EXHIBIT 10.1
EXECUTION COPY
AMENDMENT NO. 2 TO SENIOR CREDIT AGREEMENT
This AMENDMENT NO. 2, dated as of
February 22, 2002, to the SENIOR CREDIT
AGREEMENT dated as of June 27, 2001 and amended
as of September 19, 2001 (as amended and
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 (f/k/a The Chase
Manhattan 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 has requested that certain amendments be
made to the Senior Credit Facility.
C. The Borrower and the Banks are entering 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 Borrower and the Banks agree as follows:
Section 1. Amendments to the Senior Credit Facility. The
Senior Credit Facility is hereby amended, effective as of the Amendment
Effective Date, as follows:
(a) The following definitions are hereby added to Section
1.01 in their appropriate alphabetical order:
(i) "Applicable Rate" means, for any day, with respect to
any Base Rate Loan or Euro-Dollar Loan, as the case may be, the
applicable rate per annum set forth below under the caption "Base
Rate Spread" or "Euro-Dollar Spread", as the case may be, based
upon the ratings by S&P and Moody's, respectively, applicable on
such date to the Index Debt:
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Base Rate Euro-Dollar
Index Debt Ratings: Spread Spread
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Category 1 2.50% 3.50%
B+ and B1 or higher
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Category 2 2.75% 3.75%
Lower than B+ or B1 or unrated
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For purposes of the foregoing, (i) if either Moody's or
S&P shall not have in effect a rating for the Index Debt (other
than by reason of the circumstances referred to in the last
sentence of this paragraph), then such rating agency shall be
deemed to have established a rating in Category 2; and (ii) if the
ratings established or deemed to have been established by Moody's
and S&P for the Index Debt shall be changed (other than as a
result of a change in the rating system of Moody's or S&P), such
change shall be effective as of the date on which it is first
announced by the applicable rating agency. Each change in the
Applicable Rate shall apply during the period commencing on the
effective date of such change and ending on the date immediately
preceding the effective date of the next such change. If the
rating system of Moody's or S&P shall change, or if either such
rating agency shall cease to be in the business of rating
corporate debt obligations, the Borrower and the Banks shall
negotiate in good faith to amend this definition to reflect such
changed rating system or the unavailability of ratings from such
rating agency and, pending the effectiveness of any such
amendment, the Applicable Rate shall be determined by reference to
the rating most recently in effect prior to such change or
cessation.
(ii) "Index Debt" means Indebtedness for borrowed money
under this Agreement.
(iii) "Moody's" means Xxxxx'x Investors Service, Inc.
(iv) "S&P" means Standard & Poor's.
(b) Section 2.18(b)(i) is hereby amended by deleting the
reference therein to "$125,000,000" and replacing it with a reference to
"$175,000,000".
(c) Section 2.06 is hereby amended as follows:
(i) The reference to "2.50%" in subsection (a) is hereby
deleted and replaced with a reference to "the Applicable Rate".
(ii) The reference to "3.50%" in subsection (b) is hereby
deleted and replaced with a reference to "the Applicable Rate."
(d) Section 5.16 is hereby amended and restated in its
entirety as follows:
"Section 5.16. Capital Expenditures. The aggregate amount
of Consolidated Capital Expenditures for any period set forth
below shall not exceed the amount set forth below opposite such
period, plus (a) Excess Liquidity for such period, plus (b) an
amount (the "Carryforward Amount") equal to the sum of (i) any
amount by which the amount set forth below opposite the
immediately preceding period, if any, exceeds the Consolidated
Capital Expenditures during such immediately preceding period and
(ii) in the case of the twelve months ending February 28, 2004,
any amount by which the sum of (x) the amount set forth below
opposite the twelve months ending March 1, 2003 plus (y) any
increase in such amount pursuant to clause (i) above exceeds the
Consolidated Capital Expenditures for the twelve months ending
March 1, 2003:
Period Amount
Twelve months ending March 2, 2002.......................... $150,000,000
Twelve months ending March 1, 2003.......................... $150,000,000
Twelve months ending February 28, 2004...................... $150,000,000
Twelve months ending February 26, 2005...................... $150,000,000
February 27, 2005 through June 27, 2005..................... $100,000,000."
