Exhibit 4.27
▇▇▇▇▇, INC.
7.30% SENIOR SECURED NOTES DUE FEBRUARY 28, 2002
AMENDMENT NO. 1 TO NOTE AGREEMENT
RITE AID CORPORATION
AMENDMENT NO. 1 TO GUARANTY AGREEMENT
As of October 25, 1999
TO EACH OF THE CURRENT NOTEHOLDERS
NAMED IN ANNEX 1 HERETO:
Ladies and Gentlemen:
▇▇▇▇▇, INC. (hereinafter "▇▇▇▇▇"), a Delaware corporation and RITE
AID CORPORATION (hereinafter "RITE AID") (together with their successors
and assigns) agree with you as follows:
1. PRELIMINARY STATEMENTS.
1.1. NOTE ISSUANCE, ETC.
▇▇▇▇▇ issued and sold $79,560,908.91 aggregate principal amount of
its 7.30% Senior Secured Notes due February 28, 2002 (as may be amended,
restated or otherwise modified from time to time, the "NOTES") pursuant to
a Note Agreement dated September 30, 1996 (the "NOTE AGREEMENT"). Rite Aid
has entered into a Guaranty Agreement (the "Guaranty") with the
Noteholders, also dated September 30, 1996, whereby in consideration of the
purchase of the Notes it unconditionally and absolutely guaranteed ▇▇▇▇▇'▇
performance of its obligations under the Note Agreement. The aggregate
principal amount of the Notes currently outstanding is $49,189,662. The
register for the registration and transfer of the Notes indicates that each
of the Persons in named Annex 1 hereto (collectively, the "CURRENT
NOTEHOLDERS") is currently a holder of the aggregate principal amount of
Notes indicated in such Annex.
2. DEFINED TERMS.
Capitalized terms used herein and not otherwise defined herein have
the meanings ascribed to them in the Note Agreement.
3. REQUEST FOR CONSENT TO AMENDMENTS.
▇▇▇▇▇ and Rite Aid (collectively the "COMPANIES") request that each
of you consent to the amendments to the Note Agreement (the "AMENDMENTS")
provided for by this Amendment No. 1 to Note Agreement and Amendment No. 1
to Guaranty Agreement (collectively, this "AMENDMENT AGREEMENT").
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
To induce you to enter into this Amendment Agreement and to consent
to the Amendments, the Companies, jointly and severally, represent and
warrant as follows:
4.1. ORGANIZATION, POWER AND AUTHORITY, ETC.
The Companies are corporations duly incorporated and validly existing
in good standing under the laws of their respective jurisdictions of
incorporation.
4.2. LEGAL VALIDITY.
The execution and delivery of this Amendment Agreement by each of the
Companies and compliance by them with their obligations hereunder: (a) are
within the corporate powers of the respective Companies; and (b) are legal
and do not conflict with, result in any breach of, constitute a default
under, or result in the creation of any Lien upon any Property of either
Company under the provisions of: (i) any charter instrument or bylaw to
which either Company is a party or by which either Company or any of its
Property may be bound; (ii) any order, judgement, decree or ruling of any
court, arbitrator or Governmental Authority applicable to either Company or
its Property; or (iii) any agreement or instrument to which either Company
is a party or by which either Company or any of its Property may be bound
or any statute or other rule or regulation of any Governmental Authority
applicable to either Company or its Property, except where such conflict,
breach or default could not reasonably be expected to have a Material
Adverse Effect.
This Amendment Agreement has been duly authorized by all necessary
action on the part of the Companies, has been executed and delivered by a
duly authorized officer of the Companies, and constitutes a legal, valid
and binding obligation on each of the Companies enforceable in
accordance with its terms, except that enforceability may be limited by
applicable bankruptcy, reorganization, arrangement, insolvency, moratorium,
or other similar laws affecting the enforceability of creditors' rights
generally and subject to the availability of equitable remedies.
4.3. NO DEFAULTS.
No event has occurred and no condition exists that, upon the
execution and delivery of this Amendment Agreement, would constitute a
Default or Event of Default.
5. AMENDMENTS.
The Note Agreement, each of the Notes outstanding on the
Effective Date and the Rite Aid Guaranty are hereby amended in the manner
specified in Exhibit A.
5.1. EFFECTIVENESS OF AMENDMENTS.
The Amendments shall become effective on such date (the "EFFECTIVE
DATE") as
(i) the Companies and the Current Noteholders shall have indicated
their written consent to the Amendments by executing and delivering to each
other counterparts of this Agreement,
(ii) the Amended and Restated Credit Agreement, dated as of October
25, 1999, among Rite Aid, the banks from time to time parties thereto, and
▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent (the "▇▇▇▇▇▇ CREDIT
AGREEMENT") shall have been executed and delivered by the parties thereto,
(iii) the Loan Documents (as defined in the ▇▇▇▇▇▇ Credit Agreement)
shall have been executed and delivered by the parties thereto, and
(iv) the Companies shall have made payment of the fee payable to the
Noteholders pursuant to Section 6 of this Amendment Agreement and the
expenses to be paid on behalf of the Noteholders pursuant to Section 7 of
this Amendment Agreement (to the extent a statement therefor has been
presented to the Companies on or prior to the Effective Date).
