Exhibit 4.4
EXECUTION COPY
AMENDMENT NO. 1 TO TERM LOAN AGREEMENT
AMENDMENT dated as of December 2, 1999 to the Term Loan Agreement
dated as of October 25, 1999 (the "CREDIT AGREEMENT") among RITE AID
CORPORATION (the "BORROWER"), the BANKS party thereto (the "BANKS") and
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent (the
"ADMINISTRATIVE AGENT").
W I T N E S S E T H :
The parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Credit
Agreement has the meaning assigned to such term in the Credit Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby" and each
other similar reference and each reference to "this Agreement" and each
other similar reference contained in the Credit Agreement shall, after this
Amendment becomes effective, refer to the Credit Agreement as amended
hereby.
SECTION 2. Amendments to the Credit Agreement. (a) The following new
definition is added to Section 1.01 in its appropriate alphabetical
position:
"LIFO ADJUSTMENTS" means, for any period, the net adjustment to
costs of goods sold for such period required by the Borrower's LIFO
inventory method, determined in accordance with generally accepted
accounting principles.
(b) The following definitions in Section 1.01 are amended to read in
their entirety as follows:
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net
Income for such period, plus (a), to the extent deducted in
determining Consolidated Net Income for such period, the aggregate
amount of (i) Consolidated Interest Charges, (ii) provision for
income taxes, (iii) depreciation and amortization, (iv) LIFO
Adjustments, (v) store closing expenses and (vi) any other
nonrecurring charge to the extent such nonrecurring charge does not
involve any cash expenditure during such period, less (b), to the
extent not deducted in determining Consolidated Net Income for such
period, the aggregate amount of (i) any cash expenditure during such
period in connection with which a nonrecurring charge was taken in
any prior period and (ii) LIFO Adjustments.
"CONSOLIDATED NET INCOME" means, for any period, the net income
(or loss) of the Borrower and its Consolidated Subsidiaries
(exclusive of (a) extraordinary items of gain or loss, (b) any gain
or loss in connection with any sale of assets other than sales of
inventory in the ordinary course of business, but in the case of loss
only to the extent that such loss does not involve any cash
expenditure during such period and (c) the Borrower's share of the
net income (or loss) of xxxxxxxxx.xxx), determined on a consolidated
basis for such period.
"CONSOLIDATED NET WORTH" means at any date the consolidated
stockholders' equity of the Borrower and its Consolidated
Subsidiaries determined as of such date; provided that such
consolidated stockholders' equity shall be adjusted to exclude the
effect of items which have been excluded from Consolidated Net Income
for any period commencing after August 28, 1999 by reason of the
parenthetical phrase contained in the definition of such term.
Consolidated Net Worth includes the Borrower's 8% Convertible
Pay-In-Kind Preferred Stock.
"CONSOLIDATED RENT" means, for any period, the consolidated
rental expense of the Borrower and its Consolidated Subsidiaries for
such period, and including in any event rental costs of closed stores
for such period whether or not reflected as an expense in the
determination of Consolidated Net Income for such period.
(c) The definition of October Special Charges in Section 1.01 and
Section 1.02(b) are deleted, and Section 1.02(a) is redesignated Section
1.02.
(d) Section 5.12 is amended to read in its entirety as follows:
SECTION 5.12 Capitalization Leverage Ratio. At no time shall
the ratio of (i) Consolidated Debt at such time to (ii) Total Capital
at such time, exceed 0.695; provided that upon any sale of the
capital stock of PCS, such maximum ratio shall be reset at the level
which produces the result that the amount of additional Debt that the
Borrower may incur within the limits of this ratio immediately after
giving effect to such sale and the repayment of any Debt required in
connection therewith is equal to the amount of additional Debt that
the Borrower could incur within the limits of this ratio immediately
before giving effect to such sale and the repayment of any Debt
required in connection therewith.
(e) Section 5.13 is amended to read in its entirety as follows:
SECTION 5.13. Limitation on Debt. The Borrower will not, and
will not permit any of its Subsidiaries to, incur or at any time be
liable with respect to any Debt except:
(a) Debt under this Agreement or the Pro Rata
Credit Agreement;
(b) Debt outstanding on December 2, 1999;
(c) Debt incurred to refinance Debt referred to in clause
(a) or clause (b) above, provided that the amount thereof that
is at the time outstanding or committed is not increased and
the maturity thereof is not shortened; and
(d) Debt not permitted by clauses (a), (b) and (c) above
in an aggregate principal amount at any time outstanding not to
exceed $25,000,000.
(f) Section 5.14 is amended to read in its entirety as follows:
SECTION 5.14. Fixed Charge Coverage. At no time during any
period set forth below shall the Fixed Charge Coverage Ratio be less
than the ratio set forth below opposite such period:
FISCAL QUARTER ENDING
ON OR CLOSEST TO RATIO
November 30, 1999 1.35
February 29, 2000 1.30
May 31, 2000 and 1.25
thereafter
SECTION 3. Representations of Borrower. The Borrower represents and
warrants that (i) the representations and warranties of the Borrower set
forth in Article 4 of the Credit Agreement will be true on and as of the
Amendment Effective Date and (ii) no Default will have occurred and be
continuing on such date.
SECTION 4. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 5. Counterparts. This Amendment may be signed in any number
of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
SECTION 6. Effectiveness. This Amendment shall become effective on
the date (not later than December 9, 1999) when the following conditions
are met (the "AMENDMENT EFFECTIVE DATE"):
(a) the Administrative Agent shall have received from each of the
Borrower and the Required Banks a counterpart hereof signed by such
party or facsimile or other written confirmation (in form
satisfactory to the Administrative Agent) that such party has signed
a counterpart hereof;
(b) the Administrative Agent shall have received (i) an amendment fee
for the account of each Bank from which a signed counterpart hereof
(or other written confirmation) shall have been received by the
Administrative Agent not later than the later of (x) the date on
which the other conditions set forth in this Section 6 have been
satisfied and (y) the date hereof, in an amount equal to 0.25% of
such Bank's outstanding Loans and (ii) payment of all expenses then
payable pursuant to Section 9.03 of the Credit Agreement;
(c) the Administrative Agent shall have received evidence satisfactory
to it that (i) the incoming officers of the Borrower previously
identified to the Administrative Agent as such shall have accepted
employment with the Borrower on mutually satisfactory terms and (ii)
the Borrower shall have made a public announcement that such incoming
officers have accepted such employment; and
(d) the Administrative Agent shall have received evidence satisfactory
to it that substantially identical amendments to the covenants set
forth in any other agreement with substantially identical covenants
as those set forth in the Credit Agreement and to which the Borrower
or any of its Subsidiaries is a party shall have become or shall
simultaneously become effective.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first above written.
RITE AID CORPORATION
By: __________________________________
Name:
Title:
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK
By: __________________________________
Name:
Title:
