EFTA01382444.pdf

Amendment No. 3 to Form S-1 Table of Contents AB ACQUISITION LLC AND SUBSIDIARIES Notes to Consolidated Financial Statements Albertson's Term Loan facilities are secured by (i) a first-priority lien on substantially all of the assets of the borrowers and guarantors (other than accounts receivable, inventory and related assets of the proceeds thereof (the "Albertson's ABL priority collateral")) and (ii) a second-priority lien on substantially all of the Albertson's ABL priority collateral. NAI Term Loans On June 27. 2014, in anticipation of the Safeway acquisition, NAI entered into a Senior Secured Term Loan Agreement in the amount of $850.0 million, with an interest rate of LIBOR, subject to a 1.0% floor, plus 3.75% and an expiration date of June 27, 2021. The borrowings are guaranteed by NAI's existing and future direct and indirect wholly owned domestic subsidiaries that are not borrowers, subject to certain exceptions. The borrowings are secured by (i) a first-priority lien on (a) all of the borrowers' and guarantors' real property, equipment, fixtures and intellectual property, certain other property relating solely to or constituting proceeds of such assets and all proceeds of the foregoing and (b) equity interests in NAI and its subsidiaries and intercompany notes, certain dividends and distributions with respect thereto and proceeds thereof and (ii) a second-priority lien on all of the borrowers' and guarantors' accounts, inventory, documents, letters of credit and letters of credit rights, investment property (excluding equity interests in the Company and its subsidiaries), general intangibles (excluding intellectual property), deposit accounts, scripts and prescription files, and certain related assets, and all proceeds of the foregoing (the "NAI ABL priority collateral"). The agreement requires annual principal payments of 1.0% of the original loan balance, paid quarterly. In conjunction with the new Senior Secured Term Loan Agreement, the Company capitalized an additional $23.0 million of deferred financing costs and $4.3 million of original issue discount. Asset-Based Loan Facilities On March 21, 2013, and in conjunction with the NAI acquisition, Albertson's repaid and replaced an existing ABL Facility of $350.0 million with a new asset-based loan facility in the amount of $850.0 million (the "Albertson's ABL"), and NAI entered into an asset-based loan facility of $400.0 million (the "NAI ABL"), in each case providing for borrowings collateralized by accounts receivable, customer pharmacy files, inventory and certain other assets. Albertson's ABL: The Albertson's ABL had an interest rate of LIBOR (subject to a 1.0% floor) plus a margin ranging from 1.75% to 2.25% and also provided a letter-of-credit (-LOC") sub-facility of $400.0 million. On September 19, 2013, Albertson's amended the Albertson's ABL and on December 27, 2013, Albertson's entered into a second amendment to the Albertson's ABL facility (the "Amended Albertson's ABL"), increasing the commitment to $950.0 million, with a maturity date of March 21, 2018. The Amended Albertson's ABL continued to provide for a LOC sub-facility of $400.0 million. The Amended Albertson's ABL has a loan interest rate of LIBOR plus a margin ranging from 1.75% to 2.25%. The margin is determined by the average daily excess availability percentage for the most recent quarterly period. In addition, a facility fee ranging from 0.25% to 0.375% is charged for any unused portion of the Amended Albertson's ABL, which is based on the average daily unused amount as a percentage of the aggregate commitments during the most recent fiscal quarter ended. The fees for the Amended Albertson's ABL LOC sub-facility are based upon the Amended Albertson's ABL interest rate margin plus a fronting fee of 0.125%. Concurrently with the Safeway acquisition, the Amended Albertson's ABL was amended and restated to provide for borrowing capacity of up to $3.0 billion and to extend the maturity date to the earlier of January 30, 2020 and the date that is 91 days F-55 (Continued) Mtn. um V.. sec.go% Archi% es editor data' 1646972 000119312515335826'd900395dsla.htm110 14'2015 9:03:02 AR CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) DB-SDNY-0081804 CONFIDENTIAL SDNY_GM_00227988 EFTA01382444