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): January 6, 2020
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))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which
registered |
||
| Common Stock, $1.00 par value | RAD | The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01. Entry into a Material Definitive Agreement.
On January 6, 2020, Rite Aid Corporation (the “Company”) entered into an amendment (the “Amendment”) to its senior secured credit agreement, dated as of December 20, 2018, among the Company, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent, which, among other things, permits the issuance of the New Notes (as defined below) and the grant of a security interest in substantially all assets (other than equity and customary excluded assets) of the Company’s subsidiaries to the trustee under the indenture governing the New Notes to secure the obligations under the New Notes.
The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
Item 8.01. Other Events.
On January 6, 2020, the Company announced the commencement of an offer to exchange (the “Exchange Offer”) up to $600 million aggregate principal amount of the Company’s 6.125% Senior Notes due 2023 (the “Old Notes”) for newly issued 7.500% Senior Secured Notes due 2025 (the “New Notes”). The New Notes and the related guarantees will be secured, subject to permitted liens, by substantially all of the Company’s subsidiaries assets (other than equity and customary excluded assets), including (i) a first-priority lien on the Notes priority collateral, and (ii) a second-priority lien on the ABL priority collateral, which, in each case, also secure the Company’s existing credit facilities. The consummation of the Exchange Offer is subject to certain customary conditions. A copy of the press release announcing the Exchange Offer, and which describes the Exchange Offer in greater detail, is hereby incorporated by reference and attached hereto as Exhibit 99.1.
This report does not constitute an offer to sell, or a solicitation of an offer to buy, any security. No offer, solicitation, or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| 10.1 | First Amendment to Credit Agreement, dated January 6, 2020. |
| 99.1 | Press Release announcing the commencement of the Exchange Offer, dated January 6, 2020. |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL). |
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: January 7, 2020 | By: | /s/ James J. Comitale | |
| Name: | James J. Comitale | ||
| Title: | Executive Vice President, General Counsel | ||
Exhibit 10.1
[EXECUTION COPY]
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of January 6, 2020 (this “First Amendment”), is entered into among RITE AID CORPORATION, a Delaware corporation (the “Borrower”), the Lenders (as defined below) party hereto the Administrative Agent (as defined below) and the Collateral Agent (as defined below), and modifies that certain Credit Agreement, dated as of December 20, 2018 (as may be amended, restated, amended and restated, extended, supplemented or otherwise modified in writing from time to time and in effect immediately prior to the effectiveness of this First Amendment, the “Existing Credit Agreement” and the Existing Credit Agreement, as amended by this First Amendment, the “Amended Credit Agreement”), among (a) the Borrower, (b) the lenders from time to time party thereto (each a “Lender”, and collectively, the “Lenders”), (c) BANK OF AMERICA, N.A. as administrative agent (in such capacity, including any successor thereto, the “Administrative Agent”) and collateral agent (in such capacity, including any successor thereto, the “Collateral Agent”) for the Lenders and the other Senior Loan Secured Parties, and (d) the other agents party thereto. Capitalized terms used herein and not defined herein shall have the meaning assigned to such terms in the Amended Credit Agreement.
PRELIMINARY STATEMENTS
A. The Borrower has requested that the Administrative Agent and the Lenders agree to amend certain of the terms and provisions of the Existing Credit Agreement as specifically set forth in this First Amendment.
B. The Administrative Agent and the undersigned Lenders are prepared to amend the Existing Credit Agreement, subject to the conditions and in reliance on the representations set forth herein.
Accordingly, in consideration of the premises and other good and valuable consideration, the parties hereto hereby agree as follows:
1. Amendments to Existing Credit Agreement.
(a) The definition of “Permitted Split-Priority Term Loan Debt” in Section 1.01 (Defined Terms) of the Existing Credit Agreement is hereby amended by restating clause (b) of such term in its entirety as follows:
“(b) (i) to the extent such Indebtedness is incurred pursuant to “tranche B” term loan facilities, the applicable Split-Priority Debt Documents shall not include amortization provisions other than customary amortization provisions and amortization requirements for “tranche B” term loan Indebtedness, as determined as of the date of issuance or incurrence by a Responsible Officer of the Borrower in good faith and (ii) to the extent such Indebtedness is incurred pursuant to senior high yield notes or other senior notes, such Indebtedness (A) is not subject to mandatory redemption, repurchase, prepayment or sinking fund obligation (except customary asset sale or change-of-control provisions), in each case prior to the then Latest Maturity Date in effect and (B) has mandatory prepayment, repurchase or redemption, covenant, default and remedy provisions customary for senior high yield notes or other senior notes, as the case may be, in each case of clause (A) and (B), as determined as of the date of issuance or incurrence by a Responsible Officer of the Borrower in good faith,”.
(b) The definition of “Split-Priority Debt Documents” in Section 1.01 (Defined Terms) of the Existing Credit Agreement is hereby amended by restating such term in its entirety as follows:
““Split-Priority Debt Documents” means, with respect to any series, issue or class of Split-Priority Term Loan Debt, the credit agreements, indentures, notes, instruments or other operative agreements evidencing or governing such Indebtedness.”
(c) The definition of “Split-Priority Debt Facility” in Section 1.01 (Defined Terms) of the Existing Credit Agreement is hereby amended by restating such term in its entirety as follows:
““Split-Priority Debt Facility” means the credit agreement or indenture with respect to any class or series of Split-Priority Term Loan Debt.”
(d) The definition of “Split-Priority Term Loan Debt” in Section 1.01 (Defined Terms) of the Existing Credit Agreement is hereby amended by:
(i) restating the text following the word “means” and preceding the words “, which Indebtedness” in its entirety as follows:
“Indebtedness of the Borrower incurred after the Closing Date pursuant to either (a) a bank credit facility (other than this Agreement) that has terms customary for similarly structured “tranche B” term loan facilities or (b) senior high yield notes or other senior notes (whether such notes are issued for cash, in exchange for other notes of the Borrower or for other consideration)”; and
(ii) restating the text appearing in clause (B) following the words “insofar as” its entirety as follows:
“such amended agreements or replacement agreements deal with intercreditor issues relating to the relative rights of the Senior Secured Parties and the holders of Split-Priority Term Loan Debt in the Collateral, on terms and conditions both reasonably acceptable to the Administrative Agent and customary for similar intercreditor agreements relating to cross-collateralized asset-based credit facilities, on the one hand, and tranche B term loan facilities or senior high yield notes or other senior notes, as applicable, on the other hand (the amendments to agreements and any Split-Priority Intercreditor Agreement referred to in this clause (B) being referred to herein as the “Split-Priority Implementing Agreements”);”.
(e) Clause (c) of Section 4.02 (Conditions Precedent to each Credit Event) is hereby amended and restated in its entirety as follows:
“(c) No Default or Event of Default, Etc. (i) No event has occurred and is continuing, or would result from such Borrowing or issuance or from the application of the proceeds therefrom, that constitutes a Default or an Event of Default and (ii) such Borrowing or issuance would not result in a violation of the amount of Indebtedness permitted under the 2023 6.125% Note Indenture, any Split-Priority Debt Document, any Second Priority Debt Document, or any agreement or instrument governing Material Indebtedness of the Loan Parties or their Restricted Subsidiaries, and would not otherwise give rise to any requirement to secure such other Indebtedness on an equal and ratable basis with the Senior Obligations, unless the incurrence of any Liens to satisfy such requirement would not result in a Default or an Event of Default.”
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(f) Section 6.10 (Restrictive Agreements) of the Existing Credit Agreement is hereby amended by:
(i) restating clause (a)(I) of such Section in its entirety as follows:
“(I) customary restrictions and conditions contained in agreements relating to Securitizations and Factoring Transactions permitted hereunder, provided that such restrictions and conditions apply only to Securitization Vehicles and to the Securitization Assets that are subject to such Securitizations or to the Factoring Assets that are subject to such Factoring Transaction, as applicable,”; and
(ii) restating clause (b)(H) of such Section in its entirety as follows:
“(H) customary restrictions and conditions contained in agreements relating to Securitizations and Factoring Transactions permitted hereunder, provided that such restrictions and conditions apply only to Securitization Vehicles and to the Securitization Assets that are subject to such Securitizations or to the Factoring Assets that are subject to such Factoring Transaction, as applicable,”.
