form8k.htm
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 16, 2009 (June 12,
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 12, 2009, Rite Aid Corporation
("Rite Aid") completed its previously announced offering (the "Offering") of
$410 million aggregate principal amount of its 9.750% senior secured notes due
June 2016 (the "Notes") to qualified institutional buyers pursuant to Rule 144A,
and outside of the United States pursuant to Regulation S, under the Securities
Act of 1933, as amended (the "Securities Act"). The Notes are
unsecured, unsubordinated obligations of Rite Aid and are guaranteed by the same
subsidiaries (the "Subsidiary Guarantors") that guarantee Rite Aid's obligations
under its senior secured credit facility and 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 and
that will guarantee Rite Aid's obligations under its anticipated $1.0 billion
senior secured revolving credit facility due September 2012 (the "New
Revolver"). The guarantees of the Notes are secured on a senior lien
basis, pari passu with the secured guarantees of Rite Aid's senior secured
credit facility. Rite Aid used the net proceeds of the Offering to
repay a portion of the amounts outstanding under Rite Aid's existing revolving
credit facility, with a corresponding reduction in commitment.
Registration
Rights Agreement
On June 12, 2009 (the "Closing Date"),
the Company entered into a registration rights agreement relating to the Notes,
among the Company, the Subsidiary Guarantors and Citigroup Global Markets Inc.,
Banc of America Securities LLC and Wachovia Capital Markets, LLC, as the initial
purchasers (the "Initial Purchasers") of the Notes (the "Registration Rights
Agreement"). The Registration Rights Agreement requires Rite Aid and
the Subsidiary Guarantors, at their cost, to among other things: (i) file a
registration statement with respect to the Notes within 150 days after the
Closing Date to be used in connection with the exchange of the Notes and related
guarantees for publicly registered notes and related guarantees with
substantially identical terms in all material respects (except for the transfer
restrictions relating to the Notes); (ii) use their commercially reasonable
efforts to cause the applicable registration statement to become effective under
the Securities Act within 210 days after the Closing Date; and (iii) use their
commercially reasonable efforts to effect an exchange offer of the Notes and the
related guarantees for registered notes and related guarantees within 270 days
after the Closing Date. In addition, under certain circumstances,
Rite Aid and the Subsidiary Guarantors may be required to file a shelf
registration statement to cover resales of the Notes.
If: (i) Rite Aid and the Subsidiary
Guarantors fail to file any of the registration statements required by the
Registration Rights Agreement on or before the date specified for such filing;
(ii) any of such registration statements are not declared effective by the SEC
on or prior to the date specified for such effectiveness; (iii) Rite Aid and the
Subsidiary Guarantors fail to consummate the exchange offer within 270 days
after the Closing Date; (iv) a shelf registration statement, if required, has
not been filed on or prior to the 30th day after Rite Aid's obligation to file a
shelf registration statement arises; (v) any required registration statement is
filed and declared effective but thereafter ceases to be effective during the
applicable period (subject to certain exceptions) (each such event referred to
in clauses (i) through (v) above, a "Registration Default"), then Rite Aid will
be obligated to pay additional interest to each holder of the Notes that are
subject to transfer restrictions, with respect to the first 90-day period
immediately
following
the occurrence of a Registration Default, at a rate of 0.25% per annum on the
principal amount of the Notes that are subject to transfer restrictions held by
such holder. The amount of additional interest will increase by an additional
0.25% per annum with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of additional
interest for all Registration Defaults of 0.50% per annum on the principal
amount of the Notes that are subject to transfer
restrictions. Following the cure of the Registration Default, the
accrual of additional interest will cease. A Registration Default
referred to in (v) above will be deemed not to have occurred and be
continuing in relation to a shelf registration statement or the related
prospectus if such Registration Default has occurred solely as a result of the
filing of a post-effective amendment to such shelf registration statement and
for such time as is reasonably necessary to incorporate Rite Aid's annual
audited financial information, quarterly financial information or other required
information where such post-effective amendment is not yet effective and needs
to be declared effective to permit holders of the Notes to use the related
prospectus and Rite Aid is using its commercially reasonable efforts to have
such post-effective amendment declared effective. A copy of the
Registration Rights Agreement is filed hereto as Exhibit 10.1 and is
incorporated herein by reference.
