Exhibit 10.1

EXECUTION VERSION

CONFIDENTIAL

 

Bank of America, N.A.

Merrill Lynch, Pierce, Fenner & Smith Incorporated

One Bryant Park

New York, New York 10036

 

Credit Suisse Loan Funding LLC

Credit Suisse AG

Eleven Madison Avenue

New York, New York

10010

 

Goldman Sachs Bank USA

200 West Street

New York, New York 10282

Morgan Stanley Senior Funding, Inc.

1585 Broadway

New York, New York 10036

 

Barclays

745 Seventh Avenue

New York, New York 10019

 

Deutsche Bank AG New York Branch

Deutsche Bank AG Cayman Islands Branch

Deutsche Bank Securities Inc.

60 Wall Street

New York, New York 10005

Royal Bank of Canada

200 Vesey Street

New York, New York 10281

 

Wells Fargo Bank, National Association

Wells Fargo Securities, LLC

550 South Tryon Street

Charlotte, NC 28202

 

PNC Bank, National Association

3 PNC Plaza

225 Fifth Avenue, 5th Floor
Pittsburgh, PA 15222

 

PNC Capital Markets LLC

The Tower at PNC

300 Fifth Avenue, 10th Floor

Pittsburgh, PA 15222

Suntrust Robinson Humphrey, Inc.

SunTrust Bank

3333 Peachtree Road Northeast

Atlanta, Georgia 30326

 

U.S. Bank National Association

800 Nicollet Mall

Minneapolis, MN 55402

 

MUFG

1221 Avenue of the

Americas

New York, New York

10020

Bank of Montreal

3 Times Square, 28th Floor

New York, New York 10036

 

Capital One, National Association

299 Park Avenue

New York, NY 10171

 

Fifth Third Bank

Fifth Third Center

38 Fountain Square Plaza

Cincinnati, OH 45263

TD Bank, N.A.

125 Park Avenue, 24th Floor

New York, New York 10017

   

May 8, 2018

Albertsons Companies, Inc.

250 Parkcenter Blvd.

Boise, Idaho 83706

 

  Re: Project Ranch Second Amended and Restated Commitment Letter

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Ladies and Gentlemen:

Reference is made to (i) that certain Commitment Letter, dated as of
February 18, 2018 (the “Original Commitment Letter”), by and among Bank of
America, N.A. (“Bank of America”), Merrill Lynch, Pierce, Fenner & Smith
Incorporated (or any of its designated affiliates, “MLPF&S”), Credit Suisse AG
(“CS” and, together with Credit Suisse Loan Funding LLC (“CSLF”), “Credit
Suisse”) and Credit Suisse Securities (USA) LLC (“CS Securities”), and Goldman
Sachs Bank USA (“GS Bank” and together with CS, CS Securities, Bank of America
and MLPF&S, the “Original Commitment Parties”) and Albertsons Companies, Inc.
(the “Company” or “you”) and (ii) that certain Amended and Restated Commitment
Letter (the “Restated Commitment Letter”), dated as of March 12, 2018, by and
among you, the Original Commitment Parties, Morgan Stanley Senior Funding, Inc.
(“MSSF”), Deutsche Bank Securities Inc. (“DBSI”), Deutsche Bank AG New York
Branch (“DBNY”), Deutsche Bank AG Cayman Islands Branch (“DBCI” and together
with DBSI and DBNY, “Deutsche Bank”), Barclays Bank PLC (“Barclays”), Royal Bank
of Canada (“RBC”), Wells Fargo Bank, National Association (“Wells Fargo Bank”),
Wells Fargo Securities, LLC (“Wells Fargo Securities” and together with Wells
Fargo Bank, “Wells Fargo”), PNC Bank, National Association (“PNC Bank”), PNC
Capital Markets LLC (“PNC Capital Markets” and together with PNC Bank, “PNC”),
Suntrust Robinson Humphrey, Inc. (“STRH”), SunTrust Bank (“SunTrust Bank” and
together with STRH, “SunTrust”), U.S. Bank National Association (“U.S. Bank”),
MUFG (as defined below), Bank of Montreal (“Bank of Montreal”), Fifth Third Bank
(“Fifth Third”), TD Bank, N.A. (“TD Bank”) and Capital One, National Association
(“Capital One” and, together with the Original Commitment Parties, CSLF, MSSF,
Deutsche Bank, Barclays, RBC, Wells Fargo, PNC, SunTrust, U.S. Bank, MUFG, Bank
of Montreal, Fifth Third and TD Bank, the “Commitment Parties”, “we” or “us”).
You have advised us that you intend to acquire, directly or indirectly (the
“Acquisition”), Rite-Aid Corporation (the “Target”) pursuant to an Agreement and
Plan of Merger, dated as of February 18, 2018, by and among the Company, Ranch
Acquisition II, LLC, a newly formed, wholly owned subsidiary of the Company,
Ranch Acquisition Corp., a newly formed, wholly owned subsidiary of Ranch
Acquisition II, LLC, and the Target (the “Acquisition Agreement”), and to assume
associated liabilities, to refinance certain existing indebtedness, and to
consummate the other transactions (together with the Acquisition and certain
related transactions, the “Transactions”) described in the Transaction
Description attached hereto as Exhibit A (the “Transaction Description”). For
purposes of this Commitment Letter, “MUFG” means MUFG Bank Ltd. (formerly known
as The Bank of Tokyo-Mitsubishi UFJ, Ltd.), MUFG Union Bank, N.A., MUFG
Securities Americas Inc. and/or any of their affiliates as MUFG shall determine
to be appropriate to provide the services contemplated herein. Any capitalized
term used but not defined herein shall have the meaning assigned to it in the
Transaction Description, each Summary of Principal Terms and Conditions attached
hereto as Exhibit B-1, Exhibit B-2 and Exhibit C (collectively, the “Term
Sheets”) and/or the Conditions Annex attached hereto as Exhibit D (the
“Conditions Annex”). This second amended and restated commitment letter, the
Transaction Description, the Term Sheets and the Conditions Annex are
collectively referenced as the “Commitment Letter”. This Commitment Letter
amends, restates and supersedes in all respects the Restated Commitment Letter.

1. Commitments.

Each of the Commitment Parties listed on Schedule I (in such capacity, together
with their respective affiliates of similar creditworthiness, each an “Initial
Lender” and collectively, the “Initial Lenders”) is pleased to advise you of its
several and not joint commitment to provide to the Borrowers (i) the amount of
the Best Efforts ABL Revolving Facility (as defined in Exhibit A) set forth
opposite such Initial Lender’s name on Schedule I, (ii) if the Best Efforts ABL
Facility (as defined in Exhibit A) does not become effective on the Closing Date
(as defined in Exhibit A), the amount of Incremental ABL

 

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Commitments (as defined below) set forth opposite such Initial Lender’s name on
Schedule I, (iii) the amount of the ABL FILO Facility set forth opposite such
Initial Lender’s name on Schedule I (which shall be (A) subject to the “flex
provisions” of the Fee Letter in the form of the ABL FILO Facility contemplated
by Exhibit B-1 if the Best Efforts ABL Facility is provided on the Closing Date
and (B) if clause (A) does not apply, in the form of the ABL FILO Facility
contemplated by Exhibit B-2) and (iv) the amount of the Senior Secured Bridge
Facility (as defined in Exhibit C) set forth opposite such Initial Lender’s name
on Schedule I, in each case, upon the terms and subject to the conditions
expressly set forth in this Commitment Letter.    It is expressly understood and
agreed that (i) the amount of the commitments in respect of the Best Efforts ABL
Revolving Facility that are in excess of the aggregate commitments of the
Initial Lenders in respect of the Best Efforts ABL Revolving Facility as set
forth on Schedule I (such amount of commitments, the “Excess Best Efforts ABL
Revolving Commitments”) are not being provided on an underwritten basis by any
Commitment Party or any of its affiliates (each a “Commitment Party Entity”) and
(ii) no Commitment Party Entity shall have any obligation to provide any portion
of the Excess Best Efforts ABL Revolving Commitments or to ensure the successful
syndication of the Excess Best Efforts ABL Revolving Commitments and any such
obligation would only arise pursuant to a separate written agreement between
such Commitment Party Entity and you.

Each commitment by an Initial Lender shall be several and not joint with the
commitments of each other Initial Lender. For purposes of this Commitment
Letter, the “Incremental ABL Commitments” means an aggregate of $1,000,000,000
of Additional Commitments (as defined in the Existing ABL Facility) having terms
and conditions identical to the Commitments under the Existing ABL Facility in
effect on the date hereof, which will be documented pursuant to an Increase
Joinder (as defined in the Existing ABL Facility) (the “Incremental ABL
Facilities Documentation”) consistent with the foregoing and which shall provide
that, subject to the conditions set forth in paragraph 13 of the Conditions
Annex, up to $1,700,000,000 of loans under the Existing ABL Facility may be
borrowed to finance a portion of the Refinancing and pay fees and expenses in
connection with the Transactions (plus additional amounts to finance (i) working
capital needs of the Company and its subsidiaries, (ii) upfront fees or original
issue discount pursuant to the “flex” provisions of the Fee Letter or incurred
in connection with the Senior Secured Notes, (iii) Merger Consideration and
(iv) the refinancing of indebtedness of the Target and its subsidiaries
following the date of the Acquisition Agreement as permitted by the Acquisition
Agreement) (the “Incremental ABL Documentation Principles”).

It is agreed that (i) MLPF&S, Credit Suisse, GS Bank, MSSF, Barclays, DBSI, RBC,
Wells Fargo Bank, PNC Capital Markets, STRH, U.S. Bank, MUFG, Bank of Montreal,
Capital One, Fifth Third and TD Bank will act as joint lead bookrunners and
joint lead arrangers for each of the Incremental ABL Commitments and the Best
Efforts ABL Revolving Facility, (ii) each of MLPF&S, Credit Suisse, GS Bank
MSSF, Barclays, DBSI, RBC, Wells Fargo Bank (solely with respect to the ABL FILO
Facility), Wells Fargo Securities (solely with respect to the Senior Secured
Bridge Facility) and MUFG will act as joint lead bookrunners and joint lead
arrangers for the ABL FILO Facility and the Senior Secured Bridge Facility and
(iii) each of PNC Capital Markets, STRH and U.S. Bank will act as co-managers
for the ABL FILO Facility and the Senior Secured Bridge Facility (in such
capacity, each an “Arranger” and collectively, the “Arrangers”). It is further
agreed that MLPF&S will appear on the top left cover page of any marketing
materials for any marketing materials for each of the Credit Facilities and the
names of the other applicable Arrangers will appear immediately to the right
thereof in the applicable order set forth above, and such persons will hold
roles and responsibilities conventionally understood to be associated with such
name placement. Except as otherwise provided in the Term Sheets, it is also
agreed that Bank of America will act as the sole and exclusive administrative
agent (in such capacity, the “Best Efforts ABL Administrative Agent”) for the
Best Efforts ABL Facility, Bank of America will act as the sole and exclusive
administrative agent (in such capacity, the “ABL FILO Administrative Agent”) for
the ABL FILO Facility, and Bank of America will act as the sole and exclusive
administrative agent (in such capacity, the “Bridge Administrative Agent” and,
together with the ABL Administrative Agent and the ABL

 

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Facility Administrative Agent, the “Administrative Agents”) for the Senior
Secured Bridge Facility. You agree that no other agents, co-agents or arrangers
will be appointed, no other titles will be awarded and no compensation (other
than that expressly contemplated by this Commitment Letter and the Fee Letter
referred to below) will be paid to any Lender in connection with the Credit
Facilities in order to obtain its commitments unless you and the Original
Commitment Parties shall so agree.

2. Conditions to Commitments. Notwithstanding anything in this Commitment
Letter, the second amended and restated fee letter, dated as of the date hereof
between you and us (the “Fee Letter”), the Facilities Documentation or any other
letter agreement or other undertaking concerning the financing of the
transactions contemplated hereby to the contrary, (i) the commitments of the
Initial Lenders hereunder and the undertakings of the Arrangers hereunder are
subject only to the conditions set forth in the Conditions Annex, and upon
satisfaction (or waiver by us) of such conditions, the initial funding of the
applicable Credit Facilities shall occur (except, in the case of the Senior
Secured Bridge Facility, to the extent of the amount of the gross proceeds of
the Senior Secured Notes or other “Securities”(as defined in the Fee Letter)
issued in lieu of the Senior Secured Bridge Facility or a portion thereof); it
being understood that there are no conditions (implied or otherwise) to the
commitments hereunder in respect of the initial fundings contemplated hereby,
including compliance with the terms of this Commitment Letter, the Fee Letter or
the Facilities Documentation, other than those expressly set forth in the
Conditions Annex, (ii) the only representations and warranties the accuracy of
which shall be a condition to availability of the Credit Facilities on the
Closing Date shall be (A) such of the representations and warranties with
respect to the Target in the Acquisition Agreement as are material to the
interests of the Lenders, but only to the extent that you have (or your
applicable affiliate has) the right to terminate its obligations under the
Acquisition Agreement or to decline to consummate the Acquisition as a result of
a breach of such representations and warranties in the Acquisition Agreement (to
such extent, the “Specified Acquisition Agreement Representations”) and (B) the
Specified Representations (as defined below) in the Facilities Documentation and
(iii) the terms of the Facilities Documentation shall be in a form such that
they do not impair availability of the Credit Facilities on the Closing Date if
the conditions expressly set forth in the Conditions Annex are satisfied (it
being understood that, to the extent any collateral (including the creation or
perfection of any security interest) is not or cannot be provided and/or
perfected on the Closing Date (other than (x) to the extent that a lien on such
collateral may under applicable law be perfected upon closing by the filing of
financing statements under the Uniform Commercial Code, (y) delivery of the
certificated equity interests, if any, of the Target and its wholly owned
subsidiaries (to the extent required by the Term Sheets); provided that any such
certificated equity securities of wholly-owned subsidiaries will only be
required to be delivered on the Closing Date to the extent that it is in your
possession, and (z) the execution and delivery by each Loan Party of customary
personal property security agreements (including, without limitation,
intellectual property security agreements) consistent with the Documentation
Principles) after your use of commercially reasonable efforts to do so, then the
provision of any such collateral shall not constitute a condition precedent to
the availability of the Credit Facilities on the Closing Date but shall be
required to be provided within 90 days (or such longer period as the applicable
Administrative Agent may agree in its reasonable judgment) after the Closing
Date pursuant to arrangements to be mutually agreed. For purposes hereof,
“Specified Representations” means the representations and warranties set forth
in the Term Sheets relating to the corporate or other organizational existence
of the Loan Parties, organizational power and authority (as they relate to due
authorization, execution, delivery and performance of the Facilities
Documentation), no violation of charter documents (as it relates to the
execution, performance and delivery of the Facilities Documentation), due
authorization, execution and delivery and enforceability, in each case as they
relate to the entering into and performance of the relevant Facilities
Documentation by the Loan Parties, solvency as of the Closing Date (after giving
effect to the Transactions) of the Company and its subsidiaries on a
consolidated basis (such representation and warranty to be consistent with the
solvency certificate in the form set forth in Annex I attached to the Conditions
Annex), Federal Reserve margin regulations, the Investment Company Act, PATRIOT
ACT and the use of proceeds not violating FCPA or OFAC, and creation, validity
and perfection of security interests,

 

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as applicable, in the collateral to be granted on the Closing Date (subject to
the exceptions set forth in this paragraph and the Term Sheets and permitted
liens as set forth in the Facilities Documentation). This paragraph, and the
provisions contained herein, shall be referred to as the “Certain Funds
Provision”.

3. [Reserved].