2. Conditions Precedent to First Amendment. This First Amendment shall become effective as of the date first written above (the “First Amendment Effective Date”) upon the satisfaction of each of the following conditions precedent:
(a) First Amendment. The Administrative Agent shall have received this First Amendment, duly executed by the Borrower and the Required Lenders, and acknowledged by each Subsidiary Loan Party.
(b) Representations and Warranties. The representations and warranties of the Loan Parties contained in each Senior Loan Document shall be true and correct in all material respects on and as of the First Amendment Effective Date, after giving effect to the First Amendment and the consummation of the transactions contemplated by the First Amendment taking place on or about the First Amendment Effective Date, as though made on and as of such date (except to the extent any such representation or warranty expressly relates to an earlier date, in which case such representation and warranty shall have been true and correct in all material respects as of such earlier date); provided that any representation or warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects on such respective dates.
3
(c) No Default or Event of Default. No Default or Event of Default exists or has occurred and is continuing on and as of the First Amendment Effective Date or, after giving effect to the First Amendment, would result from the First Amendment and the transactions contemplated hereby.
(d) Fees and Expenses. The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the First Amendment Effective Date and reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower under the Existing Credit Agreement on or prior to the First Amendment Effective Date and invoiced at least three (3) Business Days prior to the First Amendment Effective Date.
3. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders as of the First Amendment Effective Date as follows:
(a) Authorization; Enforceability. The execution, delivery and performance by such Loan Party of this First Amendment, and the consummation of the transactions contemplated hereby taking place on or about the First Amendment Effective Date, are within the Borrower’s and Subsidiary Loan Party’s corporate powers and have been duly authorized by all necessary corporate, limited liability company or similar action and, if required, stockholder, member or similar action. This First Amendment has been duly executed and delivered by each Loan Party and constitutes a legal, valid and binding obligation of the Borrower or such Subsidiary Loan Party (as the case may be), enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
(b) Governmental Approvals; No Conflicts. The transactions contemplated by this First Amendment (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, (b) will not violate any applicable law or regulation or any order of any Governmental Authority, except for such violations that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, (c) will not violate the charter, by-laws or other organizational documents of the Borrower or any of the Subsidiaries, (d) will not violate or result in a default under any indenture, agreement or other instrument evidencing or governing Indebtedness or any other material agreement binding upon the Borrower or any Subsidiary or its assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any Subsidiary, and (e) will not result in the creation or imposition of any Lien on any asset of the Borrower or any Subsidiary.
(c) Representations and Warranties. The representations and warranties of the Loan Parties contained in each Senior Loan Document are true and correct in all material respects on and as of the First Amendment Effective Date, after giving effect to the First Amendment and the consummation of the transactions contemplated by the First Amendment taking place on or about the First Amendment Effective Date, as though made on and as of such date (except to the extent any such representation or warranty expressly relates to an earlier date, in which case such representation and warranty shall have been true and correct in all material respects as of such earlier date); provided that any representation or warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects on such respective dates.
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(d) No Default. No Default or Event of Default exists or has occurred and is continuing on and as of the First Amendment Effective Date or, after giving effect to the First Amendment, would result from the First Amendment and the transactions contemplated hereby.
4. Survival. All representations and warranties made by the Borrower (on behalf of itself of the other Loan Parties) in this First Amendment or any other Senior Loan Document and in the certificates or other instruments delivered in connection with or pursuant to this First Amendment or any other Senior Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this First Amendment, regardless of any investigation made by any such other party or on its behalf and notwithstanding that any Agent, any Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under Senior Loan Documents is outstanding.
5. First Amendment as a Senior Loan Document. This First Amendment constitutes a “Senior Loan Document” under the Amended Credit Agreement.
6. Effect on Senior Loan Documents. After giving effect to this First Amendment on the First Amendment Effective Date, the Amended Credit Agreement and the other Senior Loan Documents shall be and remain in full force and effect in accordance with their terms and are hereby ratified and confirmed by the Borrower in all respects. The execution, delivery, and performance of this First Amendment shall not operate as a waiver of any right, power, or remedy of any Agent or the Lenders under the Existing Credit Agreement or the other Senior Loan Documents. The Borrower hereby acknowledges and agrees that, after giving effect to this First Amendment, all of its obligations and liabilities under the Existing Credit Agreement and the other Senior Loan Documents to which it is a party, as such obligations and liabilities have been amended by this First Amendment, are reaffirmed and remain in full force and effect. All references to the Existing Credit Agreement in any Senior Loan Document or other document or instrument delivered in connection therewith shall be deemed to refer to the Amended Credit Agreement. Nothing contained herein shall be construed as a novation of the Senior Obligations outstanding under and as defined in the Existing Credit Agreement, which shall remain in full force and effect, except as modified hereby.
7. Limited Effect. This First Amendment relates only to the specific matters expressly covered herein, shall not be considered to be an amendment or waiver of any rights or remedies that any Agent or any Lender may have under the Existing Credit Agreement or any other Senior Loan Document (except as expressly set forth herein) or under applicable law, and shall not be considered to create a course of dealing or to otherwise obligate in any respect any Agent or any Lender to execute similar or other amendments or waivers or grant any amendments or waivers under the same or similar or other circumstances in the future.
8. Governing Law. THIS FIRST AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
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9. Counterparts. This First Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract, and shall become effective as to each party hereto. Delivery of an executed counterpart of a signature page of this First Amendment by facsimile or other electronic imaging means (e.g., via electronic mail in .pdf form) shall be effective as delivery of a manually executed counterpart of this First Amendment.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to the Credit Agreement to be executed and delivered as of the date first above written.
| RITE AID CORPORATION, | ||
| as the Borrower | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
Acknowledgment, Ratification and Reaffirmation of Subsidiary Loan Parties
January 6, 2020
Each Subsidiary Loan Party acknowledges that its consent to this First Amendment is not required, but each of the undersigned nevertheless does hereby agree and consent to this First Amendment and to the documents and agreements referred to herein. Each Subsidiary Loan Party agrees and acknowledges that (i) notwithstanding the effectiveness of this First Amendment, such Subsidiary Loan Party’s guarantee of the Senior Obligations pursuant to the Senior Subsidiary Guarantee Agreement shall remain in full force and effect without modification thereto and (ii) nothing herein shall in any way limit any of the terms or provisions of such Subsidiary Loan Party’s guarantee of the Senior Obligations pursuant to the Senior Subsidiary Guarantee Agreement or any Subsidiary Loan Party’s obligations under any other Senior Loan Document to which it is a party (as the same may be amended from time to time), all of which are hereby ratified, confirmed and affirmed in all respects. Each Subsidiary Loan Party hereby further acknowledges that the Borrower, the Administrative Agent and the Lenders may from time to time enter into any further amendments, modifications, terminations and/or amendments of any provisions of the Amended Credit Agreement or any other Senior Loan Documents without notice to or consent from such Subsidiary Loan Party and without affecting the validity or enforceability of such Subsidiary Loan Party’s guarantee of the Senior Obligations pursuant to the Senior Subsidiary Guarantee Agreement or giving rise to any reduction, limitation, impairment, discharge or termination of such Subsidiary Loan Party’s guarantee of the Senior Obligations pursuant to the Senior Subsidiary Guarantee Agreement.
Each Subsidiary Loan Party hereby reaffirms its grant to the Senior Collateral Agent, for the benefit of the Senior Secured Parties, of a continuing security interest in and Lien upon the Collateral of such Subsidiary Loan Party, whether now owned or hereafter acquired or arising, and wherever located, all as provided in the Senior Subsidiary Security Agreement and in the other Senior Collateral Documents, and each Subsidiary Loan Party hereby reaffirms that the Senior Obligations are and shall continue to be secured by the continuing security interest and Lien granted by such Subsidiary Loan Party to the Senior Collateral Agent, for the benefit of the Senior Secured Parties, pursuant to the Senior Subsidiary Security Agreement and the other Senior Collateral Documents.
