Exhibit (10)S

DIP FACILITY TERM SHEET
Dated: January 14, 2015
WHEREAS, Target Canada Co., a Nova Scotia unlimited company, has requested that
the DIP Lender (as defined below) provide it funding in order to assist with
certain restructuring proceedings under the Companies’ Creditors Arrangement Act
(the “CCAA”) to be commenced before the Ontario Superior Court of Justice (the
“Court”) involving itself and its subsidiaries in accordance with the terms set
out herein;
NOW THEREFORE, the parties, in consideration of the foregoing and the mutual
agreements contained herein (the receipt and sufficiency of which are hereby
acknowledged), agree as follows:
DIP BORROWER
Target Canada Co. and its subsidiaries (collectively, the “Borrower”)
DIP LENDER
Target Corporation (the “DIP Lender”)

STATUS OF EXISTING FACILITY
Effective upon the date upon which the Borrower obtains the Initial Order under
the CCAA (the “Filing Date”), the Borrower acknowledges and agrees the amount
owing to Nicollet Enterprise 1 S.à r.l. (the “Parent”) pursuant to the Loan
Facility Agreement dated as of May 18, 2011, between Borrower and Parent (f/k/a
TSS S.à r.l.), as amended on March 28, 2014, on October 30, 2014 and on January
2, 2015 (as so amended, the “Existing Credit Agreement”) is CDN
$3,068,729,437.67 (together with fees, costs, expenses and other charges now or
hereafter payable by the Borrower pursuant thereto), and is subject to the stay
of proceedings contained in the Initial Order, but is owing without offset,
right of compensation, defence or counterclaim of any nature, kind or
description whatsoever. Notwithstanding the foregoing, Borrower and Parent have
entered into a Subordination and Postponement Agreement dated as of January 12,
2015 pursuant to which the claims and rights of the Parent under the Existing
Credit Agreement may be subordinated to other Proven Claims in the CCAA
proceeding, all as more fully set forth therein.

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USE OF PROCEEDS AND PROJECTED CASH FLOWS
The Borrower has provided to the DIP Lender prior to the execution of this Term
Sheet the cash flow projections (as the same may be amended from time to time as
described below, the “Cash Flow Projections”) set out in Schedule A reflecting
the projected cash requirements of the Target Canada Group for the 13 week
period commencing on the Filing Date calculated on a weekly basis. The
expenditures set out in the Cash Flow Projections may not be exceeded without
the consent of the DIP Lender other than a cumulative variance in the actual
expenditures from the Filing Date forward in an aggregate amount less than 20%
which variance has been approved by the Monitor and nonetheless still subject to
the Maximum Amount (as defined below),
 
Every four weeks, the Borrower will provide the DIP Lender with an updated
weekly budget of the following 13 week period in reasonably similar form to the
Cash Flow Projections attached as Schedule A hereto (as updated, the “Updated
Cash Flow Projections”) describing the Borrower’s updated cash flow requirements
which shall be prepared by the Borrower in good faith and approved by the
Monitor. Updated Cash Flow Projections which have been approved by the Monitor
and do not project the DIP Facility exceeding the Maximum Amount then shall be
the Cash Flow Projections for the purpose of this Term Sheet.
 
Advances under the DIP Facility (“DIP Advances”) shall only be used for working
capital and general corporate purposes of the Borrower and its subsidiaries
while under CCAA protection to pay those expenses contemplated by the Initial
Order, any other Restructuring Court Order (as defined below) and in conformance
with the Cash Flow Projections (the “Contemplated Expenses”).
 
All material expenditures by the Borrower shall be consistent with Cash Flow
Projections and shall be subject in each case to the overall limit on the
availability of DIP Advances imposed by the Maximum Amount.
 
Notwithstanding anything to the contrary herein, none of the proceeds of the DIP
Advances may be used in connection with (a) any investigation (including
discovery proceedings), initiation or prosecution of any claims, causes of
action, motions, applications, actions, or other litigation against the DIP
Lender, or (b) the initiation or prosecution of any claims, causes of action,
motions, applications, actions, or other

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litigation against the DIP Lender in such capacity in respect of this Term
Sheet.