4. Syndication.

(a) We intend to syndicate each of the Credit Facilities to a group of lenders
identified by the Arrangers in consultation with you (together with the Initial
Lenders, the “Lenders”). In addition, notwithstanding the foregoing, the
Arrangers will not syndicate to those banks, financial institutions and other
institutional lenders and investors (i) that have been separately identified in
writing by you to us prior to the date of the Original Commitment Letter,
(ii) those persons who are competitors of the Company, the Target and their
respective subsidiaries that are separately identified in writing by you to us
from time to time (which list of competitors may be supplemented by you after
the Closing Date by means of a written notice to each Administrative Agent), and
(iii) in the case of each of clauses (i) and (ii), any of their affiliates that
are either (a) identified in writing by you from time to time or (b) readily
identifiable on the basis of such affiliate’s name (clauses (i), (ii) and
(iii) above, collectively “Disqualified Lenders”); provided that designations of
Disqualified Lenders may not apply retroactively to disqualify any entity that
has previously acquired an assignment or participation in any Facility.
Notwithstanding any other provision of this Commitment Letter to the contrary,
other than assignments among Goldman Sachs Bank USA and Goldman Sachs Lending
Partners LLC, (x) no Initial Lender shall be relieved or novated from its
obligations hereunder in connection with any syndication or assignment until
after the funding of the initial loans on the Closing Date, (y) no such
assignment or novation shall become effective with respect to any portion of any
Initial Lender’s commitment in respect of any of the Credit Facilities until the
initial funding of the Credit Facilities on the Closing Date, and (z) unless you
otherwise agree in writing, each Initial Lender shall retain exclusive control
over all rights and obligations with respect to its commitments, including all
rights with respect to consents, modifications and amendments, until the funding
of the initial loans on the Closing Date; provided that GS Bank may, without
notice to you, assign its rights and obligations under this Commitment Letter
and the Fee Letter to Goldman Sachs Lending Partners LLC.

(b) The Arrangers may decide to commence syndication efforts at any time after
the date of your acceptance of this Commitment Letter, and from such date until
the earlier to occur of (a) a Successful Syndication (as defined in the Fee
Letter) of the Credit Facilities and (b) the date that is 30 days after the
Closing Date (such period, the “Syndication Period”), you agree to assist us in
achieving a Successful Syndication. To assist us in our syndication efforts, you
agree, upon our reasonable request, to (i) provide, and, to the extent possible
using your commercially reasonable efforts, cause the Target to provide, to the
Arrangers all information reasonably requested and deemed reasonably necessary
or advisable by the Arrangers to complete a Successful Syndication (it being
understood, for the avoidance of doubt, that the only financial statements
required to be provided to the Arrangers in connection with the syndication
shall be those required under paragraph 5, as applicable, of the Conditions
Annex), (ii) assist, and to the extent possible using your commercially
reasonable efforts, cause the Target to assist, the Arrangers in the preparation
of one or more confidential information memoranda (the “Confidential Information
Memorandum”) and other customary marketing materials to be used in connection
with the syndication, (iii) make available at a reasonable number of meetings of
prospective Lenders your representatives, and, to the extent possible using your
commercially reasonable efforts, representatives of the Target, in each case, on
reasonable prior notice and at reasonable times and places to be mutually
agreed, (iv) use your commercially reasonable efforts to obtain ratings for the
Senior Secured Bridge Facility, Senior Secured Notes and ABL FILO Facility and
corporate or corporate family ratings, as applicable, for the Company from S&P
(as defined below) and Moody’s (as defined below) and

 

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(v) ensure that, at all times during the Syndication Period, no competing issues
of commercial bank facilities or debt securities in which any Loan Party is a
primary obligor are announced, arranged, syndicated or issued by the Company or
any of its subsidiaries, without our prior written consent (which consent shall
not be unreasonably withheld, conditioned or delayed) if such issuance would
have a material adverse effect on the syndication of the Credit Facilities;
provided that such restriction shall not apply to (A) the Transactions or
(B) deferred purchase price obligations, capital leases, purchase money
financing of equipment, borrowings under the Existing ABL Facility or other
ordinary course indebtedness of the Company, the Target or any of your or its
respective subsidiaries, intercompany indebtedness, and indebtedness permitted
under the Acquisition Agreement and other financings permitted under the
Company’s existing debt facilities in the ordinary course of business, provided
that the Company may not (i) incur any indebtedness the proceeds of which will
be used for any restricted payments, or to finance any acquisitions that, in the
aggregate, involve consideration of more than $250 million, and (ii) enter into
and consummate any sale and leaseback transactions in an aggregate amount that
exceeds $250 million unless the proceeds thereof are used to reduce loans or
commitments under the Senior Secured Bridge Facility or the Term Loan Facility.
Notwithstanding the foregoing, it is understood and agreed that the commencement
and completion of any syndication of the Credit Facilities (and your
undertakings with respect thereto set forth herein) shall not be a condition
precedent to the commitments of the Initial Lenders hereunder or the
undertakings of the Arrangers hereunder. You acknowledge and agree that you will
be responsible for the contents of all Information (as defined below) provided
in connection with our syndication efforts and that we may rely on the accuracy
thereof in preparing any Confidential Information Memorandum or other
Informational Materials (as defined below).

(c) The Arrangers and/or one or more of their respective affiliates will
exclusively manage all aspects of the syndication of the Credit Facilities (in
consultation with you), including decisions as to the selection and number of
potential Lenders to be approached, when they will be approached, whose
commitments will be accepted, when they will participate and the final
allocations of the commitments and any related fees among the Lenders, and the
Arrangers will exclusively perform all functions and exercise all authority as
is customarily performed and exercised in such capacities. Except as otherwise
agreed by you, neither you nor any of your affiliates shall be obligated to pay
any fees in connection with the syndication of the Credit Facilities other than
those fees expressly set forth in the Fee Letter and the Term Sheets.

5. Information.

(a) You hereby represent and warrant that (i) to the best of your knowledge with
respect to the Target and its subsidiaries and otherwise without such
qualification with respect to assets already owned by you, all written
information and written data (other than (A) the Projections, as defined below,
(B) matters relating to the forward looking portion of financial models and
(C) projections and information of a general economic or industry-specific
nature) concerning the Company and its subsidiaries or the Target and its
subsidiaries that have been or will be supplied to the Lenders by you or any of
your representatives on your behalf and that are used in connection with the
financing contemplated by this Commitment Letter (the “Information”), taken as a
whole, are, or will be when furnished, complete and correct in all material
respects as of the date furnished and do not, or will not when furnished,
considered as a whole, contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which such
statements are made (after giving effect to all supplements and updates thereto
from time to time), and (ii) all financial projections concerning the Company
and its subsidiaries or the Target and its subsidiaries that have been or will
be made available to the Lenders by you or any of your representatives on your
behalf and that are used in connection with the financing contemplated by this
Commitment Letter (the “Projections”) have been or will be (and with respect to
the

 

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Target and its subsidiaries, to the knowledge of the Company) prepared in good
faith based upon assumptions believed by the preparer thereof in good faith to
be reasonable at the time furnished (it being understood that such Projections
are not to be viewed as facts, are by their nature inherently uncertain, and are
subject to significant contingencies many of which are beyond your control, that
no assurance can be given that any particular Projection will be realized, that
actual results may differ and that such differences may be material). If you
become aware that any of the representations or warranties in the preceding
sentence would be incorrect in any materially adverse manner prior to the end of
the Syndication Period, if the Information and Projections were being furnished,
and all such representations were being made, at such time, you will notify us
and will (i) with respect to Information or Projections relating to you or your
subsidiaries, promptly supplement the Information and the Projections and
(ii) with respect to Information or Projections relating to the Target and its
subsidiaries, use your commercially reasonable efforts to cause the Target to
supplement the Information and the Projections from time to time until the later
of the end of the Syndication Period and the Closing Date such that the
representations in the preceding sentence remain true under those circumstances;
provided, that your obligation to update the Information and Projections, shall
not be a condition to the availability of the Credit Facilities on the Closing
Date. In syndicating the Credit Facilities, we will be entitled to use and rely
on the Information and the Projections without responsibility for independent
review or verification thereof.

(b) You hereby acknowledge and agree that the Arrangers may make available the
Information, Projections and other marketing materials and presentations,
including the Confidential Information Memorandum (collectively, the
“Informational Material”), to the potential Lenders by posting the Informational
Materials on IntraLinks, Syndtrak or any similar platform (the “Platform”) or by
other similar electronic means. You hereby further acknowledge and agree that
(i) certain potential Lenders (the “Public Lenders”) may not wish to receive
material non-public information with respect to the Company, the Target or your
and its respective subsidiaries or any of your or their respective securities
and (ii) you will take commercially reasonable steps to assist, and cause your
affiliates, advisors, and to the extent possible using your commercially
reasonable efforts, the Target to assist, the Arrangers in the preparation of
Informational Materials to be used in connection with the syndication of the
Credit Facilities to Public Lenders, which will only include data and materials
that either (A) are publicly available, (B) constitute information concerning
the Company or its subsidiaries or their securities that would be publicly
available if the Company or such subsidiary (as the case may be) were required
to be subject to the reporting requirements of Section 13(a) or Section 15 (d)
of the Securities Exchange Act of 1934 as amended from time to time, or (C) are
not material information (although it may be sensitive or proprietary) with
respect to the Company, the Target or their respective subsidiaries or any of
their respective securities for purposes of United States federal and state
securities laws (such Informational Materials, collectively, “Public
Information”). You further hereby acknowledge and agree that (i) Informational
Material that is to be made available to Public Lenders will be clearly and
conspicuously marked “PUBLIC” which, at a minimum, will mean that the word
“PUBLIC” will appear prominently on the first page thereof, (ii) by marking
Informational Material “PUBLIC,” you will be deemed to have authorized the
Arrangers and the proposed Lenders to treat such Informational Material as not
containing any information with respect to the Company, the Target or any of
their respective subsidiaries or any of their respective securities that would
not meet the criteria set forth in clauses (A), (B), and (C) of clause (ii) of
the preceding sentence; (iii) all Informational Material marked “PUBLIC” is
permitted to be made available through a portion of the Platform designated
“Public Lender,” and (iv) the Arrangers will be entitled to treat any
Informational Material that is not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Lender.”

 

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6. Indemnification.

(a) You hereby agree to indemnify and hold harmless each Arranger and each
Initial Lender and each of their respective affiliates, directors, officers,
employees, partners, representatives and agents (each, an “Indemnified Party”)
from and against any and all actions, suits, losses, claims, damages and
liabilities of any kind or nature (regardless of whether any such Indemnified
Party is a party thereto and whether or not any investigation, claim, action,
suit or proceeding is brought by the Company or the Target or any other person),
joint or several, to which any such Indemnified Party becomes subject, related
to or arising out of (i) the Transactions, the Original Commitment Letter, the
Restated Commitment Letter, the Original Fee Letter (as defined in the Fee
Letter) and the Restated Fee Letter (as defined in the Fee Letter), (ii) the use
of Informational Materials in connection with any syndication as described
above, and (iii) the use or the contemplated use of the proceeds of the Credit
Facilities, and to reimburse any Indemnified Party for all reasonable
out-of-pocket expenses (collectively, “Losses”) within thirty (30) days after
its demand therefor (accompanied by reasonably detailed supporting
documentation) as they are incurred in connection with the investigation of,
preparation for, or defense of any pending or threatened claim or any action or
proceeding arising therefrom. Notwithstanding anything to the contrary contained
herein or in the Term Sheets, you shall in no event be required to indemnify or
reimburse any Indemnified Party for any Losses (A) to the extent resulting
primarily from (1) the gross negligence, bad faith or willful misconduct of, or
material breach of this Commitment Letter, the Fee Letter or the Facilities
Documentation by, such Indemnified Party (or any of its controlled affiliates
and controlling persons and its and their respective officers, directors,
employees, agents, advisors and other representatives of such Indemnified Party
(collectively, “related persons”)) as determined by a final non-appealable
judgment of a court of competent jurisdiction, or (2) disputes solely among
Indemnified Parties (or their related persons) that do not involve or arise from
an act or omission by you or your affiliate or any claims against any
Indemnified Party in its capacity or in fulfilling its role as an agent or
arranger or (B) in respect of Losses consisting of legal fees or expenses, other
than the reasonable invoiced fees, expenses and charges of one primary counsel
(and, to the extent deemed reasonably necessary or advisable by the Arrangers,
one local counsel in each material relevant jurisdiction) for all Indemnified
Parties taken as a whole, and solely in the case of a conflict of interest, one
additional primary counsel (and, to the extent deemed reasonably necessary or
advisable by the Arrangers, one local counsel in each material relevant
jurisdiction) to the affected Indemnified Parties, taken as a whole.

(b) If the Closing Date occurs, you hereby agree to reimburse the Arrangers for
all reasonable and documented out-of-pocket expenses (including due diligence
expenses, syndication expenses, travel expenses, collateral field exams, audits
and appraisals and expenses relating to the Original Commitment Letter and the
Restated Commitment Letter) (collectively, the “Expenses”) on the Closing Date
(so long as any invoices therefor (accompanied by reasonably-detailed supporting
documentation therefor) are delivered to you at least two business days prior to
the Closing Date) or promptly following delivery of an invoice therefor (in the
case of any invoices that are delivered later than two business days prior to
the Closing Date). In addition, it is understood and agreed that you shall not
be required to reimburse any of the Expenses in respect of legal fees and
expenses, other than the reasonable and documented out-of-pocket fees, charges
and disbursements of one primary counsel to the Indemnified Parties (and, to the
extent deemed reasonably necessary or advisable by the Arrangers, one local
counsel in each material relevant jurisdiction) for all Indemnified Parties
taken as a whole, incurred in connection with the Credit Facilities and any
related documentation (including this Commitment Letter, the Fee Letter and the
Facilities Documentation). For the avoidance of doubt, if any invoices
documenting Expenses are not delivered at least two business days prior to the
Closing Date, then you agree to reimburse the Arrangers for such Expenses
promptly following the Closing Date. You acknowledge that we may receive a
benefit, including without limitation, a discount, credit or other
accommodation, from any of such counsel based on the fees such counsel may
receive on account of their relationship with us including, without limitation,
fees paid pursuant hereto.

 

8

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(c) Notwithstanding any other provision hereof, no party hereto shall be liable
for any indirect, special, punitive or consequential damages that may be alleged
as a result of the Original Commitment Letter, the Restated Commitment Letter,
this Commitment Letter, the Original Fee Letter, the Restated Fee Letter, the
Fee Letter or any element of the Transactions; provided that nothing contained
in this sentence will limit your indemnity or reimbursement obligations to the
extent such indirect, special, punitive or consequential damages are included in
any third party claim in connection with which such Indemnified Party is
entitled to indemnification hereunder. No Indemnified Party seeking
indemnification or reimbursement under this Commitment Letter will, without your
prior written consent (not to be unreasonably withheld, delayed or conditioned),
settle, compromise, consent to the entry of any judgment in or otherwise seek to
terminate any claim, litigation, action, investigation or proceeding referred to
herein, provided that you agree to indemnify and hold harmless each Indemnified
Party in connection with any settlement made with your written consent or if
there is a final and non-appealable judgment of a court of competent
jurisdiction against an Indemnified Party in connection with any claim,
litigation, action, investigation or proceeding referred to herein. You
acknowledge that information and documents relating to the Credit Facilities may
be transmitted through SyndTrak, Intralinks, the Internet, e-mail or similar
electronic transmission systems, and that we shall not be liable for any damages
arising from the unauthorized use by others of information or documents
transmitted in such manner except to the extent such damages are found in a
final, non-appealable judgment of a court of competent jurisdiction to have
resulted primarily from our willful misconduct or gross negligence (it being
understood that actions consistent with industry practice in the leveraged
lending market shall not constitute gross negligence or willful misconduct).
Upon the execution and delivery of the definitive Facilities Documentation, the
provisions thereof relating to indemnification and reimbursement shall supersede
the indemnification and reimbursement provisions hereof, and you shall thereupon
be released from such indemnification and reimbursement provisions hereof.
Notwithstanding the foregoing, each Indemnified Party (and its related persons)
shall be obligated to refund and return promptly any and all amounts paid by you
under this paragraph to such Indemnified Party (or such related person) for any
such fees, expenses or damages to the extent such Indemnified Party (or such
related person) is not entitled to payment of such amounts in accordance with
the terms hereof, as determined by a final non-appealable judgment of a court of
competent jurisdiction.

(d) The limitations described in this Section 6 are hereinafter referred to as
the “Expense and Indemnification Limitations.”

7. Confidentiality. (a) You agree that you will not disclose, directly or
indirectly, this Commitment Letter, the Original Commitment Letter, the Restated
Commitment Letter, the Original Fee Letter, the Restated Fee Letter, the Fee
Letter or the contents of any of the foregoing, to any person or entity without
the prior written approval of the Commitment Parties (such approval not to be
unreasonably withheld or delayed), except (x) to the indirect equity holders
(including potential equity investors) of the Company and to your and their
respective officers, directors, agents, employees, attorneys, accountants,
advisors, controlling persons or equity holders on a confidential and
need-to-know basis, and who are advised of the confidential nature of such
information and are or have been advised of their obligation to keep information
of this type confidential, (y) if the Commitment Parties consent in writing to
such proposed disclosure or (z) pursuant to the order of any court or
administrative agency in any pending legal, judicial or administrative
proceeding, or otherwise as required by applicable law or compulsory legal
process or to the extent requested or required by governmental and/or regulatory
authorities (in which case, you shall, to the extent permitted by law, notify us
promptly thereof, in advance); provided that (i) you may disclose this
Commitment Letter (and, so long as the amount of the fees payable to the
Arrangers and the Initial Lenders and the rates and amounts included in the flex
provisions are redacted in a form satisfactory to the Arrangers and the Initial
Lenders, the Fee Letter) and the contents hereof to the Target and its
subsidiaries and their respective officers, directors, agents, employees,
attorneys, accountants, advisors, controlling persons or equity holders, on a
confidential basis, and who are informed of the

 

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confidential nature of such information and are or have been advised of their
obligation to keep information of this type confidential, (ii) you may disclose
this Commitment Letter and its contents (but not the Fee Letter or its contents
except as set forth in clause (vi) below) in any syndication or other marketing
materials in connection with the Credit Facilities, in any prospectus, private
placement or offering memorandum or offering circular in connection with the
offering and sale of the Senior Secured Notes or other Securities, in any
registration statement, in any proxy materials for the Target’s shareholders,
and in any public filing relating to the Transactions, (iii) you may disclose
the Term Sheets and the contents thereof to rating agencies in connection with
obtaining ratings in connection with the Transactions, (iv) you may disclose the
Original Commitment Letter and the Original Fee Letter as provided in the
Original Commitment Letter and you may disclose the Restated Commitment Letter
and the Restated Fee Letter as provided in the Restated Commitment Letter,
(v) you may disclose the Commitment and/or the Fee Letter to the extent the
contents of the Commitment Letter and/or Fee Letter becomes publicly available
other than by reason of disclosure by you in breach of this Commitment Letter
and/or Fee Letter, (vi) you may disclose the Fee Letter and the contents thereof
or this Commitment Letter and the contents thereof in connection with the
protection and enforcement of your rights with respect to this Commitment Letter
or the Fee Letter and (vii) you may disclose the aggregate fee amounts contained
in the Fee Letter as part of Projections, pro forma information or a generic
disclosure of aggregate sources and uses related to fee amounts related to the
Transactions to the extent customary or required in offering and marketing
materials or in any public filing. In addition, we may disclose the existence of
the facilities and the information about the facilities to market data
collectors, similar services providers to the lending industry, and service
providers to us in connection with the administration and management of the
facilities.

(b) Until the expiration of the Syndication Period, you agree to consult with us
prior to your making of any public announcement or public filing relating to the
Credit Facilities or to us in connection therewith, except to the extent such
announcement or filing is specified by applicable law or regulation or if such
consultation is not permitted by applicable legal, regulatory, administrative or
judicial process. We agree, on behalf of each of ourselves and our subsidiaries
and affiliates, that we will not, and will cause our respective subsidiaries and
affiliates to not, prior to the Closing Date, make any public filing or other
public disclosure in which reference is made to the Company, the Target or any
of your or its respective subsidiaries, the Transactions or the commitments
contained herein, without your prior consent, except as may be required by
applicable legal, regulatory, administrative or judicial process requirements.
In consultation with the Company, an Arranger may place advertisements in
financial and other newspapers and periodicals or on a home page or similar
place for dissemination of information on the Internet or World Wide Web as it
may choose, and circulate similar promotional materials, after closing of the
Transactions in the form of a “tombstone” or otherwise describing the names of
the Company, the Target, and their respective affiliates (or any of them), and
the type and closing date of the Credit Facilities, all at the expense of such
Arranger.

(c) Each of the Arrangers and the Initial Lenders shall use all confidential
information provided to it by or on behalf of you hereunder solely for the
purposes of providing the services that are the subject of this Commitment
Letter and otherwise in connection with the Transactions and shall treat
confidentially all such information; provided, however, that nothing herein
shall prevent any Arranger or any Initial Lender from disclosing any such
information or the terms and contents of this Commitment Letter and the Fee
Letter (i) to Moody’s Investors Service, Inc. (“Moody’s”) and S&P Global
Ratings, a subsidiary of the Standard and Poor’s Financial Services LLC (“S&P”),
and other rating agencies as determined by the Arrangers; provided that such
information is supplied only on a customary basis after consultation with you,
(ii) to any Lenders or participants or prospective Lenders or participants, in
each case other than Disqualified Lenders, (iii) to the extent required by the
order of any court or administrative agency in any pending legal, judicial or
administrative proceeding or otherwise as required by applicable law or
regulation (in which case, such person shall, to the extent permitted by law,
notify you promptly thereof, in advance), (iv) upon the request or demand of any
regulatory authority or self-

 

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regulatory body having jurisdiction or oversight over such person or its
affiliates (in which case, to the extent permitted by law, such person shall,
except with respect to any audit or examination conducted by bank accountants or
any governmental bank regulatory authority exercising examination or regulatory
authority, promptly notify you in advance), (v) to their affiliates and their
and their affiliates’ respective employees, directors, legal counsel,
independent auditors, professionals and other experts or agents of such person
on a “need to know” basis and who are informed of the confidential nature of
such information and are or have been advised of their obligation to keep
information of this type confidential, (vi) to the extent any such information
becomes publicly available other than by reason of disclosure by such person in
breach of this Commitment Letter or is received by such person from a third
party that is not to such person’s knowledge subject to confidentiality
obligations to you or the Target or any of your or its respective affiliates,
(vii) with your prior written consent, (vii) to the extent independently
developed by an Arranger or Initial Lender, (viii) in protecting and enforcing
the rights of an Arranger or an Initial Lender with respect to this Commitment
Letter or the Fee Letter including for the purposes of establishing a “due
diligence” defense with respect to the Transactions, and (ix) on a confidential
basis to any actual or prospective direct or indirect contractual counterparty
to any swap or derivative transaction relating to the Company or any of its
respective subsidiaries; provided that the disclosure of any such information to
any Lenders or prospective Lenders or participants or prospective participants
or swap or derivative counterparty referred to above shall be made subject to
the acknowledgment and acceptance by such Lender or prospective Lender or
participant or prospective participant or swap or derivative counterparties that
such information is being disseminated on a confidential basis (on substantially
the terms set forth in this paragraph or as is otherwise reasonably acceptable
to you). It is expressly understood that the obligations of each Lender are
several and not joint and that no Lender shall be liable to the extent any
confidentiality restrictions are violated by any other Lender. Each Lender shall
be liable for any violation of the confidentiality restrictions set forth herein
by any of its employees or directors. The obligations under this paragraph of
each Arranger and Initial Lender and each of its affiliates, if any, shall
terminate automatically and be superseded by the confidentiality provisions in
the Facilities Documentation to which such Arranger or Initial Lender is a party
upon the execution and delivery thereof and in any event shall terminate on the
second anniversary of the date of the Original Commitment Letter.

8. PATRIOT Act Notification. Each of the Commitment Parties hereby notifies you
that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L.
107-56 (signed into law October 26, 2001) (the “Patriot Act”), it is required to
obtain, verify and record information that identifies the Company, the Target
and each other Borrower or Guarantor (as defined in the Term Sheets) in
accordance with the Patriot Act. This notice is given in accordance with the
requirements of the Patriot Act and is effective for each Commitment Party and
each Lender. You hereby acknowledge and agree that the Arrangers shall be
permitted to share any or all such information with the Lenders.

9. Other Services. You acknowledge that the Commitment Parties and their
respective affiliates (the term “Commitment Parties” as used in this paragraph
being understood to include such affiliates) may be providing debt financing,
equity capital or other services (including financial advisory services to other
companies with which you or your affiliates may have conflicting interests
regarding the Transactions and otherwise and that each Commitment Party may act
as it deems appropriate in acting in such capacities. In order to best service
all parties, each Commitment Party agrees to maintain confidentiality walls in
accordance with their internal policies and standard industry practice. You
further acknowledge and agree that (a) no fiduciary, advisory or agency
relationship between you and the Commitment Parties is intended to be or has
been created in respect of any of the transactions contemplated by this
Commitment Letter, irrespective of whether the Commitment Parties have advised
or are advising you on other matters, (b) the Commitment Parties or the Initial
Lenders, on the one hand, and you, on the other hand, have an arm’s length
business relationship that does not directly or indirectly give rise to, nor do
you rely on, any fiduciary duty on the part of the Commitment Parties in respect
of the transactions

 

11

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contemplated by this Commitment Letter, (c) you are capable of evaluating and
understanding, and you understand and accept, the terms, risks and conditions of
the transactions contemplated by this Commitment Letter, (d) you have been
advised that the Commitment Parties are engaged in a broad range of transactions
that may involve interests that differ from your interests and that the
Commitment Parties do not have any obligation to disclose such interests and
transactions to you by virtue of any fiduciary, advisory or agency relationship
in respect of the transactions contemplated by this Commitment Letter, and
(e) you waive, to the fullest extent permitted by law, any claims you may have
against the Commitment Parties for breach of fiduciary duty or alleged breach of
fiduciary duty, in each case, in connection with the transactions contemplated
by this Commitment Letter, and agree that the Commitment Parties shall not have
any liability (whether direct or indirect) to you in respect of such a fiduciary
duty claim or to any person asserting a fiduciary duty claim on behalf of or in
right of you, including your stockholders, employees or creditors. You shall
consult with your own advisors concerning such matters and shall be responsible
for making your own independent investigation and appraisal of the transactions
contemplated hereby (including, without limitation, with respect to any consents
needed in connection therewith), and the Commitment Parties shall not have any
responsibility or liability to you with respect thereto. Any review by any of
the Commitment Parties of the Company, the Transactions, the other transactions
contemplated hereby or other matters relating to such transactions will be
performed solely for the benefit of such Commitment Party and shall not be on
behalf of you or any of your affiliates. Neither we nor any of our respective
affiliates will use confidential information obtained from the Target, you or
your or their respective affiliates or on your or their behalf by your or their
respective representatives by virtue of the transactions contemplated hereby in
connection with the performance of services for other persons, and neither we
nor any of our respective affiliates will furnish any such information to such
other persons. You also acknowledge that no Commitment Party has any obligation
in connection with the Transactions to use, or to furnish to you or your
subsidiaries, confidential information obtained from other companies or
entities. Additionally, you acknowledge and agree that we are not advising you
as to any legal, tax, investment, accounting or regulatory matters in any
jurisdiction (including, without limitation, with respect to any consents needed
in connection with the transactions contemplated hereby).

You further acknowledge that each of us is a full service securities firm
engaged in securities trading and brokerage activities as well as providing
investment banking and other financial services. In the ordinary course of
business, any of us may provide investment banking and other financial services
to, and/or acquire, hold or sell, for its own accounts and the accounts of
customers, equity, debt and other securities and financial instruments
(including bank loans and other obligations) of, you and other companies with
which you may have commercial or other relationships. With respect to any
securities and/or financial instruments so held by any of us or any of our
respective customers, all rights in respect of such securities and financial
instruments, including any voting rights, will be exercised by the holder of the
rights, in its sole discretion.

As you know, each of MLPF&S, Credit Suisse and Goldman Sachs & Co. LLC have been
retained by the Company (or one of its affiliates) as a financial advisor (in
such capacity, the “Financial Advisors”) in connection with the Acquisition. You
agree to such retention, and further agree not to assert any claim you might
allege based on any actual or potential conflicts of interest that might be
asserted to arise or result from the engagement of the Financial Advisors, on
the one hand, and our and our affiliates’ relationships with you as described
and referred to herein, on the other. Each of the Commitment Parties hereto
acknowledges (i) the retention of the Financial Advisors and (ii) that such
relationship does not create any fiduciary duties or fiduciary responsibilities
to such Commitment Party on the part of the Financial Advisors or its
affiliates.

The Company acknowledges that Bank of America currently is acting as
administrative agent and a lender under the Existing ABL Facility and certain
other Commitment Party Entities may be lenders under the Existing ABL Facility,
and the Company’s and its affiliates’ rights and obligations under any

 

12

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other agreement with any Commitment Party Entity or any of their respective
affiliates (including the Existing ABL Facility) that currently or hereafter may
exist are, and shall be, separate and distinct from the rights and obligations
of the parties pursuant to this Commitment Letter, and none of such rights and
obligations under such other agreements shall be affected by the Commitment
Party Entities’ performance or lack of performance of services and agreements
hereunder.

10. Expiration of Commitments. This Commitment Letter and the commitments of the
Initial Lenders and the undertakings of the Arrangers set forth herein shall, in
the event this Commitment Letter is accepted by you as provided in the last
paragraph hereof, automatically terminate without further action or notice at
the earliest of (i) 5:00 p.m. (Eastern) on the date that is 5 business days
following that date that is 6 months after the date of the Original Commitment
Letter (or 9 months after the date of the Original Commitment Letter if the End
Date (as defined in the Acquisition Agreement) is extended pursuant to
Section 9.1(c) of the Acquisition Agreement) if the Closing Date shall not have
occurred by such time (the “Expiration Date”), unless you and we shall, in our
sole discretion, agree to an extension, (ii) the termination of the Acquisition
Agreement in accordance with its terms and (iii) the consummation of the
Acquisition without the use of the Credit Facilities (in the case of the Senior
Secured Bridge Facility, unless and to the extent the Senior Secured Notes or
other “Securities” are issued in lieu of the Senior Secured Bridge Facility).

In addition, if the proceeds of the Escrow Notes (as defined in the Fee Letter)
have been received and deposited into an escrow account, then immediately
following receipt by the Lead Borrower of written notice from the escrow agent
for the escrow account that all such proceeds have been received and are being
held in such escrow account, the commitments in respect of the Senior Secured
Bridge Facility shall automatically be reduced by the amount of the gross
proceeds from the Escrow Notes.

11. Binding Obligations. Each of the parties hereto agrees that this Commitment
Letter is a binding and enforceable agreement with respect to the subject matter
contained herein, including the commercially reasonable negotiation of the
Facilities Documentation by the parties hereto in a manner consistent with this
Commitment Letter, it being understood and agreed that the funding of the Credit
Facilities remains subject to conditions precedent as set forth in the
Conditions Annex.

12. Survival. This paragraph and the indemnification, reimbursement,
confidentiality, jurisdiction, governing law, no agency or fiduciary duty,
venue, waiver of jury trial and syndication provisions contained herein and in
the Fee Letter shall remain in full force and effect regardless of whether the
Facilities Documentation shall be executed and delivered and notwithstanding the
termination of this Commitment Letter or the commitments hereunder; provided
that (a) if the Closing Date occurs, your obligations with respect to
syndication shall survive until the expiration of the Syndication Period, (b) on
the Closing Date, all provisions (other than in respect of the confidentiality,
jurisdiction, governing law, no agency or fiduciary duty, venue and waiver of
jury trial provisions) shall automatically be superseded by the Facilities
Documentation to the extent covered thereby and you shall automatically be
released from all liability in connection therewith at such time and (c) so long
as the Closing Date has not occurred, you may terminate this Commitment Letter
(other than in respect of the confidentiality, indemnification, reimbursement,
jurisdiction, governing law, no agency or fiduciary duty, venue and waiver of
jury trial provisions) upon written notice to the Arrangers at any time (subject
to the preceding provisions).