[Signature Pages Follow]
The undersigned Subsidiary Loan Parties are signatories to this Acknowledgment, Ratification and Reaffirmation in their capacity as Subsidiary Loan Parties.
| EACH OF THE SUBSIDIARIES OF THE BORROWER LISTED ON SCHEDULE I HERETO, | ||
| as Subsidiary Loan Parties | ||
| By: | ||
| Name: | ||
| Title: | ||
| EACH OF THE SUBSIDIARIES OF THE BORROWER LISTED ON SCHEDULE II HERETO, | ||
| as Subsidiary Loan Parties | ||
| By: | ||
| Name: | ||
| Title: | ||
| EACH OF THE SUBSIDIARIES OF THE BORROWER LISTED ON SCHEDULE III HERETO, | ||
| as Subsidiary Loan Parties | ||
| By: | ||
| Name: | ||
| Title: | ||
| EACH OF THE SUBSIDIARIES OF THE BORROWER LISTED ON SCHEDULE IV HERETO, | ||
| as Subsidiary Loan Parties | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| BANK OF AMERICA, N.A., | ||
| as the Administrative Agent | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| BANK OF AMERICA, N.A., | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| WELLS FARGO BANK, NATIONAL ASSOCIATION, | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| CITIBANK, N.A., | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| BMO HARRIS BANK N.A., | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| CAPITAL ONE, NATIONAL ASSOCIATION, | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| FIFTH THIRD BANK, | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| ING CAPITAL LLC, | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| MUFG UNION BANK, N.A., | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| TRUIST BANK (as successor by merger to SunTrust Bank and formerly known as Branch Banking and Trust Company), as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| CITIZENS BANK, N.A., | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| REGIONS BANK, | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| TD BANK, N.A., | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| CIT BANK, N.A., | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| THE HUNTINGTON NATIONAL BANK, | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| U.S. BANK NATIONAL ASSOCIATION, | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| SANTANDER BANK, N.A., | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| SIEMENS FINANCIAL SERVICES, INC., | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| WEBSTER BUSINESS CREDIT CORPORATION, | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
| ATLANTIC UNION BANK, | ||
| as a Lender | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page – First Amendment to Credit Agreement]
Schedule I to the
First Amendment to Credit Agreement
SUBSIDIARY LOAN PARTIES
112 Burleigh Avenue Norfolk, LLC
1515 West State Street Boise, Idaho, LLC
1740 Associates, L.L.C.
3581 Carter Hill Road-Montgomery Corp.
4042 Warrensville Center Road – Warrensville Ohio, Inc.
5277 ASSOCIATES, INC.
5600 Superior Properties, Inc.
657-659 Broad St. Corp.
Apex Drug Stores, Inc.
Broadview and Wallings-Broadview Heights Ohio, Inc.
Eagle Managed Care Corp.
Eckerd Corporation
EDC Drug Stores, Inc.
England Street-Asheland Corporation
GDF, INC.
Genovese Drug Stores, Inc.
Gettysburg and Hoover-Dayton, Ohio, LLC
Harco, Inc.
JCG (PJC) USA, LLC
JCG Holdings (USA), Inc.
K & B ALABAMA CORPORATION
K & B Louisiana Corporation
K & B Mississippi Corporation
K & B SERVICES, INCORPORATED
K & B TENNESSEE CORPORATION
K&B TEXAS CORPORATION
K & B , Incorporated
LAKEHURST AND BROADWAY CORPORATION
Maxi Drug North, Inc.
Maxi Drug South, L.P.
Maxi Drug, Inc.
Maxi Green Inc.
Munson & Andrews, LLC
Name Rite, L.L.C.
P.J.C. Distribution, Inc.
P.J.C. Realty Co., Inc.
Patton Drive and Navy Boulevard Property Corporation
PDS-1 Michigan, Inc.
Perry Distributors, Inc.
Perry Drug Stores, Inc.
PJC Dorchester Realty LLC
Schedule I
PJC EAST LYME REALTY LLC
PJC Haverhill Realty LLC
PJC HERMITAGE REALTY LLC
PJC Hyde Park Realty LLC
PJC Lease Holdings, Inc.
