Under
the terms of Rite Aid Corporation's (the "Company") Receivables Financing
Agreement dated as of September 21, 2004 (as amended, the “Receivables Financing
Agreement”), by and among Rite Aid Funding II, CAFCO, LLC, CRC FUNDING, LLC,
Falcon Asset Securitization Company LLC, Variable Funding Capital Company LLC,
as the investors, Citibank, N.A. ("Citibank"), JPMorgan Chase Bank, N.A.
("JPMorgan") and Wachovia Bank, National Association ("Wachovia"), as the banks,
Citicorp North America, Inc. ("CNAI"), as program agent, CNAI, JPMorgan and
Wachovia, as investor agents, Rite Aid Hdqtrs. Funding, Inc., as collection
agent, and certain other parties thereto as originators, the Company sells
substantially all of its eligible third party pharmaceutical receivables to a
special purpose entity ("SPE") and retains servicing responsibility. The assets
of the SPE are not available to satisfy the creditors of any other person,
including any of the Company’s affiliates. These agreements provide for the
Company to sell, and for the SPE to purchase, these receivables. The SPE then
transfers interests in these receivables to various commercial paper vehicles
("CPVs"). The amounts available to the Company under the Receivables
Financing Agreement are dependant upon a formula that takes into account such
factors as write-off history, receivable concentrations and other
adjustments. Adjustments to the formula are at the discretion of the
CPVs. Should any of the CPVs fail to renew their annual commitment
under these agreements, the Company has access to a backstop facility, which is
backed by the banks, and which expires in September 2010, to provide receivable
financing to the Company.
On
September 16, 2008, the Company entered into an amendment to the Receivables
Financing Agreement (the "Amendment") which renewed the commitment of the
parties thereto under the Receivables Financing Agreement, which had been
scheduled to terminate on September 16, 2008, through January 15,
2009. Should any of the CPVs not renew their commitment
under these agreements on January 15, 2009, the Company has access to a backstop
facility, which is backed by the banks, and which expires in September 2010, to
provide receivable financing to the Company.
The
Amendment also modifies the program and liquidity fees. The program
fee is has been modified from LIBOR plus 1.00% to 1.25% of receivables funded by
the CPVs. The liquidity fee has been modified from 0.25% to 1.50% of
the total securitization agreement commitment of $650,000,000.