13. Governing Law, Etc. This Commitment Letter and the Fee Letter supersede all
prior agreements and understandings relating to the subject matter hereof. No
party has been authorized by us to make any oral or written statements
inconsistent with this Commitment Letter. This Commitment Letter and the Fee
Letter shall not be assignable by you without our prior written consent, and any
purported assignment without such consent shall be null and void, ab initio;
provided that GS may, without notice to you, assign its rights and obligations
under this Commitment Letter and the Fee Letter to Goldman Sachs

 

13

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Lending Partners LLC. This Commitment Letter is intended to be for the benefit
of the parties hereto and is not intended to confer any benefits upon, or create
any rights in favor of, any person other than the parties hereto, the Lenders
and, with respect to the indemnification provided under the heading
“Indemnification,” each Indemnified Party. Notwithstanding the foregoing, the
parties hereto agree that MLPF&S may, without notice to you, the Sponsor or the
Company, assign its rights and obligations under this Commitment Letter and the
Fee Letter to any other registered broker dealer wholly owned by Bank of America
Corporation to which all or substantially all of Bank of America Corporation’s
or any of its subsidiaries’ investment banking, commercial lending services or
related businesses may be transferred following the date of this Commitment
Letter. This Commitment Letter may be executed in separate counterparts and
delivery of an executed signature page of this Commitment Letter by facsimile or
electronic mail shall be effective as delivery of manually executed counterpart
hereof. This Commitment Letter may only be amended or modified by an agreement
in writing signed by each of you and us, and shall remain in full force and
effect and not be superseded by any other documentation unless such other
documentation is signed by each of you and us and expressly states that this
Commitment Letter is superseded thereby. Any of us may place advertisements in
financial or other newspapers and periodicals or on a home page or similar place
for dissemination of information on the Internet or World Wide Web as such party
may choose, and circulate similar promotional materials, after the closing of
the Transactions in the form of a “tombstone” or otherwise describing the names
of you and your affiliates (or any of them), and the amount, type and closing
date of such Transactions, all at such party’s expense. This Commitment Letter
shall be governed by, and construed and enforced in accordance with, the laws of
the State of New York without regard to principles of conflicts of law to the
extent that the application of the laws of another jurisdiction will be required
thereby; provided, however, that (a) the interpretation of the definition of
Company Material Adverse Effect and whether there shall have occurred a Company
Material Adverse Effect, (b) whether the representations and warranties made
with respect to the Target in the Acquisition Agreement are accurate and whether
as a result of any inaccuracy thereof you have the right to terminate your
obligations under the Acquisition Agreement, or to decline to consummate the
Acquisition, and (c) whether the Acquisition has been consummated in accordance
with the terms of the Acquisition Agreement, shall be determined in accordance
with the laws of the State of Delaware without regard to conflict of laws
principles that would result in the application of the laws of another
jurisdiction. The parties hereby waive any right to trial by jury in any action,
proceeding, suit, claim or counterclaim brought by or on behalf of any party
related to or arising out of this Commitment Letter, the Fee Letter or the
performance of services hereunder or thereunder. The parties hereto hereby
submit to the exclusive jurisdiction of the federal and New York State courts
located in New York County (and appellate courts thereof) in connection with any
dispute related to this Commitment Letter, the Fee Letter or any of the matters
contemplated hereby or thereby, and agree that service of any process, summons,
notice or document by registered mail addressed to you or us at the addresses
set forth on the signature pages hereto shall be effective service of process
against you or us, as applicable, for any suit, action or proceeding relating to
any such dispute. The parties hereto irrevocably and unconditionally waive any
objection to the laying of such venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding
has been brought in an inconvenient forum. A final judgment in any such suit,
action or proceeding brought in any such court may be enforced in any other
courts to whose jurisdiction you and we are or may be subject by suit upon
judgment.

If you are in agreement with the foregoing, please indicate acceptance of the
terms hereof by signing the enclosed counterpart of this Commitment Letter and
returning it to the Arrangers, together with executed counterpart of the Fee
Letter. This Commitment Letter, the commitments of the Initial Lenders and the
undertakings of the Arrangers set forth herein, shall become effective when
signed counterparts of this Commitment Letter and the Fee Letter from each of
the parties listed on the signature pages hereto shall have been delivered to
the Arrangers in accordance with the terms of the immediately preceding
sentence.

 

14

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[Signature Pages Follow]

 

15

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Sincerely, BANK OF AMERICA, N.A. By:  

/s/ Darryl Kuriger

  Name:   Darryl Kuriger   Title:   Managing Director MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED By:  

/s/ Darryl Kuriger

  Name:   Darryl Kuriger   Title:   Managing Director

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH By:  

/s/ William O’Daly

  Name:   William O’Daly   Title:   Authorized Signatory By:  

/s/ D. Andrew Maletta

  Name:   D. Andrew Maletta   Title:   Authorized Signatory CREDIT SUISSE
SECURITIES (USA) LLC By:  

/s/ Hayes Smith

  Name:   Hayes Smith   Title:   Managing Director

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

CREDIT SUISSE LOAN FUNDING LLC By:  

/s/ Ali Mehdi

  Name:   Ali Mehdi   Title:   Managing Director

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

GOLDMAN SACHS BANK USA By:  

/s/ Robert Ehudin

  Name:   Robert Ehudin   Title:   Authorized Signatory

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

Morgan Stanley Senior Funding, Inc.

1585 Broadway

New York, NY 10036 By:  

/s/ Reagan Philipp

  Name:   Reagan Philipp   Title:   Authorized Signatory

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

BARCLAYS BANK PLC By:  

/s/ Joseph Jordan

  Name: Joseph Jordan   Title:   Managing Director

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

DEUTSCHE BANK SECURITIES INC. By:  

/s/ John Huntington

  Name: John Huntington   Title:   Managing Director By:  

/s/ Celine Catherin

  Name: Celine Catherin   Title:   Managing Director DEUTSCHE BANK AG NEW YORK
BRANCH By:  

/s/ John Huntington

  Name: John Huntington   Title:   Managing Director By:  

/s/ Celine Catherin

  Name: Celine Catherin   Title:   Managing Director

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

RBC CAPITAL MARKETS, LLC By:  

/s/ James S. Wolfe

  Name: James S. Wolfe  

Title:   Managing Director, Head of Global

            Leveraged Finance

ROYAL BANK OF CANADA By:  

/s/ James S. Wolfe

  Name: James S. Wolfe  

Title:   Managing Director, Head of Global

            Leveraged Finance

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

WELLS FARGO BANK, NATIONAL ASSOCIATION By:  

/s/ Jason P. Shanahan

  Name: Jason P. Shanahan  

Title:   Director

WELLS FARGO SECURITIES, LLC By:  

/s/ Adam Hyder

  Name: Adam Hyder  

Title:   Director

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

PNC CAPITAL MARKETS LLC By:  

/s/ Brian D. Prettyman

  Name: Brian D. Prettyman  

Title:   Managing Director

PNC BANK NATIONAL ASSOCIATION By:  

/s/ Sari Garrick

  Name: Sari Garrick  

Title:   Senior Vice President

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

SUNTRUST ROBINSON HUMPHREY, INC. By:  

/s/ Aaron Peyton

  Name: Aaron Peyton  

Title:   Managing Director

SUNTRUST BANK By:  

/s/ Seth Meier

  Name: Seth Meier  

Title:   Director

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

U.S. BANK NATIONAL ASSOCIATION By:  

/s/ Christopher D. Fudge

  Name: Christopher D. Fudge  

Title:   Vice President

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

MUFG UNION BANK, N.A. By:  

/s/ John McDevitt

  Name: John McDevitt  

Title:   Director

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

BANK OF MONTREAL By:  

/s/ Craig Thistlewaite

  Name: Craig Thistlewaite   Title:   Managing Director

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

CAPITAL ONE, NATIONAL ASSOCIATION By:  

/s/ Michael Lockery

  Name: Michael Lockery   Title:   Duly Authorized Signatory

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

FIFTH THIRD BANK By:  

/s/ Bond Harberts

  Name: Bond Harberts   Title:   Director

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

TD BANK, N.A. By:  

/s/ Cyntra A. Trani

  Name: Cyntra A. Trani   Title:   Senior Vice President

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

Agreed to and

accepted as of the date first above written:

ALBERTSONS COMPANIES, INC. By:  

/s/ Robert B. Dimond

  Name: Robert B. Dimond   Title:   Chief Financial Officer

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

Schedule I

Commitment Amounts

 

Initial Lender

   Best Efforts ABL
Revolving Facility      Incremental ABL
Commitments      ABL FILO Facility      Senior Secured
Bridge Facility  

Bank of America

   $ 625,000,000      $ 223,333,334      $ 334,000,000      $ 110,000,000  

CS

   $ 300,000,000      $ 223,333,333      $ 334,000,000      $ 110,000,000  

GS Bank

   $ 300,000,000      $ 223,333,333      $ 334,000,000      $ 110,000,000  

MSSF

   $ 152,000,000      $ 75,000,000      $ 112,500,000      $ 37,500,000  

DBNY

   $ 245,000,000      $ 60,000,000      $ 90,000,000        —    

DBCI

     —          —          —        $ 30,000,000  

Barclays

   $ 235,000,000      $ 60,000,000      $ 90,000,000      $ 30,000,000  

RBC

   $ 225,000,000      $ 50,000,000      $ 75,000,000      $ 25,000,000  

Wells Fargo Bank

   $ 600,000,000      $ 50,000,000      $ 75,000,000      $ 25,000,000  

PNC Bank

   $ 275,000,000      $ 12,500,000      $ 18,750,000      $ 6,250,000  

SunTrust Bank

   $ 200,000,000      $ 12,500,000      $ 18,750,000      $ 6,250,000  

U.S. Bank

   $ 260,000,000      $ 10,000,000      $ 15,000,000      $ 5,000,000  

MUFG

   $ 350,000,000        —        $ 3,000,000      $ 5,000,000  

Bank of Montreal

   $ 200,000,000        —          —          —    

Fifth Third

   $ 200,000,000        —          —          —    

TD Bank

   $ 200,000,000        —          —          —    

Capital One

   $ 300,000,000        —          —          —       

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 4,667,000,000      $ 1,000,000,000      $ 1,500,000,000      $ 500,000,000
    

 

 

    

 

 

    

 

 

    

 

 

 

[Project Ranch Commitment Letter]

--------------------------------------------------------------------------------

EXHIBIT A

EXHIBIT A

TRANSACTION DESCRIPTION

Capitalized terms used but not defined in this Exhibit A shall have the
respective meanings set forth in the other Exhibits to the Commitment Letter, of
which this Exhibit A is a part, and in the Commitment Letter. In the case of any
such capitalized term that is subject to multiple and differing definitions, the
appropriate meaning thereof in this Exhibit A shall be determined by reference
to the context in which it is used.

The Company intends to, directly or indirectly, acquire the Target as set forth
in the Acquisition Agreement.

In connection therewith, it is intended that:

(a) The Company will organize Ranch Acquisition II, LLC (“Merger Sub II”) as a
wholly owned subsidiary of the Company and Ranch Acquisition Corp. (“Merger
Sub”) as a wholly owned subsidiary of Merger Sub II;

(b) the Company will use commercially reasonable efforts to either obtain the
Senior Secured Bridge Facility or issue the Senior Secured Notes;

(c) the Company will use commercially reasonable efforts to (i) either (x)
obtain the Incremental ABL Commitments or (y) (A) obtain commitments for the
Excess Best Efforts ABL Revolving Commitments and enter into the Best Efforts
ABL Facility and (B) terminate in full the commitments under the Existing ABL
Facility, repay all amounts outstanding thereunder, cash collateralize, backstop
or replace all letters of credit outstanding thereunder (except to the extent
that any such letter of credit is issued by an Issuing Bank (as defined in
Exhibit B-1 and such letter of credit is “rolled over” into the Best Efforts ABL
Revolving Facility) and, except to the extent that the Best Efforts ABL Facility
is provided in the form of an amendment and restatement of the Existing ABL
Facility, obtain a release of all security interests therefor (the “Existing ABL
Refinancing”) and (ii) obtain the ABL FILO Facility (as defined in Exhibit B-2);

(d) on the Closing Date, subject to the satisfaction of the conditions set forth
in the Acquisition Agreement, Merger Sub shall merge with and into the Target,
with the Target as the surviving entity and the equityholders of the Target
shall have the right to receive equity interests in the Company and/or
additional consideration to be paid in cash in each case in accordance with the
terms of the Acquisition Agreement (the “Merger Consideration”) and, subject to
the terms of the Acquisition Agreement (as amended), immediately thereafter the
Target shall merge with and into Merger Sub II, with Merger Sub II as the
surviving entity and wholly-owned subsidiary of the Company;

(e) The Target shall repay or cause the repayment, redemption, satisfaction and
discharge, repurchase or defeasance of all of its and its subsidiaries existing
indebtedness (other than (i) capital leases, (ii) the Target’s Senior Notes due
2027 and Senior Notes due 2028 (the “Ratably Secured Notes”) and (iii) certain
other permitted indebtedness to be agreed) (the “Refinancing”); and

(f) The proceeds of the Senior Secured Bridge Facility, the ABL FILO Facility
and/or cash on hand (including drawings under the Existing ABL Facility or the
Best Efforts ABL Facility) of the Company, the Target and their respective
subsidiaries on the Closing Date will be applied to fund Merger Consideration,
the Refinancing (and, if applicable, the Existing ABL Refinancing) and pay the
fees, premiums, expenses and other transaction costs incurred in connection with
the Transactions, including those amounts set forth in the Fee Letter.

--------------------------------------------------------------------------------

For purposes of Commitment Letter and Fee Letter the “Closing Date” shall means
the date of initial effectiveness and funding (or utilization) of the Credit
Facilities (or issuance of the Senior Secured Notes in lieu of the Senior
Secured Bridge Facility (or release of the proceeds thereof to the Company if
issued prior to the closing of the Acquisition)) and the consummation of the
Acquisition.

 

B-1-2

--------------------------------------------------------------------------------

EXHIBIT B-1

EXHIBIT B-1

BEST EFFORTS ABL FACILITY TERM SHEET

SUMMARY OF PRINCIPAL TERMS AND CONDITIONS1

 

Borrowers:      (i) Albertsons Companies, Inc. (the “Lead Borrower”), (ii) the
subsidiaries of the Lead Borrower that are co-borrowers under that certain
Second Amended and Restated Asset-Based Revolving Credit Agreement, dated as of
December 21, 2015 (as amended, supplemented or amended and restated from time to
time or prior to the date of the Commitment Letter, the “Existing ABL
Facility”), by and among the Lead Borrower, the co-borrowers party thereto, the
guarantors party thereto, Bank of America, N.A., as Administrative Agent (the
“Existing ABL Administrative Agent”) and Collateral Agent (the “Existing ABL
Facility Collateral Agent”), and the other parties thereto and (iii) following
the Acquisition, the Target and its U.S. subsidiaries that have assets to be
included in the Borrowing Base (as applicable, individually, a “Borrower” and,
collectively, the “Borrowers”). Guarantors:                           Same as
the Existing ABL Facility (including, from and after the closing of the
Acquisition to the extent not a Borrower, the Target and its U.S. subsidiaries
that would be required to become guarantors of the Existing ABL Facility in
accordance with its terms (collectively, the “Guarantors”); provided that if any
of the Borrowers under the Best Efforts ABL Revolving Facility is not a Borrower
under the ABL FILO Facility, such Borrower will be a Guarantor with respect to
the ABL FILO Facility. Joint Lead Arrangers and Joint Bookrunners for Best
Efforts ABL Revolving Facility:      MLPF&S, CSLF, GS Bank, MSSF, Barclays,
DBSI, RBC, Wells Fargo Bank, MUFG, PNC Capital Markets, STRH, U.S. Bank, Bank of
Montreal, Capital One, Fifth Third and TD Bank (the “Best Efforts ABL Revolving
Arrangers”). Joint Lead Arrangers and Joint Bookrunners for ABL FILO Facility:  
   MLPF&S, CSLF, GS Bank, MSSF, Barclays, DBSI, RBC, Wells Fargo Bank and MUFG
(the “ABL FILO Lead Arrangers”). Co-Managers for ABL FILO Facility:      PNC
Capital Markets, STRH and U.S. Bank (the “ABL FILO Co-Managers” and, together
with the ABL FILO Lead Arrangers, the “ABL FILO Arrangers”; the ABL FILO
Arrangers and the Best Efforts ABL Revolving Arrangers are referred to
collectively herein as the “Best Efforts ABL Arrangers”).

 

1  All capitalized terms used but not defined herein shall have the meanings
provided in the Commitment Letter to which this summary is attached and the
other exhibits thereto.

--------------------------------------------------------------------------------

Lenders:      A syndicate of banks, financial institutions and other entities
(excluding any Disqualified Lenders), including the Initial Lenders, arranged by
the applicable Best Efforts ABL Arrangers in consultation with the Borrowers
(collectively, the “Best Efforts Lenders”). ABL Administrative Agent:      Bank
of America, N.A. (the “Best Efforts ABL Administrative Agent”). ABL Collateral
Agent:      Bank of America, N.A. (the “Best Efforts ABL Collateral Agent”).
Issuing Banks:      Unless otherwise agreed by the Best Efforts ABL Revolving
Arrangers, each Initial Lender (or its applicable affiliate) with respect to a
portion of the aggregate letter of credit sublimit that is proportionate to such
Initial Lender’s (or its lending affiliate’s) commitment under the Best Efforts
ABL Revolving Facility on the Closing Date (each, an “Issuing Bank”). Swingline
Lender:      Bank of America, N.A. (the “Swingline Lender”). Co-Documentation
Agents:      Financial institutions to be mutually agreed. Credit Facilities:  
               

(A)  A revolving credit facility (the “Best Efforts ABL Revolving Facility” and
the loans thereunder, “Best Efforts ABL Revolving Loans”) in an aggregate
principal amount of $5,000,000,000 (the commitments under the Best Efforts
Revolving Facility, the “Best Efforts ABL Revolving Commitments”) (with
subfacilities for letters of credit and swingline loans on terms consistent with
the Existing ABL Facility) of which $4,667,000,000 is committed by the
Commitment Parties under the Commitment Letter.