PJC Manchester Realty LLC
PJC Mansfield Realty LLC
PJC New London Realty LLC
PJC of Massachusetts, Inc.
PJC of Rhode Island, Inc.
PJC of Vermont Inc.
PJC Peterborough Realty LLC
PJC Providence Realty LLC
PJC Realty MA, Inc.
PJC Realty N.E. LLC
PJC Revere Realty LLC
PJC Special Realty Holdings, Inc.
RAM-UTICA, INC.
RDS Detroit, Inc.
Read’s, Inc.
RITE AID DRUG PALACE, INC.
Rite Aid Hdqtrs. Corp.
Rite Aid Hdqtrs. Funding, Inc.
RITE AID LEASE MANAGEMENT COMPANY
RITE AID OF ALABAMA, INC.
Rite Aid of Connecticut, Inc.
Rite Aid of Delaware, Inc.
RITE AID OF FLORIDA, INC.
RITE AID OF GEORGIA, INC.
RITE AID OF ILLINOIS, INC.
RITE AID OF INDIANA, INC.
RITE AID OF KENTUCKY, INC.
Rite Aid of Maine, Inc.
RITE AID OF MARYLAND, INC.
Rite Aid of Massachusetts, Inc.
RITE AID OF MICHIGAN, INC.
RITE AID OF NEW HAMPSHIRE, INC.
RITE AID OF NEW JERSEY, INC.
RITE AID OF NEW YORK, INC.
Rite Aid of North Carolina, Inc.
Rite Aid of Ohio, Inc.
Rite Aid of Pennsylvania, LLC
RITE AID OF SOUTH CAROLINA, INC.
RITE AID OF TENNESSEE, INC.
RITE AID OF VERMONT, INC.
RITE AID OF VIRGINIA, INC.
RITE AID OF WASHINGTON, D.C., INC.
Schedule I
RITE AID OF WEST VIRGINIA, INC.
Rite Aid Online Store, Inc.
Rite Aid Payroll Management, Inc.
RITE AID REALTY CORP.
RITE AID ROME DISTRIBUTION CENTER, INC.
RITE AID SPECIALTY PHARMACY, LLC
Rite Aid Transport, Inc.
Rite Investments Corp.
Rite Investments Corp., LLC
RX CHOICE, INC.
Silver Springs Road – Baltimore, Maryland/One, LLC
Silver Springs Road – Baltimore, Maryland/TWO, LLC
THE JEAN COUTU GROUP (PJC) USA, INC.
The Lane Drug Company
Thrift Drug, Inc.
THRIFTY CORPORATION
Thrifty PayLess, Inc.
Tyler and Sanders Roads, Birmingham – Alabama, LLC
Schedule I
Schedule II to the
First Amendment to Credit Agreement
SUBSIDIARY LOAN PARTIES
RCMH LLC
RediClinic LLC
RediClinic Associates, Inc.
RediClinic of PA, LLC
Schedule II
Schedule III to the
First Amendment to Credit Agreement
SUBSIDIARY LOAN PARTIES
ADVANCE BENEFITS, LLC
ASCEND HEALTH TECHNOLOGY LLC
Design Rx Holdings LLC
Design Rx, LLC
DESIGNRXCLUSIVES, LLC
ENVISION MEDICAL SOLUTIONS, LLC
Envision Pharmaceutical Holdings LLC
Envision Pharmaceutical Services, LLC
Envision Pharmaceutical Services, LLC
EnvisionRx Puerto Rico, Inc.
FIRST FLORIDA INSURERS OF TAMPA, LLC
Hunter Lane, LLC
Laker Software, LLC
MedTrak Services, L.L.C.
Orchard Pharmaceutical Services, LLC
Rx Initiatives L.L.C.
