the Borrower and its Subsidiaries in which
inventory that is included in the determination of the Borrowing Base Amount or the ABL DIP Borrowing Base Amount is located as of the
Closing Date.
SECTION 3.06.
Litigation and Environmental Matters.
(a) Except
as set forth on Schedule 3.06(a) and the Chapter 11 Case, there are no actions, suits or proceedings by or before any arbitrator
or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of
the Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined,
could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve any of
the Loan Documents or the Transactions.
(b) Except
as set forth on Schedule 3.06(b) and except with respect to any other matters that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of the Subsidiaries (i) has failed
to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental
Law, (ii) has become subject to any Environmental Liability or (iii) has received notice of any claim with respect to any Environmental
Liability.
(c) Except
as set forth on Schedule 3.06(c), and except as could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (i) Hazardous Materials have not been released, discharged or disposed of, on any property currently or, to the knowledge
of any Loan Party, formerly owned or operated by any Loan Party or any Subsidiary thereof and (ii) neither the Borrower nor any of
the Subsidiaries are undertaking any investigation or assessment or remedial or response action relating to any actual or threatened release,
discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any Governmental
Authority or the requirements of any Environmental Law.
SECTION 3.07.
Compliance with Laws and Agreements. Each of the Borrower and the Subsidiaries is in compliance with (a) all laws,
regulations and orders of any Governmental Authority applicable to it or its property (including HIPAA and all other material healthcare
laws and regulations) and (b) all indentures, agreements and other instruments binding upon it or its property or assets, except
where (i) the failure to be so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect or (ii) solely in the case of clause (b), any such non-compliance is subject to the Automatic Stay.
SECTION 3.08.
Investment and Holding Company Status. Neither the Borrower nor any of the Subsidiaries is an “investment company”
as defined in, or subject to regulation under, the Investment Company Act of 1940.
SECTION 3.09.
Taxes. Each of the Borrower and the Subsidiaries has timely filed or caused to be filed all Post-Petition United States
Federal income Tax returns and reports and all other material Post-Petition Tax returns and reports required to have been filed and has
paid or caused to be paid all Post-Petition material Taxes required to have been paid, except (a) where the payment of any such Taxes
is being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside
on its books adequate reserves or (b) to the extent not required to be paid by the Bankruptcy Court. The charges, accruals and reserves
on the books of the Borrower and its Consolidated Subsidiaries in respect of Post-Petition Taxes or charges imposed by a Governmental
Authority are, in the opinion of the Borrower, adequate.
SECTION 3.10.
ERISA. No ERISA Event has occurred or is reasonably expected to occur except where failure to do so, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse Effect.
SECTION 3.11.
Disclosure; Accuracy of Information.
(a) As
of the Closing Date, none of the reports, financial statements, certificates or other information, other than projections and other information
of a general economic or industry-specific nature, furnished by or on behalf of any Loan Party to any Agent or any Lender in connection
with the negotiation of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by
other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not materially misleading; provided that, with respect to
projected financial information, financial estimates, forecasts and other forward-looking information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to be reasonable at the time so furnished.
(b) Each
Borrowing Base Certificate that has been or will be delivered to the Administrative Agent or any Lender is (or when delivered, will be)
complete and correct in all material respects.
SECTION 3.12.
Subsidiaries. Schedule 3.12 sets forth the name of, and the ownership interest of the Borrower in, each Subsidiary
and identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of the Closing Date.
SECTION 3.13.
Insurance. Schedule 3.13 sets forth a description of all general liability, property and casualty insurance maintained
by or on behalf of the Borrower and the Subsidiaries as of the Closing Date and all such policies of insurance are in full force and effect.
The Borrower and the Subsidiaries have insurance, including self-insurance, in such amounts and covering such risks and liabilities as
are in accordance with normal industry practice for similarly situated Persons. The Borrower reasonably believes that the insurance maintained
by or on behalf of the Borrower and the Subsidiaries is adequate.
SECTION 3.14.
Labor Matters. Except as set forth on Schedule 3.14, as of the Closing Date, there are no strikes, lockouts or slowdowns
against the Borrower or any Subsidiary pending or, to the knowledge of the Borrower, threatened which could reasonably be expected to
result in a Material Adverse Effect. Except as set forth on Schedule 3.14, the hours worked by and payments made to employees of
the Borrower and the Subsidiaries have not been in violation in any material respect of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters. Except as set forth on Schedule 3.14, all payments due from the
Borrower or any Subsidiary, or for which any claim may be made against the Borrower or any Subsidiary, on account of wages, have been
paid or accrued as a liability on the books of the Borrower or such Subsidiary. Except as set forth on Schedule 3.14, the consummation
of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective
bargaining agreement to which the Borrower or any Subsidiary is bound.
SECTION 3.15.
Real Estate Leases. Except as set forth on Schedule 3.15, (a) each Real Estate Lease for a Store location, Ground-Leased
Real Property or leased warehouse or distribution center location of a Loan Party is enforceable (except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and
by general principles of equity) against the lessor thereof in accordance with its terms and is in full force and effect and (b) subject
to the applicability of Section 365(d)(3) of the Bankruptcy Code, other than for defaults arising as a result of the commencement
of the Chapter 11 Case, the Loan Parties are not in default of the material terms of any such Real Estate Lease beyond the applicable
notice and cure period set forth therein; provided that the representation set forth in this Section 3.15 shall not
apply to (i) any Real Estate Lease relating to a Store or other real property location subject to a Specified Sale Transaction or
the Specified Store Closing Sale after (x) the completion of such Specified Sale Transaction or the Specified Store Closing Sale
in respect of such location and (y) the effective date of the rejection of the applicable Real Estate Lease or (ii) any Real
Estate Lease rejected in accordance with the procedures set forth in Section 5.23.
SECTION 3.16.
Federal Reserve Regulations.
(a) Neither
the Borrower nor any Subsidiary is engaged principally, or as one of its important activities, in the business of extending credit for
the purpose of buying or carrying Margin Stock.
(b) No
part of the proceeds of any Loan will be used by the Borrower or any Subsidiary, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that entails a violation of the provisions of Regulation T, U or X of the Board.
SECTION 3.17.
Security Interests. Subject to entry of the Financing Order by the Bankruptcy Court, the Collateral Documents are effective
to create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral, and such security interest shall constitute a fully perfected Lien on, and security interest in, all right, title and
interest of the grantors thereunder in the Collateral, with the priority set forth in the Financing Order.
SECTION 3.18.
Use of Proceeds. The Borrower will use the proceeds of the Loans only for the purposes permitted by Section 5.10.
SECTION 3.19.
Anti-Corruption Laws and Sanctions. The Borrower has implemented and maintains in effect policies and procedures reasonably
designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption
Laws and applicable Sanctions. Neither the Borrower nor any of its Subsidiaries nor, to the knowledge of the Borrower or such Subsidiary,
any director, officer, employee or agent of the Borrower or such Subsidiary (a) is a Sanctioned Person or a Sanctioned Entity, (b) has
any assets located in Sanctioned Entities, or (c) derives revenues from investments in, or transactions with Sanctioned Persons or
Sanctioned Entities in violation of applicable Sanctions. The Borrower, its Subsidiaries and their respective officers and employees and,
to the knowledge of the Borrower, its directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all
material respects. None of (i) the Borrower, any Subsidiary or, to the knowledge of the Borrower or such Subsidiary, any of their
respective directors, officers or employees, or (ii) to the knowledge of the Borrower, any agent, affiliate or representative of
the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby,
is a Sanctioned Person or is located in a Sanctioned Country. The Transactions will not violate Anti-Corruption Laws or applicable Sanctions.
SECTION 3.20.
Affected Financial Institutions; Covered Entities. None of the Borrower or any Subsidiary is (a) an Affected Financial
Institution or (b) a Covered Entity.
SECTION 3.21.
Chapter 11 Case Matters.
(a) The
Chapter 11 Case was commenced on the Petition Date in accordance with applicable law and notice of (i) the motion seeking approval
of the Loan Documents and the Interim Financing Order and the Final Financing Order, (ii) the hearing for the entry of the Interim
Financing Order and (iii) the hearing for the entry of the Final Financing Order, in each case, has been or will be given in accordance
with applicable law and the Bankruptcy Rules.
(b) After
the entry of the Interim Financing Order, and pursuant to and to the extent permitted in the Financing Order, the Obligations will constitute
allowed administrative expense claims in the Chapter 11 Case having priority over all administrative expense claims and unsecured claims
against the Loan Parties now existing or hereafter arising, of any kind whatsoever, including all administrative expense claims of the
kind specified in Sections 105, 326, 328, 330, 331, 503(a), 503(b), 506(c) (after entry of the Final Financing Order), 507(a), 507(b),
546(c), 546(d), 726, 1114 or any other provision of the Bankruptcy Code or otherwise, as provided under Section 364(c)(l) of
the Bankruptcy Code, subject to (i) the Carve Out and (ii) the priorities set forth in the Financing Order.
(c) After
the entry of the Interim Financing Order and pursuant to and to the extent permitted in the Financing Order, the Obligations will be secured
by a valid and perfected first priority Lien on all of the Collateral, subject, as to priority only, to (i) the Carve Out, (ii) the
Permitted Prior Liens, (iii) the pari passu Liens securing the ABL DIP Obligations, to the extent permitted by Section 6.02(a)(iii),
and (iv) solely with respect to the Split-Lien Priority Collateral, the Liens securing the Existing Split-Priority Indebtedness,
to the extent permitted by Section 6.02(a)(iv).
(d) The
Interim Financing Order (with respect to the period on and after entry of the Interim Financing Order and prior to the Final Order Entry
Date) and the Final Financing Order (with respect to the period on and after the Final Order Entry Date), as the case may be, once entered,
is in full force and effect and has not been reversed, stayed (whether by statutory stay or otherwise), modified or amended.
(e) Notwithstanding
the provisions of Section 362 of the Bankruptcy Code, and subject to the applicable provisions of the Financing Order, upon the maturity
(whether by acceleration or otherwise) of the Obligations, the Lenders shall be entitled to immediate payment of such Obligations and
to enforce the remedies provided for hereunder, under the other Loan Documents or under applicable law, without further application to
or order by the Bankruptcy Court.
ARTICLE IV
Conditions
SECTION 4.01.
Conditions Precedent to Effectiveness. This Agreement and the obligations of the Lenders to make Loans hereunder shall not
become effective until the date on which the each of the following conditions shall have been satisfied or waived in accordance with Section 9.02,
except to the extent such conditions are subject to Section 5.25:
(a) Loan
Documents. The Administrative Agent (or its counsel) shall have received from each Loan Party and each Lender either (i) a
counterpart of this Agreement, the Security Agreement, the Guarantee Agreement, the Indemnity Subrogation and Contribution Agreement,
and each promissory note (for each Lender requesting a promissory note no later than three (3) Business Days prior to the Closing
Date) signed on behalf of each such party thereto or (ii) written evidence reasonably satisfactory to the Administrative Agent (which
may include facsimile transmission or electronic .pdf copy of a signed signature page of the agreements referred to in the foregoing
clause (i)) that each such party has signed a counterpart of the agreements referred to in the foregoing clause (i) to
which it is a party.
(b) Searches
and Collateral Matters. The Administrative Agent shall have received (i) the results of (x) searches of the Uniform Commercial
Code filings (or equivalent filings) and (y) judgment and tax lien searches, made with respect to the Loan Parties in the states
or other jurisdictions of formation of such Person and with respect to such other locations and names disclosed to the Administrative
Agent, together with copies of the financing statements (or similar documents) disclosed by such searches, and (ii) evidence of the
completion of all other actions, recordings and filings of, or with respect to, any Collateral Document (or evidence that such actions,
recordings or filings will be completed substantially concurrently with the effectiveness of this Agreement and the Interim Financing
Order) that the Administrative Agent may deem necessary in order to satisfy the Collateral and Guarantee Requirement, including the entry
by the Bankruptcy Court of the Interim Financing Order.
(c) Opinions
of Counsel. The Administrative Agent shall have received a customary written opinion (addressed to the Administrative Agent and the
Lenders and dated as of the Closing Date) of Kirkland & Ellis LLP, counsel for the Loan Parties, covering corporate authority
matters and other customary matters consistent with debtor-in-possession credit facility opinions previously delivered by Kirkland &
Ellis LLP to Bank of America. The Borrower, on behalf of itself and each of the Subsidiary Loan Parties, hereby requests such counsel
to deliver such opinion.
(d) Secretary’s
Certificates; Corporate Authority. The Administrative Agent shall have received (i) a copy of the certificate or articles of
incorporation or organization (or similar organizational document), including all amendments thereto, of each Loan Party, certified, if
applicable, as of a recent date by the Secretary of State of the state of its organization, and a certificate as to the good standing
(or local equivalent) of each Loan Party (to the extent available in the relevant jurisdiction) as of a recent date, from such Secretary
of State or similar Governmental Authority; (ii) a certificate of the Secretary or Assistant Secretary of each Loan Party dated the
Closing Date and certifying (A) that attached thereto is a true and complete copy of the by-laws or operating (or limited liability
company) agreement (or similar governing document) of such Loan Party as in effect on the Closing Date and at all times since a date prior
to the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the board of directors (or equivalent governing body) of such Loan Party authorizing the execution, delivery
and performance of the Loan Documents to which such Person is a party, the Transactions and, in the case of the Borrower, the borrowings
hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the
certificate or articles of incorporation or formation of such Loan Party have not been amended since the date of the last amendment thereto
shown on the certificate of good standing furnished pursuant to clause (i) above, and (D) as to the incumbency and specimen
signature of each officer executing any Loan Document or any other document delivered in connection herewith on behalf of such Loan Party;
and (iii) a certificate of another officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing
the certificate pursuant to clause (ii) above.
(e) Officer’s
Closing Certificate. The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower (i) certifying
that the conditions specified in Sections 4.01(l) through (n) have been satisfied and (ii) attaching a true,
correct and complete copy of (A) the Intercompany Inventory Purchase Agreement, as amended, and (B) the ABL DIP Loan Agreement,
and in each case, certifying that such document is in full force and effect.
(f) Approved
Budget. The Administrative Agent shall have received the initial Approved Budget.
(g) Transaction
Funds Flow. The Administrative Agent shall have received a funds flow agreement relating to the Transactions (the “Transaction
Funds Flow”), in form and substance satisfactory to the Administrative Agent, duly executed by the Borrower, the Administrative
Agent and the other parties thereto.
(h) ABL
DIP Intercreditor Agreement and ABL DIP Facility. The Administrative Agent shall have received the ABL DIP Intercreditor Agreement,
duly executed by the parties thereto (and acknowledged by the Loan Parties), and substantially concurrently with the effectiveness of
this Agreement in accordance with this Section 4.01, (i) the ABL DIP Loan Agreement and the other ABL DIP Loan Documents
to be entered into on the date hereof shall be in full force and effect and shall have been approved by the Bankruptcy Court and (ii) the
Net Cash Proceeds of the Loans to be disbursed on the Closing Date as set forth in the Transaction Funds Flow shall be disbursed pursuant
to the Transaction Funds Flow.
(i) Borrowing
Base Certificate; ABL DIP Availability. The Administrative Agent and the Lenders shall have received a Borrowing Base Certificate,
as of October 7, 2023, executed by a Financial Officer of the Borrower, demonstrating that there shall be no less than $375,000,000
of ABL DIP Availability after giving pro forma effect to the Transactions on the Closing Date (including the incurrence of all Term Loans
on the Closing Date and the application of collections on the Closing Date).
(j) Insurance.
The Administrative Agent shall be satisfied with the amount, types and terms and conditions of all insurance maintained by the Borrower
and the Subsidiary Loan Parties (it being acknowledged and agreed by the Administrative Agent that the insurance identified on Schedule
3.13 to this Agreement satisfies the condition in this Section 4.01(j)).
(k) Bankruptcy
Matters.
(i) The
Administrative Agent shall have received duly executed copies of the engagement letters for the Company Financial Advisors, which shall
be on terms and conditions reasonably acceptable to the Administrative Agent; it being agreed that the terms and conditions of the existing
engagements of Alvarez & Marsal North America, LLC and Guggenheim Securities, LLC as Company Financial Advisors are acceptable
to the Administrative Agent.
(ii) (A) The
Bankruptcy Court shall have entered the Interim Financing Order and the Cash Management Order, and (B) neither the Interim Financing
Order nor the Cash Management Order shall have been (1) stayed, vacated or reversed (in whole or in part as of the Closing Date)
or (2) amended or modified other than with the consent of the Administrative Agent.
(iii) (A) The
Administrative Agent shall have received drafts of the “first day” pleadings for the Chapter 11 Case, in each case, in form
and substance reasonably satisfactory to the Administrative Agent not later than a reasonable time in advance of the Petition Date for
the Administrative Agent’s counsel to review and analyze the same; and (B) all motions, orders (including the “first
day” orders) and other documents to be filed with and submitted to the Bankruptcy Court on the Petition Date shall cover such matters,
and be in form and substance, reasonably satisfactory to the Administrative Agent, and the Bankruptcy Court shall have approved and entered
all “first day” orders.
(iv) To
the extent a Restructuring Support Agreement is to be entered into on or prior to the Closing Date, such Restructuring Support Agreement
shall be on terms and conditions acceptable to the Administrative Agent, and duly executed by the parties thereto.
(l) No
Material Adverse Effect. Since the Petition Date, other than those events or circumstances customarily resulting from the commencement
of the Chapter 11 Case, no event or condition has occurred that has had or could be reasonably expected to have, either individually or
in the aggregate, a Material Adverse Effect.
(m) Representations
and Warranties. The representations and warranties of the Loan Parties contained in each Loan Document (including in Article III
of this Agreement) are true and correct in all material respects on and as of the Closing Date, after giving effect to this Agreement
and the consummation of the Transactions taking place on the Closing Date, as though made on and as of the Closing Date (except to the
extent any such representation or warranty expressly relates to an earlier date, in which case such representation and warranty shall
have been true and correct in all material respects as of such earlier date); provided that any representation or warranty that
is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all
respects on such respective dates.
(n) No
Default. No Default or Event of Default exists or has occurred and is continuing on and as of the Closing Date or, after giving effect
to this Agreement and the consummation of the Transactions taking place on the Closing Date, would result from the consummation of the
Transactions taking place on the Closing Date.
(o) Flood
Determination. The Administrative Agent and each Lender shall have received a “Life-of-Loan” Federal Emergency Management
Agency Standard Flood Hazard Determination with respect to all of the real estate listed on Schedule 5 of the Security Agreement.
(p) Borrowing
Request. The Administrative Agent shall have received a Borrowing Request as required by Article II.
(q) Term
Loan Push-Down Reserve. Any Term Loan Push-Down Reserve required to be maintained at such time is being maintained by the ABL DIP
Agent.
(r) USA
Patriot Act; KYC. The Administrative Agent and the Lenders shall have received, at least two (2) Business Days prior to the Closing
Date, all documentation and other information required by US Governmental Authorities under applicable “know your customer”
and anti-money laundering rules and regulations, including the USA Patriot Act and, with respect to any Loan Party that qualifies
as a “legal entity customer” under the Beneficial Ownership Regulation, a Beneficial Ownership Certification with respect
to such Loan Party, that shall have been reasonably requested by the Administrative Agent not less than five (5) Business Days prior
to the Closing Date.
(s) Fees
and Expenses. Substantially concurrently with the effectiveness of this Agreement in accordance with this Section 4.01,
(i) the Administrative Agent, the applicable Arrangers and the Lenders shall have received payment of all fees and other amounts
due and payable on the Closing Date pursuant to the fee letters (including the Fee Letter) executed and delivered by the Borrower in favor
of the Administrative Agent, such Arrangers or the Lenders (or any other their respective affiliates) in respect of the Transactions and
(ii) the Administrative Agent shall have received reimbursement or payment of all out-of-pocket expenses required to be reimbursed
or paid by the Borrower under this Agreement or any other Loan Document and, in the case of this clause (ii), invoiced at least
one (1) day prior to the Closing Date.
Without limiting the generality
of the provisions of the last paragraph of Section 8.03, for purposes of determining compliance with the conditions specified
in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted
or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory
to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying
its objection thereto.
ARTICLE V
Affirmative Covenants
Until the Obligation Payment
Date, the Borrower covenants and agrees with the Lenders that:
SECTION 5.01.
Financial Statements and Other Information. The Borrower will furnish to the Administrative Agent and (except in the case
of Section 5.01(h)) each Lender:
(a) as
soon as available and in any event within 90 days (or such earlier date that is 10 days after the then-current filing deadline
for the Borrower’s Annual Report on Form 10-K) after the end of each fiscal year of the Borrower, its audited consolidated
balance sheet and related statements of income and cash flows as of the end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by Deloitte & Touche LLP or another registered independent public
accounting firm of recognized national standing (without a “going concern” or like qualification or exception and without
any material qualification or exception as to the scope of such audit, except as a result of the Chapter 11 Case) to the effect that such
consolidated financial statements present fairly in all material respects the financial position, results of operations and cash flows
of the Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP;
(b) (i) as
soon as available and in any event within 45 days (or such earlier date that is five days after the then-current filing deadline
for the Borrower’s Quarterly Report on Form 10-Q) after the end of each of the first three fiscal quarters of each fiscal year
of the Borrower, its consolidated balance sheet as of the end of such fiscal quarter and related statements of income for such fiscal
quarter and of income and cash flows for the then elapsed portion of such fiscal year, setting forth in each case in comparative form
the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year
and (ii) as soon as available and in any event within 30 days after the end of each fiscal month of the Borrower, its consolidated
balance sheet as of the end of such fiscal month and related statements of income for such fiscal month and of income and cash flows for
the then elapsed portion of such fiscal year, setting forth in each case in comparative form the figures for the corresponding period
or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year;
(c) concurrently
with any delivery of financial statements under Section 5.01(a) or (b), a Compliance Certificate (i) certifying
as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to
be taken with respect thereto, (ii) stating whether any change in GAAP or in the application thereof has occurred since the date
of the Borrower’s audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying
the effect of such change on the financial statements accompanying such certificate, (iii) setting forth the aggregate sale price
of Eligible Script Lists sold since the most recent date on which the Eligible Script Lists Value was provided to the Lenders and (iv) reporting
and certifying as to such other matters as may be required thereby in connection with any delivery of a Compliance Certificate pursuant
to this Section 5.01(c) (as set forth in Exhibit E);
(d) (i) as
soon as practicable in advance of filing with the Bankruptcy Court or delivering to the Statutory Committee, if any, or to the U.S. Trustee,
as the case may be, the Final Financing Order, all other material proposed orders and pleadings related to (x) the Chapter 11 Case
(all of which must be in form and substance satisfactory to the Administrative Agent), (y) the Obligations and/or (z) any Chapter
11 Case Milestones (all of which must be in form and substance satisfactory to the Administrative Agent) and (ii) substantially simultaneously
with the filing with the Bankruptcy Court or delivering to the Statutory Committee, if any, or to the U.S. Trustee, as the case may be,
monthly operating reports and all other notices, filings, motions, pleadings or other information concerning the financial condition of
the Loan Parties and their Subsidiaries or the Chapter 11 Case that may be filed with the Bankruptcy Court or delivered to the Statutory
Committee, if any, or to the U.S. Trustee;
(e) within
three (3) Business Days after the end of each fiscal month of the Borrower, a certificate of a Financial Officer setting forth in
reasonable detail a description of each disposition of assets not in the ordinary course of business (other than in connection with the
Specified Store Closing Sales) 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 $1,000,000;
(f) by
not later than 5:00 p.m., on the fourth Business Day of each week (but in any event not later than Friday of such week) (commencing with
the first such day of the first full calendar week following the Petition Date), a Borrowing Base Certificate showing the ABL DIP Borrowing
Base Amount, ABL DIP FILO Borrowing Base Amount and the Borrowing Base Amount, in each case, as of the close of business on the last day
of the Borrower’s most recent fiscal week;
(g) no
later than 60 days following the end of each fiscal year of the Borrower (or, in the reasonable discretion of the Administrative
Agent, no later than 30 days after the end of such 60-day period), forecasts for the Borrower and its Consolidated Subsidiaries of
(i) quarterly consolidated balance sheet data and related consolidated statements of income and cash flows for each quarter in the
next succeeding fiscal year, (ii) consolidated balance sheet data and related consolidated statements of income and cash flows for
each of the five fiscal years immediately following such fiscal year (or, if shorter, each fiscal year following such fiscal year through
the Maturity Date) and (iii) month-end ABL DIP Availability for each of the 12 months in the next succeeding fiscal year;
(h) not
later than 30 days prior to the commencement of each fiscal year, a certificate of a Financial Officer setting forth the end dates of
each of the fiscal quarters in such fiscal year;
(i) promptly
after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the
Borrower or any Subsidiary with the SEC, or with any national securities exchange, or distributed by the Borrower to its shareholders
generally, as the case may be;
(j) promptly
following any request therefor, information and documentation reasonably requested by the Administrative Agent or any Lender for purposes
of compliance with applicable “know your customer” and anti-money-laundering rules and regulations, including the USA
PATRIOT Act and the Beneficial Ownership Regulation;
(k) promptly
following any request therefor, such other information regarding the financial condition, business or identity of the Borrower or any
Subsidiary, or compliance with the terms of any Loan Document, as any Agent, at the request of any Lender, may reasonably request, including
any information to be provided pursuant to Section 9.17 (provided that neither the Borrower nor any Subsidiary shall
be required to deliver any information or other documentation pursuant to this Section 5.01(k) that (i) constitutes
trade secrets or proprietary information, (ii) in respect of which disclosure to any Agent or any Lender (or their respective representatives
or contractors) is prohibited by applicable law, court order or regulation or any contractual obligation or (iii) is subject to attorney-client
or similar privilege or constitutes attorney work product; provided, however, that, in the event that any such Person not
provide any document or information in reliance on the foregoing clauses (ii) or (iii), such Person shall provide notice
to the Administrative Agent that such documents or information is being withheld and such Person shall use commercially reasonable efforts
to communicate the applicable documents or information in a way that would not violate the applicable obligation or risk waiver of such
privilege); and
(l) within
two (2) Business Days after the delivery thereof to the applicable recipient, (i) any reports, budgets, or other written information
or (ii) any indications of interest, term sheets or draft purchase or agency agreements (or similar documents) with respect to any
potential Specified Sale Transaction, Elixir Monetization Event or Permitted Real Estate Disposition, in each case; provided to (A) the
ABL DIP Agent or the ABL DIP Lenders (or their respective advisors), whether pursuant to the ABL DIP Loan Documents or otherwise or (B) the
holders of the Existing Split-Priority Indebtedness or their applicable debt representative (or their respective advisors) or any party
to the Restructuring Support Agreement (or their respective advisors), whether pursuant to any agreements evidencing the Existing Split-Priority
Indebtedness, the Restructuring Support Agreement or otherwise.
Documents required to be delivered
pursuant to Section 5.01(a), (b) or (i) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date
(i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the
website address listed on Schedule 9.01 (or such other website as may be identified by the Borrower to the Administrative Agent
from time to time); or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website,
if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored
by the Administrative Agent); provided that: (x) to the extent reasonably required by the Administrative Agent or any Lender
as a result of any regulatory requirements, internal guidelines, compliance requirements or systems limitations, the Borrower shall deliver
paper copies of such documents to the Administrative Agent or any Lender upon its written request to the Borrower to deliver such paper
copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender, and (y) the
Borrower shall notify the Administrative Agent (by facsimile or electronic mail) of the posting of any such documents and, promptly following
the Administrative Agent’s written request therefor, provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain
paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with
any such request by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.
The Borrower hereby acknowledges
that (a) the Administrative Agent and/or the Arrangers may, but shall not be obligated to, make available to the Lenders materials
and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting
the Borrower Materials on IntraLinks, Syndtrak, ClearPar, or a substantially similar electronic transmission system (the “Platform”)
and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material
non-public information with respect to the Borrower or its Subsidiaries, or the respective securities of any of the foregoing, and who
may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower hereby agrees
that it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public
Lenders and that (w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum,
shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials
“PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Arrangers and the Lenders to treat
such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect
to the Borrower or its securities for purposes of United States Federal and state securities laws (provided, however, that
to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 9.12); (y) all
Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public
Side Information;” and (z) the Administrative Agent and the Arranger shall be entitled to treat any Borrower Materials that
are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side
Information.” Notwithstanding the foregoing, the Borrower shall be under no obligation to mark any Borrower Materials “PUBLIC”.
SECTION 5.02.
Notices of Material Events. The Borrower will furnish to the Administrative Agent and each Lender prompt written notice
after any Responsible Officer of the Borrower obtains knowledge of any of the following:
(a) the
occurrence of any Default;
(b) the
filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the
Borrower or any Subsidiary thereof that could reasonably be expected to result in a Material Adverse Effect;
(c) the
occurrence of any one or more ERISA Events that could reasonably be expected to result in a Material Adverse Effect;
(d) (i) any
Lien (other than Permitted Encumbrances and security interests created under any Loan Document or ABL DIP Loan Document) on any material
portion of the Collateral; or (ii) any casualty event relating to a material portion of the Collateral;
(e) the
occurrence of any other event which could reasonably be expected to have a material adverse effect on the security interests created by
the Loan Documents for the benefit of the Loan Parties or on the aggregate value of the Collateral;
(f) any
breach by any party to the Restructuring Support Agreement of its obligations thereunder (or receipt of any written notice sent by (or
on behalf of) a party to the Restructuring Support Agreement claiming any such breach) or any termination of the Restructuring Support
Agreement (or receipt of any written notice sent by (or on behalf of) a party to the Restructuring Support Agreement claiming or threatening
to terminate the Restructuring Support Agreement); and
(g) any
other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under Section 5.02
above shall be accompanied by a statement of a Responsible Officer or other executive officer of the Borrower setting forth the details
of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.03.
Information Regarding Collateral. The Borrower will furnish to the Administrative Agent prompt written notice of any change
(i) in any Loan Party’s corporate name, (ii) in the location of any Loan Party’s jurisdiction of incorporation or
organization, or (iii) in any Loan Party’s form of organization. The Borrower agrees not to effect or permit any change referred
to in the preceding sentence unless all filings have been made (or arrangements have been approved by the Administrative Agent, acting
reasonably, for such filings to be made) under the Uniform Commercial Code or otherwise that are required in order for the Collateral
Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral for
the benefit of the Secured Parties.
SECTION 5.04.
Existence; Conduct of Business. Except as otherwise permitted by this Agreement, the Borrower will continue, and will cause
each Subsidiary to continue, to engage in business of the same general type as now conducted by the Borrower and including any related
or supplemental business. The Borrower will, and will cause each of the Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges, and franchises, in
each case material to the conduct of its business; provided that the foregoing shall not prohibit any merger, consolidation, liquidation,
dissolution or sale of assets permitted under Section 6.03.
SECTION 5.05.
Payment of Obligations. The Borrower will, and will cause each of the Subsidiaries to, pay its Indebtedness and other obligations,
including Tax liabilities, which, if unpaid, could result in a material Lien on any of their properties or assets, before the same shall
become delinquent or in default, except where (a) (i) the validity or amount thereof is being contested in good faith by appropriate
proceedings, and (ii) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance
with GAAP, (b) enforcement of the non-payment thereof is or would be subject to the Automatic Stay, or (c) the failure to make
payment could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.06.
Maintenance of Properties. The Borrower will, and will cause each of the Subsidiaries to, keep and maintain all property
used in the conduct of its business in good working order and condition, ordinary wear and tear excepted, except where failure to do so,
individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.07.
Insurance.
(a) The
Borrower will, and will cause each of the Subsidiaries to, maintain (either in the name of the Borrower or in such Subsidiary’s
own name), with financially sound and reputable insurance companies insurance in such amounts (with no greater risk retention) and against
such risks as are customarily maintained by companies of established repute engaged in the same or similar businesses operating in the
same or similar locations. If at any time the improvements located on any real estate owned by the Borrower or any Subsidiary is located
in an area which is designated (i) a “flood hazard area” in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency (or any successor agency), the Borrower will, or will cause any applicable Subsidiary to, obtain flood insurance in
such total amount as is reasonable and customary for companies engaged in the same or similar business and otherwise comply with the National
Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973, as amended from time to time, or (ii) a “Zone
1” area, the Borrower will, or will cause any applicable Subsidiary to, obtain earthquake insurance in such total amount as is reasonable
and customary for companies engaged in the same or similar business. The Borrower will furnish to the Lenders, upon request of the Agents,
information in reasonable detail as to the insurance so maintained.
(b) The
Borrower will, and will cause each of the Subsidiary Loan Parties to, (i) cause all such policies to be endorsed or otherwise amended
to include a “standard” or “New York” lender’s loss payable endorsement, in form and substance satisfactory
to the Agents, which endorsement shall provide that, if the insurance carrier shall have received written notice from the Administrative
Agent of the occurrence of an Event of Default, the insurance carrier shall pay all proceeds otherwise payable to the Borrower and any
other Loan Party under such policies directly to the Collateral Agent for application to the Obligations (in accordance with the terms
of this Agreement and the ABL DIP Intercreditor Agreement, if applicable); (ii) cause all such policies to provide that none of the
Borrower, the Subsidiary Loan Parties, the Administrative Agent, the Collateral Agent, the Collateral Agent or any other party shall be
a coinsurer thereunder and to contain a “Replacement Cost Endorsement”, without any deduction for depreciation, and such other
provisions as the Agents may reasonably require from time to time to protect their interests; (iii) deliver broker’s certificates
to the Collateral Agent naming it as “additional insured” under the applicable policy; and (iv) cause each such policy
to provide that it shall not be canceled or not renewed by reason of nonpayment of premium upon not less than ten (10) days’
prior written notice thereof by the insurer to the Collateral Agent (giving the Collateral Agent the right to cure defaults in the payment
of premiums) or for any other reason upon not less than thirty (30) days’ prior written notice thereof by the insurer to the Collateral
Agent, in each case with such modifications as the Administrative Agent may approve, acting reasonably.
(c) In
connection with the covenants set forth in this Section, it is agreed that:
(i) none
of the Agents, the Lenders, or their agents or employees shall be liable for any payment of the premiums for such insurance policies or
any loss or damage insured by the insurance policies required to be maintained under this Section, and (A) the Borrower and each
Subsidiary Loan Party shall look solely to their insurance companies or any other parties other than the aforesaid parties for the recovery
of such loss or damage and (B) such insurance companies shall have no rights of subrogation against the Agents, the Lenders or their
agents or employees; provided, however, that if 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 (and, agrees to cause each
Subsidiary Loan Party to waive their respective) right of recovery, if any, against the Agents, the Lenders and their agents and employees;
and
(ii) the
designation of any form, type or amount of insurance coverage by the Agents or the Required Lenders under this Section shall in no
event be deemed a representation, warranty or advice by the Agents or the Lenders that such insurance is adequate for the purposes of
the business of the Borrower and the Subsidiaries or the protection of their properties.
(d) The
Borrower will, and will cause each of the Subsidiaries to, permit any representatives that are designated by the Administrative Agent
to inspect the insurance policies maintained by or on behalf of the Borrower and the Subsidiaries and inspect books and records related
thereto and any properties covered thereby.
SECTION 5.08.
Books and Records; Inspection and Audit Rights; Collateral and Borrowing Base Reviews.
(a) The
Borrower will, and will cause each of the Subsidiaries to, keep proper books of record and account in which full, true and correct entries
are made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of the Subsidiaries
to, permit any representatives designated by any Lender (at such Lender’s expense, unless a Default has occurred and is continuing,
in which case at the Borrower’s expense), and after such Lender has consulted the Administrative Agent with respect thereto, to
visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition
with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.
(b) The
Borrower will, and will cause each of the Subsidiaries to, permit any representatives designated by the Administrative Agent (including
any consultants (including the Lender Group Consultants), field examiners, accountants, lawyers and appraisers retained by the Administrative
Agent) to conduct (i) two field examinations of the Loan Parties and the Collateral in any twelve month period, (ii) two appraisals
of the Borrower’s and the Subsidiaries’ assets of the type (other than Prescription Files) that are included in the Borrowing
Base Amount in any twelve month period, (iii) two appraisals of the Borrower’s and the Subsidiaries’ Prescription Files
in any twelve month period, (iv) one appraisal of the Borrower’s and the Subsidiaries’ Owned Real Property in any twelve
month period and (v) other evaluations and appraisals of the Borrower’s computation of the Borrowing Base Amount and the assets
of the type included in therein, all at such reasonable times and as often as reasonably requested or at any time if a Default shall have
occurred and be continuing. The Borrower shall pay the reasonable fees and expenses of any representatives retained by the Administrative
Agent to conduct any such evaluation or appraisal (it being understood that the third party representatives retained by the Administrative
Agent shall conduct any such evaluation or appraisal on behalf of the Administrative Agent); provided, however, that, notwithstanding
the foregoing, the Administrative Agent may undertake one such additional field examination, one such additional appraisal of Prescription
Files and one such additional appraisal of other assets (if any) of the type included in the Borrowing Base Amount in each fiscal year
of the Borrower, at the expense of the Lenders.
(c) The
Borrower will, and will cause each of the Subsidiaries to, in connection with any computation of the Borrowing Base Amount, maintain Realty
Reserves and such other reserves in effect from time to time (for purposes of computing the Borrowing Base Amount) in respect of Eligible
Accounts Receivable and Eligible Script Lists and make such other adjustments to its parameters for including Eligible Accounts Receivable
and Eligible Script Lists in the Borrowing Base Amount as the Administrative Agent shall require based upon the results of such evaluation
and appraisal in its commercially reasonable judgment to reflect Borrowing Base Factors (it being understood and agreed that the amount
of any such reserve adjustment shall have a reasonable relationship to the event, condition or other matter that is the basis for such
reserve or such adjustment).
(d) The
Borrower will, and will cause each of the Subsidiaries to, at the prior written request of the Administrative Agent from time to time,
and at the expense of the Borrower, cooperate with the Administrative Agent (including any consultants (including the Lender Group Consultants),
field examiners, accountants, lawyers and appraisers retained by the Administrative Agent) to (i) permit to be conducted monthly
“desktop” Collateral appraisals, including reviews of inventory levels and mix and Prescription Files; and (ii) deliver
any information reasonably requested in writing by the Administrative Agent or its representatives in connection with appraisals, collateral
audits, valuations of the Collateral for the purposes of a “stalking horse” bid, other Collateral reporting, or otherwise.
(e) Notwithstanding
the foregoing Section 5.08(b) to the contrary, so long as the ABL DIP Agent is conducting the number of field examinations
and appraisals permitted to be conducted under such Section, and the Administrative Agent and the Lenders have received copies of all
such field examinations and appraisals, the Administrative Agent shall not conduct a field examination and/or an appraisal at the expense
of the Borrower (it being understood that this Section 5.08(e) shall not apply to appraisals of Owned Real Property,
which shall be conducted in the manner contemplated by Section 5.08(b) above).
SECTION 5.09.
Compliance with Laws. Except to the extent non-compliance is permitted under the Bankruptcy Code or subject, as applicable,
to the Automatic Stay, the Borrower will, and will cause each of the Subsidiaries to, comply in all material respects with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its property, including all Environmental Laws, HIPAA and all
other material healthcare laws and regulations, except where the necessity of compliance therewith is contested in good faith by appropriate
proceedings or to the extent that any failures so to comply, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect. The Borrower will implement and maintain in effect and enforce policies and procedures designed to ensure compliance
by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable
Sanctions and the Borrower and its Subsidiaries shall conduct their business in compliance with Anti-Corruption Laws and applicable Sanctions
in all material respects.
SECTION 5.10.
Use of Proceeds.
(a) The
proceeds of the Loans made on the Closing Date will be used by the Borrower strictly in accordance with the Transaction Funds Flow (and
within two (2) Business Days of the Closing Date as set forth therein) and the Approved Budget (subject to Permitted Variance) for
working capital needs and for general corporate purposes, in each case to the extent expressly under applicable law and the Loan Documents,
including (i) to pay fees, expenses, and costs incurred in connection with the Chapter 11 Case in accordance with the Approved Budget,
as well as the payment of any adequate protection payments approved in the Financing Order, and (ii) to fund the Carve Out.
(b) No
proceeds of the Loans will be used to repay, prepay, redeem or otherwise satisfy any Indebtedness of the Borrower or its Subsidiaries,
including any ABL Pre-Petition Senior Obligations, ABL DIP Obligations or Existing Split-Priority Indebtedness.
(c) No
proceeds of the Loans will be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying
any Margin Stock. The Borrower will ensure that no such use of Loan proceeds will entail any violation of Regulation T, U or X of the
Board.
(d) The
Borrower will not request any Borrowing, and the Borrower shall not use, and shall ensure that its Subsidiaries and its or their respective
directors, officers, employees and agents shall not use, the proceeds of any Borrowing (A) in furtherance of an offer, payment, promise
to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption
Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned
Person, or in any Sanctioned Country, or (C) in any manner that would result in the violation of any Sanctions applicable to any
party hereto.
SECTION 5.11.
Additional Subsidiaries. If any additional Domestic Subsidiary (other than any Excluded Subsidiary) is formed or acquired
after the Closing Date, the Borrower will, within five (5) days after such Subsidiary is formed or acquired (or such later date as
the Administrative Agent may agree) (or, with respect to any other Subsidiary, if the Borrower elects to cause such Subsidiary to become
a Subsidiary Loan Party, the Borrower will) notify the Administrative Agent thereof and cause the Collateral and Guarantee Requirement
to be satisfied with respect to such Subsidiary; provided that, the Borrower shall not form or acquire, or permit any Subsidiary
to form or acquire, any additional Subsidiaries after the Closing Date, unless the Administrative Agent shall have provided its prior
written consent to the formation or acquisition of such Subsidiary; and provided, further, that, no Subsidiary of any Loan
Party that is not a Loan Party on the Closing Date shall be joined to this Agreement or any other Loan Document unless and until such
Subsidiary has delivered all documentation and other information required by US Governmental Authorities under applicable “know
your customer” and anti-money laundering rules and regulations, including the USA Patriot Act and, with respect to any such
Subsidiary that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, a Beneficial Ownership Certification
with respect to such Subsidiary, and the Administrative Agent has received confirmation from each Lender that such Lender has received
all such documentation and other information.
SECTION 5.12.
Further Assurances.
(a) The
Borrower will, and will cause each Subsidiary Loan Party to, execute any and all further documents, financing statements, agreements and
instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, deeds of
trust and other documents), which may be required under any applicable law, or which any Agent or the Required Lenders may reasonably
request, to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of the Loan Parties. The Borrower
also agrees to provide to each Agent, from time to time upon request by any of them, evidence reasonably satisfactory to Agents, as to
the perfection and priority of the Liens created or intended to be created by the Collateral Documents in favor of the Collateral Agent
in favor of the Secured Parties.
(b) It
is understood and agreed that the Administrative Agent may file one or more Mortgages in the appropriate real estate records with respect
to any Owned Real Property if (i) an Event of Default has occurred and is continuing or (ii) the Administrative Agent determines
that the filing of any such Mortgage (x) is necessary or advisable under applicable law for perfection and/or the exercise and enforcement
of remedies or (y) would enhance the marketability of the Owned Real Property in connection with the exercise and enforcement of
remedies or otherwise (and regardless of whether the Secured Parties have commenced any exercise of remedies at such time). If at any
time the Administrative Agent so elects to file any such Mortgage in the appropriate real estate records, then the Borrower shall, and
shall cause each Subsidiary Loan Party to, execute any and all further documents, agreements and instruments, and take all such further
actions which may be required under any applicable law, or which any Agent or the Required Lenders may reasonably request, to cause any
such Mortgage to be filed in the appropriate real estate records (including that the Borrower and Subsidiary Loan Parties shall pay all
recording and stamp taxes (including mortgage recording and intangible taxes) payable in connection therewith upon the recording thereof).
Notwithstanding anything in this Agreement or any other Loan Document to the contrary, it is understood and agreed that the Administrative
Agent shall not obtain or file any Mortgage with respect to any Owned Real Property unless and until (i) the Administrative Agent
and each Lender has received a “Life-of-Loan” Federal Emergency Management Agency Standard Flood Hazard Determination with
respect to such property and (ii) if such Owned Real Property is in a “flood hazard area” in any Flood Insurance Rate
Map published by the Federal Emergency Management Agency (or any successor agency), each Lender has received all flood due diligence and
flood insurance compliance with respect thereto, including satisfactory evidence that the Borrower or any Subsidiary, as applicable, has
obtained flood insurance with respect to such Owned Real Property as required by Section 5.07.
SECTION 5.13.
[Reserved].
SECTION 5.14.
Intercompany Transfers. The Borrower shall maintain accounting systems capable of tracing intercompany transfers
of funds and other assets.
SECTION 5.15.
Inventory Purchasing. The Borrower shall, and shall cause each Subsidiary party to the Intercompany Inventory Purchase Agreement
to, at all times maintain in all material respects the vendor inventory purchasing system and the intercompany inventory purchasing system
in accordance in all material respects with the terms of the Intercompany Inventory Purchase Agreement. The Borrower shall cause each
Subsidiary which owns or acquires any Collateral consisting of inventory to be party to the Intercompany Inventory Purchase Agreement.
SECTION 5.16.
Cash Management System. The Borrower will, and will cause each Subsidiary Loan Party to, (a) at all times, maintain
a Cash Management System that complies with the Cash Management Order, Schedule 2 of the Security Agreement and Section 5.17
and (b) comply with each of such Loan Party’s obligations under the Cash Management System, and to use its best efforts to
cause any applicable third party to effectuate the Cash Management System.
SECTION 5.17.
Specified Elixir Assets. To the extent no Elixir Monetization Event is consummated on or prior to February 15, 2024
(provided that this paragraph shall not apply if the 100% of the equity interests or substantially all of the assets of Elixir Insurance
Company are sold as a part of a Specified Elixir Sale prior to such date), or, if earlier, on the date that the Borrower has elected to
no longer pursue an Elixir Monetization Event, the Borrower shall promptly (and in any event, within ten (10) Business Days (or such
longer period as the Administrative Agent may agree in writing)) thereafter cause the intercompany payable(s) outstanding at such
time and owing by Elixir Insurance Company to one or more Loan Parties to be satisfied by causing a portion of the Specified Elixir Assets
to be purchased by, or otherwise transferred to, one or more Loan Parties in an amount equal to the fair market value (as determined by
the Borrower in good faith) of such Specified Elixir Assets equal to the amount of such intercompany payable(s) at the time of such
purchase or transfer (or otherwise on terms satisfactory to the Administrative Agent); provided that such purchase or transfer may be
limited to the extent required by applicable law, including insurance laws, regulations or orders applicable to Elixir Insurance Company.
SECTION 5.18.
Company Financial Advisors and Lender Group Consultants.
(a) The
Borrower will, and will cause each Subsidiary to,
(i) Timely
file motions with the Bankruptcy Court seeking to continue to retain the Company Financial Advisors that have been retained as of the
Petition Date.
(ii) Continue
to retain the Company Financial Advisors. The retention of each Company Financial Advisor shall be on terms and conditions (including
as to scope of engagement) reasonably satisfactory to the Administrative Agent; provided that the Administrative Agent hereby confirms
that, as of the Closing Date, the existing engagements of Alvarez & Marsal North America, LLC and Guggenheim Securities, LLC
as Financial Advisors satisfy the applicable requirements set forth in this Section 5.18(a).
(iii) Fully
cooperate with the Company Financial Advisors, including in connection with the preparation of the Approved Budget and other reporting
or information required to be delivered pursuant to this Agreement or that is requested by the Administrative Agent or any Lender from
time to time. The Loan Parties hereby (i) authorize the Administrative Agent (or its agents or advisors, including any Lender Group
Consultant) to communicate directly with the Company Financial Advisors regarding any and all matters related to the Loan Parties and
their Affiliates, including all financial reports and projections developed, reviewed or verified by any of the Company Financial Advisors
and all additional information, reports and statements requested by the Administrative Agent and (ii) authorize and direct each Company
Financial Advisor to provide the Administrative Agent (or their respective agents or advisors, including any Lender Group Consultant)
with copies of reports and other information or materials prepared or reviewed by any such Company Financial Advisor as the Administrative
Agent may request in writing.
(b) The
Borrower, on behalf of itself and each other Loan Party, hereby acknowledges that the Administrative Agent shall be permitted to engage
outside consultants and advisors (each, a “Lender Group Consultant” and collectively, the “Lender Group Consultants”)
to provide advice, analysis and reporting for the sole benefit of the Administrative Agent and the other Secured Parties, which as of
the Closing Date includes BRG. Each Loan Party covenants and agrees that (i) such Loan Party shall, and shall cause each Company
Financial Advisor to, cooperate with any Lender Group Consultant, (ii) all costs and expenses of any such Lender Group Consultant
shall be paid or reimbursed by the Borrower in accordance with Section 9.03, and (iii) all reports, determinations and
other written and verbal information provided by any Lender Group Consultant shall be confidential and no Loan Party shall be entitled
to have access to any such reports, determinations or information.
(c) From
time to time upon reasonable written request of the Administrative Agent, the Borrower will, and will cause each Subsidiary to, conduct
and cause the applicable Company Financial Advisor (or other appropriate Loan Party professionals) to participate, together with financial
officers of the Loan Parties, in bi-weekly (i.e., every two weeks) status calls with the Administrative Agent and the Lenders to discuss
(i) the Approved Budget or the Approved Budget Variance Reports and/or any other reports or information delivered pursuant to this
Agreement, (ii) the financial operations and performance of the Loan Parties’ business, (iii) the status of any Specified
Sale Transaction, the Specified Store Closing Sale, and/or the achievement of any Chapter 11 Case Milestones and/or (iv) such other
matters relating to the Loan Parties and their business and operations as the Administrative Agent (or its agents, consultants or advisors)
shall reasonably request.
SECTION 5.19.
Approved Budget.
(a) The
Borrower will, and will cause each Subsidiary to, use the Loans under this Agreement and the other Loan Documents and use “cash
collateral” (as defined in Section 363(a) of the Bankruptcy Code) solely in accordance with the Approved Budget (subject
to the Permitted Variance) and Section 5.10.
(b) The
Approved Budget may be updated, modified or supplemented from time to time by the Borrower with the prior written consent of the Administrative
Agent, and shall be updated from time to time upon the written request of the Administrative Agent; provided that, on or before
the fourth Business Day of the first week (but in any event not later than Friday of such week) of each successive four-week period following
the Closing Date (i.e., commencing with the week of November 12, 2023), the Borrower shall submit an updated budget for the next
successive thirteen-week period (it being understood that, unless otherwise agreed by the Administrative Agent, each updated budget shall
only add projections for periods not previously covered by any Approved Budget and shall not modify any prior periods). Each such updated,
modified or supplemented budget shall be approved by, and in form and substance satisfactory to, the Administrative Agent (which approval
or disapproval, as the case may be, the Administrative Agent shall provide in writing within five (5) Business Days after receipt
of such updated budget (together with all supporting documentation and information that has been reasonably requested by the Administrative
Agent)) and no such updated, modified or supplemented budget shall be effective until so approved in writing and once so approved shall
be deemed an Approved Budget; provided that, in the event the Administrative Agent and the Borrower cannot (while acting in good
faith) agree as to an updated, modified or supplemented budget, such disagreement shall give rise to an Event of Default hereunder once
the period covered by the most recent Approved Budget has terminated. Each Approved Budget delivered to the Administrative Agent shall
be accompanied by such supporting documentation as reasonably requested by the Administrative Agent. Each Approved Budget shall be prepared
in good faith, with due care, and based upon assumptions which the Borrower believes to be reasonable.
(c) The
Loan Parties shall perform in accordance with the Approved Budget, subject to the following to be tested commencing with the fourth calendar
week following the Closing Date (i.e., commencing with the Cumulative Four-Week Period ending on November 11, 2023) (the “Permitted
Variance”): (i) the Actual Cash Receipts for any Cumulative Four-Week Period shall not be less than 85.0% of the Budgeted
Cash Receipts for such Cumulative Four-Week Period, as set forth in the most recent Approved Budget and (ii) the Actual Operating
Disbursement Amounts for any Cumulative Four-Week Period shall not be greater than 112.5% of the Budgeted Operating Disbursement Amounts
for such Cumulative Four-Week Period, as set forth in the most recent Approved Budget.
(d) The
Borrower shall deliver to the Administrative Agent, by not later than 5:00 p.m., on the fourth Business Day of each week (but in any event
not later than Friday of such week) (commencing with the first such day of the first full calendar week following the entry of the Interim
Financing Order), a Compliance Certificate, which shall, among other things, (i) certify as to whether a Default or Event of Default
(including with respect to the covenants contained in Section 5.19(c)) has occurred and, if a Default or Event of Default
has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) attach an Approved
Budget Variance Report, and (iii) on a bi-weekly basis (i.e., every two weeks), include a report listing the Stores subject to Specified
Store Closing Sales and the other remaining Stores and confirming the lease assumption/rejection status and lease expiration date of each
Store location and each leased warehouse or distribution center location of any Loan Party.
(e) The
Administrative Agent and the Lenders (i) may assume that the Loan Parties will comply with the Approved Budget, (ii) shall have
no duty to monitor such compliance and (iii) shall not be obligated to pay (directly or indirectly from proceeds of Collateral) any
unpaid expenses incurred or authorized to be incurred pursuant to any Approved Budget. The line items in the Approved Budget for payment
of the Obligations, including any expenses payable pursuant to Section 9.05, are estimates only, and the Loan Parties shall
remain obligated to pay any and all Obligations in accordance with the terms of the Loan Documents and the Financing Order regardless
of whether such amounts exceed such estimates. Nothing in any Approved Budget (including any estimates of a loan balance in excess of
borrowing base restrictions) shall constitute an amendment or other modification of any Loan Document or any of the borrowing base restrictions
or other lending limits set forth therein.
SECTION 5.20.
Chapter 11 Case Milestones.
(a) The
Borrower will, and will cause each of the Subsidiaries to, comply with each of the covenants contained on Schedule 5.20 (collectively,
the “Chapter 11 Case Milestones”), upon the terms and at the times provided for therein; provided that the Administrative
Agent may, in its sole and absolute discretion, extend any of the Chapter 11 Case Milestones for a period of not more than ten (10) Business
Days in the aggregate for any particular Chapter 11 Case Milestone or for such longer period with the consent of the Required Lenders
(in their sole and absolute discretion).
(b) The
Borrower will, and will cause each of the Subsidiaries to, provide the Administrative Agent with a status report and such other updated
information relating to the achievement of any Chapter 11 Case Milestone as may be reasonably requested by the Administrative Agent or
the Required Lenders, in form and substance reasonably acceptable to the Administrative Agent.
SECTION 5.21.
Compliance with Bankruptcy Court Orders, Bankruptcy Code, Etc. The Borrower will, and will cause each Subsidiary to, comply
with (a) the Financing Order and the Cash Management Order, in all respects, and shall not seek any reversal, vacatur, stay, amendment
or modification thereto, without the prior written consent of the Administrative Agent, (b) all other orders of the Bankruptcy Court,
and (c) all other obligations and responsibilities as debtors-in-possession under the Bankruptcy Code and the Bankruptcy Rules.
SECTION 5.22.
Real Estate Leases. The Borrower will, and will cause each of the Subsidiaries to:
(a) subject
to Section 365(d)(3) of the Bankruptcy Code, (i) make all required payments under all Real Estate Leases for Store locations,
Ground-Leased Real Property and leased warehouse or distribution center locations of any Loan Party as required by the Bankruptcy Court
and otherwise in accordance with the Approved Budget (subject to the Permitted Variance) and (ii) perform, in all material respects,
and within any applicable notice or cure period set forth therein, all other obligations in respect of all Real Estate Leases for Store
locations and leased warehouse or distribution center locations of any Loan Party as required by the Bankruptcy Court;
(b) keep
all Real Estate Leases for Store locations, Ground-Leased Real Property and leased warehouse or distribution centers of any Loan Party
in full force and effect and not allow such Real Estate Leases to lapse or be terminated or any rights to renew such Real Estate Leases
to be forfeited or cancelled; and
(c) promptly
notify the Administrative Agent of any material default beyond the applicable notice and cure period set forth in such Real Estate Lease
by any party thereto with respect to Real Estate Leases for Store locations, Ground-Leased Real Property and leased warehouse or distribution
center locations of any Loan Party, and reasonably cooperate with the Administrative Agent in all respects to cure any such material default
then continuing;
in
each case of clause (a), (b) and (c), other than with respect to (i) any Real Estate Lease relating
to a Store or other real property location subject to a Specified Sale Transaction or the Specified Store Closing Sale after (x) the
completion of such Specified Sale Transaction or the Specified Store Closing Sale at such location and (y) the effective date of
the rejection of the applicable Real Estate Lease or (ii) any Real Estate Lease rejected in accordance with the procedures set forth
in Section 5.23.
SECTION 5.23.
Assumption and Rejection of Contracts and Real Estate Leases. The Borrower will, and will cause each of the Subsidiaries
to, provide to the Administrative Agent and to BRG (or any other Lender Group Consultant designated by the Administrative Agent in writing
to the Borrower as a required recipient of such notice) prior written notice of the filing any motion or notice to assume or reject, pursuant
to Section 365 of the Bankruptcy Code, any of the Borrower’s or any Subsidiary’s material contracts or any of the Borrower’s
or any Subsidiary’s Real Estate Leases for Store locations, Ground-Leased Real Property or leased warehouse or distribution center
locations, in each case, as soon as reasonably practicable and at least three (3) Business Days (or such shorter notice reasonably
acceptable to the Administrative Agent) prior to the filing of any such motion, and no such contract or Real Estate Lease shall be assumed
or rejected, if such assumption or rejection could be expected to adversely impact the Term Loan Exclusive Collateral, the ABL Priority
Collateral or any Lien of the Collateral Agent thereon (in the determination of the Administrative Agent, in its commercially reasonable
judgment, which determination is delivered to the Borrower in writing not later than two (2) Business Days after receipt of the Borrower’s
applicable notice delivered pursuant to this Section 5.23; provided, however, it is understood and agreed that it would adversely
impact the Term Loan Exclusive Collateral to reject any Real Estate Lease that governs Ground-Leased Real Property and, accordingly, the
Borrower shall not file any motion to reject any such Real Estate Lease without the prior written consent of the Administrative Agent,
such consent not to be unreasonably withheld, conditioned or delayed). Notwithstanding the foregoing, this Section 5.23 shall not
apply with respect to any Real Estate Leases for any Specified Stores.
SECTION 5.24.
Term Loan Exclusive Collateral Accounts. Within ten (10) days after the Petition Date (as may be extended by the Administrative
Agent in writing in its sole discretion), the Borrower or a Subsidiary Loan Party shall have established (or shall have designated) one
or more Term Loan Exclusive Collateral Accounts. To the extent Net Cash Proceeds in respect of any Term Loan Exclusive Collateral have
not been delivered directly to the Administrative Agent to be applied to the Obligations in the manner set forth in Section 2.11,
the Borrower shall, and shall cause each Subsidiary Loan Party to, deposit any Net Cash Proceeds of Term Loan Exclusive Collateral (and
not any other funds) received by the Borrower or such Subsidiary Loan Party in the Term Loan Exclusive Collateral Accounts and, thereafter,
shall use such Net Cash Proceeds to repay the Obligations as required by Section 2.11. For the avoidance of doubt, none of
the Term Loan Exclusive Collateral Accounts or any funds therein shall (i) constitute ABL Priority Collateral or (ii) be subject
to any Liens other than the Liens of the Collateral Agent securing the Obligations.
SECTION 5.25.
Post-Closing Obligations. The Borrower shall, and shall cause each Subsidiary to,
complete each of the post-closing obligations and/or deliver to the Administrative Agent or the Collateral Agent, as applicable, each
of the documents, instruments, agreements and information listed on Schedule 5.25, on or before the date set forth for each such
item on Schedule 5.25 (as may be extended by such Agent in writing in its sole discretion),
each of which shall be completed or provided in form and substance reasonably satisfactory to such Agent.
ARTICLE VI
Negative Covenants
Until the Obligation Payment
Date, the Borrower covenants and agrees with the Lenders that:
SECTION 6.01.