MAXIMUM AMOUNT
The maximum amount (“Maximum Amount”) available under the credit facility (the
“DIP Facility”) will be USD $175,000,000.
MATURITY DATE
The earlier of (i) the date on which the stay of proceedings pursuant to the
Initial Order, as amended from time to time, finally expires without being
extended, (ii) the date on which the CCAA proceedings are terminated or (iii)
January 15, 2016, or such later date as may be agreed to in writing by the DIP
Lender, in its sole discretion (the “Maturity Date”).
 
The commitment in respect of the DIP Facility shall expire on the Maturity Date
and all amounts outstanding under the DIP Facility (the “Obligations”) shall be
repaid in full on the Maturity Date without the DIP Lender being required to
make demand upon the Borrower or to give notice that the DIP Facility has
expired and the Obligations are due and payable, subject to the order of the
Court.
DIP FACILITY
The DIP Facility will be a non-revolving term multi-draw credit facility up to
the Maximum Amount, and will be available until the Maturity Date, subject to
and upon the terms and conditions set out in this Term Sheet and the DIP Credit
Documentation. All DIP Advances shall be deposited into the Borrower’s existing
bank accounts at Bank of America (the “Borrower’s Accounts”) and withdrawn
strictly to pay those Contemplated Expenses and otherwise in accordance with the
terms hereof and the Initial Order. Each Borrower under the DIP Facility shall
be jointly and severally liable for the amounts borrowed by any Borrower and
interest thereon.

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INTEREST RATE
The Borrower shall pay the DIP Lender interest (“Interest”) on the principal
outstanding amount of the DIP Advances and all other Obligations from time to
time owing hereunder from the date of each DIP Advance or the date such other
Obligation arises, as applicable, both before and after maturity, demand,
default, or judgment and until actual payment in full, at the rate of 5% per
annum payable on the Maturity Date; provided, however, that upon the occurrence
of an Event of Default that is continuing the rate shall automatically become 7%
per annum until the Maturity Date.
All payments under or in respect of the DIP Facility shall be made free and
clear of any withholding tax unless the Borrower is required to make such
withholding under applicable law. If such withholding is required, any payments
under the DIP Facility shall be made net of applicable withholding and there
shall be no additional amounts payable by the Borrower in respect of withholding
tax.
 
For the purpose of the Interest Act (Canada), the yearly rate of interest
applicable to amounts owing under this note will be calculated on the basis of a
365 day year.
 
If any provision of this Term Sheet or the DIP Credit Documentation would
obligate the Borrower to make any payment of interest or other amount payable to
the DIP Lender in an amount or calculated at a rate which would be prohibited by
law or would result in a receipt by the DIP Lender of interest at a criminal
rate (as construed under the Criminal Code (Canada)), then notwithstanding that
provision, that amount or rate shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may
be, as would not be so prohibited by law or result in a receipt by the DIP
Lender of interest at a criminal rate.
DIP SECURITY
All Obligations of the Borrower under or in connection with the DIP Facility and
any of the DIP Credit Documentation shall be secured by a Court Ordered Charge
on all real and personal property now leased, owned or hereafter acquired by the
Borrower (the “DIP Lender’s Charge”) without need for any further loan or
security documentation or filings in any personal property security registration
regime or real property system.

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MANDATORY REPAYMENTS
1.
Unless otherwise agreed by the DIP Lender, the Borrower shall make the following
mandatory prepayments of the outstanding principal amount of the DIP Advances,
if any, at the time of receipt of the net cash proceeds described below (subject
in each case to payment or reserves for Court Ordered Charges, taxes and payment
of Permitted Priority Liens):
 
 
(a)    
Prepayments in an amount equal to (i) 100% of the net cash proceeds received
from the incurrence of indebtedness by the Borrower or any of its subsidiaries
which, for greater certainty, may only be incurred with the consent of the DIP
Lender, and (ii) 100% of the net cash proceeds from the receipt of any
extraordinary income or receipts (including, without limitation, insurance
proceeds (excluding business interruption, workers compensation or liability
insurance), tax refunds and similar receipts outside of the ordinary course) by
the Borrower or any of its subsidiaries; and
 
 
 
(b)
Prepayments in an amount equal to 100% of the net cash proceeds of any sale or
other disposition (including as a result of casualty or condemnation) by the
Borrower or any of its subsidiaries of any assets other than inventory (whether
such inventory is sold or disposed of through return to the vendor or
wholesaler, the liquidation of the inventory by the Agent once appointed by the
Court or otherwise).
 
