Exhibit 10.1
EXECUTION COPY
AMENDMENT NO. 4 TO SENIOR CREDIT AGREEMENT
AMENDMENT NO. 4, dated as of February 6, 2003 (this
"Amendment"), to the SENIOR CREDIT AGREEMENT dated as of
June 27, 2001 (as amended, supplemented or otherwise
modified from time to time, the "Senior Credit Facility"),
among RITE AID CORPORATION, a Delaware corporation ("Rite
Aid" or the "Borrower"), the Banks (as defined in Article 1
thereof), CITICORP USA, INC. ("Citicorp USA"), as a
Swingline Bank, as an Issuing Bank and as administrative
agent for the Banks (in such capacity, the "Senior
Administrative Agent"), Citicorp USA, as collateral agent
for the Banks (in such capacity, the "Senior Collateral
Agent") and JPMORGAN CHASE BANK, CREDIT SUISSE FIRST BOSTON
and FLEET RETAIL FINANCE INC., as syndication agents (in
such capacity, the "Syndication Agents").
RECITALS
A. Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to them in the Senior Credit Facility.
B. The Borrower and the Banks are entering into this Amendment
pursuant to Section 9.05(a) of the Senior Credit Facility.
AGREEMENTS
In consideration of the foregoing Recitals and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Amendments to the Senior Credit Facility. The Senior
Credit Facility is hereby amended as follows:
(a) The Definitions Annex is amended by amending the definition of
"Specified Debt Financings", for purposes of the Senior Credit Facility only,
by inserting "; (vi) any Replacement Second Priority Debt or Replacement
Senior Second Priority Debt" at the end of clause (v) thereof and by replacing
the reference therein to "(vi)" with a reference to "(vii)".
(b) Section 1.01 is amended by inserting the following definitions in
the appropriate alphabetical order:
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""11.25% Senior Notes" means the 11.25% Senior Notes of the
Borrower due 2008 issued pursuant to the Unsecured Note Indenture and
any Registered Equivalent Notes issued in exchange therefor."
""February 2003 Note Indenture" means an Indenture to be
entered into among Rite Aid, the Subsidiary Guarantors and the
trustee named therein, relating to the February 2003 Notes."
""February 2003 Notes" means the Senior Secured Notes of
Rite Aid due 2011 having terms (i) substantially as set forth in
Annex A to the Fourth Amendment or (ii) that are not substantially
less favorable to the Banks than those set forth in Annex A to the
Fourth Amendment and issued pursuant to the February 2003 Note
Indenture and any Registered Equivalent Notes issued in exchange
therefor."
""Fourth Amendment" means Amendment No. 4 to this Agreement
dated as of February 6, 2003."
(c) Section 5.07(a) is amended by deleting the reference to "or" at
the end of clause (ii), deleting clause (iii) thereof through the word
"Agreement" and restating clause (A) thereof in its entirety as follows:
"(A)(w) the Senior Loan Documents, (x) agreements with
respect to Debt secured by Liens permitted by Section 5.15
restricting the ability to transfer or grant Liens on the assets
securing such Debt, (y) agreements with respect to Additional Second
Priority Debt, Replacement Second Priority Debt, Additional Senior
Second Priority Debt or Replacement Senior Second Priority Debt (1)
containing provisions described in clauses (i) and/or (ii) above that
are not substantially more restrictive, taken as a whole, than those
of the February 2003 Note Indenture when originally entered into or
(2) requiring that such Debt be secured by assets in respect of which
Liens are granted to secure other Debt (provided that in the case of
any such assets subject to a Senior Lien, such Debt will be required
to be secured only with a Second Priority Lien); provided, however,
that the Second Priority Debt Documents relating to any such Debt may
not contain terms requiring any Liens be granted with respect to
Senior Collateral consisting of cash or Temporary Cash Investments
pledged pursuant to Section 2.18(j) of this Agreement or Section 8 of
the Senior Subsidiary Guarantee Agreement or otherwise required to be
provided upon the occurrence of a default under any bank credit
facility to secure obligations in respect of letters of credit issued
thereunder and (z) agreements with respect to unsecured Debt governed
by indentures or by credit agreements or note purchase agreements
with institutional investors permitted by this Agreement containing
terms that are not substantially more restrictive, taken as a whole,
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than those of the Unsecured Note Indenture as in effect on the date
of the Fourth Amendment."