Indebtedness; Certain Equity Securities.
(a) The
Borrower will not, and will not permit any Subsidiary to, create, issue, incur, assume or permit to exist any Indebtedness, any Attributable
Debt in respect of any Sale and Leaseback Transaction, any Disqualified Preferred Stock except:
(i) Indebtedness
under the Loan Documents;
(ii) the
ABL Pre-Petition Senior Obligations;
(iii) Indebtedness
of the Borrower and the Subsidiaries in respect of intercompany Investments permitted under Section 6.04; provided
that any such Indebtedness owing by the Borrower or a Subsidiary Loan Party to a Subsidiary that is not a Loan Party is subordinated to
the Obligations pursuant to terms substantially the same as those forth on Annex I of the ABL Pre-Petition Credit Agreement; provided,
further, that any references therein to the ABL Pre-Petition Senior Obligations, the ABL Pre-Petition Credit Agreement or the ABL Pre-Petition
Agent shall refer to the Obligations hereunder, this Agreement and the Administrative Agent, respectively;
(iv) the
Existing Non-Guaranteed Indebtedness, to the extent subject to the terms of the Financing Order;
(v) Indebtedness
incurred pursuant to the ABL DIP Loan Documents so long as the aggregate principal amount of such Indebtedness does not exceed $3,575,000,000;
(vi) Indebtedness
of Elixir Insurance Company incurred in connection with any Elixir Monetization Event; provided that (A) no Loan Party shall
be an obligor (or subject to any right of recourse) in respect of such Indebtedness, (B) the Net Cash Proceeds of any such Elixir
Monetization Event are received by a Loan Party, and (C) the existence of such Indebtedness (or the rights conferred to the holders
of such Indebtedness) could not reasonably be expected to impair or limit the ability of the Loan Parties to the consummate a Specified
Elixir Sale or the anticipated consideration to be received by the Loan Parties in connection with a Specified Elixir Sale;
(vii) the
Existing Split-Priority Indebtedness, to the extent subject to the terms of the Financing Order;
(viii) to
the extent constituting Indebtedness, any superpriority administrative claims granted pursuant to the Financing Order;
(ix) [reserved];
(x) [reserved];
(xi) endorsements
of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;
(xii) Indebtedness
consisting of Capital Lease Obligations (not otherwise permitted pursuant to this Section 6.01(a)), to the extent (A) existing
on the Closing Date and set forth on Schedule 6.01(a)(xii) and (B) permitted to be incurred by the ABL Pre-Petition Credit
Agreement as of the date of incurrence thereof, but not any extensions, renewals, refinancings or replacements of such Indebtedness;
(xiii) [reserved];
(xiv) Indebtedness
(including Capital Lease Obligations) and Attributable Debt in respect of Sale and Leaseback Transactions, equipment financing or leasing
in the ordinary course of business of the Borrower and the Subsidiaries consistent with past practices;
(xv) [reserved];
(xvi) [reserved];
(xvii) [reserved];
(xviii) [reserved];
(xix) Guarantees
of any Indebtedness under clauses (i), (ii) and (vii) of this Section 6.01(a); and
(xx) to
the extent constituting Indebtedness, the Carve Out.
Notwithstanding any
of the foregoing, and except for the Carve Out, no Indebtedness permitted under this Section 6.01(a) shall be permitted
to have an administrative expense claim status under the Bankruptcy Code senior to or pari passu with the superpriority administrative
expense claims of the Agents and the Lenders as set forth herein and in the Financing Order, other than, (A) solely with respect
to the Split-Lien Priority Collateral, the Existing Split-Priority Indebtedness permitted under Section 6.01(a)(vii) and
(B) solely with respect to ABL Priority Collateral and Split-Lien Priority Collateral, and solely to the extent such administrative
expense claim status ranks pari passu with the superpriority administrative expense claims of the Agents and the Lenders, the Indebtedness
incurred pursuant to the ABL DIP Loan Documents permitted under Section 6.01(a)(v) and the ABL Pre-Petition Senior Obligations
permitted under Section 6.01(a)(ii).
(b) The
Borrower will not, nor will it permit any Subsidiary to, issue any Preferred Stock or other preferred Equity Interests, other than (i) Qualified
Preferred Stock of the Borrower, (ii) Disqualified Preferred Stock of the Borrower permitted by Section 6.01(a), (iii) [reserved],
(iv) Preferred Stock of a Subsidiary issued to the Borrower or a Subsidiary Loan Party or, in the case of a Subsidiary that is not
a Subsidiary Loan Party, to another Subsidiary that is not a Subsidiary Loan Party, and (v) other preferred Equity Interests issued
and outstanding on the Closing Date and set forth on Schedule 6.01(b).
SECTION 6.02.
Liens.
(a) The
Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now
owned or hereafter acquired by it, except:
(i) Liens
created under the Loan Documents to secure the Obligations;
(ii) Permitted
Encumbrances;
(iii) Liens
created (x) under the ABL DIP Loan Documents to secure Indebtedness permitted under Section 6.01(a)(v) and the other
ABL DIP Obligations, to the extent such Liens are subject to the ABL DIP Intercreditor Agreement and the Financing Order and (y) under
the ABL Pre-Petition Senior Loan Documents to secure Indebtedness permitted under Section 6.01(a)(ii), to the extent such
Liens are subject to the Financing Order;
(iv) Liens
on ABL Priority Collateral and Split-Lien Priority Collateral securing the Existing Split-Priority Indebtedness, to the extent such Liens
are subject to the Financing Order;
(v) any
Lien securing Indebtedness of a Subsidiary owing to a Subsidiary Loan Party;
(vi) any
Lien securing Attributable Debt and other payment obligations under leases incurred in connection with a Sale and Leaseback Transaction
permitted pursuant to Section 6.01(a)(xiv) and Section 6.06; provided that such Liens attach only
to the equipment, real property or other assets subject to such Sale and Leaseback Transaction;
(vii) adequate
protection Liens and superpriority administrative claims, in each case, granted pursuant to the Financing Order;
(viii) Liens
securing Indebtedness incurred in connection with any Elixir Monetization Event permitted pursuant to Section 6.01(a)(vi) or
otherwise attaching to the Specified Elixir Assets in connection with an Elixir Monetization Event; provided that (A) such
Liens do not attach to any assets of a Loan Party or any assets of a Subsidiary (other than the Specified Elixir Assets) and (B) the
existence of such Liens or related Indebtedness (or the rights conferred to the holders of such Liens or Indebtedness) could not reasonably
be expected to impair or limit the ability of the Loan Parties to consummate a Specified Elixir Sale or the anticipated consideration
to be received by the Loan Parties in connection with a Specified Elixir Sale;
(ix) any
Lien on equipment securing Indebtedness incurred to finance such equipment pursuant to Section 6.01(a)(xiv);
(x) Permitted
Prior Liens;
(xi) Liens
existing on the Petition Date and identified on Schedule 6.02(a)(xi); provided that such Liens do not attach to any
property other than the property identified on Schedule 6.02(a)(xi) and secure only the ABL Pre-Petition Senior Obligations
they secured on the Petition Date;
(xii) Liens
relating to or in connection with any Plan or Multiemployer Plan; provided that any such Lien is at all times unperfected and perfection
of any such Lien is subject to the Automatic Stay;
(xiii) Liens
(other than Liens securing Indebtedness) that are not otherwise permitted under any other provision of this Section 6.02(a); provided,
that (A) the aggregate amount of liabilities secured by such Liens shall not at any time exceed $5,000,000 and (B) such Liens
shall not attach to any ABL Priority Collateral or Term Loan Exclusive Collateral, unless such Lien shall rank junior to the Liens of
(x) the ABL DIP Agent and the Collateral Agent on such ABL Priority Collateral and (y) the Collateral Agent on such Term Loan
Exclusive Collateral; and
(xiv) put
and call agreements, described on Schedule 6.02(a)(xi), with respect to Equity Interests acquired or created prior to the Petition
Date in connection with Joint Ventures existing as of the Petition Date; provided that the exercise of any such put or call agreements
against the Borrower or its Subsidiaries is subject to the Automatic Stay.
(b) [Reserved].
(c) Notwithstanding
anything to the contrary herein, Liens permitted under Section 6.02(a) (other than (i) solely with respect to Split-Lien
Priority Collateral, the Liens permitted under Section 6.02(a)(iv), and (ii) solely with respect to ABL Priority Collateral
and solely to the extent such Liens rank pari passu with the Liens securing the Obligations, the Liens permitted under Section 6.02(a)(iii)(x)),
shall at all times be junior and subordinate to the Liens under the Collateral Documents (including the Financing Order) securing the
Obligations.
(d) The
prohibition provided for in this Section 6.02 specifically includes any effort by any Loan Party or Subsidiary, any Statutory
Committee or any other party in interest in the Chapter 11 Case to prime or create pari passu to any claims, Liens or interests
of the Agents and the Lenders, other than as set forth in the Financing Order and irrespective of whether such claims, Liens or interests
may be “adequately protected.”
SECTION 6.03.
Fundamental Changes. Without limiting the restrictions on Business Acquisitions set forth in Section 6.04, the
Borrower will not, and will not permit any Subsidiary Loan Party to, merge into or consolidate with any other Person, or permit any other
Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving
effect thereto (in the case of clause (iii) below) no Default shall have occurred and be continuing (i) any Person may
merge or consolidate into the Borrower in a transaction in which the Borrower is the surviving corporation, provided that, if such
other Person is a Subsidiary Loan Party, it shall have no assets that constitute Collateral, (ii) any Person may merge into or consolidate
with a Subsidiary Loan Party in a transaction in which such Subsidiary Loan Party is the surviving Person or the surviving Person is or
concurrently with such merger or consolidation becomes a Subsidiary Loan Party, (iii) any Subsidiary Loan Party may liquidate or
dissolve with the prior written consent of the Administrative Agent; provided that at the time of such liquidation or dissolution,
no assets of such Subsidiary Loan Party shall be included in the determination of the Borrowing Base Amount, (iv) any Asset Sale
of the Equity Interests in any Subsidiary Loan Party that is permitted under Section 6.05 may be effected through a merger,
consolidation, liquidation or dissolution of such Subsidiary Loan Party; provided that (A) any such merger involving a Person
that is not a wholly-owned Subsidiary immediately prior to such merger shall not be permitted to engage in such merger unless also permitted
by Section 6.04 and (B) the Borrower and the applicable Subsidiary Loan Party shall comply with the provisions of Section 5.11
with respect to any Subsidiary acquired pursuant to this Section 6.03, to the extent applicable.
SECTION 6.04.
Investments, Loans, Advances, Guarantees and Acquisitions. The Borrower will not, and will not permit any of the Subsidiaries
to, make any Investment except:
(a) Permitted
Investments;
(b) Investments
of the Borrower and the Subsidiary Loan Parties and set forth on Schedule 6.04;
(c) Guarantees
of Indebtedness and/or Guarantees consisting of Indebtedness permitted by Section 6.01;
(d) Investments
received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and
suppliers, in each case in the ordinary course of business;
(e) Investments
by the Borrower or any Subsidiary Loan Party in Subsidiary Loan Parties; provided that the Borrower and such Subsidiary Loan Party,
as the case may be, shall comply with the applicable provisions of Section 5.11 with respect to any newly formed Subsidiary;
(f) Investments
consisting of non-cash consideration received in connection with any Asset Sale permitted by Section 6.05(a) (other than
with respect to any sale of inventory at retail in the ordinary course of business);
(g) Investments
by the Subsidiaries in the Borrower; provided that the proceeds of such Investments are used for a purpose set forth in Section 5.10;
(h) [reserved];
(i) usual
and customary loans and advances to employees, officers and directors of the Borrower and the Subsidiaries, in the ordinary course of
business; provided that aggregate amount of such loans and advances outstanding at any time shall not exceed $1,000,000;
(j) [reserved];
(k) to
the extent contemplated by the Approved Budget, Investments in charitable foundations organized under Section 501(c) of
the Code in an amount not to exceed $3,000,000 in the aggregate in any calendar year; provided that amounts raised from customers or vendors
for purposes of making Investments in charitable foundations organized under Section 501(c) of the Code shall not be subject
to such calendar year cap;
(l) any
Investment consisting of a Hedging Agreement permitted by Section 6.07;
(m) [reserved];
(n) [reserved];
(o) [reserved];
(p) Investments
by any Subsidiary that is not a Subsidiary Loan Party in any other Subsidiary that is not a Subsidiary Loan Party or in any Subsidiary
Loan Party;
(q) Investments
held by any Person that becomes a Subsidiary at the time such Person becomes a Subsidiary; provided that no such Investment was
made in contemplation of such Person becoming a Subsidiary;
(r) [reserved];
(s) Investments
consisting of Guarantees by the Borrower or any of its Subsidiaries of obligations of the Borrower or any of its Subsidiaries to the extent
not constituting Indebtedness and incurred in the ordinary course of business; and
(t) as
contemplated by the Approved Budget, Investments in the form of intercompany loans to Elixir Insurance Company consistent with past
practices.
Notwithstanding anything to the contrary set forth
in this Agreement or in any other Loan Document, no Investment shall be made by any Loan Party to any other Loan Party or third party
in the form of real estate or Equity Interests.
SECTION 6.05.
Asset Sales. The Borrower will not, and will not permit any of the Subsidiaries to, conduct any Asset Sale, including any
sale of any Equity Interest owned by it, nor will the Borrower permit any of the Subsidiaries to issue any additional Equity Interest
in such Subsidiary, except:
(a) Permitted
Dispositions;
(b) any
Specified Sale Transaction;
(c) any
disposition of the Specified Elixir Assets on market terms (as determined by the Borrower in good faith), in connection with any Elixir
Monetization Event provided that (i) no Loan Party shall be an obligor (or subject to any right of recourse or repurchase obligation)
pursuant to the terms of such disposition and (ii) the Net Cash Proceeds of any such disposition are received by a Loan Party;
(d) any
issuance of Equity Interests of any Subsidiary by such Subsidiary to the Borrower or any other Subsidiary Loan Party;
(e) any
Sale and Leaseback Transaction permitted pursuant to Section 6.01(a)(xiv) and Section 6.06;
(f) the
Specified Store Closing Sales; and
(g) any
Permitted Real Estate Disposition;
provided
that, (i) with respect to sales, transfers or dispositions under Section 6.05(b), (e), (f) or (g),
100% of the consideration therefor shall consist of cash, (ii) prior to any sales, transfers or dispositions or series of related
sales, transfers or dispositions of assets of the type included in the determination of the Borrowing Base Amount, ABL DIP Borrowing Base
Amount or the ABL DIP FILO Borrowing Base Amount (other than pursuant to the Specified Store Closing Sales) or of the Equity Interests
of any Subsidiary Loan Party with assets of the type included in the determination of the Borrowing Base Amount, ABL DIP Borrowing Base
Amount or the ABL DIP FILO Borrowing Base Amount, in each case pursuant to this Section 6.05 and with a value in excess of
$5,000,000, (1) the Borrower shall have delivered to Administrative Agent at least two (2) Business Days prior to the consummation
of any such sales, transfers or dispositions, an updated Borrowing Base Certificate giving pro forma effect to such sales, transfers or
dispositions (as if such sales, transfers or dispositions occurred on such date of delivery of the Borrowing Base Certificate) and demonstrating
that, on a pro forma basis, the Credit Extension Conditions under (and as defined in) the ABL DIP Loan Agreement shall be satisfied after
giving effect to such transaction (which Credit Extension Conditions shall, for the avoidance of doubt, give effect to any Term Loan Push-Down
Reserve required at such time after giving pro forma effect to such sales, transfers or dispositions) and (2) no Event of Default
shall have occurred and be continuing and (iii) any sale, transfer or disposition of Intellectual Property pursuant to this Section 6.05
that is reasonably necessary in connection with the enforcement of any rights or remedies with respect to Term Loan Exclusive Collateral,
shall be made expressly subject to the Term Loan License and any purchaser, assignee or other transferee thereof shall agree in writing
(pursuant to an agreement in form and substance reasonably satisfactory to Collateral Agent) to be bound by the Term Loan License. Other
than in connection with a Specified Elixir Sale or an Elixir Monetization Event, neither the Loan Parties nor any of their Subsidiaries
(including Elixir Insurance Company) shall be permitted to conduct any Asset Sale consisting of the Specified Elixir Assets or any other
assets of Elixir Insurance Company, without the prior written consent of the Administrative Agent.
SECTION 6.06.
Sale and Leaseback Transactions. The Borrower will not, and will not permit any of the Subsidiaries to, enter into any Sale
and Leaseback Transaction, except (a) to the extent constituting a Permitted Real Estate Disposition and (b) for Sale and Leaseback
Transactions permitted by and effected pursuant to Section 6.01(a)(xiv) which do not result in Liens other than Liens
permitted pursuant to Section 6.02(a).
SECTION 6.07.
Hedging Agreements. The Borrower will not, and will not permit any of the Subsidiaries to, incur or at any time be liable
with respect to any monetary liability under any Hedging Agreements, unless such Hedging Agreements (a) are entered into for bona
fide hedging purposes of the Borrower, any Subsidiary Loan Party (as determined in good faith by a member of the senior management of
the Borrower at the time such Hedging Agreement is entered into), (b) correspond in terms of notional amount, duration, currencies
and interest rates, as applicable, to Indebtedness of the Borrower or any Subsidiary Loan Party permitted to be incurred under Section 6.01(a) or
to business transactions of the Borrower and the Subsidiary Loan Parties on customary terms entered into in the ordinary course of business
and (c) do not exceed an amount equal to the aggregate principal amount of the Obligations.
SECTION 6.08.
Restricted Payments; Certain Payments of Indebtedness.
(a) The
Borrower will not, nor will it permit any Subsidiary to, declare or make, directly or indirectly, any Restricted Payment, except (i) the
Borrower may declare and pay dividends with respect to its common stock or Qualified Preferred Stock payable solely in additional shares
of its common stock or Qualified Preferred Stock, and (ii) Subsidiaries (other than those directly owned, in whole or part, by the
Borrower) may declare and pay dividends ratably with respect to their common stock.
(b) The
Borrower will not, nor will it permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any Indebtedness (which, for purposes of this Section 6.08(b),
shall include any Indebtedness incurred pursuant to Section 6.01(a)), except:
(i) payments
or prepayments of Indebtedness under the Loan Documents;
(ii) to
the extent contemplated by the Approved Budget and permitted by the Financing Order, regularly scheduled interest and principal payments
as and when due in respect of any Indebtedness permitted pursuant to clause (xii) or (xiv) of Section 6.01(a);
(iii) payments
and refinancing of the ABL Pre-Petition Senior Obligations in accordance with the Financing Order;
(iv) (A) to
the extent paid with proceeds of Split-Lien Priority Collateral or to the extent contemplated by the Approved Budget, regularly scheduled
interest payments as and when due in respect of the Existing Split-Priority Indebtedness and (B) solely to the extent and in the
manner permitted by the Financing Order (and, if applicable, as otherwise contemplated pursuant to Section 2.11(d)), payments
of the Existing Split-Priority Indebtedness with certain Net Cash Proceeds of a Specified Elixir Sale or Elixir Monetization Event;
(v) (A) regularly
scheduled interest payments as and when due in respect of the ABL DIP Loans and (B) payments or prepayments of the ABL DIP Loans;
and
(vi) repurchases,
exchanges, redemptions or prepayments of Indebtedness for consideration consisting solely of common stock of the Borrower or Qualified
Preferred Stock or with Net Cash Proceeds from the substantially contemporaneous issuance of common stock or Qualified Preferred Stock
of the Borrower;
provided,
however, no payments permitted under the foregoing clauses (iii), (iv) and (v) shall be permitted using the Loans or
any proceeds of Term Loan Exclusive Collateral.
SECTION 6.09.
Transactions with Affiliates. The Borrower will not, and will not permit any Subsidiary to, directly or indirectly, sell,
lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except:
(a) payment
of compensation to directors, officers, and employees of the Borrower or any of the Subsidiaries in the ordinary course of business;
(b) except
pursuant to the Approved Budget, without the express prior written consent of the Administrative Agent and an order of the Bankruptcy
Court (including the Financing Order) after notice and hearing, payments in respect of transactions required to be made pursuant to agreements
or arrangements in effect on the Closing Date and set forth on Schedule 6.09;
(c) transactions
involving the acquisition of inventory in the ordinary course of business; provided that (i) the terms of such transaction
are (A) set forth in writing, (B) in the best interests of the Borrower or such Subsidiary, as the case may be, and (C) no
less favorable to the Borrower or such Subsidiary, as the case may be, than those that could be obtained in a comparable arm’s length
transaction with a Person that is not an Affiliate of the Borrower or a Subsidiary and, (ii) if such transaction involves aggregate
payments or value in excess of $7,500,000, the board of directors of the Borrower (including a majority of the disinterested members of
the board of directors) approves such transaction and, in its good faith judgment, believes that such transaction complies with clauses
(i)(B) and (C) of this Section 6.09(c);
(d) [reserved];
(e) [reserved];
and
(f) any
other Affiliate transaction not otherwise permitted pursuant to this Section 6.09; provided that (i) the terms
of such transaction are (A) set forth in writing, (B) in the best interests of the Borrower or such Subsidiary, as the case
may be, and (C) no less favorable to the Borrower or such Subsidiary, as the case may be, than those that could be obtained in a
comparable arm’s length transaction with a Person that is not an Affiliate of the Borrower or a Subsidiary, (ii) if such transaction
involves aggregate payments or value in excess of $2,500,000 in any consecutive 12-month period, the board of directors of the Borrower
(including a majority of the disinterested members of the board of directors) approves such transaction and, in its good faith judgment,
believes that such transaction complies with clauses (i)(B) and (C) of this Section 6.09(f) and
(iii) if such transaction involves aggregate payments or value in excess of $5,000,000 in any consecutive 12-month period, the Borrower
obtains a written opinion from an independent investment banking firm or appraiser of national prominence, as appropriate, to the effect
that such transaction is fair to the Borrower or such Subsidiary, as the case may be, from a financial point of view.
SECTION 6.10.
Restrictive Agreements.
(a) The
Borrower will not, and will not permit any Subsidiary to, enter into any agreement which imposes a limitation on the incurrence by the
Borrower and the Subsidiaries of Liens that (i) would restrict any Subsidiary from granting Liens on any of its assets (including
assets in addition to the then-existing Collateral, to secure the Obligations) or (ii) is more restrictive, taken as a whole, than
the limitation on Liens set forth in this Agreement except, in each case, (A)(s), the Loan Documents, (t) the ABL Pre-Petition Loan
Documents, (u) the ABL DIP Loan Documents, (v) agreements with respect to Indebtedness secured by Liens permitted by Section 6.02(a) restricting
the ability to transfer or grant Liens on the assets securing such Indebtedness, (w) [reserved], (x) [reserved] and (y) agreements
with respect to unsecured Indebtedness governed by indentures or by credit agreements or note purchase agreements with institutional investors
permitted by this Agreement containing terms that are not materially more restrictive, taken as a whole, than those of this Agreement,
(B) customary restrictions contained in purchase and sale agreements limiting the transfer of or granting of Liens on 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 Closing Date and not entered into in contemplation
of the transactions effected on such date hereunder, (F) the Existing Non-Guaranteed Indentures, in each case when originally entered
into, (G) any restriction existing under agreements relating to assets acquired by the Borrower or a Subsidiary in a transaction
permitted hereby; provided that such agreements existed at the time of such acquisition, were not put into place in anticipation
of such acquisition and are not applicable to any assets other than assets so acquired, (H) [reserved] and (I) customary restrictions
and conditions contained in agreements relating to an Elixir Monetization Event permitted hereunder; provided that such restrictions
and conditions apply only to the Specified Elixir Assets that are subject to such Elixir Monetization Event.
(b) The
Borrower will not, and will not permit any Subsidiary to, enter into or suffer to exist or become effective any consensual encumbrance
or restriction on the ability of any Subsidiary to (i) make Restricted Payments in respect of any Equity Interests of such Subsidiary
held by, or pay any Indebtedness owed to, the Borrower or any other Subsidiary, (ii) make any Investment in the Borrower or any other
Subsidiary, or (iii) transfer any of its assets to the Borrower or any other Subsidiary, except for (A) any restriction existing
under (1) the Loan Documents, the ABL DIP Loan Documents, the ABL Pre-Petition Senior Loan Documents or, to the extent applicable,
existing on the Closing Date under the Existing Non-Guaranteed Indentures, (2) [reserved] above or (3) agreements with respect
to Indebtedness permitted by this Agreement containing provisions described in clauses (i), (ii) and (iii) above
that are not materially more restrictive, taken as a whole, than those of this Agreement, (B) customary non-assignment provisions
in leases and other contracts entered into in the ordinary course of business, (C) as required by applicable law, (D) customary
restrictions contained in purchase and sale agreements limiting the transfer of the subject assets pending closing, (E) any restriction
existing under agreements relating to assets acquired by the Borrower or a Subsidiary in a transaction permitted hereby; provided
that such agreements existed at the time of such acquisition, were not put into place in anticipation of such acquisition and are not
applicable to any assets other than assets so acquired, (F) [reserved], (G) agreements with respect to Indebtedness secured
by Liens permitted by Section 6.02 that restrict the ability to transfer the assets securing such Indebtedness and (H) customary
restrictions and conditions contained in agreements relating to any Elixir Monetization Event permitted hereunder, provided that
such restrictions and conditions apply only to the Specified Elixir Assets that are subject to such Elixir Monetization Event
SECTION 6.11.
Amendment of Material Documents.
(a) The
Borrower will not, nor will it permit any Subsidiary to, amend or modify (or to waive any of its rights under) any ABL DIP Loan Documents
without the consent of the Administrative Agent, other than (i) modifications to such ABL DIP Loan Documents in connection with the
joinder of additional Subsidiary Loan Parties effected by the execution of supplements to such ABL DIP Loan Documents, (ii) modifications
to such ABL DIP Loan Documents conforming to corresponding modifications to the Loan Documents, or (iii) amendments or modifications
of, or waivers under, such ABL DIP Loan Documents that are not materially adverse to the Secured Parties.
(b) The
Borrower will not, and will not permit any Subsidiary party to the Intercompany Inventory Purchase Agreement to, amend, terminate, or
otherwise modify the Intercompany Inventory Purchase Agreement in any manner materially adverse to the Lenders or their interests under
the Loan Documents without the prior written approval of the Administrative Agent; provided, however, that the foregoing
shall not limit the Borrower’s responsibilities pursuant to Section 3.2 of the Intercompany Inventory Purchase Agreement.
(c) After
the effective date of the Restructuring Support Agreement, the Borrower will not, and will not permit any Subsidiary party to the Restructuring
Support Agreement to, amend or otherwise modify the Restructuring Support Agreement in a manner adverse to the interests of the Agents
or the Lenders (in their capacities as such) or their interests under the Loan Documents without the prior written approval of the Administrative
Agent. It is acknowledged and agreed that the Administrative Agent shall have consent or consultation rights, as applicable, with
respect to the matters described in Exhibit B to the Restructuring Support Agreement, in each case, as in effect on the effective
date of the Restructuring Support Agreement.
SECTION 6.12.
Minimum ABL DIP Availability. The Borrower will not permit, at any time, ABL DIP Availability to be less than $200,000,000.
SECTION 6.13.
Restrictions on Asset Holdings by the Borrower. The Borrower will not at any time:
(a) make
or hold any Investments other than investments in the Equity Interests of the Subsidiaries (including any distributions or other assets
received in respect thereto), intercompany advances to Subsidiaries and Investments permitted by Section 6.13(c) and
Investments consisting of any unsecured Guarantee of any obligations of any Subsidiary in the ordinary course of business (to the extent
such obligations of such Subsidiary are not prohibited from being incurred hereunder);
(b) acquire
or hold any Stores, other capital assets, inventory or accounts receivable, other than (x) any real estate which the Borrower holds
only as lessor and which is leased and operated by another Person and (y) de minimis business assets maintained in the ordinary course
of business;
(c) acquire
or hold cash, cash equivalents, Permitted Investments or balances in bank accounts, other than such amounts as are reasonably anticipated
(at the time so acquired or held) to be utilized within five (5) Business Days for any purpose not prohibited under this Agreement;
or
(d) grant
any Lien on any of its assets to secure any Indebtedness (other than, to the extent otherwise permitted to be granted pursuant to Section 6.02,
(i) the Obligations, (ii) the ABL DIP Obligations, (iii) the Existing Split-Priority Indebtedness, (iv) the ABL Pre-Petition
Senior Obligations and (v) as otherwise contemplated by the Financing Order).
SECTION 6.14.
Corporate Separateness. The Borrower will, and will cause each Subsidiary to, take all necessary steps to maintain its identity
as a separate legal entity from other Persons and to make it manifest to third parties that it is an entity with assets and liabilities
distinct from those of each of other Person.
SECTION 6.15.
Cash Management. At any time any Loans are outstanding, the Borrower shall not, and shall not permit any Subsidiary to,
permit cash on hand (including the proceeds of any Loans) in an aggregate amount in excess of $5,000,000 to accumulate and be maintained
in the Deposit Accounts of the Borrower and its Subsidiaries, provided, that, for purposes hereof, “cash on hand”
shall exclude the following: (i) “store” cash, cash in transit between stores and local Deposit Accounts and cash receipts
from sales in the process of inter-account transfers, in each case as a result of the ordinary course operations of the Loan Parties,
(ii) cash necessary for the Loan Parties and their Subsidiaries to satisfy the current liabilities incurred by such Loan Parties
and their Subsidiaries in the ordinary course of their businesses and without acceleration of the satisfaction of such current liabilities
within the next three (3) Business Days, (iii) cash proceeds of Term Loan Exclusive Collateral held in any Term Loan Exclusive
Collateral Account prior to application thereof in accordance with the Loan Documents or the Financing Order, (iv) cash held in any
Deposit Account relating to any Elixir Monetization Event, (v) cash collateral required to cash collateralize letters of credit in
accordance with the applicable loan or letter of credit documents, and (vi) cash held in any Deposit Account of the Loan Parties
which is under the sole dominion and control of the Collateral Agent if the Collateral Agent has exclusive rights of withdrawal with respect
to such Deposit Accounts.
SECTION 6.16.
Use of Proceeds. The Borrower shall not, and shall not permit any Subsidiary to, (x) use the proceeds of any Loan,
or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, to fund any activities
of or business with any Sanctioned Person or Sanctioned Entity that, at the time of such funding, is the target of Sanctions, or in any
other manner that will result in a violation by any party hereto (including any Person participating in the transaction, whether as Lender,
an Arranger, Administrative Agent or otherwise) of Sanctions or (y) use the proceeds of any Loan in furtherance of an offer, payment,
promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Sanctions
or Anti-Corruption Laws or an any other manner that would violate any Anti-Corruption Laws.
SECTION 6.17.
Intellectual Property Collateral. The Borrower shall not, and shall not permit any Subsidiary to, designate any Intellectual
Property that constitutes Collateral as Split-Lien Priority Collateral pursuant to the definition of “Collateral Designation Date”
(as defined in the ABL DIP Loan Agreement) or otherwise at any time prior to the Obligation Payment Date (it being acknowledged and agreed
that, for the purposes of “Collateral Designation Date” (as defined in the ABL DIP Loan Agreement), an Event of Default under
the ABL Pre-Petition Credit Agreement shall be deemed to be continuing as a result of the commencement of the Chapter 11 Case).
SECTION 6.18.
Elixir Monetization Event. Without limiting any of the other provisions of this Article VI applicable to Elixir Monetization Events,
Elixir Insurance Company shall not consummate or participate in any Elixir Monetization Event, unless the Net Cash Proceeds of such Elixir
Monetization Event are received by a Loan Party and are applied in accordance with Section 2.11(d).
ARTICLE VII
Events of Default
SECTION 7.01.
Events of Default.
If any of the following events (each, an “Event
of Default”) shall occur:
(a) the
Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof
or at the date fixed for prepayment thereof;
(b) the
Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of two (2) Business Days;
(c) any
representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary Loan Party in or in connection with any
Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder,
shall prove to have been incorrect in any material respect when made or deemed made;
(d) the
Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.01 (Financial Statements
and Other Information), 5.02 (Notices of Material Events), 5.08 (Books and Records; Inspection and Audit Rights; Collateral
and Borrowing Base Reviews), 5.10 (Use of Proceeds), 5.11 (Additional Subsidiaries), 5.12(b) (Further Assurances),
5.15 (Inventory Purchasing), 5.16 (Cash Management System), 5.17 (Specified Elixir Assets), 5.18 (Company
Financial Advisors and Lender Group Consultants), 5.19 (Approved Budget), 5.20 (Chapter 11 Case Milestones), 5.21
(Compliance with Bankruptcy Court Orders, Bankruptcy Code, Etc.), 5.22 (Real Estate Leases), 5.23 (Assumption and Rejection
of Contracts and Real Estate Leases), 5.24 (Term Loan Exclusive Collateral Accounts), 5.25 (Post-Closing Obligations), or
in Article VI;
(e) any
Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified
in clause (a), (b) or (d) of this Article), and such failure shall continue unremedied for a period of
20 days after the earlier of (x) notice thereof has been delivered by the Administrative Agent to the Borrower (which notice shall
be given promptly at the request of the Required Lenders) and (y) any Financial Officer or senior executive Responsible Officer of
any Loan Party obtaining actual knowledge of such failure;
(f) the
Borrower or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness (other than any Material Indebtedness the payment or enforcement of which is subject to the Automatic Stay), including
any obligation to reimburse letter of credit obligations or to post cash collateral with respect thereto, when and as the same shall become
due and payable or within any applicable grace period;
(g) except
for the filing of the Chapter 11 Case, any event or condition occurs that results in any Material Indebtedness (other than any Material
Indebtedness the payment or enforcement of which is subject to the Automatic Stay) becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any such Material Indebtedness
or any trustee or agent on its or their behalf to cause any such Material Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to
any such Material Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such
Material Indebtedness; provided, further that this clause (g) shall not apply to any mandatory repurchase offer
or other mandatory repurchase, redemption or prepayment obligation of the Borrower that may arise under Convertible Debt to the extent
that the making of such mandatory repurchase by the Borrower is otherwise permitted under this Agreement;
(h) the
ABL DIP Agent shall fail to maintain any Term Loan Push-Down Reserve against the ABL DIP Borrowing Base Amount as and when required pursuant
to the ABL DIP Intercreditor Agreement;
(i) the
Borrower or any Subsidiary shall, except as contemplated by the applicable bid procedures, (i) fail to comply, in any material respect,
with the terms of any binding agreement for a Specified Sale Transaction or any of the documents or agreements executed in connection
therewith, (ii) fail to consummate a Specified Sale Transaction in accordance with the terms of the definitive documents or agreements
executed in connection therewith and the related Bankruptcy Court orders authorizing such Specified Sale Transaction (in each case of
clauses (i) and (ii), (x) without any waiver or amendment to such documents, agreements or Bankruptcy Court orders,
unless consented to in writing by the Administrative Agent and (y) other than as a result of a consummation of a higher or better
transaction as contemplated by the applicable bid procedures), or (iii) take any action which would reasonably be expected to result
in a decrease in proceeds from a Specified Sale Transaction of more than $15,000,000 or to adversely affect the Borrower’s or any
Subsidiary’s ability to comply with the terms of any definitive documents or agreements executed in connection with such Specified
Sale Transaction;
(j) after
entry into the Restructuring Support Agreement, the Restructuring Support Agreement is terminated for any reason and, at the time of or
following such termination, any holder of the Existing Split-Priority Indebtedness shall be granted relief from the Automatic Stay to
proceed to execute upon or enforce their Lien on any Collateral;
(k) one
or more judgments for the payment of money in an aggregate amount in excess of $20,000,000 (other than any such judgment or judgments
the payment or enforcement of which is subject to the Automatic Stay) shall be rendered against the Borrower, any Subsidiary or any combination
thereof (to the extent not covered by insurance as to which the insurer has been notified of such judgment or order and has not denied
coverage) and the same shall not have been satisfied, vacated, discharged or stayed or bonded pending an appeal for a period of 30 consecutive
days, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Subsidiary
to enforce any such judgment;
(l) any
ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, has resulted or could reasonably
be expected to result in a Material Adverse Effect;
(m) (i) any
Lien purported to be created under any Collateral Document shall cease to be a valid and perfected Lien on any material portion of the
Collateral, with the priority required by the Loan Documents or the Borrower or any Subsidiary shall so assert in writing, except as a
result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents, or (ii) any
Loan Document shall become invalid, or the Borrower or any Subsidiary shall so assert in writing;
(n) a
Change in Control shall occur;
(o) any
Subsidiary Loan Party shall amend or revoke any instruction in the Government Lockbox Account Agreement to any Government Lockbox Account
Bank in respect of a Government Lockbox Account unless (i) the Administrative Agent shall have given its prior written consent or
(ii) the Government Lockbox Account is then under the control of any other Person pursuant to Section 5.16; or
(p) the
occurrence of any of the following in the Chapter 11 Case:
(i) the
bringing of a motion, taking of any action or the filing of any plan of reorganization or disclosure statement attendant thereto by any
of the Borrower or any Subsidiary, or any Person claiming by or through the Borrower or any Subsidiary, in the Chapter 11 Case: (A) to
obtain additional financing under Section 364(c) or Section 364(d) of the Bankruptcy Code not otherwise permitted
pursuant to the Loan Documents, (B) to grant any Lien (other than Liens expressly permitted by Section 6.02) upon or
affecting any Collateral, (C) except as provided in the Financing Order, to use “cash collateral” (as defined in Section 363(a) of
the Bankruptcy Code) under Section 363(c) of the Bankruptcy Code without the prior written consent of the Administrative Agent,
(D) that seeks to prohibit the Collateral Agent from credit bidding on any or all of the Loan Parties’ assets during the pendency
of the Chapter 11 Case, or (E) any other action or actions materially adverse to the Administrative Agent, the Collateral Agent and
the Lenders or their rights and remedies under the Loan Documents or their interest in the Collateral, other than, in the case of clause
(C) or (D) above, in connection with the indefeasible payment in full in cash (including pursuant to a refinancing)
of the Obligations;
(ii) (A) the
filing of any plan of reorganization or disclosure statement attendant thereto, or any direct or indirect amendment to such plan or disclosure
statement, by any Loan Party that does not propose to indefeasibly repay in full in cash the Obligations on the effective date of such
plan, or by any other Person, in each case, without the prior written consent of the Administrative Agent, or the Borrower or any Subsidiary
shall seek, support or fail to contest in good faith the filing or confirmation of any such plan of reorganization or entry of any such
order, (B) the entry of any order terminating any Loan Party’s exclusive right to file a plan of reorganization, or (C) the
expiration of any Loan Party’s exclusive right to file a plan of reorganization;
(iii) the
entry of an order in the Chapter 11 Case confirming a plan of reorganization that (A) is not acceptable to the Administrative Agent
in its discretion (it being understood that a plan of reorganization that provides for the indefeasible repayment in full in cash of the
Obligations on the effective date thereto shall be deemed to be acceptable to the Administrative Agent) or (B) does not contain a
provision for the indefeasible repayment in full in cash of all of the Obligations on or before the effective date of such plan or plans
or reorganization;
(iv) (A) the
entry of an order amending, supplementing, staying, vacating or otherwise modifying the Loan Documents (including the Financing Order)
or the Cash Management Order, in each case, without the prior written consent of the Administrative Agent, (B) the filing of a motion
for reconsideration with respect to the Financing Order or the Cash Management Order, or (C) the Financing Order or the Cash Management
Order shall otherwise not be in full force and effect;
(v) except
as set forth in any motions which have been delivered to and are acceptable to the Administrative Agent or as set forth in the Financing
Order, the payment of, or application for authority to pay, any Pre-Petition claim without the prior written consent of the Administrative
Agent;
(vi) the
allowance of any claim or claims under Section 506(c) of the Bankruptcy Code or otherwise against the Administrative Agent,
the Collateral Agent any Lender or any of the Collateral;
(vii) the
filing of a motion by the Borrower or any of its Affiliates for, or the entry or any order directing, the appointment of an interim or
permanent trustee in the Chapter 11 Case or the appointment of a trustee, receiver, or an examiner in the Chapter 11 Case with expanded
powers to operate or manage the financial affairs, the business, or reorganization of the Loan Parties;
(viii) other
than pursuant to any Specified Sale Transaction or with the prior written consent of the Administrative Agent, the sale of all or substantially
all of the Loan Parties’ assets either through a sale under Section 363 of the Bankruptcy Code, through a confirmed plan of
reorganization in the Chapter 11 Case or otherwise that does not result in the indefeasible repayment in full in cash of the Obligations
upon the closing of such sale or initial payment of the purchase price or effectiveness of such plan of reorganization;
(ix) the
dismissal of the Chapter 11 Case, or the conversion of the Chapter 11 Case from one under Chapter 11 of the Bankruptcy Code to one under
Chapter 7 of the Bankruptcy Code or the Borrower or any Subsidiary shall file a motion or other pleading seeking the dismissal of the
Chapter 11 Case under Section 1112 of the Bankruptcy Code or otherwise or the conversion of the Chapter 11 Case from one under Chapter
11 of the Bankruptcy Code to one under Chapter 7 of the Bankruptcy Code;
(x) the
filing of a motion by the Borrower or any Subsidiary or any of their respective Affiliates seeking, or the Bankruptcy Court shall enter
an order granting, relief from or modifying the Automatic Stay (A) to allow any creditor (other than the Administrative Agent or
the Collateral Agent) to execute upon or enforce a Lien on any Collateral having a value in excess of $20,000,000 (or any Term Loan Exclusive
Collateral or any ABL Priority Collateral having, in the aggregate, a value in excess of $5,000,000), (B) approving any settlement
or other stipulation not approved by the Administrative Agent with any secured creditor of any Loan Party providing for payments as adequate
protection or otherwise to such secured creditor, or (C) with respect to any Lien of or the granting of any Lien on any Collateral
to any federal, state or local environmental or regulatory agency or authority, which in either case involves a claim of $20,000,000;
(xi) the
commencement of a suit or an action against the Administrative Agent, the Collateral Agent or any Lender (in each case, in their capacities
as such) by or on behalf of the Borrower or any Subsidiary (or their estates) or by their Affiliates;
(xii) the
entry of an order in the Chapter 11 Case avoiding or permitting recovery of any portion of the payments made on account of the Obligations;
(xiii) other
than with the prior written consent of the Administrative Agent, the filing of a motion by any Loan Party or any of their respective Affiliates
seeking, or the Bankruptcy Court shall enter an order granting, a change in venue with respect to the Chapter 11 Case;
(xiv) other
than in respect of the Carve Out or the Obligations, or as otherwise permitted under the Loan Documents (including the Financing Order),
the existence (or the entry of) any order of the Bankruptcy Court authorizing (x) any claims or charges, entitled to superpriority
administrative expense claim status in the Chapter 11 Case having a priority that is pari passu with or senior to the claims of
the Administrative Agent, the Collateral and the Lenders under the Loan Documents or (y) any Lien on the Collateral having a priority
that is pari passu with or senior to the Liens of the Collateral Agent securing the Obligations;
(xv) [reserved];
or
(xvi) the
Borrower or any Subsidiary shall take any action in support of any matter prohibited by this Section 7.01(p) or any other
Person shall do so and such application is not contested in good faith by the Borrower and the relief requested is granted in an order
that is not stayed pending appeal;
then, in the case of any such Event of Default,
and at any time thereafter during the continuance of such Event of Default, subject to the Financing Order and the terms thereof, the
Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take any of the following actions,
at the same or different times:
(i) [reserved];
(ii) declare
the Obligations then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the principal of the Obligations so declared to be due and payable,
together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower;
(iii) terminate,
reduce or restrict any right or ability of the Loan Parties to use any “cash collateral” (within the meaning of Section 363(c) of
the Bankruptcy Code) of the Secured Parties, other than to the extent expressly permitted in the Financing Order;
(iv) declare
that the application of the Carve Out has occurred through the delivery of a Carve Out Trigger Notice in accordance with the Financing
Order;
(v) subject
to the Remedies Notice Period, (A) direct any or all of the Loan Parties to sell or otherwise dispose of any or all of the Collateral
on terms and conditions acceptable to the Administrative Agent pursuant to Section 363, Section 365 and other applicable provisions
of the Bankruptcy Code (and, without limiting the foregoing, direct any Loan Party to assume and assign any lease or executory contract
included in the Collateral to the Administrative Agent’s designees in accordance with and subject to Section 365 of the Bankruptcy
Code) and (B) if applicable, implement (or require implementation of) the actions specified in the Financing Order in connection
with the occurrence of any Specified Sale Process Default; and/or
(vi) subject
to the Remedies Notice Period, whether or not the maturity of the Obligations shall have been accelerated pursuant hereto, proceed to
protect, enforce and exercise all rights and remedies of the Secured Parties under this Agreement or any of the other Loan Documents (including
the Financing Order) or under applicable law (including the Uniform Commercial Code).
SECTION 7.02.
Application of Proceeds. Subject to the provisions of the Financing Order, the ABL DIP Intercreditor Agreement and the provisions
of Section 2.11 directing the application of payments required thereby, after the occurrence and during the continuance of
(i) any Cash Sweep Period, or (ii) any Event of Default and acceleration of the Obligations, all proceeds realized from any
Loan Party or on account of any Collateral owned by a Loan Party or any payments in respect of any Obligations and all proceeds of the
Collateral, shall be applied in the following order:
(a) FIRST,
ratably to pay the Obligations in respect of any fees, expenses, indemnities and other amounts (including (x) fees, expenses, indemnities
and other amounts accrued after the commencement of any Bankruptcy Proceeding, whether or not allowed in such Bankruptcy Proceeding, (y) fees,
charges and disbursements of counsel to the Administrative Agent and (z) to the extent not funded by the Lenders, Protective Advances
(and any interest in respect thereof) then due to the Administrative Agent, Collateral Agent and their Affiliates until paid in full;
(b) SECOND,
to payment of that portion of the Obligations constituting fees, expenses, indemnities and other amounts (other than principal and interest
owed to the Lenders in their capacity as such) payable to the Lenders (including (x) such fees, expenses, indemnities and other amounts
accrued after the commencement of any Bankruptcy Proceeding, whether or not allowed in such Bankruptcy Proceeding and (y) fees, charges
and disbursements of counsel to the respective Lenders arising under the Loan Documents), ratably among the applicable Lenders in proportion
to the respective amounts described in this clause SECOND payable to them;
(c) THIRD,
to the extent that one or more Lenders have funded in cash to the Administrative Agent a participation in outstanding Protective Advances,
ratably to pay all such Protective Advances (and any interest in respect thereof) until paid in full, ratably among the applicable Lenders
in proportion to the respective amounts described in this clause THIRD payable to them;
(d) FOURTH,
ratably to pay interest (including default interest) accrued in respect of the Obligations (other than to the extent interest thereon
is paid under clause FIRST and/or THIRD above, Protective Advances) until paid in full, ratably among the applicable Lenders in proportion
to the respective amounts described in this clause FOURTH payable to them;
(e) FIFTH,
ratably to pay principal due in respect of the Term Loans, until paid in full, ratably among the applicable Lenders in proportion to the
respective amounts described in this clause FIFTH payable to them;
(f) SIXTH,
to pay any other Obligations due to the Loan Parties, until paid in full, ratably among the applicable Secured Parties in proportion to
the respective amounts described in this clause SIXTH payable to them; and
(g) SEVENTH,
the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by applicable
law.
ARTICLE VIII
Rights of Agents
SECTION 8.01.
Appointment and Authority of Agents.
(a) Each
of the Lenders hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other
Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated
to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.
The provisions of this Article VIII are solely for the benefit of the Administrative Agent, the other Agents and the Lenders,
and the Borrower shall not have rights as a third party beneficiary of any of such provisions. It is understood and agreed that
the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative
Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable
law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship
between contracting parties.
(b) Bank
of America shall also act as the Collateral Agent under the Loan Documents, and each of the Lenders hereby irrevocably appoints and authorizes
Bank of America to act as the agent of such Lender in such capacities for purposes of acquiring, holding and enforcing any and all Liens
on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably
incidental thereto. In this connection, Bank of America in its capacities as Collateral Agent and any co-agents, sub-agents and
attorneys-in-fact appointed by the Collateral Agent pursuant to the terms hereof for purposes of holding or enforcing any Lien on the
Collateral (or any portion thereof granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the
direction of the Collateral Agent or the Collateral Agent, as applicable), shall be entitled to the benefits of all provisions of this
Article VIII and Article IX (including Section 9.03(c), as though such co-agents, sub-agents and attorneys-in-fact
were the “Collateral Agent” under the Loan Documents) as if set forth in full herein with respect thereto.
(c) Without
limiting the generality of the foregoing, each Secured Party hereby authorizes the Agents to consent, on behalf of each Secured Party,
to the Financing Order, each to be negotiated between the Loan Parties, the Agents, and the Statutory Committee.
SECTION 8.02.
Rights as a Lender. Each financial institution serving as an Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it were not an Agent, and such financial institutions and
their Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity
for and generally engage in any kind of business with the Borrower or any Subsidiary or any Affiliate of any of the foregoing as if they
were not Agents hereunder and without any duty to account therefor to the Lenders.
SECTION 8.03.
Exculpatory Provisions. No Agent shall have any duties or obligations except those expressly set forth in the Loan Documents.
Without limiting the generality of the foregoing, (a) no Agent shall be subject to any fiduciary or other implied duties, regardless
of whether a Default has occurred and is continuing, (b) no Agent shall have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that such Agent is required
to exercise in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances
as provided in Section 9.02); provided that no Agent shall be required to take any action that, in its opinion or the opinion
of its counsel, may expose such Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance
of doubt any action that may be in violation of the Automatic Stay or any similar stay under any Debtor Relief Law and (c) except
as expressly set forth in the Loan Documents, no Agent shall have any duty to disclose, and no Agent shall be liable for the failure to
disclose, any information relating to the Borrower or any of the Subsidiaries that is communicated to or obtained by the financial institution
serving as such Agent or any of its Affiliates in any capacity. No Agent shall be liable for any action taken or not taken by it with
the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of its own gross negligence or willful misconduct (as determined
by a court of competent jurisdiction by final and non-appealable judgment). No Agent shall be deemed to have knowledge of any Default
unless and until written notice thereof is given to such Agent by the Borrower or a Lender, as applicable, and no Agent shall be responsible
for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any
Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to such Agent.
SECTION 8.04.
Reliance by the Agents. Each Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been
signed or sent by the proper Person. Each Agent also may rely upon any statement made to it orally or by telephone and believed by it
to be made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder
to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that
such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender
prior to the making of such Loan. Any Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants
and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any
such counsel, accountants or experts.
SECTION 8.05.
Delegation of Duties. Each Agent may perform any and all of its duties and exercise any and all of its rights and powers
by or through any one or more sub-agents appointed by such Agent. Any Agent and any such sub-agent may perform any and all of its duties
and exercise any and all of its rights and powers through their Related Parties. The exculpatory provisions of this Article VIII
shall apply to any such sub-agent and to the Related Parties of any Agent and any such sub-agent, and shall apply to their activities
in connection with the syndication of the credit facilities provided for herein as well as activities as an Agent. No Agent shall be responsible
for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and
nonappealable judgment that such Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.
SECTION 8.06.
Resignation or Removal of an Agent.
(a) Subject
to any limitations and requirements set forth in the Collateral Documents, any Agent may at any time give notice of its resignation to
the Lenders and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation
with the Borrower, to appoint a successor acting in the same capacity as the resigning Agent, which shall be a bank with an office in
the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed
and shall have accepted such appointment within thirty (30) days after the retiring Agent gives notice of its resignation (or such earlier
day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Agent may (but
shall not be obligated to) on behalf of the Lenders, appoint a successor Agent meeting the qualifications set forth above. Whether or
not a successor has been appointed, such resignation shall become effective with such notice on the Resignation Effective Date.
(b) [Reserved].
(c) With
effect from the Resignation Effective Date (i) the retiring or removed Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any collateral security held by any Agent on behalf of any of
the Secured Parties under any of the Loan Documents, the retiring or removed Agent shall continue to hold such collateral security until
such time as a successor Agent is appointed to act in such capacity) and (ii) except for any indemnity payments or other amounts
then owed to the retiring or removed Agent, all payments, communications and determinations provided to be made by, to or through such
Agent shall instead be made by or to each Lender directly, until such time, if any, as the Required Lenders appoint a successor Agent
as provided for above. Upon the acceptance of a successor’s appointment as Agent hereunder, such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the retiring (or removed) Agent (other than as provided in Section 2.17
and other than any rights to indemnity payments or other amounts owed to the retiring or removed Agent as of the Resignation Effective
Date), and the retiring or removed Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan
Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Agent
shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring
or removed Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article VIII
and Section 9.03 shall continue in effect for the benefit of such retiring or removed Agent, its sub-agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by any of them (i) while the retiring or removed Agent was
acting as Agent and (ii) after such resignation or removal for as long as any of them continues to act in any capacity hereunder
or under the other Loan Documents, including (a) acting as collateral agent or otherwise holding any collateral security on behalf
of any of the Lenders and (b) in respect of any actions taken in connection with transferring the agency to any successor Agent.
Notwithstanding anything to the contrary contained herein, any resignation or removal of the Collateral Agent pursuant to the terms hereof
shall be subject to the terms, conditions and limitations set forth in the Collateral Documents and no such resignation or removal shall
be effective except to the extent made in compliance with the terms of such Collateral Documents.
SECTION 8.07.
Reports and Financial Statements. By signing this Agreement, each Lender (and with respect to clause (a), each Secured
Party):
(a) [reserved];
(b) is
deemed to have requested that the Administrative Agent furnish such Lender, promptly after they become available, copies of (i) all
financial statements (and other information) required to be delivered by the Borrower under Section 5.01, (ii) all commercial
finance examinations and appraisals of the Loan Parties and the Collateral, as applicable, received by the Administrative Agent, (iii) all
Borrowing Base Certificates and Compliance Certificates (including those attaching Approved Budget Variance Reports) received by the Administrative
Agent (collectively, the “Reports”), and (iv) the notices delivered by the Borrower under Section 5.02,
and the Administrative Agent agrees to furnish the same promptly to the Lenders (which Reports may be furnished in accordance with the
final paragraph of Section 5.01);
(c) expressly
agrees and acknowledges that the Administrative Agent makes no representation or warranty as to the accuracy of the Reports, and shall
not be liable for any information contained in any Report;
(d) expressly
agrees and acknowledges that the Reports are not comprehensive audits or examinations, that the Administrative Agent or any other party
performing any audit or examination will inspect only specific information regarding the Loan Parties and will rely significantly upon
the Loan Parties’ books and records, as well as on representations of the Loan Parties’ personnel; and
(e) without
limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold the Administrative
Agent and any such other Lender preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying
Lender may reach or draw from any Report in connection with any credit extensions that the indemnifying Lender has made or may make to
the Borrower, or the indemnifying Lender’s purchase of Loans of the Borrower; and (ii) to pay and protect, and indemnify, defend,
and hold the Administrative Agent and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings,
damages, costs, expenses, and other amounts (including Attorney Costs) incurred by the Administrative Agent and any such other Lender
preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying
Lender in violation of the terms hereof.
SECTION 8.08.
Non-Reliance on Agents and Other Lenders. Each Lender acknowledges that it has, independently and without reliance upon
any Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or related agreement or any document
furnished hereunder or thereunder.
SECTION 8.09.
[Reserved].
SECTION 8.10.
[Reserved].
SECTION 8.11.
No Other Duties. Anything herein to the contrary notwithstanding, none of the Arrangers listed on the cover page hereof
shall have any powers, duties or responsibilities under this Agreement or any other Loan Documents, except in its capacity, as an Agent
or a Lender hereunder.
SECTION 8.12.
Agents May File Proofs of Claim; Credit Bidding. In case of the pendency of any Bankruptcy Proceeding or any other
judicial proceeding relative to any Loan Party, each Agent (irrespective of whether the principal of any Loan shall then be due and payable
as herein expressed or by declaration or otherwise and irrespective of whether any Agent shall have made any demand on the Borrower) shall
be entitled and empowered, by intervention in such Bankruptcy Proceeding or otherwise:
(a) to
file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Secured
Parties (including any claim for the reasonable compensation, expenses, disbursements and advances of the Secured Parties and their respective
Related Parties and counsel and all other amounts due the Secured Parties, including under Section 2.12 and Section 9.03)
allowed in such judicial proceeding; and
(b) to
collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Secured
Party to make such payments to any Agent and, if the Agents shall consent to the making of such payments directly to the Secured Parties,
to pay to each Agent any amount due for the reasonable compensation, expenses, disbursements and advances of such Agent and its agents
and counsel, and any other amounts due such Agent under the Documents, including under Section 2.12 and Section 9.03.
Nothing contained herein shall
be deemed to authorize any Agent to authorize or consent to or accept or adopt on behalf of any Secured Party any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights of any Secured Party to authorize any Agent to vote in
respect of the claim of any Secured Party or in any such Bankruptcy Proceeding.
The Secured Parties hereby
irrevocably authorize each Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Obligations (including
accepting some or all of the Collateral in satisfaction of some or all of Obligations pursuant to a deed in lieu of foreclosure or otherwise)
and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at
any sale thereof conducted under the provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of the Bankruptcy Code,
or any similar Debtor Relief Law in any other jurisdictions to which a Loan Party is subject, (b) at any other sale or foreclosure
or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) any Agent (whether by judicial action
or otherwise) in accordance with any applicable law. In connection with any such credit bid and purchase, the Obligations owed to the
Secured Parties shall be entitled to be, and shall be, credit bid on a ratable basis (with Obligations with respect to contingent or unliquidated
claims receiving contingent interests in the acquired assets on a ratable basis that would vest upon the liquidation of such claims in
an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) in the asset
or assets so purchased (or in the Equity Interests or debt instruments of the acquisition vehicle or vehicles that are used to consummate
such purchase). In connection with any such bid (i) each Agent shall be authorized to form one or more acquisition vehicles
to make a bid, (ii) to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that
any actions by the Agents with respect to such acquisition vehicle or vehicles, including any disposition of the assets or Equity Interests
thereof shall be governed, directly or indirectly, by the vote of the Required Lenders, irrespective of the termination of this Agreement
and without giving effect to the limitations on actions by the Required Lenders contained in clauses (i) through (xiv) of
Section 9.02(b)), (iii) each Agent shall be authorized to assign the relevant Obligations to any such acquisition vehicle
pro rata by the Lenders, as a result of which each of the Lenders shall be deemed to have received a pro rata portion of any Equity Interests
and/or debt instruments issued by such an acquisition vehicle on account of the assignment of the Obligations to be credit bid, all without
the need for any Secured Party or acquisition vehicle to take any further action, and (iv) to the extent that Obligations that are
assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better,
because the amount of Obligations assigned to the acquisition vehicle exceeds the amount of debt credit bid by the acquisition vehicle
or otherwise), such Obligations shall automatically be reassigned to the Lenders pro rata and the Equity Interests and/or debt instruments
issued by any acquisition vehicle on account of the Obligations that had been assigned to the acquisition vehicle shall automatically
be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action.
SECTION 8.13.
Collateral and Guaranty Matters. Without limiting the provisions of Section 8.12, the Secured Parties hereby
irrevocably authorize the Agents, at their option and in their discretion (subject to the terms and conditions set forth in any applicable
Collateral Documents):
(a) to
release any Lien on any property granted to or held by the Agents under any Loan Document (i) upon the Obligation Payment Date, (ii) constituting
property being sold, transferred or disposed of in a transaction permitted under Section 6.05(a), (b), (e),
(f) and (g) (other than any such transaction constituting a sale, disposition or transfer to a Person required
to grant a Lien to an Agent under the Loan Documents), subject to the conditions thereof; provided that (A) the Liens of the ABL
DIP Agent on such property are released substantially concurrently with the release of any Lien of the Agents on such property and (B) the
release of any such Lien shall not constitute a release by the Agents of any Lien on the proceeds received by any Loan Party in connection
with the applicable sale, transfer or other disposition, or (iii) if approved, authorized or ratified in writing in accordance with
Section 9.02 of this Agreement;
(b) (i) to
release any Subsidiary Loan Party from its obligations under the Guarantee Agreement if such Person ceases to be a Subsidiary as a result
of a transaction permitted hereunder, (ii) to release any Subsidiary Loan Party from its obligations under the Guarantee Agreement
in connection with a transaction permitted under Section 6.03, or (iii) to terminate this Agreement and the other Loan
Documents upon the occurrence of the Obligation Payment Date; provided that, in the case of clause (i) or (ii) above, such Subsidiary
Loan Party is released from any guaranty of the ABL DIP Obligations substantially concurrently with such Subsidiary Loan Party’s
release from its obligations under the Guarantee Agreement; or
(c) to
subordinate any Lien on any property granted to or held by any Agent under any Loan Document to the holder of any Lien on such property
that is permitted by Section 6.02(a)(vi) or (ix).