 

(B)  A “first in last out” asset-based term loan facility (the “ABL FILO
Facility” and, together with the Best Efforts ABL Revolving Facility, the “Best
Efforts ABL Facility”) in an aggregate principal amount of $1,500,000,000. The
term loans under the ABL FILO Facility are, collectively, referred to as the
“ABL FILO Loans.”

Purpose:      The proceeds of the ABL FILO Loans and up to $1,700,000,000 of
Best Efforts ABL Revolving Loans may be borrowed to finance a portion of the
Refinancing and pay fees and expenses in connection with the Transactions (plus
additional amounts to finance (i) Merger Consideration, (ii) the Existing ABL
Refinancing, (iii) working capital needs of the Company and its subsidiaries,
(iv) the refinancing of indebtedness of the Target

 

B-1-2

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                  and its subsidiaries incurred following the date of the
Acquisition Agreement as permitted by the Acquisition Agreement and (v) upfront
fees or original issue discount pursuant to the “flex” provisions of the Fee
Letter or incurred in connection with the Senior Secured Notes). Following the
Closing Date, the Best Efforts ABL Revolving Facility will be used by the
Borrowers and their subsidiaries for working capital and general corporate
purposes (including permitted acquisitions and other investments). Maturity Date
and Amortization:     

(A)  The Best Efforts ABL Revolving Facility shall mature and the Best Efforts
ABL Revolving Commitments shall terminate in full on the date that is five
(5) years after the Closing Date (the “Best Efforts ABL Maturity Date”).

 

(B)  The ABL FILO Loans will be due and payable in full on the Best Efforts ABL
Maturity Date. Commencing at the end of the first full calendar quarter ending
after the calendar quarter that includes the Closing Date, the ABL FILO Loans
will amortize in equal quarterly principal installments in an annual amount
equal to 1.0% of the original principal amount of the ABL FILO Loans, with the
remaining balance payable in full on the Best Efforts ABL Maturity Date.

Availability:     

(A)  Subject to the limitations set forth above in the section entitled
“Purpose”, borrowings under the Best Efforts ABL Revolving Facility may be made
at any time on and after the Closing Date, and letters of credit may be issued
at any time on and after the Closing Date, to but excluding the business day
preceding the Best Efforts ABL Maturity Date. Best Efforts ABL Revolving Loans
may be borrowed, repaid and, subject to the terms and conditions of the Best
Efforts ABL Facility Documentation, reborrowed at any time and from time to time
during the period of availability provided in the preceding sentence.

 

(B)  The full amount of the ABL FILO Facility must be drawn in a single drawing
on the Closing Date. Amounts borrowed under the ABL FILO Facility that are
repaid or prepaid may not be reborrowed.

     The aggregate of the outstanding principal amount of the Best Efforts ABL
Revolving Loans (including swingline loans), the undrawn amount of the letters
of credit and the unreimbursed amount of payments in respect of drafts under
letters of credit issued under the Best Efforts ABL Facility may not at any time
exceed the lesser of the aggregate Best Efforts ABL Revolving Commitments and
the Borrowing Base (as defined in the manner described below).

 

B-1-3

--------------------------------------------------------------------------------

                  The “Borrowing Base” shall be defined in a manner consistent
with the Existing ABL Facility except that it shall include a reserve in the
amount of the outstanding ABL FILO Facility. Letters of Credit:      Up to
$1,975,000,000 of the Best Efforts ABL Revolving Facility will be available for
letters of credit, on terms and conditions consistent with the Existing ABL
Facility (including with respect to limitations on the types of letters of
credit required to be issued by any specific Issuing Bank). Swingline Facility:
     The Swingline Lender will make available to the Borrowers a swingline
facility under which the Borrowers may make short-term borrowings of up to
$250,000,000. Except for purposes of calculating the Commitment Fee described
below, any such swingline borrowings will reduce availability under the Best
Efforts ABL Revolving Facility on a dollar-for-dollar basis. Each Best Efforts
ABL Lender under the Best Efforts ABL Revolving Facility shall, promptly upon
request by the Swingline Lender, fund to the Swingline Lender its pro rata share
of any swingline borrowings. Security and Priority of Payments:     

Subject, on the Closing Date, to the Certain Funds Provision, the obligations
under the Best Efforts ABL Facility will be, and certain bank products
(including hedging and treasury management obligations) incurred in favor of any
person that is a Best Efforts ABL Arranger, the Best Efforts ABL Administrative
Agent, a Best Efforts ABL Lender or an affiliate of a Best Efforts ABL Arranger,
the Best Efforts ABL Administrative Agent or a Best Efforts ABL Lender at the
time such obligations are incurred (the “ABL Obligations”), will be secured by
(i) first priority (subject to permitted prior liens) security interests in all
Collateral (as defined in the Existing ABL Facility) constituting ABL Priority
Collateral (as defined in the Existing ABL Facility) and (ii) second priority
(subject to permitted prior liens) security interests in all Collateral (as
defined above) constituting CF Debt Priority Collateral (as defined in the
Intercreditor Agreement (as defined in the Existing ABL Facility)). The Best
Efforts ABL Collateral Agent will enter into a joinder to the Intercreditor
Agreement on the Closing Date to provide that the Best Efforts ABL Facility is
an “ABL Credit Agreement” for purposes of the Intercreditor Agreement (unless
the Best Efforts ABL Facility takes the form of an amendment and restatement of
the Existing ABL Facility).

 

In no event will the Collateral for the Best Efforts ABL Facility include any
Excluded Property (as defined in the Existing ABL Facility).

 

B-1-4

--------------------------------------------------------------------------------

                  The Best Efforts ABL Facility Documentation (as defined below)
will provide that in the event of any enforcement action under the Best Efforts
ABL Facility Documentation or any bankruptcy or insolvency proceeding against
any Borrower or any Guarantor, all amounts received on account of any ABL
Obligations received by the Best Efforts ABL Administrative Agent, the Best
Efforts ABL Collateral Agent or any Best Efforts ABL Lender shall be turned over
to the Best Efforts ABL Administrative Agent (to the extent not received
directly by the Best Efforts ABL Administrative Agent) and shall be applied
first, to the payment in full of all ABL Obligations in respect of the Best
Efforts ABL Revolving Facility (whether or not allowed or allowable in any
bankruptcy or insolvency proceeding) prior to being applied to any ABL
Obligations in respect of the ABL FILO Facility. Documentation:      The
documentation for the Best Efforts ABL Facility (the “Best Efforts ABL Facility
Documentation”) will include, among other items, a credit agreement, guarantees,
intercreditor agreement and appropriate pledge and security agreements
substantially identical to the credit agreement, guarantees, intercreditor
agreement and pledge and security agreements for the Existing ABL Facility
(collectively, the “Existing ABL Facility Documentation”) and, if permitted by
the Existing ABL Facility Documentation and mutually agreed by the Best Efforts
ABL Administrative Agent and the Lead Borrower, may take the form of an
amendment and restatement of the Existing ABL Facility Documentation; provided
that the Best Efforts ABL Facility Documentation shall be modified to include
(x) the specific terms set forth in this Exhibit B-1, (y) a customary “successor
LIBOR” provision to be mutually agreed by the Best Efforts ABL Administrative
Agent and the Lead Borrower (and, in any event, to include a customary negative
consent provision in favor of the Required Lenders (to be defined consitent with
the Existing ABL Facility but to include both the Best Efforts ABL Revolving
Facility and the ABL FILO Facility) and (z) changes and modifications to be
mutually agreed by the Best Efforts ABL Arrangers and the Lead Borrower to take
into account the operational requirements and strategic requirements of the Lead
Borrower and its restricted subsidiaries (after giving effect to the
Transactions) in light of their industries (and risks and trends associated
therewith), business and business practices, geographical locations and
operations and financial reporting, and in light of that certain borrower model
(the “Borrower Model”) delivered to the Initial Lenders under the Original
Commitment Letter on February 14, 2018. This paragraph, and the provisions
contained herein, shall be referred to as the “Best Efforts ABL Documentation
Principles”. Incremental Facilities:                   The Borrowers shall be
entitled on one or more occasions to increase commitments under the Best Efforts
ABL Revolving Facility and/or the ABL FILO Facility in an aggregate principal
amount of up to $500,000,000 on the same terms and conditions

 

B-1-5

--------------------------------------------------------------------------------

     as set forth in connection with the increase of commitments in the Existing
ABL Facility; provided that (i) the “most favored nations” pricing provisions
applicable to the Best Efforts ABL Revolving Facility shall not apply to any
increased commitments in respect of the ABL FILO Facility and (ii) customary
terms and conditions consistent with the Term Loan Facility will apply with
respect to any increase in the ABL FILO Facility with additional customary
modifications to reflect the nature of the ABL FILO Loans (other the “most
favored nations” clause, which shall be 50bps). Interest Rates:               
  

(A)  With respect to Best Efforts ABL Revolving Loans (including swingline loans
which shall at all times be Base Rate Loans) until the end of the first full
fiscal quarter after the Closing Date, at the Lead Borrower’s option, (i) the
LIBOR Rate (as defined in the Existing ABL Facility) plus 1.50% or (ii) the Base
Rate (as defined in the Existing ABL Facility) plus 0.50%. Thereafter, the
applicable margins for the Best Efforts ABL Revolving Loans will be subject to a
pricing grid consistent with the Existing ABL Facility.

 

(B)  With respect to the ABL FILO Loans, at the Lead Borrower’s option, (i) the
LIBOR Rate (as defined in the Existing ABL Facility) plus 3.75% or (ii) the Base
Rate (as defined in the Existing ABL Facility) plus 2.75%.

Commitment Fees:      A commitment fee will accrue on the unutilized portion of
the Best Efforts ABL Revolving Commitments at the same rate applicable under the
Existing ABL Facility. Letter of Credit Fees:      Letter of Credit fees and
Issuing Bank fees will accrue at the same rates as provided in the Existing
Credit Agreement. Mandatory Prepayments:      Same as the Existing ABL Facility
(it being understood that prior to any mandatory prepayment of ABL FILO Loans
(excluding, for avoidance of doubt, scheduled amortization prior to final
maturity), all Best Efforts ABL Revolving Loans shall be prepaid in full and all
letters of credit under the Best Efforts ABL Revolving Facility shall be cash
collateralized). Cash Dominion:      Same as the Existing ABL Facility. Optional
Prepayments:     

(A)  With respect to the Best Efforts ABL Revolving Facility, same as the
Existing ABL Facility.

 

(B)  With respect to ABL FILO Loans, the Borrowers may voluntarily prepay ABL
FILO Loans (together with accrued but unpaid interest thereon) in whole or in
part at any time and from time to time (subject to minimum thresholds to be
agreed) without premium or penalty (except LIBOR breakage costs). Voluntary
prepayments of principal will be applied to LIBOR borrowings and/or Base Rate
borrowings constituting the ABL FILO Loans in the manner designated by the
Borrowers, ratably among the ABL FILO Lenders.

 

B-1-6

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Conditions to Initial Credit Extensions:      Conditions precedent to the
initial extensions of credit under the Best Efforts ABL Facility will be only
those set forth in the Conditions Annex, subject in all respects to the Certain
Funds Provision. Conditions to Other Credit Extensions:      Same as the
Existing ABL Facility. Representations and Warranties:                   Same as
the Existing ABL Facility. Affirmative Covenants:      Same as the Existing ABL
Facility except that, for so long as the ABL FILO Facility is outstanding, there
will be an additional covenant requiring the Borrowers to use commercially
reasonable efforts to maintain a public corporate credit rating from S&P and a
public corporate family rating in Moody’s in each case with respect to the Lead
Borrower and a public rating of the ABL FILO Facility by each of S&P and Moody’s
and to hold a quarterly lender call (which such call may be a customary earnings
call that is held for shareholders and other debt holders). Negative Covenants:
     Same as the Existing ABL Facility. Financial Covenants:      Same as the
Existing ABL Facility. Events of Default:      Same as the Existing ABL
Facility. Assignments and Participations:                  

(A)  With respect to the Best Efforts ABL Revolving Facility, the same as the
Existing ABL Facility.

 

(B)  With respect to the ABL FILO Facility, each Best Efforts ABL Lender may
assign all or, subject to minimum amounts to be agreed, a portion of its loans
and commitments under the ABL FILO Facility except to the Lead Borrower, an
affiliate of the Lead Borrower (subject to exceptions consistent with the
Existing ABL Facility), a natural person or a Disqualified Lender. Assignments
will require payment of an administrative fee to the Best Efforts ABL
Administrative Agent and the consents of the Best Efforts ABL Administrative
Agent and the Lead Borrower, which consents shall not be unreasonably withheld
or delayed; provided that (i) no consents shall be required for an assignment to
an existing Best Efforts ABL Lender or an affiliate or approved fund of an
existing Best Efforts ABL Lender, (ii) no consent of the Lead Borrower shall be
required when a payment or

 

B-1-7

--------------------------------------------------------------------------------

                 

bankruptcy event of default is continuing and (iii) the Lead Borrower shall be
deemed to have consented if it has not responded within five business days of a
request for consent. In addition, each Best Efforts ABL Lender may sell
participations in all or a portion of its loans and commitments under the ABL
FILO Facility; provided that no purchaser of a participation shall have the
right to exercise or to cause the selling Best Efforts ABL Lender to exercise
voting rights in respect of the ABL FILO Facility, except with respect to:
(x) reductions or forgiveness of principal, interest or fees payable to such
participant; (y) extensions of the scheduled date for payment of principal or
interest on the loans in which such participant participates; and (z) releases
of all or substantially all of the value of the guarantees of the Guarantors, or
all or substantially all of the Collateral.

 

In addition, assignments may be made to the Sponsors (as defined in the Existing
ABL Facility) on the same terms as set forth in Existing ABL Facility.

 

For the avoidance of doubt there shall be no assignment or participation to a
Disqualified Lender.

Expenses and Indemnification:      Same as the Existing ABL Facility Defaulting
Lenders:      Same as the Existing ABL Facility. Yield Protection, Taxes and
Other Deductions:      Same as the Existing ABL Facility. Voting:      Same as
the Existing ABL Facility except that class voting on certain matters to be
reasonably agreed by the Best Efforts ABL Administrative Agent and the Lead
Borrower will be required. Replacement of Best Efforts ABL Lenders:      Same as
the Existing ABL Facility. Governing Law:      New York. Counsel to Best Efforts
ABL Arrangers, the Best Efforts      ABL Administrative Agent, the      Issuing
Banks and the Best Efforts ABL Collateral Agent:      Cahill Gordon & Reindel
LLP

 

B-1-8

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EXHIBIT B-2

EXHIBIT B-2

ABL FILO FACILITY

SUMMARY OF PRINCIPAL TERMS AND CONDITIONS2

 

Borrowers:                   (i) Albertsons Companies, Inc. (the “Lead
Borrower”) and (ii) any other subsidiary of the Lead Borrower that is a
co-borrower under the Existing ABL Facility or Best Efforts ABL Facility, as
applicable (individually, a “Borrower” and, collectively, the “Borrowers”).
Guarantors:      Same as the Existing ABL Facility and also any other entity
that is a co-borrower under the Existing ABL Facility or Best Efforts ABL
Facility, as applicable, but not the ABL FILO Facility (including, from and
after the closing of the Acquisition, the Target and its U.S. subsidiaries that
would be required to become guarantors of the Existing ABL Facility in
accordance with its terms (collectively, the “Guarantors”). ABL FILO Lead
Arrangers and Bookrunners:      MLPF&S, CSLF, GS Bank, MSSF, Barclays, DBSI,
RBC, Wells Fargo Bank and MUFG (the “ABL FILO Lead Arrangers”). Co-Managers for
ABL FILO Facility:      PNC Capital Markets, STRH and U.S. Bank (the “ABL FILO
Co-Managers” and, together with the ABL FILO Lead Arrangers, the “ABL FILO
Arrangers”). ABL FILO Lenders:      A syndicate of banks, financial institutions
and other entities (other than Disqualified Lenders), including certain of the
Initial Lenders, arranged by the ABL FILO Arrangers in consultation with the
Borrowers (collectively, the “ABL FILO Lenders”). ABL FILO Administrative Agent:
     Bank of America, N.A. (the “ABL FILO Administrative Agent”). ABL FILO
Collateral Agent:      Bank of America, N.A. (the “ABL FILO Collateral Agent”).
Syndication Agents:      Financial institutions to be mutually agreed. Credit
Facility:      An asset-based term loan facility (the “ABL FILO Facility”) in an
aggregate principal amount of $1,500,000,000. The term loans under the ABL FILO
Facility are, collectively, referred to as the “ABL FILO Loans.”