(d) Section 5.07(a) is further amended by (i) replacing the "and"
immediately before the reference to "(F)" with a comma, (ii) inserting a
reference in clause (F) thereof to ", the Shareholder Notes, the Indentures,
the February 2003 Note Indenture when originally entered into" immediately
following the reference therein to "the Exchange Note Documents", (iii)
replacing the reference in clause (F) thereof to "Initial Borrowing Date" with
a reference to "date of the Fourth Amendment" and (iv) inserting new clauses
(G) and (H) as follows:
", (G) any restriction existing under agreements relating to
assets acquired by the Borrower or a Subsidiary in a
transaction permitted hereby, provided such agreements
existed at the time of such acquisition, were not put into
place in anticipation of such acquisition and are not
applicable to any assets other than assets so acquired and
(H) any restriction existing under any agreement of a Person
acquired as a Subsidiary pursuant to Section 5.21(a)(vii),
Section 5.21(b) or Section 5.22(b), provided any such
agreement existed at the time of such acquisition, was not
put into place in anticipation of such acquisition and was
not applicable to any Person or assets other than the Person
or assets so acquired.".
(e) Section 5.07(b) is amended in its entirety as follows:
"(b) The Borrower will not, and will not permit any
Subsidiary to, enter into or suffer to exist or become effective any
consensual encumbrance or restriction on the ability of any
Subsidiary to (i) make Restricted Payments in respect of any capital
stock of such Subsidiary held by, or pay any Debt owed to, the
Borrower or any other Subsidiary, (ii) make any Investment in the
Borrower or any other Subsidiary, or (iii) transfer any of its assets
to the Borrower or any other Subsidiary, except for (A) any
restriction existing under (1) the Senior Loan Documents or existing
on the date of the Fourth Amendment under the indenture governing the
Shareholder Notes, the Unsecured Note Indenture, the Exchange Note
Documents, the Synthetic Lease Documents, the Indentures or under the
February 2003 Note Indenture when originally entered into, (2) the
indenture or agreement governing any Replacement Senior Second
Priority Debt or Replacement Second Priority Debt in respect of Debt
set forth in clause (1) above, (3) the indenture or agreement
governing any Additional Senior Second Priority Debt, provided the
provisions thereof described in clauses (i), (ii) and (iii) above are
not substantially more restrictive, taken as a whole, than those of
the Synthetic Lease Documents (as in effect on the date of the Fourth
Amendment) or (4) agreements with respect to Debt permitted by this
Agreement containing provisions described in clauses (i), (ii) and
(iii) above that are not substantially more restrictive, taken as a
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whole, than those of the February 2003 Note Indenture when originally
entered into or, alternatively, than those of the Unsecured Note
Indenture (as in effect on the date of the Fourth Amendment), (B)
customary non- assignment provisions in leases and other contracts
entered into in the ordinary course of business, (C) as required by
applicable law, (D) customary restrictions contained in purchase and
sale agreements limiting the transfer of the subject assets pending
closing, (E) any restriction existing under agreements relating to
assets acquired by the Borrower or a Subsidiary in a transaction
permitted hereby, provided such agreements existed at the time of
such acquisition, were not put into place in anticipation of such
acquisition and are not applicable to any assets other than assets so
acquired, (F) any restriction existing under any agreement of a
Person acquired as a Subsidiary pursuant to Section 5.21(a)(vii),
Section 5.21(b) or Section 5.22(b), provided any such agreement
existed at the time of such acquisition, was not put into place in
anticipation of such acquisition and was not applicable to any Person
or assets other than the Person or assets so acquired and (G)
agreements with respect to Debt secured by Liens permitted by Section
5.15 that restrict the ability to transfer the assets securing such
Debt."