Upon request by the Administrative
Agent at any time, the Required Lenders (or, where expressly required by the terms of this Agreement, a greater proportion of the Lenders
or other parties hereto as required herein) will confirm in writing each Agent’s authority to release or subordinate its interest
in particular types or items of property, or to release any Subsidiary Loan Party from its obligations under the Guarantee Agreement pursuant
to this Section 8.13. In each case as specified in this Section 8.13, each Agent will, subject to the terms and
conditions set forth in the Collateral Documents, at the Borrower’s expense, execute and deliver to the applicable Loan Party such
documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security
interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Subsidiary Loan Party
from its obligations under the Guarantee Agreement, in each case in accordance with the terms of the Loan Documents and this Section 8.13;
provided that the Borrower shall have delivered to the Administrative Agent, at least five (5) Business Days prior to the
date of the proposed execution of any document evidencing such release or subordination (or such shorter period as the Administrative
Agent may agree in writing in its reasonable discretion), a written request therefor identifying the relevant Collateral or Loan Party,
together with a certification by the Borrower stating that such transaction is in compliance with this Agreement and the other Loan Documents
and otherwise in form and substance satisfactory to the Administrative Agent. No Agent shall be required to execute any such document
on terms which, in its reasonable opinion, would, under applicable law, expose such Agent to liability or create any obligation or entail
any adverse consequence other than the release of such Liens without recourse or warranty, and such release shall not in any manner discharge,
affect or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of any Loan Party in respect
of) all interests retained by any Loan Party, including (without limitation) the proceeds of any sale, all of which shall continue to
constitute part of the Collateral.
No Agent shall be responsible
for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the
Collateral, the existence, priority or perfection of any Agent’s Lien thereon, or any certificate prepared by any Loan Party in
connection therewith, nor shall any Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of
the Collateral.
SECTION 8.14.
Additional Secured Parties. The benefit of the provisions of the Loan Documents directly relating to the Collateral or any
Lien granted thereunder shall extend to and be available to any Secured Party that is not an Agent or a Lender party hereto as long as,
by accepting such benefits, such Secured Party agrees, as among Agents and all other Secured Parties, that such Secured Party is bound
by (and, if requested by the Administrative Agent, shall confirm such agreement in a writing in form and substance reasonably acceptable
to the Administrative Agent) this Article VIII and Section 2.17, Section 7.02, Section 9.02(a),
Section 9.03(c), Section 9.08, Section 9.09, Section 9.13, and Section 9.20
and the ABL DIP Intercreditor Agreement, and the decisions and actions of the Agents and the Required Lenders (or, where expressly required
by the terms of this Agreement, a greater proportion of the Lenders or other parties hereto as required herein) to the same extent a Lender
is bound; provided, however, that, notwithstanding the foregoing, (a) such Secured Party shall be bound by Section 9.03(c) only
to the extent of liabilities, reimbursement obligations, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses,
or disbursements with respect to or otherwise relating to the Liens and Collateral held for the benefit of such Secured Party, in which
case the obligations of such Secured Party thereunder shall not be limited by any concept of pro rata share or similar concept, (b) each
of the Agents and the Lenders party hereto shall be entitled to act at its sole discretion, without regard to the interest of such Secured
Party, regardless of whether any Obligation to such Secured Party thereafter remains outstanding, is deprived of the benefit of the Collateral,
becomes unsecured or is otherwise affected or put in jeopardy thereby, and without any duty or liability to such Secured Party or any
such Obligation and (c) except as otherwise set forth herein and in the other Loan Documents, such Secured Party shall not have any
right to be notified of, consent to, direct, require or be heard with respect to, any action taken or omitted in respect of the Collateral
or under any Loan Document.
SECTION 8.15.
Certain ERISA Matters.
(a) Each
Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the
date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative
Agent and not, for the avoidance of doubt, to or for the benefit of the Borrower or any Subsidiary Loan Party, that at least one of the
following is and will be true:
(i) such
Lender is not using “plan assets” (within the meaning of Section 3(42) of ERISA or otherwise) of one or more Benefit
Plans with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments
or this Agreement,
(ii) the
transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent
qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts),
PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption
for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined
by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and
performance of the Loans, the Commitments and this Agreement,
(iii) (1) such
Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE
84-14), (2) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate
in, administer and perform the Loans, the Commitments and this Agreement, (3) the entrance into, participation in, administration
of and performance of the Loans, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of
Part I of PTE 84-14 and (4) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of
PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the
Loans, the Commitments and this Agreement, or
(iv) such
other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and
such Lender.
(b) In
addition, unless either (1) sub-clause (i) in the immediately preceding clause (a) is true with respect to
a Lender or (2) a Lender has provided another representation, warranty and covenant in accordance with sub-clause (iv) in
the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became
a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases
being a Lender party hereto, for the benefit of, the Administrative Agent and not, for the avoidance of doubt, to or for the benefit of
the Borrower or any other Subsidiary Loan Party, that the Administrative Agent is not a fiduciary with respect to the assets of such Lender
involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this
Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any
Loan Document or any documents related hereto or thereto).
SECTION 8.16.
Recovery of Erroneous Payments. Without limitation of any other provision in this Agreement, if at any time the Administrative
Agent makes a payment hereunder in error to any Lender (the “Applicable Credit Party”), whether or not in respect of
an Obligation due and owing by the Borrower at such time, where such payment is a Rescindable Amount, then in any such event, each Applicable
Credit Party receiving a Rescindable Amount severally agrees to repay to the Administrative Agent forthwith on demand the Rescindable
Amount received by such Applicable Credit Party in immediately available funds in the currency so received, with interest thereon, for
each day from and including the date such Rescindable Amount is received by it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation. Each Applicable Credit Party irrevocably waives any and all defenses, including any “discharge
for value” (under which a creditor might otherwise claim a right to retain funds mistakenly paid by a third party in respect of
a debt owed by another) or similar defense to its obligation to return any Rescindable Amount. The Administrative Agent shall inform each
Applicable Credit Party promptly upon determining that any payment made to such Applicable Credit Party comprised, in whole or in part,
a Rescindable Amount.
ARTICLE IX
Miscellaneous
SECTION 9.01.
Notices.
(a) Except
in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in clause (b) below),
all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile or electronic mail as follows, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:
(i) if
to the Borrower, any Agent or Bank of America, to the address, facsimile number, electronic mail address or telephone number specified
for such Person on Schedule 9.01; and
(ii) if
to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire
(including, as appropriate, notices delivered solely to the Person designated by a Lender on its Administrative Questionnaire then in
effect for the delivery of notices that may contain material non-public information relating to the Borrower).
Notices and other communications
sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received;
notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal
business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient).
Notices and other communications delivered through electronic communications to the extent provided in sub clause (b) below
shall be effective as provided in clauses (b) and (c) below.
(b) Electronic
Communications. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail, FpML messaging, and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided
that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the Administrative
Agent that it is incapable of receiving notices under such Article II by electronic communication. Any Agent or the Borrower
may each, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.
(c) Unless
the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received
upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested”
function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet
or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the
foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor;
provided that, for both clauses (i) and (ii), if such notice, email or other communication is not sent during
the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business
on the next Business Day for the recipient.
(d) The
Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO
NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR
ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS
MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall any Agent or any of its Related Parties
(collectively, the “Agent Parties”) have any liability to the Borrower, any Lender or any other Person for losses,
claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s, any
Subsidiary Loan Party’s or any Agent’s transmission of Borrower Materials or notices through the Platform, any other electronic
platform or electronic messaging service, or through the Internet other than losses, claims, liabilities or expenses that are determined
by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct
of such Agent Party.
(e) Change
of Address, Etc. Each of the Borrower and each Agent, may change its address, facsimile, electronic mail address or telephone number
for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, facsimile,
electronic mail address or telephone number for notices and other communications hereunder by notice to the Borrower and the Administrative
Agent. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has
on record (i) an effective address, contact name, telephone number, facsimile number and electronic mail address to which notices
and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees
to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information”
or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance
with such Public Lender’s compliance procedures and applicable law, including United States Federal and state securities Laws, to
make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform
and that may contain material non-public information with respect to the Borrower or its securities for purposes of United States Federal
or state securities laws.
(f) Reliance
by Agents and Lenders. The Agents and the Lenders shall be entitled to rely and act upon any notices (including telephonic notices,
Borrowing Requests and Interest Election Requests) purportedly given by or on behalf of the Borrower even if (i) such notices were
not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein,
or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify the
Administrative Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from
the reliance by such Person on each notice purportedly given by or on behalf of the Borrower provided, however, such indemnity
will not be available for losses, costs, expenses and liabilities that are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful misconduct of the Administrative Agent, the Lender or its
respective Related Party. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded
by the Administrative Agent, and each of the parties hereto hereby consents to such recording.
SECTION 9.02.
Waivers; Amendments.
(a) No
failure or delay by any Agent or any Lender in exercising any right, remedy, privilege or power hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance
of steps to enforce such a right, remedy, privilege or power, preclude any other or further exercise thereof or the exercise of any other
right, remedy, privilege or power. The rights, remedies, powers and privileges of the Agents and the Lenders hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights, remedies, powers or privileges that they would otherwise have (including
under applicable law).
Notwithstanding anything to
the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other
Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection
with such enforcement shall be instituted and maintained exclusively by, the Collateral Agent in accordance with the Security Agreement
and the other Collateral Documents for the benefit of all the Secured Parties; provided, however, that the foregoing shall
not prohibit (a) any Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity
as an Agent) hereunder and under the other Loan Documents, (b) [reserved], (c) any Lender from exercising setoff rights in accordance
with Section 9.08 (subject to the terms of Section 2.18), or (d) any Lender from filing proofs of claim or
appearing and filing pleadings on its own behalf during the pendency of a Bankruptcy Proceeding relative to any Loan Party; and provided,
further, that if at any time there is no Person acting as the Collateral Agent hereunder and under the other Loan Documents, then
(i) the Administrative Agent or, if there shall be no Administrative Agent, the Required Lenders shall, to the fullest extent permitted
by law, have the rights otherwise ascribed to the Collateral Agent pursuant to the Security Agreement the other Collateral Documents and
(ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and
subject to Section 2.18, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available
to it and as authorized by the Required Lenders.
No waiver of any provision of
any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted
by Section 9.02(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for
which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default,
regardless of whether any Agent or any Lender may have had notice or knowledge of such Default at the time.
(b) Subject
to Sections 2.07(f) and 2.14(b), neither this Agreement nor any other Loan Document nor any provision hereof or thereof
may be waived, amended or modified except, (I) in the case of this Agreement, pursuant to an agreement or agreements in writing entered
into by the Borrower, the Administrative Agent and the Required Lenders (or the Administrative Agent with the consent (and on behalf)
of the Required Lenders) or, (II) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent, the Collateral Agent or Agents that are parties thereto, in each case with the consent of the Required
Lenders, and the Loan Party or Loan Parties that are parties thereto; and provided that no such agreement shall (1) increase,
extend or reinstate the Commitment of any Lender without the written consent of such Lender (it being understood that the waiver of any
Default or mandatory prepayment shall not constitute an extension or increase of any Commitment of any Lender), (2) reduce or forgive
the principal amount of any Loan or reduce the rate of interest thereon, or reduce or forgive any fees payable hereunder, without the
written consent of each Lender affected thereby, (3) postpone the maturity of any Loan or any date for the payment of any principal,
interest or fees payable hereunder, or reduce the amount of, waive or excuse any such payment, without the written consent of each Lender
affected thereby; provided that only the consent of the Required Lenders shall be necessary to waive any mandatory prepayment or
any obligation of the Borrower to pay default interest under Section 2.13(c)), (4) amend Section 7.02, Section 2.18(b) or
(c) in a manner that would alter the pro rata sharing or application of payments required thereby, as applicable, without
the written consent of each Lender, (5) except as expressly permitted by this Agreement or the other Loan Documents, subordinate
the Lien of the Collateral Agent securing the Obligations on all or substantially all of the Collateral in any transaction or series of
related transactions (or modify any Loan Document to permit any such subordination), without the prior written consent of all Lenders,
(6) change any of the provisions of this Section or the percentage set forth in the definition of “Required Lenders”
or any other provision of any Loan Document specifying the number or percentage of Lenders required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender, (7) release the
Borrower from its obligations under the Loan Documents or release any Subsidiary Loan Party from its Guarantee under the Guarantee Agreement
or limit its liability in respect of such Guarantee (except as expressly provided in the Guarantee Agreement or in Section 8.13),
without the written consent of each Lender, (8) subordinate to the prior payment of any other Indebtedness, the Obligations, without
the prior written consent of all Lenders, (9) except to the extent the release of any Collateral is permitted pursuant to the Loan
Documents, release all or substantially all of the Collateral from the Liens under the Collateral Documents, without the written consent
of each Lender, (10) [reserved]; (11) increase “Accounts Receivable Advance Rate” or “Script Lists Advance
Rate” without the written consent of each Lender; (12) without the prior written consent of each Lender, (i) change the
definition of the term “ Borrowing Base Amount” (or any component definition of any such terms (including any applicable advance
rates)) if as a result thereof the “Borrowing Base Amount” would be increased, or (ii) change the definition of “Term
Loan Push-Down Reserve” (or any component definition of such term); (13) without the prior written consent of all Lenders, modify
the definition of “Protective Advance” so as to increase the amount thereof; or (14) amend the definition of “Applicable
Percentage” without the written consent of each affected Lender; and provided, further, that no such agreement shall
amend, modify or otherwise affect the rights or duties of any Agent without the prior written consent of such Agent. Notwithstanding the
foregoing, any provision of this Agreement may be amended by an agreement in writing entered into by the Borrower, the Required Lenders
and the Administrative Agent if (i) by the terms of such agreement the Commitment of each Lender not consenting to the amendment
provided for therein shall terminate upon the effectiveness of such amendment and (ii) at the time such amendment becomes effective,
each Lender not consenting thereto receives payment in full of the principal of and interest accrued on each Loan made by it and all other
amounts owing to it or accrued for its account under this Agreement. Notwithstanding the foregoing, any provision of this Agreement or
any other Loan Document may be amended by an agreement in writing entered into by the Borrower and the Administrative Agent to cure any
ambiguity, omission, mistake, defect or inconsistency so long as, in each case, the Lenders shall have received at least five (5) Business
Days’ prior written notice thereof and the Administrative Agent shall not have received, within five Business Days of the date of
such notice to the Lenders, a written notice from (x) the Required Lenders stating that the Required Lenders object to such amendment
or (y) if affected by such amendment, any Agent stating that it objects to such amendment.
(c) Notwithstanding
the foregoing, (i) Collateral shall be released from the Lien under the Collateral Documents from time to time as necessary to effect
any sale of Collateral permitted by the Loan Documents, and the Collateral Agent shall execute and deliver all release documents reasonably
requested to evidence such release; provided that arrangements satisfactory to the Administrative Agent shall have been made for
application of the cash proceeds thereof in accordance with Section 2.11, if required, and for the pledge of any non-cash
proceeds thereof pursuant to the Collateral Documents and (ii) if a Subsidiary Loan Party ceases to be a Subsidiary in accordance
with this Agreement, or ceases to own any property that constitutes Collateral, at the request of and at the expense of the Borrower,
such Subsidiary Loan Party shall be released from the Guarantee Agreement, the Security Agreement and each other Loan Document to which
it is a party, subject to the provisions of Section 8.13 (and each Agent shall, upon the request and at the expense of the Borrower,
execute such documents evidencing such release as may be reasonably requested by the Borrower).
(d) Notwithstanding
anything herein to the contrary (including this Section 9.02):
(i) after
the Closing Date, the Fee Letter may be amended or modified, or rights or privileges thereunder waived, in a writing executed only by
the parties thereto;
(ii) (A) the
Interim Financing Order and the Final Financing Order may be amended or modified, in each case, in the manner contemplated in the definition
thereof; (B) the ABL DIP Intercreditor Agreement may be amended or modified in accordance with the terms of the ABL DIP Intercreditor
Agreement; and (C) any Loan Document may be amended and waived with the written consent of the Administrative Agent at the request
of the Borrower, without the need to obtain the consent of any Lender, if such amendment or waiver is delivered in order to comply with
the Financing Order or any other order of the Bankruptcy Court; provided, however, that any such amendment or modification
contemplated by clause (A) or (B) above (each, a “Subject Modification”) that has the effect
of amending or modifying (or waiving the provisions of) any Loan Document (including the Financing Order or the ABL DIP Intercreditor
Agreement) in a manner that would otherwise require consent of any one or more Lenders pursuant to any of clauses (1) through
(14) of the first proviso to Section 9.02(b), such Subject Modification may be made only with the prior written consent
of such Lenders as may be required by the applicable clauses of the first proviso to Section 9.02(b); and
(iii) without
limiting the last sentence of Section 5.12(b), any Collateral Document and any other documents executed by any Loan Party
or any Subsidiary in connection with this Agreement or any other Loan Document may be in a form reasonably determined by the Administrative
Agent and may be, together with this Agreement, waived, amended or modified solely with the consent of the Administrative Agent at the
request of the Borrower without the need to obtain the consent of any other Lender if such waiver, amendment or modification is delivered
to effect the granting, perfection, protection, expansion or enhancement of any security interest in any Collateral or additional property
to become Collateral for the benefit of the Secured Parties or to cause any Collateral Document to be consistent with this Agreement and
the other Loan Documents; provided, that, notification of any such waiver, amendment or modification of any Loan Document shall be made
by the Administrative Agent to the Lenders promptly upon such amendment becoming effective.
SECTION 9.03.
Expenses; Indemnity; Damage Waiver.
(a) The
Borrower shall pay (i) all reasonable and documented out-of-pocket expenses incurred by the Agents and their Affiliates (including
Attorney Costs and reasonable and documented fees, expenses and disbursements of the Lender Group Consultants), in connection with the
syndication of the credit facilities provided for herein, the preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated)
(limited, in the case of legal fees, expenses and disbursements, to the Attorney Costs of one counsel to the Agents and, if necessary,
of one local counsel in each relevant jurisdiction, and of one special counsel for each relevant specialty, in each case to the Agents,
and (ii) all reasonable and documented out-of-pocket expenses incurred by any Agent or any Lender (including Attorney Costs), in
connection with the enforcement or protection of its rights under or in connection with the Loan Documents, including its rights under
this Section, or in connection with the Loans made or other extensions of credit made available hereunder, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect of such Loans (limited, in the case of legal fees, expenses
and disbursements, to the Attorney Costs of (x) one counsel to the Agents and the Lenders (taken as a whole), (y) one counsel
in the jurisdiction of the Bankruptcy Court and, if necessary, one local counsel in each relevant jurisdiction and of one special counsel
for each relevant specialty, in each case, to the Agents and the Lenders (taken as a whole), and (z) in the event of an actual or
potential conflict of interest between the Agents or the Lenders, where the Person or Persons affected by such conflict of interest inform
the Borrower in writing of such conflict of interest, one additional counsel in the jurisdiction of the Bankruptcy Court and one additional
local counsel in each other relevant jurisdiction, in each case, to each group of affected Persons similarly situated (taken as a whole)).
For the avoidance of doubt and subject to the limitations set forth above with respect to Attorney Costs, the Borrower shall reimburse
the Agents for all reasonable and documented legal, accounting, appraisal, consulting, and other fees, costs and expenses incurred in
connection with the negotiation, preparation and administration of the Loan Documents (including the Financing Order) and incurred in
connection with:
(i) obtaining
of approval of the Loan Documents (including the Financing Order) by the Bankruptcy Court;
(ii) the
preparation and review of pleadings, documents and reports related to the Chapter 11 Case, attendance at meetings, court hearings or conferences
related to the Chapter 11 Case, and general monitoring of the Chapter 11 Case; and
(iii) efforts
of any Agent (or its external counsel or the Lender Group Consultants) to (A) monitor the Loans or any of the other Obligations,
(B) evaluate, observe or assess any of the Loan Parties or their respective affairs, and (C) verify, protect, evaluate, assess,
appraise, collect, sell, liquidate or otherwise dispose of any of the Collateral (including, for the avoidance of doubt, any recording
fees in connection with filing Mortgages).
(b) The
Borrower shall indemnify each Agent (and any sub-agent thereof), each Lender, and each Related Party of any of the foregoing Persons (each
such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including Attorney Costs) incurred by or asserted against any Indemnitee (but limited, in the
case of legal fees, expenses and disbursements, to the Attorney Costs of (x) one counsel to all Indemnitees (taken as a whole), (y) one
counsel in the jurisdiction of the Bankruptcy Court and, if necessary, one local counsel in each relevant jurisdiction and of one special
counsel for each relevant specialty, in each case, to all Indemnitees (taken as a whole), and (z) and, in the event of an actual
or potential conflict of interest between Indemnitees, where the Person or Persons affected by such conflict of interest inform the Borrower
in writing of such conflict of interest, one additional counsel in the jurisdiction of the Bankruptcy Court and one additional local counsel
in each other relevant jurisdiction, in each case, to each group of affected Indemnitees similarly situated (taken as a whole)) arising
out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document, the performance by the parties
to the Loan Documents of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated
hereby or thereby, or, in the case of any Agent (and any sub agent thereof) and its Related Parties only, the administration of this Agreement
and the other Loan Documents (including in respect of matters addressed in Section 2.17), (ii) any Loan or other extension
of credit hereunder or the use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials
on or from any property currently or formerly owned or operated by the Borrower or any of the Subsidiaries, or any Environmental Liability
related in any way to the Borrower or any of the Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party
or by the Borrower or any other Subsidiary Loan Party, and regardless of whether any Indemnitee is a party thereto, IN ALL CASES,
WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE;
provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities
or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee. In no event shall any Loan Party have any liability for indemnification under
this Section 9.03(b) for any special, indirect, consequential or punitive damages, except for claims made by third parties
for which an Indemnitee is otherwise entitled to indemnity pursuant to this Section 9.03(b). Without limiting the provisions
of Section 2.17(c), this Section 9.03(b) shall not apply with respect to Taxes other than any Taxes that
represent losses, claims, damages, etc. arising from any non-Tax claim.
(c) To
the extent that the Borrower for any reason fails to indefeasibly pay any amount required to be paid by it to any Agent (or any sub agent
thereof) or any Related Party of the foregoing under Section 9.03(a) or (b), each Lender severally agrees to pay
to such Agent (or any such sub agent) or such Related Party, as the case may be, such Lender’s pro rata share of such unpaid
amount (including any such unpaid amount in respect of a claim asserted by such Lender), determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought; provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted against such Agent (or any such sub agent) in its capacity
as such in its capacity as such, or against any Related Party of any of the foregoing, acting for any Agent (any such sub agent) in connection
with such capacity. The obligations of the Lenders under this Section 9.03(c) are subject to the provisions of Section 2.06(c).
For purposes hereof, a Lender’s “pro rata share” shall be determined based upon its share of the sum of the outstanding
Term Loans at the time.
(d) To
the extent permitted by applicable law, each party hereto (each for itself and on behalf of its Subsidiaries) hereby waives, releases
and agrees not to assert any claim against any Indemnitee or the Borrower (or any of its Subsidiaries), on any theory of liability, for
any special, indirect, consequential or punitive damages (as opposed to direct or actual damages), whether or not accrued and whether
or not known or suspected to exist in its favor, arising out of, in connection with, or as a result of, this Agreement, any other Loan
Document or any other agreement or instrument contemplated hereby or thereby, the Transactions or any Loan or the use of the proceeds
thereof; provided that the foregoing shall not limit the Borrower’s liability under Section 9.03(b) in respect
of claims made by third parties for which an Indemnitee is otherwise entitled to indemnity pursuant to Section 9.03(b). No
Indemnitee shall be liable for any damages arising from the use by any unintended recipients of any information or other materials distributed
to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection
with this Agreement or the other Loan Documents or the Transactions, other than for direct and actual damages (as opposed to special,
indirect, consequential or punitive damages) that a court of competent jurisdiction determines in a final and nonappealable judgment to
have resulted from the gross negligence or willful misconduct of such indemnitee.
(e) All
amounts due under this Section shall be payable not later than five (5) Business Days after written demand therefor, or after
any Event of Default, upon written demand therefor. If the Borrower fails to pay when due any amounts payable by it pursuant to this Section 9.03,
such amount may be paid on behalf of the Borrower by the Administrative Agent in its sole discretion, without notice to or consent from
the Borrower and any amounts so paid shall constitute Loans (or, if applicable, Protective Advances) hereunder.
(f) The
Agreements in this Section 9.03 and the indemnity provisions of Section 9.01(f) shall survive the resignation
of any Agent, the replacement of any Lender, the termination of the aggregate Commitments and the repayment, satisfaction or discharge
of all the other Obligations.
SECTION 9.04.
Successors and Assigns.
(a) The
provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights
or obligations hereunder except to an assignee in accordance with the provisions of Section 9.04(b) (and any attempted
assignment or transfer by the Borrower without such consent shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto, their successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Related Parties of each of the Agents and the Lenders) any legal or equitable right, remedy
or claim under or by reason of this Agreement.
(b) (i)
Subject to the conditions set forth in Section 9.04(b)(ii), any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion of the Loans at the time owing to it), with the prior written
consent of:
(A) the
Borrower (such consent not to be unreasonably withheld or delayed); provided that (1) no consent of the Borrower shall be
required for an assignment to a Lender, an ABL DIP Lender, an Affiliate of a Lender or an ABL DIP Lender, an Approved Fund or, if an Event
of Default has occurred and is continuing, any other assignee and (2) the Borrower shall be deemed to have consented to any such
assignment unless it shall have objected thereto within 10 Business Days after having received notice thereof; and
(B) the
Administrative Agent; provided that no consent of the Administrative Agent shall be required if such assignment is to a Person
that is a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender.
(ii) Assignments
shall be subject to the following additional conditions:
(A) except
in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, the amount of the Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $5,000,000 or, if smaller, the entire remaining amount of the assigning Lender’s
Loans, unless the Administrative Agent shall otherwise consent; provided that in the event of concurrent assignments to two or
more assignees that are Affiliates of one another, or to two or more Approved Funds managed by the same investment advisor or by affiliated
investment advisors, all such concurrent assignments shall be aggregated in determining compliance with this subsection;
(B) each
partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under
this Agreement with respect to the Loans assigned;
(C) the
parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500; provided that the Administrative Agent may, in its sole discretion, elect to waive such processing
and recordation fee in the case of any assignment;
(D) the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire;
(E) no
such assignment shall be made (1) to the Borrower or any of the Borrower’s Affiliates or Subsidiaries, as applicable (2) to
a natural Person (or a holding company, investment vehicle or trust for, owned and operated by or for the primary benefit of a natural
Person) or (3) to any Disqualified Institution or (4) to any holder of the Existing Split-Priority Indebtedness (or such holder’s
Affiliates) (any such Person described in this clause (E), an “Ineligible Person”); and
(F) in
connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless
and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments
to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment,
purchases by the assignee of participations or subparticipations, or other compensating actions), to pay and satisfy in full all payment
liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and interest accrued thereon). Notwithstanding
the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under
applicable law without compliance with the provisions of this clause (F), then the assignee of such interest shall be deemed to
be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
(iii) Subject
to acceptance and recording thereof pursuant to Section 9.04(b)(iv), from and after the effective date specified in each Assignment
and Acceptance the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03 with respect
to facts and circumstances occurring prior to the effective date of such assignment; provided that, except to the extent otherwise expressly
agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder
arising from that Lender’s having been a Defaulting Lender). Upon request, the Borrower (at its expense) shall execute and deliver
a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply
with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with Section 9.04(c).
(iv) The
Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower (and such agency being solely for Tax purposes),
shall maintain at one of its offices a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the
names and addresses of the Lenders, and the Commitment of, and principal amount (and stated interest) of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent
manifest error and the Borrower, the Agents and the Lenders shall treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall
be available for inspection by the Borrower, any other Agent and any Lender at any reasonable time and from time to time upon reasonable
prior notice.
(v) Upon
its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to
in Section 9.04(b) and any written consent to such assignment required by Section 9.04(b), the Administrative
Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the Register as provided in this Section 9.04(b)(v).
(vi) By
executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows: (A) such assigning Lender warrants that it is the legal
and beneficial owner of the interest being assigned thereby free and clear of any adverse claim and that the outstanding balances of its
Loans, in each case without giving effect to assignments thereof that have not become effective, are as set forth in such Assignment and
Acceptance; (B) except as set forth in clause (A) above, such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement
or any other Loan Document or any other instrument or document furnished pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of any of the foregoing, or the financial condition of the Loan Parties or the performance
or observance by the Loan Parties of any of their obligations under this Agreement or under any other Loan Document or any other instrument
or document furnished pursuant hereto or thereto; (C) each of the assignee and the assignor represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; (D) such assignee confirms that it has received a copy of this Agreement,
together with copies of any amendments or consents entered into prior to the date of such Assignment and Acceptance and copies of the
most recent financial statements delivered pursuant to Section 5.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (E) such assignee will independently
and without reliance upon the Agents, such assigning Lender or any other Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (F) such
assignee appoints and authorizes the Agents to take such action as agents on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to them by the terms hereof and thereof, together with such powers as are reasonably incidental
thereto; and (G) such assignee agrees that it will perform in accordance with their terms all the obligations that by the terms of
this Agreement are required to be performed by it as a Lender.
(c) (i)
Any Lender may, without the consent of or notice to the Borrower or the Agents, sell participations to one or more banks or other entities
(other than any Ineligible Person) (a “Participant”) in all or a portion of such Lender’s rights and obligations
under this Agreement (including all or a portion of the Loans owing to it); provided that (A) such Lender’s obligations
under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the Borrower, the Agents and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the avoidance of doubt, each
Lender shall be responsible for the indemnity under Section 9.03(c) without regard to the existence of any participation.
Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b)(1), (2) or (3) that affects
such Participant. Subject to Section 9.04(c)(ii), the Borrower agrees that each Participant shall be entitled to the benefits
of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 9.04(b) (it being understood that the documentation required under Section 2.17(e) shall
be delivered to the Lender who sells the participation). To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender; provided such Participant agrees to be subject to Section 2.18(c) as
though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the
Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest)
of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”);
provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity
of any Participant or any information relating to a Participant's interest in any Loans or its other obligations under any Loan Document)
to any Person except to the extent that such disclosure is necessary to establish that such Loans or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive
absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative
Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(ii) A
Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender
would have been entitled to receive with respect to the participation sold to such Participant. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.17(f) as
though it were a Lender.
(d) Any
Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or any central bank having jurisdiction
over such Lender, and this Section shall not apply to any such pledge or assignment of a security interest; provided that
no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.
(e) In
the case of any Lender that is a fund that invests in bank loans, such Lender may, without the consent of the Borrower or the Administrative
Agent, assign or pledge all or any portion of its rights under the Loan Documents, including the Loans and promissory notes or any other
instrument evidencing its rights as a Lender under the Loan Documents, to any holder of, trustee for, or any other representative of holders
of obligations owed or securities issued by such fund, as security for such obligations or securities; provided that any foreclosure
or similar action by such trustee or representative shall be subject to the provisions of this Section 9.04 concerning assignments.
(f) Notwithstanding
anything to the contrary in this Agreement or any other Loan Document, no Disqualified Institution that purports to become a Lender hereunder
(notwithstanding the provisions of this Agreement that prohibit Disqualified Institutions from becoming Lenders) shall be entitled to
any of the rights or privileges enjoyed by the other Lenders with respect to voting, information and lender meetings. In addition, if
any assignment or participation is made to any Disqualified Institution without the Borrower’s express prior written consent, the
Borrower may, in addition to any other rights and remedies that it may have against such Disqualified Institution, at its sole expense
and effort, upon notice to the applicable Disqualified Institution and the Administrative Agent, require such Disqualified Institution
to assign, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all of its interest,
rights and obligations under this Agreement to one or more Persons that meet the requirements for an assignee under Section 9.04(b) at
the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified Institution paid to acquire such interests,
rights and obligations, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable
to it hereunder.
(g) Notwithstanding
anything to the contrary in this Agreement or any other Loan Document, the Administrative Agent shall not be responsible (or have any
liability) for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions thereof relating to Disqualified
Institutions. The Administrative Agent may make the list of Disqualified Institutions available to all Lenders on the Platform or to any
Lender, Participant, or any prospective Lender or Participant, upon any such Person’s written request therefor. Without limiting
the generality of the foregoing, the Administrative Agent shall not (i) be obligated to ascertain, monitor or inquire as to whether
any Lender or Participant or prospective Lender or Participant is a Disqualified Institution or (ii) have any liability with respect
to or arising out of any assignment or participation of Loans or Commitments, or disclosure of confidential information, to any Disqualified
Institution.
SECTION 9.05.
Survival. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in
the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered
to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making
of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that any Agent or any
Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder,
and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections
2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless
of the consummation of the transactions contemplated hereby, the repayment of the Loans and the termination of the Commitments or the
termination of this Agreement or any provision hereof.
SECTION 9.06.
Integration; Effectiveness. This Agreement, the other Loan Documents and any separate letter agreements with respect to
fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become
effective as provided in Section 4.01.
SECTION 9.07.
Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction
shall not invalidate such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 9.07,
if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor
Relief Laws, as determined in good faith by the Administrative Agent then such provisions shall be deemed to be in effect only to the
extent not so limited.
SECTION 9.08.
Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of their Affiliates
is hereby authorized at any time and from time to time, to the fullest extent permitted by law (notwithstanding the provisions of the
Automatic Stay and without notice, application or motion, hearing before, or order of the Bankruptcy Court, but subject to the terms of
the Financing Order), to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time
held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any
of and all the obligations of the Borrower now or hereafter existing under this Agreement or any other Loan Document held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such
obligations may be unmatured; provided that, in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all
amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions
of Section 7.02 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held
in trust for the benefit of the Administrative Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the
Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised
such right of setoff. The rights of each Lender under this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have. Each Lender agrees to notify the Borrower and the Administrative Agent promptly after any
such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.
Notwithstanding the provisions of this Section 9.08, if at any time any Lender or any of their respective Affiliates maintains
one or more deposit accounts for the Borrower or any other Loan Party into which Medicare and/or Medicaid receivables are deposited, such
Person shall waive the right of setoff set forth herein.
SECTION 9.09.
Governing Law; Jurisdiction; Consent to Service of Process.
(a) This
Agreement shall be construed in accordance with and governed by the law of the State of New York and, to the extent applicable, the Bankruptcy
Code.
(b) Subject
to the jurisdiction of the Bankruptcy Court (and of the related Federal courts), the Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and
of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that any Agent or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in
any other court of competent jurisdiction to the extent necessary or required as a matter of law to assert such claim, action or proceeding
against any assets of any Loan Party or any of their Subsidiaries or to enforce any judgment arising out of any such claim, action or
proceeding.
(c) The
Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in Section 9.09(b). Each of the parties hereto hereby irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) Each
party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner
permitted by law.
SECTION 9.10.
WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11.
[Reserved].
SECTION 9.12.
Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference
only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 9.13.
Confidentiality. Each of the Agents and the Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates’ auditors and Related Parties (it being understood
that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory authority (including any self-regulatory authority,
such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process (including any Federal Reserve Bank or central bank pursuant to Section 9.04(d)), (d) to
any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any assignee of or Participant in, or any prospective assignee
of or Participant in, any of its rights or obligations under this Agreement, (g) with the consent of the Borrower, (h) to any
pledgee referred to in Section 9.04(e) or any direct or indirect contractual counterparty in any Hedging Agreement (or
to any such contractual counterparty’s professional advisor), so long, in each such case, as such Person agrees to be bound by the
provisions of this Section 9.13, (i) on a confidential basis to (x) any rating agency in connection with rating
the Borrower or its Subsidiaries or the credit facilities provided hereunder or (y) the CUSIP Service Bureau or any similar agency
in connection with the application, issuance, publishing and monitoring of CUSIP numbers of other market identifiers with respect to the
credit facilities provided hereunder or (j) to the extent such Information (x) becomes publicly available other than as a result
of a breach of this Section or (y) becomes available to any Agent or any Lender on a nonconfidential basis from a source other
than the Borrower. In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information
about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the Agents
and the Lenders in connection with the administration of this Agreement, the other Loan Documents, and the Commitments. For the purposes
of this Section, “Information” means all information received from the Borrower relating to the Borrower or its business,
other than any such information that is available to any Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower.
Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information
as such Person would accord to its own confidential information. Each of the Administrative Agent and the Lenders acknowledges that (a) the
Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed
compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information
in accordance with applicable law, including United States Federal and state securities laws.
SECTION 9.14.
Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively
the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted
for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable
in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to
the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods
shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal
Funds Effective Rate to the date of repayment, shall have been received by such Lender.
SECTION 9.15.
ABL DIP Intercreditor Agreement and Financing Order. Each Lender authorizes each Agent to enter into (a)(x) the ABL
DIP Intercreditor Agreement and (y) amendments or supplements to the ABL DIP Intercreditor Agreement to the extent permitted by this
Agreement and made in accordance with the ABL DIP Intercreditor Agreement and (b)(x) the Interim Financing Order and the Final Financing
Order and (y) amendments or supplements to the Interim Financing Order or the Final Financing Order, in each case, to the extent
permitted by this Agreement and made in accordance with the Interim Financing Order or the Final Financing Order, as applicable. Bank
of America agrees, subject to the applicable terms and conditions set forth herein and in the other Collateral Documents, to act as Collateral
Agent under the ABL DIP Intercreditor Agreement in connection with the incurrence of the Indebtedness under the ABL DIP Loan Documents
permitted under this Agreement.
SECTION 9.16.
Cash Sweep. At all times after the Closing Date, a Cash Sweep Period shall be in effect.
SECTION 9.17.
USA Patriot Act. Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the
Borrower that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify the Borrower in accordance with its requirements. The Borrower shall promptly, following
a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or
such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and
anti-money laundering rules and regulations, including the USA Patriot Act.
SECTION 9.18.
[Reserved].
SECTION 9.19.
[Reserved].
SECTION 9.20.
No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including
in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees,
and acknowledges its Subsidiaries’ understanding, that: (i) (A) the arranging and other services regarding this Agreement
provided by the Administrative Agent, the Arrangers, and the Lenders are arm’s-length commercial transactions between the Borrower
and its Subsidiaries, on the one hand, and the Administrative Agent, the Arrangers, and the Lenders, on the other hand, (B) the Borrower
has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower
is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by
the other Loan Documents; (ii) (A) the Administrative Agent, the Arrangers and the Lenders each is and has been acting solely
as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an
advisor, agent or fiduciary for the Borrower or any of its Subsidiaries, or any other Person and (B) neither the Administrative Agent,
nor any Arranger, nor any Lender has any obligation to the Borrower or any of its Subsidiaries with respect to the transactions contemplated
hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, the
Arrangers, the Lenders, and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ
from those of the Borrower and its Subsidiaries, and neither the Administrative Agent, nor any Arranger nor any Lender has any obligation
to disclose any of such interests to the Borrower and its Subsidiaries. To the fullest extent permitted by law, the Borrower hereby waives
and releases any claims that it may have against the Administrative Agent, the Arrangers, and the Lenders with respect to any breach or
alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
SECTION 9.21.
Electronic Execution; Electronic Records. This Agreement, any Loan Document and any other Communication, including Communications
required to be in writing, may be in the form of an Electronic Record and may be executed using Electronic Signatures. Each of the Loan
Parties and each of the Secured Parties agrees that any Electronic Signature on or associated with any Communication shall be valid and
binding on such Person to the same extent as a manual, original signature, and that any Communication entered into by Electronic Signature,
will constitute the legal, valid and binding obligation of such Person enforceable against such Person in accordance with the terms thereof
to the same extent as if a manually executed original signature was delivered. Any Communication may be executed in as many
counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same
Communication. For the avoidance of doubt, the authorization under this Section 9.21 may include, without limitation,
use or acceptance of a manually signed paper Communication which has been converted into electronic form (such as scanned into PDF format),
or an electronically signed Communication converted into another format, for transmission, delivery and/or retention. The Administrative
Agent and each of the Secured Parties may, at its option, create one or more copies of any Communication in the form of an imaged Electronic
Record (“Electronic Copy”), which shall be deemed created in the ordinary course of such Person’s business, and
destroy the original paper document. All Communications in the form of an Electronic Record, including an Electronic Copy, shall
be considered an original for all purposes, and shall have the same legal effect, validity and enforceability as a paper record. Notwithstanding
anything contained herein to the contrary, the Administrative Agent is not under any obligation to accept an Electronic Signature in any
form or in any format unless expressly agreed to by such Person pursuant to procedures approved by it; provided, further, that
without limiting the foregoing, (a) to the extent the Administrative Agent has agreed to accept such Electronic Signature, the Administrative
Agent and each of the Secured Parties shall be entitled to rely on any such Electronic Signature purportedly given by or on behalf of
any Loan Party and/or any Secured Party without further verification and regardless of the appearance or form of such Electronic Signature,
and (b) upon the request of the Administrative Agent or any Secured Party, any Communication executed using an Electronic Signature
shall be promptly followed by a manually executed counterpart.
The Administrative Agent shall
not be responsible for or have any duty to ascertain or inquire into the sufficiency, validity, enforceability, effectiveness or genuineness
of any Loan Document or any other agreement, instrument or document (including, for the avoidance of doubt, in connection with the Administrative
Agent’s reliance on any Electronic Signature transmitted by telecopy, emailed .pdf or any other electronic means). The Administrative
Agent shall be entitled to rely on, and shall incur no liability under or in respect of this Agreement or any other Document by acting
upon, any Communication or any statement made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise
authenticated (whether or not such Person in fact meets the requirements set forth in the Documents for being the maker thereof).
Each of the Loan Parties and
each Secured Party hereby waives (i) any argument, defense or right to contest the legal effect, validity or enforceability of this
Agreement, any other Loan Document based solely on the lack of paper original copies of this Agreement, such other Loan Document, and
(ii) any claim against the Administrative Agent, each other Secured Party and each of their respective Related Parties for any liabilities
arising solely from the Administrative Agent’s and/or any such other Secured Party’s reliance on or use of Electronic Signatures,
including any liabilities arising as a result of the failure of the Loan Parties to use any available security measures in connection
with the execution, delivery or transmission of any Electronic Signature.
SECTION 9.22.
Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any
Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any
liability of any Lender that is an Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured,
may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges
and agrees to be bound by:
(a) the
application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which
may be payable to it by any Lender that is an Affected Financial Institution; and
(b) the
effects of any Bail-In Action on any such liability, including, if applicable:
(i) a
reduction in full or in part or cancellation of any such liability;
(ii) a
conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution,
its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments
of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document;
or
(iii) the
variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution
Authority.
SECTION 9.23.
Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee
or otherwise, for any Hedging Agreement or any other agreement or instrument that is a QFC (such support, “QFC Credit Support”,
and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution
power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”)
in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents
and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other
state of the United States):
(a) In
the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding
under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest
and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such
QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special
Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed
by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party
becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply
to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater
extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents
were governed by the laws of the United States or a state of the United States.
(b) As
used in this Section 9.23, the following terms have the following meanings:
“BHC Act
Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with,
12 U.S.C. §1841(k)) of such party.
“Covered
Entity” means any of the following: (a) a “covered entity” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 252.82(b); (b) a “covered bank” as that term is defined in, and interpreted
in accordance with, 12 C.F.R. § 47.3(b); or (c) a “covered FSI” as that term is defined in, and
interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default
Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81,
47.2 or 382.1, as applicable.
“QFC”
has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. §
5390(c)(8)(D).
SECTION 9.24.
Certain Waivers.
(a) Without
limiting the generality of the foregoing, or of any other waiver or other provision set forth in this Agreement, the Borrower, on behalf
of itself and each Subsidiary Loan Party, hereby absolutely, knowingly, unconditionally, and expressly waives any and all claim, defense
or benefit arising directly or indirectly under any one or more of Sections 2787 to 2855 inclusive of the California Civil Code or any
similar law of California.
(b) The
Borrower, on behalf of itself and each Subsidiary Loan Party, further waives (to the extent permitted by applicable Law): (i) any
defense to the recovery by the Administrative Agent or any other Secured Party against such Loan Party of any deficiency or otherwise
to the enforcement of this Agreement or any other Loan Document or any security for this Agreement or any other Loan Document based upon
the Administrative Agent’s or any other Secured Party’s election of any remedy against any Loan Party, including the defense
to enforcement of this Agreement or any other Loan Document (the so-called “Gradsky” defense) which, absent this waiver,
each Loan Party would have by virtue of an election by the Administrative Agent or any other Secured Party to conduct a non-judicial
foreclosure sale (also known as a “trustee’s sale”) of any Owned Real Property or Ground-Leased Real Property as security
for the Obligations, it being understood by each Loan Party that any such non-judicial foreclosure sale will destroy, by operation of
California Code of Civil Procedure Section 580d, all rights of any party to a deficiency judgment against the Borrower (and/or the
applicable Loan Party) and, as a consequence, will destroy all rights that such Loan Party would otherwise have (including the right
of subrogation, the right of reimbursement, and the right of contribution) to proceed against the Borrower and/or any other Loan Party;
(ii) any defense or benefits that may be derived from California Code of Civil Procedure Sections 580a, 580b, 580d or 726, or comparable
provisions of the laws of any other jurisdiction and all other anti-deficiency and one form of action defenses under the laws of California
and any other jurisdiction; and (iii) any right to a fair value hearing under California Code of Civil Procedure Section 580a,
or any other similar law, to determine the size of any deficiency owing (for which any Loan Party would be liable hereunder) following
a non-judicial foreclosure sale.
(c) Without
limiting the foregoing or anything else contained in this Agreement or any other Loan Document, the Borrower, on behalf of itself and
each Subsidiary Loan Party, waives all rights and defenses that such Loan Party may have because any of the Obligations are secured by
Owned Real Property or Ground-Leased Real Property. This means, among other things: (i) that the Secured Parties may collect from
any Loan Party without first foreclosing on any real or personal property collateral pledged by the Borrower or any other Loan Party,
and (ii) if any Secured Party forecloses on any Owned Real Property or Ground-Leased Real Property pledged by the Borrower or any
other Loan Party: (A) the amount of the Obligations may be reduced only by the price for which that collateral is sold at the foreclosure
sale, even if the collateral is worth more than the sale price; and (B) any Credit Party may collect from any Loan Party even if
the Secured Party, by foreclosing on the Owned Real Property or Ground-Leased Real Property, has destroyed any right such Loan Party
may have to collect from the Borrower or another Loan Party. This is an unconditional and irrevocable waiver of any rights and defenses
that any Loan Party may have because the Obligations are secured by Owned Real Property or Ground-Leased Real Property. These rights
and defenses include, but are not limited to, any rights or defenses based upon Sections 580a, 580b, 580d, or 726 of the California Code
of Civil Procedure.
(d) In
the case of a power of sale foreclosure, the fair market value of the Owned Real Property or Ground-Leased Real Property shall be conclusively
deemed to be the amount of the successful bid at the foreclosure sale. The Borrower, on behalf of itself and each Subsidiary Loan Party,
waives (to the extent permitted by applicable Law) any rights or benefits it may now or hereafter have to a fair value hearing under
Section 580a of the California Code of Civil Procedure. The Secured Parties shall have absolutely no obligation to make a bid at
any foreclosure sale, but rather may make no bid or bid any amount which any Secured Party, in its sole discretion, deems appropriate.
(e) The
Borrower, on behalf of itself and each Subsidiary Loan Party, hereby irrevocably authorizes the Administrative Agent to apply any and
all amounts received by the Administrative Agent in repayment of the Obligations first to amounts which are secured pursuant to the terms
of any Mortgage and then to amounts which are not secured pursuant to the terms of such Mortgage, if any. The Borrower, on behalf of
itself and each Subsidiary Loan Party, hereby waives any and all rights that it has or may hereafter have under Section 2822 of
the California Civil Code which provides that if a guarantor is “liable upon only a portion of an obligation and the principal
provides partial satisfaction of the obligation, the principal may designate the portion of the obligation that is to be satisfied.”
(f) The
Borrower, on behalf of itself and each Subsidiary Loan Party, waives (to the extent permitted by applicable Law) all rights and defenses
arising out of an election of remedies by any Secured Party, even though that election of remedies, such as a nonjudicial foreclosure
with respect to security for an Obligation, has destroyed such Loan Party’s rights of subrogation and reimbursement against the
Borrower (or any other Loan Party) by operation of Section 580d of the California Code of Civil Procedure or otherwise.
(g) The
Borrower, on behalf of itself and each Subsidiary Loan Party, waives (to the extent permitted by applicable Law) such Loan Party’s
rights of subrogation and reimbursement, including (i) any defenses such Loan Party may have by reason of an election of remedies
by the Administrative Agent, and (ii) any rights or defenses such Loan Party may have by reason of protection afforded to the Borrower
or a Loan Party with respect to the Obligations pursuant to the anti-deficiency or other laws of California limiting or discharging the
Borrower’s or any other Loan Party’s obligations, including Sections 580a, 580b, 580d or 726 of the California Code of Civil
Procedure.
SECTION 9.25.
ABL DIP Intercreditor Agreement. Notwithstanding anything herein to the contrary, the terms of this Agreement and the rights
of the Agents and the Secured Parties are subject to the ABL DIP Intercreditor Agreement.
[Signature Pages Follow]
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, |
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as Borrower |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Term Loan Agreement]
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BANK OF AMERICA, N.A., |
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as the Administrative Agent |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Term Loan Agreement]
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BANK OF AMERICA, N.A., |
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as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Term Loan Agreement]
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CAPITAL ONE, NATIONAL ASSOCIATION, |
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as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Credit Agreement]
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WELLS FARGO BANK, NATIONAL ASSOCIATION, |
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as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Credit Agreement]
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BMO BANK N.A., |
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as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Credit Agreement]
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PNC BANK NATIONAL ASSOCIATION, |
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as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Credit Agreement]
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TRUIST BANK, |
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as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Credit Agreement]
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TD BANK, N.A, |
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as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Term Loan Agreement]
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FIRST-CITIZENS BANK & TRUST
COMPANY, |
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as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Term Loan Agreement]
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KEYBANK NATIONAL ASSOCIATION, |
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as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Term Loan Agreement]
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ATLANTIC UNION BANK, |
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as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Term Loan Agreement]
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APPLE BANK FOR SAVINGS, |
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as a Lender |
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By: |
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Name: |
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Title: |
[Signature Page – DIP Term Loan Agreement]
Exhibit 10.4
Execution Copy
ASSET
PURCHASE AGREEMENT
Dated
as of OCTOBER 15, 2023
by
and AMONG
MedImpact
Healthcare Systems, Inc., as Purchaser,
and
Hunter
lane, llc
AND
ITS SUBSIDIARIES NAMED HEREIN, as Sellers
TABLE OF CONTENTS
Page
Article I Purchase and Sale of Acquired Assets; Assumption of Assumed Liabilities |
1 |
Section 1.1 |
Purchase and Sale of the Acquired Assets |
1 |
Section 1.2 |
Excluded Assets |
4 |
Section 1.3 |
Assumption of Certain Liabilities |
6 |
Section 1.4 |
Excluded Liabilities |
7 |
Section 1.5 |
Assumption/Rejection of Certain Contracts / Non-Assignment |
10 |
Section 1.6 |
Excluded Asset Designation |
12 |
Section 1.7 |
EIC |
12 |
|
|
|
Article II Consideration; Payment; Closing |
13 |
Section 2.1 |
Consideration; Payment |
13 |
Section 2.2 |
Deposit; Purchase Price Adjustment Escrow |
13 |
Section 2.3 |
Closing |
15 |
Section 2.4 |
Closing Deliveries by Sellers |
15 |
Section 2.5 |
Closing Deliveries by Purchaser |
16 |
Section 2.6 |
Withholding |
17 |
Section 2.7 |
Purchase Price Adjustment |
17 |
|
|
|
Article III Representations and Warranties of SellerS |
21 |
Section 3.1 |
Organization and Qualification |
21 |
Section 3.2 |
Authorization of Agreement |
21 |
Section 3.3 |
Conflicts; Consents |
22 |
Section 3.4 |
Financial Statements |
22 |
Section 3.5 |
Title to Properties; Sufficiency of Assets |
23 |
Section 3.6 |
Contracts |
25 |
Section 3.7 |
No Litigation |
27 |
Section 3.8 |
Permits; Compliance with Laws |
28 |
Section 3.9 |
Environmental Matters |
29 |
Section 3.10 |
Intellectual Property |
29 |
Section 3.11 |
Privacy and Security Matters. |
32 |
Section 3.12 |
Healthcare Matters |
33 |
Section 3.13 |
Tax Matters |
34 |
Section 3.14 |
Employees |
35 |
Section 3.15 |
Insurance |
36 |
Section 3.16 |
Affiliate Transactions |
36 |
Section 3.17 |
Brokers |
36 |
Section 3.18 |
Anti-Corruption |
37 |
Section 3.19 |
Absence of Certain Changes |
37 |
Section 3.20 |
Bank Accounts |
37 |
Section 3.21 |
Employee Benefit Plans |
37 |
Section 3.22 |
No Other Representations or Warranties |
38 |
|
|
|
Article IV Representations and Warranties of Purchaser |
38 |
Section 4.1 |
Organization and Qualification |
38 |
TABLE OF CONTENTS
Page
Section 4.2 |
Authorization of Agreement |
38 |
Section 4.3 |
Conflicts; Consents |
39 |
Section 4.4 |
Financing |
39 |
Section 4.5 |
Brokers |
39 |
Section 4.6 |
No Litigation |
40 |
Section 4.7 |
Certain Arrangements |
40 |
Section 4.8 |
Solvency |
40 |
Section 4.9 |
WARN Act and Mass Layoffs |
40 |
Section 4.10 |
No Additional Representations or Warranties |
40 |
|
|
|
Article V Bankruptcy Court Matters |
41 |
Section 5.1 |
Bankruptcy Actions |
41 |
Section 5.2 |
Cure Costs |
42 |
Section 5.3 |
Approval |
42 |
|
|
|
Article VI Covenants and Agreements |
43 |
Section 6.1 |
Conduct of the Business of Sellers |
43 |
Section 6.2 |
Access to Information |
46 |
Section 6.3 |
Employee Matters |
47 |
Section 6.4 |
Regulatory Approvals |
50 |
Section 6.5 |
Antitrust Notification |
50 |
Section 6.6 |
Reasonable Efforts; Cooperation |
52 |
Section 6.7 |
Certain Financing Matters |
53 |
Section 6.8 |
Further Assurances |
53 |
Section 6.9 |
Insurance Matters |
54 |
Section 6.10 |
Receipt of Misdirected Assets; Liabilities |
54 |
Section 6.11 |
Guarantees; Third Party Assurances |
55 |
Section 6.12 |
Acknowledgment by Purchaser |
56 |
Section 6.13 |
Guaranty |
57 |
Section 6.14 |
Confidentiality |
59 |
Section 6.15 |
No Successor Liability |
60 |
Section 6.16 |
Retained Privileged Materials |
61 |
Section 6.17 |
Notification of Certain Matters |
61 |
Section 6.18 |
Change of Name |
61 |
Section 6.19 |
Open Source Remediation |
61 |
Section 6.20 |
CMS Novation |
61 |
Section 6.21 |
Completion of TSA Schedules |
62 |
|
|
|
Article VII Conditions to Closing |
62 |
Section 7.1 |
Conditions Precedent to the Obligations of Purchaser and Sellers |
62 |
Section 7.2 |
Conditions Precedent to the Obligations of Purchaser |
63 |
Section 7.3 |
Conditions Precedent to the Obligations of Sellers |
63 |
Section 7.4 |
Waiver of Conditions |
64 |
TABLE OF CONTENTS
Page
Article VIII Termination |
64 |
Section 8.1 |
Termination of Agreement |
64 |
Section 8.2 |
Effect of Termination |
66 |
|
|
|
Article IX Taxes |
67 |
Section 9.1 |
Transfer Taxes |
67 |
Section 9.2 |
Allocation of Purchase Price |
68 |
Section 9.3 |
Cooperation |
68 |
Section 9.4 |
Post-Closing Actions |
68 |
Section 9.5 |
Preparation of Tax Returns and Payment of Taxes |
69 |
|
|
|
Article X Miscellaneous |
70 |
Section 10.1 |
Non-Survival of Representations and Warranties and Certain Covenants; Certain Waivers |
70 |
Section 10.2 |
Expenses |
70 |
Section 10.3 |
Notices |
70 |
Section 10.4 |
Binding Effect; Assignment; Designated Purchasers |
72 |
Section 10.5 |
Amendment and Waiver |
72 |
Section 10.6 |
Third Party Beneficiaries |
72 |
Section 10.7 |
Non-Recourse |
72 |
Section 10.8 |
Severability |
73 |
Section 10.9 |
Construction |
73 |
Section 10.10 |
Schedules |
73 |
Section 10.11 |
Complete Agreement |
73 |
Section 10.12 |
Specific Performance |
74 |
Section 10.13 |
Jurisdiction and Exclusive Venue |
74 |
Section 10.14 |
Governing Law; Waiver of Jury Trial |
75 |
Section 10.15 |
No Right of Set-Off |
75 |
Section 10.16 |
Counterparts and PDF |
75 |
Section 10.17 |
Publicity |
76 |
Section 10.18 |
Bulk Sales Laws |
76 |
Section 10.19 |
Sellers’ Representative |
76 |
Section 10.20 |
Financing Sources |
77 |
|
|
|
Article XI Additional Definitions and Interpretive Matters |
77 |
Section 11.1 |
Certain Definitions |
77 |
Section 11.2 |
Index of Defined Terms |
90 |
Section 11.3 |
Rules of Interpretation |
91 |
INDEX OF EXHIBITS
EXHIBIT A |
FORM OF BILL OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT |
EXHIBIT B |
FORM OF PATENT ASSIGNMENT AGREEMENT |
EXHIBIT C |
FORM OF TRADEMARK ASSIGNMENT AGREEMENT |
EXHIBIT D |
FORM OF DOMAIN NAME ASSIGNMENT AGREEMENT |
EXHIBIT E |
FORM OF CLOSING WORKING CAPITAL STATEMENT AND EXAMPLE CALCULATION |
EXHIBIT F |
FORM OF BIDDING PROCEDURES ORDER |
EXHIBIT G |
FORM OF TSA |
Asset
Purchase Agreement
This Asset Purchase Agreement
(this “Agreement”), dated as of October 15, 2023, is made by and among MedImpact Healthcare Systems, Inc.,
a California corporation (subject to Section 10.4(b), “Purchaser”), MI OpCo Holdings, Inc., a Delaware
corporation (“Guarantor”), and Hunter Lane, LLC, a Delaware limited liability company (as in existence on the date
hereof, as a debtor-in-possession and a reorganized Debtor, as applicable, “Elixir”) and the Subsidiaries of Elixir
that are indicated on the signature pages attached hereto (together with Elixir, each a “Seller” and collectively
“Sellers”). Purchaser and Sellers are referred to herein individually as a “Party” and collectively
as the “Parties.” Capitalized terms used herein shall have the meanings set forth herein including Article XI.
