UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of report (Date of earliest event reported):
June 11,
2009 (June 5, 2009)
Rite
Aid Corporation
(Exact
name of registrant as specified in its charter)
Delaware
|
1-5742
|
23-1614034
|
(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File Number)
|
(IRS
Employer
Identification
Number)
|
30
Hunter Lane, Camp Hill, Pennsylvania 17011
(Address
of principal executive offices, including zip code)
(717)
761-2633
(Registrant's
telephone number, including area code)
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[
] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[
] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item
1.01. Entry into a Material Definitive Agreement.
On June 5, 2009, Rite Aid Corporation
("Rite Aid") amended and restated the credit agreement (the "Restated Credit
Agreement") governing its senior secured credit facility to permit the
refinancing of Rite Aid's indebtedness under its senior secured credit facility
with new secured indebtedness, which may be on a senior or second lien basis and
to provide Rite Aid with greater flexibility to consummate asset
sales. The Restated Credit Agreement also permits Rite Aid to
refinance its existing accounts receivable securitization facilities with
on-balance sheet indebtedness, which may be secured or unsecured on a senior or
second priority basis (in each case subject to permitted liens). In
addition, as a result of the Restated Credit Agreement, if Rite Aid has less
than $150 million of revolver availability under its senior secured credit
facility, Rite Aid will be subject to a fixed charge coverage ratio maintenance
test. The Restated Credit Agreement also restricts Rite Aid and the Subsidiary
Guarantors (as defined below) from accumulating cash on hand in excess of $200
million at any time when revolving loans under Rite Aid's senior secured credit
facility are outstanding (not including cash located in Rite Aid's store deposit
accounts, cash related to Rite Aid's accounts receivable securitization
facilities, cash necessary to cover Rite Aid's current liabilities and certain
other exceptions). The Restated Credit Agreement also states that if at
any time (subject to certain exceptions) either (i) an event of default exists
under Rite Aid's senior secured credit facility or (ii) the sum of revolver
availability under Rite Aid's senior secured credit facility and certain amounts
held on deposit with the senior collateral agent in a concentration account is
less than $100 million for three consecutive business days, the funds in Rite
Aid's deposit accounts will be swept to a concentration account with the senior
collateral agent and will be applied first to repay outstanding revolving loans
under Rite Aid's senior secured credit facility, and then held as collateral for
the senior lien obligations and the second lien obligations until such cash
sweep period is rescinded pursuant to the terms of Rite Aid's senior secured
credit facility. A copy of the Amended and Restated Credit Agreement,
dated as of June 5, 2009, is filed hereto as Exhibit 10.1 and is incorporated
herein by reference.
On
June 10, 2009, Rite Aid entered into a refinancing amendment to the Restated
Credit Agreement pursuant to which it borrowed $525 million under a new term
loan (the "Tranche 4 Term Loan") under the Restated Credit
Agreement. The net proceeds of the Tranche 4 Term Loan were used to
repay Rite Aid's $145 million Tranche 1 Term Loan as well as approximately $350
million of the amounts outstanding under Rite Aid's existing revolving credit
facility, with a corresponding reduction in revolving commitments, and to pay
related fees and expenses. The Tranche 4 Term Loan was issued at a
96% discount, resulting in gross proceeds of $504 million before fees and
expenses. A copy of the Refinancing Amendment No. 1, dated as of June
10, 2009 ("Refinancing Amendment No. 1"), is filed hereto as Exhibit 10.2 and is
incorporated herein by reference.
In addition, on June 5, 2009, Rite Aid
executed the Amended and Restated Collateral Trust and Intercreditor agreement
(the "Amended Intercreditor Agreement") to the Collateral Trust and
Intercreditor Agreement, originally dated as of June 27, 2001, as amended and
restated
as
of May 28, 2003, and further amended as of June 4, 2007, as well as the related
definitions annex attached thereto, providing for the amendments described
therein to allow the Company to incur or issue and sell one or more series or
classes of senior lien indebtedness (to the extent permitted under the
indentures and any other instruments that govern Rite Aid's debt then
outstanding) and allow such new senior lien indebtedness to be guaranteed by the
Subsidiary Guarantors and secured by the same senior liens granted by the
Subsidiary Guarantors on the collateral that secures Rite Aid's obligations
under its senior secured credit facility (including the Tranche 4 Term Loan and
the anticipated New Revolver) and, when issued, Rite Aid's 9.750% senior secured
notes due 2016 (the "9.750% Notes") described below, subject to certain
conditions set forth therein. A copy of the Amended and Restated
Collateral Trust and Intercreditor Agreement, including the related definitions
annex, dated as of June 5, 2009, is filed hereto as Exhibit 10.3 and is
incorporated herein by reference.