(f) Section 5.07(e) is amended by (x) deleting clause (i)(B) thereof,
replacing the reference in clause (i) to "(C)" with a reference to "(B)" and
replacing the reference in clause (i) to "(D)" with a reference to "(C)" and
(y) replacing the reference to "$150,500,000 in the aggregate" in clause (ii)
thereof with the following: "an aggregate of $150,500,000 plus the amount, if
any, of Shareholder Notes subject to Optional Debt Repurchases prior to
February 28, 2004 under clause (i) of this paragraph (e), in each case".
(g) Section 5.20(f) is amended by replacing the reference to
"September 1, 2005" in clause (ii) therein with a reference to "December 31,
2008", and by revising the reference in clause (iii) therein to read in its
entirety as follows:
"(iii) the terms relating to amortization, convertibility
and subordination (if any), and other material terms taken as a
whole, of any such extending, refunding, refinancing or exchanging of
Debt, and of any agreement entered into and of any instrument issued
in connection therewith, are not materially less favorable to the
Borrower and the Subsidiaries (or, in the case of subordination
terms, to the Senior Bank Parties) than the terms, taken as a whole,
of the agreements and instruments governing the Debt being extended,
refunded, refinanced or exchanged; provided, however, that any such
extending, refunding or refinancing Debt (x) may bear interest not in
excess of the then applicable market rate and may have market call
protection provisions, and (y) which extends, refunds or refinances
unsecured Debt, may, in any event, have terms and provisions which,
taken as a whole, are not materially less favorable to the Borrower
and the Subsidiaries than those of the Unsecured Note Indenture (as
in effect on the date of the Fourth Amendment), and".
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(h) Each of Sections 5.20(g), 5.20(h), 5.20(i) and 5.20(o) is amended
by replacing the reference to "April 1, 2006" in clause (y) therein with a
reference to "December 31, 2008" and by replacing the reference to "no more
restrictive" in clause (y) therein with a reference to "that are not
substantially more restrictive, taken as a whole,".
Section 2. Consents. The Banks, including for purposes of Section
7.01 of the Collateral Trust and Intercreditor Agreement, hereby (i) consent
to one or more amendments of the Exchange Note Indenture and any notes issued
thereunder (including any amendment not requiring the consent of the trustee
thereunder or of the holders of the Exchange Notes), (ii) consent to one or
more amendments of the indenture pursuant to which the Shareholder Notes were
issued and the Shareholder Notes (including any amendment not requiring the
consent of the trustee thereunder or the holders of the Shareholder Notes), in
each case to the extent necessary to provide additional covenants and other
terms substantively equivalent to any or all of the covenants and other terms
contained in the February 2003 Note Indenture when originally entered into and
(iii) confirm their consent to the prior issuance by the Borrower of the
Shareholder Notes and waive any noncompliance with the Senior Credit Facility
that may be deemed to have occurred as a result thereof.
Section 3. Representations and Warranties. To induce the other
parties hereto to enter into this Amendment, the Borrower represents and
warrants to each of the Banks, the Senior Administrative Agent and the Senior
Collateral Agent that, as of the Amendment Effective Date (as defined below):
(a) This Amendment has been duly authorized, executed and delivered
by it and constitutes its valid and binding obligation, enforceable against it
in accordance with its terms.
(b) The representations and warranties set forth in Article IV of the
Senior Credit Facility are true and correct in all material respects on and as
of the Amendment Effective Date with the same effect as though made on and as
of the Amendment Effective Date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct as of such earlier
date).
(c) After giving effect to the agreements herein, no Default has
occurred and is continuing.
