Dollar Tree 2014 Annual Report Download - page 78

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connection with the consummation of the Acquisition, the wholly owned subsidiary that issued the acquisition notes will merge
with and into the Company, the Company will assume the obligations in respect of the acquisition notes, and the acquisition
notes will be jointly and severally guaranteed on an unsecured, unsubordinated basis, subject to certain exceptions, by each of
the Company’s subsidiaries that guarantees the obligations under the Company’s new senior secured credit facilities or certain
other indebtedness, including Family Dollar and certain of its subsidiaries.
The 2020 notes, which mature on March 1, 2020, were issued pursuant to an indenture, dated as of February 23, 2015, with
U.S. Bank National Association, as trustee (the “2020 notes indenture”). The 2023 notes, which mature on March 1, 2023,
were issued pursuant to an indenture, dated as of February 23, 2015, with U.S. Bank National Association, as trustee (the “2023
notes indenture”, and together with the 2020 notes indenture, the “indentures”).
The indentures provide that if the Acquisition is not consummated before August 28, 2015, if the Escrow Agent has not
received certain additional monthly deposits by certain dates, or upon the occurrence of certain other events, the acquisition
notes will be subject to a special mandatory redemption at a price of 100% of the gross proceeds of the acquisition notes
offered, plus accrued and unpaid interest to, but excluding, the date of redemption.
Interest on the acquisition notes is due semiannually on March 1 and September 1 of each year, commencing on September
1, 2015.
The indentures contain covenants that, from and after the date of the Acquisition, will limit the ability of the Company and
certain of its subsidiaries to, among other things and subject to certain significant exceptions: (i) incur, assume or guarantee
additional indebtedness; (ii) declare or pay dividends or make other distributions with respect to, or purchase or otherwise
acquire or retire for value, equity interests; (iii) make any principal payment on, or redeem or repurchase, subordinated debt;
(iv) make loans, advances or other investments; (v) incur liens; (vi) sell or otherwise dispose of assets, including capital stock
of subsidiaries; (vii) consolidate or merge with or into, or sell all or substantially all assets to, another person; and (viii) enter
into transactions with affiliates. The indentures also provide for certain events of default, which, if any of them occurs, would
permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding
acquisition notes under the applicable indenture to be declared immediately due and payable.
Credit Facility and Term Loan
On March 9, 2015, a wholly owned subsidiary of the Company entered into a credit agreement, with JPMorgan Chase
Bank, N.A., as administrative agent, providing for $6,200 million in senior secured credit facilities (the “New Senior Secured
Credit Facilities”) consisting of a $1,250 million revolving credit facility (the “New Revolving Credit Facility”) and $4,950
million of term loan facilities (the “New Term Loan Facilities”). The New Term Loan Facilities consist of a $1,000 million
Term Loan A tranche and a $3,950 million Term Loan B tranche. The New Revolving Credit Facility and the borrowings under
the Term Loan A tranche will mature five years after the closing of the Acquisition, unless any of the 2020 notes remain
outstanding as of 91 days prior to their stated maturity, in which case the New Revolving Credit Facility and the borrowings
under the Term Loan A tranche will mature at such time. The borrowings under the Term Loan B tranche will mature seven
years after the closing of the Acquisition.
The proceeds of the borrowings under the Term Loan B tranche were deposited in an escrow account (separate from the
escrow accounts related to the acquisition notes) and will be held in escrow prior to the closing of the Acquisition. Upon the
consummation of the Acquisition, the Company will become the borrower under the New Senior Secured Credit Facilities and
will draw the term loans under the Term Loan A facility and will have the ability to borrow under the New Revolving Credit
Facility.
The New Senior Secured Credit Facilities will not be guaranteed by the Company or any of its subsidiaries prior to the
consummation of the Acquisition, but upon consummation of the Acquisition the New Senior Secured Credit Facilities will be
guaranteed by certain of the Company's direct or indirect wholly owned U.S. subsidiaries, including Family Dollar and certain
of its subsidiaries (collectively, the “Credit Agreement Guarantors”). Upon the consummation of the Acquisition, the Company
expects the New Senior Secured Credit Facilities will be secured by a security interest in substantially all of the assets of the
Company and the Credit Agreement Guarantors, subject to certain exceptions.
The loans under the Term Loan A tranche and the New Revolving Credit Facility will bear interest at LIBOR plus 2.25%
per annum (or a base rate plus 1.25%), and the Term Loan B tranche of the New Senior Secured Credit Facilities will bear
interest at LIBOR plus 3.50% per annum (or a base rate plus 2.50%). The Term Loan B tranche will be subject to a “LIBOR
floor” of 0.75%. The Term Loan A tranche of the New Term Loan Facilities will require quarterly amortization payments of
1.25% of the original principal amount thereof in the first year following the consummation of the Acquisition, 2.5% of the
original principal amount thereof in the second year following the Acquisition, and 3.75% of the original principal amount