(e) Section 5.17 is hereby amended and restated in its
entirety as follows:
"Section 5.17. Maximum Leverage Ratio. At no time shall
the Leverage Ratio as of any date during any period set forth
below be greater than the amount set forth opposite such period:
Period Amount
Nine months ending December 1, 2001........................ 8.25 to 1.00
Twelve months ending March 2, 2002......................... 8.40 to 1.00
Twelve months ending May 31, 2002.......................... 9.50 to 1.00
Twelve months ending August 31, 2002.........................10.00 to 1.00
Twelve months ending November 30, 2002..................... 9.50 to 1.00
Twelve months ending March 1, 2003......................... 8.30 to 1.00
Twelve months ending May 31, 2003.......................... 7.90 to 1.00
Twelve months ending August 31, 2003....................... 7.70 to 1.00
Twelve months ending November 30, 2003..................... 7.50 to 1.00
Twelve months ending February 28, 2004..................... 7.00 to 1.00
Twelve months ending May 31, 2004.......................... 6.70 to 1.00
Twelve months ending August 31, 2004....................... 6.50 to 1.00
Twelve months ending November 30, 2004..................... 6.50 to 1.00
Twelve months ending February 26, 2005..................... 6.00 to 1.00
Twelve months ending May 31, 2005.......................... 6.00 to 1.00."
(f) Section 5.18 is hereby amended and restated in its
entirety as follows:
"Section 5.18. Minimum Interest Coverage Ratio. At no
time shall the Consolidated Interest Coverage Ratio for any period
be less than the amount set forth below opposite such period:
Period Amount
Nine months ending December 1, 2001......................... 1.25 to 1.00
Twelve months ending March 2, 2002.......................... 1.20 to 1.00
Twelve months ending May 31, 2002........................... 1.15 to 1.00
Twelve months ending August 31, 2002........................ 1.10 to 1.00
Twelve months ending November 30, 2002...................... 1.20 to 1.00
Twelve months ending March 1, 2003.......................... 1.35 to 1.00
Twelve months ending May 31, 2003........................... 1.45 to 1.00
Twelve months ending August 31, 2003........................ 1.45 to 1.00
Twelve months ending November 30, 2003...................... 1.60 to 1.00
Twelve months ending February 28, 2004...................... 1.70 to 1.00
Twelve months ending May 31, 2004........................... 1.75 to 1.00
Twelve months ending August 31, 2004........................ 1.90 to 1.00
Twelve months ending November 30, 2004...................... 2.00 to 1.00
Twelve months ending February 26, 2005...................... 2.00 to 1.00
Twelve months ending May 31, 2005........................... 2.00 to 1.00."
(g) Section 5.19 is hereby amended and restated in its
entirety as follows:
"Section 5.19. Minimum Fixed Charge Coverage Ratio. At no
time shall the Consolidated Fixed Charge Coverage Ratio for any
period set forth below be less than the amount set forth below
opposite such period:
Period Amount
Nine months ending December 1, 2001........................... 0.90 to 1.00
Twelve months ending March 2, 2002............................ 0.90 to 1.00
Twelve months ending May 31, 2002............................. 0.90 to 1.00
Twelve months ending August 31, 2002.......................... 0.90 to 1.00
Twelve months ending November 30, 2002........................ 0.90 to 1.00
Twelve months ending March 1, 2003............................ 1.00 to 1.00
Twelve months ending May 31, 2003............................. 1.00 to 1.00
Twelve months ending August 31, 2003.......................... 1.00 to 1.00
Twelve months ending November 30, 2003........................ 1.05 to 1.00
Twelve months ending February 28, 2004........................ 1.05 to 1.00
Twelve months ending May 31, 2004............................. 1.05 to 1.00
Twelve months ending August 31, 2004.......................... 1.10 to 1.00
Twelve months ending November 30, 2004........................ 1.10 to 1.00
Twelve months ending February 26, 2005........................ 1.10 to 1.00
Twelve months ending May 31, 2005............................. 1.10 to 1.00."