Rx Options, LLC
Schedule III
Schedule IV to the
First Amendment to Credit Agreement
SUBSIDIARY LOAN PARTIES
Health Dialog Services Corporation
Schedule IV
Exhibit 99.1
Rite Aid Announces Exchange Offer for up to $600 million
principal amount of its Senior Notes due 2023
CAMP HILL, Pa. (January 6, 2020) – Rite Aid Corporation (NYSE: RAD) (“Rite Aid” or the “Company”) today announced that it has commenced an offer to exchange (the “Exchange Offer”) up to $600 million aggregate principal amount (the “Maximum Amount”) of its outstanding 6.125% Senior Notes due 2023 (the “Old Notes”) for newly issued 7.500% Senior Secured Notes due 2025 (the “New Notes”), upon the terms and subject to the conditions set forth in the offering memorandum dated January 6, 2020 (the “Offering Memorandum”). The purpose of the Exchange Offer is to improve the Company’s maturity profile by extending the maturity date of a portion of the Old Notes from April 2023 to July 2025.
The table below summarizes the principal economic terms of the Exchange Offer.
| Old Notes to be Exchanged |
CUSIP Number /
ISIN |
Aggregate Principal
Amount Outstanding |
Exchange
|
Early Tender
|
Total Exchange
|
|||||||
| 6.125% Senior Notes due 2023 |
767754CH5 /
US767754CH50 / U76659AW8 / USU76659AW82 |
$ | 1,753,490,000 | $950 principal amount of New Notes | $50 principal amount of New Notes | $1,000 principal amount of New Notes | ||||||
| (1) | For each $1,000 principal amount of Old Notes. |
| (2) | Includes the Early Tender Payment. |
The New Notes will mature on July 1, 2025, will be fully and unconditionally guaranteed on a senior secured basis by the same subsidiary guarantors as the Company’s existing credit facilities and the Old Notes and will be effectively senior to the Old Notes. The New Notes and the related guarantees will be secured by substantially all of the Company’s subsidiaries assets, including (i) a first-priority lien on the Notes priority collateral, and (ii) a second-priority lien on the ABL priority collateral, which, in each case include assets of PBM entities (other than insurance entities) and also secure the Company’s existing credit facilities.
The ABL priority collateral generally consists of cash and cash equivalents, accounts, receivables, payment intangibles, inventory, prescription files (including eligible script lists) and, prior to the repayment of the Company’s first-in, last-out senior secured term loan facility, intellectual property. The Notes priority collateral generally consists of equipment, fixtures, investment property (other than equity interests in subsidiaries), intellectual property (following the repayment of the Company’s first-in, last-out senior secured term loan facility) and other collateral to the extent it does not constitute ABL priority collateral.
In order to be eligible to receive the Total Exchange Consideration of $1,000 in principal amount of New Notes per $1,000 principal amount of Old Notes, holders are required to validly tender their Old Notes in the Exchange Offer prior to 5:00 p.m., New York City time, on January 17, 2020 (such date and time, as it may be extended by the Company, the “Early Deadline”). Holders will be eligible to receive only the Exchange Consideration of $950 in principal amount of New Notes per $1,000 principal amount of Old Notes for any Old Notes tendered in the Exchange Offer after the Early Deadline. The Exchange Offer will expire at 11:59 p.m., New York City time, on February 3, 2020 (such date and time, as it may be extended by the Company, the “Expiration Time”).
In addition to the Total Exchange Consideration or Exchange Consideration, as applicable, all Old Notes accepted for exchange will also receive payment of accrued and unpaid interest in cash to, but not including, the settlement date for the Exchange Offer, which will occur promptly after the Expiration Time and is expected to be within two business days following the Expiration Time (the “Settlement Date”).
If the Exchange Offer is oversubscribed, Old Notes will be accepted for exchange on a pro rata basis up to the Maximum Amount, and the balance of Old Notes not accepted for exchange will be returned to Holders; provided that Old Notes tendered for exchange before the Early Deadline will be accepted in priority to Old Notes tendered for exchange after the Early Deadline.
Old Notes that are tendered may be validly withdrawn, in whole or in part, at any time prior to 5:00 p.m., New York City time, on January 17, 2020 (the “Withdrawal Deadline”). The Company reserves the right to amend, extend or terminate the Exchange Offer at any time, subject to applicable law.