WHEREAS, on October 15,
2023 (the “Petition Date”), Sellers, together with certain of Sellers’ Subsidiaries and Affiliates, commenced
voluntary cases under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy Code”),
in the United States Bankruptcy Court for the District of New Jersey (the “Bankruptcy Court”), which cases are
jointly administered for procedural purposes under Case No. [●] ([●]) (Bankr. D.N.J.) (collectively, the “Bankruptcy
Cases”); and
WHEREAS, Purchaser desires
to purchase the Acquired Assets and assume the Assumed Liabilities from Sellers, and Sellers desire to sell, convey, assign, and transfer
to Purchaser the Acquired Assets together with the Assumed Liabilities, in a sale authorized by the Bankruptcy Court pursuant to,
inter alia, sections 105, 363 and 365 of the Bankruptcy Code, in accordance with the other applicable provisions of the Bankruptcy Code
and the Federal Rules of Bankruptcy Procedure and the local rules for the Bankruptcy Court, all on the terms and subject to
the conditions set forth in this Agreement and subject to the entry and terms of the Sale Order;
NOW, THEREFORE, in consideration
of the foregoing and the mutual representations, warranties, covenants, and agreements set forth herein, intending to be legally bound
hereby, the Parties hereby agree as follows.
Article I
Purchase and Sale of Acquired Assets;
Assumption of Assumed Liabilities
Section 1.1 Purchase
and Sale of the Acquired Assets. Pursuant to sections 105, 363 and 365 of the Bankruptcy
Code, on the terms and subject to the conditions set forth herein and in the Sale Order, at the Closing, Sellers shall sell, transfer,
assign, convey, and deliver to Purchaser, and Purchaser shall purchase, acquire, and accept from Sellers, all of Sellers’ right,
title and interest in and to, as of the Closing, the Acquired Assets, free and clear of all Encumbrances other than Permitted Encumbrances.
“Acquired Assets” means all of the properties, rights, interests and other assets owned by or held by a Seller as
of the Closing, whether tangible or intangible, real, personal, or mixed, wherever located and whether or not required to be reflected
on a balance sheet prepared in accordance with GAAP, including any such properties, rights, interests, and other assets acquired by any
Seller after the date hereof and prior to the Closing, and including Sellers’ right, title and interest in and to, as of the Closing,
the following assets of each Seller, but excluding in all cases the Excluded Assets:
(a) (i) subject
to Section 1.5, all Contracts listed on Schedule 1.1(a)(i) to which any Seller is a party, but, in all cases,
excluding Leases, which are addressed in Section 1.1(g) and (ii) the Contracts listed on Schedule 1.1(a)(ii) (the
“Commercial Interco Contracts” and, together with (i), the “Assigned Contracts”), including that
certain Pharmacy Benefit Management Services Agreement (the “ROI Agreement”), effective the 1st day of January, 2010,
by and between Rx Options, Inc., an Ohio corporation and a Seller (“ROI”), and EIC (f/k/a Envision Insurance
Company);
(b) all
rights under non-disclosure, confidentiality, and similar arrangements with (or for the benefit of) employees and agents of Sellers or
with third parties (including any non-disclosure, confidentiality agreements or similar arrangements entered into in connection the Auction),
which any such agreements will be Assigned Contracts subject to designation as an Excluded Contract pursuant to Section 1.5;
(c) all
accounts receivable (including Rebate Assets), notes receivable, negotiable instruments and chattel paper owing from Persons other than
Sellers and their Affiliates, together with any unpaid interest or fees accrued thereon or other amounts due with respect thereto, but
in all cases excluding any CMS Receivable;
(d) all
bank accounts;
(e) all
credits, prepaid expenses, deferred charges and expenses, advance payments, and prepaid items and duties, including all lease and rental
payments that have been prepaid by any Seller with respect to any Acquired Leased Real Property;
(f) all
Documents (excluding any credit card numbers or related customer payment sources, social security numbers, or other information to the
extent prohibited by any Law);
(g) subject
to Section 1.5, the Leased Real Property listed on Schedule 1.1(g) (the “Acquired Leased Real Property”
and the Lease governing any Acquired Leased Real Property, an “Acquired Lease”) and any security deposits related
thereto;
(h) all
land, together with all buildings, structures, improvements, and fixtures located thereon, and all easements, privileges, appurtenances
and other rights and interests appurtenant thereto and all right, title and interest in and to any streets, alleys, passages or other
rights-of-way or appurtenances included in, adjacent to or used in connection with such land and all right, title and interest in all
mineral rights appurtenant to such land, owned by the Sellers (the “Owned Real Property”);
(i) all
tangible assets (including Equipment) of Sellers, including the tangible assets of Sellers located at any Acquired Leased Real Property
or the Owned Real Property and any tangible assets on order to be delivered to any Seller; provided that, with respect to any
such tangible asset that is leased to any Seller, the lease agreement covering such leased tangible asset is an Assigned Contract;
(j) all
rights against third parties (including customers, suppliers, vendors, merchants, manufacturers (including pharmaceutical drug manufacturers),
Group Purchasing Organizations, and counterparties to any Assigned Contract), including causes of action, claims, counterclaims, defenses,
credits, rebates (including any vendor, manufacturers (including pharmaceutical drug manufacturers), Group Purchasing Organizations,
or supplier rebates), demands, allowances, refunds (other than Tax refunds attributable to a Pre-Closing Tax Period), causes of action,
rights of set off, rights of recovery, rights of recoupment or rights under or with respect to express or implied guarantees, warranties,
representations, covenants or indemnities made by such third parties, in each case arising out of or relating to events or circumstances
occurring from and after the Closing Date with respect to any of the Acquired Assets or Assumed Liabilities (in each case, other than
against any Seller or its Affiliates and excluding any CMS Receivable);
(k) to
the extent transferable under applicable Law, all of the rights, interests and benefits (if any) accruing under all Permits and Governmental
Authorizations, and all pending applications therefor and copies of all governmental filings associated therewith, including, to the
extent transferable under applicable Law, those Permits and Governmental Authorizations listed on Schedule 1.1(k);
(l) to
the extent transferable, excluding all director and officer insurance policies, (i) all current and prior insurance policies of
any Seller, and (ii) all insurance rights and benefits (including proceeds) of any nature to the extent arising from or relating
to any of the Acquired Assets or Assumed Liabilities (including returns and refunds of any premiums paid, or other amounts due back to
Sellers, with respect to cancelled policies), including all such insurance recoveries and rights to assert claims with respect to any
such insurance recoveries (the foregoing clauses (i) and (ii), collectively, the “Acquired Insurance Assets”);
(m) all
Intellectual Property owned or purported to be owned by the Sellers, all rights to collect royalties and proceeds in connection with
such Intellectual Property that are or were due or payable prior to, on, or after the Closing, all rights to sue and recover for past,
present and future infringements, dilutions, misappropriations, violations of, or other conflicts with, such Intellectual Property, and
any and all corresponding rights that, now or hereafter, may be secured throughout the world, including the Laker Software and the Intellectual
Property set forth on Schedule 1.1(m) (collectively, the “Acquired Intellectual Property”);
(n) all
Inventory and supplies of the Sellers;
(o) (i) all
avoidance claims or causes of action available to Sellers under chapter 5 of the Bankruptcy Code (including sections 544, 545, 547, 548,
549, 550 and 553) or any similar actions under any other applicable Law (whether or not asserted as of the Closing Date) (“Avoidance
Actions”) against any trade creditor, customer, supplier, manufacturer, distributor, broker, licensee, licensor, agent, or
vendor of any Seller or any other Person with whom any Seller has an ordinary course commercial relationship, (ii) all Avoidance
Actions relating to the Acquired Assets or Assumed Liabilities, or against any of the Sellers’ counterparties to the Assigned Contracts,
and (iii) all rights, claims, causes of action, rights of recovery, rights of set-off, and rights of recoupment of any Seller against
any Transferred Employee (the foregoing clauses (i), (ii), and (iii), collectively, the “Acquired Avoidance Actions”);
provided that, for the avoidance of doubt, the Acquired Avoidance Actions extend solely to actions related to the Acquired Assets
and the Business and shall not include preference claims or avoidance claims and actions (including any such claims and actions arising
under Sections 544, 545, 547, 548, 549, 550 and 553 of the Bankruptcy Code) against any representatives of the Debtors, or the Debtors’
non-debtor Affiliates, Subsidiaries, or representatives of any of the foregoing; provided further that Purchaser will not pursue
or cause to be pursued either directly or indirectly any Acquired Avoidance Actions except as a defense (to the extent permitted under
applicable Law) against any claim or cause of action asserted by any Person enumerated in clauses (i), (ii), and (iii);
(p) all
deposits, including maintenance deposits, and security deposits for rent, electricity, telephone or otherwise; and
(q) all
goodwill, payment intangibles and general intangible assets and rights of Sellers.
Section 1.2 Excluded
Assets. Notwithstanding anything to the contrary in this Agreement, in no event shall Sellers
be deemed to sell, transfer, assign, convey or deliver, and Sellers shall retain all right, title and interest to, in and under the following
properties, rights, interests and other assets of Sellers (collectively, the “Excluded Assets”):
(a) all
Cash and Cash Equivalents, such bank account(s) as the Parties reasonably agree prior to the Closing for Sellers to retain for winddown
and related purposes, and any retainers or similar amounts paid to Advisors or other professional service providers;
(b) subject
to Section 1.5, all Contracts of Sellers other than Assigned Contracts and any Acquired Lease (the “Excluded Contracts”),
including the Rejection Contracts;
(c) all
Documents (including information stored on the computer systems, data networks or servers of any Seller) (i) that exclusively relate
to any of the Excluded Assets or Excluded Liabilities, (ii) that are Sellers’ financial accounting Documents, all minute books,
Organizational Documents, stock certificates or other Equity Interests instrument, stock registers and such other books and records of
any Seller pertaining to the ownership, organization or existence of such Seller, Tax Returns (and any related work papers), corporate
seal, checkbooks, and canceled checks, or (iii) that any Seller is required by Law or Healthcare Law to retain; provided
that Purchaser shall have the right to make copies of any portions of such Documents (other than Excluded Tax Returns) to the extent
not prohibited by applicable Law or Healthcare Law;
(d) all
documents prepared or received by any Seller or any of its Affiliates or on their behalf in connection with the sale of the Acquired
Assets, this Agreement or the other Transaction Agreements, the Transactions, or the Bankruptcy Case, that are subject to any attorney-client
privilege and the transfer of which to Purchaser would result in the waiver of any such privilege (“Retained Privileged Materials”);
(e) other
than the Acquired Insurance Assets, all current and prior insurance policies and Employee Benefit Plans of any Seller or its Affiliates,
including for the avoidance of doubt all director and officer insurance policies, and all rights and benefits of any nature of Sellers
or its Affiliates with respect thereto, including all insurance recoveries thereunder and rights to assert claims with respect to any
such insurance recoveries;
(f) all
Equity Interests of any Seller or any of their respective Subsidiaries, including, EIC;
(g) except
for the Acquired Avoidance Actions, (i) all rights, claims, causes of action, rights of recovery, rights of set-off, and rights
of recoupment as of the Closing of any Seller or its Affiliates, in each case, directly arising out of events occurring prior to the
Closing Date, and (ii) all claims that any Seller or any of its Affiliates may have against any Person with respect to any other
Excluded Assets or any Excluded Liabilities;
(h) Sellers’
claims, causes of action or other rights under this Agreement, including the Purchase Price hereunder, or any agreement, certificate,
instrument, or other document executed and delivered between any Seller or its Affiliates and Purchaser in connection with the Transactions,
or any other agreement between any Seller or its Affiliates and Purchaser entered into on or after the date hereof;
(i) all
Tax refunds attributable to a Pre-Closing Tax Period, and Tax attributes and Tax assets;
(j) any
CMS Receivable and any billed and unbilled rebate receivables related to EIC;
(k) except
for the Acquired Avoidance Actions and Rebate Assets, all demands, credits, statements, allowances, refunds, rebates (including any vendor
or supplier rebates), rights (including under or with respect to express or implied guarantees, warranties, representations, covenants
and indemnities), claims, counterclaims, defenses, credits, causes of action, rights of set off, rights of recovery or rights of recoupment
relating to or arising against suppliers, vendors, merchants, manufacturers and counterparties to Leases, licenses or any Contract, directly
arising out of events occurring prior to the Closing Date;
(l) any
properties, rights, interests, and assets of Sellers designated as an Excluded Asset pursuant to Section 1.6; and
(m) all
Liabilities or other amounts owing from any Sellers or any of their respective Affiliates (other than any such Liabilities under any
Assigned Contract).
Section 1.3 Assumption
of Certain Liabilities. On the terms and subject to the conditions set forth herein and
in the Sale Order, effective as of the Closing, in addition to the payment of the Cash Payment in accordance with Section 2.1,
Purchaser shall irrevocably assume from each Seller (or with respect to Taxes, if applicable, from such Seller’s applicable Affiliate)
(and after the Closing pay, perform, discharge, or otherwise satisfy in accordance with their respective terms), and Sellers (or with
respect to Taxes, if applicable, from such Seller’s applicable Affiliate) shall irrevocably transfer, assign, convey, and deliver
to Purchaser, only the following Liabilities (and no other Liabilities, which other Liabilities shall be retained by Sellers), without
duplication and only to the extent not paid, performed, discharged or otherwise satisfied on or prior to the Closing (collectively, the
“Assumed Liabilities”):
(a) all
Cure Costs in an amount not to exceed $1,400,000 (the “Assumed Cure Costs”);
(b) all
Liabilities and obligations of any Seller under the Assigned Contracts and any Acquired Lease solely to the extent first arising after
the Closing and, for the avoidance of doubt, excluding any Excluded Rebate Liability;
(c) all
Liabilities arising out of the conduct of the Business or the ownership or operation of the Acquired Assets or the Business, in each
case, by Purchaser on or after the Closing Date;
(d) all
trade payables of Sellers to non-Affiliated third parties in connection with the Business existing on the Closing Date that remain unpaid
and are not delinquent as of the Closing Date and incurred in the Ordinary Course and other Liabilities of Sellers of the types included
in the definition of Closing Working Capital but not including any Excluded Rebate Liability or any Liabilities to the extent relating
to or otherwise arising, whether before, on or after the Closing, under any of the Excluded Contracts (collectively, the “Assumed
Current Liabilities”;
(e) all
recoupment obligations of any Seller under any Assigned Contracts or Excluded Contracts solely to the extent related to claims by any
pharmaceutical drug manufacturer or Group Purchasing Organizations pursuant to any Assigned Contract, or Excluded Contract, for the recoupment
of any Rebate Assets (collectively, the “Assumed Rebate Liability”), but excluding any Liabilities related to any
billed and unbilled manufacture rebate receivable related to the business of EIC;
(f) without
duplication: (i) all Liabilities for Taxes with respect to the Acquired Assets, the Business, or the Transferred Employees for any
taxable period (or portion thereof) beginning after the Closing Date, and (ii) all Transfer Taxes pursuant to Section 9.1;
(g) all
Liabilities relating to the Transferred Employees that arise after the Closing Date; and
(h) all
Liabilities relating to the termination of Scheduled Employees who do not receive a Transfer Offer from Purchaser in compliance with
Section 6.3(a).
Section 1.4 Excluded
Liabilities. Purchaser shall not assume, be obligated to pay, perform or otherwise discharge
or in any other manner be liable or responsible for any Liabilities of, or Action against, any Seller of any kind or nature whatsoever,
whether absolute, accrued, contingent or otherwise, liquidated or unliquidated, due or to become due, known or unknown, currently existing
or hereafter arising, matured or unmatured, direct or indirect, and however arising, whether existing on the Closing Date or arising
thereafter as a result of any act, omission, or circumstances taking place on or prior to the Closing, other than the Assumed Liabilities
(all such Liabilities that are not Assumed Liabilities being referred to collectively herein as the “Excluded Liabilities”).
Without limiting the generality of the foregoing, the Excluded Liabilities shall include the following Liabilities of any Seller:
(a) all
Cure Costs other than the Assumed Cure Costs (the “Excluded Cure Costs”);
(b) except
to the extent of any Assumed Cure Costs, Assumed Current Liabilities, or Assumed Rebate Liability expressly assumed pursuant to Section 1.3,
any Liability arising out of facts or circumstances in existence on or prior to the Closing and from or related to any breach, default
under, failure to perform, torts related to the performance of, violations of Law, infringements or indemnities under, guaranties pursuant
to and overcharges, underpayments or penalties on the part of the Sellers or any of their Affiliates under any Contract, agreement, arrangement
or understanding to which any Seller or any of its Affiliates is a party prior to the Closing;
(c) except
to the extent of any Assumed Cure Costs, Assumed Current Liabilities, or Assumed Rebate Liability expressly assumed pursuant to Section 1.3,
all Liabilities arising out of, relating to or otherwise in respect of the operation of the Business or businesses of Sellers’
Affiliates, or any of the Sellers’, or Sellers’ Affiliates’, products or services, or the operation or condition of
the Acquired Assets or the Assumed Liabilities, in each case, on or prior to the Closing or facts, actions, omissions, circumstances
or conditions existing, occurring or accruing on or prior to the Closing;
(d) all
Liabilities arising from or related to any Action (whether civil, criminal, administrative, investigative, or informal) against any Sellers
or their Affiliates, (including, for the avoidance of doubt, any Action related to fraud, breach of fiduciary duty, misfeasance or under
any other theory relating to conduct, performance or non-performance of any Seller, or any of their Affiliates, or any of their respective
directors, officers, or employees), or related to the Acquired Assets or the Assumed Liabilities, pending or threatened or having any
other status or with respect to facts, actions, omissions, circumstances or conditions existing, occurring or accruing prior to the Closing
(including any breach, default, failure to perform, torts related to performance, violations of Law, infringements or indemnities, guaranties
and overcharges, underpayments or penalties, whether in respect of any Contract, agreement, arrangement, promise or understanding of
any kind) including any successor liability claims or that may be owed to or assessed by, any Governmental Body or other Person, and
whether commenced, filed, initiated, or threatened prior to, on or following the Closing;
(e) all
Liabilities to the extent relating to or otherwise arising, whether before, on or after the Closing, under any of the Excluded Contracts;
(f) all
Liabilities of Sellers for Indebtedness and any Accrued Rebate Liability related to any billed and unbilled rebate receivables related
to EIC;
(g) all
guarantees of Indebtedness made by the Sellers and all reimbursement obligations to guarantors of the Sellers’ obligations or under
letters of credit or other similar agreements or instruments;
(h) other
than the Assumed Rebate Liability, all Liabilities related to claims or Actions by any pharmaceutical drug manufacturer, Group Purchasing
Organizations, or any other Person related to rebates, recoupment, payments or similar items, whether or not pursuant to any Assigned
Contract or any other Contract (the “Excluded Rebate Liability”);
(i) all
Liabilities related to, resulting from or arising out of, prior to, on or after the Closing, any (i) unredeemed refund amounts,
rebates (except for any Assumed Rebate Liability), or similar items, (ii) customer deposits or (iii) customer promotions and
loyalty programs;
(j) all
Liabilities to (i) any current or former owner of capital stock or other Equity Interests of the Sellers or any securities convertible
into, exchangeable or exercisable for shares of capital stock or other Equity Interests of the Sellers, (ii) any current or former
holder of indebtedness for borrowed money of the Sellers or (iii) in respect of obligations for indemnification or advancement of
expenses, any current or former officer or director of the Sellers, in each case of (i), (ii), and (iii), solely in such Person’s
capacity as such;
(k) the
sponsorship of and all Liabilities at any time arising under, pursuant to or in connection with any Employee Benefit Plans (whether arising
prior to, on or after the Closing Date) and all Liabilities for compliance with the requirements of section 4980B of the Tax Code and
the rules and regulations thereunder with respect to all individuals who are “M&A qualified beneficiaries” (as such
term is defined in 26 C.F.R. § 54.4980B-9);
(l) Except
as expressly assumed by Purchaser in Section 6.3(g), Liabilities arising under the WARN Act and similar Laws relating to
the termination of any current or former employee or contractor of any Seller, or any Affiliate of a Seller, (including any Transferred
Employees), and including any current, threatened or potential claims for compensation or benefits, in each such case, to the extent
related to employment or contracting with the Sellers (or any of their Affiliates) or termination thereof, whether arising prior to,
on or after the Closing Date
(m) all
Liabilities and other payments incurred or otherwise payable by any of the Sellers or their respective Affiliates, or for which any of
the Sellers or their respective Affiliates is liable, in connection with in connection with the administration of the Bankruptcy Cases
or the negotiation, execution and consummation of the Transactions or any Transaction Agreement (including any preparation for a transaction
process, bankruptcy process, any sale process involving other potential buyers or any contemplated public offering or financing), including
the fees and expenses of financial advisors, accountants, legal counsel, consultants, brokers and other advisors with respect thereto,
whether incurred, accrued or payable on or prior to or after the date of this Agreement or the Closing Date;
(n) all
Liabilities of Sellers arising under or pursuant to Environmental Laws, including with respect to any real property owned, operated,
leased or otherwise used by Sellers, whether or not used in the Ordinary Course, including any Liabilities for noncompliance with Environmental
Laws or the Release of Hazardous Substances, to the extent arising as a result of any act, omission, or circumstances taking place on
or prior to the Closing, whether known or unknown as of the Closing;
(o) other
than the Assumed Rebate Liability or any Assumed Current Liability expressly assumed pursuant to Section 1.3, all Liabilities
relating to any Product that is or has been manufactured, tested, distributed, held or marketed by or on behalf of any Seller, or the
Affiliate of any Seller, arising from any recall, withdrawal or suspension (whether voluntarily or otherwise), except to the extent that
such recall, withdrawal or suspension results from Purchaser’s operation of the Business or the Acquired Assets following the Closing;
(p) all
Liabilities as to which any Seller is an obligor, or is otherwise responsible or liable, to any Seller or any of its Affiliates, other
than any Assumed Current Liability.
(q) all
Liabilities of Sellers arising out of any (i) Excluded Contract, (ii) Permit that is not transferred to Purchaser as part of
the Acquired Assets or, (iii) Contract or Permit that is not transferred to Purchaser (subject to Section 1.5(c)) because
of any failure to obtain any Consent or Governmental Authorization required for such transfer;
(r) all
Liabilities of Sellers related to any Contract of any Seller, or an Affiliate of any Seller, with Virginia Premier, which such Contracts
shall be an Excluded Contract;
(s) all
Liabilities relating to Transferred Employees that arise on or prior to the Closing Date;
(t) all
Liabilities arising with respect to any Business Employees who are not required to receive a Transfer Offer or who otherwise fails to
become employed by Purchaser or its Affiliates immediately following the Closing Date (including due to refusing to accept a Transfer
Offer that complies with Section 6.3), other than as a result of Purchaser’s breach of Section 6.3;
(u) (i) all
Liabilities relating to income Taxes imposed upon any of the Sellers (or for which any of the Sellers may otherwise be liable, including
as a transferee, successor, or by contract (other than as expressly provided in this Agreement)), without regard to whether such Taxes
relate to periods (or portions thereof) ending on or prior to the Closing Date, (ii) all Liabilities relating to Taxes imposed on
or with respect to the Acquired Assets for any Pre-Closing Tax Period, and (iii) all Liabilities of any of the Sellers relating
to the payment for the income Taxes of any Person under Treasury Regulation Section 1.1502-6 (or any similar provision of state,
local, or non-U.S. Law); and
(v) drafts
or checks outstanding as of the Closing;
provided
that in the event of any conflict between the terms of Section 1.3 and this Section 1.4, the terms
of Section 1.3 shall control.
Section 1.5 Assumption/Rejection
of Certain Contracts / Non-Assignment.
(a) Assumption
and Assignment of Executory Contracts. Sellers shall provide timely and proper written notice of the motion seeking entry of the
Sale Order to all parties to any executory Contracts or unexpired Leases to which any Seller is a party that are Assigned Contracts
or an Acquired Lease and take all other actions reasonably necessary to cause such Contracts to be assumed by Sellers and assigned to
Purchaser pursuant to section 365 of the Bankruptcy Code to the extent that such Contracts are Assigned Contracts or an Acquired
Lease at Closing. The Sale Order shall provide that as of and conditioned on the occurrence of the Closing, the applicable Sellers shall
assume and assign or cause to be assigned to Purchaser, as applicable, the Assigned Contracts and any Acquired Lease, each of which shall
be identified by the name or appropriate description and date of the Assigned Contract and any Acquired Lease (if available), the other
party to the Assigned Contract, and any Acquired Lease, and the address of such party for notice purposes, all included in a notice filed
with the Bankruptcy Court. Such notice shall also set forth Sellers’ good faith estimate of the amounts necessary to cure any defaults
under each of the Assigned Contracts and any Acquired Lease as determined by Sellers based on their books and records or as otherwise
determined by the Bankruptcy Court. At the Closing, Sellers shall, pursuant to the Sale Order, and the Assignment and Assumption Agreement(s) assume
and assign to Purchaser (the consideration for which is included in the Purchase Price), all Assigned Contracts and any Acquired Lease
that may be assigned by any such Seller to Purchaser pursuant to sections 363 and 365 of the Bankruptcy Code, subject to adjustment
pursuant to Section 1.5(b). At the Closing, (i) Purchasers shall pay all Assumed Cure Costs and Sellers shall pay all
Excluded Cure Costs, and (ii) Purchaser shall assume, and thereafter in due course and in accordance with its respective terms pay,
fully satisfy, discharge and perform all of the obligations under each Assigned Contract and any Acquired Lease pursuant to section 365
of the Bankruptcy Code. On the date hereof, Sellers shall set forth on Schedule 3.6(a) their good faith estimate of
the Cure Costs of each executory Assigned Contract, Material Contract, and unexpired Lease, including the Acquired Lease.
(b) Excluding
or Adding Assigned Contracts and any Acquired Lease Prior to Closing. Purchaser shall have the right to notify Sellers in writing
of any Assigned Contract (other than Contracts with customers or pharmacies or any Commercial Interco Contract) and any Acquired Lease
that it does not wish to assume or a Contract or Lease (other than any Contract set forth on Schedule 1.5(b) (the “Rejection
Contracts”)) to which any Seller is a party that Purchaser wishes to add as an Assigned Contract or an Acquired Lease, as applicable,
at any time, and from time to time, up to one Business Day prior to the Bid Deadline (as defined in the Bidding Procedures Order), and
(i) any such previously considered Assigned Contract (other than Contracts with customers or pharmacies or any Commercial Interco
Contract) or Acquired Lease that Purchaser no longer wishes to assume shall be automatically deemed removed from the Schedules related
to Assigned Contracts or Acquired Lease, as applicable, and automatically deemed an Excluded Contract, in each case, without any adjustment
to the Purchase Price, and (ii) any such previously considered Excluded Contract (other than any Rejection Contract) that Purchaser
wishes to assume as an Assigned Contract, or Acquired Lease, as applicable, shall be automatically deemed added to the Schedules related
to Assigned Contracts, or Acquired Lease, as applicable, and automatically no longer deemed an Excluded Contract, and assumed by the
applicable Seller to sell and assign to Purchaser, in each case, without any adjustment to the Purchase Price.
(c) Non-Assignment.
(i) Notwithstanding
anything to the contrary in this Agreement, a Contract shall not be an Assigned Contract or an Acquired Lease hereunder and shall not
be assigned to, or assumed by, Purchaser to the extent that such Contract is terminated by a Seller, its Affiliates or any other party
thereto, or terminates or expires by its terms, on or prior to such time as it is to be assumed by Purchaser as an Assigned Contract
or an Acquired Lease hereunder and is not continued or otherwise extended upon assumption.
(ii) Notwithstanding
anything to the contrary in this Agreement, to the extent an Acquired Asset requires a Consent or Governmental Authorization (other than,
and in addition to and determined after giving effect to any Order of the Bankruptcy Court, including the Sale Order) in order to permit
the sale or transfer to Purchaser of the applicable Seller’s right, title and interest in and to such asset, and such Consent or
Governmental Authorization has not been obtained prior to such time as such right, title and interest is to be transferred by Purchaser
as an Acquired Asset hereunder, such asset shall not be an Acquired Asset hereunder and shall not be transferred to, or received by,
Purchaser. If any Acquired Asset is deemed not to be assigned pursuant to this clause (ii), the Closing shall nonetheless
take place subject to the terms and conditions set forth herein and, thereafter, through the earlier of such time as such Consent or
Governmental Authorization is obtained and six (6) months following the Closing or the election of Purchaser, upon written notice
to Sellers and in the sole discretion of Purchaser(or the closing of the Bankruptcy Cases or dissolution of the applicable Seller(s) if
earlier), Sellers and Purchaser shall (A) use reasonable best efforts to secure such Consent or Governmental Authorization as promptly
as practicable after the Closing and (B) cooperate in good faith in any lawful and commercially reasonable arrangement reasonably
proposed by Purchaser, including subcontracting, licensing, or sublicensing to Purchaser any or all of any Seller’s rights and
obligations with respect to any such Acquired Asset, under which (1) Purchaser shall obtain (without infringing upon the legal rights
of such third party or violating any Law) the economic rights and benefits (net of the amount of any related Tax costs imposed on Sellers
or their respective Affiliates or any direct costs associated with the retention and maintenance of such Acquired Asset incurred by any
Seller or its Affiliates) with respect to such Acquired Asset with respect to which the Consent or Governmental Authorization has not
been obtained and (2)Purchaser shall assume and timely discharge any related burden and obligation with respect to such Acquired Asset.
Upon satisfying any requisite Consent or Governmental Authorization requirement applicable to such Acquired Asset after the Closing,
the applicable Seller’s right, title and interest in and to such Acquired Asset shall promptly be transferred and assigned to Purchaser
in accordance with the terms of this Agreement and the Sale Order. Notwithstanding anything herein to the contrary, (x) the provisions
of this Section 1.5(c) shall not apply to any Consent or approval required under the HSR Act and any Foreign Competition
Laws, which Consent or approval shall be governed by Section 6.5 and (y) no Seller will be obligated to pay any consideration
therefor to any third party from whom Consent or Governmental Authorization is requested or to initiate any litigation to obtain any
such Consent or Governmental Authorization.
Section 1.6 Excluded
Asset Designation. At any time at least two (2) Business Day prior to the Closing,
Purchaser may, in its sole discretion and by written notice to the Sellers, designate any of the Acquired Assets (other than any executory
Contracts or unexpired Lease subject to Section 1.5(b)), as additional Excluded Assets. Purchaser acknowledges and agrees
that there shall be no reduction in the Purchase Price if it elects to designate any Acquired Assets as Excluded Assets pursuant to the
operation of this section.
Section 1.7 EIC.
(a) “EIC”
means Elixir Insurance Company, an Ohio corporation and wholly-owned Subsidiary of Sellers that is not a Debtor.
(b) At
the Closing, subject to the terms and subject to the conditions set forth herein, Sellers shall cause EIC to sell, transfer, assign,
convey, and deliver to Purchaser, and Purchaser shall purchase, acquire, and accept from EIC, all of EIC’s right, title and interest
in and to, as of the Closing, the following assets, free and clear of all Encumbrances other than Permitted Encumbrances:
(i) the
CMS Contracts;
(ii) the
EGWP Contracts; and
(iii) all
books and records maintained by or on behalf of EIC or any Affiliate for and with respect to the CMS Contracts and any EGWP Contracts.
(c) On
the terms and subject to the conditions set forth herein, effective as of the Closing, Purchaser shall irrevocably assume from EIC (and
after the Closing pay, perform, discharge, or otherwise satisfy in accordance with their respective terms), and EIC shall irrevocably
transfer, assign, convey, and deliver to Purchaser, all Liabilities and obligations of, and claims against, EIC under the CMS Contracts
incurred from and after the Closing.
(d) On
the terms and subject to the conditions set forth herein, effective as of the Closing, Purchaser shall irrevocably assume from EIC (and
after the Closing pay, perform, discharge, or otherwise satisfy in accordance with their respective terms), and EIC shall irrevocably
transfer, assign, convey, and deliver to Purchaser, all Liabilities and obligations of EIC under the EGWP Contracts incurred from and
after the Closing.
(e) Where
applicable, the CMS Contracts and the EGWP Contracts shall constitute Acquired Assets; provided that (i) the Parties acknowledge
and agree that EIC is not and shall not in any event be a Debtor and (ii) as such, none of the provisions of this Agreement related
to or involving the Bankruptcy Code shall apply to the transactions contemplated by this Section 1.7.
(f) “CMS
Contracts” means collectively, (i) that certain Contract titled "Contract with Approved Entity pursuant to Sections
1860D-1 Through 1860D-43 of the Social Security Act for the Operation of an Employer Group Only Voluntary Medicare Prescription Drug
Plan" (Contract No. S7694), by and between CMS and EIC, executed on or about September 11, 2023, including all documents
incorporated therein by reference and addenda thereto, (ii) any plans entered into thereunder, (iii) any “lives”
covered by any of the foregoing], and (iv) that certain Contract titled "Medicare Mark License Agreement" (Contract No. S7694),
by and between CMS and EIC, executed on or about September 11, 2023.
Article II
Consideration; Payment; Closing
Section 2.1 Consideration;
Payment.
(a) The
aggregate consideration (collectively, the “Purchase Price”) to be paid by Purchaser for the purchase of the Acquired
Assets shall be: (i) the assumption of Assumed Liabilities and (ii) subject to adjustment pursuant to Section 2.7,
a cash payment of $575,000,000 (the “Cash Payment”).
(b) At
the Closing, Purchaser shall deliver, or cause to be delivered, to Sellers the Cash Payment less the Deposit (the “Closing
Date Payment”). The Closing Date Payment and any payment required to be made pursuant to any other provision hereof shall be
made in cash by wire transfer of immediately available funds to such bank account as shall be designated in writing by the applicable
Party to (or for the benefit of) whom such payment is to be made at least two (2) Business Days prior to the date such payment is
to be made.
Section 2.2 Deposit;
Purchase Price Adjustment Escrow.
(a) Deposit.
(i) Purchaser
has, on or prior to the date hereof (or, if the date hereof is not a Business Day, the first Business Day immediately following the date
hereof) and pursuant to the Escrow Agreement, made an earnest money deposit with the Escrow Agent in the amount equal to $12,000,000
(the “Initial Deposit”), by wire transfer of immediately available funds for deposit into a separate segregated, non-interest
bearing escrow account (the “Escrow Account”) maintained by the Escrow Agent in accordance with the Escrow Agreement
and Bidding Procedures Order.
(ii) So
long as this Agreement has not been earlier terminated, Purchaser will, on or prior to October 23, 2023, and pursuant to the Escrow
Agreement, make a second earnest money deposit with the Escrow Agent in the amount equal to $3,000,000 (the “Second Deposit”),
by wire transfer of immediately available funds for deposit into the Escrow Account maintained by the Escrow Agent in accordance with
the Escrow Agreement and Bidding Procedures Order.
(iii) So
long as this Agreement has not been earlier terminated, Purchaser will, on or prior to October 30, 2023, and pursuant to the Escrow
Agreement, make a third earnest money deposit with the Escrow Agent in the amount equal to the difference (i) $57,500,000 minus
(ii) the sum of the Initial Deposit and the Second Deposit (such difference, the “Final Deposit”), by wire transfer
of immediately available funds for deposit into the Escrow Account maintained by the Escrow Agent in accordance with the Escrow Agreement
and Bidding Procedures Order, such that immediately after the Final Deposit is made the amount in the Escrow Account equals $57,500,000
(the total amount of funds held in the Escrow Account at any given time from the Initial Deposit, Second Deposit, or Final Deposit, shall
be referred to herein as the “Deposit”). The Deposit shall not be subject to any lien, attachment, trustee process,
or any other judicial process of any creditor of any Seller or Purchaser and shall be applied against payment of the Purchase Price on
the Closing Date.
(b) If
this Agreement has been terminated by (i) Sellers pursuant to Section 8.1(d), Section 8.1(f), or Section 8.1(p) or
(ii) Purchaser pursuant to Section 8.1(n) or Section 8.1(o), then, in any such case, the Parties shall
promptly, but in any event within five (5) Business Days after such termination hereof, deliver joint written instructions to the
Escrow Agent directing the Escrow Agent to transfer by wire transfer of immediately available funds 100% of the Deposit (together with
any and all investment interest thereon (less any Taxes with respect to such interest), if any) to such account(s) as may be designated
by Elixir, and Elixir shall retain the Deposit (together with any and all investment interest thereon (less any Taxes with respect to
such interest), if any); provided that nothing in this paragraph shall be deemed to limit any other remedies to which Sellers
may be entitled under this Agreement or applicable Law; provided that Sellers acknowledge and agree that retaining the Deposit
pursuant to this Section 2.2(b) shall be Sellers' sole and exclusive remedy arising (i) from Seller’s termination
of this Agreement pursuant to Section 8.1(d), Section 8.1(f), or Section 8.1(p) (or upon any
other grounds) as a result of Purchaser’s breach of Section 2.2(a) or Section 4.4, (ii) from
Purchaser’s breach of Section 2.2(a) or Section 4.4, or (iii) from Purchaser’s termination
of this Agreement pursuant to Section 8.1(n) or Section 8.1(o); provided that nothing herein shall limit
any Party’s Liability for Fraud.
(c) If
this Agreement has been terminated by any Party, other than as contemplated by Section 2.2(b), then the Parties shall promptly,
but in any event within five (5) Business Days after such termination hereof, deliver joint written instructions to the Escrow Agent
directing the Escrow Agent to transfer by wire transfer of immediately available funds 100% of the Deposit (together with any and all
investment interest thereon (less any Taxes with respect to such interest), if any) to such account(s) as may be designated by Purchaser,
and the Deposit, together with any and all investment interest thereon (less any Taxes with respect to such interest), if any, shall
be returned to Purchaser within five (5) Business Days after such termination.
(d) The
Parties agree that Sellers’ right to retain the Deposit, as set forth in Section 2.2(b), is not a penalty, but rather
is liquidated damages in a reasonable amount that will compensate Sellers for their efforts and resources expended and the opportunities
foregone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the Transactions,
which amount would otherwise be impossible to calculate with precision.
(e) If
the Closing occurs, at the Closing the Parties shall deliver a joint written instruction to the Escrow Agent directing the Escrow Agent
to (i) transfer by wire transfer of immediately available funds an amount equal to (i) 100% of the Deposit (together with any
and all investment interest thereon, if any) minus (ii) the Purchase Price Adjustment Escrow Amount, which shall continue
to be held in accordance with the Escrow Agreement, to such account(s) as may be designated by Elixir. The Purchase Price Adjustment
Escrow Amount shall not be subject to any lien, attachment, trustee process, or any other judicial process of any creditor of any Seller
or Purchaser.
Section 2.3 Closing.
The closing of the purchase and sale of the Acquired Assets, the delivery of the Purchase Price, the assumption of the Assumed Liabilities
in accordance with this Agreement (the “Closing”) will take place by telephone conference and electronic exchange
of documents (or, if the Parties agree to hold a physical closing, at the offices of Kirkland & Ellis LLP, located at 601 Lexington
Avenue, New York, New York 10022) at 10:00 a.m. Eastern Time on the first day of the month immediately following full satisfaction
or due waiver (by the Party entitled to the benefit of such condition) of the closing conditions set forth in Article VII
(other than conditions that by their terms or nature are to be satisfied at the Closing), or at such other place and time as the Parties
may agree in writing. The date on which the Closing actually occurs is referred to herein as the “Closing Date;” provided
that if the Closing Date would otherwise occur on January 1, 2024, the Closing Date shall be January 2, 2024.
Section 2.4 Closing
Deliveries by Sellers. At or prior to the Closing, Sellers shall deliver to Purchaser:
(a) a
bill of sale and assignment and assumption agreement substantially in the form of Exhibit A (the “Assignment and
Assumption Agreement”) duly executed by the applicable Sellers;
(b) a
short-form patent assignment agreement substantially in the form of Exhibit B, duly executed by the applicable Sellers;
(c) a
short-form trademark assignment agreement substantially in the form of Exhibit C, duly executed by the applicable Sellers;
(d) a
short-form domain name assignment agreement substantially in the form of Exhibit D, duly executed by the applicable Sellers;
(e) the
TSA, duly executed by the applicable Sellers or their Affiliates;
(f) chain
of custody agreements, in customary form and only to the extent necessary in accordance with applicable Law to transfer Sellers’
right, title, and interest in any pharmaceutical Investory to Purchaser, which agreements shall not expand any representation or warranty,
or any remedy or Liability, of any Party, duly executed by the applicable Sellers;
(g) a
special warranty deed with respect to each Owned Real Property, conveying to Purchaser fee simple title to such Owned Real Property,
subject only to Permitted Encumbrances;
(h) an
IRS Form W-9 or IRS Form W-8, as applicable, executed by each Seller or each Seller’s regarded owner for U.S. federal
income Tax purposes; provided that the Purchaser’s sole remedy for the failure to provide any such form shall be to withhold
any required amount under applicable Tax Law; and
(i) an
officer’s certificate, dated as of the Closing Date, executed by a duly authorized officer of Elixir certifying that the conditions
set forth in Section 7.2(a), Section 7.2(b), and Section 7.2(d) have been satisfied.
Section 2.5 Closing
Deliveries by Purchaser. At the Closing, Purchaser shall deliver to (or at the direction
of) Sellers:
(a) the
Closing Date Payment, subject to adjustment pursuant to Section 2.7;
(b) the
Assignment and Assumption Agreement, duly executed by Purchaser;
(c) a
short-form patent assignment agreement substantially in the form of Exhibit B, duly executed by the Purchaser;
(d) a
short-form trademark assignment agreement substantially in the form of Exhibit C, duly executed by the Purchaser;
(e) a
short-form domain name assignment agreement substantially in the form of Exhibit D, duly executed by the Purchaser;
(f) the
TSA, duly executed by the applicable Sellers or their Affiliates;
(g) chain
of custody agreements, in customary form and only to the extent necessary in accordance with applicable Law to transfer Sellers’
right, title, and interest in any pharmaceutical Inventory to Purchaser, which agreements shall not expand any representation or warranty,
or any remedy or Liability, of any Party, duly executed by the applicable Purchaser; and
(h) an
officer’s certificate, dated as of the Closing Date, executed by a duly authorized officer of Purchaser certifying that the conditions
set forth in Section 7.3(a) and Section 7.3(b) have been satisfied.
Section 2.6 Withholding.
Purchaser, the Sellers, and their Affiliates (or any applicable agents thereof) shall be entitled to deduct and withhold from the Cash
Payment or other consideration payable pursuant to this Agreement such amounts as may be required to be deducted and withheld under the
Tax Code or any provision of applicable Law; provided that Purchaser and its Affiliates shall use commercially reasonable efforts
to provide notice of any such intent by them to withhold or deduct (other than in respect of payments that are compensatory in nature)
to Sellers at least five (5) Business Days in advance of such withholding or deduction, and Purchaser and its Affiliates shall cooperate
in good faith with Sellers to reduce or eliminate any such withholding or deduction. To the extent that such amounts are paid over to
the appropriate Taxing Authority, such amounts shall be treated for all purposes of this Agreement as having been paid to the Person
in respect of which such deduction and withholding were made.
Section 2.7 Purchase
Price Adjustment.
(a) Closing
Adjustment.
(i) At
the Closing, the Cash Payment component of the Closing Date Payment payable at Closing by Purchaser pursuant to Section 2.5(a) shall
be adjusted in the following manner: either (1) an increase by the amount, if any, by which the Estimated Closing Working Capital
(as determined in accordance with Section 2.7(a)(ii)) is greater than the Target Working Capital provided that in no event
will such increase be more than $50,000,000, or (2) a decrease by the amount, if any, by which the Estimated Closing Working Capital
is less than the Target Working Capital.
(ii) At
least 3 Business Days before the Closing, Sellers shall prepare and deliver to Purchaser a statement setting forth its good faith estimate
of Closing Working Capital (the “Estimated Closing Working Capital”), which statement shall be substantially in the
form of Exhibit E and contain a calculation of Estimated Closing Working Capital (the “Estimated Closing Working
Capital Statement”), and prepared in accordance with GAAP applied using the accounting methods, practices, principles, policies
and procedures, with consistent classifications, judgments and valuation and estimation methodologies used by Sellers and their Affiliates
in the preparation of the Financial Statements, subject to any modifications and limitations set forth on Exhibit E.
(iii) The
Parties agree that the amounts set forth in Exhibit E are solely for the purposes of providing an example calculation of
Closing Working Capital in accordance with the terms of this Agreement but that such amounts are solely illustrative and do not constitute
any agreement or representation or warranty by any Party as to what such amounts shall be in the Estimate Closing Working Capital or
the Closing Working Capital and none of the Estimated Closing Working Capital Statement, the Closing Working Capital Statement, or the
Statement of Objections shall be bound by or required to include the amounts set forth in Exhibit E.
(b) Post-Closing
Adjustment. Within 90 days after the Closing Date, Purchaser shall prepare and deliver to Seller a statement setting forth Purchaser’s
good faith calculation of Closing Working Capital, which statement shall be substantially in the form of Exhibit E (the “Closing
Working Capital Statement”), and prepared in accordance with GAAP applied using the same accounting methods, practices, principles,
policies and procedures, with consistent classifications, judgments and valuation and estimation methodologies used by Sellers and their
Affiliates in the preparation of the Financial Statements, subject to any modifications and limitations set forth on Exhibit E.
(c) Review.
(i) After
receipt of the Closing Working Capital Statement, Sellers shall have 45 days (or such longer period as the Parties may agree in writing,
the “Review Period”) to review the Closing Working Capital Statement. During the Review Period, Sellers and Sellers’
Advisors shall have full access to the relevant books and records of Purchaser, the personnel of, and work papers prepared by, Purchaser
or Purchaser’s financial Advisors to the extent that they relate to Closing Working Capital and to such historical financial information
(to the extent in Purchaser’s possession) relating to Closing Working Capital as Sellers may reasonably request for the purpose
of reviewing the Closing Working Capital Statement and to prepare a Statement of Objections; provided that such access shall be
in a manner that does not interfere with the normal business operations of Purchaser.
(ii) On
or prior to the last day of the Review Period, Sellers may object to the Closing Working Capital Statement by delivering to Purchaser
a written statement setting forth Sellers’ objections in reasonable detail, indicating each disputed item or amount and the basis
for Sellers’ disagreement therewith (the “Statement of Objections”). If Sellers fail to deliver the Statement
of Objections before the expiration of the Review Period, the Closing Working Capital reflected in the Closing Working Capital Statement
will be deemed to have been accepted by Sellers and will be final and binding. If Sellers deliver the Statement of Objections before
the expiration of the Review Period, Purchaser and Sellers shall negotiate in good faith to resolve such objections within 45 days after
the delivery of the Statement of Objections or such longer period as the Parties may agree in writing (the “Resolution Period”),
and, if the same are so resolved within the Resolution Period, the Closing Working Capital Statement with such changes as may have been
previously agreed in writing by Purchaser and Sellers, shall be final and binding on the Parties. All discussions related thereto will
be governed by Rule 408 of the Federal Rules of Evidence (as in effect as of the date of this Agreement) and any applicable
similar state rule, unless otherwise agreed in writing by Sellers and Purchaser.
(iii) If
Sellers and Purchaser fail to reach an agreement with respect to all of the matters set forth in the Statement of Objections before expiration
of the Resolution Period, then any amounts remaining in dispute (“Disputed Amounts”) shall be submitted for resolution
to RSM US LLP or Grant Thornton LLP, at the election of Purchaser, (the “Independent Accountant”) who, acting as an
expert and not an arbitrator, shall resolve the Disputed Amounts only and make any adjustments to the Closing Working Capital Statement.
The Parties will execute a customary engagement letter if so requested by the Independent Accountant and will cooperate with the Independent
Accountant during the term of its engagement. The Independent Accountant will have exclusive jurisdiction over any disputes arising out
of or relating to the adjustments pursuant to this Section 2.7, and resort to the process involving the Independent Accountant
as provided in this Section 2.7(c) will be the only recourse and remedy of the Parties against one another with respect
to any such dispute. The Parties agree that all adjustments shall be made without regard to materiality. The Independent Accountant shall
decide only the Disputed Amounts and its decision for each Disputed Amount must be within the range of values assigned to each such item
in the Closing Working Capital Statement and the Statement of Objections, respectively. The fees and expenses of the Independent Accountant
(the “Accounting Fees”) shall be paid pro rata by Sellers, on the one hand, and Purchaser, on the other hand,
based upon the percentage that the amount actually contested but not awarded to Sellers or Purchaser, respectively, bears to the aggregate
amount actually contested by Sellers or Purchaser, respectively, as determined by the Independent Accountant. The Independent Accountant
shall make a determination as soon as practicable within 30 days (or such other time as the Parties shall agree in writing) after its
engagement, and its resolution of the Disputed Amounts and its adjustments to the Closing Working Capital Statement and allocation of
Accounting Fees between Purchaser and Sellers shall, in each case, be final, conclusive and binding upon the Parties.
(iv) Closing
Working Capital (i) will be determined in accordance with the definitions set forth in this Agreement, and (ii)(A) will not
include any changes in assets or liabilities as a result of purchase accounting adjustments or other changes arising from or resulting
as a consequence of the Transactions, (B) will be, and will be based on facts and circumstances as they exist as of the Closing,
expressly including “Type 1” subsequent event evidence to the extent permitted under GAAP, but otherwise will exclude the
effects of any act, decision, change in circumstances or event arising or occurring on or after the Closing, (C) will not include
any reserve or accrual, or any line item or line item entry, not reflected in Exhibit E. The Parties agree that the purpose
of determining the Closing Working Capital in accordance with this Section 2.7 is solely to accurately measure changes (if
any) in the amounts of the Closing Working Capital from the Estimated Closing Working Capital set forth in the Estimated Closing Working
Capital Statement in order to determine the final Closing Working Capital and that such processes are not intended to permit the introduction
of principles, policies, practices, procedures, methodologies, classifications, methods, conventions, assumptions, judgments or estimation
techniques that are different from those used in the calculation of the Cash Payment (including any exclusions or deviations from GAAP
and the methodology used by Sellers to prepare such estimates).
(d) Payments.
(i) If
the amount of the Closing Working Capital set forth in the Closing Working Capital Statement as finally determined in accordance with
Section 2.7(c) is greater than the Estimated Closing Working Capital, Purchaser shall pay to Sellers an amount equal
to such difference and the Parties shall direct the Escrow Agent to release to Sellers the Purchase Price Adjustment Escrow Amount from
the Escrow Account; provided that notwithstanding anything contained in this Agreement to the contrary, in no event shall the
Cash Payment as adjusted pursuant to this Section 2.7 exceed $625,000,000.
(ii) If
the amount of the Closing Working Capital set forth in the Closing Working Capital Statement as finally determined in accordance with
Section 2.7(c) is less than the Estimated Closing Working Capital (any such excess, the “Purchaser Adjustment
Amount”), Sellers shall pay to Purchaser an amount equal to such difference as follows: (A) if such difference equals
or exceeds the amount available in the Escrow Account, the Parties shall direct the Escrow Agent (pursuant to the terms of the Escrow
Agreement) to release to Purchaser the entire Purchase Price Adjustment Escrow Amount from the Escrow Account, and (B) if such difference
is less than the amount available in the Escrow Account, the Parties shall direct the Escrow Agent (pursuant to the terms of the Escrow
Agreement) to release to Purchaser an amount equal to such difference from the Escrow Account and release any remaining amounts in the
Escrow Account to Sellers.
(iii) Purchaser
agrees that (i) payment of the Purchaser Adjustment Amount (if any) from the Escrow Account in accordance with the Escrow Agreement
shall be the sole and exclusive remedy for Purchaser for payment of the Purchaser Adjustment Amount, if any, and the Purchase Price Adjustment
Escrow Amount in the Escrow Account will be Purchaser’s sole and exclusive source of recovery for any amounts owing to Purchaser
pursuant to this Section 2.7, even if the Purchaser Adjustment Amount exceeds the Purchase Price Adjustment Escrow Amount,
and (ii) the adjustments to the Purchase Price provided for in this Section 2.7, and the dispute resolution provisions
provided for in this Section 2.7, will be the exclusive remedy for the matters addressed or could be addressed by this Section 2.7.
For the avoidance of doubt, and without limiting the generality of the foregoing, no claim by Purchaser or any of its Affiliates or Advisors
for the payment of the Purchaser Adjustment Amount will be asserted against any of the Sellers; provided that, for the avoidance of doubt,
this sentence will not limit the obligations of Sellers expressly set forth in this Section 2.7, including with respect to
the obligation, if any, to instruct the Escrow Agent to release the Purchaser Adjustment Amount from the Escrow Account.
(iv) Any
payments required to be made pursuant to this Section 2.7(d) will (A) be due (x) within five (5) Business
Days of acceptance of the applicable Closing Working Capital Statement or (y) if there are Disputed Amounts, then within five (5) Business
Days of the resolution of any Disputed Amounts pursuant to Section 2.7(c)(iii); and (B) be paid by wire transfer of
immediately available funds to such account as is directed by Purchasers or Sellers, as the case may be.
(e) Adjustments
for Tax Purposes. Any payments made pursuant to Section 2.7 shall be treated as an adjustment to the Purchase Price by
the Parties for Tax purposes, unless otherwise required by Law.
Article III
Representations and Warranties of SellerS
Except as disclosed in the
forms, reports, schedules, statements, exhibits and other documents filed during the 6 months preceding the date hereof with the SEC
by Rite Aid Corporation, a Delaware corporation and parent of Elixir, in respect of Sellers, their Affiliates, and their businesses to
the extent publicly available on the EDGAR system of the United States Securities and Exchange Commission (the “Filed SEC Documents”)
(other than any disclosures set forth under the headings “Risk Factors” or “Forward-Looking Statements” and any
other disclosures included therein to the extent they are forward-looking in nature) or set forth in the Schedules delivered by Sellers
concurrently herewith (each, a “Schedule” and collectively, the “Schedules”) and subject to Section 10.10,
Sellers represent and warrant to Purchaser as of the date hereof as follows.
Section 3.1 Organization
and Qualification. Each Seller is a corporation, limited liability company or limited partnership,
as applicable, duly incorporated or organized, validly existing, and in good standing under the Laws of the jurisdiction of its incorporation
or formation. Each Seller is duly licensed or qualified to do business under the Laws of each jurisdiction in which the nature of the
business conducted by it makes such licensing or qualification necessary, except where failure to be so licensed, qualified or in good
standing would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 3.2 Authorization
of Agreement. Subject to requisite Bankruptcy Court approvals:
(a) each
Seller has all necessary power and authority to execute and deliver this Agreement and the other Transaction Agreements to which each
such Seller is a party and to perform its obligations hereunder and to consummate the Transactions;
(b) the
execution, delivery and performance by each Seller of this Agreement and the other Transaction Agreements to which such Seller is a party,
and the consummation by such Seller of the Transactions, subject to requisite Bankruptcy Court approvals being granted, have been duly
authorized by all requisite corporate action, limited liability company action or limited partnership action on the part of such Seller,
as applicable, and no other organizational proceedings on such Seller’s part are necessary to authorize the execution, delivery
and performance by such Seller of this Agreement or the other Transaction Agreements and the consummation by it of the Transactions;
and
(c) this
Agreement and the other Transaction Agreements to which each Seller is a party have been, or will be, duly executed and delivered by
such Seller and, assuming due authorization, execution and delivery hereof and thereof by the other parties hereto and thereto, constitutes,
or will constitute, legal, valid and binding obligations of such Seller, enforceable against such Seller in accordance with its and their
terms, except that such enforceability (a) may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other similar Laws of general application affecting or relating to the enforcement of creditors’ rights generally and (b) is
subject to general principles of equity, whether considered in a proceeding at law or in equity (collectively, the “Enforceability
Exceptions”).
Section 3.3 Conflicts;
Consents. Assuming that (a) requisite Bankruptcy Court approvals are obtained, (b) the
notices, authorizations, approvals, Orders, Permits or consents set forth on Schedule 3.3 are made, given or obtained (as
applicable), and (c) the requirements of the HSR Act and any other applicable antitrust, competition, foreign direct involvement
or “FDI”, or merger control Laws promulgated by any Governmental Body (“Foreign Competition Laws”)
are complied with, neither the execution and delivery by Sellers of this Agreement or the other Transaction Agreements, nor the consummation
by Sellers of the Transactions, nor performance or compliance by Sellers with any of the terms or provisions hereof or thereof, will
(i) conflict with or violate any provision of any Seller’s certificate of incorporation or bylaws, certificate of formation
or limited liability company agreement, certificate of limited partnership, partnership agreement or other governing documents, as applicable,
(ii) violate or constitute a breach of or default (with or without notice or lapse of time, or both) under or give rise to a right
of termination, modification, or cancelation of any obligation or to the loss of any benefit, any of the terms or provisions of any Material
Contract or accelerate any Seller’s obligations under any such Material Contract, (iii) conflict with or violate any Law or
Order applicable to any Seller or any of the Acquired Assets, or by which any Seller, or any of the Acquired Assets, may be bound or
affected, or (iv) result in the creation of any Encumbrance (other than a Permitted Encumbrance) on any Acquired Assets, except,
in each case of clauses (ii) thru (iv), as would not, individually or in the aggregate, reasonably be expected to be material to
the Acquired Assets or the Assumed Liabilities, taken as a whole.
Section 3.4 Financial
Statements.
(a) Rite
Aid Corporation, a Delaware corporation and direct or indirect parent of Sellers (“RAD”), has filed with the EDGAR
system of the United States Securities and Exchange Commission:
(i) its
Form 10K, filing date May 1, 2023, which includes the audited consolidated balance sheet of RAD and subsidiaries as of March 4,
2023 and the related audited consolidated statements of operations, comprehensive loss, stockholders’ (deficit) equity, and cash
flows for the fiscal year ended March 4, 2023; and
(ii) its
Form 10Q, filing date July 11, 2023, which includes the unaudited consolidated balance sheet of RAD and subsidiaries as of
June 3, 2023, the related unaudited consolidated statements of operations, comprehensive loss, stockholders’ (deficit) equity,
and cash flows for the thirteen weeks ended June 3, 2023.
(b) Attached
to Schedule 3.4(b) are:
(i) the
unaudited balance sheet of the Pharmacy Services Segment of RAD as of March 4, 2023 and the related unaudited statements of operations
and cash flows for the fiscal year ended March 4, 2023; and
(ii) the
unaudited balance sheet of the Pharmacy Services Segment of RAD as of June 30, 2023 and the related unaudited statements of operations
and cash flows for the six months ended June 30, 2023 ((a), and (b), collectively, the “Financial Statements”).
(c) The
Financial Statements have been prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto and, in the case of unaudited Financial Statements, subject to normal year-end audit adjustments,
to the absence of notes and to any other adjustments described therein, including in any notes thereto) and fairly present in all material
respects the consolidated financial position of the Sellers and their respective consolidated Subsidiaries as of the dates thereof and
the consolidated results of their operations and cash flows for the periods shown, except as may be indicated in the notes thereto.
(d) Each
of the Sellers maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions
are executed with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformance with GAAP, and to maintain accountability for assets; (iii) access to Sellers’ assets
are permitted only in accordance with management’s authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken with respect to any differences (v) violations of the
applicable Anti-Corruption Laws will be prevented and detected. None of RAD, to the extent directly related to the Business, any of the
Sellers or, to the Knowledge of Sellers, any of their respective independent auditors, has identified or been made aware of “significant
deficiencies” or “material weaknesses” (as defined by the Public Company Accounting Oversight Board) in the design
or operation of the their internal controls over financial reporting which would reasonably be expected to adversely affect in any material
respect their ability to record, process, summarize and report financial data, in each case which has not been subsequently remediated.
Section 3.5 Title
to Properties; Sufficiency of Assets.
(a) (i) The
Sellers own good and valid title to, or hold a valid leasehold interest in, all of the Acquired Assets, whether tangible or intangible,
free and clear of all Encumbrances (other than Permitted Encumbrances), and (ii) at the Closing, Sellers will transfer, convey and
assign good and valid title to, or a valid leasehold interest in, all of the Acquired Assets free and clear of all Encumbrances (other
than Permitted Encumbrances).