Senior
Lien Intercreditor Agreement
In connection with the Offering, Rite
Aid entered into a senior lien intercreditor agreement (the "Senior
Intercreditor Agreement"), dated as of the Closing Date, among Rite Aid, the
Subsidiary Guarantors, the senior collateral agent for holders of Rite Aid's
senior lien indebtedness (the "Senior Collateral Agent"), the senior collateral
agent under Rite Aid's senior secured credit facility, as authorized
representative under the senior secured credit facility, and The Bank of New
York Mellon Trust Company, N.A., as the authorized representative for the
Notes. Under the Senior Intercreditor Agreement, the authorized
representative of the lenders under Rite Aid's senior secured credit facility
has the right to instruct the Senior Collateral Agent to take actions with
respect to the shared collateral until the termination of Rite Aid's senior loan
obligations under its senior secured credit facility, even though all holders of
senior obligations are pari passu and will share equally and ratably in any
proceeds of the shared collateral. After the termination of Rite
Aid's senior secured credit facility, the authorized representative of whichever
series of senior obligations constitutes the largest outstanding principal
amount of any then outstanding series of senior obligations with respect to the
shared collateral will have the right to instruct the Senior Collateral Agent to
take actions with respect to the shared collateral. Nothing contained
in the Senior Intercreditor Agreement will affect the equal nature of the senior
lien or the priority of Rite Aid's second priority indebtedness as set forth in
its existing collateral trust and intercreditor agreement or any other rights of
or obligations owed to a second priority debt party (in its capacity as such)
contained in such existing collateral trust and intercreditor agreement or
otherwise. A copy of the Senior Lien Intercreditor Agreement is filed
hereto as Exhibit 10.2 and is incorporated herein by reference.
The Initial Purchasers 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. Citigroup Global Markets Inc. acted and is acting as joint
lead arranger and joint book-runner, and an affiliate of Citigroup Global
Markets Inc. is the administrative agent and collateral agent, under Rite Aid's
senior secured credit facility,
Tranche 4
Term Loan and the anticipated New Revolver. Banc of America
Securities LLC acted and is acting as joint lead arranger, and joint book-runner
and an affiliate of Banc of America Securities LLC is the syndication agent,
under Rite Aid's senior secured credit facility, Tranche 4 Term Loan and
the anticipated New Revolver. Wachovia Capital Markets, LLC is acting
as joint lead arranger and joint book-runner and an affiliate of Wachovia
Capital Markets, LLC is acting as co-documentation agent under Rite Aid's
Tranche 4 Term Loan and the anticipated New Revolver. Affiliates of the
Initial Purchasers are lenders under Rite Aid's senior secured credit facility,
Tranche 4 Term Loan and the anticipated New Revolver. In connection with
these roles, the Initial Purchasers and their respective affiliates each
received, and will receive, customary fees. Affiliates of one or more
of the Initial Purchasers are lenders under Rite Aid's existing revolving credit
facility being repaid in connection with the Offering and the anticipated New
Revolver.
See the disclosure in Item 2.03 below
for disclosure regarding the Indenture (as defined below). Such
disclosure is incorporated by reference into this Item 1.01.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation Under
an Off-Balance Sheet Arrangement of a Registrant
The information regarding the Notes set
forth in Item 1.01 above is incorporated herein by reference.
The Notes were issued pursuant to an
indenture, dated as of June 12, 2009, among the Company, The Bank of New York
Mellon Trust Company, N.A., as trustee, and the Subsidiary Guarantors (the
"Indenture"). At any time and from time to time, prior to June 12,
2012, Rite Aid may redeem up to a maximum of 35% of the original aggregate
principal amount of the Notes with the proceeds of one or more equity offerings,
at a redemption price equal to 109.750% of the principal amount thereof, plus
accrued and unpaid interest thereon, if any, to, but not including, the
redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
provided that:
(i) at least 65% of the original aggregate principal amount of the Notes remains
outstanding; and (ii) the redemption occurs within 75 days of the completion of
such equity offering upon not less than 30 nor more than 60 prior days
notice. Prior to June 12, 2013, Rite Aid may redeem some or all of
the Notes by paying a "make-whole" premium based on U.S. Treasury
Rates. On or after June 12, 2013, and on or after June 12 of the
relevant year listed below, Rite Aid may redeem some or all of the Notes at the
prices listed below, plus accrued and unpaid interest, if any, to, but not
including, the redemption date (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant interest payment
date): 2013 at a redemption price of 104.875%; 2014 at a redemption price of
102.438% and thereafter at a redemption price of 100%.