In connection with the Amended
Intercreditor Agreement and the Restated Credit Agreement, conforming changes
were made to certain of Rite Aid's other agreements that govern its senior lien
and second priority indebtedness. Copies of the Amended and Restated
Senior Subsidiary Guarantee Agreement, dated as of June 5, 2009, and the Amended
and Restated Senior Subsidiary Security Agreement, dated as of June 5, 2009, are
filed hereto as Exhibit 10.4 and Exhibit 10.5, respectively, and are
incorporated herein by reference.
Certain of the lenders, the
administrative agent and the collateral agent to the senior secured credit
facility and their affiliates have performed investment banking, commercial
banking and advisory services for Rite Aid from time to time for which they have
received customary fees and expenses.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
The information regarding Rite Aid's
entry into the Restated Credit Agreement, Refinancing Amendment No. 1, the
Amended Intercreditor Agreement, the Amended and Restated Senior Subsidiary
Guarantee Agreement and the Amended and Restated Senior Subsidiary Security
Agreement set forth in Item 1.01 above is incorporated herein by
reference.
At Rite Aid's option, the Tranche 4
Term Loan bears interest at a rate per annum equal to either (i) an adjusted
LIBOR rate (with a LIBOR floor of 3.00% per annum) plus 6.50% or (ii) the
greater of (x) Citibank's base rate (with a base rate floor of 4.00% per
annum) and (y) the federal funds rate plus 0.50%, in each case plus
5.50%. The Tranche 4 Term Loan is guaranteed by all of Rite Aid's
subsidiaries that guarantee Rite Aid's senior secured credit facility, and that
will guarantee the 9.750% Notes and the anticipated new $1.0 billion senior
secured revolving credit facility due September 2012 (the "New Revolver") which
Rite Aid intends to obtain, pursuant to a refinancing amendment to its Restated
Credit Agreement, after the consummation of the offering of the 9.750% Notes (
the “Subsidiary Guarantors”). The New Revolver would replace Rite
Aid's existing revolving credit facility. The Subsidiary Guarantors also
guarantee Rite Aid's outstanding 10.375% senior secured notes due 2016, 7.5%
senior secured notes due 2017, 8.625% senior notes due 2015, 9.375% senior notes
due 2015 and 9.5% senior notes due 2017. The Tranche 4 Term Loan and
the guarantees thereof are secured by the same senior liens granted by the
Subsidiary Guarantors
on
the collateral that secures Rite Aid's obligations under its senior secured
credit facility (including the anticipated New Revolver) and, when issued, the
9.750% Notes. Rite Aid will be required to make mandatory
prepayments of the Tranche 4 Term Loan (on a pro rata basis with any other term
loans under its senior secured credit facility and other senior lien obligations
that require the sharing of such prepayments, including the 9.750% Notes) with
the proceeds of certain asset dispositions and casualty events (subject to
certain limitations). Rite Aid will also be required to make
mandatory prepayments of the Tranche 4 Term Loan (on a pro rata basis with any
other term loans under its senior secured credit facility) with a portion of any
excess cash flow generated by Rite Aid and with the proceeds of certain
issuances of equity and debt (subject to certain exceptions). If at
any time the total credit exposure outstanding under Rite Aid's senior secured
credit facility (including the Tranche 4 Term Loan and the anticipated New
Revolver) and together with the principal amount of the 9.750% Notes, and the
principal amount of any other senior lien obligations exceeds the borrowing
base, Rite Aid will be required to make certain other mandatory prepayments to
eliminate such shortfall.
All prepayments of the Tranche 4 Term
Loan occurring on or prior to the third anniversary of the borrowings under the
Tranche 4 Term Loan will be subject to a prepayment premium in an
amount equal to (i) 5.0% of the principal amount prepaid if such prepayment
occurs on or prior to the first anniversary of such borrowing, (ii) 3.0% of the
principal amount prepaid if such prepayment occurs on or prior to the second
anniversary of such borrowing and (iii) 1.0% of the principal amount prepaid if
such prepayment occurs on or prior to the third anniversary of such
borrowing. The Tranche 4 Term Loan will mature on June 10,
2015.