 
2.
All net cash proceeds payable to the DIP Lender from any of the events described
above shall be applied, except as otherwise agreed to by the DIP Lender in
writing, as follows:
 
 
(a)
first, to pay accrued and unpaid Interest on the Obligations under the DIP
Facility;
 
 
 
(b)
second, to repay any principal amounts outstanding in respect of the DIP
Facility; and

 
 
 
(c)
third, the balance to be paid to the Borrower.

 

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Any repayment of principal hereunder will not increase or decrease the remaining
amount available under the DIP Facility then available under this Term Sheet.
ADDITIONAL CONDITIONS PRECEDENT TO DIP FUNDING TO THE BORROWER
The DIP Lender’s obligation to make any DIP Advance hereunder is subject to, and
conditional upon, all of the following conditions precedent being satisfied at
the time each such DIP Advance is to be made:
 
1.
The Borrower shall have commenced proceedings under the CCAA and an Initial
Order in form and substance acceptable to the DIP Lender, acting reasonably,
shall have been entered by the Court (as amended from time to time, the “Initial
Order”) and shall be in full force and effect and shall have not been stayed,
reversed, vacated, rescinded, modified or amended in any respect materially
adversely affecting the DIP Lender solely in its capacity as DIP Lender, unless
otherwise agreed by the DIP Lender, acting reasonably.
 
2.
There shall not exist any continuing Event of Default or Pending Event of
Default as hereinafter defined (including any Event of Default or Pending Event
of Default that would result from making the contemplated DIP Advance).
 
3.
Other than the proceedings contemplated by the Initial Order and regulatory
compliance matters, there shall not exist in Canada in respect of the Borrower
or any subsidiary any action, suit, investigation, litigation or proceeding
pending or threatened in any court or before any arbitrator or governmental
authority which is not stayed by the Initial Order.
 
4.
Each Restructuring Court Order (defined below) shall be in full force and effect
and not have been stayed, reversed, vacated, rescinded, modified or amended in
any respect materially adversely affecting the DIP Lender, solely in its
capacity as DIP Lender unless otherwise agreed by the DIP Lender, acting
reasonably.

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5.
The Borrower shall have complied in all material respects with all applicable
laws, regulations and policies in relation to its business and the Initial
Order, except to the extent stayed or excused under applicable provisions of the
CCAA or any Restructuring Court Order (defined below).
 
6.
There shall be no Liens ranking ahead of the DIP Lender’s Charge, except for the
other Court Ordered Charges and Permitted Priority Liens arising by operation of
law in the ordinary course of business without any contractual grant of
security.
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees, and agrees to cause each of its subsidiaries,
to do the following:
 
1.
Allow the DIP Lender and its financial advisor(s) (the “DIP Advisors”) full
access to the books and records of the Target Canada Group on reasonable notice
and during normal business hours and cause management thereof to fully
co-operate with all reasonable requests of the DIP Advisors.
 
2.
Provide to the DIP Lender an oral or brief written weekly status update and plan
regarding the restructuring process and information which may otherwise be
confidential subject to same being maintained as confidential by the DIP Lender
and the DIP Advisors, subject to usual exceptions.
 
3.
Use reasonable efforts to keep the DIP Lender and the DIP Advisors apprised on a
timely basis of all material developments with respect to the activities and
affairs of the Target Canada Group.
 
4.
Deliver to the DIP Lender such information as may from time to time be
reasonably requested by the DIP Lender or the DIP Advisors (including any
information pertaining to non-debtor affiliates and/or subsidiaries of the
Target Canada Group), at the reasonable times requested.