Each of the following constitutes an
event of default under the Indenture: (1) failure to make the payment of any
interest on the Notes when the same becomes due and payable, and such failure
continues for a period of 30 days; (2) failure to make the payment of any
principal of, or premium, if any, on, the Notes when the same becomes due and
payable at its stated
maturity,
upon acceleration, redemption, optional redemption, required repurchase or
otherwise; (3) failure to comply with the covenant described under "—Merger,
Consolidation and Sale of Property" in the Indenture; (4) failure to comply with
any other covenant or agreement in the Notes or in the Indenture (other than a
failure that is the subject of the foregoing clause (1), (2) or (3)) and such
failure continues for 30 days after written notice is given to Rite Aid; (5) a
default under any debt of Rite Aid or any restricted subsidiary that results in
acceleration of the final maturity of such debt, or failure to pay any such debt
at final maturity (giving effect to applicable grace periods), in an aggregate
amount greater than $35.0 million or its foreign currency equivalent at the
time; (6) any judgment or judgments for the payment of money in an aggregate
amount in excess of $35.0 million (or its foreign currency equivalent at the
time) that shall be rendered against Rite Aid or any restricted subsidiary and
that shall not be waived, satisfied or discharged for any period of 30
consecutive days during which a stay of enforcement shall not be in
effect; (7) certain events involving bankruptcy, insolvency or
reorganization of Rite Aid or any significant subsidiary; (8) any
subsidiary guarantee of a significant subsidiary ceases to be in full force and
effect (subject to certain exceptions) and such default continues for 20 days
after notice to Rite Aid, or any subsidiary guarantor that is a significant
subsidiary denies or disaffirms its obligations under the Notes and (9) the
material impairment of the security interests under certain of Rite Aid's
agreements governing its senior lien indebtedness for any reason other than the
satisfaction in full of all obligations under the Indenture and discharge of
such agreements and the Indenture or any security interest created thereunder
shall be declared invalid or unenforceable or Rite Aid or any of its
subsidiaries asserting, in any pleading in any court of competent jurisdiction,
that any such security interest is invalid or unenforceable. A
default under clauses (4), (8) or (9) is not an event of default until the
trustee or the holders of not less than 25% in aggregate principal amount of the
Notes then outstanding notify Rite Aid of the default and Rite Aid does not cure
such default within the time specified after receipt of such notice. Such notice
must specify the default, demand that it be remedied and state that such notice
is a "Notice of Default."
Rite Aid is not required to make
mandatory sinking fund payments with respect to the Notes.
Upon a change of control, as defined in
the Indenture, Rite Aid is required to offer to purchase all of the Notes then
outstanding at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, to, but not including, the purchase
date (subject to the rights of holders of record on the relevant record date to
receive interest due on the relevant interest payment date).
The covenants in the Indenture limit
the ability of Rite Aid and certain of its subsidiaries to, among other things:
(1) incur additional debt; (2) pay dividends or make other restricted payments;
(3) purchase, redeem or retire capital stock or subordinated debt; (4) make
asset sales; (5) enter into transactions with affiliates; (6) incur liens; (7)
enter into sale leaseback transactions; (8) provide subsidiary guarantees; (9)
make investments; and (10) merge or consolidate with any other
person. A copy of the Indenture is filed hereto as Exhibit 4.1 and is
incorporated by reference herein.
Item
9.01. Financial Statements and Exhibits.
(c)
Exhibits.
Number
|
|
Description
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4.1
|
|
Indenture,
dated as of June 12, 2009, among Rite Aid Corporation, as issuer, the
Subsidiary Guarantors named therein and The Bank of New York Mellon Trust
Company, N.A., as trustee.
|
4.2
|
|
Form
of 9.750% Notes due 2016 (included in Exhibit 4.1).
|
10.1
|
|
Registration
Rights Agreement relating to the Notes, dated June 12, 2009, among Rite
Aid Corporation, the Subsidiary Guarantors and Citigroup Global Markets
Inc., Banc of America Securities LLC, and Wachovia Capital Markets, LLC as
the Initial Purchasers of the Notes.
|
10.2
|
|
Senior
Lien Intercreditor Agreement dated as of June 12, 2009, among Rite Aid
Corporation, the Subsidiary Guarantors named therein, Citicorp North
America, Inc., as senior collateral agent for the Senior Secured Parties
(as defined therein), Citicorp North America, Inc., as senior
representative for the Senior Loan Secured Parties ( as defined therein),
The Bank of New York Mellon Trust Company, N.A., as Senior Representative
(as defined therein) for the Initial Additional Senior Debt Parties (as
defined therein), and each additional Senior Representative from time to
time party thereto.
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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.
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|
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Date: June
16, 2009
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By:
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/s/
Marc A. Strassler
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Name:
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Marc
A. Strassler
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Title:
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Executive
Vice President,
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|
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General
Counsel and Secretary
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Exhibit
Index
Number
|
|
Description
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4.1
|
|
Indenture,
dated as of June 12, 2009, among Rite Aid Corporation, as issuer, the
Subsidiary Guarantors named therein and The Bank of New York Mellon Trust
Company, N.A., as trustee.
|
4.2
|
|
Form
of 9.750% Notes due 2016 (included in Exhibit 4.1).
|
10.1
|
|
Registration
Rights Agreement relating to the Notes, dated June 12, 2009, among Rite
Aid Corporation, the Subsidiary Guarantors and Citigroup Global Markets
Inc., Banc of America Securities LLC, and Wachovia Capital Markets, LLC as
the Initial Purchasers of the Notes.
|
10.2
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|
Senior
Lien Intercreditor Agreement dated as of June 12, 2009, among Rite Aid
Corporation, the Subsidiary Guarantors named therein, Citicorp North
America, Inc., as senior collateral agent for the Senior Secured Parties
(as defined therein), Citicorp North America, Inc., as senior
representative for the Senior Loan Secured Parties ( as defined therein),
The Bank of New York Mellon Trust Company, N.A., as Senior Representative
(as defined therein) for the Initial Additional Senior Debt Parties (as
defined therein), and each additional Senior Representative from time to
time party thereto.
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8