(b) Other
than the Excluded Assets, but together with the rights and services set forth in the TSA, the Acquired Assets constitute all of the assets,
properties and rights necessary to operate and conduct the Business in substantially the same manner as the Business was operated and
conducted immediately as of the date hereof.
(c) Schedule 3.5(c) sets
forth the address of each Owned Real Property.
(d) With
respect to the Owned Real Property:
(i) a
Seller has good and marketable fee simple title to such Owned Real Property, which shall be, free and clear of all Encumbrances as of
the Closing Date, except for Permitted Encumbrances;
(ii) no
Seller has leased or otherwise granted to any Person the right to use or occupy such Owned Real Property or any portion thereof or otherwise
transferred any of its rights to the Owned Real Property or any improvements thereon;
(iii) other
than the right of Purchaser pursuant to this Agreement, there are no outstanding options, rights of first offer or rights of first refusal
to purchase such Owned Real Property or any portion thereof or interest therein; and
(iv) the
Sellers are not a party to any agreement or option to purchase any real property or interest therein relating to, or used in connection
with, the Business.
(e) One
or more of the Sellers has a good and valid leasehold interest to all real property leased by Sellers (the “Leased Real Property”),
free and clear of all Encumbrances (other than Permitted Encumbrances). There are no leases, license agreements or other rights to occupy
the Leased Real Property, or any portion thereof, except those rights of Seller as tenant pursuant to the applicable Acquired Lease or
pursuant to any Permitted Encumbrance.
(f) Schedule 3.5(f) sets
forth the address of each Leased Real Property. The Sellers have made available to the Purchaser or the Purchaser’s Advisors true,
correct and complete copies of each Acquired Lease. Except as set forth on Schedule 3.5(f) (and subject to entry of
the Sale Order), with respect to each Acquired Lease (i) such Acquired Lease is legal, valid, binding, enforceable and in full force
and effect; (ii) to the Knowledge of Sellers, there are no existing material disputes with respect to such Acquired Lease; (iii) none
of Sellers or, to the Knowledge of Sellers, any other party to the Acquired Lease is in material breach or material default under such
Acquired Lease, and, to the Knowledge of Sellers, no event has occurred since January 1, 2022 or circumstance exists which, with
the delivery of notice, the passage of time or both, would constitute such a material breach or material default, or permit the termination,
modification or acceleration of rent under such Acquired Lease; (iv) no Seller has currently subleased, licensed or otherwise granted
any Person the right to use or occupy such Leased Real Property or any portion thereof; (v) none of the Acquired Leases, or any
interest therein, is collaterally assigned or subject to a security interest (other than Permitted Encumbrances); and (vi) a Seller
has a valid leasehold interest in the Leased Real Property; and (vii) no notice of termination or default has been delivered or
received with respect to any Acquired Lease.
(g) The
improvements and fixtures (including building systems, such as heating, plumbing, ventilation, air conditioning and electric) on the
Owned Real Property and Leased Real Property are in adequate operating condition and in a state of adequate maintenance and repair, ordinary
wear and tear excepted, are adequate and suitable for the current operations of the Business. There is no condemnation, eminent domain,
expropriation or similar proceeding pending or, to Sellers’ Knowledge, threatened against any of the Owned Real Property or Leased
Real Property or any improvement thereon. The Owned Real Property and Leased Real Property constitutes all of the real property utilized
by a Seller in the operation of the Business other than, for the avoidance of doubt, any real property used by Sellers’ Affiliates
in providing services used by Sellers under the TSA.
Section 3.6 Contracts.
(a) Schedule 3.6(a) sets
forth a list of each Material Contract, as of the date of this Agreement. “Material Contract” means any Contract to
which the Sellers are party, excluding any Employee Benefit Plan, that:
(i) relates
to the formation, creation, governance, economics, or control of any joint venture, partnership or other similar arrangement, other than
Contracts entered into in the Ordinary Course;
(ii) provides
for indebtedness for borrowed money of Sellers having an outstanding or committed amount in excess of $100,000, other than letters of
credit or expense advances made in the Ordinary Course or loans made under any 401(k) plan;
(iii) relates
to the acquisition or disposition of any business (whether by merger, sale of stock, sale of assets or otherwise) for aggregate consideration
under such Contract in excess of $500,000 pursuant to which any earn-out, indemnification or deferred or contingent payment obligations
remain outstanding that would reasonably be expected to involve payments by or to Sellers of more than $500,000 after the date hereof
(in each case, excluding for the avoidance of doubt, acquisitions or dispositions supplies, merchandise, Inventory, products, Equipment,
properties or other assets in the Ordinary Course, or of supplies, Inventory, merchandise, products, Equipment, properties or other
assets that are obsolete, worn out, surplus or no longer used or useful in the conduct of the Business);
(iv) is
a Contract pursuant to which Sellers would reasonably be expected to (i) make payments of more than $500,000 during any fiscal year
or (ii) receive payments of more than $3,500,000 during any fiscal year;
(v) contains
any provision (A) limiting, in any material respect, the right of Sellers to engage in any business, solicit or hire any Person,
compete with any Person, or operate anywhere in the world, (B) granting any exclusivity right to any third party or containing a
“most favored nation” provision in favor of any third party, or (C) granting any right of first refusal, right of first
offer or right of first negotiation in each case of (A), (B) and (C), that would reasonably be expected to be material to the Business,
taken as a whole;
(vi) is
a Contract with a Governmental Body that involves aggregate annual payments in excess of $1,000,000 (not including drug spend);
(vii) is
a Contract with a Group Purchasing Organization that involves aggregate annual payments in excess of $500,000;
(viii) contains
minimum payment or purchase requirements, guarantees of purchase or sale, volume-based commitments or other pricing clauses of similar
contractual language, in each case, except as would not reasonably be expected to be material to the Acquired Assets and the Business,
taken as a whole;
(ix) is
a Contract between any Seller (on the one hand) and EIC (on the other hand);
(x) is
a collective bargaining agreement or other similar labor agreement covering (A) Business Employees or (B) to the extent such
Contract would reasonably be expected to impact the Transactions or the hiring and employment of Business Employees by Purchaser hereunder,
other employees of Sellers;
(xi) is
any Contract with any current Business Employee or contractor, that (A) involves aggregate annual compensation in excess of $100,000
during the past twelve-month period or that will be in excess of $100,000 during the twelve-month period following the date hereof for
such person, other than offer letter agreements for at-will employment; or (B) involves any severance, change-in-control, retention,
or similar type of payment payable by a Seller; or
(xii) is
any Contract for any employee staffing arrangement or any other arrangement whereby the Sellers spend in excess of $200,000 annually
to retain the services of a staffing agency, professional employer organization, or employer of record.
(b) True
and complete copies of all Material Contracts have previously been made available to Purchaser or Purchaser’s Advisors. Subject
to requisite Bankruptcy Court approvals, and assumption by the applicable Seller of the applicable Contract in accordance with applicable
Law and except (i) as a result of the commencement of the Bankruptcy Cases, (ii) with respect to any Contract that has previously
expired in accordance with its terms, or (iii) as set forth in Schedule 3.6(b), (A) each Material Contract is valid
and binding on the Seller that is a party thereto and, to the Knowledge of Sellers, each other party thereto, and is in full force and
effect, subject to the Enforceability Exceptions, (B) the applicable Seller, and to the Knowledge of Sellers, any other party thereto,
have performed all obligations required to be performed by it under each Material Contract, (C) Sellers have received no written
notice of the existence of any breach or default on the part of any Sellers under any Material Contract, (D) there are no events
or conditions which constitute, or, after notice or lapse of time or both, will constitute a default on the part of a Seller, or to the
Knowledge of Sellers, any counterparty under such Material Contract and (E) to the Knowledge of Sellers, Sellers have not received
any written notice from any Person that such Person intends to terminate, or not renew, any Material Contract.
(c) Schedule 3.6(c) sets
forth a list of the top 10 suppliers by value of purchases for each of the specialty pharmacy and pharmacy benefit management segments
of the Business for each of the year ended December 31, 2022 and the six (6) month period ended June 30, 2023 (each, a
“Significant Supplier”).
(d) Schedule 3.6(d) sets
forth a list of the top 20 customers by revenue (each, a “Significant Customer”) for each of the specialty pharmacy
and pharmacy benefit management segments of the Business for each of the year ended December 31, 2022 and the six (6) month
period ended June 30, 2023.
(e) Since
January 1, 2023, none of the Significant Suppliers or Significant Customers has canceled or otherwise terminated (other than pursuant
to natural expiration) or made any written threat to any Seller to cancel or otherwise terminate or materially curtail its relationship
with any Seller.
(f) Except
as set forth on Schedule 3.6(f) and except with respect to Excluded Liabilities: (i) all Client Contracts, Pharmacy
Contracts and Rebate Contracts are currently, and since January 1, 2022 have been, adjudicated in accordance with the terms and
conditions of each such Client Contract, Pharmacy Contract or Rebate Contract, in all material respects; and (ii) all material rebate
claims of the Sellers since January 1, 2022 have been submitted and processed in accordance with the terms and conditions of the
applicable Rebate Contract in all material respects, it being understood, in the case of (i) and (ii), that such terms
include, for instance, reconciliation processes to correct the amount of payments initially made and compliance with such terms shall
give effect to such reconciliations and that the initial design and setup of logistical arrangements with counterparties involves some
degree of trial and error.
(g) Scheduled 3.6(g) sets
forth a list of customer Contracts of Sellers pursuant to which Sellers have received revenue of at least 80% of the aggregate revenue
of the Business for the seven (7) month period ended July 31, 2023, together with the lives associated therewith, the
start date of such Contracts, and the expected end date of such Contracts.
Section 3.7 No
Litigation.
(a) There
are no Actions pending or, to Sellers’ knowledge, threatened against or affecting any of the Sellers that would reasonably be expected
to adversely affect any Seller’s performance of its obligations under any of the Transaction Agreements or the consummation of
the Transactions.
(b) Except
as set forth on Schedule 3.8(b), there is no Action pending, or to the Knowledge of Sellers threatened, against or relating
to any Seller, the Business, the Acquired Assets or the Assumed Liabilities that (i) if adversely determined against any Seller,
the Business, or the Acquired Assets would reasonably be expected to result in Liabilities, fines or damages of more than $500,000 or
would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, or (ii)(A) relates to a criminal
matter or (B) calls for injunctive relief or other restriction that, if adversely determined against any Seller, would reasonably
be expected to be material to the Business, Acquired Assets and the Assumed Liabilities, taken as a whole.
(c) Except
as set forth on Schedule 3.8(c), since January 1, 2022, there has been no (i) such Action pending, or to the Knowledge
of Sellers threatened, against any Seller or (ii) material Order imposed (or otherwise pending or the Knowledge of Sellers threatened)
upon any Seller, in each case, by or before any Governmental Body.
Section 3.8 Permits;
Compliance with Laws.
(a) Each
Seller (with respect to the Business) is, and has been since January 1, 2022, in compliance in all material respects with all Laws
or Orders, applicable to such Seller. Each Seller holds all licenses, permits, Healthcare Permits, certificates, approvals and authorizations
from Governmental Bodies necessary for the lawful conduct of the Business (collectively, “Permits”). Except as would
not, individually or in the aggregate, reasonably be expected to be material to the Business, (i) each Healthcare Permit is valid,
subsisting and in full force and effect and (ii) the Business as currently conducted is not in violation of, nor are the Sellers
in default or violation under, any Healthcare Permit.
(b) To
the Knowledge of the Sellers since January 1, 2022, no event has occurred which, with notice or the lapse of time or both, would
constitute a default or violation of any material terms, condition or provision of any Healthcare Permits. There are no actions pending
or, to the Knowledge of the Sellers, threatened, that seek the revocation, cancellation or adverse modification of any Healthcare Permit.
To the Knowledge of the Sellers, each director, officer, employee, agent and independent contractor of the Sellers possesses all Permits
necessary for the lawful conduct of his or her duties and obligations in the operation of the Business.
(c) Each
Seller and each of their respective directors, officers and employees acting in such capacity and, to the Knowledge of Sellers, each
of its and their other agents acting on its or their behalf, is, and has been since January 1, 2022, in compliance in all material
respects with the Foreign Corrupt Practices Act of 1977 and any rules and regulations promulgated thereunder.
(d) Since
January 1, 2022, none of the Sellers, nor to the Knowledge of Sellers, any Affiliate of Sellers, has received written notice from
any Governmental Body claiming or alleging that any of the Sellers are not in compliance with any applicable Law or Order applicable
to any of them, or the operation of their respective businesses, in any material respect, in each case except as would not, individually
or in the aggregate, reasonably be expected to be material to the Business, the Acquired Assets and the Assumed Liabilities, taken as
a whole.
Section 3.9 Environmental
Matters. Except as disclosed on Schedule 3.9, (a) Sellers are, and have
been since January 1, 2022, in compliance in all material respects with all applicable Environmental Laws with respect to the conduct
of the Business, (b) since January 1, 2022, no Seller has received any written notice alleging that any Seller is in violation
of, or liable under, in any material respect, any Environmental Law that is unresolved with respect to the conduct of the Business, and
to the Knowledge of the Sellers, there are no facts or circumstances that would be reasonably expected to result in any future written
notices, (c) Sellers possess and are in compliance in all material respects with all Permits required under Environmental Laws for
the operation of the Business as currently conducted (“Environmental Permits”), (d) there is no Action under
or pursuant to any Environmental Law or Environmental Permit that is pending or, to the Knowledge of Sellers, threatened in writing against
any Seller, (e) Sellers are not subject to any Order imposed by any Governmental Body pursuant to Environmental Laws under which
there are uncompleted, outstanding or unresolved obligations on the part of any Seller, (f) since January 1, 2022 there has
been no Release of Hazardous Materials with respect to any Seller’s currently or formerly owned, leased, or operated property,
or at any location or facility where wastes from the operations or assets of the Sellers have been disposed or recycled, (g) no
Seller is subject to any outstanding Order under any Environmental Law, (h) no Seller has assumed responsibility for, or agreed
to indemnify or hold harmless any Person for, any Liability or obligation, arising under or relating to Environmental Laws, including
any obligation for investigation, corrective or remedial action, and (i) the Sellers have provided copies of all environmental assessments,
environmental sampling and monitoring data, and health and safety audits concerning the business that are in their possession.
Section 3.10 Intellectual
Property.
(a) Sellers
are the sole and exclusive owners of all of the rights, title and interest in and to the Acquired Intellectual Property, in each case
free and clear of all Encumbrances (other than Permitted Encumbrances). Except as would not, individually or in the aggregate, reasonably
be expected to be material to the Business, all of the Acquired Intellectual Property that is registered is subsisting, valid and enforceable.
(b) Section 3.10(b) is
a complete and accurate list of each trademark registration, application for trademark registration and domain name included in the Acquired
Intellectual Property that is registered with or applied for with (collectively, “Registered Trademarks”) the United
States Patent and Trademark Office, any similar intellectual property office or any domain name registrar (each a “Registration
Office”) setting forth as applicable, the title, application number, filing date, and registration number. Except as would
not, individually or in the aggregate, reasonably be expected to be material to the Business, with respect to each Registered Trademark,
all necessary filing, examination, registration, maintenance, renewal and other fees and Taxes due on or prior to the date hereof and
the Closing Date have been timely paid in full, and all necessary documents (including responses to office actions and other correspondence
from a Registration Office) and certificates have been timely filed with all relevant Registration Offices for the purposes of maintaining
such Registered Trademarks, in each case in accordance with applicable Law and to avoid loss or abandonment thereof.
(c) Sellers
own or have valid, legally enforceable and sufficient rights to use all Intellectual Property necessary to the conduct of the Business
as currently conducted by Sellers, free and clear of all Encumbrances (other than Permitted Encumbrances). Sellers have taken reasonable
steps to maintain and protect the confidentiality of the material trade secrets and other material non-public Acquired Intellectual Property.
Except as would not, individually or in the aggregate, reasonably be expected to be material to the Business, Acquired Assets and the
Assumed Liabilities, taken as a whole, the Sellers have not disclosed any material trade secrets or non-public information included in
the Acquired Intellectual Property (or any tangible embodiment thereof) to any Person without having such Person execute a written agreement
regarding the non-disclosure and non-use thereof. Nothing in this Section 3.10(c) shall be interpreted or construed
as a representation or warranty with respect to whether there is any infringement, misappropriation, or violation of any Intellectual
Property, which is the subject of Section 3.10(d) and Section 3.10(e).
(d) No
Actions are pending or, to the Knowledge of Sellers, threatened against any Seller, and since January 1, 2022, Sellers have not
received any written notice or claim (including any cease and desist letter), (i) challenging the ownership, validity, enforceability
or use by any Seller of any Acquired Intellectual Property, (ii) alleging that the Business, any Acquired Assets, or any Seller
in connection with the Business is infringing, misappropriating or otherwise violating the Intellectual Property of any Person, (iii) that
any Seller in connection with the Business requires a license to any Person’s Intellectual Property, or (iv) that includes
any unsolicited written offer to license (or any other notice of) any Person’s Intellectual Property.
(e) To
the Knowledge of Sellers, since January 1, 2022, no Person has infringed, misappropriated or otherwise violated the rights of Sellers
with respect to any Acquired Intellectual Property, except as would not reasonably be expected to be material to the Business, taken
as a whole. Since January 1, 2022, no Seller has notified any Person that such Person is infringing, misappropriating, or violating
any Acquired Intellectual Property. Since January 1, 2022, the using, making, modifying, selling, licensing, or distributing any
of the Acquired Assets and the conduct and operation of the Business by Sellers has not violated, misappropriated, or infringed the Intellectual
Property rights of any other Person, except as would not reasonably be expected to be material to the Business, taken as a whole.
(f) The
consummation of the Transactions will not result in the grant of any right or license to any third party of any Acquired Intellectual
Property.
(g) No
event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will, or would reasonably
be expected to, require the disclosure or delivery to any Person (including any technology/software escrow company) of the source code
for any material, proprietary software (including the Laker Software) that is included in the Acquired Intellectual Property (collectively,
the “Transaction Source Code”), other than disclosure prior to the Closing Date of source code to employees or contractors
of a Seller in connection with their performance of services for a Seller. Other than employees and contractors of a Seller who perform
services for a Seller, no Seller has provided to any Person any Transaction Source Code.
(h) Each
Seller is in compliance in all material respects with all Open License Terms applicable to any Public Software licensed to or used by
a Seller. No Seller has received any written notice alleging that it is in violation or breach of any Open License Terms. Each Seller’s
use, modification, and distribution of any Public Software does not (a) require a Seller to make available any Transaction Source
Code or any third party’s source code (other than the source code for third party software used by Seller under Open License Terms);
(b) require a Seller to grant permission to create modifications to or derivative works of any material proprietary software included
in or provided with the Acquired Intellectual Property (“Acquired Software”); (c) require a Seller to grant a
royalty-free license to any Person under any Acquired Intellectual Property or any third party Intellectual Property provided therewith
(including any Acquired Software).
(i) Except
as would not reasonably be expected to be material to the business of Laker Software, Inc., no software, systems or networks included
in the Acquired Intellectual Property contain any “virus,” “malware,” “malicious code,” or other
similar software (collectively, “Viruses”). Except as would not reasonably be expected to be material to the business
of Laker Software, Inc., the Sellers have taken reasonable steps to prevent the introduction of Viruses into any Acquired Intellectual
Property.
(j) Except
as would not, individually or in the aggregate, reasonably be expected to be material to the business of Laker Software, Inc., taken
as a whole, no funding, facilities or resources of any Governmental Body or any university, college, other educational institution, multi-national,
bi-national or international organization or research center was used in connection with the development or creation, in whole or in
part, any Acquired Intellectual Property.
(k) All
current and former employees, consultants and independent contractors of Sellers who are or were involved in the creation or development
of any material Acquired Intellectual Property have executed a written agreement regarding the protection of proprietary information
and the present assignment to a Seller, or have otherwise assigned by operation of Law, all right, title and interest in such Intellectual
Property created or developed by such Persons on behalf of such Seller.
(l) Schedule 3.10(l) is
a complete and accurate list of all Contracts to which any Seller is a party pursuant to which a Seller has granted or is required to
grant to any Person any license to, any covenant not to assert or sue, other immunity from suit under, or any other rights, to any material
Acquired Intellectual Property, other than (i) Contracts entered with customers and vendors in the ordinary course of business,
(ii) Intellectual Property assignment Contracts entered into with employees or third-party contractors in the ordinary course of
business, (iii) confidentiality or non-disclosure Contracts entered into in the ordinary course of business, and (iv) Contracts
primarily for the provision of services where the granting or obtaining (or agreement to obtain) any right to use, or permission or agreement
to permit any other Person to use, any Intellectual Property is ancillary or incidental to the transactions contemplated in such contract.
(m) Schedule 3.10(m) is
a complete and accurate list of all Contracts to which any Seller is a party pursuant to which any Person is currently granting or is
required to grant in the future to a Seller any right under or license to, any covenant not to assert or sue or other immunity from suit
under or any other rights to any material Intellectual Property, other than (i) Contracts granting rights to commercial, off the
shelf software and services with an annual license fee of less than $500,000, (ii) Contracts relating to free or open source software,
(iii) confidentiality or non-disclosure Contracts entered into in the ordinary course of business, and (iv) Contracts primarily
for the provision of services where the granting or obtaining (or agreement to obtain) any right to use, or permission or agreement to
permit any other Person to use, any Intellectual Property is ancillary or incidental to the transactions contemplated in such Contract.
(n) Schedule 3.10(n) is
a complete and accurate list, grouped by subsection, of all Contracts as follows: (i) by which Seller acquired from another Person
any material Acquired Intellectual Property, (ii) under which a Seller grants to or receives from any Person an option or right
of first refusal or right of first negotiation relating to any material Intellectual Property, and (iii) Contracts entered into
in connection with the settlement of any dispute related to material Intellectual Property, including settlement agreements, covenants
not to sue, and coexistence agreements.
Section 3.11 Privacy
and Security Matters.
(a) Except
as would not, individually or in the aggregate, reasonably be expected to be material to the Business, Acquired Assets and the Assumed
Liabilities, taken as a whole, in connection with the Acquired Assets, the Sellers are, and have been since January 1, 2022, in
compliance with (A) all Laws pertaining to (i) data security, and (ii) the collection, storage, use, access, disclosure,
processing, security, and transfer of Personal Information (referred to collectively in this Agreement as “processing”)
((i) and (ii) together “Privacy Laws”); (B) all Contracts (or portions thereof) to which any Seller
is a party to the extent applicable to the Processing of Personal Information (collectively, “Privacy Agreements”);
and (C) the Payment Card Industry Data Security Standard and all applicable rules and requirements by the PCI Security Standards
Council, any member thereof, and any entity functioning as a card brand, card association, or other binding requirements pertaining to
the acceptance of payment cards (collectively “PCI Requirements”).
(b) The
Sellers have implemented written policies relating to processing of Personal Information, including, a publicly posted website privacy
policy (“Privacy and Information Security Policies”). Except as would not, individually or in the aggregate, reasonably
be expected to be material to the Business, Acquired Assets and the Assumed Liabilities, taken as a whole, the Sellers are and since
January 1, 2022 have been, in compliance with all such Privacy and Information Security Policies.
(c) Except
as would not, individually or in the aggregate, reasonably be expected to be material to the Business, Acquired Assets and the Assumed
Liabilities, taken as a whole, at all times since January 1, 2022, the Sellers have taken commercially reasonable steps designed
to protect the confidentiality, integrity, and security of all Personal Information, confidential information, and any other proprietary
data used in the operation of the Business (collectively, “Business Data”) in Sellers’ possession or control
against damage, loss, and against unauthorized access, acquisition, use, modification, disclosure or other misuse.
(d) Since
January 1, 2022, Seller has not experienced any material unauthorized access, use, loss, destruction, modification, or disclosure
of Business Data in the possession or control of any Seller that has had a material and adverse effect on the Business (a “Security
Breach”). Since January 1, 2022, no Seller has provided any notices to, nor has it been legally required to provide any
such notices, to any Person as a result of any Security Breach. Since January 1, 2022, no Seller, its Affiliates, nor any third
party acting at its direction or authorization has paid any perpetrator of any actual or threatened Security Breach or cyber-attack,
including, but not limited to a ransomware attack or a denial-of-service attack.
Section 3.12 Healthcare
Matters. Except as would not reasonably be expected to be material to the Acquired Assets
and the Business, taken as a whole:
(a) Each
of Seller and EIC is, and since January 1, 2022 has been, in compliance in all material respects with all applicable Healthcare
Laws. Neither Sellers nor EIC has received any written or, to the Knowledge of Sellers, oral notice of any pending or threatened adverse
Action, claim or default alleging material non-compliance with such Healthcare Laws by the Sellers, or EIC. Neither Sellers nor EIC is
a party to any corporate integrity agreement or has any reporting obligations pursuant to any deferred prosecution, consent decree, settlement,
integrity agreement, corrective action plan or other similar obligation, Order, or agreement with any Governmental Body.
(b) Neither
Sellers nor EIC or any of their respective owners, directors, officers, managers, agents or managing employees (as such term is defined
in 42 U.S.C. § 1320a-5(b)), is, or has, (i) been debarred, excluded or suspended from participating in any Governmental Health
Program, or subject to sanction, charged, pled guilty or nolo contendere to, or been convicted of a crime in connection with, any Governmental
Health Program or under any Healthcare Law; (ii) been listed on the Office of Inspector General’s List of Excluded Individuals
and Entities, state Medicaid exclusion lists, or the General Services Administration published list of parties excluded from federal
procurement programs and non-procurement programs.; (iii) been audited or investigated, outside of the ordinary course of business,
by any Governmental Health Programs (or any Governmental Body with respect to any Healthcare Laws); or (iv) had a contract terminated
by any Governmental Health Programs for a material breach or material default of the terms of the applicable contract.
(c) Each
Seller and EIC is, and has been, since January 1, 2022 in material compliance with HIPAA and have established and implemented such
policies, programs, procedures, Contracts and systems as are necessary to comply in all material respects with HIPAA. Neither Sellers
nor EIC has received written notice of, and there is no Action, or inquiry or investigation pending or, to the Knowledge of Seller, threatened
with respect to any alleged “breach” as defined in HIPAA by any Seller, EIC, or their workforce. Each Seller and EIC has
undertaken all necessary risk assessments of the Business required by HIPAA and has implemented appropriate corrective action to address
all material vulnerabilities in its HIPAA safeguards and controls identified through such assessments. Each Seller and EIC has a written,
signed, and HIPAA-compliant business associate agreement with each Person that is a “covered entity” or “business associate”
(as such terms are defined by HIPAA) of such Seller or EIC, as applicable.
(d) Neither
Sellers nor EIC has knowingly billed, received, paid or reimbursed in excess of amounts allowed by applicable Healthcare Laws, nor advised
or provided information that could be reasonably interpreted to advocate upcoding or otherwise improperly coding any claims for payment
for healthcare items or services to obtain greater reimbursement than would be paid pursuant to a properly coded and submitted claim.
Neither Sellers nor EIC has made, offered, received or solicited any bribes, kickback payments or other similar payments of cash or other
consideration, including payments to customers or clients or employees of customers or clients for purposes of doing business with such
Persons.
(e) Each
Seller and EIC has and maintains a compliance program reasonably designed to satisfy the elements of an effective corporate compliance
and ethics program identified in U.S.S.G. § 8B2.1. There are no outstanding material compliance complaints, reports, corrective
actions, or ongoing internal compliance investigations.
Section 3.13 Tax
Matters. Except as would not reasonably be expected to be material to the Acquired Assets
and the Business, taken as a whole:
(a) Each
Seller (or its applicable Affiliate) has prepared (or caused to be prepared) and timely filed (taking into account valid extensions of
time within which to file) all material Tax Returns with respect to the Acquired Assets required to be filed by it (taking into account
valid extensions of time within which to file), and all such filed Tax Returns (taking into account all amendments thereto) are true,
complete and accurate in all material respects and were prepared in compliance in all material respects with applicable Law.
(b) All
material Taxes with respect to the Acquired Assets owed by a Seller, that are due (whether or not shown on any Tax Return) have been
timely paid or have been adequately reserved against in accordance with GAAP.
(c) There
are no Encumbrances for Taxes on any of the Acquired Assets other than Permitted Encumbrances.
(d) None
of the Sellers has waived any statute of limitations in respect of material Taxes with respect to the Acquired Assets or agreed to any
extension of time with respect to an assessment or deficiency for material Taxes with respect to the Acquired Assets (in each case, other
than pursuant to extensions of time or waivers to file Tax Returns obtained in the Ordinary Course or waivers or extensions that have
expired).
(e) Since
January 1, 2020, no claim has been made in writing by a Taxing Authority in a jurisdiction where any Seller or its Affiliate does
not file Tax Returns with respect to the Acquired Assets that any such Seller is or may be subject to taxation by that jurisdiction with
respect to the Acquired Assets that has not otherwise been fully resolved.
(f) Each
Seller (or its applicable Affiliate) has withheld and paid to the applicable Taxing Authority all Taxes required to have been withheld
and timely paid with respect to the Acquired Assets or the Transferred Employees, and such amounts to the appropriate Taxing Authority.
(g) No
federal, state, local, or non-U.S. Tax audits or administrative or judicial Tax proceedings are pending or being conducted with respect
to any Seller with respect to the Acquired Assets. None of the Sellers has received from any federal, state, local, or non-U.S. taxing
authority (including jurisdictions where Seller has not filed Tax Returns) any (i) written notice indicating an intent to open an
audit or other review (since January 1, 2020), or (ii) written notice of deficiency or proposed adjustment for any amount of
Tax proposed, asserted, or assessed by any Taxing Authority against Seller that has not been fully resolved, in each case, with respect
to the Acquired Assets.
(h) Notwithstanding
anything in this Agreement to the contrary, the representations and warranties in this Section 3.13 shall constitute the
sole representations and warranties in this Agreement with respect to Taxes and no representation or warranty set forth in this Section 3.13
shall be deemed to apply directly or indirectly with respect to any Seller Combined Tax Return. No representation or warranty is
made with respect to any Tax attribute for any Post-Closing Tax Period.
Section 3.14 Employees.
(a) Schedule 3.14(a) sets
forth the following information for each Business Employee: (i) name; (ii) job title; (iii) date of hire (or seniority
date, if different); (iv) full-time or part-time status; (v) exempt or non-exempt classification; (vi) base annual salary
or hourly wage rate (as applicable); (vii) location (including location into which a remote employee reports); (viii) leave
status; (ix) work authorization or permit type; (x) accrued, but unused paid-time-off; (xi) employing entity; and (xii) target
annual bonus and the most recent bonus received; and, on a separate list on Schedule 3.14(a) (xiii) Healthcare
Permit number and issuing authority, as applicable.
(b) None
of Sellers (with respect to the Business or Business Employees) is party to any collective bargaining agreements or similar labor-related
Contracts with any labor union representing any Business Employees. There is no current written demand from any labor union seeking
recognition as the exclusive bargaining representative of any Business Employees by any Seller and there is no pending or, to the Knowledge
of Sellers, threatened, strike, lockout, organized labor slowdown, or concerted work stoppage by any Business Employees.
(c) Sellers
are in compliance in all material respects with all applicable Laws respecting employment practices and labor, including those related
to wages and hours (including minimum wage and overtime Laws and wage payment Laws), collective bargaining, unemployment insurance, workers’
compensation, immigration, retaliation, harassment and discrimination, disability rights and benefits, affirmative action, employee layoffs,
employee notification, leave, affirmative action, health and safety, and child labor.
(d) Except
as would not result in material Liability, Sellers currently properly classify and have properly classified each Business Employee as
exempt or non-exempt for the purposes of the Fair Labor Standards Act.
(e) There
is no Action pending or, to the Knowledge of Sellers, threatened in writing against any Seller alleging a violation of any labor or employment
Law that if adversely determined against such Seller would reasonably be expected to result in Assumed Liabilities or would, individually
or in the aggregate, reasonably be expected to be material to the Business, the Acquired Assets and the Assumed Liabilities, taken as
a whole, nor have any such Actions been brought in the last 3 years.
(f) No
“mass layoff,” “plant closing” or similarly defined conduct (as defined in the federal Worker Adjustment and
Retraining Notification Act or any similar state, local or foreign Law (collectively, “WARN”)) has been implemented
by Sellers in the ninety (90) days immediately prior to the date of this Agreement. Except as set forth on Schedule 3.14(f),
Sellers do not currently plan or contemplate any plant closings, reduction in force, terminations of employees, or similar personnel
actions at any site of employment where any Business Employees or other employees of Sellers are located that would trigger obligations
under WARN.
Section 3.15 Insurance.
Schedule 3.15 sets forth a description of all material insurance policies maintained by Sellers other than any policies maintained
in connection with an Employee Benefit Plan (the “Business Insurance Policies”). All such Business Insurance Policies
are in full force and effect. No Seller since January 1, 2022, has received written notice from any insurer or agent of such insurer
with respect to the cancellation or termination of any such Business Insurance Policies.
Section 3.16 Affiliate
Transactions. Except as set forth on Schedule 3.16, to the Knowledge of Sellers,
no Affiliate of any Seller, or any officer or director of any Seller, (a) is a party to any agreement that constitutes an Acquired
Asset having a potential or actual value or a contingent or actual Liability exceeding $1,000,000, other than (i) loans and other
extensions of credit to directors and officers of a Seller for travel, business or relocation expenses or other employment-related purposes
in the Ordinary Course, (ii) employment arrangements in the Ordinary Course and (iii) the Employee Benefit Plans, or (b) has
any material interest in any Acquired Asset.
Section 3.17 Brokers.
Except for Guggenheim Securities, LLC (“Guggenheim Securities”), the fees and expenses of which will be paid by Sellers,
no broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s
or other similar fee or commission, or the reimbursement of expenses in connection therewith, in connection with the Transactions based
upon arrangements made by or on behalf of Sellers.
Section 3.18 Anti-Corruption.
Since January 1, 2021, neither Sellers nor any of their Affiliates or their employees,
or to the Knowledge of Sellers, any other Person acting on behalf of any of the foregoing, has directly or knowingly indirectly in connection
with the business and operations of the Sellers: (i) made, offered, promised to make or authorized any unlawful payment, gift, or
any other thing of value or advantage in violation of Anti-Corruption Laws, (ii) requested or received any payment, gift, or other
thing of value or advantage in violation of Anti-Corruption Laws or (iii) otherwise violated any provision of the Anti-Corruption
Laws. The Sellers have implemented policies and procedures reasonably designed to prevent, detect, and deter violations of any Anti-Corruption
Laws. Since January 1, 2021, neither Sellers nor its Affiliates have received any notice from any Governmental Body or any other
Person regarding any actual, alleged, or investigated violation of, or failure to comply with or Liability under, any Anti-Corruption
Laws, and to the Knowledge of Sellers there are no conditions or circumstances that would reasonably be expected to give rise to any
material future Action against, or voluntary disclosure by, the Sellers with respect to any Anti-Corruption Laws.
Section 3.19 Absence
of Certain Changes. Except as set forth on Schedule 3.19, since June 30,
2023, (i) the Sellers have conducted their business in the Ordinary Course in all material respects (other than the marketing of
the Business and processes and negotiations with Advisors and third parties in connection therewith, and preparation and commencement
of the Bankruptcy Cases and actions related thereto), (ii) there has not been any Material Adverse Effect and (iii) there is
no material business interruption or similar event, change or circumstance that has occurred, or is occurring, at any of the facilities,
plants, offices, laboratories, warehouses, distribution centers and other properties (including at any Owned Real Property or Leased
Real Property) owned or operated by the Sellers.
Section 3.20 Bank
Accounts. Schedule 3.20 sets forth a complete list of all bank accounts (including
any deposit accounts, securities accounts and any sub-accounts) of Sellers.
Section 3.21 Employee
Benefit Plans.
(a) Each
Employee Benefit Plan intended to be “qualified” within the meaning of Section 401(a) of the Tax Code has received
a favorable determination letter from the IRS or is entitled to rely upon a favorable opinion letter issued by the IRS. There are no
pending, or to the Knowledge of Sellers, threatened claims (other than routine claims for benefits) by, on behalf of or against any Employee
Benefit Plan which could reasonably be expected to result in any Assumed Liability. The Employee Benefit Plans comply in form and in
operation with their terms and applicable Laws, including the applicable requirements of the Tax Code and ERISA, except as would not
reasonably be expected to be material to the Acquired Assets and the Business, taken as a whole.
(b) The
consummation of the Transactions is not reasonably expected to (i) accelerate the time of payment or vesting, or materially increase
the amount, of compensation due to any Business Employee under any Employee Benefit Plan, (ii) cause a Seller to transfer or set
aside any assets to fund any benefits under any Employee Benefit Plan or (iii) result in any “disqualified individual”
with respect to any Seller receiving any “excess parachute payment” (as each such term is defined in section 280G of the
Tax Code), determined without regard to any arrangements that may be implemented by, or at the direction of, Purchaser or any of its
Affiliates.
Section 3.22 No
Other Representations or Warranties. Except for the representations and warranties expressly
contained in this Article III (as qualified by the Schedules and in accordance with the express terms and conditions (including
limitations and exclusions) of this Agreement) (the “Express Representations”) (it being understood that Purchaser
and the Purchaser Group have relied only on such Express Representations and warranties), Purchaser acknowledges and agrees, on its own
behalf and on behalf of the Purchaser Group, that no Seller nor any other Person on behalf of any Seller makes, and neither Purchaser
nor any member of the Purchaser Group has relied on, is relying on, or will rely on the accuracy or completeness of any express or implied
representation or warranty with respect to any Seller, the Business, the Acquired Assets, or the Assumed Liabilities or with respect
to any information, statements, disclosures, documents, projections, forecasts or other material of any nature made available or provided
by any Person (including in any presentations or other materials prepared by Guggenheim Securities or AlixPartners) (the “Information
Presentation”) or in that certain “Project Poet” datasite administered by Datasite (the “Dataroom”)
or elsewhere to Purchaser or any of its Affiliates or Advisors. Except with respect to the Express Representations, all other representations
and warranties, whether express or implied, are hereby expressly disclaimed by Sellers. Nothing in this Section 3.22 shall
limit any rights or remedies of Purchaser with respect to a claim for Fraud.
Article IV
Representations and Warranties of Purchaser
Purchaser represents and
warrants to Sellers as of the date hereof as follows.
Section 4.1 Organization
and Qualification. Purchaser is a corporation duly formed, validly existing and in good
standing under the Laws of the State of California and has all requisite power and authority necessary to carry on its business as it
is now being conducted, except (other than with respect to Purchaser’s due formation and valid existence) as would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on Purchaser’s ability to consummate the Transaction. Purchaser
is duly licensed or qualified to do business and is in good standing (where such concept is recognized under applicable Law) in each
jurisdiction in which the nature of the business conducted by it or the character or location of the properties owned or used by it makes
such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on Purchaser’s ability to consummate the Transaction
by this Agreement.
Section 4.2 Authorization
of Agreement. Purchaser has all necessary power and authority to execute and deliver this
Agreement and to perform its obligations hereunder and to consummate the Transactions. The execution, delivery and performance by
Purchaser of this Agreement, and the consummation by Purchaser of the Transactions, subject to requisite Bankruptcy Court approvals,
have been duly authorized by all requisite corporate or similar organizational action and no other corporate or similar organizational
proceedings on its part are necessary to authorize the execution, delivery and performance by Purchaser of this Agreement and the consummation
by it of the Transactions. Subject to requisite Bankruptcy Court approvals, this Agreement has been duly executed and delivered
by Purchaser and, assuming due authorization, execution and delivery hereof by the other Parties, constitutes a legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its terms, except that such enforceability may be limited by
the Enforceability Exceptions.
Section 4.3 Conflicts;
Consents.
(a) Assuming
that (i) the Sale Order, and all other requisite Bankruptcy Court approvals are obtained, (ii) the notices, authorizations,
approvals, Orders, permits or consents set forth on Schedule 4.3(a) are made, given or obtained (as applicable), and
(iii) the requirements of the HSR Act are complied with, neither the execution and delivery by Purchaser of this Agreement, nor
the consummation by Purchaser of the Transactions, nor performance or compliance by Purchaser with any of the terms or provisions hereof,
will (A) conflict with or violate any provision of Purchaser’s Organizational Documents, (B) violate any Law or Order
applicable to Purchaser, (C) violate or constitute a breach of or default (with or without notice or lapse of time, or both) under
or give rise to a right of termination, modification, or cancelation of any obligation or to the loss of any benefit, any of the terms
or provisions of any loan or credit agreement or other material Contract to which Purchaser is a party or accelerate Purchaser’s
obligations under any such Contract, or (D) result in the creation of any Encumbrance (other than a Permitted Encumbrance) on any
properties or assets of Purchaser or any of its Subsidiaries, except, in the case of clauses (A) through (D), as would
not, individually or in the aggregate, reasonably be expected to prevent or materially impair, alter or delay the ability of Purchaser
to consummate the Transactions.
(b) Except
as set forth on Schedule 4.3(a), Purchaser is not required to file, seek or obtain any notice, authorization, approval, Order,
permit or consent of or with any Governmental Body in connection with the execution, delivery and performance by Purchaser of this Agreement
or the consummation by Purchaser of the Transactions, except (i) any filings required to be made under the HSR Act or (ii) where
failure to obtain such consent, approval, authorization or action, or to make such filing or notification, would not, individually or
in the aggregate, reasonably be expected to prevent or materially impair, alter or delay the ability of Purchaser to consummate the Transactions.
Section 4.4 Financing.
As of October 28, 2023, Purchaser or Guarantor will, and will through the Closing, have sufficient funds in an aggregate amount
necessary to pay the Purchase Price, to perform the Assumed Liabilities as they become due in accordance with their terms and to consummate
all of the other Transactions, including the payment of the Purchase Price and all fees, expenses of, and other amounts required to be
paid by, Purchaser in connection with Transactions and does not know of any circumstance or condition that would reasonably be expected
to prevent or substantially delay the availability of such funds or otherwise impair such capability at the Closing and such other dates
that such obligations and transactions are required to be satisfied pursuant to the terms hereof. Purchaser affirms that it is not a
condition to Closing or to any of its obligations under this Agreement that Purchaser obtains financing for the Transactions. Purchaser
is and shall be capable of satisfying the conditions contained in sections 365(b)(1)(C) and 365(f) of the Bankruptcy Code with
respect to the Assigned Contracts and the related Assumed Liabilities.
Section 4.5 Brokers.
Except for UBS Securities LLC, all of whose fees and expenses will be borne solely by Purchaser, there is no investment banker, broker,
finder, or other intermediary which has been retained by or is authorized to act on behalf of Purchaser that might be entitled to any
fee or commission in connection with the Transactions.
Section 4.6 No
Litigation. There are no Actions pending or, to Purchaser’s knowledge, threatened
against or affecting Purchaser that will or would be reasonably likely to adversely affect Purchaser’s performance of its obligations
under this Agreement or the consummation of the Transactions.
Section 4.7 Certain
Arrangements. Except for any financing sources or lenders of Purchaser related to Purchaser’s
financing of the Transaction, as of the date hereof, there are no Contracts, undertakings, commitments, agreements or obligations, whether
written or oral, between any member of the Purchaser Group, on the one hand, and any member of the management of any Seller or its respective
board of directors (or member of management or applicable governing body of any Affiliate of any Seller), any holder of equity or debt
securities of any Seller, or any lender or creditor of any Seller or any Affiliate of any Seller, on the other hand, (a) relating
in any way to the acquisition of the Acquired Assets or the Transactions or (b) that would be reasonably likely to prevent, restrict,
impede or affect adversely the ability of any Seller or any of its Affiliates to entertain, negotiate or participate in any such transactions.
Section 4.8 Solvency.
Assuming the accuracy in all material respects of the representations and warranties in Article III, Purchaser is, and immediately
after giving effect to the Transactions Purchaser shall be, solvent and at all times shall: (a) be able to pay its debts as they
become due; (b) own property that has a fair saleable value greater than the amounts required to pay its debt (including a reasonable
estimate of the amount of all contingent Liabilities) and (c) have adequate capital to carry on its business. No transfer of property
is being made and no obligation is being incurred in connection with the Transactions with the intent to hinder, delay or defraud either
present or future creditors of Purchaser. In connection with the Transactions, Purchaser has not incurred, nor plans to incur, debts
beyond its ability to pay as they become absolute and matured.
Section 4.9 WARN
Act and Mass Layoffs. Purchaser does not currently plan or contemplate any plant closings,
reduction in force, terminations of employees, or similar personnel actions impacting Business Employees that would trigger obligations
under the WARN Act or similar Laws.
Section 4.10 No
Additional Representations or Warranties. Except for the representations and warranties
contained in this Article IV, Sellers are not relying on and will not rely on the accuracy or completeness of any other express
or implied representation or warranty with respect to Purchaser or with respect to any other information provided to Sellers by Purchaser
and acknowledge that neither Purchaser nor any other Person on behalf of Purchaser makes on behalf of Purchaser makes any other express
or implied representation or warranty with respect to Purchaser or with respect to any other information provided to Sellers by Purchaser.
Article V
Bankruptcy Court Matters
Section 5.1 Bankruptcy
Actions.
(a) Bankruptcy
Court Milestones. The Sellers shall comply with the following timeline (the “Bankruptcy Court Milestones”):
(i) As
promptly as practicable but in no event later than one (1) day after the Petition Date, the Sellers shall file with the Bankruptcy
Court the Bidding Procedures Motion.
(ii) No
later than three (3) Business Days following the Second Day Hearing, the Sellers shall obtain entry of the Bidding Procedures Order.
(iii) No
later than 60 days after the Petition Date, the Bidding Deadline pursuant to the Bidding Procedures Order will occur.
(iv) No
later than 75 days after the Petition Date, the Auction (if necessary) shall have been held pursuant to the Bidding Procedures Order.
(v) No
later than 80 days after the Petition Date, but subject to the availability of the Bankruptcy Court, the Bankruptcy Court shall have
held the hearing to consider entry of the Sale Order.
(b) The
bidding procedures to be employed with respect to this Agreement shall be those reflected in the Bidding Procedures Order. Purchaser
agrees and acknowledges that Sellers, including through their representatives, are and may continue soliciting inquiries, proposals or
offers from third parties in connection with any Alternative Transaction pursuant to the terms of the Bidding Procedures Order. Sellers
may modify the motion seeking approval of the Sale Order pursuant to discussions with the United States Trustee assigned to the Bankruptcy
Case, the Bankruptcy Court, any creditor or committee representing a group of creditors in the Bankruptcy Case, or any other party in
interest, with such modifications being acceptable to Purchaser in its commercially reasonable discretion.
(c) From
the date hereof until the earlier of (i) the termination of this Agreement in accordance with Article VIII and (ii) the
Closing Date, Sellers shall use commercially reasonable efforts to obtain entry by the Bankruptcy Court of the Sale Order.
(d) The
Parties shall use their respective commercially reasonable efforts to obtain entry by the Bankruptcy Court of the Sale Order. Purchaser
shall promptly take all actions as are reasonably requested by Sellers to assist in obtaining the Bankruptcy Court’s entry of the
Sale Order, and any other Order reasonably necessary in connection with the Transactions as promptly as practicable, including furnishing
affidavits, financial information, or other documents or information for filing with the Bankruptcy Court and making such employees and
Advisors of Purchaser and its Affiliates available to testify before the Bankruptcy Court for the purposes of, among other things, providing
necessary assurances of performance by Purchaser under this Agreement and demonstrating that Purchaser is a “good faith”
purchaser under section 363(m) of the Bankruptcy Code, as well as demonstrating Purchaser’s ability to pay and perform or
otherwise satisfy any Assumed Liabilities following the Closing.
(e) Each
Seller and Purchaser shall (i) appear formally or informally in the Bankruptcy Court if reasonably requested by the other Party
or required by the Bankruptcy Court in connection with the Transactions and (ii) keep the other reasonably apprised of the status
of material matters related to the Agreement, including, upon reasonable request promptly furnishing the other with copies of notices
or other communications received by Sellers from the Bankruptcy Court with respect to the Transactions.
(f) If
an Auction is conducted, and Purchaser is not the prevailing party at the conclusion of such Auction (such prevailing party, the “Successful
Bidder”) but is the next highest bidder at the Auction, Purchaser shall be required to serve as a back-up bidder (the “Backup Bidder”)
and keep Purchaser’s bid to consummate the Transactions on the terms and conditions set forth in this Agreement (as the same may
be revised in the Auction) open and irrevocable until the earlier of (i) 60 days following the hearing to consider the Sale Order,
(ii) the closing of an Alternative Transaction with a Successful Bidder, or (iii) such other date as this Agreement is terminated.
(g) Sellers
and Purchaser acknowledge that this Agreement and the sale of the Acquired Assets are subject to higher and better bids and Bankruptcy
Court approval. Purchaser acknowledges that Sellers must take reasonable steps to demonstrate that they have sought to obtain the highest
or otherwise best price for the Acquired Assets, including giving notice thereof to the creditors of Sellers and other interested parties,
providing information about Sellers to prospective bidders, entertaining higher and better offers from such prospective bidders, and,
in the event that additional qualified prospective bidders desire to bid for the Acquired Assets, conducting an Auction.
(h) Purchaser
shall provide adequate assurance of future performance as required under section 365 of the Bankruptcy Code for the Assigned Contracts.
Purchaser agrees that it will take all actions reasonably required to assist in obtaining a Bankruptcy Court finding that there has been
a sufficient demonstration of adequate assurance of future performance under the Assigned Contracts, such as furnishing affidavits, non-confidential
financial information and other documents or information for filing with the Bankruptcy Court and making Purchaser’s Advisors available
to testify before the Bankruptcy Court.
(i) Nothing
in this Section 5.1 shall prevent Sellers from modifying the Bidding Procedures as necessary or appropriate to maximize value
for Sellers’ estate in accordance with Sellers’ fiduciary obligations.
Section 5.2 Cure
Costs. Subject to entry of the Sale Order, Purchaser shall, on or prior to the Closing (or,
in the case of any Contract that is to be assigned following the Closing pursuant to Section 1.5, on or prior to the date
of such assignment), pay the Assumed Cure Costs. Also, subject to entry of the Sale Order, Sellers shall, on or prior to the Closing
(or, in the case of any Contract that is to be assigned following the Closing pursuant to Section 1.5, on or prior to the
date of such assignment), pay the Excluded Cure Costs and cure any and all other defaults and breaches under the Assigned Contracts so
that such Contracts may be assumed by the applicable Seller and assigned to Purchaser in accordance with the provisions of section 365
of the Bankruptcy Code and this Agreement.
Section 5.3 Approval.
Sellers’ obligations under this Agreement and in connection with the Transactions are subject to entry of and, to the extent entered,
the terms of any Orders of the Bankruptcy Court (including entry of the Sale Order). Nothing in this Agreement shall require Sellers
or their respective Affiliates to give testimony to or submit a motion to the Bankruptcy Court that is untruthful or to violate any duty
of candor or other fiduciary duty to the Bankruptcy Court or its stakeholders.
Article VI
Covenants and Agreements
Section 6.1 Conduct
of the Business of Sellers.
(a) Except
(i) as required by applicable Law, Order or a Governmental Body, (ii) any limitations on operations imposed by the Bankruptcy
Court or the Bankruptcy Code or Sellers’ debtor-in-possession financing or use of cash collateral, as the case may be, (iii) as
expressly contemplated, required or permitted by this Agreement, or (iv) as set forth on Schedule 6.1, during the period
from the date of this Agreement until the Closing (or such earlier date and time on which this Agreement is terminated pursuant to Article VIII),
unless Purchaser otherwise consents in writing, Sellers shall use their commercially reasonable efforts to carry on the Business in the
Ordinary Course; provided that no action by any Seller with respect to matters specifically addressed by Section 6.1(b) shall
be deemed to be a breach of this Section 6.1(a) unless such action would constitute a breach of Section 6.1(b).
(b) Except
(i) as required by applicable Law, Order or a Governmental Body, (ii) any limitations on operations imposed by the Bankruptcy
Court or the Bankruptcy Code or Sellers’ debtor-in-possession financing or use of cash collateral, as the case may be, (iii) as
expressly contemplated, required or permitted by this Agreement, (iv) to the extent related to an Excluded Asset or an Excluded
Liability, or (v) as set forth on Schedule 6.1, during the period from the date of this Agreement until the Closing
(or such earlier date and time on which this Agreement is terminated pursuant to Article VIII), unless Purchaser otherwise
consents in writing, Sellers shall not take any of the following actions with respect to the Business:
(i) (A) incur,
assume or otherwise become liable for any indebtedness for borrowed money, issue or sell any debt securities or rights to acquire any
debt securities of Sellers, guarantee any such indebtedness or any debt securities of another Person or enter into any “keep well”
or other agreement to maintain any financial statement condition of another Person (collectively, “Indebtedness”),
except, but only to the extent the following will constitute Excluded Liabilities, (1) for intercompany Indebtedness among Sellers
and their Affiliates, (2) for letters of credit, bank guarantees, security or performance bonds or similar credit support instruments,
overdraft facilities or cash management programs, in each case issued, made or entered into in the Ordinary Course, (3) for Indebtedness
incurred under arrangements that are not secured by the Acquired Assets, (4) for Indebtedness incurred under existing arrangements
(including in respect of letters of credit) in an amount not to exceed $5,000,000 outstanding at any time and (5) for Indebtedness
incurred in connection with the refinancing of any Indebtedness existing on the date of this Agreement or permitted to be incurred, assumed
or otherwise entered into hereunder, or (B) make any loans, capital contributions or advances to, or investments in, any Person
other than (1) as permitted pursuant to Section 6.1(b)(iv), (2) in the Ordinary Course, and (3) to any other
Seller or Subsidiary; provided any such actions in the foregoing clauses (1), (2), and (3) do not give rise to an Assumed
Liability;
(ii) sell
or lease to any Person, in a single transaction or series of related transactions, any of Acquired Assets, except (A) Ordinary Course
dispositions of Inventory, (B) transfers among the Sellers, (C) leases or subleases of real property under which a Seller is
a tenant or a subtenant and voluntary terminations or surrenders of such leases or subleases, in each case following prior good faith
consultation with Purchaser, and (D) other sales and leases in the Ordinary Course;
(iii) make
or authorize capital expenditures, including for property, plant and Equipment, except for those (A) in connection with the repair
or replacement of facilities, properties or assets destroyed or damaged due to casualty or accident (whether or not covered by insurance),
(B) otherwise in an aggregate amount for all such capital expenditures made pursuant to this clause (B) not to exceed $5,000,000
in the aggregate or (C) in accordance with the capital expenditure budget set forth on Schedule 6.1(b)(iii);
(iv) except
as permitted under Section 6.1(b)(iii), make any acquisition of, or investment in, any securities or business (including
by merger), (which for the avoidance of doubt shall not include acquisitions of Inventory in the Ordinary Course);
(v) except
(A) in the Ordinary Course or (B) as permitted pursuant to the terms of any Employee Benefit Plan, (1) grant to any Business
Employee at the level of Director or above any increase in compensation (including bonus or long-term incentive opportunities), (2) hire
any employee who would be a Business Employee at the level of Director or above; (3) establish, adopt, enter into, materially amend
or terminate any material Employee Benefit Plan, except in connection with annual open enrollment in the Ordinary Course; (4) take
any action to discretionally accelerate any rights or benefits of any Business Employee at the level of Director or above under any Employee
Benefit Plan; or (5) terminate any Business Employee (other than for cause) at the level of Director or above; provided that
the foregoing clauses (1) through (5) shall not restrict any Seller from taking any action, including the termination of any
non-Business Employee, or establishing any Employee Benefit Plan or other compensation or benefit plan that is not targeted at Business
Employees;
(vi) make
any material changes in financial accounting methods, principles or practices materially affecting the consolidated assets, Liabilities
or results of operations of Sellers with respect to the Business, except insofar as may be required (A) by GAAP (or any interpretation
thereof), (B) by any applicable Law or (C) by any Governmental Body or quasi-governmental authority (including the Financial
Accounting Standards Board or any similar organization);
(vii) grant
any Encumbrance (other than Permitted Encumbrances) on any of its material Acquired Assets; other than to secure Indebtedness and other
obligations in existence at the date of this Agreement (and required to be so secured by their terms) or permitted under Section 6.1(b)(i);
provided that any such Encumbrance will be extinguished in connection with the Closing;
(viii) waive,
release, assign, institute, compromise, or settle any pending or threatened Action against, or related to, any Seller, the Business,
the Acquired Assets, or the Assumed Liabilities and that would result in an Assumed Liability;
(ix) (A) terminate,
amend, supplement, modify or waive any provision of, or accelerate any rights, benefits or obligations under, any Material Contract,
except any such action in the Ordinary Course or the expiration in accordance with its term or (B) enter into any Contract that
would be a Material Contract if executed prior to the date of this Agreement or which would result in an aggregate obligation of Sellers
in excess of $200,000, except for (Y) any renewal of any customer Contract in the Ordinary Course upon terms and conditions which
are not materially less favorable in the aggregate to the Sellers than those in effect as of the date of this Agreement and (Z) any
renewal of any other such Contract in the Ordinary Course upon terms and conditions which are no less favorable to the Sellers, in any
material respect, than those in effect as of the date of this Agreement; provided that if Purchaser does not object within two
(2) Business Days of a notice referencing this Section, describing in reasonable detail the Contract for which consent is being
requested, and requesting consent for such Contract, Purchaser shall be deemed to have consented to Sellers entering into such Contract;
(x) (A) abandon,
cancel, fail to renew, or permit to lapse any Acquired Intellectual Property that is used in the conduct of the Business, or held for
use by the Sellers, in each case that is material to the Business, taken as a whole other than pursuant to expiration of any such Acquired
Intellectual Property at the end of its maximum term, or (ii) sell, transfer, license or otherwise encumber any material Acquired
Intellectual Property, other than licenses of Acquired Intellectual Property in the Ordinary Course;
(xi) solely
with respect to Acquired Assets, (A) make any unusual or extraordinary efforts to collect any accounts receivable, intercompany
obligation or Liability for Indebtedness, or give any discounts or concessions for early payment of such accounts receivable, intercompany
obligation or Liability for Indebtedness or (B) make any sales of, or, other than Permitted Encumbrances, convey any interest in,
any accounts receivable, intercompany obligation or Liability for Indebtedness to any third party; provided that Sellers shall be entitled
to, in their reasonable business judgment, take such actions with respect to such items that have been outstanding for more than twelve (12)
months;
(xii) amend
in any material respect, cancel or permit to terminate any material insurance policy naming any Seller as an insured, a beneficiary or
a loss payable payee without first obtaining comparable substitute insurance coverage with no lapse in coverage; or
(xiii) grant
any waiver under or amend or modify, or surrender, revoke, permit to lapse or otherwise terminate any Permit, other than in the Ordinary
Course or as would not reasonably be expected to be material to the operation of the Business.
(c) Nothing
contained in this Agreement is intended to give Purchaser or its Affiliates, directly or indirectly, the right to control or direct the
Business (or the other business of Sellers and their Affiliates) prior to the Closing, and nothing contained in this Agreement is intended
to give any Seller, directly or indirectly, the right to control or direct Purchaser’s or its Subsidiaries’ operations. Prior
to the Closing, each of Purchaser and Sellers shall exercise, consistent with the terms and conditions of this Agreement, complete control
and supervision over its and its Subsidiaries’ respective operations. Notwithstanding anything to the contrary contained herein,
any action taken, or omitted to be taken, by any Seller pursuant to any Law, Order, directive, pronouncement or guideline issued by any
Governmental Body or industry group providing for business closures, “sheltering-in-place” or other restrictions that relates
to, or arises out of, any pandemic, epidemic or disease outbreak shall in no event be deemed to constitute a breach of this Section 6.1.
Section 6.2 Access
to Information.