(h) Section 5.20 is hereby amended as follows:
(i) Each reference to "$300,000,000" in clause (h) is
deleted and replaced with a reference to "$550,000,000".
(ii) The following is added at the end of clause (h):
"; and provided further that the 4.75% Senior Unsecured
Convertible Notes due December 1, 2006 of the Borrower issued
under the Indenture dated as of November 19, 2001 between Rite Aid
and BNY Midwest Trust Company, as trustee, in an aggregate
principal amount of $250,000,000 shall at all times be deemed to
have been incurred under this Section 5.20(h) and shall not be
permitted to be reclassified pursuant to the last sentence of this
Section 5.20."
(iii) The following is added immediately following
Section 5.20(p):
"For purposes of this Section 5.20, any Debt incurred
under Section 5.20(g)(y), Section 5.20(h)(y), Section 5.20(i)(y)
or Section 5.20(o)(y) may later be reclassified as having been
incurred pursuant to any other such subsection of this Section
5.20 to the extent such Debt could be incurred pursuant to such
other subsection at the time of such reclassification."
(i) Section 9.11 is hereby amended as follows:
(i) The reference to "$50,000,000" in clause (a)(ii)
thereof is deleted and replaced with a reference to "$75,000,000".
(ii) The reference to "$75,000,000" in clause (b)(ii)
thereof is deleted and replaced with a reference to
"$100,000,000".
Section 2. 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, the
Senior Collateral Agent and the Syndication Agents that, as of the
Amendment Effective Date:
(a) This Amendment has been duly authorized, executed and
delivered by it and constitutes its valid and binding obligation,
enforceable 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 representatives and warranties shall be
true and correct as of such earlier date).
(c) After giving effect to the agreements herein, no
Default or Event of Default has occurred and is continuing.
Section 3. Effectiveness. This Amendment shall become
effective on the first date (the "Amendment Effective Date") on which (i)
the Senior Administrative Agent shall have received counterparts of this
Amendment that, when taken together, bear the signatures of the Majority
Banks, the Borrower and the Senior Administrative Agent, (ii) the Senior
Administrative Agent and each of the other Banks executing this Amendment
shall have received a fee from the Borrower in an amount determined by the
Senior Administrative Agent to ensure the approval of this Amendment, which
amount is currently anticipated to equal approximately 0.25% of each
approving Bank's existing commitment under the Senior Credit Facility, and
any other fees owed to such Bank by the Borrower and (iii) the Senior
Administrative Agent shall have received, on behalf of itself and the
Banks, a favorable written opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, counsel to the Borrower, in a form satisfactory to the Senior
Administrative Agent, (A) dated the Amendment Effective Date, (B) addressed
to the Senior Administrative Agent and the Banks, and (C) covering such
matters relating to the Senior Credit Facility and the other Senior Loan
Documents and the transactions contemplated thereby as the Senior
Administrative Agent shall reasonably request, and the Borrower hereby
instructs such counsel to deliver such opinion.
Section 4. Governing Law. This Amendment shall be a
contract made under and governed by the laws of the State of New York,
without regard to the conflicts of law provisions thereof.
Section 5. 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 6. 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 Cravath, Swaine & Xxxxx, counsel for the
Senior Administrative Agent.
Section 7. 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 8. Headings. The headings of this Amendment are
for purposes of reference only and shall not limit or otherwise affect the
meaning hereof.
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:
AMENDMENT NO. 2
DATED AS OF FEBRUARY 22, 2002 TO THE
RITE AID SENIOR CREDIT FACILITY
To approve Amendment No. 2:
Name of Institution:
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by
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Name:
Title:
