This excerpt taken from the RAD 8-K filed Sep 28, 2007.
Credit Agreement On July 30, 2004, the Parent Company and the Company entered into a credit agreement providing the Company with a credit facility that consists of a revolving loan, a swingline loan and letters of credit. Under the terms of the agreement, the maximum available outstanding under each of the revolving loan, the swingline loan and the letters of credit is $325,000, $35,000, and $130,000 respectively, subject to an aggregate maximum of $325,000. Borrowings under the credit agreement bear interest at (a) the higher of (i) the U.S. prime rate or (ii) the federal funds rate plus 0.5%, or (b) the LIBOR rate, plus a variable margin (ranging from 0.5% to 2.50%). The variable margins are dependent on the achievement of certain financial ratios.
The credit agreement contains certain restrictive covenants including the achievement of various financial ratios. At June 2, 2007, the Parent Company and the Company were in compliance with these covenants. Subsequent to the acquisition of the Company by Rite Aid Corporation, this agreement was eliminated.
The credit agreement is secured by a first ranking security interest in substantially all of the Companys assets and a first ranking pledge of the Companys capital stock.
At June 2, 2007 and May 27, 2006 no amounts were outstanding under the revolving loan and the swingline loan. The Company had outstanding letters of credit totaling $65,274, $70,433, and $67,424 in fiscal 2007, 2006, and 2005, respectively.