 

 

2 All capitalized terms used but not defined herein shall have the meanings
provided in the Commitment Letter to which this summary is attached and the
other exhibits thereto.

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Purpose:      The proceeds of the ABL FILO Facility will be used on the Closing
Date to finance a portion of the Merger Consideration and the Refinancing and to
pay fees and expenses in connection with the Transactions. Maturity Date:     
The ABL FILO Loans will be due and payable in full on the date that is (5) years
after the Closing Date (the “ABL FILO Maturity Date”). Amortization:  
                Commencing at the end of the first full calendar quarter ending
after the calendar quarter that includes the Closing Date, the ABL FILO Loans
will amortize in equal quarterly principal installments in an annual amount
equal to 1.0% of the original principal amount of the ABL FILO Loans, with the
remaining balance payable in full on the ABL FILO Maturity Date. Incremental
Facilities:      The Borrowers shall be entitled on one or more occasions to
increase commitments under the ABL FILO Facility in aggregate principal amount
of up to $500,000,000 on the same terms and conditions as set forth in the Term
Loan Facility with additional customary modifications to reflect the nature of
the ABL FILO Loans (other the “most favored nations” clause, which shall be
50bps) (such increase, an “Incremental FILO Facility”); provided that the
available amount for the Incremental FILO Facility shall be reduced on a dollar
for dollar basis by the amount of any additional commitments established under
the Existing ABL Facility or Best Efforts ABL Revolving Facility, as applicable,
following the Closing Date. Availability:      The full amount of the ABL FILO
Facility must be drawn in a single drawing on the Closing Date. Amounts borrowed
under the ABL FILO Facility that are repaid or prepaid may not be reborrowed.
Security:                   Subject, on the Closing Date, to the Certain Funds
Provision, the obligations under the ABL FILO Facility will be, and certain bank
products (including hedging and treasury management obligations) incurred in
favor of any person that is an ABL FILO Arranger, the ABL FILO Administrative
Agent, an ABL FILO Lender or an affiliate of an ABL FILO Arranger, the ABL FILO
Administrative Agent or an ABL FILO Lender at the time such obligations are
incurred (the “ABL FILO Obligations”), will be secured (subject to the FILO
Intercreditor Agreement referred to below) by (i) first priority (subject to
permitted prior liens) security interests in all Collateral (as defined in the
Existing ABL Facility) constituting ABL Priority Collateral (as defined in the
Existing ABL Facility) and (ii) second priority (subject to permitted prior
liens) security interests in all Collateral (as defined above) constituting CF
Debt Priority Collateral (as defined in the Intercreditor Agreement (as defined
in the Existing ABL Facility)). The ABL FILO Collateral Agent will enter into a
joinder to the Intercreditor Agreement on the Closing Date to provide that the
ABL FILO Facility is an “ABL Credit Agreement” for purposes of the Intercreditor
Agreement.

 

B-2-2

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In no event will the Collateral for the ABL FILO Facility include any Excluded
Property (as defined in the Existing ABL Facility).

 

The ABL Filo Collateral Agent shall automatically release its security interest
in any CF Debt Priority Collateral upon the release of the lien of the
collateral agent for the Term Loan Facility on such collateral.

Documentation:                   The documentation for the ABL FILO Facility
(the “ABL FILO Facility Documentation”) will include, among other items, a
credit agreement, guarantees, intercreditor agreement and appropriate pledge and
security agreements substantially identical to the credit agreement, guarantees,
intercreditor agreement and pledge and security agreements for the Existing ABL
Facility (collectively, the “Existing ABL Facility Documentation”); provided
that the ABL FILO Facility Documentation shall be modified to (v) eliminate
revolving credit facility specific provisions contained therein, (w) include the
specific terms set forth in this Exhibit B-2, (x) provide an authorization and
direction for the ABL FILO ABL Administrative Agent and the ABL FILO Collateral
Agent to enter into the FILO Intercreditor Agreement (as defined in the Existing
ABL Facility) or, if applicable, a corresponding intercreditor agreement with
the Best Efforts ABL Administrative Agent and Best Efforts ABL Collateral Agent,
(y) include a customary “successor LIBOR” provision to be mutually agreed by the
ABL FILO Administrative Agent and the Lead Borrower (and, in any event, to
include a customary negative consent provision in favor of the Required Lenders
(to be defined consitent with the Existing ABL Facility but to refer to the ABL
FILO Facility) and (z) to incorporate changes and modifications to be mutually
agreed by the ABL FILO Arrangers and the Lead Borrower to take into account the
operational requirements and strategic requirements of the Lead Borrower and its
restricted subsidiaries (after giving effect to the Transactions) in light of
their industries (and risks and trends associated therewith), business and
business practices, geographical locations and operations and financial
reporting, and in light of the Borrower Model. This paragraph, and the
provisions contained herein, shall be referred to as the “ABL FILO Facility
Documentation Principles”. Interest:      At Borrowers’ option, loans will bear
interest based on the Base Rate or LIBOR, as described below:      A. Base Rate
Option

 

B-2-3

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                  Base Rate borrowings will bear interest at the Base Rate
(defined in accordance with the Existing ABL Facility) plus the applicable
margin specified below, calculated in accordance with the Existing ABL Facility.
     Base Rate borrowings will be in minimum amounts (and minimum multiples
thereof) consistent with the Existing ABL Facility and will require one business
day’s prior notice.      B. LIBOR Option      LIBOR borrowings will bear
interest for periods to be selected by the Borrowers in a manner consistent with
the Existing ABL Facility at the LIBOR Rate (as determined in accordance with
the Existing ABL Facility) plus the applicable margin specified below.     
LIBOR borrowings will require three business days’ prior notice and will be in
minimum amounts (and minimum multiples thereof) to be agreed upon. Default
Interest:      Interest will accrue (i) on any overdue payment of principal at a
rate of 2.0% per annum plus the rate otherwise applicable to such principal and
(ii) on any overdue payment of any other amount, at a rate of 2.0% per annum
plus the non-default interest rate then applicable to Base Rate loans under the
ABL FILO Facility. Default interest shall be payable on demand. Interest
Margins:      The applicable margin will be (i) for Base Rate Loans, 2.75% and
(ii) for LIBOR Rate Loans, 3.75%. Mandatory Prepayments:      Same as the
Existing ABL Facility (it being understood that in connection with any mandatory
prepayment (excluding, for avoidance of doubt, scheduled amortization prior to
final maturity), the Borrowers shall be first required to prepay loans and/or
cash collateralize letters of credit under the Existing ABL Facility or Best
Efforts ABL Facility, as applicable, in full and then to prepay ABL FILO Loans).
Cash Dominion:      Same as the Existing ABL Facility (it being understood that
no amounts shall be required to be deposited with the ABL FILO Administrative
Agent except to the extent required to be applied to prepay ABL FILO Loans as
provided above). Optional Prepayments:      The Borrowers may voluntarily prepay
ABL FILO Loans (together with accrued but unpaid interest thereon) in whole or
in part at any time and from time to time (subject to minimum thresholds to be
agreed) without premium or penalty (except LIBOR breakage costs). Voluntary
prepayments of principal will be applied to LIBOR borrowings and/or Base Rate
borrowings constituting the ABL FILO Loans in the manner designated by the
Borrowers, ratably among the ABL FILO Lenders.

 

B-2-4

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Conditions to Credit Extensions:                   Conditions precedent to the
borrowings under the ABL FILO Facility on the Closing Date will be only those
set forth in the Conditions Annex, subject in all respects to the Certain Funds
Provision. Representations and Warranties:      Consistent with the Existing ABL
Facility subject to the ABL FILO Facility Documentation Principles. Affirmative
Covenants:      Consistent with the Existing ABL Facility subject to the ABL
FILO Facility Documentation Principles and an additional covenant requiring the
Borrowers to use commercially reasonable efforts to maintain a public corporate
credit rating from S&P and a public corporate family rating in Moody’s in each
case with respect to the Lead Borrower and a public rating of the ABL FILO
Facility by each of S&P and Moody’s and to hold a quarterly lender call (which
such call may be a customary earnings call that is held for shareholders and
other debt holders). Negative Covenants:      Consistent with the Existing ABL
Facility subject to the ABL FILO Facility Documentation Principles (and, in any
event, to allow for permitted refinancing of the Existing ABL Facility or Best
Efforts ABL Facility, as applicable, on substantially similar terms (other than
maturity dates, interest rates and fees and other terms that are not materially
adverse to the ABL FILO Lenders in their capacities as such). Financial
Covenants:      Same as the Existing ABL Facility. Events of Default:      Same
as the Existing ABL Facility. Assignments and Participations:      Each ABL FILO
Lender may assign all or, subject to minimum amounts to be agreed, a portion of
its loans and commitments under the ABL FILO Facility except to the Lead
Borrower, an affiliate of the Lead Borrower (subject to exceptions consistent
with the Existing ABL Facility), a natural person or a Disqualified Lender.
Assignments will require payment of an administrative fee to the ABL FILO
Administrative Agent and the consents of the ABL FILO Administrative Agent and
the Lead Borrower, which consents shall not be unreasonably withheld or delayed;
provided that (i) no consents shall be required for an assignment to an existing
ABL FILO Lender or an affiliate or approved fund of an existing ABL FILO Lender,
(ii) no consent of the Lead Borrower shall be required when a payment or
bankruptcy event of default is continuing and (iii) the Lead Borrower shall be
deemed to have consented if it has not responded within five business days of a
request for consent. In addition, each ABL FILO Lender may sell participations
in all or a portion of its loans and commitments under the ABL FILO Facility;
provided that no purchaser of a participation shall have the right to exercise
or to cause the selling ABL FILO Lender to exercise voting rights in respect of
the ABL FILO Facility, except

 

B-2-5

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with respect to: (x) reductions or forgiveness of principal, interest or fees
payable to such participant; (y) extensions of the scheduled date for payment of
principal or interest on the loans in which such participant participates; and
(z) releases of all or substantially all of the value of the guarantees of the
Guarantors, or all or substantially all of the Collateral.

 

In addition, assignments may be made to the Sponsors (as defined in the Existing
ABL Facility) on the same terms as set forth in Existing ABL Facility.

 

For the avoidance of doubt there shall be no assignment or participation to a
Disqualified Lender.

Expenses and Indemnification:                   Consistent with the Existing ABL
Facility, subject to the ABL FILO Facility Documentation Principles. Yield
Protection, Taxes and Other Deductions:      Consistent with the Existing ABL
Facility, subject to the ABL FILO Facility Documentation Principles. Voting:  
   Consistent with the Existing ABL Facility, subject to the ABL FILO Facility
Documentation Principles. Replacement of ABL FILO Lenders:      Consistent with
the Existing ABL Facility, subject to the ABL FILO Facility Documentation
Principles. Governing Law:      New York. Counsel to ABL FILO Arrangers, ABL
FILO Administrative      Agent and ABL FILO Collateral      Agent:      Cahill
Gordon & Reindel LLP

 

B-2-6

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EXHIBIT C

SENIOR SECURED BRIDGE FACILITY

SUMMARY OF PRINCIPAL TERMS AND CONDITIONS3

 

Borrowers:    The Company (the “Lead Borrower”) and any other subsidiary of the
Lead Borrower designated by the Lead Borrower that is a borrower under the Term
Loan Facility (as defined below) (each, a “Borrower” and, collectively, the
“Borrowers”). Guarantors:    Same as under the Second Amended and Restated Term
Loan Agreement, dated August 25, 2014 and effective January 30, 2015, by and
among Albertson’s LLC, Safeway Inc. and the other co-borrowers, as borrowers,
Albertsons’s Holdings LLC and the other guarantors from time to time thereto, as
guarantors, the lenders from time to time thereto, and Credit Suisse AG, Cayman
Islands Branch, as administrative and collateral agent (as amended, amended and
restated or otherwise supplemented, the “Term Loan Facility”) (such guarantors,
the “Guarantors” and together with the Borrowers, the “Loan Parties”). Any
guarantees of the Senior Secured Bridge Facility will be automatically released
upon the release of the guarantors under the Term Loan Facility. Bridge Lead
Arrangers and Bookrunners:    MLPF&S, CSLF, GS Bank, MSSF, Barclays, DBSI, RBC,
Wells Fargo Securities and MUFG (the “Bridge Lead Arrangers”). Bridge
Co-Managers:    PNC Capital Markets, STRH and U.S. Bank (the “Bridge
Co-Managers” and together with the Bridge Lead Arrangers, the “Bridge
Arrangers”). Bridge Administrative Agent and Collateral Agent:    Bank of
America, N.A. (the “Bridge Administrative Agent” and, together with the Existing
ABL Administrative Agent or Best Efforts Administrative Agent, as applicable,
and the ABL FILO Administrative Agent, the “Administrative Agents”). Bridge
Lenders:    A syndicate of banks, financial institutions and other entities,
including the Initial Lenders (excluding any Disqualified Lender), arranged by
the Bridge Arrangers and reasonably acceptable to the Company (collectively, the
“Bridge Lenders”).

 

3  All capitalized terms used but not defined herein shall have the meanings
provided in the Commitment Letter to which this summary is attached or in the
other exhibits thereto.

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Initial Loans:    The Bridge Lenders will make secured senior loans (the
“Initial Bridge Loans”) to the Borrowers on or prior to the Closing Date in an
aggregate principal amount of up to $500,000,000 minus the gross proceeds
received by the Borrowers from Senior Secured Notes (the “Senior Secured Notes”)
and other Securities (as defined in the Fee Letter) issued following the date of
the Commitment Letter and on or prior to the Closing Date, pursuant to a senior
bridge loan facility (the “Senior Secured Bridge Facility”, and together with
the Best Efforts ABL Facility, if applicable, the Incremental ABL Commitments,
if applicable, and the ABL FILO Facility, the “Credit Facilities” and each, a
“Credit Facility”). Availability:    The Bridge Lenders will make the Initial
Bridge Loans on the Closing Date. Amounts repaid or prepaid under the Senior
Secured Bridge Facility may not be reborrowed. Purpose:    The proceeds of the
Initial Bridge Loans will be used on the Closing Date to finance a portion of
the Merger Consideration, Refinancing and to pay fees and expenses in connection
with the Transactions. Maturity:   

All of the Initial Bridge Loans will mature on the date that is the one year
anniversary of the Closing Date (the “Initial Loan Maturity Date”). Any Initial
Bridge Loans that have not been previously repaid in full on or prior to the
Initial Loan Maturity Date will be automatically converted into a senior secured
term loan (each, an “Extended Term Loan”) due on the date that is 8 years after
the Closing Date (the “Senior Maturity Date”). The date on which Initial Bridge
Loans are converted into Extended Term Loans is referred to as the “Bridge
Conversion Date”. At any time on or after the Bridge Conversion Date, at the
option of the applicable Bridge Lender, the Extended Term Loans may be exchanged
in whole or in part for senior exchange notes having the terms set forth in
Annex I hereto (the “Senior Secured Exchange Notes”) having an equal principal
amount; provided that no Senior Secured Exchange Notes shall be issued until the
Borrowers shall have received requests to issue at least $300,000,000 in
aggregate principal amount of Senior Secured Exchange Notes.

 

On the Bridge Conversion Date, the covenants, defaults and certain other terms
applicable to the Extended Term Loans will automatically be modified as set
forth in Annex I hereto. The Senior Secured Exchange Notes will be issued
pursuant to an indenture that will have the terms set forth on Annex I hereto.