Section 4. Effectiveness. This Amendment, other than Section 1(f)
hereof, shall become effective on the first date (the "Amendment Effective
Date") on which the Senior Administrative Agent shall have received
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counterparts of this Amendment that, when taken together, bear the signatures
of the Majority Banks, the Borrower and the Senior Administrative Agent.
Section 1(f) of this Agreement shall become effective on the first date on
which (i) the condition set forth in the immediately preceding sentence is
satisfied and (ii) Rite Aid shall have issued the February 2003 Notes in an
aggregate principal amount of not less than $150,000,000 and the indenture
governing the February 2003 Notes shall have been executed and delivered and,
unless the Majority Banks shall have otherwise consented, shall contain terms
that are not substantially less favorable to the Banks than those set forth in
Annex A to this Amendment (and shall be deemed to have become effective on
such date immediately prior to any repurchase or redemption of the Shareholder
Notes on such date that occurs prior to such issuance).
Section 5. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
Section 6. Reference to Senior Credit Facility. Except as amended
hereby, the Senior Credit Facility shall remain in full force and effect and
is hereby ratified and confirmed in all respects. On and after the Amendment
Effective Date, each reference in the Senior Credit Facility to "this
Agreement", "hereunder", "hereof", "herein", or words of like import, and each
reference to the Senior Credit Facility shall be deemed a reference to the
Senior Credit Facility, as amended hereby, as the case may be. This Amendment
shall constitute a "Senior Loan Document" for all purposes of the Senior
Credit Facility and the other Senior Loan Documents.
Section 7. Costs and Expenses. The Borrower agrees to reimburse the
Senior Administrative Agent for its reasonable out-of-pocket expenses in
connection with this Amendment, including the reasonable fees, charges and
disbursements of counsel for the Senior Administrative Agent.
Section 8. Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument.
Delivery of any executed counterpart of a signature page of this Amendment by
facsimile transmission shall be as effective as delivery of a manually
executed counterpart hereof.
Section 9. Headings. The headings of this Amendment are for purposes
of reference only and shall not limit or otherwise affect the meaning hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.
RITE AID CORPORATION,
By:___________________________
Name:
Title:
CITICORP USA, INC., individually and as
Senior Administrative Agent and Senior
Collateral Agent,
By:
------------------------------------
Name:
Title:
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AMENDMENT NO. 4
DATED AS OF FEBRUARY 6, 2003 TO THE
RITE AID SENIOR CREDIT FACILITY
To approve Amendment No. 4:
Name of Institution:
-----------------------------
by
---------------------------
Name:
Title:
ANNEX A
This Annex A summarizes the primary differences between the covenants
and certain other provisions contained in the 11 1/4% Senior Notes due 2008
(the "11 1/4% Notes") of Rite Aid Corporation ("Rite Aid") and the covenants
and other provisions to be contained in the Senior Secured Notes due 2011 (the
"February 2003 Notes") of Rite Aid. Unless otherwise noted below, capitalized
terms used herein and not otherwise defined have a substantially similar
meaning to the meaning assigned to them in the Indenture under which the 11
1/4% Notes were issued. Rite Aid 's obligations under the February 2003 Notes
will be guaranteed, subject to certain limitations, by Rite Aid's subsidiaries
that guarantee Rite Aid's obligations under the Senior Credit Facility. The
guarantees will be secured by second priority liens granted by the subsidiary
guarantors on all their assets that secure Rite Aid's obligations under the
Senior Credit Facility, subject to certain exceptions. The second priority
liens will be shared with certain existing and future indebtedness and certain
of such indebtedness will have priority over the February 2003 Notes in
distributions of the collateral. The February 2003 Notes include additional
provisions relating to the subsidiary guarantees, the security interests, the
collateral and various agreements related to the foregoing.