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5.
Consult with the DIP Lender with respect to the asset sale and disposition
process established in the CCAA proceedings (the “Approved Sale Process”), and
any amendments thereto, and deliver to the DIP Lender draft copies of any court
materials in respect of the CCAA Proceeding (including, without limitation, any
notices of motion, affidavits, other evidence, and forms of orders) which the
Borrower intends to file with the Court for review and comment by the DIP Lender
no later than 2 Business Days prior to the date on which the Borrower serves and
files such court materials (or as soon as possible in exigent circumstances
where it is not reasonably practicable to provide copies 2 Business Days in
advance).
 
6.
Use the proceeds of the DIP Facility only for the purposes of working capital
and general corporate purposes of the Borrower consistent with the restrictions
set out herein.
 
7.
Every week (by noon Central time on the 5th Business Day for the preceding week)
provide to the DIP Lender and DIP Advisors the following:
 
 
(i)
statement of receipts and disbursements for the past week, showing variances on
a weekly and cumulative basis (with reference to the Cash Flow Projections) and,
for all material variances (favourable or unfavourable) for any line item, an
explanation of such variance;

 
 
 
(ii)
statement of accounts receivable and accounts payable; and

 
 
 
(iii)
asset sales process update report regarding the Approved Sale Process from the
Financial Advisor (defined below), senior management and/or the Monitor;

 

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8.
Maintain all cash and cash equivalents, and deposit all proceeds of receivables
of the Borrower in the Borrower’s Accounts unless otherwise agreed by the DIP
Lender.
 
9.
Comply with the provisions of the Court orders made in the CCAA Proceedings (the
“Restructuring Court Orders” and each a “Restructuring Court Order”).
 
10.
Forthwith notify the DIP Lender and DIP Advisors of the occurrence of any Event
of Default or Pending Event of Default, or of any event or circumstance that may
constitute a material adverse change from the Cash Flow Projections.
 
11.
Duly and punctually pay or cause to be paid to the DIP Lender all principal and
interest payable by it under this Term Sheet and under any other DIP Credit
Documentation on the dates, at the places and in the amounts and manner set
forth herein.
 
12.
Comply in all material respects with all applicable laws, rules and regulations
applicable to their businesses in the CCAA Proceedings, including, without
limitation, environmental laws.
 
13.
Retain Lazard Freres & Co. LLC as financial advisor (the “Financial Advisor”),
such retention to be ratified by the Court, on terms and conditions acceptable
to the Borrower and the DIP Lender acting reasonably, to conduct the Approved
Sale Process in the CCAA Proceedings in accordance with a plan approved by the
Monitor, the DIP Lender and the Court as it may be amended from time to time in
accordance with the terms hereof.
 
14.
Conclude substantially all “going out of business” sales and disposition of its
retail inventory by June 1, 2015 or as may otherwise be agreed by Monitor and
DIP Lender.

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NEGATIVE COVENANTS
The Borrower covenants and agrees, and covenants and agrees to cause its
subsidiaries, not to do the following other than with the prior written consent
of the DIP Lender:
 
1.
Transfer, lease or otherwise dispose of all or any part of its assets outside
the ordinary course of business (but excluding disposition of retail inventory
by the Agent through “going out of business sales” or similar sales) except in
accordance with the Initial Order and Approved Sale Process without the prior
written consent of the DIP Lender. For greater certainty, in the case of any
transfer, lease or disposition of any property, assets or undertaking of any of
the Borrower or any subsidiaries thereof, all proceeds of such transfer, lease
or disposition shall be subject to the provisions herein under “Mandatory
Repayments” to the extent applicable and subject to the exceptions contained
therein.
 
2.
Make any payment of principal or interest in respect of existing (pre-Filing
Date) indebtedness (other than indebtedness secured by Permitted Priority Liens)
or declare or pay any dividends except as contemplated by the Cash Flow
Projections and as approved by the Monitor and the DIP Lender or the Court, it
being understood that such covenant shall not require consent for critical
supplier/service provider payments made in accordance with the Initial Order.
 
3.
Create or permit to exist indebtedness for borrowed money other than existing
(pre-Filing Date) debt and debt contemplated by this DIP Facility.
 