Security:    On the Closing Date, subject to the Certain Funds Provision, the
obligations under the Initial Bridge Loans shall be, and upon conversion or
issuance the obligations under the Extended Term Loans and the Senior Secured
Exchange Notes shall be, secured by (i) perfected first priority (subject to
permitted liens as described in the Bridge Facility Documentation) security
interests in and liens (including mortgage liens) on the CF Debt Priority
Collateral (as defined below) (other than CF Debt Priority Collateral of New
Albertson’s L.P. and its subsidiaries) and (ii) perfected second priority

 

C-2

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(subject to permitted liens as described in the Bridge Facility Documentation)
security interests in and liens on the ABL Priority Collateral; provided that
(i) with respect to assets of Safeway Inc. and its subsidiaries, the lien
securing the Initial Bridge Loans, Extended Term Loans, Senior Secured Exchange
Notes and any other Securities, in the aggregate, shall be limited to 10% of
Consolidated Net Tangible Assets (as defined in the indentures governing the
existing debt securities of Safeway Inc.) as calculated on the Closing Date.

 

Notwithstanding anything to the contrary, no action shall be taken to grant
(except in the case of clause (iii)) or perfect any security interest in any of
the following (i) any fee-owned property located in the U.S. having a fair
market value equal to or less than an amount to be agreed consistent with the
Term Loan Facility, (ii) any real property leasehold interests located in the
U.S. having a fair market value equal to or less than an amount to be agreed
(with no requirement for landlord waivers, consents, estoppels or collateral
access letters with respect to any leasehold interest), (iii) except to the
extent the security interest can be perfected by a UCC filing, cash and cash
equivalents, deposit and securities accounts (including security entitlements
and related assets) and other assets requiring perfection through control
agreements or perfection by control (other than certificates evidencing equity
in certain subsidiaries that constitutes CF Debt Priority Collateral), (iv) any
“Excluded Property” as defined under the security agreement for the Term Loan
Facility, (v) assets that do not secure the Term Loan Facility and (vi) assets
of New Albertson’s L.P. and its subsidiaries that constitute CF Debt Priority
Collateral subject to the limitation on liens in its existing indenture. For the
avoidance of doubt, the Senior Secured Bridge Facility shall not be secured by
the equity interests of the Lead Borrower.

 

For purposes herein, “CF Debt Priority Collateral” and “ABL Priority Collateral”
shall each have the meaning ascribed to it in that certain amended and restated
intercreditor agreement (as amended or supplemented from time to time, the
“Intercreditor Agreement”) dated January 30, 2015 (as amended, amended and
restated or otherwise supplemented, from time to time) among the Lead Borrower,
Bank of America, N.A., as collateral agent, under the Existing ABL Facility and
Credit Suisse AG, as collateral agent under the Term Loan Facility.

 

The priorities and rights of the respective security interests and liens of the
Bridge Administrative Agent, the collateral agent under the Existing ABL
Facility or Best Efforts ABL Facility, the collateral agent under the ABL FILO
Facility, the collateral agent under the Term Loan Facility, and the collateral
agent for the Senior Secured Notes, if issued, and the exercise of certain of
their rights and remedies with respect thereto will be subject to the
Intercreditor Agreement (and, in the case of the Senior Secured Bridge Facility,
the Senior Secured Notes and any Securities, a pari passu intercreditor
agreement in form usual and customary for facilities and transactions of this
type) in accordance with the Bridge Documentation Principles.

 

 

C-3

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   The Bridge Administrative Agent shall automatically release its security
interest in (i) any ABL Priority Collateral upon the release of the lien of the
collateral agent for the Existing ABL Facility or Best Efforts ABL Facility, as
applicable, on such collateral and (ii) any CF Debt Priority Collateral upon the
release of the lien of the collateral agent for the Term Loan Facility on such
collateral. For the avoidance of doubt, the collateral agent for the Term Loan
Facility shall initially act as bailee on behalf of the Bridge Administrative
Agent for the required physical pledged collateral. Interest:   

Prior to the Initial Loan Maturity Date, the Initial Bridge Loans will accrue
interest at a rate per annum equal to LIBOR (as defined below) for periods to be
selected by Borrowers of one, two, three or six months or, with the consent of
all Bridge Lenders, nine or twelve months, plus a Spread (as defined below). As
used herein, the “Spread” means initially 575 basis points, which will increase
by 50 basis points at the end of the first three-month period after the Closing
Date and which will increase by 50 basis points at the end of each three-month
period thereafter.

 

Notwithstanding the foregoing (other than with respect to default interest), at
no time shall the per annum interest rate on the Initial Bridge Loans exceed the
Senior Secured Cap (as defined in the Fee Letter). Upon any payment event of
default, the interest rate will be, with respect to overdue amounts, the
applicable interest rate plus 2.00% per annum. Interest on such overdue amounts
will be payable upon written demand.

 

The Borrowers shall pay (or cause to be paid) accrued interest on the entire
principal amount of the outstanding Initial Bridge Loans in cash quarterly in
arrears and on the Initial Loan Maturity Date.

   Following the Initial Loan Maturity Date, all outstanding Extended Term Loans
and Senior Secured Exchange Notes will accrue interest at the rate provided for
the Extended Term Loans and Senior Secured Exchange Notes in Annex I hereto.   
Calculation of interest shall be on the basis of actual days elapsed in a year
of 360 days.    As used herein, “LIBOR” means a rate per annum equal to the
London Interbank Offered Rate (“LIBOR”) for the applicable interest period for
the corresponding deposits of U.S. dollars appearing on Reuters Screen LIBOR01
Page (or any successor or substitute therefor selected by the Bridge
Administrative Agent in its reasonable judgment) two business days prior to the
start of the interest period; provided, that LIBOR will be deemed to be not less
than 0.00% per annum.

 

C-4

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Mandatory Redemption:    The Borrowers will be required to prepay Initial Bridge
Loans at par, plus accrued and unpaid interest from the net cash proceeds (after
deduction of, among other things, amounts required to repay the Term Loan
Facility of (a) to the extent permitted under the Term Loan Facility, all
non-ordinary course assets sales or other dispositions of property by the Lead
Borrower or any of its restricted subsidiaries (including casualty insurance and
condemnation proceeds), in excess of an amount to be mutually agreed, and
subject to other exceptions to be agreed upon and a 100% reinvestment right if
reinvested (or committed to be reinvested) within 12 months of such sale or
disposition, (b) the issuance of any Securities (as defined in the Fee Letter)
or other refinancing debt securities by the Borrowers or any of their restricted
subsidiaries (subject to exceptions consistent with Bridge Documentation
Principles) and (c) the issuance of equity securities by the Lead Borrower in a
public or private primary offering. Change of Control:    The Lead Borrower will
be required to offer to prepay the Initial Bridge Loans upon the occurrence of a
change of control (to be defined in a manner consistent with Term Loan
Facility), which offer shall be at 100% of the principal amount thereof, plus
accrued and unpaid interest. Optional Prepayment:    The Initial Bridge Loans
may be prepaid, in whole or in part, at the option of the Borrowers, at any
time, without premium or penalty (except LIBOR breakage costs). Documentation:
   The Facilities Documentation with respect to the Senior Secured Bridge
Facility (the “Bridge Facility Documentation”) will contain only those mandatory
prepayments, representations, warranties, conditions to borrowing, affirmative
and negative covenants and events of default as set forth in this Exhibit B
applicable to the Lead Borrower and its restricted subsidiaries, in each case,
usual and customary for facilities and transactions of this type with changes
and modifications to take into account the operational requirements and
strategic requirements of the Lead Borrower and its restricted subsidiaries
(after giving effect to the Transactions) in light of their industries (and
risks and trends associated therewith), business and business practices,
geographical locations and operations and financial reporting, and in light of
the Borrower Model, shall include collateral and other provisions to be mutually
agreed between the Administrative Agent and the Lead Borrower and shall be
negotiated in good faith to finalize the Bridge Facility Documentation, giving
effect to the Certain Funds Provision, as promptly as reasonably practicable.
This paragraph, and the provisions contained herein, shall be referred to as the
“Bridge Documentation Principles”. The Bridge Documentation Principles, the
Incremental ABL Commitment Documentation Principles, the Best Efforts ABL
Documentation Principles and the ABL FILO Facility Documentation Principles are
collectively referred to as the “Documentation Principles.”

 

C-5

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Conditions Precedent on the Closing Date:    Conditions precedent to the
borrowings under the Senior Secured Bridge Facility on the Closing Date will be
only those set forth in the Conditions Annex, subject in all respects to the
Certain Funds Provision. Representations and Warranties:    Consistent, to the
extent applicable, with those in the Term Loan Facility (with appropriate
customary changes for bridge financings that are consistent with the Bridge
Documentation Principles) and which will be, in any event, not less favorable to
the Borrowers and their restricted subsidiaries than the provisions of the Term
Loan Facility. Covenants:   

The Bridge Facility Documentation will contain such affirmative and negative
covenants applicable to the Lead Borrower and its restricted subsidiaries as are
usual and customary for publicly traded high yield securities and otherwise
substantially identical to that certain indenture governing the Lead Borrower’s
5.75% Senior Notes due 2025 (the “Bond Precedent”), the definitive terms of
which will be negotiated in good faith (giving due regard to the operational
requirements, size, industries, businesses, and business practices of the Lead
Borrower and its subsidiaries, with modifications to the asset sale covenant so
that it applies to any proceeds received in connection with the WBA Asset
Purchase Agreement (as defined in the Acquisition Agreement) received by the
Lead Borrower after the Closing Date) (the “Applicable Bond Standard”), will be
incurrence-based covenants, and, in no event, except as set forth herein, shall
be more restrictive than, or include any covenants not included in the Term Loan
Facility and any subsidiary that is designated as an “unrestricted subsidiary”
under the Term Loan Facility as of the Closing Date shall be designated as an
“unrestricted subsidiary” under the Senior Secured Bridge Facility as of the
Closing Date. Prior to the Initial Loan Maturity Date, the ability to incur
indebtedness, incur liens and pay dividends may be more restrictive than those
of the Extended Term Loans and the Senior Secured Exchange Notes, as reasonably
agreed by the Bridge Administrative Agent and the Lead Borrower. In addition,
for the avoidance of doubt, the Bridge Facility Documentation shall permit the
Ratably Secured Notes to be secured on a pari passu basis with the collateral of
the Target but not to the collateral owned by any subsidiary of the Target that
secures the Senior Secured Bridge Facility, the Term Loan Facility and the ABL
Facility.

 

There will be no financial maintenance covenants.

Events of Default:    Customary for offerings of high yield securities and
consistent with the Applicable Bond Standard but not including a cross-default
(and, in lieu thereof, a cross-acceleration and cross-payment default at
maturity to material debt).

 

C-6

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Cost and Yield Protection:    Usual for facilities and transactions of this
type, including customary tax gross-up provisions and customary mitigation
provisions. Assignment and Participation:    Subject to prior notification of
the Bridge Administrative Agent, the Bridge Lenders will have the right to
assign Initial Bridge Loans (in minimum increments of $5 million) with the prior
written consent of the Bridge Administrative Agent (except in the case of an
assignment to a Bridge Lender or one of its affiliates), which consent shall not
be unreasonably withheld or delayed; provided that, prior to the Initial Loan
Maturity Date, and unless a payment or bankruptcy (with respect to any Borrower
or any Guarantor) event of default has occurred and is continuing, the consent
of the Lead Borrower (not to be unreasonably withheld or delayed) shall be
required with respect to any assignment if, subsequent thereto, the Initial
Bridge Lenders (as defined in the Commitment Letter) would hold, in the
aggregate, less than 50.1% of the outstanding Initial Bridge Loans.   

The Bridge Lenders will have the right to participate their Initial Bridge Loans
to other financial institutions provided that no purchaser of a participation
shall have the right to exercise or to cause the selling Bridge Lender to
exercise voting rights in respect of the Senior Secured Bridge Facility, except
with respect to significant matters customarily permitted in facilities of this
type, such as reductions in amount or interest rate or extensions of maturity.

 

Notwithstanding the foregoing, no assignments or participations shall be made
with a Disqualified Lender.

Voting:    Amendments and waivers of the Bridge Facility Documentation will
require the approval of Bridge Lenders holding more than 50% of the outstanding
Initial Bridge Loans (the “Required Bridge Lenders”), except that (a) the
consent of each directly and adversely affected Bridge Lender (and not the
Required Bridge Lenders) will be required for (i) reductions or extensions of
the scheduled date for payment of principal, interest rates or Spread owing to
such Bridge and (ii) extensions of the Initial Loan Maturity Date (it being
understood and agreed that the amendment or waiver of any mandatory prepayment
shall only require the consent of the Required Bridge Lenders) or the Senior
Maturity Date and (b) the consent of 100% of the Bridge Lenders will be required
with respect to (i) releases of all or substantially all of the value of the
guarantees, or all or substantially all of the collateral and (ii) reductions in
voting thresholds. Expenses and Indemnification:    All reasonable and
documented out-of-pocket expenses of the Bridge Arrangers and the Bridge
Administrative Agent associated with the syndication of the Senior Secured
Bridge Facility and with the preparation, execution and delivery,
administration, amendment, waiver or modification of the Bridge Facility
Documentation are to be paid by the Lead Borrower on and after the Closing Date,
subject

 

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   to the Expense and Indemnification Limitations. In addition, all reasonable
and documented out-of-pocket expenses for enforcement costs associated with the
Senior Secured Bridge Facility are to be paid by the Lead Borrower subject to
the Expense and Indemnification Limitations.    The Borrowers and the Guarantors
will indemnify the Bridge Arrangers, the Bridge Administrative Agent, the Bridge
Lenders, their respective affiliates, successors and assigns and the officers,
directors, employees, agents, advisors, controlling persons and members of each
of the foregoing (each, an “Indemnified Party”) and hold them harmless from and
against all reasonable and reasonably documented costs, expenses and liabilities
of such Indemnified Party arising out of or relating to any claim or any
litigation, investigation or other proceeding (regardless of whether such
Indemnified Party is a party thereto and regardless of whether such matter is
initiated by a third party or by the Borrowers or Guarantors or any of their
affiliates or equity holders) that relates to the Transactions, including the
financing contemplated hereby, subject to the Expense and Indemnification
Limitations. Governing Law and Forum:    New York. Counsel for Bridge
Administrative Agent and Bridge Arrangers:    Cahill Gordon & Reindel LLP.

 

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Annex I to Exhibit C

SENIOR TERM LOANS

SENIOR SECURED EXCHANGE NOTES

SUMMARY OF PRINCIPAL TERMS AND CONDITIONS

 

Issuers:    The Lead Borrower and the other Borrowers of the Initial Bridge
Loans (in their capacity as the borrowers of the Extended Term Loans and the
issuer of the Senior Secured Exchange Notes, each, an “Issuer” and,
collectively, the “Issuers”). In addition, the Lead Borrower may designate
certain additional subsidiaries as “additional issuers”. Extended Term Loans:   
On the Initial Loan Maturity Date, all of the outstanding Initial Bridge Loans
will be automatically converted into Extended Term Loans having a principal
amount equal to 100% of the aggregate principal amount of the converted Initial
Bridge Loans. Maturity:    The Extended Term Loans and the Senior Secured
Exchange Notes will mature on the Senior Maturity Date. Interest Rate:    The
Extended Term Loans and the Senior Secured Exchange Notes will bear interest at
a rate per annum equal to the Senior Secured Cap (as defined in the Fee
Letter). Upon any payment event of default, the interest rate will be, with
respect to overdue amounts, the applicable interest rate, plus 2.00% per
annum. Interest on such overdue amounts will be payable upon written demand.   
Interest will be payable in arrears at the end of each semi-annual fiscal period
and computed on the basis of a 360-day year. Guarantees:    Same as the Initial
Bridge Loans (including as to release). Mandatory Redemption:    After the
Bridge Conversion Date, the Issuers will be required to make an offer to prepay
the Extended Term Loans and repurchase the Senior Secured Exchange Notes at par,
plus accrued and unpaid interest, from the net cash proceeds (after deduction
of, among other things, amounts required to repay the Term Loan Facility) of all
non-ordinary course (to be defined in a manner consistent with Applicable Bond
Standard) assets sales or other dispositions of property by the Issuers or any
of their restricted subsidiaries (including casualty insurance and condemnation
proceeds), in excess of an amount to be mutually agreed and subject to
exceptions to be mutually agreed upon and a 100% reinvestment right if
reinvested (or committed to be reinvested) within 12 months of such sale or
disposition. In addition, after any payments required to be made to repay the
Term Loan Facility, the Issuers will be required to offer to prepay the Extended
Term Loans and repurchase the Senior Secured Exchange Notes upon the occurrence
of a change of control (to be defined in a manner consistent with the Bond
Precedent), which offer shall be at 101% of the principal amount plus accrued
and unpaid interest.