(a) From
the date hereof until the Closing, Sellers will provide Purchaser and its authorized Advisors with reasonable access and upon reasonable
advance notice and during regular business hours (and in accordance with the reasonable procedures established by Sellers) to the books
and records of Sellers, in order for Purchaser and its authorized Advisors to access such information regarding the Acquired Assets and
the Assumed Liabilities as is reasonably necessary in order to consummate the Transactions; provided that (i) such access
does not unreasonably interfere with the normal operations of any Seller, (ii) such access will occur in such a manner as Sellers
reasonably determine to be appropriate to protect the confidentiality of the Transactions and such books and records, (iii) all
requests for access will be directed to Guggenheim Securities or such other Person(s) as Guggenheim Securities may designate in
writing from time to time (iv) nothing herein will require Sellers to provide access to, or to disclose any information to, Purchaser
if such access or disclosure (A) would cause significant competitive harm to any Seller if the Transactions are not consummated,
(B) would waive any legal privilege, (D) would be in violation of applicable Laws (including the HSR Act and Foreign Competition
Laws) or the provisions of any agreement to which Sellers are bound or would violate any fiduciary duty, or (E) is in respect of
Excluded Tax Returns. Notwithstanding anything to the contrary contained herein will permit Purchaser or its authorized Advisors to conduct
any sampling or testing of environmental media or any other invasive investigation or assessment at any Leased Real Property including
of the type commonly known as a Phase II environmental site assessment.
(b) Subject
to Section 6.14, the information provided pursuant to this Section 6.2 will be governed by all the terms and
conditions of the Confidentiality Agreement. Sellers and their Affiliates make no representation or warranty as to the accuracy of any
information, if any, provided pursuant to this Section 6.2, and Purchaser may not rely on the accuracy of any such information,
in each case, other than the Express Representations.
(c) From
and after the Closing for a period of three years following the Closing Date (or, if later, the closing of the Bankruptcy Cases),
Purchaser will provide Sellers and their Advisors with reasonable access, during normal business hours, and upon reasonable advance notice,
to the books and records, including work papers, schedules, memoranda, Tax Returns, Tax schedules, Tax rulings, and other documents (for
the purpose of examining and copying) relating to the Acquired Assets, the Excluded Assets, the Assumed Liabilities or the Excluded Liabilities
with respect to periods or occurrences prior to the Closing Date, and reasonable access, during normal business hours, and upon reasonable
advance notice, to employees, officers, Advisors, accountants, offices and properties of Purchaser (including for the purpose of better
understanding the books and records). Unless otherwise consented to in writing by Sellers, Purchaser will not, for a period of three
(3) years following the Closing Date, destroy, alter or otherwise dispose of any of such books and records without first offering
to surrender to Sellers such books and records or any portion thereof that Purchaser may intend to destroy, alter or dispose of. From
and after the Closing, Purchaser will, and will cause its employees to, provide Sellers with reasonable assistance, support and cooperation
with Sellers’ wind-down and related activities (e.g., helping to locate documents or information related to preparation
of Tax Returns or prosecution or processing of insurance/benefit claims).
(d) Prior
to the Closing, the Parties shall reasonably cooperate with each other in coordinating their communications with any customer, supplier
or other contractual counterparty of Sellers in relation to this Transaction; provided that Purchaser will not, and will not permit
any member of the Purchaser Group to, contact any officer, manager, director, employee, customer, supplier, lessee, lessor, lender, licensee,
licensor, distributor, noteholder or other material business relation of any Seller prior to the Closing with respect to any Seller,
the Business or the Transactions, in each case without the prior written consent of Sellers for each such contact, such consent not to
be unreasonably withheld.
Section 6.3 Employee
Matters.
(a) At
least 15 Business Days prior to the Closing Date, Purchaser shall extend to each Business Employee set forth on Schedule 6.3(a) (the
“Scheduled Employees”) (which Schedule 6.3(a) Purchaser shall provide to Sellers by the date that
is 15 days following the date hereof and which Schedule 6.3(a) shall include at least 900 Business Employees) a written
offer of employment reviewed by Sellers, and which Sellers have had an opportunity to comment on, providing for a position that is materially
the same as such employee’s position immediately prior to the Closing (including level of responsibility, primary location of employment
and authority) on the terms set forth in this Section 6.3 (“Transfer Offer”) and that, if accepted, shall
become effective immediately following the Closing. Business Employees who accept such Transfer Offers and begin employment with Purchaser
as of the Closing Date shall be collectively referred to herein as “Transferred Employees.” Nothing herein shall be
construed as a representation or guarantee by any Seller or any of their respective Affiliates that any or all Scheduled Employees employed
by Sellers will accept the Transfer Offer, or that any Transferred Employee will continue in employment with Purchaser following the
Closing for any period of time. Purchaser shall notify Sellers in a reasonable timeframe prior to the Closing Date with respect to whether
each such offer has been accepted or rejected. Purchaser shall carry out all necessary actions, and Sellers shall reasonably cooperate
with Purchaser, to effect the timely employment by Purchaser or its applicable Affiliate of each Transferred Employee immediately following
the Closing, and Sellers shall reasonably cooperate in connection therewith. Effective as of the Closing, each Transferred Employee previously
employed by Sellers shall cease to be an employee of each Sellers.
(b) For
a period of one year from and after the Closing Date, Purchaser shall provide each Transferred Employee, or cause each Transferred Employee
to be provided, with: (i) a base compensation or wage rate, as applicable, that is no less than that provided to such Transferred
Employee as of immediately prior to the Closing; (ii) cash incentive opportunities that are no less favorable than those provided
to such Transferred Employee as of immediately prior to the Closing; (iii) health and welfare plans that are substantially similar
in the aggregate to the health and welfare plans maintained by Purchaser or any of its Affiliates as of the Closing Date; and (iv) other
employee benefits (including severance benefits and retention bonuses, but excluding long term incentive compensation and equity incentive
compensation) that are no less favorable than those provided to such Transferred Employees as of the Closing Date. For purposes of eligibility,
vesting and determining level of benefits under the benefit plans and programs maintained by Purchaser and its Affiliates or any of its
Affiliates after the Closing Date (the “Purchaser Plans” ), each Transferred Employee shall be credited with his or
her years of service with Sellers (and any predecessor thereof) before the Closing Date, except to the extent such credit would result
in a duplication of benefits.
(c) On
the Closing, Transferred Employees (and their eligible dependents and beneficiaries) shall cease active participation in the Employee
Benefit Plans. Without limiting the generality of any other provision of this Agreement: (i) each Transferred Employee shall be
immediately eligible to participate, without any waiting time, in any and all Purchaser Plans; (ii) for purposes of each Purchaser
Plan providing health or welfare benefits, Purchaser shall cause all pre-existing condition exclusions and actively-at-work requirements
of such Purchaser Plan to be waived for such Transferred Employee and his or her covered dependents (unless such exclusions or requirements
were applicable under comparable Employee Benefit Plans); and (iii) Purchaser shall cause any co-payments, deductible and other
eligible expenses incurred by such Transferred Employee or his or her covered dependents during the plan year in which the Closing Date
occurs to be credited for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such
Transferred Employee and his or her covered dependents for the applicable plan year of each comparable Purchaser Plan.
(d) For
the avoidance of doubt, Sellers shall be responsible for and ensure timely payment of all (i) final wages, including accrued wages,
salary, accrued but unpaid bonuses, commission and other incentive payments, accrued but unpaid vacation and other compensation owed
to the Business Employees through the Closing Date, and Purchaser shall not be liable for any such payments arising through the Closing
Date, and (ii) all contributions under Employee Benefit Plans accruing prior to the Closing Date, including any such 401(k) plan
employer contributions notwithstanding any year end service requirement. Further, to the extent a Scheduled Employee refuses to accept
a Transfer Offer that complies with Section 6.3(a) or otherwise fails to be employed by Purchaser or its Affiliate as
of the Closing Date, in each case through no fault of Purchaser, Sellers shall be responsible for any termination or other liabilities
related to the employment or termination of any such Scheduled Employee.
(e) The
provisions of this Section 6.3 are for the sole benefit of the Parties and nothing herein, express or implied, is intended
or shall be construed to confer upon or give any Person (including for the avoidance of doubt any employees of Sellers or Transferred
Employees), other than the Parties and their respective permitted successors and assigns, any legal or equitable or other rights or remedies
(with respect to the matters provided for in this Section 6.3 or under or by reason of any provision of this Agreement).
Nothing contained herein, express or implied: (i) shall be construed to establish, amend, or modify any benefit plan, program, agreement
or arrangement; (ii) shall, subject to compliance with the other provisions of this Section 6.3, alter or limit Purchaser’s
or Sellers’ ability to amend, modify or terminate any particular benefit plan, program, agreement or arrangement; or (iii) is
intended to confer upon any current or former employee any right to employment or continued employment for any period of time by reason
of this Agreement, or any right to a particular term or condition of employment.
(f) Sellers
shall be solely responsible for any and all obligations and Liabilities arising under Section 4980B of the Tax Code with respect
to all “M&A qualified beneficiaries” as defined in 26 C.F.R. § 54.4980B 9.
(g) Sellers
expressly agree to retain all obligations, Liabilities, and commitments related to WARN, including any requirement to provide notice,
that accrue up to and including the Closing Date; provided that Purchaser shall provide Sellers with sufficient advance notice
to allow Sellers to comply with WARN in the event that Purchasers fail to offer employment to a sufficient number of Scheduled Employees
or offer terms of employment that, in either event, would reasonably be expected to constitute a constructive discharge under WARN. Notwithstanding
anything to the contrary herein, Sellers or their Affiliates shall be permitted to provide WARN notices prior to the Closing to any employees
they reasonably believe could be owed it under applicable Law, in consultation with Purchaser. Purchaser expressly agrees to assume all
obligations, Liabilities, and commitments related to WARN, including any requirement to provide notice, that accrue following the Closing
Date, as well as any WARN Liabilities relating to the termination of Scheduled Employees who do not receive a Transfer Offer that complies
with the requirements under Section 6.3(a) from Purchaser.
(h) For
any Transferred Employees who are Delayed Transferred Employees, the provisions of this Section 6.3 shall apply to such employees
mutatis mutandis to the maximum extent permitted by applicable Law.
(i) In
the event that the Closing is to occur prior to January 1, 2024, the Parties shall negotiate in good faith an amendment to the TSA
or other Contract, pursuant to which Sellers shall continue to employee the Transferred Employees and administer their payroll and continue
their existing benefits, all at Purchaser’s sole cost and expense (with no markup by Seller) until such time as Purchaser is able
to onboard such Transferred Employees to its payroll systems and Purchaser Plans, such time not to be later than February 1, 2024,
and the provisions of this Section 6.3 shall be amended accordingly.
Section 6.4 Regulatory
Approvals.
(a) Subject
to Section 6.5, Sellers will (i) cooperate with Purchaser in exchanging such information and providing such assistance
as Purchaser may reasonably request in connection with any filings made by the Purchaser Group pursuant to Section 6.4(b),
and (ii) (A) supply promptly any additional information and documentary material that may be requested in connection with the
filings made pursuant to this Section 6.4(a) or Section 6.4(b) and (B) use reasonable best efforts
to take all actions necessary to obtain all required clearances in connection with such filings.
(b) Subject
to Section 6.5, Purchaser will, and will cause its Affiliates and Advisors to, (i) make or cause to be made all filings
and submissions required to be made by any member of the Purchaser Group under any applicable Laws for the consummation of the Transactions,
if any, including any Healthcare Laws, and including, obtaining any required Healthcare Permits, (ii) cooperate with Sellers in
exchanging such information and providing such assistance as Sellers may reasonably request in connection with any filings made by a
Seller pursuant to Section 6.4(a), and (iii) (A) supply promptly any additional information and documentary material
that may be requested in connection with the filings made pursuant to this Section 6.4(b) or Section 6.4(a) and
(B) use reasonable best efforts to take all actions necessary to obtain all required clearances.
(c) This
Section 6.4 shall not apply to efforts related to Foreign Competition Laws, which shall be governed by the obligations set
forth in Section 6.5 below.
Section 6.5 Antitrust
Notification.
(a) Sellers
and Purchaser (and their respective Affiliates, if applicable) will, as promptly as practicable (and, in the case of filings under the
HSR Act, no later than ten (10) Business Days following the date hereof), (i) file with the United States Federal Trade Commission
and the United States Department of Justice, the notification form required pursuant to the HSR Act for the Transactions, and (ii) make
all notifications, filings, registrations or other materials required or necessary under the Foreign Competition Laws set forth on Schedule 7.1(a).
Each Seller and Purchaser shall (and shall cause their respective Affiliates to) furnish to each other’s counsel such necessary
information and reasonable assistance as the other may request in connection with its preparation of any filing or submission that is
necessary under the HSR Act or such Foreign Competition Laws, and will respond to any requests made for any supplemental information
by any Governmental Body as promptly as practicable. Sellers and Purchaser shall not extend any waiting period or enter into any agreement
or understanding with any Governmental Body without the prior written consent of the other; provided that such consent shall not
be unreasonably withheld, conditioned, or delayed. Purchaser will be solely responsible for payment of all filing fees payable in connection
with such filings.
(b) Subject
to the immediately following sentence, Sellers and Purchaser will use their reasonable best efforts to as promptly as practicable (and
in any event prior to the Outside Date) obtain any clearances, Consents, approvals, waivers, actions, waiting period expirations or terminations,
non-actions or other authorizations required under the HSR Act or such Foreign Competition Laws for the consummation of this Agreement
and the Transactions and will keep each other apprised of the status of any communications with, and any inquiries or requests for additional
information from, any Governmental Body and will comply promptly with any such inquiry or request. Nothing in this Agreement, including
this Section 6.5, obligates Purchaser to (i) oppose any motion or action for a temporary, preliminary or permanent Order
against, or preventing or delaying, the consummation of the Transactions, or undertake any appeal of any adverse decision or Order by
any Governmental Body, (ii) propose offer, accept, or enter into any consent decree, consent agreement, settlement or other agreement
or arrangement to hold separate, license, sell, transfer, dispose or divest any assets (whether tangible or intangible), rights, properties,
products or businesses of Purchaser, its Affiliates or, after the Closing, the Acquired Assets, (iii) agree to the termination,
modification, or assignment of existing relationships, joint ventures, Contracts or obligations of Purchaser or its Affiliates or (iv) agree
to any limitations on conduct or actions of members of Purchaser, its Affiliates or after the Closing, the Acquired Assets.
(c) The
Parties commit to instruct their respective counsel to cooperate with each other and use reasonable best efforts to facilitate and expedite
obtaining any clearances, Consents, approvals, waivers, actions, waiting period expirations or terminations, non-actions or other authorizations
under the HSR Act or Foreign Competition Laws at the earliest practicable dates and, in any event, prior to the Outside Date. Such reasonable
best efforts and cooperation shall include each Party and its respective counsel undertaking to (i) promptly notify the other Party
or its counsel of, and, if in writing, furnish such other Party or its counsel with copies of (or, in the case of oral communications,
advise such other Party or its counsel of the contents of), any communication received by such Person from a Governmental Body in connection
with the filings made pursuant to this Section 6.5 and (ii) keep the other Party or its counsel informed with respect
to the status of any applicable submissions and filings to any Governmental Body in connection with this Agreement and the Transactions
and any developments, meetings or discussions with any Governmental Body in respect thereof, including with respect to (A) the receipt
of any non-action, action, clearance, Consent, approval, waiver, or other authorizations, (B) the expiration or termination of any
waiting period, (C) the commencement or proposed or threatened commencement of any investigation, litigation or administrative or
judicial Action or proceeding under applicable Laws, including any proceeding initiated by a private party, and (D) the nature and
status of any objections raised or proposed or threatened to be raised by any Governmental Body with respect to this Agreement and the
Transactions. Neither Sellers nor Purchaser will participate in any meeting or discussion with any Governmental Body with respect of
any such filings, applications, investigation or other inquiry relating to the Transaction without giving the other Party reasonable
prior notice of the meeting or discussion and, unless prohibited by the relevant Governmental Body, the opportunity to attend and participate
in such meeting or discussion. Each Party will have the right to review and approve the content of any draft notifications, formal notifications,
filing, submission or other written communication (and any analyses, memoranda, presentations, white papers, correspondence or other
written materials submitted therewith) to be submitted by the other Party to any Governmental Body in advance of any such submission.
Each Party acknowledges that, with respect to any non-public information provided by a Party to the other under this Section 6.5,
each Party may (1) designate such material as restricted to “outside counsel only” and any such material shall not be
shared with employees, officers or directors or their equivalents of the receiving Party without approval of the disclosing Party and
(2) make appropriately limited redactions necessary to satisfy contractual confidentiality obligations, preserve attorney-client
privilege or protect material relating to the valuation of the Acquired Assets.
(d) Purchaser
will not, and will not permit any member of the Purchaser Group or their respective Affiliates to, engage in any action or enter into
any transaction or permit any action to be taken or transaction to be entered into that would reasonably be expected to (i) impose
a material delay in the obtaining of, or materially increase the risk of not obtaining, any clearances, Consents, approvals, waivers,
actions, waiting period expirations or terminations, non-actions or other authorizations under the HSR Act or Foreign Competition Laws
from any Governmental Body necessary to consummate the Transactions, (ii) materially increase the risk of any Governmental Body
entering an Order preventing, delaying or prohibiting the consummation of the Transactions or (iii) delay the consummation of the
Transactions.
Section 6.6 Reasonable
Efforts; Cooperation.
(a) Subject
to the other terms of this Agreement, each Party shall (whether directly or through its Advisors) use its reasonable best efforts to
perform its obligations hereunder and to take, or cause to be taken, and do, or cause to be done, all things necessary, proper or advisable
to cause the Transactions to be effected as soon as practicable, but in any event on or prior to the Outside Date, in accordance with
the terms hereof and to cooperate with each other Party and its Advisors in connection with any step required to be taken as a part of
its obligations hereunder.
(b) The
obligations of Sellers pursuant to this Agreement, including this Section 6.6, shall be subject to any Orders entered, or
approvals or authorizations granted or required, by or under the Bankruptcy Court or the Bankruptcy Code (including in connection with
the Bankruptcy Cases), Sellers’ debtor-in-possession financing, and Sellers’ obligations as debtors-in-possession to comply
with any Order of the Bankruptcy Court (including the Bidding Procedures Order, and the Sale Order), and Sellers’ duty to seek
and obtain the highest or otherwise best price for the Acquired Assets as required by the Bankruptcy Code.
Section 6.7 Certain
Financing Matters.
(a) From
the date hereof until the Closing Date, Sellers shall (whether directly or through their respective Advisors) use their commercially
reasonable efforts to provide all cooperation reasonably requested by Purchaser in connection with the Financing, at Purchaser’s
sole expense, including by using commercially reasonable efforts to (i) furnish Purchaser on a reasonably timely basis with such
documentation and information (including financial information) that Purchaser or Purchaser’s financing sources have reasonably
requested in writing (including electronic correspondence) in connection with obtaining or consummating the Financing, (ii) assist
with the preparations for (but not the execution of) the provision of guarantees and the pledging of collateral (it being understood
that no such pledging of collateral will be made by any Seller or be effective until at or after the Closing), (iii) provide all
documentation and other information required by bank regulatory authorities under applicable “know-your-customer”, anti-money
laundering rules and regulations, including the PATRIOT Act and beneficial ownership regulations, at least three (3) Business
Days prior to Closing, reasonably requested no later than five (5) Business Days prior to the Closing by Purchaser, and (iv) facilitate
the taking of all actions reasonably requested by Purchaser in connection with the Financing; provided that (A) no personal liability
shall be imposed on any of the Advisors, employees, officers or directors of Sellers involved in the foregoing cooperation, (B) Sellers
will not be required to pay any commitment or other fees or expenses in connection with Purchaser’s debt financing, and (C) no
Advisor, director or officer of any of Sellers shall be obligated to execute any documentation in connection with Purchaser’s debt
financing unless continuing in such capacity after the Closing.
(b) None
of Sellers shall be required to take any action pursuant to this Section 6.7 that would subject it to actual or potential
Liability for which it would not be indemnified hereunder or to bear any cost or expense or to pay any commitment or other fee or provide
or agree to provide any indemnity in connection with the Financing or any of the foregoing prior to the Closing. Purchaser shall indemnify
and hold harmless the Seller Parties from and against any and all Liabilities, losses, damages, claims, costs, expenses, interest, awards,
judgments and penalties suffered or incurred by them in connection with this Section 6.7 and any information utilized in
connection therewith. Purchaser shall, promptly upon request by Elixir, reimburse Sellers for all reasonable out-of-pocket costs incurred
by them in connection with this Section 6.7.
(c) Notwithstanding
this Section 6.7 or anything else in this Agreement, Purchaser acknowledges and agrees that (i) it is not a condition
to the Closing or to any of Purchaser’s other obligations under this Agreement that Purchaser obtain the Financing. The Parties
agree that this Section 6.7 (and not Section 6.6 or Section 6.8) sets forth Sellers’ sole obligations
with respect to the Financing and (ii) the condition set forth in Section 7.2(b), as it applies to Sellers’ obligations
under this Section 6.7, shall be deemed satisfied unless the failure to obtain the Financing is a direct result of Sellers’
knowing and material willful breach of their obligations under this Section 6.7.
Section 6.8 Further
Assurances. From time to time, as and when requested by any Party and at such requesting
Party’s expense, any other Party will execute and deliver, or cause to be executed and delivered, all such documents and instruments
and will take, or cause to be taken, all such further or other actions as such requesting Party may reasonably deem necessary or desirable
to evidence and effectuate the Transactions.
Section 6.9 Insurance
Matters.
(a) Purchaser
acknowledges that, upon Closing, all nontransferable insurance coverage provided in relation to any Seller and the Acquired Assets that
is maintained by such Seller (whether such policies are maintained with third party insurers or with any Seller) shall cease to provide
any coverage to Purchaser and the Acquired Assets and no further coverage shall be available to Purchaser or the Acquired Assets under
any such policies.
(b) To
the extent that (i) any insurance policies issued for the benefit of any Seller (the “Sellers’ Insurance Policies”)
cover any Liability relating to the Acquired Assets and relating to or arising out of occurrences or events on or prior to the Closing
(“Pre-Closing Matters”) and (ii) the Sellers’ Insurance Policies continue to offer coverage after the Closing
to permit claims to be made thereunder with respect to Pre-Closing Matters, the Sellers shall cooperate with Purchaser in submitting
claims and seeking recovery with respect to Pre-Closing Matters on behalf of Purchaser under the Seller’s Insurance Policies. Purchaser
shall not make any such claims if, and to the extent that, such claims are covered by insurance policies held by Purchaser or its Affiliates.
The Sellers shall, on request from Purchaser, with respect to any claim arising from an Assumed Liability that is covered or potentially
covered the Sellers’ Insurance Policies, (i) report such claim to the appropriate insurer as promptly as practicable after
such claim is reported to the Sellers, and (ii) instruct that any proceeds of such insurance policy are paid directly to Purchaser,
the attorneys handling the defense of such claim or, where applicable, to the claimant as a result of any judgment or settlement, rather
than to the Sellers (but subject to all limitations and deductibles and exclusions under such policies and net of Sellers’ out-of-pocket
costs and expenses of seeking such recovery and any Taxes incurred by Sellers with respect to such recovery, all of which shall be paid
directly to Sellers); provided that Purchaser shall notify the Sellers promptly of any such claim or potential claim and shall
reasonably cooperate in the investigation and pursuit of any such claim or potential claim.
Section 6.10 Receipt
of Misdirected Assets; Liabilities.
(a) From
and after the Closing, if any Seller or any of its respective Affiliates receives any right, property or asset that is an Acquired Asset,
the applicable Seller shall promptly transfer or cause such of its Affiliates to transfer such right, property or asset (and shall promptly
endorse and deliver any such asset that is received in the form of cash, checks or other documents) to Purchaser, and such asset will
be deemed the property of Purchaser held in trust by such Seller for Purchaser until so transferred. From and after the Closing, if Purchaser
or any of its Affiliates receives any right, property or asset that is an Excluded Asset, Purchaser shall promptly transfer or cause
such of its Affiliates to transfer such asset (and shall promptly endorse and deliver any such right, property or asset that is received
in the form of cash, checks, or other documents) to the applicable Seller, and such asset will be deemed the property of such Seller
held in trust by Purchaser for such Seller until so transferred.
(b) From
and after the Closing, if any Seller or any of its Affiliates is subject to a Liability that should belong to Purchaser or its Affiliates
pursuant to the terms of this Agreement, such Seller shall promptly transfer or cause such of its Affiliates to transfer such Liability
to Purchaser, and Purchaser shall assume and accept such Liability. From and after the Closing, if Purchaser or any of its Affiliates
is subject to a Liability that should belong to a Seller or its Affiliates pursuant to the terms of this Agreement, Purchaser shall promptly
transfer or cause such of its Affiliates to transfer such Liability to the applicable Seller or its Affiliates, and such Seller or its
Affiliates shall assume and accept such Liability.
Section 6.11 Guarantees;
Third Party Assurances.
(a) Purchaser
acknowledges Sellers and their Affiliates have entered into various arrangements (i) in which guarantees, letters of credit, sureties,
bonds or similar arrangements were issued by Sellers or their Affiliates and (ii) in which Sellers or their Affiliates are the primary
obligors on other Contracts, in any such case to support or facilitate Sellers, in each case, set forth in Schedule 6.11(a) (
“Seller Support Obligations”). It is understood that the Seller Support Obligations are not intended to continue after
the Closing. Purchaser agrees that it shall use its reasonable best efforts to obtain replacements for the Seller Support Obligations
(which shall include the full and unconditional release of Sellers and their Affiliates) that will be in effect at the Closing or, in
the case of Seller Support Obligations described in the foregoing clause (ii), will use its commercially reasonable efforts to
arrange for itself or one of its Subsidiaries to be substituted as the primary obligor thereon as of the Closing through an assumption,
accession, acknowledgement or similar agreement (which shall include the full and unconditional release of Sellers and their Affiliates)
with the beneficiary of the applicable Seller Support Obligation. Whether or not Purchaser is able to satisfy the terms of the immediately
preceding sentence, Purchaser shall indemnify Sellers and their Affiliates and each of their respective officers, directors, employees,
agents and representatives from and against any and all Liabilities incurred by any of them relating to the Seller Support Obligations.
Purchaser agrees that, with respect to any Seller Support Obligation, its reasonable best efforts pursuant to this Section 6.11
shall include, if requested, the execution and delivery by Purchaser, or by an Affiliate of Purchaser acceptable to the beneficiary
of such Seller Support Obligation, of a replacement guarantee that is substantially in the form of such Seller Support Obligation. All
costs and expenses incurred in connection with providing the release or substitution of the Seller Support Obligations shall be borne
by Purchaser.
(b) At
or prior to the Closing, Purchaser shall at its sole cost and expense arrange for the issuance of replacement surety bonds or similar
instruments or post cash collateral to the issuer with respect to all outstanding surety bonds or similar instruments issued with respect
to the Business and which are set forth in Schedule 6.11(b) (collectively, the “Third Party Assurances”)
such that all Third Party Assurances may be returned, terminated or otherwise unwound in full as of the Closing.
Section 6.12 Acknowledgment
by Purchaser.
(a) Purchaser
acknowledges and agrees, on its own behalf and on behalf of the Purchaser Group, that it has conducted to its full satisfaction an independent
investigation and verification of the Business (including its financial condition, results of operations, assets, Liabilities, properties,
Contracts, environmental, health or safety conditions and compliance, employee matters, regulatory compliance, business risks and prospects),
and the Acquired Assets and the Assumed Liabilities, and, in making its determination to proceed with the Transactions, Purchaser and
the Purchaser Group have relied solely, are relying, and will rely, solely, on the Express Representations and the results of the Purchaser
Group’s own independent investigation and verification and have not relied on, are not relying on, and will not rely on, any information,
statements, disclosures, documents, projections, forecasts or other material made available to Purchaser or any of its Affiliates or
Advisors in the Dataroom, any Information Presentation, or the Projections or any other information, statements, disclosures or materials,
in each case, whether written or oral, made or provided by or on behalf of any Seller or any other Seller Party, or any failure of any
of the foregoing to disclose or contain any information, except for the Express Representations (it being understood that Purchaser and
the Purchaser Group have relied only on the Express Representations). Purchaser acknowledges and agrees, on its own behalf and on behalf
of the Purchaser Group, that (i) the Express Representations are the sole and exclusive representations, warranties and statements
of any kind made to Purchaser or any member of the Purchaser Group and on which Purchaser or any member of the Purchaser Group may rely
in connection with the Transactions and (ii) all other representations, warranties and statements of any kind or nature expressed
or implied, whether in written, electronic or oral form, including (A) the completeness or accuracy of, or any omission to state
or to disclose, any information (other than solely to the extent expressly set forth in the Express Representations) including in the
Dataroom, Information Presentation, Projections, meetings, calls or correspondence with management of any Seller, any of the Seller
Parties or any other Person on behalf of any Seller or any of the Seller Parties or any of their respective Affiliates or Advisors and
(B) any other statement relating to the historical, current or future business, financial condition, results of operations, assets,
Liabilities, properties, Contracts, environmental, health or safety conditions and compliance, employee matters, regulatory compliance,
business risks and prospects of the Business, or the quality, quantity or condition of any of the Acquired Assets are, in each case,
specifically disclaimed by each Seller, on its behalf and on behalf of the Seller Parties. Purchaser, on its own behalf and on behalf
of the Purchaser Group: (1) disclaims reliance on the items in clause (ii) in the immediately preceding sentence; and
(2) acknowledges and agrees that it has relied on, is relying on and will rely on only the items in clause (i) in the
immediately preceding sentence (which do not, for the avoidance of doubt, include Purchaser’s or Purchaser Group’s reliance
on the Express Representations). Without limiting the generality of the foregoing, Purchaser acknowledges and agrees, on its own behalf
and on behalf of the Purchaser Group, that neither Sellers, nor any other Person (including the Seller Parties), has made, is making
or is authorized to make, and subject to Section 6.12(c), Purchaser, on its own behalf and on behalf of the Purchaser Group,
hereby waives, all rights and claims it or they may have against any Seller Party with respect to the accuracy of, any omission or concealment
of, or any misstatement with respect to, (x) any potentially material information regarding any Seller or any of their respective
assets (including the Acquired Assets), Liabilities (including the Assumed Liabilities) or operations and (y) any warranty or representation
(whether in written, electronic or oral form), express or implied, as to the quality, merchantability, fitness for a particular purpose,
or condition of any Seller’s business (including the Business), operations, assets, Liabilities, Contracts, environmental, health
or safety conditions and compliance, employee matters, regulatory compliance, business risks and prospects or any portion thereof, except,
in each case, solely to the extent expressly set forth in the Express Representations.
(b) Without
limiting the generality of the foregoing, in connection with the investigation by the Purchaser Group of the Business, Purchaser and
the members of the Purchaser Group, and the Advisors of each of the foregoing, have received or may receive, from or on behalf of any
Seller, or other Seller Parties, certain projections, forward-looking statements and other forecasts (whether in written, electronic,
or oral form, and including in the Information Presentation, Dataroom, management meetings, etc.) (collectively, “Projections”).
Purchaser acknowledges and agrees, on its own behalf and on behalf of the Purchaser Group, that (i) such Projections are being provided
solely for the convenience of Purchaser to facilitate its own independent investigation of Sellers, (ii) there are uncertainties
inherent in attempting to make such Projections, (iii) Purchaser is familiar with such uncertainties, and (iv) Purchaser is
taking full responsibility for making their own evaluation of the adequacy and accuracy of all Projections (including the reasonableness
of the assumptions underlying such Projections).
(c) Nothing
in this Section 6.12 shall limit any rights or remedies available to Purchaser in the case of a claim for Fraud.
(d) Purchaser
acknowledges and agrees, on its own behalf and on behalf of the Purchaser Group, that it will not assert, institute, or maintain, and
will cause each member of the Purchaser Group not to assert, institute or maintain, any Action that makes any claim contrary to the agreements
and covenants set forth in this Section 6.12, including any such Action with respect to the distribution to Purchaser or
any member of the Purchaser Group, or Purchaser’s or any member of the Purchaser Group’s use, of the information, statements,
disclosures or materials in the Information Presentation, the Dataroom or Projections or any other information, statements, disclosures,
or materials, in each case whether written or oral, provided by them or any other Seller Party or any failure of any of the foregoing
to disclose any information.
Section 6.13 Guaranty.
(a) Guarantor
hereby irrevocably, absolutely and unconditionally guarantees to Sellers (i) the due and punctual performance, when and as due,
of all obligations, covenants and agreements of Purchaser arising under or pursuant to this Agreement; (ii) the accuracy of Purchaser’s
representations and warranties set forth herein; and (iii) the punctual payment of all sums, if any, now or hereafter owed by Purchaser
under and in accordance with the terms of this Agreement, including the payment obligations of the Purchaser pursuant to Section 2.1
(the matters set forth in clauses (i), (ii), and (iii), collectively, “Guaranteed Obligations”).
(b) If
Purchaser fails to perform any of the Guaranteed Obligations, then Guarantor shall itself be jointly and severally liable for the Guaranteed
Obligations and shall perform or take whatever steps as may be necessary to procure performance of the same.
(c) Notwithstanding
any other provision of this Section 6.13, nothing herein shall be construed as imposing greater obligations or Liabilities
on Guarantor than for which Purchaser itself would be liable under this Agreement or obliging Guarantor to indemnify and hold harmless
Sellers against any losses, costs, or expenses for which Purchaser itself would not be liable under this Agreement, except as set forth
in this Section 6.13, including Section 6.13(f) and Section 6.13(h).
(d) The
obligations of Sellers under this Agreement shall conclusively be deemed to have been created, contracted, or incurred in reliance upon
this Section 6.13 and all dealings between Sellers and Purchaser shall likewise be conclusively presumed to have been consummated
in reliance upon this Section 6.13.
(e) Guarantor’s
obligations hereunder shall not be affected by any facts or circumstances that might constitute a legal or equitable bar, discharge or
defense to any Guaranteed Obligations available to Guarantor but not available to Purchaser, and Guarantor hereby expressly waives and
renounces any and all such bars, discharges and defenses.
(f) The
guarantee by Guarantor contained herein shall be a continuing guarantee, shall remain in full force and effect and shall continue to
be enforceable by Sellers until the performance by Purchaser of all of the Guaranteed Obligations (notwithstanding any change, restructuring,
bankruptcy, insolvency or termination of the corporate structure or existence of any Seller or any of its Subsidiaries) and that upon
completion of all of the Guaranteed Obligations, this guarantee shall terminate automatically and Guarantor shall stand discharged of
all of its obligations under this guarantee. Guarantor shall indemnify Sellers for any costs and expenses incurred by Sellers in enforcing
this Section 6.13, including the fees and expenses of counsel and other Advisors of Sellers in the investigation and prosecution
of any Action with respect hereto. Guarantor’s obligations under this Section 6.13 shall not be terminated, modified,
affected or impaired by reason of any relief or discharge of Purchaser from any of Purchaser’s respective obligations in bankruptcy
or similar proceedings, or by liquidation or dissolution.
(g) The
liability of Guarantor under this Section 6.13 shall be unlimited and unconditional, and this Section 6.13 shall
be a continuing guaranty.
(h) Guarantor
hereby makes the representations and warranties set forth in Article IV as to itself, and such representations and warranties
shall apply mutatis mutandis as if Guarantor were substituted for Purchaser therein.
Section 6.14 Confidentiality.
(a) The
Confidentiality Agreement is hereby incorporated herein by reference and shall continue in full force and effect in accordance with its
terms; provided that from and after the Closing, all of Purchaser’s and its Affiliates obligations under the Confidentiality
Agreement with respect to confidential information that constitutes an Acquired Asset or Assumed Liability, shall terminate and be of
no further force or effect.
(b) From
and after the Closing the confidential information and trade secrets included in the Acquired Assets (“Business Confidential
Information”) will be the confidential information of Purchaser; provided that Business Confidential Information shall
not include any information that is or, after the Closing, becomes generally available to the public other than as a result of disclosure,
directly or indirectly, by Sellers in violation of this Section 6.14. The Sellers will not use the Business Confidential
Information except to (i) provide the services under the TSA, or (ii) comply with applicable Law or a Contract that is an Excluded
Asset and solely for the purpose of complying with such Contract,, (iii) enforce Sellers’ rights hereunder, or (iv) participate
in commercial arrangements between Sellers and their Affiliates, on the one hand, and Purchaser and its Affiliates, on the other hand
((i) through (iv), the “Permitted Purposes”).
(c) Following
the Sellers’ delivery of the Acquired Assets to Purchaser and Purchaser’s confirmation of receipt of the Acquired Assets,
the Sellers will use commercially reasonable efforts to permanently delete and erase from the Sellers’ systems and storage locations
all software and other technology that is not needed by the Sellers to provide the services under the TSA, except Sellers may retain
such documents, records, and copies as are be required in order to satisfy any retention policies, internal compliance procedures or
regulations or Law to which Seller is subject, or where it is not reasonably possible to destroy copies that have been created by ordinary
course electronic backup procedures, provided that (x) the obligations in this Section 6.14 shall continue to apply
to such documents, records and copies and (y) in each case, such documents, records and copies are only available and accessible
to employees of Seller with a need to know solely for the foregoing purposes. Following the termination or expiration of the TSA, Sellers
will use commercially reasonable efforts permanently delete and erase from the Sellers’ systems and storage locations all of the
software and other technology included in the Acquired Assets that was needed by the Sellers to perform obligations under the TSA, except
Sellers may retain such documents, records, and copies as are be required in order to satisfy any retention policies, internal compliance
procedures or regulations or Law to which Seller is subject, or where it is not reasonably possible to destroy copies that have been
created by ordinary course electronic backup procedures, provided that (x) the obligations in this Section 6.14 shall
continue to apply to such documents, records and copies and (y) in each case, such documents, records and copies are only available
and accessible to employees of Seller with a need to know solely for the foregoing purposes.
(d) From
and after the Closing, except with the prior written consent of Purchaser, the Sellers agree to keep confidential and not disclose the
Business Confidential Information, except to the extent that (A) such information has otherwise been made public other than as a
result of disclosure, directly or indirectly, by Sellers in violation of this Section 6.14, (B) any such information
is reasonably necessary for enforcing the Sellers’ rights hereunder and is disclosed to any Governmental Body in connection with
any Actions involving a dispute between any Seller and any Purchaser Group member, (C) any Seller is required by applicable Law
(including, in connection with the Bankruptcy Cases) to divulge or disclose any such information (in which case Sellers shall promptly
notify Purchaser in advance of disclosing such information and use commercially reasonable efforts to cooperate with Purchaser to limit
such disclosure, to the extent permitted under applicable Law), and (D) to its Affiliates and Advisors solely on a need to know
basis in connection with the Permitted Purposes and solely for the Permitted Purposes.
(e) Purchaser
acknowledges that Sellers’ and their Affiliates’ directors, officers and employees may unavoidably retain unassisted mental
impressions of Business Confidential Information that were not the result of such individuals having studied, memorized, or reviewed
Business Confidential Information for the purpose of remembering, preserving, replicating or otherwise using such Business Confidential
Information (“Mental Impressions”), and such retention of such Mental Impressions shall not in and of itself constitute
a breach of this Section 6.14. In addition, to the extent such Mental Impressions are recalled indirectly or subconsciously
as part of such individual’s general industry knowledge, and not as such individual’s direct or conscious recollection (i) of
Business Confidential Information or (ii) as information relating to or having been included in the Acquired Assets, such individual’s
actions or omissions, to the extent based on such general industry knowledge and not on specific Business Confidential Information, shall
not in and of themselves constitute a breach of this Section 6.14. However, and notwithstanding anything to the contrary,
this Section 6.14(e) will not (x) affect in any manner whatsoever Purchaser’s rights in the Acquired Intellectual
Property or (y) assign to Sellers or their Affiliates or any other Person or otherwise grant to Sellers or their Affiliates or any
other Person any license or other rights whatsoever to, any of the Acquired Intellectual Property.
Section 6.15 No
Successor Liability. The Parties intend that, to the fullest extent permitted by applicable
Law (including under Section 363 of the Bankruptcy Code), upon the closing, Purchaser shall not be deemed to: (a) be the successor
of any Seller, (b) have, de facto, or otherwise, merged with or into Sellers, (c) be a mere continuation or substantial continuation
of Sellers or the enterprise(s) of Sellers or (d) be liable or have any Liability for any acts or omissions of Sellers in the
conduct of their businesses or arising under or related to the Acquired Assets other than as expressly set forth and agreed in this Agreement.
Without limiting the generality of the foregoing, and except as otherwise expressly provided in this Agreement, the Parties intend that
Purchaser shall have no Liability for any Encumbrance (other than the Assumed Liabilities and Permitted Encumbrances on the Acquired
Assets) against Sellers or any of Sellers predecessors or Affiliates, and Purchaser shall have no successor or vicarious liability of
any kind or character whether known or unknown as of the Closing Date or in connection with the transactions contemplated to occur on
the Closing, whether now existing or hereafter arising, or whether fixed or contingent, with respect to the businesses of Sellers, the
Acquired Assets or any Liability of Sellers arising prior to, or relating to any period occurring prior to, the Closing Date. The Parties
agree that the Sale Order shall contain provisions substantially in the form set forth in this Section 6.15.
Section 6.16 Retained
Privileged Materials. Following the Closing (i) in the event of a dispute between Purchaser
and its Affiliates, on the one hand, and a third party (other than Sellers), on the other hand, Purchaser shall have the right to, or
to require Sellers to, assert the attorney-client privilege to prevent disclosure of any Retained Privileged Materials to a third party,
and (ii) without Purchaser’s prior written consent, Sellers shall not, unless required by applicable Law, disclose, transfer
or otherwise make available any Retained Privileged Materials to any third-party, in any manner that would reasonably be expected to
result in the waiver of the attorney-client privilege with respect to such materials.
Section 6.17 Notification
of Certain Matters. The Sellers will promptly (and, in any event, within ten (10) days)
notify Purchaser in writing of: (i) any notice or other communication from any Person alleging that the Consent of such Person is
or may be required in connection with the Transactions; (ii) any notice or other communication from any Governmental Body, or any
Action by any Governmental Body, related to or in connection with the Transactions (including that may restrain, enjoin or otherwise
prohibit the consummation of the Transactions); and (iii) the discovery of any variances from, or the existence or occurrence of
any event, fact or circumstance arising after the execution of this Agreement that would reasonably be expected to cause, any of the
representations and warranties contained in Article III to be untrue or inaccurate such that the condition set forth in Section 7.2(a) will
not be satisfied.
Section 6.18 Change
of Name. Promptly (and, in any event, within 60 days) following the Closing, each Seller
shall, and shall cause their Subsidiaries (other than EIC) to, discontinue the use of their current legal entity name (and any other
trade names or “d/b/a” names currently utilized by each Seller) and shall not subsequently change any of their names to or
otherwise use or employ any name which includes the words “Elixir,” “Ascend,” “Laker,” and/or “Tonic”
and the other names listed on Schedule 6.18 without the prior written consent of Purchaser, and each Seller shall cause the
name of Sellers in the caption of the Bankruptcy Cases to be changed to the new names of each Seller.
Section 6.19 Open
Source Remediation. Prior to Closing, Seller shall obtain and pay for commercial licenses
for iTextSharp, ServiceStack and jqGrid software sufficient to permit Seller’s use of such software.
Section 6.20 CMS
Novation. As promptly as practicable, and in any event not later than ten (10) Business
Days, after the date hereof, Sellers shall cause EIC to jointly prepare with EIC and to file with CMS a request for CMS to approve and
consent to the novation of the CMS Contracts from EIC to Purchaser pursuant to the Novation Agreement, by and among CMS, EIC (as transferor)
and Purchaser (as transferee) (“Novation Agreement”). Sellers shall cause EIC to include in such request all of the
information and documentation required pursuant to 42 CFR § 423.552 and any additional information required or advisable pursuant
to applicable Law. Thereafter, Sellers shall cause EIC, in coordination with Purchaser, to promptly update, as necessary or appropriate,
the Novation Agreement request to include all of the information required pursuant to 42 CFR § 423.552 and any additional information
required or advisable pursuant to applicable Law, including all information requested by CMS. Sellers shall cause EIC to furnish to Purchaser,
and Purchaser shall furnish to Sellers, all necessary information as the other Party may reasonably request in connection with its preparation
of any filing or submission in connection with the Novation Agreement, and shall keep the other Party apprised of the status of any communications
with, and inquiries or requests for additional information from, CMS or other Governmental Body. Sellers shall cause EIC to, and Purchaser
shall, comply promptly with any such inquiry or request of CMS related to the Novation Agreement. Sellers shall cause EIC to, and Purchaser
shall, satisfy all requirements applicable to the Novation Agreement pursuant to 42 CFR §§ 423.551 AND 423.552. In the event
that the Novation Agreement is not obtained pursuant to the terms and conditions set forth in this Section 6.20, the terms
and conditions set forth in Section 1.7 shall become null and void. Notwithstanding this Section 6.20 or anything
else in this Agreement, Purchaser acknowledges and agrees that (a) it is not a condition to the Closing or to any of Purchaser’s
other obligations under this Agreement that the Parties obtain the Novation Agreement. The Parties agree that this Section 6.20
(and not Section 6.6 or Section 6.8) sets forth Sellers’ sole obligations with respect to the potential
Novation Agreement and (ii) the condition set forth in Section 7.2(b), as it applies to Sellers’ obligations under
this Section 6.20, shall be deemed satisfied unless the failure to obtain the Novation Agreement is a direct result of Sellers’
knowing and material willful breach of their obligations under this Section 6.20.
Section 6.21 Completion
of TSA Schedules. Purchaser and Sellers shall cooperate in good faith to finalize the TSA
to the reasonable satisfaction of the Purchaser and Sellers as soon as reasonably practicable following the date hereof and in any event
on or prior to the date that is 3 weeks following the date hereof. Purchaser and Sellers shall negotiate in good faith to modify and
finalize the schedules to and the economic terms of the TSA; provided that Purchaser and Sellers acknowledge and agree that the
form of TSA attached as Exhibit G is considered substantially complete but there are open matters relating primarily to finalizing
the services and economic terms, which may include revisions to the body of the TSA.
Article VII
Conditions to Closing
Section 7.1 Conditions
Precedent to the Obligations of Purchaser and Sellers. The respective obligations of each
Party to consummate the Closing are subject to the satisfaction (or to the extent permitted by Law, written waiver by Sellers and Purchaser)
on or prior to the Closing Date, of each of the following conditions:
(a) the
expiration or termination of any required waiting period under the HSR Act or under the Foreign Competition Laws set forth in Schedule 7.1(a) related
to the Transactions, and receipt of any necessary approval related to the Transactions under the Foreign Competition Laws or other regulations
set forth in Schedule 7.1(a);
(b) no
court of competent jurisdiction shall have issued, enacted, entered, promulgated or enforced any Order (including any temporary restraining
Order or preliminary or permanent injunction) restraining, enjoining or otherwise prohibiting the Transactions that is still in effect;
and
(c) the
Bankruptcy Court shall have entered the Sale Order and the Sale Order shall not have been stayed, reversed, or modified in a manner not
reasonably acceptable to the Parties.
Section 7.2 Conditions
Precedent to the Obligations of Purchaser. The obligations of Purchaser to consummate the
Closing are subject to the satisfaction (or to the extent permitted by Law, written waiver by Purchaser in its sole discretion), on or
prior to the Closing Date, of each of the following conditions:
(a) (i) the
representations and warranties made by Sellers in Article III (in each case, other than the Fundamental Representations and
the Seller Sufficiency Representations) shall be true and correct in each case in all respects as of the Closing Date as though made
on and as of the Closing Date (other than representations and warranties that are made as of a specified date need be true and correct
only as of such date), except where the failure of such representations and warranties to be true and correct (without giving effect
to any limitation as to “materiality”, “Material Adverse Effect” or similar qualifiers contained therein (other
than “material weaknesses” in Section 3.4(d) and the word “Material” when used in the instances
of the defined term “Material Contract” and “Material Adverse Effect” in Section 3.19)) has not had,
and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (ii) the representations
and warranties set forth in Section 3.1, Section 3.2, Section 3.5(a) and Section 3.17
(collectively, the “Fundamental Representations”) shall be true and correct in all respects other than for de
minimis inaccuracies, in each case as of the Closing Date as though all such representations and warranties had been made as of the Closing
Date (other than representations and warranties that by their terms address matters only as of another specified date, which shall be
so true and correct only as of such other specified date) and (iii) the representations and warranties set forth in Section 3.5(b) (the
“Seller Sufficiency Representations”) shall be true and correct in all respects, in each case as of the Closing Date
as though such representations and warranties had been made as of the Closing Date;
(b) Sellers
shall have performed or complied with, or caused to be performed or complied with, in all material respects, all of the obligations and
covenants required by this Agreement to be performed or complied with by Sellers on or prior to the Closing;
(c) Sellers
shall have delivered, or caused to be delivered, to Purchaser all of the items set forth in Section 2.4;
(d) From
the date of this Agreement, there shall not have occurred any Material Adverse Effect.
Section 7.3 Conditions
Precedent to the Obligations of Sellers. The obligations of Sellers to consummate the Closing
are subject to the satisfaction (or to the extent permitted by Law, written waiver by Sellers in their sole discretion), on or prior
to the Closing Date, of each of the following conditions:
(a) the
representations and warranties made by Purchaser in Article IV shall be true and correct, in each case as of the Closing
Date, with the same force and effect as though all such representations and warranties had been made as of the Closing Date (other than
representations and warranties that by their terms address matters only as of another specified date, which shall be so true and correct
only as of such other specified date), except where the failure of such representations or warranties to be so true and correct (without
giving effect to any limitation as to “materiality”, “material adverse effect”, “Material Adverse Effect”
or similar qualifiers contained therein) would not materially impair or prevent Purchaser’s ability to consummate the Transactions;
(b) Purchaser
shall have performed or complied with, or caused to be performed or complied with, in all material respects, all of the obligations and
covenants required by this Agreement to be performed or complied with by Purchaser on or prior to the Closing; and
(c) Purchaser
shall have delivered, or caused to be delivered, to Sellers all of the items set forth in Section 2.5.
Section 7.4 Waiver
of Conditions. Upon the occurrence of the Closing, any condition set forth in this Article VII
that was not satisfied as of the Closing will be deemed to have been waived for all purposes by the Party having the benefit of such
condition as of and after the Closing. None of Purchaser or Sellers may rely on the failure of any condition set forth in this Article VII,
as applicable, to be satisfied if such failure was caused by such Party’s failure to perform any of its obligations under this
Agreement, including its obligation to use its reasonable best efforts to consummate the Transactions as required under this Agreement.
Article VIII
Termination
Section 8.1 Termination
of Agreement. This Agreement may be terminated at any time prior to the Closing only in
accordance with this Section 8.1, and in no other manner:
(a) by
the mutual written consent of Sellers and Purchaser;
(b) by
written notice of either Purchaser or Sellers, upon the issuance of an Order by a court of competent jurisdiction restraining, enjoining
or otherwise prohibiting the consummation of the Closing or declaring unlawful the Transactions, and such Order having become final,
binding and non-appealable; provided that no Party may terminate this Agreement under this Section 8.1(b) if
the issuance of such Order was caused by such Party’s failure to perform any of its obligations under this Agreement;
(c) by
written notice of either Purchaser or Sellers, if the Closing shall not have occurred on or before May 31, 2024 (the “Outside
Date”); provided that a Party shall not be permitted to terminate this Agreement pursuant to this Section 8.1(c) if
the failure of the Closing to have occurred by the Outside Date was caused by such Party’s failure to perform any of its obligations
under this Agreement;
(d) by
written notice from Sellers to Purchaser, upon a breach of any covenant or agreement on the part of Purchaser, or if any representation
or warranty of Purchaser will have become untrue, in each case, such that the conditions set forth in Section 7.3(a) or Section 7.3(b) would
not be satisfied, including a breach of Purchaser’s obligation to consummate the Closing; provided that (i) if such
breach is curable by Purchaser (other than a breach or failure by Purchaser to close when required pursuant to Section 2.3)
then Sellers may not terminate this Agreement under this Section 8.1(d) unless such breach has not been cured by the
date which that the earlier of (A) two (2) Business Days prior to the Outside Date and (B) 30 days after Sellers notify
Purchaser of such breach and (ii) Sellers’ right to terminate this Agreement pursuant to this Section 8.1(d) will
not be available to Sellers at any time that Sellers are in material breach of, any covenant, representation or warranty hereunder;
(e) by
written notice from Purchaser to Sellers, upon a breach of any covenant or agreement on the part of Sellers, or if any representation
or warranty of the Sellers will have become untrue, in each case, such that the conditions set forth in Section 7.2(a) or Section 7.2(b) would
not be satisfied; provided that (i) if such breach is curable by Sellers then Purchaser may not terminate this Agreement
under this Section 8.1(e) unless such breach has not been cured by the date which is the earlier of (A) two (2) Business
Days prior to the Outside Date and (B) 30 days after Purchaser notifies Sellers of such breach and (ii) the right to terminate
this Agreement pursuant to this Section 8.1(e) will not be available to Purchaser at any time that Purchaser is in material
breach of, any covenant, representation or warranty hereunder;
(f) by
written notice from Sellers to Purchaser, if (i) all of the conditions set forth in Section 7.1 and Section 7.2
have been satisfied (other than conditions that by their nature are to be satisfied at the Closing, but which conditions are capable
of being satisfied) or waived, (ii) Sellers have confirmed in writing to Purchaser that Sellers are ready, willing, and able to
consummate the Closing, and (iii) Purchaser fails to complete the Closing by, or at, the later of (A) three Business Days of
receipt of the notice described in clause (ii), and (B) the time required by Section 2.3;
(g) by
written notice from Sellers to Purchaser, if any Seller or the board of directors (or similar governing body) of any Seller determines
that proceeding with the Transactions or failing to terminate this Agreement would be inconsistent with its or such Person’s or
body’s fiduciary duties;
(h) by
written notice of either Purchaser or Sellers, if (i) any Seller enters into one or more Alternative Transactions with one or more
Persons other than Purchaser or the Successful Bidder or the Backup Bidder at the Auction or (ii) the Bankruptcy Court approves
an Alternative Transaction other than with the Successful Bidder or the Backup Bidder;
(i) by
written notice from either Purchaser or Sellers, if Purchaser (i) is not the Successful Bidder or the Backup Bidder at the Auction
or (ii) is the Backup Bidder at the Auction and Sellers consummate an Alternative Transaction with the Successful Bidder;
(j) by
Sellers or Purchaser, if the Bankruptcy Cases are dismissed or converted to a case or cases under chapter 7 of the Bankruptcy Code, or
if a trustee or examiner with expanded powers to operate or manage the financial affairs or reorganization of the Sellers is appointed
in the Bankruptcy Cases;
(k) by
Purchaser if Sellers withdraw or seek authority to withdraw the Bidding Procedures Motion;
(l) by
Purchaser if (i) following entry by the Bankruptcy Court of the Bidding Procedures Order, such order is (A) amended, modified
or supplemented in a manner reasonably expected to be adverse to Purchaser without Purchaser’s prior written consent or (B) voided,
reversed or vacated or is subject to a stay, or (ii) following entry by the Bankruptcy Court of the Sale Order, the Sale Order is
(A) amended, modified or supplemented in an adverse way without Purchaser’s prior written consent or (B) voided, reversed
or vacated or is subject to a stay;
(m) by
Purchaser, if any of the Bankruptcy Court Milestones are not met;
(n) by
Purchaser, in its sole discretion, on or prior to October 23, 2023;
(o) by
Purchaser, in its sole discretion, on or prior to October 30, 2023; or
(p) by
written notice from Sellers to Purchaser, upon a breach of Section 2.2(a) on the part of Purchaser.
Section 8.2 Effect
of Termination.
(a) In
the event of termination of this Agreement pursuant to Section 8.1, this Agreement shall forthwith become null and void and
no Party or any of its partners, officers, directors, managers or equityholders will have any Liability under this Agreement; provided
that Section 2.2, Section 6.2(b), Section 6.14, this Section 8.2 and Article X
shall survive any such termination; provided further that no termination will relieve any Party from any Liability for any
Willful Breach of this Agreement prior to the date of such termination; provided further that, subject to Section 10.12,
the maximum Liability of Purchaser under, or arising out of, this Agreement shall be equal to the Deposit. Subject to Section 10.12,
nothing in this Section 8.2 will be deemed to impair the right of any Party to be entitled to specific performance or other
equitable remedies to enforce specifically the terms and provisions of this Agreement. Notwithstanding anything contained herein to the
contrary, (i) retaining the Deposit pursuant to Section 2.2(b) is Sellers' sole and exclusive remedy arising from
(A) Seller’s termination of this Agreement pursuant to Section 8.1(p) or any other section of Section 8.1
(or upon any other grounds) as a result of Purchaser’s breach of Section 2.2(a) or Section 4.4,
and (B) Purchaser’s breach of Section 2.2(a) or Section 4.4, and (ii) retaining the Deposit
pursuant to Section 2.2(b) is Sellers’ sole and exclusive remedy arising from Purchaser’s termination of
this Agreement pursuant to Section 8.1(n) or Section 8.1(o). For the avoidance of doubt, Sellers will not
be entitled to specific performance or other equitable remedies to enforce specifically (1) the terms and provisions of Section 2.2(a) requiring
Purchaser to make the Second Deposit or Final Deposit, or (2) requiring Purchaser to cure any breach of Section 4.4.
(b) If
this Agreement is terminated other than pursuant to Section 8.1(a), Section 8.1(d), Section 8.1(f),
Section 8.1(n), Section 8.1(o), or Section 8.1(p), then the Sellers will pay to Purchaser by wire
transfer of immediately available funds within three (3) Business Days following such termination of this Agreement an amount
equal to the reasonable and documented out-of-pocket costs and expenses (including fees and expenses of counsel) incurred by Purchaser
in connection with the negotiation, diligence, execution, performance and enforcement of this Agreement, which amount will shall not
exceed $8,625,000 (“Expense Reimbursement”).
(c) In
consideration for Purchaser having expended considerable time and expense in connection with this Agreement and the negotiation thereof,
if this Agreement is terminated pursuant to Section 8.1(c), Section 8.1(e), Section 8.1(g), Section 8.1(h), Section 8.1(i),
Section 8.1(j), Section 8.1(k), or Section 8.1(l), Sellers shall pay to Purchaser a break-up fee
in an amount equal to $11,500,000 (the “Breakup Fee”); provided that the Breakup Fee shall be payable concurrently
with the consummation of, and only out of the cash proceeds of, an Alternative Transaction, to an account designated by Purchaser in
writing to Elixir.
(d) Each
of the Parties acknowledges and agrees that the agreements contained in this Section 8.2(b) are an integral part of
this Agreement and that the Breakup Fee and Expense Reimbursement are not a penalty, but rather represent liquidated damages in a reasonable
amount that will reasonably compensate Purchaser in the circumstances in which such and Breakup Fee and Expense Reimbursement, as applicable,
are payable for the efforts and resources expended and opportunities foregone by Purchaser while negotiating and pursuing this Agreement
and in reasonable reliance on this Agreement and on the reasonable expectation of the consummation of the Transactions, which amount
would otherwise be impossible to calculate with precision.
(e) Subject
in all cases to Section 10.12, prior to the applicable Closing, in the event of any breach by any Seller of this Agreement,
the sole and exclusive remedy of Purchaser shall be to terminate this Agreement in accordance with Section 8.1 and, if applicable,
to receive the and Expense Reimbursement or the Breakup Fee, as applicable, in accordance with Section 8.2(b). Pursuant to
the Bidding Procedures Order and subject to approval by the Bankruptcy Court and entry of the Sale Order, the claim of Purchaser in respect
of the Expense Reimbursement or the Breakup Fee is and constitutes an allowed administrative expense claim against Sellers under section
503 of the Bankruptcy Code in the Bankruptcy Case.
Article IX
Taxes
Section 9.1 Transfer
Taxes. Any U.S. federal, state, local, and non-U.S., GST/HST, sales Tax, consumption sales,
use, excise, value added, registration, real property, purchase, transfer, franchise, deed, fixed asset, stamp, documentary stamp, use
or other Taxes and recording charges (including all related interest, penalties, and additions to any of the foregoing) payable by reason
of the sale of the Acquired Assets or the assumption of the Assumed Liabilities under this Agreement or the Transactions (the “Transfer
Taxes”) shall be borne and timely paid by Purchaser, and Purchaser shall timely file all Tax Returns related to any Transfer
Taxes with the appropriate Taxing Authority.