4.
Enter into or amend any material transaction, agreement, contract, guarantee, or
arrangement of any kind or nature outside the ordinary course of business, or
make any payments, except for those transactions, agreements, contracts,
arrangements or payments which are contemplated by the Cash Flow Projections,
effected pursuant to the wind down and liquidation process and approved by the
Monitor or approved by the DIP Lender.

 
5.
Enter into or agree to enter into any investments other than cash equivalents or
acquisitions of any kind, direct or indirect, in any business.

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6.
Create or permit to exist any Liens on any of its properties or assets other
than the Court Ordered Charges and Permitted Priority Liens.
 
7.
Amalgamate, consolidate with or merge into, or enter into any similar
transaction with any other entity other than in accordance with any Plan of
Compromise or Arrangement.
 
8.
Amend its corporate charter or take any action to cause the dissolution of the
Borrower entity other than in accordance with any Plan of Compromise or
Arrangement.
 
9.
Seek or obtain any Restructuring Court Order that materially adversely affects
the DIP Lender solely in its capacity as DIP Lender except with the prior
written consent of the DIP Lender.
EVENTS OF DEFAULT
The occurrence of any one or more of the following events shall constitute an
event of default (“Event of Default”) under this Term Sheet
 
 
(a)
breach by the Borrower in the observance or performance of any material
provision, covenant (affirmative or negative) or agreement contained in this
Term Sheet or other DIP Credit Documentation and such breach shall continue
unremedied for more than 10 Business Days after the Borrower becomes aware of
such breach (or such other period as may be mutually agreed); provided, however,
that a breach of the reporting requirements under “Affirmative Covenants”
Section 7 must be remedied within 3 Business Days after such report was due;

 

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(b)
(i) any order shall be entered reversing, amending, varying, supplementing,
staying, vacating or otherwise modifying in any respect in a manner materially
affecting the DIP Lender any Restructuring Court Order without the prior written
consent of the DIP Lender, (ii) any Restructuring Court Order shall cease to be
in full force and effect in a manner that has a material adverse effect on the
interests of the DIP Lender, or (iii) Borrower or any subsidiary shall fail to
comply in any material respect that has an adverse affect on the interests of
the DIP Lender with any Restructuring Court Order;

 
 
 
(c)
this Term Sheet or any other DIP Credit Documentation shall cease to be
effective or shall be contested by the Borrower;

 
 
 
(d)
any Restructuring Court Order is issued by the Court (or any other court of
competent jurisdiction) that materially adversely affects the DIP Lender,
without the prior written consent of the DIP Lender;

 
 
 
(e)
the CCAA proceedings are terminated or dismissed or converted to a receivership,
proposal in bankruptcy or bankruptcy proceeding or any order is granted by the
Court (or any court of competent jurisdiction) granting relief from the stay of
proceedings in the Initial Order (as extended from time to time until the
Maturity Date with the consent of the DIP Lender, which the DIP Lender will
consent to provided that no Event of Default has occurred hereunder, the “Stay
of Proceedings”), unless agreed by the DIP Lender in its sole discretion;

 
 
 
(f)
the Stay of Proceedings expires without being extended;

 

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(g)
any plan of compromise or arrangement is proposed, filed or sanctioned by the
Court in a form and in substance that is not acceptable to the DIP Lender if
such plan of compromise or arrangement does not either provide for the repayment
of the obligations under the DIP Facility in full by the Maturity Date or
designate the DIP Lender as unaffected by such plan;

 
 
 
(h)
any Updated Cash Flow Projections delivered to the DIP Lender reflect a material
adverse change to the Borrower or there occurs any negative variance greater
than 20% for all expenditures, on a cumulative basis from the Filing Date as
compared to the Cash Flow Projections, excluding timing variances;

 
 
 
(i)
the Borrower makes any material payments of any kind not permitted by the
Initial Order or the Term Sheet;

 
 
 
(j)
there occurs a material amendment, waiver, modification or alteration to the
Approved Sale Process without the prior written consent of the Monitor or
approval of the Court;

 
 
 
(k)
if one or more of the Monitor, counsel to the Monitor, counsel to the Borrower,
or the Financial Advisor withdraws its services on behalf of the Borrower and/or
terminates its engagement with the Borrower in accordance with the provisions of
the Initial Order or otherwise, and an alternative professional is not appointed
(which, in the case of the Financial Advisor or Monitor, any such alternative
professional must be approved by the DIP Lender), or if alternative arrangements
are not made acceptable to the DIP Lender, in each case, within 5 Business Days;

 
 
 
(l)
failure of the Borrower to pay principal or interest when due under this Term
Sheet or any other DIP Credit Documentation;

 
 
 
(m)
borrowings under the DIP Facility exceed the Maximum Amount.