The Exchange Offer is subject to certain customary conditions described in the Offering Memorandum, including the receipt by the Company of Old Notes that have been validly tendered and not validly withdrawn which will result in the issuance of at least $250 million aggregate principal amount of New Notes. The Maximum Amount is $600 million and the Company does not intend to increase such amount. As of November 30, 2019, $600 million is the maximum amount of incremental secured debt that can be issued under Rite Aid's Old Notes indenture without reducing the Company's borrowing capacity under its revolving credit facilities (and assuming the outstanding letters of credit).
The Exchange Offer and the issuance of the New Notes have not been and will not be registered with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), or any other applicable securities laws, and, unless so registered, the New Notes may not be offered, sold, pledged or otherwise transferred within the United States or to or for the account of any U.S. person, except pursuant to an exemption from the registration requirements thereof. Accordingly, the New Notes are being offered and will be issued only to (i) “qualified institutional buyers” (as defined in Rule 144A under the Securities Act (“Rule 144A”)) and (ii) non-“U.S. persons” who are outside the United States in compliance with Regulation S under the Securities Act (“Regulation S”). Non U.S.-persons may also be subject to additional eligibility criteria.
Available Documents and Other Details
Documents relating to the Exchange Offer will only be distributed to holders of the Old Notes who complete and return an eligibility form confirming that they are either a “qualified institutional buyer” under Rule 144A or not a “U.S. person” under Regulation S for purposes of applicable securities laws. Holders of Old Notes who desire to complete an eligibility form should either visit https://gbsc-usa.com/eligibility/riteaid or request instructions by sending an e-mail to contact@gbsc-usa.com or by calling Global Bondholder Services Corporation, the information and exchange agent for the Exchange Offer, at (toll-free) (866) 470-3900 or (banks and brokers) (212) 430-3774. The eligibility form is also available electronically at: http://gbsc-usa.com/eligibility/riteaid.
The complete terms and conditions of the Exchange Offer are set forth in the Offering Memorandum. This press release is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell the New Notes or any other securities. The Exchange Offer is only being made pursuant to the Offering Memorandum. The Exchange Offer is not being made to holders of Old Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. The New Notes have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the Offering Memorandum.
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About Rite Aid
Rite Aid Corporation is on the front lines of delivering health care services and retail products to over 1.6 million Americans daily. Our pharmacists are uniquely positioned to engage with customers and improve their health outcomes. We provide an array of whole being health products and services for the entire family through over 2,400 retail pharmacy locations across 18 states. Through EnvisionRxOptions, we also deliver pharmacy benefit management to approximately 1,900 clients and 3.4 million members.
Statements in this release that are not historical, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements regarding Rite Aid’s competitive position and ability to realize its growth initiatives and operating efficiencies; and any assumptions underlying any of the foregoing. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” and “will” and variations of such words and similar expressions are intended to identify such forward-looking statements.
These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to, our ability to complete the transaction described herein, and any resulting charges or impact on our financial results; our high level of indebtedness and our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our debt agreements; general economic, industry, market, competitive, regulatory and political conditions; our ability to improve the operating performance of our stores in accordance with our long term strategy; the impact of private and public third-party payers continued reduction in prescription drug reimbursements rates and their efforts to limit access to payor networks, including through mail order; our ability to manage expenses and our investments in working capital; outcomes of legal and regulatory matters; changes in legislation or regulations, including healthcare reform; our ability to achieve the benefits of our efforts to reduce the costs of our generic and other drugs; the inability to complete the sale of the remaining Rite Aid distribution centers and related assets to Walgreens Boots Alliance, Inc. due to failure to satisfy the minimal remaining conditions applicable only to the distribution centers being transferred at such distribution center closing; our ability to successfully execute and achieve benefits from our recent change in senior leadership; the potential for operational disruptions due to, among other things, concerns of management, employees, current and potential customers, other third parties with whom we do business and shareholders; the success of any changes to our business strategy that may be implemented under our new chief executive officer and other management; our ability to achieve cost savings through the organizational restructurings within the anticipated timeframe, if at all; possible changes in the size and components of the expected costs and charges associated with the organizational restructuring plan; and the outlook for and future growth of the Company.
Contact:
Investors: Byron Purcell 717-975-5809 or investor@riteaid.com
Media: Christopher Savarese 717-975-5718
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