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Optional Redemption:    The Extended Term Loans may be prepaid at the option of
the Issuers, in whole or in part, at any time at par, plus accrued and unpaid
interest to the prepayment or redemption date. The Senior Secured Exchange Notes
will be non-callable for the first 3 years after the Closing Date (subject to
40% equity clawback and make-whole provisions at T+50 basis points) and will be
callable thereafter at par, plus accrued interest, plus a premium equal to three
quarters of the coupon on such Senior Secured Exchange Notes during the fourth
year after the Closing Date, one-half the coupon on such Senior Secured Exchange
Notes during the fifth year after the Closing Date and one quarter of the coupon
on such Senior Secured Exchange Notes during the sixth year after the Closing
Date, which call premiums shall decline to zero on the sixth anniversary of the
Closing Date; provided further that such call protection shall not apply to any
redemptions in case of an AHYDO “catch-up” provision, which shall permit
redemption at par.    The optional redemption provisions will be on terms
customary with high yield debt securities and consistent with the Applicable
Bond Standard. Defeasance and Discharge Provisions:    Customary for publicly
traded high yield debt securities and consistent with the Applicable Bond
Standard. Modification:    Customary for high yield debt securities for
affiliates of the Sponsor and consistent with the Applicable Bond Standard.
Registration Rights:    Private for life. Right to Transfer Senior Secured
Exchange Notes:    The holders of the Extended Term Loans and Senior Secured
Exchange Notes shall have the absolute and unconditional right to transfer such
Extended Term Loans and Senior Secured Exchange Notes in compliance with
applicable law to any third parties. Covenants:    Customary for offerings of
high yield securities and consistent with the Applicable Bond Standard. Events
of Default:    Customary for offerings of high yield securities and consistent
with the Applicable Bond Standard but not including a cross-default (and, in
lieu thereof, a cross-acceleration and cross-payment default at maturity to
material debt). Governing Law and Forum:    New York.

 

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EXHIBIT D

EXHIBIT D

CONDITIONS ANNEX

The availability of the applicable Credit Facilities shall be subject to the
satisfaction of solely the following conditions, which shall be subject in all
respects to the Certain Funds Provision and the applicable Documentation
Principles. Capitalized terms used but not defined herein have the respective
meanings set forth in the commitment letter to which this Exhibit D is attached
and in Exhibits A, B and C attached thereto.

1. (a) Each Loan Party shall have executed and delivered the applicable
Facilities Documentation to which it is a party in accordance with the terms of
the Commitment Letter, (b) the Arrangers shall have received customary closing
certificates (including a solvency certificate, substantially in the form set
forth in Annex I attached to this Exhibit C from the chief financial officer (or
other officer with equivalent duties) of the Company), and (c) the Arrangers
shall have received customary legal opinions, customary evidence of authority,
good standing certificates (to the extent applicable) in the respective
jurisdictions of organization of the Borrowers and the Guarantors and a notice
of borrowing.

2. The Refinancing shall have been consummated, or substantially concurrently
with the initial borrowing under the Credit Facilities, shall be consummated.

3. The Acquisition shall have been or, substantially concurrently with the
initial borrowing under the Credit Facilities, shall be consummated in
accordance with the terms of the Acquisition Agreement, (as amended and in
effect from time to time, but without giving effect to any modifications,
amendments, waivers or consents by the Arrangers or any of their affiliates that
are materially adverse to the Initial Lenders or the Arrangers (each in their
respective capacity as such) without the prior written consent of the Arrangers
(such consent not to be unreasonably withheld or delayed); provided that an
amendment to the Acquisition Agreeement to provide that the Target shall be
owned by a wholly owned domestic subsidiary of the Company that is a Guarantor
of the applicable Credit Facilities shall not be deemed to be materially adverse
to the Initial Lenders or the Arrangers).

4. No Company Material Adverse Effect (as defined in the Acquisition Agreement)
shall have occurred after the date of the Acquisition Agreement that is
continuing.

5. The Arrangers shall have received (a) audited consolidated balance sheets and
related consolidated statements of income, shareholders’ (or members’) equity
and cash flows of the Company (or Albertsons Companies, LLC) and the Target for
the three most recently completed fiscal years of the Company (or Albertsons
Companies, LLC) and the Target, respectively, ended at least 90 days prior to
the Closing Date and (b) unaudited condensed consolidated balance sheets and
related condensed consolidated statements of income, shareholders’ (or members’)
equity and cash flows of the Company (or its predecessor) and the Target for
each subsequent fiscal quarter (other than the fourth fiscal quarter of the
Company’s and the Target’s fiscal year, respectively) ended at least 45 days
prior to the Closing Date; provided that filing of the required financial
statements on Form 10-K, 10-Q, S-1 and/or S-4 for such time periods by the
Company and/or the Target, as the case may be, will satisfy the requirements of
this paragraph 5. The Arrangers hereby acknowledge receipt of the (i) audited
financial statements referred to in clause (a) above for fiscal year 2014, 2015
and 2016 and (ii) the unaudited financial statements referred to in clause
(b) above for the first, second and third fiscal quarter of the 2017 fiscal
year.

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6. The Arrangers shall have received an unaudited pro forma consolidated balance
sheet and related unaudited pro forma consolidated statement of income of the
Lead Borrower and its subsidiaries as of and for the twelve-month period ending
on the last day of the most recent consolidated balance sheet and related
consolidated statement of income delivered pursuant to the preceding paragraph,
prepared after giving effect to the Transactions as if the Transactions had
occurred on such date (in the case of such pro forma balance sheet) or on the
first day of such period (in the case of such pro forma statement of income), as
applicable.

7. Subject to the Certain Funds Provision and the exceptions contained in the
“Security” section of the Term Sheets, the Arrangers shall have received copies
of all UCC, lien, judgment and litigation searches with respect to the Loan
Parties, and all documents and instruments required to create and perfect (i) in
the case of the Senior Secured Bridge Facility, the Bridge Administrative
Agent’s security interest in the Collateral (as described in Exhibit C), (ii) in
the case of the Incremental ABL Commitments, the Existing ABL Collateral Agent’s
security interest in the Collateral (as described in Exhibit B-1), (iii) in the
case of the Best Efforts ABL Facility, the Best Efforts ABL Collateral Agent’s
security interest in the Collateral (as described in Exhibit B-1) and (iv) in
the case of the ABL FILO Facility, the ABL FILO Collateral Agent’s security
interest in the Collateral (as described in Exhibit B-2) shall have been
executed and delivered, and, if applicable, be in proper form for filing.

8. All fees required to be paid on the Closing Date pursuant to the Fee Letter
and the Term Sheets and reasonable and documented out-of-pocket expenses
required to be paid on the Closing Date pursuant to the Commitment Letter, in
each case to the extent invoiced at least two business days prior to the Closing
Date, shall have been paid (which amounts may be offset against the proceeds of
the applicable Credit Facilities).

9. Each Administrative Agent shall have received at least three (3) days prior
to the Closing Date all documentation and other information required by
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including without limitation the PATRIOT Act,
that has been reasonably requested by the Initial Lenders at least 10 days prior
to the Closing Date.

10. The Specified Representations and the Specified Acquisition Agreement
Representations shall be true in all material respects.

11. As a condition to the availability of the Senior Secured Bridge Facility,
(a) you shall have provided the Investment Banks (as defined in the Engagement
Letter) with a customary preliminary prospectus or preliminary offering
memorandum or preliminary private placement memorandum (collectively, the “Bond
Offering Documents”) for the Senior Secured Notes suitable for use in a
customary (for high yield debt securities consistent with Applicable Bond
Standard) “high-yield road show” relating to the Senior Secured Notes which
contains all financial statements and other data to be included therein
(including all audited financial statements, all unaudited financial statements
(which shall have been reviewed by the independent accountants as provided in
Statement on Auditing Standards No. 100) (subject to exceptions customary for a
Rule 144A offering involving high yield debt securities without registration
rights) and all appropriate pro forma financial statements (which, for the
avoidance of doubt, in no event shall require (x) financial information
otherwise required by Rule 3-05, Rule 3-09, Rule 3-10 and Rule 3-16 of
Regulation S-X (provided that information with respect to assets, liabilities,
revenue and EBITDA with respect to non-guarantors in the aggregate shall be
provided), (y) “segment reporting” and (z) any Compensation Discussion and
Analysis required by Item 402 of Regulation S-K)), and all other data (including
selected financial data) that would be necessary for the Investment Bank to
receive customary (for high yield debt securities) “comfort” (including
“negative assurance” comfort) from independent accountants in connection with
the offering of the Senior Secured Notes; provided that, such condition shall be
deemed satisfied if such Offering Document excludes the “description of notes”
and sections that would customarily be

 

D-2

--------------------------------------------------------------------------------

provided by the Investment Bank but is otherwise complete, and (b) the
Investment Bank shall have been afforded a period of at least 15 consecutive
days (unless a shorter period of time is reasonably acceptable to the Investment
Bank in its sole discretion) following the date of delivery of an Offering
Document including the information described in clause (a) to seek to place the
Senior Secured Notes with qualified purchasers thereof, subject to the Blackout
Periods. If the Company in good faith reasonably believe that it has delivered
the Bond Offering Documents, it may deliver to the Bridge Arrangers written
notice to that effect (stating when it believes it completed any such delivery),
in which case the Company shall be deemed to have delivered the Bond Offering
Documents on the date specified in such notice and the 15 consecutive day period
described above shall be deemed to have commenced on the date specified in such
notice, in each case unless the Bridge Arrangers in good faith reasonably
believes that the Company has not completed delivery of the Bond Offering
Documents and, within two business days after its receipt of such notice from
the Company, the Bridge Arrangers deliver a written notice to the Company to
that effect (stating with specificity which information is required to complete
the Bond Offering Documents).

For the purposes of this Paragraph 11, “Blackout Period” shall mean (x) the days
July 4, 2018 through July 8, 2018 and November 22 through November 25, 2018
shall be excluded as “days” for purposes of the 15 consecutive day period above
and (y) if the 15 consecutive day period has not concluded prior to August 20,
2018, such period shall not begin prior to September 4, 2018.

12. With respect to (x) the Incremental ABL Commitments, the Best Efforts ABL
Facility shall not be provided on the Closing Date and (y) the Best Efforts ABL
Facility, (i) the Arrangers shall have received commitments from one or more
Best Efforts ABL Lenders (which, for avoidance of doubt, may include any
Commitment Party that agrees, in its sole discretion to provide any portion of
the Excess Best Efforts ABL Revolving Commitments) willing, in their sole
discretion, to provide the entire amount of the Excess Best Efforts ABL
Revolving Commitments and (ii) the Incremental ABL Commitments shall not have
become effective and the Existing ABL Refinancing shall be consummated
substantially concurrently with the effectiveness of the Best Efforts ABL
Facility.

13. With respect to the Incremental ABL Commitments or the Best Efforts ABL
Facility, as applicable, and the ABL FILO Facility (i) the ABL Arrangers shall
have received (x) an appraisal from a third party appraiser (which such
appraiser shall be reasonably acceptable to the ABL Arrangers) and field exam of
the assets of the Target and its subsidiaries to be included in the Borrowing
Base and (y) a Borrowing Base certificate prepared as of the last day of the
most recent month ending at least 20 calendar days prior to the Closing Date on
a pro forma basis for the Transactions and (ii) after giving effect to all loans
and letters of credit outstanding on the Closing Date under the Existing ABL
Facility or Best Efforts ABL Revolving Facility, as applicable, and the ABL FILO
Facility after giving effect to the Transactions, Excess Availability plus up to
$500,000,000 of cash on hand of the Lead Borrower and its restricted
subsidiaries shall be not less than $2,000,000,000.

 

D-3

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Annex I to Exhibit D

ANNEX I to

EXHIBIT D

FORM OF SOLVENCY CERTIFICATE

CONFIDENTIAL

Form of Solvency Certificate

Date:             , 2018

To the Administrative Agent and each of the Lenders party to the Credit
Agreement referred to below:

I, the undersigned, a senior authorized financial officer of Albertsons
Companies, Inc., a                      (“Company”), in that capacity only and
not in my individual capacity (and without personal liability), do hereby
certify as of the date hereof, and based upon facts and circumstances as they
exist as of the date hereof (and disclaiming any responsibility for changes in
such fact and circumstances after the date hereof), that:

1. This certificate is furnished to the Administrative Agent and the Lenders
pursuant to Section          of the Credit Agreement, dated as
of                    , 2018, among                      (the “Credit
Agreement”). Unless otherwise defined herein, capitalized terms used in this
certificate shall have the meanings set forth in the Credit Agreement.

2. For purposes of this certificate, the terms below shall have the following
definitions:

(a) “Fair Value”

The aggregate amount for which assets (both tangible and intangible) in their
entirety, of the Company and its Subsidiaries (including the Target and its
Subsidiaries) taken as a whole would change hands between an interested
purchaser and a seller, in an arm’s length transaction, where both parties are
aware of all relevant facts and neither party is under any compulsion to act.

(b) “Present Fair Salable Value”

The aggregate amount of net consideration that could be expected to be realized
from an interested purchaser by a seller, in an arm’s length transaction under
present conditions in a current market for the sale of assets of a comparable
business enterprise, where both parties are aware of all relevant facts and
neither party is under any compulsion to act, where such seller is interested in
disposing of an entire operation as a going concern, presuming the business will
be continued, in its present form and character, and with reasonable promptness,
not to exceed one year.

(c) “Stated Liabilities”

The recorded liabilities (including contingent liabilities that would be
recorded in accordance with GAAP) of Company and its Subsidiaries (including the
Target and its Subsidiaries) taken as a whole, as of the date hereof after
giving effect to the consummation of the Transactions, determined in accordance
with GAAP consistently applied.

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(d) “Identified Contingent Liabilities”

The maximum estimated amount of liabilities reasonably likely to result from
pending litigation, asserted claims and assessments, guaranties, uninsured risks
and other contingent liabilities of Company and its Subsidiaries (including the
Target and its Subsidiaries) taken as a whole after giving effect to the
Transactions (including all fees and expenses related thereto but exclusive of
such contingent liabilities to the extent reflected in Stated Liabilities), as
identified and explained in terms of their nature and estimated magnitude by
responsible officers of Company.

(e) “Will be able to pay their Stated Liabilities and Identified Contingent
Liabilities as they mature”

For the period from the date hereof through the Maturity Date, Company and its
Subsidiaries (including the Target and its Subsidiaries) taken as a whole should
be able to meet their respective Stated Liabilities and Identified Contingent
Liabilities as those liabilities mature or (in the case of contingent
liabilities) otherwise become payable.

(f) “Do not have Unreasonably Small Capital”

For the period from the date hereof through the Maturity Date, Company and its
Subsidiaries (including the Target and its Subsidiaries) taken as a whole after
consummation of the Transactions and will have sufficient capital to ensure that
it will continue the respective businesses in which it is engaged or in which
its management has indicated it intends to engage.

3. For purposes of this certificate, I, or officers of Company under my
direction and supervision, have performed the following procedures as of and for
the periods set forth below.

(a) I have reviewed the financial statements (including the pro forma financial
statements) referred to in Section          of the Credit Agreement.

(b) I have knowledge of and have reviewed to my satisfaction the Credit
Agreement.

(c) As a senior authorized financial officer of Company, I am familiar with the
financial condition of Company and its Subsidiaries (including the Target and
its Subsidiaries).

4. Based on and subject to the foregoing, I hereby certify on behalf of Company
that after giving effect to the consummation of the Transactions, it is my
opinion that (i) the Fair Value and Present Fair Salable Value of the assets of
Company and its Subsidiaries (including the Target and its Subsidiaries) taken
as a whole exceed their Stated Liabilities and Identified Contingent
Liabilities; (ii) Company and its Subsidiaries (including the Target and its
Subsidiaries) taken as a whole do not have Unreasonably Small Capital; and
(iii) Company and its Subsidiaries (including the Target and its Subsidiaries)
taken as a whole will be able to pay their Stated Liabilities and Identified
Contingent Liabilities as they mature.

* * *

 

D-I-2

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IN WITNESS WHEREOF, Company has caused this certificate to be executed on its
behalf by Senior Authorized Financial Officer as of the date first written
above.

 

[Company] By:  

 

  Name:   Title: Senior Authorized Financial Officer

 

D-I-3