 

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REMEDIES
Upon the occurrence of an Event of Default, the DIP Lender may, upon three (3)
Business Days’ prior written notice to the Borrower and the Monitor, (i)
terminate the DIP Facility, (ii) apply to the Court for the appointment of an
interim receiver or a receiver and manager of the undertaking, property and
assets of the Borrower or for the appointment of a trustee in bankruptcy of the
Borrower, (iii) exercise the powers and rights of a secured party under the
Personal Property Security Act (Ontario) or any legislation of similar effect
applicable to the DIP Lender’s Charge, and (iv) exercise all such other rights
and remedies under the DIP Credit Documentation and the Restructuring Court
Orders.
FURTHER ASSURANCES
The Borrower shall at its expense, from time to time do, execute and deliver, or
will cause to be done, executed and delivered, all such further acts, documents
(including, without limitation, certificates, declarations, affidavits, reports
and opinions) and things as the DIP Lender may reasonably request for the
purpose of giving effect to this Term Sheet and the DIP Lender’s Charge,
perfecting, protecting and maintaining the Liens created by the DIP Lender’s
Charge or establishing compliance with the representations, warranties and
conditions of this Term Sheet or any other DIP Credit Documentation.
CURRENCY
Unless otherwise specified herein, all references to dollar amounts (without
further description) shall mean Canadian Dollars. All payments hereunder shall
be made in U.S. Dollars.
ENTIRE AGREEMENT
This Term Sheet, including the Schedules hereto and the DIP Credit
Documentation, constitutes the entire agreement between the parties relating to
the subject matter hereof. To the extent that there is any inconsistency between
this Term Sheet and any of the other DIP Credit Documentation, this Term Sheet
shall govern.
AMENDMENTS, WAIVERS, ETC.
No waiver or delay on the part of the DIP Lender in exercising any right or
privilege hereunder or under any other DIP Credit Documentation will operate as
a waiver hereof or thereof unless made in writing and signed by an authorized
officer of the DIP Lender. Any consent to be provided by the DIP Lender shall be
granted or withheld solely in its capacity as and having regard to its interests
as DIP Lender.

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ASSIGNABILITY
The DIP Lender’s rights and obligations under this Term Sheet are fully
assignable, to an affiliate of the DIP Lender or with the consent of the
Borrower, acting reasonably, before an Event of Default to any other entity and
are freely assignable after an Event of Default has occurred and is continuing.
The Target Canada Group hereby consents to the disclosure of any confidential
information in respect of the Target Canada Group to any potential assignee
provided such potential assignee agrees in writing to keep such information
confidential.
SEVERABILITY
Any provision in any DIP Credit Documentation which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
COUNTERPARTS AND FACSIMILE SIGNATURES
This Term Sheet may be executed in any number of counterparts and by facsimile
or e-mail transmission, each of which when executed and delivered shall be
deemed to be an original, and all of which when taken together shall constitute
one and the same instrument. Any party may execute this Term Sheet by signing
any counterpart of it.
GOVERNING LAW AND JURISDICTION
This Term Sheet shall be governed by, and construed in accordance with, the laws
of the Province of Ontario and the federal laws of Canada applicable therein.
The Borrower irrevocably submits to the non-exclusive courts of the Province of
Ontario, waives any objections on the ground of venue or forum non conveniens or
any similar grounds, and consents to service of process by mail or in any other
manner permitted by relevant law.
ADDITIONAL DEFINITIONS
Capitalized terms not otherwise defined herein shall have the following
meanings:

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“Agent” means the party that shall liquidate the inventory and furniture,
fixtures and equipment of the Borrower and its subsidiaries during the CCAA
proceedings pursuant to an agency agreement to be approved by the Court.
“Business Day” means each day other than a Saturday or Sunday or a statutory or
civic holiday that banks are open for business in both Toronto, Ontario, Canada
and Minneapolis, Minnesota, United States.
“Court Ordered Charges” means charges granted by the Court over the assets,
properties and undertakings of the Borrower pursuant to the Initial Order and
any other Restructuring Court Order, which shall include, without limitation, an
administration charge, DIP Lender's Charge, directors' charge, Agent’s charge
and key employee retention plan charge.
 
 
“DIP Credit Documentation” means this Term Sheet, the Order of the Court
approving it and any other definitive documentation in respect of the DIP
Facility that are in form and substance satisfactory to the DIP Lender.
 
 
“Filing Date” means the date upon which the Borrower obtains the Initial Order
under the CCAA.
 
 
“Liens” means all mortgages, pledges, charges, encumbrances, hypothecs, liens
and security interests of any kind or nature whatsoever.
 
 
“Pending Event of Default” means an event that, but for the requirement for the
giving of notice, lapse of time, or both, would constitute an Event of Default.
 
 
“Permitted Priority Liens” means: (i) specific purchase-money security interests
or capital leases; (ii) statutory superpriority deemed trusts and liens for
unpaid employee source deductions; (iii) liens for unpaid municipal property
taxes or utilities that are given first priority over other liens by statute;
and (iv) such other permitted liens as may be agreed to in writing by the DIP
Lender.
 
 
“Target Canada Group” means the Borrower and its direct and indirect
subsidiaries.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

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IN WITNESS HEREOF, the parties hereby execute this Term Sheet as of the date
first written above.
 
 
TARGET CANADA CO., as Borrower
By:
/s/ Aaron E. Alt
 
Name: Aaron E. Alt
 
Title: Chief Executive Officer, President and Treasurer

 
 
TARGET CORPORATION, as DIP Lender
By:
/s/ Sara J. Ross
 
Name: Sara J. Ross
 
Title:   Assistant Treasurer

 
 
TARGET CANADA HEALTH CO., as Borrower
By:
/s/ Mark J. Wong
 
Name: Mark J. Wong
 
Title:   Vice President and Secretary

 
 
TARGET CANADA MOBILE GP CO., as Borrower
By:
/s/ Mark J. Wong
 
Name: Mark J. Wong
 
Title:   President and Secretary

 
 
TARGET CANADA PHARMACY (BC) CORP., as Borrower
By:
/s/ Mark J. Wong
 
Name: Mark J. Wong
 
Title:   Vice President and Secretary

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TARGET CANADA PHARMACY (ONTARIO) CORP., as Borrower
By:
/s/ Mark J. Wong
 
Name: Mark J. Wong
 
Title:  Vice President and Secretary

 
 
TARGET CANADA PHARMACY CORP., as Borrower
By:
/s/ Mark J. Wong
 
Name: Mark J. Wong
 
Title:  Vice President and Secretary

 
 
TARGET CANADA PHARMACY (SK)  
CORP., as Borrower
By:
/s/ Mark J. Wong
 
Name:  Mark J. Wong
 
Title:   Vice President and Secretary

 
 
TARGET CANADA PHARMACY FRANCHISING LP, as Borrower
by its general partner, TARGET CANADA HEALTH CO.
By:
/s/ Mark J. Wong
 
Name:  Mark J. Wong
 
Title:  Vice President and Secretary

 
 
TARGET CANADA MOBILE LP, as Borrower
by its general partner, TARGET CANADA MOBILE GP CO.
By:
/s/ Mark J. Wong
 
Name:  Mark J. Wong
 
Title:  Vice President and Secretary

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

SCHEDULE A

CASH FLOW PROJECTIONS
See attached.