Section 9.2 Allocation
of Purchase Price. For U.S. federal and applicable state and local income Tax purposes,
Purchaser, Sellers, and their respective Affiliates shall allocate the Purchase Price (and any Assumed Liabilities or other amounts treated
as part of the purchase price for U.S. federal income Tax purposes) among the Acquired Assets in accordance with the methodology set
forth in Schedule 9.2 (the “Allocation Methodology”). As soon as commercially practicable, but no later
than 90 days following the determination of the final Purchase Price, Purchaser shall provide a proposed allocation to Sellers setting
forth the allocation of the Purchase Price (and other amounts treated as part of the purchase price for U.S. federal income Tax purposes)
among the Acquired Assets in accordance with the Allocation Methodology (the “Allocation”) subject to Sellers’
review and approval, and Purchaser shall incorporate any changes reasonably requested by Sellers with respect to such Allocation. If
Sellers deliver a written objection within 30 days after receipt of the draft Allocation proposed by Purchaser, then Purchaser and Sellers
shall negotiate in good faith to resolve any such objection, and, if Sellers and Purchaser cannot resolve such dispute within 30 days
of Purchaser’s receipt of Sellers’ objection, then a nationally recognized accounting firm mutually acceptable to Purchaser
and Sellers shall resolve such dispute, with the costs of such resolution to be allocated by such accounting firm between Purchaser and
Sellers based upon the percentage of the aggregate contested amount submitted to such accounting firm that is ultimately awarded to Purchaser,
on the one hand, or Sellers on the other hand, such that Purchaser bears a percentage of such costs and expenses equal to the percentage
of the contested amount awarded to Sellers and Sellers bears a percentage of such costs and expenses equal to the percentage of the contested
amount awarded to Purchaser. The Parties and their respective Affiliates shall file all Tax Returns in accordance with such Allocation
(as finally determined under this Section 9.2) and not take any Tax related action inconsistent with the Allocation, in each
case, unless otherwise required by a “determination” within the meaning of section 1313(a) of the Tax Code.
Section 9.3 Cooperation.
Purchaser and Sellers shall reasonably cooperate, as and to the extent reasonably requested by the other Party, in connection with the
filing of Tax Returns and any Action, audit, litigation, or other proceeding with respect to Taxes; provided that in providing
such information, assistance and access, each Party shall be entitled to redact information that is not related to the Business. Notwithstanding
anything to the contrary in this Agreement, the Sellers shall not be obligated to provide or disclose any Excluded Tax Returns.
Section 9.4 Post-Closing
Actions. Unless consented to by Sellers in writing (such consent not to be unreasonably
withheld, conditioned, or delayed), or required by Applicable Law, Purchaser shall not, and shall cause its Affiliates not to, in each
case with respect to the Acquired Assets, or the Business, (i) make or change any Tax election with retroactive effect to a Pre-Closing
Tax Period, (ii) file any amended Tax Return for a Pre-Closing Tax Period, or (iii) make or initiate any voluntary discussion,
examination or Contract with a Taxing Authority (including any voluntary disclosure agreement or similar process) for a Pre-Closing Tax
Period, in each case, that would reasonably be expected to result in any increased Tax Liability or reduction of any Tax refund or credit
of the Sellers.
Section 9.5 Preparation
of Tax Returns and Payment of Taxes.
(a) Except
as otherwise provided by Section 9.1, Sellers shall prepare and timely file (i) all Tax Returns with respect to the
Acquired Assets and the Business for any Tax period ending on or before the Closing Date (and Purchaser shall cooperate with Sellers
in causing such Tax Returns to be filed) that has not been filed prior to the Closing Date and (ii) all income Tax Returns of Sellers.
Each such Tax Return described in this Section 9.5(a)(i) shall (A) be prepared in accordance with the terms of
this Agreement, and (B) and Sellers shall use commercially reasonable efforts to submit such Tax Returns to Purchaser at least fifteen
(15) Business Days prior to the filing of such Tax Return (taking into account any extensions of the time to file), or as soon as reasonably
practicable if such timing is not possible, for Purchaser’s reasonable review and Seller shall consider any reasonable written
comments provided by Purchaser after receiving such Tax Return.
(b) Purchaser
shall prepare and timely file all Tax Returns with respect to the Acquired Assets and the Business for any Tax period ending after the
Closing Date. With respect to any Straddle Period, Purchaser shall prepare such Tax Returns consistent with past practice, and shall
use commercially reasonable efforts to provide Sellers or their successors in rights, as applicable, with a draft of such Tax Returns
at least fifteen (15) Business Days prior to the filing of any such Tax Return (taking into account any extensions of the time to file),
or as soon as reasonably practicable if such timing is not possible, for Sellers’ reasonable review and Purchaser shall consider
any reasonable written comments provided by Sellers after receiving any such Tax Return to the extent failing to do so would adversely
impact the Liability of the Sellers (including under this Agreement).
(c) Allocation
of Taxes for Straddle Periods. The amount of Taxes allocable to either the Pre-Closing Tax Period or Post-Closing Tax Period of any
Straddle Period shall equal: (a) for any Taxes imposed on a periodic basis (such as real, personal and intangible property Taxes),
the amount of such Taxes for the entire Straddle Period multiplied by a fraction, the denominator of which is the total number of days
in the Straddle Period, and the numerator being either (i) the number of days during the Straddle Period that are in the Pre-Closing
Tax Period (for the Pre-Closing Tax Period), or (ii) the number of days during the Straddle Period that are in the Post-Closing
Tax Period (for the Post-Closing Tax Period) and (b) for all other Taxes, determined on an interim closing of the books basis, effective
as of the end of the Closing Date. Any payment by a Party with respect to Taxes for a Straddle Period shall be credited towards such
Party’s Liability for their share of any Taxes with respect to a Straddle Period allocable to such Person under this Section 9.5.
Article X
Miscellaneous
Section 10.1 Non-Survival
of Representations and Warranties and Certain Covenants; Certain Waivers. Each of the representations
and warranties and the covenants and agreements (to the extent such covenant or agreement contemplates or requires performance by such
Party prior to the Closing) of the Parties set forth in this Agreement or in any other document contemplated hereby, or in any certificate
delivered hereunder or thereunder, will terminate effective immediately as of the Closing such that no claim for breach of any such representation,
warranty, covenant or agreement, detrimental reliance or other right or remedy (whether in contract, in tort or at law or in equity)
may be brought with respect thereto after the Closing. Each covenant and agreement that explicitly contemplates performance after the
Closing, will, in each case and to such extent, expressly survive the Closing in accordance with its terms, and if no term is specified,
then for seven (7) years following the Closing Date, and nothing in this Section 10.1 will be deemed to limit any rights
or remedies of any Person for breach of any such surviving covenant or agreement. Purchaser and Sellers acknowledge and agree, on their
own behalf and on behalf of the Purchaser Group or the Seller Parties, as the case may be, that the agreements contained in this Section 10.1
(a) require performance after the Closing to the maximum extent permitted by applicable Law and will survive the Closing for
five years and (b) are an integral part of the Transactions and that, without the agreements set forth in this Section 10.1,
none of the Parties would enter into this Agreement. The Purchaser on behalf of itself and the Purchaser Group hereby waives all rights
and remedies with respect to any environmental, health or safety matters, including those arising under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, or any other Environmental Laws, relating to this Agreement or the Transactions. Notwithstanding
anything contained in this Agreement to the contrary (including in this Section 10.1), nothing set forth herein shall limit
any rights or remedies available to Purchaser in respect of any claim for Fraud (subject in any event to the provisions of Section 10.7,
which, insofar as they relate to Non-Recourse Persons, shall not be limited hereby in any way).
Section 10.2 Expenses.
Whether or not the Closing takes place, except as otherwise provided herein, all fees, costs and expenses (including fees, costs and
expenses of Advisors) incurred in connection with the negotiation of this Agreement and the other agreements contemplated hereby, the
performance of this Agreement and the other agreements contemplated hereby and the consummation of the Transactions will be paid by the
Party incurring such fees, costs and expenses; it being acknowledged and agreed that (a) all filing fees in connection with any
filing or submission under the HSR Act and any Foreign Competition Laws will be allocated pursuant to Section 6.5, (b) all
Transfer Taxes will be allocated pursuant to Section 9.1, and (c) all Cure Costs will be allocated pursuant to Section 5.2.
Section 10.3 Notices.
Except as otherwise expressly provided herein, all notices, demands and other communications to be given or delivered under or by reason
of the provisions of this Agreement will be in writing and will be deemed to have been given (a) when personally delivered, (b) when
transmitted by electronic mail (having obtained electronic delivery confirmation thereof), if delivered by 5:00 P.M. local time
of the recipient on a Business Day and otherwise on the following Business Day, (c) the day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier service or (d) the third Business Day following the day
on which the same is sent by certified or registered mail, postage prepaid, in each case, to the respective Party at the number, electronic
mail address or street address, as applicable, set forth below, or at such other number, electronic mail address or street address as
such Party may specify by written notice to the other Party.
Notices
to Purchaser:
MedImpact
10181 Scripps Gateway Ct
San Diego, California 92131
Attention: James
Gollaher
Email: james.gollaher@medimpact.com
with a copy to (which shall not constitute notice):
DLA Piper LLP (US)
4365 Executive Drive, Suite 1100
San Diego, California
92121
Attention: David
M. Clark
Email: David.Clark@us.dlapiper.com
and
DLA Piper LLP (US)
444 West Lake Street,
Suite 900
Chicago, Illinois
60606
Attention: Richard
A. Chesley
Email: richard.chesley@us.dlapiper.com
Notices
to Sellers:
Hunter Lane, LLC
c/o Rite Aid Corporation
200 Newberry Commons
Etters, PA 17319
Attention: Thomas
Sabatino
Email: Thomas.Sabatino@riteaid.com
with copies to (which shall not constitute
notice):
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
Attention: Aparna
Yenamandra, P.C.
Email: aparna.yenamandra@kirkland.com
Kirkland & Ellis LLP
300 N. Lasalle
Chicago, IL 60654
Attention: Steve
Toth
Email: steve.toth@kirkland.com
Section 10.4 Binding
Effect; Assignment; Designated Purchasers.
(a) This
Agreement shall be binding upon Purchaser and, subject to the terms of the Bidding Procedures Order (with respect to the matters covered
thereby) and the entry and terms of the Sale Order, Sellers, and shall inure to the benefit of and be so binding on the Parties and their
respective successors and permitted assigns, including any trustee or estate representative appointed in the Bankruptcy Cases or any
successor Chapter 7 cases; provided that, subject to Section 10.4(b), neither this Agreement nor any of the rights
or obligations hereunder may be assigned or delegated without the prior written consent of Purchaser and Sellers, and any attempted assignment
or delegation without such prior written consent shall be null and void; provided further that Purchaser (subject to Purchaser
remaining liable for its obligations hereunder in the event such obligations are not performed in accordance with their terms) may assign
any of its rights or obligations hereunder to any of its Affiliates without the consent of any Person.
(b) At
any time prior to the Closing, Purchaser shall be entitled to designate, by written notice to Sellers no later than five (5) Business
Days prior to the Closing Date, one or more Affiliates to (i) purchase any of the Acquired Assets and pay the corresponding Purchase
Price amount, (ii) assume Assumed Liabilities, or (iii) take title directly to any Acquired Asset (any such Affiliate that
shall be designated in accordance with this clause, a “Designated Purchaser”), and, to the extent of any such designation,
this Agreement shall be binding upon such Designated Purchaser, its successors and permitted assigns, which shall be treated as Purchaser
to such extent. In addition, and for the avoidance of doubt, a Designated Purchaser shall be entitled to employ any of the Transferred
Employees on and after the Closing Date and to perform any other covenants or agreements of Purchaser under this Agreement. Notwithstanding
the foregoing, Purchaser’s designation of any Designated Purchaser shall not relieve Purchaser of its obligations under this Agreement
in the event such obligations are not performed by any such Designated Purchaser in accordance with their terms.
Section 10.5 Amendment
and Waiver. Any provision of this Agreement or the Schedules or exhibits hereto may be (a) amended
only in a writing signed by Purchaser and Sellers or (b) waived only in a writing executed by the Party against which enforcement
of such waiver is sought. No waiver of any provision hereunder or any breach or default thereof will extend to or affect in any way any
other provision or prior or subsequent breach or default.
Section 10.6 Third
Party Beneficiaries. Except as otherwise expressly provided herein, nothing expressed or
referred to in this Agreement will be construed to give any Person other than (i) for purposes of Section 10.7, the
Non-Recourse Persons, and (ii) the Parties hereto and such permitted assigns, any legal or equitable right, remedy, or claim under
or with respect to this Agreement or any provision of this Agreement.
Section 10.7 Non-Recourse.
This Agreement may only be enforced against, and any Action based upon, arising out of or related to this Agreement may only be brought
against, the Persons that are expressly named as parties to this Agreement. Except to the extent named as a party to this Agreement,
and then only to the extent of the specific obligations of such parties set forth in this Agreement, no past, present or future shareholder,
member, partner, manager, director, officer, employee, Affiliate, agent or Advisor of any Party (each, a “Non-Recourse Person”)
will have any Liability (whether in contract, tort, equity or otherwise) for any of the representations, warranties, covenants, agreements
or other obligations or Liabilities of any of the parties to this Agreement or for any Agreement Dispute and each of such Persons are
intended third party beneficiaries of this Section 10.7 and shall be entitled to enforce this Section 10.7 as
if a party directly hereto.
Section 10.8 Severability.
Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable
Law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable Law in any jurisdiction, such provision
will be ineffective only to the extent of such prohibition or invalidity in such jurisdiction, without invalidating the remainder of
such provision or the remaining provisions of this Agreement or in any other jurisdiction.
Section 10.9 Construction.
The language used in this Agreement will be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of
strict construction will be applied against any Person. The headings of the sections and paragraphs of this Agreement have been inserted
for convenience of reference only and will in no way restrict or otherwise modify any of the terms or provisions hereof.
Section 10.10 Schedules.
The Schedules have been arranged for purposes of convenience in separately numbered sections corresponding to the sections of this Agreement;
provided that each section of the Schedules will be deemed to incorporate by reference all information disclosed in any other
section of the Schedules, and any disclosure in the Schedules will be deemed a disclosure against any representation or warranty set
forth in this Agreement in each case, to the extent (and solely to the extent) the relevance of such disclosure to such other section
of the Schedules or such other representation or warranty set forth in this Agreement is reasonably apparent on the face of such disclosure
(without review or other examination of the underlying documents listed therein). Capitalized terms used in the Schedules and not otherwise
defined therein have the meanings given to them in this Agreement. The specification of any dollar amount or the inclusion of any item
in the representations and warranties contained in this Agreement, the Schedules or the attached exhibits is not intended to imply that
the amounts, or higher or lower amounts, or the items so included, or other items, are or are not required to be disclosed (including
whether such amounts or items are required to be disclosed as material or threatened). In addition, matters reflected in the Schedules
are not necessarily limited to matters required by this Agreement to be reflected in the Schedules. Such additional matters are set forth
for informational purposes only and do not necessarily include other matters of a similar nature. No information set forth in the Schedules
will be deemed to broaden in any way the scope of the Parties’ representations and warranties. Any description of any agreement,
document, instrument, plan, arrangement or other item set forth on any Schedule is qualified in its entirety by the terms of such agreement,
document, instrument, plan, arrangement, or item which terms will be deemed disclosed for all purposes of this Agreement, in each case,
solely to the extent made available to Purchaser in accordance with Section 11.3(i). The information contained in this Agreement,
in the Schedules and exhibits hereto is disclosed solely for purposes of this Agreement, and no information contained herein or therein
will be deemed to be an admission by any Party to any third party of any matter whatsoever, including any violation of Law or breach
of Contract.
Section 10.11 Complete
Agreement. This Agreement, together with the Confidentiality Agreement and any other agreements
expressly referred to herein or therein, contains the entire agreement of the Parties respecting the sale and purchase of the Acquired
Assets and the Assumed Liabilities and the Transactions and supersedes all prior agreements among the Parties respecting the sale and
purchase of the Acquired Assets and the Assumed Liabilities and the Transactions. In the event an ambiguity or question of intent or
interpretation arises with respect to this Agreement, the terms and provisions of the execution version of this Agreement will control
and prior drafts of this Agreement and the documents referenced herein will not be considered or analyzed for any purpose (including
in support of parol evidence proffered by any Person in connection with this Agreement), will be deemed not to provide any evidence as
to the meaning of the provisions hereof or the intent of the Parties with respect hereto and will be deemed joint work product of the
Parties.
Section 10.12 Specific
Performance. The Parties agree that irreparable damage, for which monetary relief, even
if available, would not be an adequate remedy, would occur in the event that any provision of this Agreement is not performed in accordance
with its specific terms or is otherwise breached, including if any of the Parties fails to take any action required of it hereunder to
consummate the Transactions. It is accordingly agreed that (a) the Parties will be entitled to an injunction or injunctions, specific
performance or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof
in the courts described in Section 10.13 without proof of damages or otherwise, this being in addition to any other remedy
to which they are entitled under this Agreement, and (b) the right of specific performance and other equitable relief is an integral
part of the Transactions and without that right, neither Sellers nor Purchaser would have entered into this Agreement. The Parties acknowledge
and agree that any Party pursuing an injunction or injunctions or other Order to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in accordance with this Section 10.12 will not be required to provide any bond
or other security in connection with any such Order. The remedies available to the Parties pursuant to this Section 10.12
will be in addition to any other remedy to which they were entitled at law or in equity, and the election to pursue an injunction or
specific performance will not restrict, impair or otherwise limit any Party from seeking to collect or collecting damages. If, prior
to the Outside Date, any Party brings any action, in each case in accordance with Section 10.13, to enforce specifically
the performance of the terms and provisions hereof by any other Party, the Outside Date will automatically be extended (i) for the
period during which such action is pending, plus ten (10) Business Days or (ii) by such other time period established
by the court presiding over such action, as the case may be.
Section 10.13 Jurisdiction
and Exclusive Venue. Each of the Parties irrevocably agrees that any Action of any kind
whatsoever, including a counterclaim, cross-claim, or defense, regardless of the legal theory under which any Liability or obligation
may be sought to be imposed, whether sounding in contract or in tort or under statute, or whether at law or in equity, or otherwise under
any legal or equitable theory, that may be based upon, arising out of, or related to this Agreement or the negotiation, execution, or
performance of this Agreement or the Transactions and any questions concerning the construction, interpretation, validity and enforceability
of this Agreement (each, an “Agreement Dispute”) brought by any other Party or its successors or assigns will be brought
and determined only in (a) the Bankruptcy Court and any federal court to which an appeal from the Bankruptcy Court may be validly
taken or (b) if the Bankruptcy Court is unwilling or unable to hear such Action, in the Court of Chancery of the State of Delaware
(or if such court lacks jurisdiction, any other state or federal court sitting in the State of Delaware) (the “Chosen Courts”),
and each of the Parties hereby irrevocably submits to the exclusive jurisdiction of the Chosen Courts for itself and with respect to
its property, generally and unconditionally, with regard to any Agreement Dispute. Each of the Parties agrees not to commence any Agreement
Dispute except in the Chosen Courts, other than Actions in any court of competent jurisdiction to enforce any Order, decree or award
rendered by any Chosen Courts, and no Party will file a motion to dismiss any Agreement Dispute filed in a Chosen Court on any jurisdictional
or venue-related grounds, including the doctrine of forum non-conveniens. The Parties irrevocably agree that venue would be proper
in any of the Chosen Court, and hereby irrevocably waive any objection that any such court is an improper or inconvenient forum for the
resolution of any Agreement Dispute. Each of the Parties further irrevocably and unconditionally consents to service of process in the
manner provided for notices in Section 10.3. Nothing in this Agreement will affect the right of any Party to serve process
in any other manner permitted by Law.
Section 10.14 Governing
Law; Waiver of Jury Trial.
(a) Except
to the extent the mandatory provisions of the Bankruptcy Code apply, this Agreement and any Agreement Dispute will be governed by and
construed in accordance with the internal Laws of the State of Delaware applicable to agreements executed and performed entirely within
such State without regards to conflicts of law principles of the State of Delaware or any other jurisdiction that would cause the Laws
of any jurisdiction other than the State of Delaware to apply.
(b) EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY AGREEMENT DISPUTE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND THEREFORE HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY AGREEMENT DISPUTE. EACH OF THE
PARTIES AGREES AND CONSENTS THAT ANY SUCH AGREEMENT DISPUTE WILL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES MAY FILE
AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THE IRREVOCABLE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY. EACH PARTY (I) CERTIFIES THAT NO ADVISOR OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY AGREEMENT DISPUTE, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS Section 10.14(b).
Section 10.15 No
Right of Set-Off. Purchaser, on its own behalf and on behalf the Purchaser Group and its
and their respective successors and permitted assigns, hereby waives any rights of set-off, netting, offset, recoupment or similar rights
that Purchaser, any member of the Purchaser Group or any of its or their respective successors and permitted assigns has or may have
with respect to the payment of the Purchase Price or any other payments to be made by Purchaser pursuant to this Agreement or any other
document or instrument delivered by Purchaser in connection herewith.
Section 10.16 Counterparts
and PDF. This Agreement and any other agreements referred to herein or therein, and any
amendments hereto or thereto, may be executed in multiple counterparts, any one of which need not contain the signature of more than
one party hereto or thereto, but all such counterparts taken together will constitute one and the same instrument. Any counterpart, to
the extent signed and delivered by means of a .PDF or other electronic transmission, will be treated in all manner and respects as an
original Contract and will be considered to have the same binding legal effects as if it were the original signed version thereof delivered
in person. Minor variations in the form of the signature page to this Agreement or any agreement or instrument contemplated hereby,
including footers from earlier versions of this Agreement or any such other document, will be disregarded in determining the effectiveness
of such signature. At the request of any party or pursuant to any such Contract, each other party hereto or thereto will re-execute original
forms thereof and deliver them to all other parties. No party hereto or to any such Contract will raise the use of a .PDF or other electronic
transmission to deliver a signature or the fact that any signature or Contract was transmitted or communicated through the use of PDF
or other electronic transmission as a defense to the formation of a Contract and each such party forever waives any such defense.
Section 10.17 Publicity.
Neither Sellers (nor any of their Affiliates) nor Purchaser shall issue any press release or public announcement concerning this Agreement
or the Transactions without obtaining the prior written approval of the other Party, which approval will not be unreasonably conditioned,
withheld or delayed, unless, in the reasonable judgment of Purchaser or Sellers, disclosure is otherwise required by applicable Law or
by the Bankruptcy Court with respect to filings to be made with the Bankruptcy Court in connection with this Agreement or by the applicable
rules of any stock exchange on which Purchaser or Sellers (or their respective Affiliates) lists securities; provided that
the Party intending to make such release shall use its reasonable efforts consistent with such applicable Law or Bankruptcy Court requirement
to consult with the other Party with respect to the text thereof.
Section 10.18 Bulk
Sales Laws. The Parties intend that pursuant to section 363(f) of the Bankruptcy
Code, the transfer of the Acquired Assets shall be free and clear of any Encumbrances in the Acquired Assets including any liens or claims
arising out of the bulk transfer Laws except Permitted Encumbrances, and the Parties shall take such steps as may be necessary or appropriate
to so provide in the Sale Order. In furtherance of the foregoing, each Party hereby waives compliance by the Parties with the “bulk
sales,” “bulk transfers” or similar Laws and all other similar Laws in all applicable jurisdictions in respect of the
Transactions.
Section 10.19 Sellers’
Representative. Each Party agrees that Elixir has the power and authority to unilaterally
act on behalf of all or any of the Sellers for the purposes specified under this Agreement. Such power will include the power to make
all decisions, actions, Consents and determinations on behalf of the Sellers, including to make any waiver of any Closing condition or
agree to any amendment to this Agreement. No Seller shall have any right to object, dissent, protest or otherwise contest the same. Purchaser
shall be entitled to rely on any action or omission taken by Elixir on behalf of the Sellers.
Section 10.20 Financing
Sources. Each of the Sellers hereby waives any rights or claims against the Financing Sources
(as defined below) and hereby agrees that in no event shall any of the Financing Sources have any liability or obligation to any Seller,
or the respective Affiliates of any Seller, and in no event shall any Seller (or the respective Affiliates of any Seller) seek or obtain
any other damages of any kind against any Financing Source (including without limitation, direct, economic, consequential, special, indirect
or punitive damages), in each case, relating to or arising out of this Agreement, any Financing (as defined below) or the transactions
contemplated hereby or thereby. Further, notwithstanding anything to the contrary herein, (i) the Financing Sources shall be third
party beneficiaries of, and shall be entitled to enforce the provisions of this Section 10.20 (including the following clause
(iii)), (ii) this Section 10.20 shall survive the termination of this Agreement, and (iii) the provisions set forth
in this Section 10.20 may not be amended, modified or altered in any manner that could be adverse to the interests of any
Financing Source in any respect without the prior written consent of the Financing Sources. Further, if for any reason pursuant to Section 2.2
or otherwise, the Sellers shall have the right to retain all or any portion of the Deposit, then each Seller hereby acknowledges
and agrees (for itself and its Affiliates) that such retention of such Deposit amount by the Sellers shall also satisfy in full any claims
that any Sellers might assert against any Financing Source. In this Section 10.20: (a) “Financing Sources”
means all agents, arrangers, lenders, bookrunners, letter of credit providers and other entities that have provided, or have committed
to provide, or will after the date of this Agreement provide, or arrange or otherwise enter into agreements in connection with, any Financing,
with the Purchaser and/or any of its Affiliates, including the parties to any credit agreement, indenture or other financing or lending
agreement, or any commitment or engagement letter (including any joinder thereto) or other agreements entered pursuant thereto or relating
thereto, together with their respective Affiliates and the current, former or future officers, directors, employees, partners, trustees,
shareholders, equityholders, managers, members, limited partners, controlling persons, agents and representatives of each of them and
their respective Affiliates, and the successors and assigns of the foregoing Persons; and (b) “Financing” means
any debt or other financings entered into by the Purchaser or any of its Affiliates in connection with the consummation of the transactions
contemplated by this Agreement prior to, on, or after the date hereof, including any borrowing of loans and any related commitment letter,
engagement letter, credit agreement, indenture, and any other related documentation governing such debt or other financing including
any credit facilities or capital markets debt financing.
Article XI
Additional Definitions and Interpretive Matters
Section 11.1 Certain
Definitions.
(a) “Action”
means any action, claim (including any “claim” as defined in the Bankruptcy Code), suit, litigation, arbitration, mediation,
complaint, audit, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding) or prosecution, contest,
hearing, inquiry, inquest, audit, examination or investigation of any kind whatsoever whether sounding in contract or tort, or whether
at law or in equity, or otherwise under any legal or equitable theory, commenced, brought, conducted or heard by or before, or otherwise
involving, any Governmental Body.
(b) “Advisors”
means, with respect to any Person as of any relevant time, any directors, officers, employees, investment bankers, financial advisors,
accountants, agents, attorneys, consultants, or other representatives of such Person.
(c) “Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person, and the term “control” (including the terms “controlled
by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause
the direction of the management, affairs and policies of such Person, whether through ownership of voting securities, by Contract or
otherwise.
(d) “Alternative
Transaction” means any transaction (or series of transactions), whether direct or indirect, whereby any Person or group of
Persons (other than Sellers and their Affiliates or Purchaser and its Affiliates) acquires a material portion of the Acquired Assets,
in each case whether by merger, sale of assets or equity, recapitalization, plan of reorganization or otherwise. Notwithstanding the
foregoing, a liquidation or wind-down of Sellers’ estates shall not be an Alternative Transaction.
(e) “Anti-Corruption
Laws” means all anti-corruption Laws applicable to the Sellers, including the United States Foreign Corrupt Practices Act of
1977 (15 U.S.C. §§ 78dd- 1, et seq.), and any other applicable anti-bribery or anti-corruption Law (including any Laws relating
to the making of any unlawful payment to any foreign or domestic government official), including any rules, regulations and guidance
promulgated under any of the foregoing that prohibit bribery, corruption, or substantially similar conduct.
(f) “Auction”
shall have the meaning ascribed to such term in the Bidding Procedures Order.
(g) “Bidding
Deadline” means the deadline by which binding bids for the Sellers’ assets must be submitted in the Auction, pursuant
to the Bidding Procedures Order.
(h) “Bidding
Procedures” means procedures governing submission and evaluation of bids to purchase some, all, or substantially all of the
Sellers’ assets, pursuant to the Bidding Procedures Order.
(i) “Bidding
Procedures Motion” means the motion seeking entry of the Bidding Procedures Order, which shall be in form and substance reasonably
satisfactory to the Sellers and Purchaser.
(j) “Bidding
Procedures Order” means an Order of the Bankruptcy Court approving the Bidding Procedures Motion, in the form attached labeled
as Exhibit F.
(k) “Business”
means the business operations of Sellers as of the date hereof, including the provision of (i) pharmacy benefits manager services
(including plan design and administration, cash card programs, formulary management, claims processing and associated clinical services,
and trade and rebate administration) and (ii) specialty and mail order pharmacy services, including fulfillment actives associated
therewith. For clarity, such business operations include the use, reproduction, modification, distribution, and licensing of the Laker
Software.
(l) “Business
Day” means any day other than a Saturday, Sunday or other day on which banks in New York City, New York are authorized or required
by Law to be closed.
(m) “Business
Employee” means each (i) employee of any of the Sellers, and (ii) employee of any non-Seller Affiliate of any Seller
whose duties and responsibilities are dedicated primarily to the Business and set forth on Section 3.14(a), together with
any replacement, if any, of any such individual only to the extent permitted by and in accordance with Section 6.1(b)(v).
(n) “Cash
and Cash Equivalents” means all of Sellers cash (including checks and deposits in transit, demand deposits, money markets or
similar accounts), checking account balances, marketable securities, certificates of deposits, time deposits, bankers’ acceptances,
commercial paper, security entitlements, securities accounts, commodity Contracts, commodity accounts, government securities, and any
other cash equivalents whether on hand, in transit, in banks or other financial institutions, or otherwise held.
(o) “Closing
Working Capital” means: (a) Current Assets, less (b) Current Liabilities, determined as of 11:59 PM Eastern
time on the date immediately preceding the Closing Date.
(p) “CMS”
means the Centers for Medicare & Medicaid Services, an agency within the U.S. Department of Health and Human Services.
(q) “CMS
Receivable” means all amounts payable to Seller or any of its Affiliates (i) by or on behalf of CMS pursuant to 42 C.F.R.
Part 423 and the Contract by and between CMS and EIC for contract year 2023 and any predecessor Contracts by and between CMS and
EIC for prior contract years or (ii) related to any financing of any historical amounts that are or would previously have been included
in clause (i).
(r) “Confidentiality
Agreement” means that certain Confidentiality Agreement, dated as of August 3, 2023, by and between Rite Aid Corporation
and MedImpact Healthcare Systems, Inc.
(s) “Consent”
means any approval, consent, ratification, permission, waiver or authorization, or an Order of the Bankruptcy Court that deems or renders
unnecessary the same.
(t) “Contract”
means any written contract, license, arrangement, promise, obligation, indenture, note, bond, Lease, sublease, mortgage, agreement, guarantee,
purchase order, service order, sales order, commitment, or other agreement or instrument, whether written or oral, that is binding upon
a Person or any of its property.
(u) “Current
Assets” means, without duplication, the total current assets of Sellers using those line items used in the example calculation
attached hereto as Exhibit E attached hereto, as determined in accordance with the GAAP consistently applied and in respect
of Taxes, in accordance with the Tax Principles.
(v) “Cure
Costs” mean all cure costs required to be paid pursuant to section 365 of the Bankruptcy Code in connection with the assumption
and assignment of the Assigned Contracts.
(w) “Current
Liabilities” means, without duplication, the total current liabilities of Sellers using those line items used in the example
calculation attached hereto as Exhibit E attached hereto, as determined in accordance with the GAAP consistently applied
and in respect of Taxes, in accordance with the Tax Principles.
(x) “Debtors”
means, collectively, the debtors-in-possession under the Bankruptcy Cases.
(y) “Delayed
Transferred Employee” means a Transferred Employee whose employment is not eligible for immediate transfer to Purchaser at
or prior to the Closing as a result of (i) requirements under applicable Law or (ii) a leave of absence, but in each case,
who successfully transfers to Purchaser within twelve (12) months of the Closing.
(z) “Documents”
means all of Sellers’ written files, documents, instruments, papers, books, reports, records, tapes, microfilms, photographs, letters,
budgets, forecasts, plans, operating records, safety and environmental reports, data, studies, and documents, Tax Returns, ledgers, journals,
title policies, customer lists, regulatory filings, operating data and plans, research material, technical documentation (design specifications,
engineering information, test results, logic manuals, processes, flow charts, etc.), user documentation (installation guides, user
manuals, training materials, release notes, working papers, etc.), marketing documentation (sales brochures, flyers, pamphlets,
web pages, etc.), and other similar materials, in each case whether or not in electronic form and, without limiting the generality
of the foregoing, (i) any and all medical records, billing records, prescriptions, prescription files and records, pharmacy customer
lists, signature logs and patient profiles including refill status reports and insurance coverages, co-pay and payment records (the information
in this clause (ii), collectively, “Company Rx Data”) relating to customers of the mail order and specialty pharmacy
business (which shall in any event include no less than twenty four (24) months for any Company Rx Data relating to customers of the
mail order and specialty pharmacy business maintained electronically or in hard copy.
(aa) “EGWP
Contracts" mean any EIC Contract (or portions thereof), pursuant to which EGWP plans are provided or administered to Medicare
Part D eligible retirees and/or their Medicare Part D eligible spouses or dependents.
(bb) “Employee
Benefit Plan” means each “employee benefit plan” within the meaning of Section 3(3) of ERISA, each other
deferred compensation, bonus or incentive compensation, pension, retiree medical, disability or life insurance, or supplemental plan,
program, Contract, agreement or arrangement, each employment, severance, change-of-control and each other employee benefit or compensation
plan, program, Contract, agreement or arrangement, whether oral or written, whether or not subject to ERISA, whether funded or unfunded,
in each case (i) that is maintained, sponsored, administered or contributed or required to be contributed to by any Seller or any
ERISA Affiliate or any of their respective Affiliates for the benefit of Business Employees or former Business Employees, or (ii) with
respect to which any Seller has any Liability; provided that the term “Employee Benefit Plan” shall not include any
statutory benefit plan to which any of the Sellers are required to participate in or comply with that is sponsored and administered by
a Governmental Body (such as Social Security).
(cc) “Encumbrance”
means any lien (as defined in section 101(37) of the Bankruptcy Code), encumbrance, claim (as defined in section 101(5) of
the Bankruptcy Code), charge, mortgage, deed of trust, option, pledge, security interest or similar interests, title defects, hypothecations,
easements, rights of way, encroachments, Orders, conditional sale or other title retention agreements and other similar impositions,
imperfections or defects of title or restrictions on transfer or use.
(dd) “Environmental
Laws” all applicable Laws concerning pollution or protection of the environment.
(ee) “Equipment”
means any and all equipment, computers, furniture, furnishings, fixtures, office supplies, vehicles and all other fixed assets.
(ff) “Equity
Interests” means, with respect to a Person, any membership interests, partnership interests, profits interests, capital stock
or other equity securities (including profit participation features or equity appreciation rights, phantom stock rights or other similar
rights) or ownership interests of such Person, or any securities (including debt securities or other indebtedness) exercisable or exchangeable
for or convertible into, or other rights to acquire, membership interests, partnership interests, capital stock or other equity securities
or ownership interests of such Person (or otherwise constituting an investment in such Person).
(gg) “ERISA”
means the Employee Retirement Income Security Act of 1974.
(hh) “Escrow
Agreement” means that certain Escrow Agreement entered into by Purchaser, Sellers and the Escrow Agent dated as of the date
hereof.
(ii) “Escrow
Agent” means Acquiom Clearinghouse LLC.
(jj) “Excluded
Tax Returns” means Tax Returns (or any portion of any Tax Return) and other books and records related to (i) Taxes that
are not related primarily to any Acquired Asset or the Business or (ii) any consolidated, combined, affiliated or unitary group
for Tax purposes that includes any Seller or any of its Affiliates.
(kk) “Fraud”
means an act committed by (a) Sellers, in the making to Purchaser the representations and warranties in Article III
or in the certificate delivered pursuant to Section 2.4(i) or (b) Purchaser, in the making to the Sellers the representations
and warranties in Article IV or in the certificate delivered pursuant to Section 2.5(h), in any such case, with
intent to deceive another Party, or to induce such other Party to enter into this Agreement and requires (i) a false representation
of material fact made in such representation; (ii) with knowledge that such representation is false; (iii) with an intention
to induce the Party to whom such representation is made to act or refrain from acting in reliance upon it; (iv) causing that Party,
in justifiable reliance upon such false representation, to take or refrain from taking action; and (v) causing such Party to suffer
damage by reason of such reliance, which together constitutes common law fraud under Delaware Law (and does not include any fraud claim
based on constructive knowledge, negligent misrepresentation, recklessness or a similar theory).
(ll) “First
Day Pleadings” means the first-day pleadings that the Sellers determine are necessary or desirable to file in the Bankruptcy
Court on or around the Petition Date.
(mm) “GAAP”
means United States generally accepted accounting principles as in effect from time to time.
(nn) “Governmental
Authorization” means any permit, Healthcare Permit, license, franchise, certificate, approval, application, registration, drug
listing, consent, permission, clearance, waiver, notification, designation, registration, certification, making, exemption, variance,
order, tariff, rate schedule, qualification, or authorization issued, granted, given or otherwise made available by or under the authority
of any Governmental Body or pursuant to any Law, including any Healthcare Law.
(oo) “Governmental
Body” means any government, quasi-governmental entity, or other governmental or regulatory body, agency or political subdivision
thereof of any nature, whether foreign, federal, state or local, or any agency, branch, department, official, entity, instrumentality
or authority thereof, or any court or arbitrator of applicable jurisdiction.
(pp) “Governmental
Health Program” means any federal health care program as defined in 42 U.S.C. § 1320a-7b(f), including, but not limited
to, Medicare, Medicaid, TRICARE, CHAMPVA, and state programs that provide or otherwise make available healthcare coverage to certain
of its residents.
(qq) “Group
Purchasing Organization” means any group purchasing organization, rebate aggregator, or other Person performing similar services.
(rr) “Hazardous
Material” means any substance, pollutant, contaminant, material and waste that is regulated by any Law or judgment or is classified
in any Environmental Law as “hazardous,” “toxic,” “dangerous,” a “pollutant,” a “contaminant”
or words of similar meaning, including asbestos, asbestos-containing materials, polychlorinated biphenyls, gasoline, diesel fuel, petroleum,
petroleum by-products or petroleum products, radioactive materials and radon gas, per- and polyfluoroalkyl substances, and any other
chemicals, materials, substances or wastes in any amount or concentration which are regulated under or for which Liability may be imposed
under any Environmental Law.
(ss) “Healthcare
Law”, means (a) all applicable healthcare Laws of any Governmental Body, or Governmental Health Program, relating to the
provision, administration of, and payment for, healthcare services, including: (i) (A) Title XVIII of the Social Security Act,
42 U.S.C. § 1395, et seq. (the Medicare statute), and 42 U.S.C. § 1395nn (Stark Law); (B) Title XIX of the Social Security
Act, 42 U.S.C. §§ 1396-1396w-5 (the Medicaid statute); (C) the Federal Health Care Program Anti-Kickback Statute, 42 U.S.C.
§ 1320a-7b(b); (D) the False Claims Act, 31 U.S.C. §§ 3729-3733; (E) the exclusion law, 42 U.S.C. § 1320a-7;
(F) the civil monetary penalties law, 42 U.S.C. § 1320 a-7a; (G) the False Claim Law, 42 U.S.C. § 1320a-7b(a); (H) the
anti-inducement law, 42 U.S.C. § 1320a-7a(a)(5); (I) HIPAA (as defined herein); (J) the Patient Protection and Affordable
Care Act of 2010; (K) the Beneficiary Inducement Statute (42 U.S.C. § 1320a-7a(a)(5)); (L) the Prescription Drug Marketing
Act of 1987; (M) the Confidentiality of Alcohol and Drug Abuse Patient Records law and regulations and any similar law (42 U.S.C.
§ 290dd-2, 42 C.F.R. Part 2); (ii) (A) any Laws with respect to healthcare-related fraud and abuse, false claims,
staffing, rebates, pharmacy services, coverage reimbursement, corporate practice of medicine, credentialing, and Healthcare Permits (as
defined herein); (B) any Laws with respect to engaging in the business of insurance; establishing, marketing and managing healthcare
and pharmacy provider networks, and insurance fraud; (iii) in each case, as amended, and all regulations promulgated thereunder
and (b) any and all state law equivalents to those Laws set forth in subsections (i), (ii) and (iii) above.
(tt) “Healthcare
Permit” means any and all licenses, certifications, consents, enrollments, authorizations, approvals, registrations, accreditations,
and any other permission that is required by applicable Law for the operation of the Business and is issued or enforced by a Governmental
Body or Governmental Health Program with jurisdiction over any Healthcare Law.
(uu) “HIPAA”
means the following, as the same may be amended, modified or supplemented from time to time, any successor statute thereto, and together
with any and all rules or regulations promulgated from time to time thereunder: (i) the Health Insurance Portability and Accountability
Act of 1996; (ii) the Health Information Technology for Economic and Clinical Health Act (Title XIII of the American Recovery and
Reinvestment Act of 2009); and (iii) applicable state Laws regarding patient privacy and the security, use or disclosure of healthcare
records.
(vv) “HSR
Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and regulations promulgated thereunder.
(ww) “Intellectual
Property” means all of the following: (i) inventions, improvements, designs, methods and processes (whether or not patentable),
patents (including utility and design patents), patent applications and patent disclosures (including invention disclosures, records
of invention, certificates of invention, and applications for certificates of inventions and priority rights filed with a Registration
Office); (ii) trademarks, service marks, trade dress, corporate names, logos, insignias, designs, symbols, trade names and fictitious
business names, emblems, signs, slogans, other similar designations of source or origin and general intangibles of like nature and Internet
domain names, social media accounts and profiles, together with all goodwill associated with each of the foregoing; (iii) copyrights,
works of authorship and mask works and all other rights corresponding thereto throughout the world, including databases, data compilations
and collections and economic rights in copyrights; (iv) registrations and applications for any of the foregoing; (v) know-how,
formularies, clinical data, research and development information, technology, product roadmaps, customer lists, trade secrets and other
non-public confidential and proprietary information; (vi) computer software (which includes firmware, middleware, code, programs,
libraries, and applications); (vii) drawings, schematics and other technical plans; and (viii) all other intellectual property.
(xx) “Inventory”
means all inventory (including active pharmaceutical ingredients, finished goods, supplies, raw materials, work in progress, spare, replacement
and component parts, and packaging containers, labels and other similar items) maintained or held by, stored by or on behalf of, or in
transit to, any of Sellers, whether for sale or non-commercial use (e.g., validation) or otherwise, together with any interests therein,
including (x) being held by customers pursuant to consignment arrangements or (y) being held by suppliers or vendors under
tolling or similar arrangements.
(yy) “Knowledge
of Seller”, “Knowledge of Sellers”, or words of like import means the actual knowledge, of Chris DuPaul,
Rand Greenblatt, Anna Khais, Corrine Whisler, Cindy Pigg, and Alan Reicher, after reasonable inquiry of their direct reports with respect
to the applicable subject matter, none of whom, for the sake of clarity and avoidance of doubt, shall have any personal Liability or
obligations regarding such knowledge.
(zz) “Laker
Software” means the software generally known as the Laker Software, including all modules, versions, releases of such software,
which software is used to provide comprehensive pharmacy claim adjudication solutions for all populations segments, including through
the “PBM Express” suite of applications.
(aaa) “Law”
means any federal, state, provincial, local, municipal, foreign or international, multinational or other law, Healthcare Law, statute,
legislation, constitution, principle of common law, resolution, ordinance, code, edict, decree, proclamation, treaty, convention, rule,
regulation, ruling, directive or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under
the authority of any Governmental Body anywhere in the world
(bbb) “Lease”
means all leases, subleases, licenses, concessions and other agreements (written or oral) pursuant to which any Seller holds any Leased
Real Property.
(ccc) “Liability”
means, as to any Person, any debt, adverse claim, liability, duty, responsibility, obligation, commitment, assessment, cost, expense,
loss, expenditure, charge, fee, penalty, fine, contribution, or premium of any kind or nature whatsoever, whether known or unknown, asserted
or unasserted, absolute or contingent, direct or indirect, accrued or unaccrued, liquidated or unliquidated, or due or to become due,
and regardless of when sustained, incurred or asserted or when the relevant events occurred or circumstances existed.
(ddd) “Material
Adverse Effect” means any matter, event, change, development, occurrence, circumstance or effect (each, an “Effect”)
that, individually or in the aggregate (a) has, or would reasonably be expected to have, a material adverse effect on the Acquired
Assets, Assumed Liabilities, taken as a whole, or on the results of operations or condition (financial or otherwise) of the Business,
or (b) would reasonably be expected to impair, in any material respect, the ability of the Sellers to consummate the Transactions;
provided that, for purposes of clause (a), none of the following shall constitute, or be taken into account in determining whether
or not there has been, a Material Adverse Effect: any Effect arising from or relating (and solely to the extent arising from or relating)
to (i) general business or economic conditions affecting the industry in which Sellers operate, including the effects of general
competition therein and any change in market share or loss or non-renewal of customers; (ii) national or international political
or social conditions, the engagement by the United States or other country in hostilities or the escalation thereof, whether or not pursuant
to the declaration of a national emergency or war, or the occurrence or the escalation of any military, cyber or terrorist (whether or
not state-sponsored) attack upon the United States or any other country, or any of its territories, possessions, or diplomatic or consular
offices or military installations; (iii) any fire, flood, hurricane, earthquake, tornado, windstorm, other calamity or act of God,
global or national health epidemic, pandemic (whether or not declared as such by any Governmental Body), viral outbreak (including “Coronavirus”
or “COVID-19” or the worsening thereof) or any quarantine or trade restrictions related thereto or any other force majeure;
(iv) financial, banking, or securities markets (including any increased cost, or decreased availability, of capital or pricing or
terms related to any financing for the Transactions); (v) changes in GAAP; (vi) changes in Laws (including, for the avoidance
of doubt, any such items related to Section 6.5) and any increase (or decrease) in the terms or enforcement of (or negotiations
or disputes with respect to) any of the foregoing; (vii) the failure to take any action if such action is prohibited by this Agreement;
(viii) Purchaser’s failure to consent to any of the actions restricted in Section 6.1; (ix) the negotiation,
announcement, or pendency of this Agreement or the Transactions, the identity, nature, or ownership of Purchaser or Purchaser’s
plans with respect to the Acquired Assets and Assumed Liabilities, including the impact thereof on the relationships, contractual or
otherwise, of the Business with employees, customers, lessors, suppliers, vendors, or other commercial partners or litigation arising
from or relating to this Agreement or the Transactions; (x) any failure, in and of itself, of Sellers to achieve any budgets, projections,
forecasts, estimates, predictions, performance metrics or operating statistics or the inputs into such items (whether or not shared with
Purchaser or its Affiliates or Advisors) or failure to win or maintain customers; provided that the Effects giving rise to or
contributing to such failure may be deemed to constitute, or be taken into account in determining whether there has been a Material Adverse
Effect; (xi) the Effect of any action taken by Purchaser or its Affiliates with respect to the Transactions or the financing thereof
or any breach by Purchaser of this Agreement; (xii) the matters set forth on the Schedules; or (xiii)(A) the commencement or
pendency of the Bankruptcy Cases; (B) any objections in the Bankruptcy Court to (1) this Agreement or any of the Transactions
or thereby, (2) the Bidding Procedures Order, the Sale Order or the reorganization or liquidation of Sellers or their Affiliates,
or (3) the assumption or rejection of any Assigned Contract or any Acquired Lease; or (C) any Order of the Bankruptcy Court
or any actions or omissions of Sellers or their Affiliates in compliance therewith; provided that any adverse Effect resulting
or arising from any matter described in clauses (i) through (iv) may be taken into account in determining whether there has
been a Material Adverse Effect to the extent, and only to the extent, that such Effect has had a materially disproportionate adverse
effect on the Business relative to similarly situated participants in the industries and geographic areas in which the Sellers operate
(in which case only such incremental materially disproportionate adverse effect may be taken into account in determining whether there
has been a Material Adverse Effect).
(eee) “Open
License Terms” means license terms that are, or are substantially similar to, licenses now or in the future approved by the
Open Source Initiative, or are considered “free” or “open source software” by the Open Source Initiative or the
Free Software Foundation, which include: (i) the GNU General Public License (GPL); (ii) Lesser/Library GPL (LGPL); (iii) the
Common Development and Distribution License (CDDL); (iv) the Artistic License (including PERL); (v) the Netscape Public License;
(vi) the Sun Community Source License (SCSL) or the Sun Industry Standards License (SISL); (vii) the Apache License; (viii) the
Common Public License; (ix) the Affero GPL (AGPL); (x) the Berkeley Software Distribution (BSD); (xi) the Mozilla Public
License (MPL), (xii) the Microsoft Limited Public License, (xiii) MongoDB, Inc.’s Server Side Public License, and
(xiv) any other licenses that are defined as OSI (Open Source Initiative) licenses as listed on the site www.opensource.org.
(fff) “Order”
means any award. order, injunction, order, decree, ruling, writ, assessment, judgment, decision, subpoena, mandate, precept, command,
directive, consent, approval, award (including any arbitration award) or similar determination or finding entered, issued, made or rendered
by any Governmental Body, including any order entered by the Bankruptcy Court in the Bankruptcy Cases (including the Sale Order).
(ggg) “Ordinary
Course” means the ordinary and usual course of operations or conduct of the Business, taking into account the contemplation,
commencement and pendency of the Bankruptcy Cases.
(hhh) “Organizational
Documents” means, with respect to any Person other than a natural person, the documents by which such Person was organized
(such as a certificate of incorporation, certificate of formation, certificate of limited partnership or articles of organization, and
including any certificates of designation for preferred stock or other forms of preferred equity) or which relate to the internal governance
of such Person (such as bylaws, a partnership agreement or an operating, limited liability or members agreement).
(iii) “Permitted
Encumbrances” means (i) Encumbrances for utilities and Taxes not yet due and payable or that are being contested in good
faith, or the nonpayment of which is permitted or required by the Bankruptcy Code, or that are being contested in good faith, or the
nonpayment of which is permitted or required by the Bankruptcy Code, (ii) easements, rights of way, restrictive covenants, encroachments
and similar non-monetary Encumbrances or non-monetary impediments against any of the Acquired Assets which do not, individually or in
the aggregate, adversely affect the operation of the Acquired Assets and, in the case of the Owned Real Property and Leased Real Property,
which do not, individually or in the aggregate, adversely affect, or materially restrict or impair the use or occupancy of such Owned
Real Property or Leased Real Property as it relates to the operation of the Acquired Assets, (iii) applicable zoning Laws, building
codes, land use restrictions and other similar restrictions imposed by Law which are not violated by the current use or occupancy of
such Owned Real Property and Leased Real Property, as applicable, (iv) Intellectual Property licenses granted by a Seller to customers
on a non-exclusive basis in the Ordinary Course, and (v) solely prior to Closing, any Encumbrances that will be removed or released
by operation of the Sale Order.
(jjj) “Person”
means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization,
labor union, organization, estate, Governmental Body or other entity or group.
(kkk) “Personal
Information” means (i) any representation of information that permits the identity of an individual to whom the information
applies to be reasonably inferred by either direct or indirect means, including (1) any information that can be used to distinguish
or trace an individual’s identity, such as name, email address, phone number, social security number, date and place of birth,
mother’s maiden name, and (2) any other information that is linked or linkable to an individual, such as financial information;
and (ii) any information defined as personal information, personal data, personally identifiable information, or similar term under
any Privacy Requirements.
(lll) “Post-Closing
Tax Period” means any taxable period beginning on or after the Closing Date and the portion of any Straddle Period attributable
to the portion of the period beginning after the Closing Date.
(mmm) “Pre-Closing
Tax Period” means any Tax period ending on or before the Closing Date and the portion of any Straddle Period through the end
of the Closing Date.
(nnn) “Privacy
Requirements” means Privacy Laws, Privacy and Information Security Policies, and Privacy Agreements.
(ooo) “Products”
means the medicinal or pharmaceutical products, product candidates or therapies that are or have been researched, developed, packaged,
labeled, used, marketed, imported, exported tested (including through clinical trials), commercialized, manufactured, stored, sold, licensed,
or distributed by or on behalf of any of the Sellers or any of their Affiliates, or which the process has taken substantial steps towards
manufacturing, commercializing, developing, packaging, labeling, storing, using, marketing, importing, exporting, distributing or selling,
including all products that are regulated as human or animal drugs, medical devices, or other health care products under Healthcare Laws,
including drug and biological candidates, compounds or products being researched, tested, stored, developed, labeled, manufactured, packed,
marketed, sold and/or distributed by any of the Sellers or any of their Affiliates.
(ppp) “Public
Software” means any software, libraries or other code that is licensed under or is otherwise subject to Open License Terms.
(qqq) “Purchaser
Group” means Purchaser (including any Designated Purchaser), any Affiliate of Purchaser and each of their respective former,
current or future Affiliates, officers, directors, employees, partners, members, managers, agents, Advisors, successors or permitted
assigns.
(rrr) “Purchase
Price Adjustment Escrow Amount” means $14,375,000.
(sss) “Rebate
Assets” means all accounts receivable, or other amounts, owing from any Person, including pharmaceutical drug manufacturers
or Group Purchasing Organizations, with respect to rebates, discounts, or similar claims.
(ttt) “Release”
means any actual or threatened release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, abandonment, disposing or allowing to escape or migrate into or through the environment (including, without limitation, ambient
air (indoor or outdoor), surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or
fixture).
(uuu) “Sale
Order” means the Order (i) approving this Agreement and the terms and conditions hereof, including pursuant to sections
363 and 365 of the Bankruptcy Code and (ii) approving and authorizing Sellers to consummate the Transactions, in form and substance
reasonably acceptable to Sellers and Purchaser.
(vvv) “Second
Day Hearing” means the hearing before the Bankruptcy Court to consider approval of, among other things, certain of the First
Day Pleadings on a final basis, but in any event shall not mean the initial hearing to consider the First Day Pleadings before the Bankruptcy
Court on or around the Petition Date.
(www) “Securities
Act” means the Securities Act of 1933 and the rules and regulations promulgated thereunder.
(xxx) “Seller
Parties” means each Seller and its former, current, or future Affiliates, officers, directors, employees, partners, members,
equityholders, controlling or controlled Persons, managers, agents, Advisors, successors or permitted assigns.
(yyy) “Straddle
Period” means any taxable period that includes but does not end on the Closing Date.
(zzz) “Subsidiary”
or “Subsidiaries” means, with respect to any Person, any corporation, limited liability company or other entity of
which a majority of the total voting power of shares of stock or other Equity Interests entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees or other governing body or Person thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or a combination
thereof or any partnership, association or other business entity of which a majority of the partnership or other similar ownership interest
is at the time owned or controlled, directly or indirectly, by such Person or one or more Subsidiaries of such Person or a combination
thereof.
(aaaa) “Target
Working Capital” means negative $206,628,000.
(bbbb) “Tax”
or “Taxes” means any federal, state, local, foreign or other income, gross receipts, capital stock, franchise,
profits, withholding, social security, unemployment, disability, real property, ad valorem/personal property, stamp, excise,
occupation, sales, use, transfer, value added, goods and services, unclaimed property, import, export, alternative minimum or
estimated tax, including any interest, penalty or addition thereto in each case whether payable directly or a primary or secondary
liability, or as a legal successor or transferee.
(cccc) “Tax
Code” means the United States Internal Revenue Code of 1986, as amended.
(dddd) “Tax
Principles” means, with respect to any Taxes, the principles that such Taxes should be: (i) calculated consistent with
the past procedures and practices in preparing Tax Returns for such Taxes to the extent consistent with applicable Law, (ii) for
any Straddle Period, calculated in accordance with the principles set forth in Section 9.5, (iii) calculated without
regard to any increase in Tax liabilities by reason of actions described in Section 9.4, and (iv) calculated by excluding
any deferred Tax assets and deferred Tax liabilities.
(eeee) “Tax
Return” means any return, claim for refund, report, statement or information return relating to Taxes required to be filed
with a Governmental Body, including any schedule or attachment thereto, and including any amendments thereof.
(ffff) “Taxing
Authority” means any U.S. federal, state, local, municipal, or foreign government, any subdivision, agency, commission or authority
thereof or any quasi-Governmental Body exercising Tax regulatory authority.
(gggg) “Transaction
Agreements” means this Agreement and any other agreements, instruments or documents entered into pursuant to this Agreement.
(hhhh) “Transactions”
means the transactions contemplated by this Agreement and the other Transaction Agreements.
(iiii) “TSA”
means a Transition Services Agreement, subject to Section 6.21, substantially in the form attached hereto as Exhibit G.
(jjjj) “Willful
Breach” shall mean a deliberate act or a deliberate failure to act regardless of whether breaching was the conscious object
of the act or failure to act.
Section 11.2 Index
of Defined Terms.
Accounting Fees |
19 |
Acquired Assets |
1 |
Acquired Avoidance Actions |
4 |
Acquired Insurance Assets |
3 |
Acquired Intellectual Property |
3 |
Acquired Lease |
2 |
Acquired Leased Real Property |
2 |
Acquired Software |
31 |
Agreement |
1 |
Agreement Dispute |
74 |
Allocation |
68 |
Allocation Methodology |
68 |
Assigned Contracts |
2 |
Assignment and Assumption Agreement |
15 |
Assumed Cure Costs |
6 |
Assumed Current Liabilities |
6 |
Assumed Liabilities |
6 |
Assumed Rebate Liability |
6 |
Avoidance Actions |
3 |
Backup Bidder |
42 |
Bankruptcy Cases |
1 |
Bankruptcy Code |
1 |
Bankruptcy Court |
1 |
Bankruptcy Court Milestones |
40 |
Breakup Fee |
67 |
Business Confidential Information |
59 |
Business Data |
32 |
Business Insurance Policies |
36 |
Cash Payment |
13 |
Chosen Courts |
74 |
Closing |
15 |
Closing Date |
15 |
Closing Date Payment |
13 |
Closing Working Capital Statement |
18 |
CMS Contracts |
13 |
Commercial Interco Contracts |
2 |
Cure Costs |
6, 7, 79 |
Dataroom |
38 |
Deposit |
14 |
Designated Purchaser |
72 |
Disputed Amounts |
18 |
EIC |
12 |
Elixir |
1 |
Employee Benefit Plan |
80 |
Enforceability Exceptions |
22 |
Environmental Permits |
29 |
Escrow Account |
13 |
Estimated Closing Working Capital |
17 |
Estimated Closing Working Capital Statement |
17 |
Excluded Assets |
4 |
Excluded Contracts |
4 |
Excluded Cure Costs |
7 |
Excluded Liabilities |
7 |
Excluded Rebate Liability |
8 |
Expense Reimbursement |
67 |
Express Representations |
38 |
FDI |
22 |
Filed SEC Documents |
21 |
Final Deposit |
14 |
Financial Statements |
23 |
Financing |
77 |
Financing Sources |
77 |
Foreign Competition Laws |
22 |
Fundamental Representations |
63 |
Guaranteed Obligations |
57 |
Guarantor |
1 |
Guggenheim Securities |
36 |
Indebtedness |
43 |
Independent Accountant |
18 |
Information Presentation |
38 |
Initial Deposit |
13 |
Leased Real Property |
24 |
Material Contract |
25 |
Mental Impressions |
60 |
Non-Recourse Person |
72 |
Novation Agreement |
61 |
Outside Date |
64 |
Owned Real Property |
2 |
Parties |
1 |
Party |
1 |
PCI Requirements |
32 |
Permits |
28 |
Permitted Purposes |
59 |
Petition Date |
1 |
Pre-Closing Matters |
54 |
Privacy Agreements |
32 |
Privacy and Information Security Policies |
32 |
Privacy Laws |
32 |
processing |
32 |
Projections |
57 |
Purchase Price |
13 |
Purchaser |
1 |
Purchaser Adjustment Amount |
20 |
Purchaser Plans |
48 |
RAD |
22 |
Registered Trademarks |
29 |
Registration Office |
29 |
Rejection Contracts |
10 |
Resolution Period |
18 |
Retained Privileged Materials |
4 |
Review Period |
18 |
ROI |
2 |
ROI Agreement |
2 |
Schedule |
21 |
Scheduled Employees |
47 |
Schedules |
21 |
Second Deposit |
14 |
Security Breach |
33 |
Seller |
1 |
Seller Sufficiency Representations |
63 |
Seller Support Obligations |
55 |
Sellers |
1 |
Sellers’ Insurance Policies |
54 |
Significant Customer |
27 |
Significant Supplier |
27 |
Statement of Objections |
18 |
Successful Bidder |
42 |
Third Party Assurances |
55 |
Transaction Source Code |
30 |
Transfer Offer |
47 |
Transfer Taxes |
67 |
Transferred Employees |
48 |
Viruses |
31 |
WARN |
36 |
Section 11.3 Rules of
Interpretation. Unless otherwise expressly provided in this Agreement, the following will
apply to this Agreement, the Schedules and any other certificate, instrument, agreement or other document contemplated hereby or delivered
hereunder.