Item
8.01. Other Events.
On
June 8, 2009, Rite Aid announced the terms of an offering of $410 million
aggregate principal amount ($10 million more than previously announced) of its
9.750% Notes (representing a yield to maturity of 10.125%, based on an offering
price of 98.196% per Note).
The
transaction is expected to close on June 12, 2009, subject to customary closing
conditions.
The
press release is attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
The
9.750% Notes and the related subsidiary guarantees have not been registered
under the Securities Act of 1933, as amended, and may not be offered or sold in
the United States absent registration or an applicable exemption from
registration requirements.
Item
9.01. Financial Statements and Exhibits.
(d) Exhibits.
Number
|
|
Description
|
10.1
|
|
Amended
and Restated Credit Agreement originally dated as of June 27, 2001, as
amended and restated as of June 5, 2009, among Rite
Aid
|
|
|
Corporation,
the lenders from time to time party thereto and Citicorp North America,
Inc., as administrative agent and collateral agent.
|
10.2
|
|
Refinancing
Amendment No. 1, dated as of June 10, 2009, relating to the Credit
Agreement dated as of June 27, 2001, as amended and restated as of June 5,
2009, among Rite Aid Corporation, the lender party thereto and Citicorp
North America, Inc., as Senior Collateral Agent.
|
10.3
|
|
Amended
and Restated Collateral Trust and Intercreditor Agreement, including the
related definitions annex, dated as of June 5, 2009, among Rite Aid
Corporation, each subsidiary named therein or which becomes a party
thereto, Wilmington Trust Company, as collateral trustee, Citicorp North
America, Inc., as senior collateral processing agent, The Bank of New York
Trust Company, N.A., as trustee under the 2017 7.5% Note Indenture (as
defined therein) and The Bank of New York Mellon Trust Company, N.A., as
trustee under the 2016 10.375% Note Indenture (as defined therein), and
each other Second Priority Representative and Senior Representative which
becomes a party thereto.
|
10.4
|
|
Amended
and Restated Senior Subsidiary Guarantee Agreement, dated as of June 5,
2009 among the Subsidiary Guarantors party thereto and Citicorp North
America, Inc., as senior collateral agent.
|
10.5
|
|
Amended
and Restated Senior Subsidiary Security Agreement, dated as of June 5,
2009, by the Subsidiary Guarantors party thereto in favor of the Citicorp
North America, Inc., as senior collateral agent.
|
99.1
|
|
Press
Release, dated June 8, 2009.
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereto
duly authorized.
Date: June
11, 2009
|
By:
|
/s/
Marc A. Strassler
|
|
|
|
Name:
|
Marc
A. Strassler
|
|
|
Title:
|
Executive
Vice President,
|
|
|
|
General
Counsel and Secretary
|
EXHIBIT
INDEX
Number
|
|
Description
|
10.1
|
|
Amended
and Restated Credit Agreement originally dated as of June 27, 2001, as
amended and restated as of June 5, 2009, among Rite Aid Corporation, the
lenders from time to time party thereto and Citicorp North America, Inc.,
as administrative agent and collateral agent.
|
10.2
|
|
Refinancing
Amendment No. 1, dated as of June 10, 2009, relating to the Credit
Agreement dated as of June 27, 2001, as amended and restated as of June 5,
2009, among Rite Aid Corporation, the lender party thereto and Citicorp
North America, Inc., as Senior Collateral Agent.
|
10.3
|
|
Amended
and Restated Collateral Trust and Intercreditor Agreement, including the
related definitions annex, dated as of June 5, 2009, among Rite Aid
Corporation, each subsidiary named therein or which becomes a party
thereto, Wilmington Trust Company, as collateral trustee, Citicorp North
America, Inc., as senior collateral processing agent, The Bank of New York
Trust Company, N.A., as trustee under the 2017 7.5% Note Indenture (as
defined therein) and The Bank of New York Mellon Trust Company, N.A., as
trustee under the 2016 10.375% Note Indenture (as defined therein), and
each other Second Priority Representative and Senior Representative which
becomes a party thereto.
|
10.4
|
|
Amended
and Restated Senior Subsidiary Guarantee Agreement, dated as of June 5,
2009 among the Subsidiary Guarantors party thereto and Citicorp North
America, Inc., as senior collateral agent.
|
10.5
|
|
Amended
and Restated Senior Subsidiary Security Agreement, dated as of June 5,
2009, by the Subsidiary Guarantors party thereto in favor of the Citicorp
North America, Inc., as senior collateral agent.
|
99.1
|
|
Press
Release, dated June 8, 2009.
|