Covenants
Limitation on Debt Substantially similar except that the
February 2003 Notes permit additional
Debt to be Incurred. In addition,
under the February 2003 Notes (a) a
number of "Permitted Debt" baskets
permit such Debt by Subsidiaries that
guarantee Rite Aid's obligations under
the February 2003 Notes rather than
Restricted Subsidiaries, (b) Rite Aid
may not permit any Restricted
Subsidiary that is not a Subsidiary
guarantor to Incur any Debt if the
proceeds are used, directly or
indirectly, to Refinance any Debt of
Rite Aid or any Subsidiary guarantor,
(c) Rite Aid may not, and may not
permit any Subsidiary guarantor to,
Incur, directly or indirectly, any
Debt sharing the collateral on a first
priority basis that is subordinate or
junior in right of payment to any
other Debt of Rite Aid or any
Subsidiary guarantor and (d) certain
reclassifications of indebtedness are
not deemed Incurrences of
indebtedness.
Limitation on Restricted
Payments Substantially similar, but the
reference date is reset to the issue
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date of the February 2003 Notes. Also,
under the February 2003 Notes an
Investment with Rite Aid Common Stock
is a Permitted Investment.
Limitation on Liens The 11 1/4% Notes permit Liens (other
than Permitted Liens) only if the 11
1/4% Notes will be secured by such
Lien equally and ratably with (or
prior to) all other Debt secured by
such Lien. The February 2003 Notes
prohibit Liens, other than Permitted
Liens. In addition, if Rite Aid or any
Subsidiary guarantor creates any
additional Lien upon any Property to
secure any Debt sharing collateral
with the February 2003 Notes, it must
concurrently grant a second priority
Lien (subject to Permitted Liens) upon
such Property as security for the
February 2003 Notes or Subsidiary
guarantees of the February 2003 Notes
(except (a) as currently required by
the 12.5% Senior Secured Notes due
2006 of Rite Aid (the "12.5% Notes")
and the Senior Secured (Shareholder)
Notes due 2006 of Rite Aid (the
"Shareholder Notes") with respect to
proceeds of certain collateral
dispositions and (b) to the extent
such Property constitutes cash or cash
equivalents securing only letter of
credit obligations under Credit
Facilities following a default).
In addition, the aggregate amount of
secured obligations that may share the
collateral on a senior basis to the
February 2003 Notes is limited to
$2,700 million and the aggregate
amount of secured Debt permitted under
the $2,900 million general Debt
baskets is reduced by the amount of
February 2003 Notes, 12.5% Notes and
Shareholder Notes outstanding. These
limits may fluctuate based upon
fluctuations of the principal Debt
basket (substantially as under the 11
1/4% Notes).
Under the February 2003 Notes, Rite
Aid will not, and will not permit any
of its Subsidiaries to, secure any
public Debt with a Lien on collateral
securing the February 2003 Notes
unless the Lien is pari passu with the
first priority obligations or with the
February 2003 Notes (i.e., not layered
between them).
The definition of Permitted Liens is
substantially similar except that any
Property securing Debt under the
principal Debt baskets must also
secure the February 2003 Notes on a
second priority basis and any Property
securing the 12.5% Notes or
Shareholder Notes must also secure the
February 2003 Notes on an equal and
ratable basis.
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Limitation on Asset Sales Substantially similar except that the
and Specified Collateral February 2003 Notes provide that (a)
Dispositions to the extent the proceeds from
specified collateral dispositions will
be allocated pursuant to the terms of
any other second priority debt
obligations to Repay or provide for
the Repayment of such second priority
Debt obligations, a pro rata portion
of such proceeds must be allocated to
Repay the February 2003 Notes pursuant
to an asset sales prepayment offer and
(b) if the assets that were the
subject of an asset disposition
constituted collateral and Rite Aid
reinvests in Additional Assets or
Expansion Capital Expenditures, then
such Additional Assets must be pledged
as collateral or the improved assets
subject to the Expansion Capital
Expenditures must constitute
collateral, in each case securing the
February 2003 Notes or Subsidiary
guarantees of the February 2003 Notes.