(a) The
terms “hereof,” “herein” and “hereunder” and terms of similar import are references to this Agreement
as a whole and not to any particular provision of this Agreement. Section, clause, Schedule and exhibit references contained in this
Agreement are references to sections, clauses, Schedules and exhibits in or to this Agreement, unless otherwise specified. All Exhibits
and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full
herein. Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein shall be defined as set forth in
this Agreement.
(b) Whenever
the words “include,” “includes” or “including” are used in this Agreement, they will be deemed to
be followed by the words “without limitation.” Where the context permits, the use of the term “or” will be equivalent
to the use of the term “and/or.”
(c) The
words “to the extent” shall mean “the degree by which” and not simply “if.”
(d) When
calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement,
the date that is the reference date in calculating such period will be excluded. If the last day of such period is a day other than a
Business Day, the period in question will end on the next succeeding Business Day.
(e) Words
denoting any gender will include all genders, including the neutral gender. Where a word is defined herein, references to the singular
will include references to the plural and vice versa.
(f) The
word “will” will be construed to have the same meaning and effect as the word “shall”. The words “shall,”
“will,” or “agree(s)” are mandatory, and “may” is permissive.
(g) All
references to “$” and dollars will be deemed to refer to United States currency unless otherwise specifically provided.
(h) All
references to a day or days will be deemed to refer to a calendar day or calendar days, as applicable, unless otherwise specifically
provided.
(i) Any
document or item will be deemed “delivered,” “provided” or “made available” by Sellers, within the
meaning of this Agreement if such document or item is included in the Dataroom, by 5:00 p.m. New York time on the date that is two
(2) Business Days prior to the date of this Agreement.
(j) Any
reference to any agreement or Contract will be a reference to such agreement or Contract, as amended, modified, supplemented or waived.
(k) Any
reference to any particular Bankruptcy Code or Tax Code section or any Law will be interpreted to include any amendment to, revision
of or successor to that section or Law regardless of how it is numbered or classified; provided that, for the purposes of the
representations and warranties set forth herein, with respect to any violation of or non-compliance with, or alleged violation of or
non-compliance, with any Bankruptcy Code or Tax Code section or Law, the reference to such Bankruptcy Code or Tax Code section or Law
means such Bankruptcy Code or Tax Code section or Law as in effect at the time of such violation or non-compliance or alleged violation
or non-compliance.
(l) A
reference to any Party to this Agreement or any other agreement or document shall include such Party’s successors and assigns,
but only if such successors and assigns are not prohibited by this Agreement.
(m) A
reference to a Person in a particular capacity excludes such Person in any other capacity or individually.
[Signature pages follow.]
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly authorized officers as of
the date first above written.
|
PURCHASER: |
|
|
|
MEDIMPACT HEALTHCARE SYSTEMS, INC. |
|
By: |
/s/
Frederick Howe |
|
Name: |
Frederick Howe |
|
Title: |
Chief Executive Officer |
[Signature
Page to Asset Purchase Agreement]
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly
authorized officers as of the date first above written.
|
GUARANTOR (SOLELY FOR PURPOSES
OF SECTION 6.13): |
|
|
|
MI OPCO HOLDINGS, INC. |
|
By: |
/s/
Frederick Howe |
|
Name: |
Frederick Howe |
|
Title: |
Chief Executive Officer |
[Signature
Page to Asset Purchase Agreement]
|
SELLERS: |
|
|
|
HUNTER LANE, LLC |
|
|
|
By: |
/s/ Christopher DuPaul |
|
Name: Christopher
DuPaul |
|
Title: EVP and President |
|
|
|
Elixir Holdings, LLC |
|
|
|
By: |
/s/ Christopher DuPaul |
|
Name: Christopher
DuPaul |
|
Title: EVP and President |
|
|
|
Elixir Rx Solutions, LLC |
|
|
|
By: |
/s/ Christopher DuPaul |
|
Name: Christopher DuPaul |
|
Title: EVP and President |
|
|
|
Elixir Rx Solutions of Nevada, LLC |
|
|
|
By: |
/s/ Christopher DuPaul |
|
Name: Christopher
DuPaul |
|
Title: EVP and President |
[Signature
Page to Asset Purchase Agreement]
|
FIRST FLORIDA INSURERS OF TAMPA, LLC |
|
|
|
By: |
/s/ Christopher
DuPaul |
|
Name: Christopher DuPaul |
|
Title: EVP and President |
|
|
|
Advance Benefits, LLC |
|
|
|
By: |
/s/ Christopher DuPaul |
|
Name: Christopher
DuPaul |
|
Title: EVP and President |
|
|
|
Elixir Rx Solutions, LLC |
|
|
|
By: |
/s/ Christopher DuPaul |
|
Name: Christopher DuPaul |
|
Title: EVP and President |
|
|
|
Ascend Health Technology LLC |
|
|
|
By: |
/s/ Christopher DuPaul |
|
Name: Christopher DuPaul |
|
Title: EVP and President |
|
|
|
Laker Software, LLC |
|
|
|
By: |
/s/ Christopher DuPaul |
|
Name: Christopher DuPaul |
|
Title: EVP and President |
[Signature
Page to Asset Purchase Agreement]
|
Design Rx Holdings LLC |
|
|
|
By: |
/s/
Christopher DuPaul |
|
Name: Christopher DuPaul |
|
Title: EVP and President |
|
|
|
Rx Initiatives, L.L.C. |
|
|
|
By: |
/s/ Christopher
DuPaul |
|
Name: Christopher DuPaul |
|
Title: EVP and President |
|
|
|
Design Rx, LLC |
|
|
|
By: |
/s/ Christopher
DuPaul |
|
Name: Christopher DuPaul |
|
Title: EVP and President |
|
|
|
Designrxclusives, LLC |
|
|
|
By: |
/s/ Christopher
DuPaul |
|
Name: Christopher DuPaul |
|
Title: EVP and President |
|
|
|
Elixir Savings, LLC |
|
|
|
By: |
/s/ Christopher
DuPaul |
|
Name: Christopher DuPaul |
|
Title: EVP and President |
[Signature
Page to Asset Purchase Agreement]
|
Elixir Pharmacy, LLC |
|
|
|
By: |
/s/
Christopher DuPaul |
|
Name: Christopher DuPaul |
|
Title: EVP and President |
|
|
|
Elixir Rx Options, LLC |
|
|
|
By: |
/s/ Christopher
DuPaul |
|
Name: Christopher DuPaul |
|
Title: EVP and President |
|
|
|
Elixir Puerto Rico, Inc. |
|
|
|
By: |
/s/ Christopher
DuPaul |
|
Name: Christopher DuPaul |
|
Title: EVP and President |
|
|
|
Tonic Procurement Solutions, LLC |
|
|
|
By: |
/s/ Christopher
DuPaul |
|
Name: Christopher DuPaul |
|
Title: EVP and President |
[Signature
Page to Asset Purchase Agreement]
Exhibit 99.1
Rite Aid Takes Steps to Accelerate Transformation
and Position Company for Long-Term Success
Reaches Agreement in Principle with Key Creditors
on the Terms of Financial Restructuring Plan
Initiates Voluntary Chapter 11 Process to Implement
a Consensual Financial Restructuring That Will Significantly Reduce Debt and Enable Execution of Key Initiatives
Receives Commitment for $3.45 Billion in New Financing
to Support Business Operations
Continuing to Serve Customers and Deliver Healthcare
Products and Services Across Retail and Online Platforms
PHILADELPHIA – Oct. 15,
2023 – Rite Aid Corporation (NYSE: RAD) (“Rite Aid” or the “Company”) today announced it has reached
an agreement in principle with certain of its senior secured noteholders on the terms of a financial restructuring plan that will allow
the Company to accelerate its ongoing business transformation. Implementing the contemplated restructuring plan will significantly reduce
the Company’s debt, increase its financial flexibility and enable it to execute on key initiatives. In connection with this, Rite
Aid has initiated a voluntary court-supervised process under Chapter 11 of the U.S. Bankruptcy Code.
Rite Aid is continuing to deliver
leading healthcare products and services across its retail and online platforms for the nearly one million customers it serves daily.
The Company remains committed to improving health outcomes and delivering on its purpose to help people achieve whole health for life.
The court-supervised process provides
an orderly and efficient forum for Rite Aid to:
| · | Finalize and build consensus for the agreement in principle the Company has reached with certain of its senior secured noteholders; |
| · | Accelerate the Company’s store footprint optimization plan; |
| · | Implement a proposed transaction under which MedImpact would acquire Elixir Solutions, subject to the outcome of a court-approved
marketing process; |
| · | Access additional liquidity; and |
| · | Resolve litigation claims in an equitable manner. |
In connection with this process, Rite
Aid has received a commitment for $3.45 billion in new financing from certain of its lenders. This financing is expected to provide sufficient
liquidity to support the Company throughout this process.
In a separate press release, Rite
Aid today announced the appointment of Jeffrey S. Stein as Chief Executive Officer, Chief Restructuring Officer and a member of the Company’s
Board of Directors, effective immediately. Mr. Stein is an experienced corporate leader and executive director with significant expertise
in supporting companies that are driving meaningful business transformations and undergoing financial restructurings. He succeeds Elizabeth
(“Busy”) Burr, who has served as Interim CEO since January 2023. Ms. Burr will continue in her role as a Director
on the Company’s Board.
Mr. Stein said, “Rite Aid
has served customers and communities across our country for more than 60 years, and the important actions we are taking today will enable
us to move ahead as a stronger company. With the support of our lenders, we look forward to strengthening our financial foundation, advancing
our transformation initiatives and accelerating the execution of our turnaround strategy. In doing so, we will be even better able to
deliver the healthcare products and services our customers and their families rely on – now and into
the future.”
Mr. Stein continued, “We
remain focused on serving our customers and communities, and we are grateful that they continue to choose our stores and pharmacies for
their healthcare needs. We thank our associates for their ongoing hard work and dedication, and we extend our gratitude to our partners,
suppliers and vendors for their continued support.”
Reducing Debt and Enhancing Financial
Flexibility
The Company has reached an agreement
in principle with certain of its senior secured noteholders on the terms of a financial restructuring that would significantly reduce
the Company’s debt.
Rite Aid intends to use the court-supervised
process to finalize the agreement in principle, build additional consensus for the financial restructuring plan it contemplates and implement
it as quickly and efficiently as possible.
Optimizing the Company’s Store Footprint
Rite Aid regularly evaluates its store
portfolio to ensure it is operating efficiently while meeting the needs of its customers, communities and associates. In connection with
the court-supervised process, the Company will continue assessing its footprint and close additional underperforming stores. These efforts
will further reduce the Company’s rent expense and are expected to strengthen its overall financial performance.
Mr. Stein added, “The court-supervised
process provides Rite Aid with legal tools to accelerate our footprint optimization in an efficient and orderly manner. We look forward
to working closely with our landlords to determine the best path forward for each of our stores.”
The Company is making every effort
to ensure customers of impacted stores have access to health services, whether at another Rite Aid or a nearby pharmacy, and will work
to transfer prescriptions accordingly so that there is no disruption of services. The Company will also transfer associates at impacted
stores to other Rite Aid locations where possible.
A&G Realty Partners is
assisting the Company with its store closing and lease restructuring program. Rite Aid landlords are encouraged to contact A&G Realty
Partners through its website, www.agrealtypartners.com.
Serving Elixir Clients, Plan Sponsors,
Members and Customers While Conducting a Sale Process
Rite Aid has entered into an agreement
with MedImpact Healthcare Systems, Inc. (“MedImpact”), an independent pharmacy benefit solutions company, pursuant to
which MedImpact will acquire Rite Aid’s Elixir Solutions business. Under the terms of the agreement, MedImpact will serve as the
“stalking horse bidder” in a court-supervised sale process under section 363 of the U.S. Bankruptcy Code. Accordingly, the
proposed transaction is subject to higher and better offers, court approval and other customary conditions.
Elixir Solutions is operating normally
and continuing to serve clients, plan sponsors, members and customers as usual.
Elixir Insurance is not included in
Rite Aid’s Chapter 11 process or the proposed transaction with MedImpact, and it is continuing to operate and serve members as usual.
Additional Information About the
Court-Supervised Process
Rite Aid and certain of its subsidiaries,
including those that comprise Elixir Solutions, have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy
Code in the U.S. Bankruptcy Court for the District of New Jersey. Elixir Insurance is not included in the Chapter 11 process.
The Company has filed a number of
customary motions with the Court seeking authorization to support its operations, including the payment of employee wages, salaries and
benefits without interruption. The Company expects to receive court approval for these requests shortly. The Company intends to pay vendors
and suppliers in full for goods and services provided on or after the filing date.
Additional information regarding
the Company’s court-supervised process is available at www.riteaidrestructuring.com. Court filings and other information
related to the proceedings are available on a separate website administrated by the Company’s claims agent, Kroll, at https://restructuring.ra.kroll.com/RiteAid;
by calling Kroll toll-free at (844) 274-2766, or (646) 440-4878 for calls originating outside of the U.S. or Canada; or by emailing Kroll
at RiteAidInfo@ra.kroll.com.
Kirkland & Ellis LLP is serving
as legal advisor, Guggenheim Securities is serving as investment banker and Alvarez & Marsal is serving as transformation officer
and financial advisor to the Company.
About Rite Aid
Rite Aid is a full-service
pharmacy that improves health outcomes. Rite Aid is defining the modern pharmacy by meeting customer needs with a wide range of vehicles
that offer convenience, including retail and delivery pharmacy, as well as services offered through our wholly owned subsidiaries, Elixir,
Bartell Drugs and Health Dialog. Elixir, Rite Aid’s pharmacy benefits and services company, consists of accredited mail and specialty
pharmacies, prescription discount programs and an industry leading adjudication platform to offer superior member experience and cost
savings. Health Dialog provides healthcare coaching and disease management services via live online and phone health services. Regional
chain Bartell Drugs has supported the health and wellness needs in the Seattle area for more than 130 years. Rite Aid employs more than
6,100 pharmacists and operates more than 2,100 retail pharmacy locations across 17 states. For more information, visit www.riteaid.com.
Cautionary Statement Regarding
Forward-Looking Statements
This press release includes statements
that may constitute “forward-looking statements,” including expectations regarding the Company’s business plan and initiatives,
the Company’s ability to continue to operate its business as currently contemplated, the effect of the Chapter 11 reorganization
and the sufficiency of the financing package described above, the Company’s ability to emerge from the Chapter 11 reorganization
as a stronger and more competitive enterprise, the Company’s continued engagement in discussions with the potential bidders regarding
the Company’s sale processes for all, or a portion of the Company’s assets, including the Company’s ability to consummate
any particular sale transaction, and other statements regarding the Company’s plans and strategy. When used in this document, the
words “will,” “target,” “expect,” “continue,” “believe,” “seek, “anticipate,”
“estimate,” “intend,” “could,” “would,” “strives” and similar expressions
are generally intended to identify forward-looking statements. These statements are made pursuant to the safe harbor provisions of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. A number of important
factors could cause actual results of the Company and its subsidiaries to differ materially from those indicated by such forward-looking
statements. These factors include, but are not limited to, risks and uncertainties outlined in the risk factors detailed in Item 1A. “Risk
Factors,” of the Company’s Annual Report on Form 10-K for the fiscal year ended March 4, 2023 (as filed with the
Securities and Exchange Commission (“SEC”) on May 1, 2023) and other risk factors identified from time to time in the
Company’s filings with the SEC. Readers should carefully review these risk factors, and should not place undue reliance on the Company’s
forward-looking statements. The Company undertakes no obligation to update any forward-looking statements to reflect changes in underlying
assumptions or factors, new information, future events or other changes.
INVESTORS:
Byron Purcell (717)
975-3710
investor@riteaid.com
MEDIA:
Joy Errico (717)
975-5718
press@riteaid.com
Exhibit 99.2
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© 2020 Rite Aid. All rights reserved. 1 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents September 16, 2023 Discussion Materials Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents
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2 Disclaimer This presentation (together with any related oral commentary and any supplemental materials or updates, this “Presentation” and, together with any associated information and materials provided heretofore, herewith or hereafter, whether communicated in written, electronic or oral form, collectively, the “Materials”) has been prepared by or on behalf of Rite Aid Corporation (collectively, together with its subsidiaries and controlled affiliates, the “Company”) solely to provide each recipient hereof (each, a “Recipient”) with certain information, in summary form only, relating to the Company’s proposed transaction(s) described herein (each, a “Transaction”) . The summary set forth herein does not purport to be a complete description of the matters described herein . This Presentation may be furnished to the Recipient directly by the Company or, on the Company’s behalf, through any one of the Company’s legal, financial or other professional advisors (collectively, the “Advisors”) . Each Advisor is appointed only to advise the Company in accordance with its applicable terms of engagement . This Presentation does not constitute an offer to sell or solicitation of an offer to purchase any securities, nor shall there be any such offer or solicitation in any jurisdiction in which such an offer or solicitation is not authorized or would be unlawful . The information contained in this Presentation is not, and under no circumstances is to be construed as, a prospectus, a public offering or an offering memorandum as defined under applicable securities legislation . Each Recipient must comply with all legal requirements in each jurisdiction in which it purchases, offers or sells any securities or possesses this Presentation, and must independently obtain any consent, approval or permission required by it in connection with any potential transaction . None of the Company or any of the Advisors makes any representation or warranty regarding, nor shall any of the foregoing persons or entities have any responsibility for, the legality of an investment or other participation in any Transaction under any investment, securities or similar laws . Recipients of this information who are considering any form of Transaction with the Company should not rely on the information contained herein as a definitive basis for any decision regarding any Transaction . Any statement herein regarding tax matters was written in connection with the promotion or marketing of the matters described herein and was not intended or written to be used, and cannot be used by any person, for the purposes of avoiding tax - related penalties under federal, state or local tax law . Receipt of this Presentation does not create, nor is it intended to create, a contract or commitment between the Company and the Recipient or any other party with respect to consummation of any Transaction . This Presentation may not be relied upon by any party as the basis for any such contract or commitment . Consummation of any Transaction is subject to, among other things, the execution of definitive documentation in writing . Until the execution of definitive documentation for any Transaction, the Company reserves the right, in its sole discretion, to modify or amend the terms of the Transaction, to approve or disapprove any prospective participant or other counterpart, to accept or reject, in whole or in part, any request by any party to participate as investor, participant or otherwise in the Transaction, to allocate to any party a smaller portion of or participation in the Transaction than the amount sought by such party and to withdraw from any further discussions, negotiations or transaction . None of the Company or the Advisors will have any liability or obligation whatsoever to any prospective transaction counterparty in the event of any of the foregoing . Any terms or other conditions in the Materials relating to any proposed Transaction are non - binding and are being presented solely for discussion and settlement purposes . The Materials are entitled to protection from any use or disclosure pursuant to Federal Rule of Evidence 408 and any other rule of similar import . The Materials are being furnished solely for the purpose of assisting each Recipient in determining whether it wishes to proceed with any further investigation of the Company and any Transaction . The Materials are not intended to form the basis of any investment decision and do not attempt to present all the information that such Recipient may consider material or desirable in making its investment decision . Each Recipient of the Materials should take such steps as it deems necessary to assure that it has the information it considers material or desirable in making its decision to participate in any Transaction and should perform its own independent investigation and analysis of the Transaction and the Company . By accepting delivery of this Presentation, each Recipient represents that it is sophisticated and capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies involving a security or securities, as well as with regard to the economic risks and merits of any Transaction, and of assessing the suitability of such investments for its purposes Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents
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3 Disclaimer (cont’d) The information used to prepare this Presentation and any other Materials is based upon industry, business, financial, legal, regulatory, tax, accounting, actuarial and other information (including, without limitation, financial projections, other estimates and other forward - looking information) furnished by the Company or information otherwise obtained from public sources, data suppliers and other third parties . None of the Advisors or any of their respective subsidiaries, affiliates, directors, officers, employees, representatives, consultants, legal counsel and/or agents has independently verified the accuracy and/or completeness of this Presentation and any other Materials, including without limitation any estimates or financial forecasts or projections or other forward - looking statements (or any assumptions underlying them, the Company’s future operations or the amount of any future income or loss) . None of the Company, the Advisors or any of their respective subsidiaries, affiliates, directors, officers, employees, representatives, consultants, legal counsel and/or agents (i) makes any representation, guaranty or warranty (express or implied) as to the accuracy or completeness of this Presentation or any other Materials, including without limitation any estimates or financial forecasts or projections or other forward - looking statements (or any assumptions underlying them, the Company’s future operations or the amount of any future income or loss) ; or (ii) will have any responsibility, obligation or liability to any Recipient or its representatives relating to or arising from any information contained in, or for any omissions from, this Presentation or any other Materials or any other written or oral communication transmitted to any Recipient in the course of its investigation and evaluation of the Company and any Transaction . This Presentation is as of the date hereof . Neither the delivery of this Presentation nor any eventual consummation of any Transaction shall, under any circumstances, imply that the information contained herein is correct as of any future date or that there has been no change in the affairs of the Company after the date hereof . Nothing contained herein is, or should be relied upon as, a promise or representation as to future performance . None of the Company or any Advisor undertakes any obligation to update, correct or otherwise revise this Presentation or any other Materials . This Information shall not be deemed an indication of the state of affairs of the Company nor shall it constitute an indication that there has been no change in the business or affairs of the Company since the date hereof . By accepting delivery of this Presentation, each Recipient acknowledges and agrees (i) to undertake and rely on its own independent investigation and analysis and consult with its own attorneys, accountants and other professional advisors regarding the Company and the merits and risks of participating in any potential Transaction, including all related legal, investment, accounting, tax and other matters ; and (ii) that none of the Advisors or any of their respective subsidiaries, affiliates, directors, officers, employees, representatives, consultants, legal counsel and/or agents is acting as a financial advisor, private placement agent, arranger or in any other advisory capacity for the benefit of such Recipient with respect to any potential Transaction or otherwise owes such Recipient any duty of loyalty or care (whether in contract, in tort or otherwise) with respect to this Presentation, any other Materials or any potential Transaction (and each Advisor, on behalf of itself and its affiliates and related parties, expressly disclaims any such advisory, fiduciary or similar relationship or other duty) . By accepting delivery of this Presentation, each Recipient will be deemed to acknowledge and agree to the matters set forth in this Disclaimer, including, without limitation, the matters set forth in the subsequent sections titled “Confidentiality Undertaking” and “Cautionary Statement Regarding Forward Looking Statements . ” CONFIDENTIALITY UNDERTAKING This Presentation contains information that is proprietary or confidential in nature . By accepting this Presentation, each Recipient agrees to treat this Presentation and the information contained herein in a confidential manner, to use this Presentation and such information only in connection with its evaluation of any proposed Transaction and that this Presentation and such information shall not be divulged to any person or entity or reproduced, disseminated or disclosed by the Recipient, directly or indirectly, in whole or in part, in each case, other than to the extent otherwise permitted pursuant to the terms of the applicable confidentiality or other non - disclosure agreement between the Recipient and the Company entered into in connection herewith . Each Recipient further agrees that the foregoing obligations shall apply to all other written or oral communications transmitted to the Recipient by or on behalf of the Company in connection with the Recipient’s evaluation of any potential Transaction . Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents
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4 Cautionary Statement Regarding Forward Looking Statements Statements in this presentation that are not historical, are forward - looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 . Such statements include, but are not limited to, statements regarding Rite Aid Corporation’s (the “Company”) outlook and guidance for fiscal 2024 and future periods ; the continued impact of the global coronavirus (COVID - 19 ) pandemic on the Company’s business ; and any assumptions underlying any of the foregoing . Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," and "will" and variations of such words and similar expressions are intended to identify such forward - looking statements . These forward - looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to : risks related to the prolonged impact of the COVID - 19 global pandemic, and the emerging new variants, including government actions and restrictive measures implemented in response, and other impacts to the business, or on the Company’s ability to execute business continuity plans, as a result of the COVID - 19 pandemic ; the impact of COVID - 19 on the Company’s workforce, operations, stores, expenses, and supply chain, and the operations or behaviors of the Company’s customers, suppliers and business partners ; the Company’s ability to successfully implement the Company’s store closure program and other strategies ; the impact of the Company’s high level of indebtedness, the ability to refinance such indebtedness on acceptable terms and the Company’s ability to satisfy its obligations and the other covenants contained in the Company’s debt agreements ; outcome of pending or new litigation including related to Opioids, “usual and customary” pricing or other matters ; the Company’s ability to monetize the CMS receivable created in the Company’s Part D business ; general competitive, economic, industry, market, political (including healthcare reform) and regulatory conditions (including changes to laws or regulations relating to labor or wages), as well as other factors that impact the markets in which we operate ; the impact of private and public third - party payers continued reduction in prescription drug reimbursements and efforts to encourage mail order ; the Company’s ability to manage expenses and its investments in working capital ; the Company’s ability to achieve the benefits of the Company’s efforts to reduce the costs of its generic and other drugs ; the Company’s ability to achieve cost savings and other benefits of its organizational restructuring within its anticipated timeframe, if at all ; the outcome of the Company’s continuing efforts to monitor and comply with applicable laws, regulations, policies and procedures ; and the Company’s ability to partner and have relationships with health plans and health systems . These and other risks, assumptions and uncertainties are more fully described in Item 1 A (Risk Factors) of the Company’s most recent Annual Report on Form 10 - K and in other documents that it files or furnishes with the Securities and Exchange Commission (the “SEC”), which you are encouraged to read . To the extent that COVID - 19 adversely affects the Company’s business and financial results, it may also have the effect of heightening many of such risk factors . Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward - looking statements . Accordingly, you are cautioned not to rely on these forward - looking statements, which speak only as of the date they are made . The degree to which COVID - 19 may adversely affect the Company’s results and operations, including its ability to achieve its outlook for fiscal 2024 guidance and future periods, will depend on numerous evolving factors and future developments, which are highly uncertain, including, but not limited to, federal, state and local governmental policies and initiatives designed to reduce the transmission of COVID - 19 and emerging new variants, and how quickly and to what extent normal economic and operating conditions can resume . As a result, the impact on the Company’s financial and operating results cannot be reasonably estimated with specificity at this time, but the impact could be material . The Company expressly disclaims any current intention, and assumes no duty, to update publicly any forward - looking statement after the distribution of this presentation, whether as a result of new information, future events, changes in assumptions or otherwise . Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents
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5 Non - GAAP Financial Measures The following presentation includes the non - GAAP financial measures Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share, Adjusted EBITDA, Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A, which are non - GAAP financial measures . See the attached tables for a reconciliation of Adjusted Net Income (Loss), Adjusted Net Income (Loss) per Diluted Share and Adjusted EBITDA to net income (loss), and net income (loss) per diluted share, which are the most directly comparable GAAP financial measures . Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share exclude amortization expense, merger and acquisition - related costs, non - recurring litigation settlements, gains or losses on debt modifications and retirements, LIFO adjustments, goodwill and intangible asset impairment charges, restructuring - related costs, the gains or losses on Bartell acquisition, and change in estimate related to manufacturer rebate receivables . The Company believes Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share serve as appropriate measures to be used in evaluating the performance of its business and help its investors better compare its operating performance over multiple periods . Adjusted EBITDA is defined as net income (loss) excluding the impact of income taxes, interest expense, depreciation and amortization, LIFO adjustments, charges or credits for facility exit and impairment, goodwill and intangible asset impairment charges, inventory write - downs related to store closings, gains or losses on debt modifications and retirements, change in estimate related to manufacturer rebate receivables, and other items (including stock - based compensation expense, merger and acquisition - related costs, non - recurring litigation settlements, severance, restructuring - related costs, costs related to facility closures, gain or loss on sale of assets, and the gain or loss on Bartell acquisition) . The add back of LIFO (credit) charge when calculating Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share removes the entire impact of LIFO (credits) charges, and effectively reflects the Company's results as if the company was on a FIFO inventory basis . The Company believes Adjusted EBITDA serves as an appropriate measure in evaluating the performance of its business and helps its investors better compare its operating performance with its competitors . Adjusted EBITDA Gross Profit includes LIFO adjustments, depreciation and amortization (COGS portion only) and other items . See the attached tables for a reconciliation of Adjusted EBITDA Gross Profit to Revenue, which is the most directly comparable GAAP financial measure . Adjusted EBITDA SG&A excludes depreciation and amortization (SG&A portion only), stock - based compensation expense, merger and acquisition - related costs, non - recurring litigation settlements, and other items . See the attached tables for a reconciliation of Adjusted EBITDA SG&A to Revenue, which is the most directly comparable GAAP financial measure . The Company believes Adjusted EBITDA Gross Profit and Adjusted EBITDA SG&A serve as appropriate measures in evaluating the performance of its business and helps its investors better compare its operating performance with its competitors . Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents
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Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents I. Company Overview II. Rite Aid 2.0 Business Plan A. Retail Business Plan B. Elixir Business Plan III. Litigation IV. Transaction Proposal V. Owned Real Estate Summary Table of Contents
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© 2020 Rite Aid. All rights reserved. 7 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents I. Company Overview
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8 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Rite Aid Overview • A full - service pharmacy company with approximately 2,300 retail pharmacy locations across 17 states and more than 46,000 employees • Rite Aid provides essential pharmacy services to customers located in underserved areas • Broad range of services – including retail, pharmacy, PBM, mail order, specialty pharmacy and claims adjudication • Rite Aid will deliver on its corporate strategy by: • Growing our pharmacy business • Deepening its customer loyalty and engagement • Scaling our Elixir business Rite Aid is a full - service pharmacy company focused on improving health outcomes Rite Aid at a Glance (1Q24A) $23.7BN Total LTM Revenue $421MM Total LTM Adjusted EBITDA 8.4% Y - o - Y Increase in Same Store Sales 13.3% Y - o - Y Increase in Pharmacy Sales 7.4% Y - o - Y increase in Prescription Volume (2) ~250MM Prescriptions Filled per Year on a 30 - day adjusted basis (1) (1) As of FY23A. (2) On a 30 - day adjusted basis; excludes COVID - related volume.
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9 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Over 70% of Retail revenue comes from Rite Aid’s Pharmacy Retail: Retail Pharmacy of consumers trust their pharmacists as healthcare advocates Average annual retail pharmacy visits per consumer, versus ~2 primary care office visits per year Clinical interventions per year scripts filled per year 90% 26 ~40M ~180M Source: Company management. Note: Planned consolidation of Wilsonville, OR and Des Moines, WA distribution centers. Rite Aid States & Store Count Rite Aid Distribution Centers 190 14 67 1 476 246 195 480 64 6 57 MA 9 CT 30 NJ 112 DE 37 263 MD 40
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10 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Retail: Front - End Offerings Our Owned Brands • Rite Aid offers a wide assortment of front - end merchandise to complement the comprehensive pharmacy products offering, including: • OTC medicine • Health and beauty aids • Personal care • Consumables • General merchandise • Seasonal merchandise • Numerous other everyday convenience products • Front - end products accounted for nearly 29% of total retail sales in FY2023 • Strong portfolio of owned brands positioned for future growth • Accounted for approximately 18% of front - end sales in FY2023 • Recent launch of RYSHI expands private label suite into the $100BN+ beauty industry Source: Company filings. Front - End Retail Offering
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11 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Pharmacy Services: Elixir A leading, independent pharmacy management platform offering comprehensive pharmacy solutions to middle market plan sponsors Overview National Footprint ~1.1MM PBM Members (1) ~1,000 Clients Rite Aid Corp. HQ Philadelphia, PA Elixir Mail & Specialty North Canton, OH Puerto Rico Office ~1,050 FTEs • Leading pharmacy management platform with 20+ year history of serving middle market health plans and employer groups • Leading independent PBM of national scale • Comprehensive suite of owned assets uniquely serving the middle market with a full pharmacy care experience, including: • An industry leading adjudication platform capable of handling all lines of business, including Medicare, offering flexibility, efficiency and data privacy protection • Accredited mail and specialty pharmacies, creating an exceptional member experience, waste reduction and cost savings • Prescription discount programs for uninsured and under - insured • Provides services across a continuum of clients including: • Mid - sized employer groups with focus on unions, municipalities, school districts and healthcare providers • Regional health plans with 100k – 500k lives and TPAs Source: Company management. Note: Pro forma for exit of Elixir Insurance Individual Part D. (1) Excludes Elixir Insurance membership.
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12 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Elixir: A PBM Providing a Full Suite of Pharmacy Capabilities Mail & Specialty Pharmacy ~ 460K Claims PBMaaS Pharmacy Benefit Management ~ 1.1MM Members (1) Discount Saving Cards ~$85MM Gross Revenue & ~15MM Claims Source: Company management. (1) Excludes Elixir Insurance membership. (2) Pro forma for Individual Part D exit. Elixir Insurance ~20K Medicare Lives (2)
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13 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Aging U.S. Population Growing Incidence of Chronic Conditions Increasing Healthcare and Pharma Spend Evolving Preferences Among Healthcare Constituents Long - Term Need for Pharmacy Services • U.S. population is rapidly aging with the population of 65+ estimated to increase from 56.4MM in 2020 to 72.7MM in 2030 • With a growing older population, healthcare needs will rise driving spend and pharma needs • Rise in the number of individuals afflicted with chronic conditions • Illnesses such as diabetes and obesity are increasing at high rates domestically and will require steady and consistent prescription levels for treatment • CMS projects national health expenditures and prescription drug spend to rise in - line or above GDP growth 2022 - 2031 • Projected national health expenditures as a percent of GDP is projected to increase from 17.4% in 2022 to 19.6% in 2031 • Physicians are increasingly conscious and concerned with achieving optimal patient outcomes • Retail pharmacists are uniquely positioned to provide a broad array of clinical services, improve patient outcomes and lower costs 2022 – 2031 CAGR U.S. Population: 65+ Years Old Source: Avalere, Washington Post, HealthAffairs, The Lancet, CMS. U.S. Diabetes Projections 46MM people with diabetes 2021 65MM people with diabetes 2050 “Most people trust pharmacists to play a greater role in providing their care. As the shortage of doctors and nurses persists, and as complex new therapies and digital healthcare technology solutions are developed, the role of pharmacists will continue to evolve.” - John McHugh, PHD, Dept. of Health Policy & Management, Columbia University The Prescription of Trust Pharmacists Transforming Patient Care report (2022) 56.4 65.9 72.7 2020 2025 2030 4.6% 5.4% 4.6% Prescription Drug Spend National Health Expenditures GDP
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14 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Rite Aid: Uniquely Positioned to Win ▪ Rite Aid is a healthcare company with a neighborhood footprint ▪ Deeply intertwined in communities served with significant local density ▪ Network of pharmacists with strong relationships and significant access to patients ▪ Highly - focused on whole - being health solutions and achieving the best outcomes for patients ▪ Independent partner that does not compete with health plans and works with them to improve outcomes and help control costs
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Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents II. Rite Aid 2.0 Business Plan
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16 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Our vision for Rite Aid 2.0 is to create a portfolio of high - performing stores to deliver value to our stakeholders and improved health and wellness outcomes to our customers Overview of Rite Aid 2.0 Business Plan Rite Aid Today (LTM 1Q24A) Rite Aid 2.0 (FY25E) 2,287 Stores $17.8BN Retail Sales (1) $284MM Retail Segment EBITDA (2) 1.6% Retail Segment EBITDA Margin (2) ~78,000 LTM Scripts / Store $421MM Total Adj. EBITDA ~$83MM Dead Rent (3) 1.8% Total EBITDA Margin Reduced Store Footprint $16.5BN Retail Sales (1) $518MM Retail Segment EBITDA (2) 3.1% Retail Segment EBITDA Margin (2) $584MM Total Adj. EBITDA $0 Dead Rent 3.0% Total EBITDA Margin • The Company’s portfolio is burdened by unprofitable stores that it is unable to effectively exit due to the associated dead rent; additionally, increasing regional and corporate overhead costs have impacted profitability • The ability to reject leases will allow the Company to rationalize the store footprint with greater flexibility; it can exit unprofitable locations, shed dead rent and use the threat of lease rejection to negotiate better lease terms • A smaller footprint, coupled with the ability to reject contracts, creates the opportunity for significant cost rationalization and enhanced profitability (1) Excludes immaterial non - core other revenue and intersegment eliminations. (2) For the avoidance of doubt, burdened by allocated costs associated with distribution centers, regional offices, advertising a nd corporate overhead. (3) FY24E estimated dead rent in status quo. ~87,000 LTM Scripts / Store
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17 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Business Plan Summary Rite Aid 2.0 provides meaningful uplift in EBITDA and EBITDA margin compared to current guidance Adjusted EBITDA ($MM) Gross Profit (1) ($MM) WholeCo Unlevered Free Cash Flow ($MM) Revenue (1) ($BN) $4,447 $4,055 $3,965 $4,121 $442 $367 $331 $358 $4,804 $4,889 $4,421 $4,295 $4,479 FY23A FY24E FY24E FY25E FY26E Actual Guidance RAD 2.0 Retail Elixir Retail Elixir $260 $262 $320 $548 $386 $617 $100 $84 $148 $66 $155 $86 $429 $360 $346 $468 $614 $541 $703 Guidance RAD 2.0 Guidance RAD 2.0 Guidance RAD 2.0 FY23A FY24E FY25E FY26E Retail Elixir Retail Elixir $18.3 $17.2 $16.5 $17.1 $4.7 $4.5 $2.9 $3.0 $24.2 $23.0 $21.7 $19.3 $20.1 FY23A FY24E FY24E FY25E FY26E Actual Guidance RAD 2.0 Retail Elixir Retail Elixir ($88) $157 ($643) $708 $418 FY23A FY24E FY24E FY25E FY26E Actual Guidance RAD 2.0 $260 $208 $518 $598 $100 $86 $66 $86 $429 $360 $294 $584 $684 FY23A FY24E FY24E FY25E FY26E Actual Guidance RAD 2.0 Retail Elixir Retail Elixir Note: Guidance figures shown are the high end of the latest guidance ranges provided by management for 1Q24A earnings. (1) Rite Aid 2.0 revenue & gross profit figures exclude intersegment eliminations and an immaterial amount of Retail Segment’s no n - c ore earnings; historical Rite Aid 2.0 revenue excludes intersegment eliminations and other revenue for comparability. (2) $100MM cash use forecast per 1Q24 earnings call, plus estimated $257MM cash interest. (2) Includes cash outflows related to CMS receivable Includes cash inflows related to CMS receivable
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Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents II.A. Retail Business Plan
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19 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents $288 214 $168 $140 $142 $177 $83 $260 ($74) ($6) ($206) ($178) ($42) ($47) ($9) FY23A EBITDA FY23A Dead Rent FY23A, less Dead Rent Wks Adj. Generic Cost & Other Rx GP Reimb. Rate Script Growth Covid Vol. & GM FE Initiatives Wage Increases Other SG&A Add. Dead Rent in FY24 Plan FY24 Plan, Less Dead Rent FY24 Plan Dead Rent FY24 Plan Retail Baseline: Year - Over - Year (“YoY”) Bridge YoY the FY24E Retail Plan reflects several material assumptions relative to actual FY23A performance Bridging Item Description Wks Adjustment • One - week adjustment from a 53 - week (FY23) to a 52 - week year (FY24) Generic Cost & Other Rx GP • Reflects reduced cost for generic scripts purchased from manufacturers, n et inflation, rebates, legal settlements and other Reimbursement Rate(s) • Reimbursement rate pressure from payors for generic / branded scripts; $206MM margin impact on Plan Sales of ~$3B (~6.3%) Covid Volume & Margin • Reflects ~40% reduction in assumed YoY covid scripts (~5MM to ~3MM) and transition to purchasing model in Aug - 23 (previously 100 % margins, post - Aug. forecast 21% margins) Script Growth • Based on 6.2% non - COVID comp growth as a result of adherence from auto - refill, deletes improvement and file buys FE Initiatives • Digital marketing strategies & inflation • Owned - Brand cost reduction, pricing optimization and other Wage Increases • Assumed at both Retail & Corporate Other SG&A • Investments related to advertising, shelf tags & additional headcount; base increases in Retail Benefits ($18M) & Corp Admin ($1 8M - Non - PPL costs) RX SG&A RX
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20 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents $260 $177 $23 $83 $97 $29 $168 $502 ($83) ($74) FY24 Plan FY24 Plan Dead Rent FY24 Plan, less Dead Rent 1Q Favorability Dead Rent Extinguished Footprint Rationalization Fee For Service Cost Reductions FE and Cost Reduction Risking Adj. Pro Forma 2.0 Retail 2.0: Run - Rate EBITDA Pro Forma FY24E EBITDA significantly enhanced on a run - rate basis by rationalizing the footprint and executing on cost savings opportunities, despite risking for challenges in front - end performance Preliminary Pro Forma FY24E Consolidated Run - Rate EBITDA Bridge Margins % 1.4% 2.9% Based on 3+9 FY24 Plan after incorporating known pro forma adjustments and 1Q favorability Extinguish existing dead rent through lease rejection Eliminate negative EBITDA drag from unprofitable stores Estimate given better than expected reimbursement rates on Medicare / Medicaid in NY as compared to plan Includes identified cost reduction opportunities in field support, advertising and corporate overhead; see page 27 for additi ona l detail Risking FY24E front - end EBITDA due to lower than plan front - end sales related to supply chain issues and weak front - end margin f rom higher shrink expense; removal of go - get cost savings in budget that are now picked up by identified cost reduction opportunities A B C D D E F B E C A F
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img021.jpg)
21 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Rite Aid’s Current Retail Portfolio Roughly three - quarters of Rite Aid’s stores are Retail EBITDA positive on an LTM basis Commentary • Pre - Allocation EBITDA: excludes allocated regional costs and corporate overhead • Retail EBITDA: fully burdened by allocated regional costs; excludes corporate overhead • Adjusted EBITDA: fully burdened by allocated regional costs and corporate overhead • Rite Aid continues to evaluate its entire footprint, including low margin Retail EBITDA positive stores, as a part of footprint rationalization efforts • Allocated costs consist of the regional operation costs and distribution center (“DC”) costs that get attributed to each store • Some of these costs are almost entirely variable and could be shed if stores are closed • Others are largely fixed and would have to be re - allocated to the remaining open stores • RAD benefits from keeping certain low - margin stores open because they help absorb fixed costs that would otherwise burden higher - margin stores Current Store Portfolio ~150 ~400 ~1,700 Pre-Allocation EBITDA Negative Retail EBITDA Negative Retail EBITDA Positive
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img022.jpg)
22 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Building Rite Aid Retail 2.0 • The Company has closed nearly 200 stores over the past few years and has developed several analytical tools to inform those d eci sions, assess opportunities to sell scripts and estimate the retention of scripts poured to nearby locations • The Company undertook a deep - dive evaluation of its store footprint based on a wide variety of factors to determine whether to k eep or close on a store - by - store basis • The decision to keep a store was impacted by, amongst other factors, the general strategy for the region or market, the store ’s financial profile and the attractiveness of store closure options • In the case of a store closure, the Company will monetize the front - end inventory through a going - out - of - business sale and decid e whether to sell the scripts or to pour those scripts to a nearby location to improve that store’s performance Management has spent significant time with the Company’s advisors to analyze the retail footprint and design the go - forward plan Factors Considered • Financial Performance • Market / Competitive Landscape • Store Profile / Format • Rent Relative to Market • Regional Presence and Market Strategy • Supply Chain and Regional Operations • Script and Inventory Liquidation Value High - Level Pour vs. Sell Framework Sell Assumed Script Value Pour Retention to Adjacent Stores Consider Selling High Low Pour Consider Pouring The decision to pour versus sell weighs the incremental EBITDA from pouring scripts to a nearby RAD location against the proceeds of selling those scripts Low High
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img023.jpg)
23 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Retail 2.0: Cost Reduction Opportunities Retail Operating Cost Reductions Corporate Cost Reductions In addition to footprint rationalization, the Company has developed plans for additional cost rationalization of ~$168MM; TBD items are excluded from business plan assumptions for conservatism Cost Area Opportunity Description Forecast Includes Advertising • Targeting reduction to low ROI spend efforts and redirection of spend from traditional media P Field Support • Organizational redesign; reduction of asset protection resources given store closures at many high - shrink locations P Rent Concessions • Engage with landlords to renegotiate go - forward leases TBD Pour Retention • Potential upside to conservative pour retention rate assumptions TBD Central Fill • Additional central fill facilities could provide additional store opex savings TBD Supply Agreements • Existing supply agreements may have better chance of renegotiation and improved Rx pricing with a healthier balance sheet TBD Distribution • Potential to further consolidate distribution centers with smaller footprint • Opportunity to sublease excess capacity in centers with fewer locations to fulfill TBD Cost Area Opportunity Description Forecast Includes IT & Support Agmts. • Ability to reject unnecessary and overly expensive contracts P Outsourced Tech • Field tech services, recruiting, insourcing, CRM and miscellaneous admin vendors P Legal Fees • Ability to reduce spend based on litigation addressed in restructuring transaction P Corporate Wages • Clean slate review of all corporate G&A necessities P Other • D&O insurance, rent, recruiting, travel, outside labor and other miscellaneous P
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img024.jpg)
24 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Retail 2.0 Financial Projections The following provides a summary of the retail business plan Gross Profit ($MM) Revenue ($BN) Adjusted EBITDA ($MM) Commentary $288 $208 $518 $598 $502 1.6% 2.9% 3.1% 3.5% FY23A FY24E FY25E FY26E PF EBITDA $4,395 $4,055 $3,965 $4,121 24.9% 23.5% 24.1% 24.1% FY23A FY24E FY25E FY26E $17.7 $17.2 $16.5 $17.1 1.7% (2.4%) (4.5%) 3.8% FY23A FY24E FY25E FY26E Growth EBITDA Margin Gross Margin (1) Run - rate FY24E RAD 2.0 EBITDA Margin. See page 24 for more detail. (2) See page 24 for more detail. (3) FY23A Adj. EBITDA, less dead rent of ~$74MM, is $214MM. (4) FY24E Adj. EBITDA, less estimated FY24E RAD 2.0 dead rent of ~$42MM, is $179MM. (2) (3) • Retail segment is poised for significant transformation in Rite Aid 2.0 due to closure of underperforming stores coupled with recurring benefits of cost savings implementation • Smaller footprint results in reduced revenue / gross profit, but unlocks the potential for material EBITDA, and margin, uplift through the ability to reduce costs (4) (1)
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img025.jpg)
Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents II.B. Elixir Business Plan
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img026.jpg)
26 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Elixir is at a Transformational Inflection Point Ongoing strategic redesign targeting membership expansion, operational excellence and focus on core competencies Focus Sowing the Seeds Pruning for Growth Reaping What We Have Sown Horizon 1 (2022 – 2023) Horizon 2 (2023 – 2025) Horizon 3 (2025 – 2026) • Brought in new leadership to lead business turnaround and stem operational issues • Stabilization through process redesign, technology revitalization and investment in people • Rationalize organizational structure to match new operating levels • Revamp sales & marketing and account management functions • Exiting the Individual Medicare Part D business to focus on core competencies (1) • Membership stabilization through new client wins and improvements in client retention • Realize benefits of operational optimization initiatives through margin enhancement • Improved cash flow profile from working capital benefits of exiting Individual Medicare Part D business • Return to broad membership growth • Full realization of initiatives to improve operational efficiencies • Continued expansion of EBITDA margins • Agile platform poised to capture additional market share while generating unlevered free cash flow (1) Effective January 2023 with complete exit in January 2024.
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img027.jpg)
27 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Elixir is at a Transformational Inflection Point (cont’d) Initiatives focused on low hanging fruit to increase profitability, retention and new sales GPO Strategy Spread Optimization Network Rates Rebate Optimization Spread Optimization Network Rates Actions Goals x Drive New Sales x Increase Profitability x Increase Profitability x Improve Retention x Increase Profitability • Adjudication system configuration changes • Automated reporting, dashboards & analytics • Capacity, expertise & documentation • Validate Rx rates • Leasing networks • Negotiation • Big 3 + larger independents Administrative Costs x Increase Profitability x Improve Retention • Improve internal processes and drive workflow automation • SOPs & workflows • Capitalization New RFPs x Drive New Sales • Expand top - of - sales funnel by increasing RFP activity with TPAs & brokers • Improving internal systems communications to apply appropriate contract exclusions • Limiting historical leakage and improving payment accuracy • Incorporating additional exclusion in new contracting process in - line with market standards • Optimize rebate rates (1) Effective January 2023 with complete exit in January 2024. Elixir Part D Exit x Increase Capital Efficiency x Reduce Risk x Increase Profitability • Exiting the Individual Medicare Part D business (1)
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img028.jpg)
28 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents 91 91 122 - 20 40 60 80 100 120 140 FY'24 FY'25 FY'26 EBITDA ($in millions) Baseline EBITDA Elixir: Baseline Annual P&L Projections EBITDA growth is a function of membership growth and ability to execute against value assurance initiatives • Impact from Part D decline drives decrease in revenue and EBITDA in FY25 relative to FY24 • Margin improvement driven by Part D exit and key business improvement initiatives partially offset by membership mix changes • Forecasted attrition of ~8% offset by successful implementation of various go - to - market strategies to drive RFPs • Improvement in percentage of lives won as a a result of sales force initiatives currently underway to increase efficacy 3.0% 2.0% 3.7% Margin: Baseline EBITDA FY25E to FY26E Baseline EBITDA FY24E to FY25E 2.0% 2.2% 3.0% 3.0% 3.7% ($ in millions) ($ in millions) Margin: Primarily Membership Mix (1) Excludes ~[$24]MM of standalone SG&A, [$11]MM impact from known lives lost and TBD uplift from run - rate initiatives. (1) No Image
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img029.jpg)
29 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents EBITDA decline of ~$25MM in FY25E and ~$36MM in FY26E compared to Baseline due to higher attrition and lower new customer wins Elixir: Baseline to Restructuring Scenario Bridge FY26E: Baseline to Restructuring FY25E: Baseline to Restructuring • Bottoms - up approach to establish incremental risk of renewal for key clients in a restructuring scenario, resulting in attrition of 14.4% and 12.5% in FY24E and FY25E , respectively, after which rates return to Baseline levels of 8% in FY26E • ~1.5MM (1) members as of 1Q24A (includes ~300K Part D members) • Initiatives Risking and SG&A reflect pro forma % of Baseline members • SG&A mitigation to offset lost profitability from membership decline to be further explored 3.0% 2.3% 3.7% 2.9% ($ in millions) No Image (1) ~47% of Elixir lives covered by customer contracts with early termination provisions; ~18% of Elixir’s lives covered by custo mer contracts with third party administrator clients. No Image
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img030.jpg)
30 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Elixir Business Plan Summary The following provides a summary of the Elixir business plan Gross Profit ($MM) Revenue ($MM) Adjusted EBITDA ($MM) Commentary $141 $91 $86 $91 $66 $122 $86 Actual Baseline RX Baseline RX Baseline RX FY23A FY24E FY25E FY26E Baseline Restructuring $409 $374 $367 $359 $331 $397 $358 Actual Baseline RX Baseline RX Baseline RX FY23A FY24E FY25E FY26E Baseline Restructuring $6,568 $4,502 $4,462 $3,089 $2,875 $3,322 $2,973 Actual Baseline RX Baseline RX Baseline RX FY23A FY24E FY25E FY26E Baseline Restructuring Growth EBITDA Margin Gross Margin • FY25E gross margin expansion driven by Part D Wind - Down and key business improvement initiatives, including client contract guarantees and exclusion optimization, partially offset by membership mix changes • EBITDA margin expansion in FY25E driven by the exit of Part D (~20bps), value assurance initiatives, Prime rebate guarantees growth and net membership mix changes • Part D Exit in FY24E results in ~$20MM EBITDA headwind, inclusive of exit and stranded costs 8.3 % 11.6 % 12.0 % 8.2 % 11.5 % 12.0 % 2.0 % 3.0 % 3.7 % 1.9 % 2.3 % 2.9 % (31 %) (31%) 8% (32%) (36%) 3% 2.1 % 6.2 %
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img031.jpg)
Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents III. Litigation
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img032.jpg)
32 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Litigation Overview • The pending investigations and litigation claims generally encompass five types of matters: • Opioids Litigation: along with its peers, Rite Aid is a defendant in the industry - wide litigation pending in state and federal courts • FTC Matters: the FTC is pursuing two sets of claims related to a prior business practice the Company has not engaged in for nearly three years and compliance with the 2010 FTC consent order • Elixir CIDs: the Company has received CIDs from the Department of Justice related to the Medicare Part D plan • U&C Pricing Litigation: Rite Aid is defending several challenges to its “usual and customary” pricing of drugs in its contracts with PBMs • The federal court recently granted Humana’s motion to confirm a $123MM arbitration award against Rite Aid; with post - judgment interest, the award is worth approximately $150MM • Schmuckley Litigation: a qui tam relator and California Department of Justice are pursuing False Claims Act claims regarding the Company’s alleged failure to comply with verification and documentation requirements in California’s Medicaid program for “Code 1” drugs • The Company also defends employment - related class actions and vendor litigation, among other types of claims in the ordinary course • There are two pending “stock drop” security class actions There are a number of pending investigations and litigation claims against Rite Aid Corporation and its subsidiaries
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img033.jpg)
Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents IV. Transaction Proposal
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img034.jpg)
34 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Transaction Overview The Company believes a restructuring supported by its stakeholders focused on implementing Rite Aid 2.0 may be value - maximizing Proposed Transaction Benefits Bolster Core Strengths ▪ Opportunity to focus on key geographies will increase strength of brand in those regions Address Operational Challenges ▪ Improved margin profile through footprint rationalization ▪ Elimination of dead rent through exit of unprofitable leases will reduce drag on FCF ▪ Increased leverage in lease renegotiations to improve retained store profile Reinforce Liquidity ▪ Will maintain access to sufficient liquidity, bolstered by asset sales from rationalization & reduced interest expense ▪ Reduce potential impacts from trade contraction by enhancing vendor confidence Reduce Leverage ▪ A right - sized balance sheet with a stronger credit profile Address Litigation ▪ Provides a forum to address current and future litigation in a comprehensive manner • A restructuring would allow Rite Aid to comprehensively address its operational and capital - structure related challenges and successfully implement the changes necessary to achieve Rite Aid 2.0 • An orderly process, entered into with support from key stakeholders, will help Rite Aid optimize business performance and preserve existing liquidity
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img035.jpg)
35 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Supplemental Liquidity Projections Detail Illustrative Petition Date Illustrative Emergence Date Approximate M/E: Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Adj. Consolidated EBITDA $29 ($16) $45 $44 $34 $3 $42 $42 $45 $48 $35 $25 (+/-) Elixir Funding (65) (176) 25 (3) (98) 91 - - - - - - (-) BK-Related Costs (36) (110) (88) (35) (28) (23) (23) (24) (17) (21) (22) (54) (-) Ordinary Course Professionals (2) (2) (9) (11) (9) (9) (7) (4) (4) (4) (4) (9) (+) Store Closure Net Proceeds 10 20 13 11 22 (2) - - - - - - (+/-) Change in Net Working Capital (114) (37) (57) 281 190 181 (35) 54 (9) 77 79 85 (-) Capex (17) (13) (15) (17) (11) (14) (15) (16) (16) (20) (16) (16) (+/-) Other (28) 26 (9) (38) 31 (5) (19) (11) (47) (22) 48 (26) UFCF ($223) ($307) ($94) $233 $131 $222 ($58) $41 ($48) $57 $121 $5 (-) Cash Interest (24) (15) (20) (27) (21) (18) (21) (17) (17) (21) (16) (9) FCF ($247) ($323) ($114) $206 $110 $203 ($79) $25 ($65) $36 $105 ($4) Cash & Liquidity Rollforward Beg. Retail Cash $98 $126 $100 $100 $100 $100 $350 $350 $350 $350 $350 $350 (+/-) FCF (247) (323) (114) 206 110 203 (79) 25 (65) 36 105 (4) (+/-) New Money DIP TL - - 200 - - - - - - - - (200) (-) 2L Paydown - - - - - - - - - - - (250) (+/-) ABL Draw / (Paydown) 275 297 (86) (206) (110) 47 79 (25) 65 (36) (105) 204 Ending Retail Cash $126 $100 $100 $100 $100 $350 $350 $350 $350 $350 $350 $100 (+) Elixir Cash 22 96 11 11 91 - - - - - - - (+) Availability 604 307 387 539 487 613 591 611 550 493 558 354 (-) Blocker / Reserves (258) (258) (250) (256) (260) (243) (248) (253) (237) (245) (249) - (-) 2L Reserve (escrow) - - - - - (250) (250) (250) (250) (250) (250) - Ending Liquidity $494 $245 $248 $395 $418 $469 $443 $458 $413 $348 $409 $454 Memo: ABL Balance $2,036 $2,333 $2,247 $2,041 $1,931 $1,677 $1,756 $1,731 $1,796 $1,760 $1,655 $1,859 Note: Liquidity defined as full cash balance at Retail and Elixir + ABL availability, net of covenant blockers / illustrative re serves.
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img036.jpg)
Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents V. Owned Real Estate Summary
![](https://www.sec.gov/Archives/edgar/data/84129/000110465923109413/tm2328505d1_ex99-2img037.jpg)
37 Privileged & Confidential | Draft - Subject to Material Change | Subject to FRE 408 and State Law Equivalents Rite Aid’s Owned Real Estate (9/5/2023) Implied Value Sensitivity • In developing their analysis, A&G leveraged its national network of brokers, with local market knowledge. The brokers also relied on store - level data, site visits, etc. to develop location - specific views of occupied market rent Cap Rate AS IS Occupied Implied Property Value AS IS Occupied 8.0% $275,006,388 9.0% 244,450,122 10.0% 220,005,110 11.0% 200,004,645 12.0% 183,337,592 13.0% 169,234,700 14.0% 157,146,507 Summary of Owned Stores Commentary State PA MI OH CA NY OR NH Other Total Number of Stores 32 13 12 11 7 9 6 9 99 Gross Sqft. 348,049 202,323 111,908 339,007 118,039 347,695 72,361 125,885 1,665,267 Avg. Sqft. Per Store 10,877 15,563 9,326 30,819 16,863 38,633 12,060 13,987 16,821 Source: Company management and A&G. Note: Of the 99 properties, 8 locations have a ground lease and in one scenario the ground is owned but the building is lease d; in addition to the 99 properties shown herein, RAD owns 4 properties that A&G didn’t ascribe value to (vacant land / parking lease / haven’t received market rent from broker ye t). Note: 9 of the 99 properties are occupied by closed Rite Aid stores.
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