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

13-Week Cash Flow Forecast
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
($ in 000's CAD)
 
Wk-1
Wk-2
Wk-3
Wk-4
Wk-5
Wk-6
Wk-7
Wk-8
Wk-9
Wk-10
Wk-11
Wk-12
Wk-13
 
13-Week
Week Ending ==>
 
17-Jan
24-Jan
31-Jan
07-Feb
14-Feb
21-Feb
28-Feb
07-Mar
14-Mar
21-Mar
28-Mar
04-Apr
11-Apr
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING RECEIPTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales Receipts
 
$
8,300

$
43,921

$
43,125

$
51,769

$
59,167

$
45,359

$
42,220

$
47,832

$
46,518

$
46,541

$
31,838

$
24,093

$
17,122

 
$
507,804

Other Receipts
 
—

—

—

—

—

—

—

—

—

—

—

—

—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL RECEIPTS
 
8,300

43,921

43,125

51,769

59,167

45,359

42,220

47,832

46,518

46,541

31,838

24,093

17,122

 
507,804

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING DISBURSEMENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee Payments
 
16,085

303

17,393

303

16,321

305

17,161

285

14,376

269

14,944

250

13,077

 
111,072

Rent & Occupancy
 
—

9,558

354

6,558

608

6,812

608

6,812

791

6,995

791

6,995

791

 
47,669

DC / Logistics
 
10,094

18,941

2,235

7,396

2,211

7,073

1,181

6,235

—

5,625

—

5,625

—

 
66,616

Normal Course Taxes
 
4,400

12,871

437

11,474

328

18,812

328

11,365

262

20,491

262

262

262

 
81,555

Professional Fees
 
—

3,747

—

3,810

—

3,977

—

3,047

—

2,477

—

2,477

—

 
19,536

All Other
 
5,429

9,313

4,879

3,821

5,080

4,758

5,153

4,161

4,869

3,684

3,728

3,451

3,328

 
61,654

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current Operating Disbursements
 
36,007

54,733

25,299

33,363

24,547

41,737

24,431

31,905

20,298

39,541

19,725

19,060

17,458

 
388,102

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING CASH FLOW
 
(27,707
)
(10,811
)
17,826

18,406

34,620

3,622

17,789

15,927

26,220

7,000

12,113

5,033

(336
)
 
119,702

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTERCOMPANY DISBURSEMENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intercompany Services
 
—

—

—

6,247

—

—

—

8,329

—

—

—

—

10,411

 
24,986

DIP Interest
 
—

—

—

—

—

129

—

—

—

—

—

—

—

 
129

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Intercompany Disbursements
 
—

—

—

6,247

—

129

—

8,329

—

—

—

—

10,411

 
25,116

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET CASH FLOW
 
$
(27,707
)
$
(10,811
)
$
17,826

$
12,160

$
34,620

$
3,493

$
17,789

$
7,599

$
26,220

$
7,000

$
12,113

$
5,033

$
(10,747
)
 
$
94,586

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
WEEKLY LIQUIDITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning Bank Cash Balance
 
$
1,000

$
13,293

$
10,000

$
10,000

$
10,000

$
27,086

$
30,579

$
48,369

$
55,967

$
82,187

$
89,187

$
101,300

$
106,333

 
$
1,000

Weekly Cash Flow
 
(27,707
)
(10,811
)
17,826

12,160

34,620

3,493

17,789

7,599

26,220

7,000

12,113

5,033

(10,747
)
 
94,586

DIP Funding
 
40,000

7,519

(17,826
)
(12,160
)
(17,534
)
—

—

—

—

—

—

—

—

 
—

Total
 
13,293

10,000

10,000

10,000

27,086

30,579

48,369

55,967

82,187

89,187

101,300

106,333

95,586

 
95,586

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FX Translation
 
—

—

—

—

—

—

—

—

—

—

—

—

—

 
—

Change in Float
 
—

—

—

—

—

—

—

—

—

—

—

—

—

 
—

Ending Bank Cash Balance
 
$
13,293

$
10,000

$
10,000

$
10,000

$
27,086

$
30,579

$
48,369

$
55,967

$
82,187

$
89,187

$
101,300

$
106,333

$
95,586

 
$
95,586

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending DIP Balance
 
$
40,000

$
47,519

$
29,693

$
17,534

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

 
$
—