Limitation on Restrictions Substantially similar, but the
on Distributions from reference date is reset to the issue
Restricted Subsidiaries date of the February 2003 Notes.
Limitation on Substantially similar.
Transactions with
Affiliates
Limitation on Sale and Substantially similar.
Leaseback Transactions
Designation of Restricted Substantially similar.
and Unrestricted
Subsidiaries
Guarantees by Unlike the 11 1/4% Notes, under the
Subsidiaries February 2003 Notes (a) Rite Aid will
cause each Subsidiary that becomes or
is a party to the senior subsidiary
guarantee agreement or the second
priority subsidiary guarantee
agreement or an obligor with respect
to any of the Debt sharing collateral
with the February 2003 Notes (except
for certain foreign Subsidiaries) to
become a Subsidiary guarantor of the
February 2003 Notes by becoming a
party to the second priority
subsidiary guarantee agreement and the
collateral trust and intercreditor
agreement, (b) the requirement that a
Restricted Subsidiary guaranteeing
Debt of Rite Aid also guarantee the
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February 2003 Notes is subject to
fewer exceptions and (c) no Subsidiary
guarantor of the February 2003 Notes
may guarantee, directly or indirectly,
(1) any Debt of Rite Aid that is
subordinate or junior in right of
payment to any other Debt of Rite Aid
unless such guarantee is expressly
subordinate in right of payment to its
Subsidiary guarantee of the February
2003 Notes or (2) any Debt of Rite Aid
other than first priority obligations
unless such guarantee is expressly
subordinate in right of payment to or
ranks pari passu with, the Subsidiary
guarantee of such Subsidiary guarantor.
Additional Security If Rite Aid or any Subsidiary executes
Documents and delivers in respect of any
Property any documents or instruments
to secure Debt or other obligations
that at the time share collateral with
the February 2003 Notes, then Rite Aid
will, or will cause such Subsidiary
to, execute and deliver substantially
identical documents or instruments in
order to vest in the second priority
collateral trustee a perfected second
priority security interest (subject to
Permitted Liens and the collateral
trust and intercreditor agreement) in
such Property for the benefit of the
second priority collateral trustee on
behalf of the holders of the February
2003 Notes.
Merger, Consolidation and Substantially similar except that
Sale of Property under the February 2003 Notes, in
addition to Rite Aid, similar but less
restrictive provisions apply to
Subsidiary guarantors of the February
2003 Notes.
Events of Default Substantially similar except that
under the February 2003 Notes, an
Event of Default includes (a) any
Subsidiary guarantee ceasing to be in
full force and effect and such default
continues for 10 days after notice or
any Subsidiary guarantor denies or
disaffirms its obligations under its
Subsidiary guarantee, (b) the material
impairment of the security interests
under the second priority collateral
documents or any security interest
being declared invalid or
unenforceable or Rite Aid or any of
its Subsidiaries asserting, in any
court of competent jurisdiction, that
any such security interest is invalid
or unenforceable (subject to certain
exceptions) and (c) an event of
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default under the provision of the
12.5% Notes that are similar to (a)
and (b) above so long as the 12.5%
Notes are outstanding.
Change of Control Put Substantially similar.
Redemption Substantially similar (the February
2003 Notes may be redeemed within the
first four years of the issuance of
such Notes at a specified "make-whole"
premium; after four years, the
February 2003 Notes may be redeemed at
declining redemption prices). Any
redemption price, whether by
make-whole, equity offering or
otherwise may differ from the
redemption prices included in the 11
1/4% Notes.
Amendment Substantially similar except that
under the February 2003 Notes, these
provisions also relate to collateral
documents and releases of collateral
and guarantees and the holders of the
February 2003 Notes will be deemed to
consent to certain amendments,
including amendments of the agreements
governing the collateral and the
guarantees granted by the Subsidiaries
and releases of guarantees and
collateral.