6. FEE.
In consideration of the consent by the Noteholders to the Amendments,
the Companies shall pay a combined fee to the Noteholders on the Effective
Date in the aggregate amount of $555,586. Such combined fee shall be paid
to the Noteholders ratably in accordance with the respective principal
amounts of Notes held by them and in the manner and to the accounts
specified in the Note Agreement for payments of principal and interest on
the Notes.
7. EXPENSES.
Whether or not the Amendments become effective, the Companies will
promptly (and in any event within thirty days of receiving any statement or
invoice therefor) pay all fees, expenses and costs relating to this
Amendment, including, but not limited to, the reasonable fees of your
special counsel, ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, incurred in connection with the
preparation, negotiation and delivery of the Amendment Agreement and any
other documents related thereto. Nothing in this Section shall limit the
Companies' obligations pursuant to paragraph 10B of the Note Agreement.
8. MISCELLANEOUS.
8.1. PART OF NOTE AGREEMENT, FUTURE REFERENCES, ETC.
This Amendment Agreement shall be construed in connection with
and as a part of the Note Agreement and, except as expressly amended
by this Amendment Agreement, all terms, conditions and covenants
contained in the Note Agreement and Notes are hereby ratified and
shall be and remain in full force and effect. Any and all notices,
requests, certificates and other instruments executed and delivered
after the execution and delivery of this Amendment Agreement may
refer to the Note Agreements and the Notes without making specific
reference to this Amendment Agreement, but nevertheless all such
references shall include this Amendment Agreement unless the context
otherwise requires.
8.2. COUNTERPARTS.
This Amendment Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may
consist of a number of copies hereof, each signed by less than all,
but together signed by all, of the parties hereto.
8.3. GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW
OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A
JURISDICTION OTHER THAN NEW YORK.
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NEXT PAGE IS SIGNATURE PAGE.]
If you are in agreement with the foregoing, please so indicate
by signing the acceptance below on the accompanying counterpart of this
agreement and return it to the Companies, whereupon it will become a
binding agreement among you and the Companies.
▇▇▇▇▇, INC.
BY:
NAME:
TITLE:
RITE AID CORPORATION
BY:
NAME:
TITLE:
The foregoing Agreement is hereby accepted as of the date first above
written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
BY:
NAME:
TITLE:
PRUCO LIFE INSURANCE COMPANY
BY:
NAME:
TITLE:
EXHIBIT A
AMENDMENTS
1. CHANGE IN INTEREST RATE.
(a) Paragraph 1 of the Note Agreement is hereby amended and
restated in its entirety as follows:
1. AUTHORIZATION OF ISSUE OF NOTES. The Company will
authorize the issue and sale of its senior promissory ntoes
(the "NOTES") in the aggregate principal amount of Seventy-Nine
Million, Five Hundred Sixty Thousand Nine Hundred Eight and
91/100 Dollars ($79,560,908.91) to be dated the date of issue
thereof, to mature on February 28, 2002, to bear interest on
the unpaid balance thereof from February 28, 1997 (or such
later day as any Note shall be dated upon an exchange of Notes)
until the principal thereof shall have become due and payable
at the rate specified below in this Section 1, payable monthly
on the last day of each month commencing on March 31, 1997 and
at maturity, and on overdue principal, Yield-Maintenance Amount
and accrued interest at the rate specified therein, and to be
substantially in the form of Exhibit A attached hereto with
such changes therefrom, if any, as may be approved by the
Purchasers and the Company. Interest on the Notes shall be
computed on the basis of a 360-day year of twelve 30-day
months. The term "Notes" as used herein shall include each Note
delivered pursuant to any provision hereof and each Note
delivered in substitution or exchange for any such Note
pursuant to any such provision. The interest rate applicable to
the Notes shall be nine and two-tenths percent (9.20%) per
annum from and including the Effective Date of the First
Amendment to, but not including, the same date of the sixth
month thereafter (the "SIX MONTH ANNIVERSARY DATE"). Subject to
the last sentence of this Section 1, commencing on the Six
Month Anniversary Date, the interest rate applicable to the
Notes at any time shall be the rate set forth below opposite
the lowest Credit Rating of either Rating Agency in effect for
any Senior Public Obligations of the Guarantor at such time:
[TABLE OMITTED]
(b) The first paragraph of the form of Note attached to the
Note Agreement as Exhibit A is hereby amended and restated in its
entirety as set forth below in this paragraph (b), and a portion of
the first paragraph of each Note that is outstanding on the Effective
Date of the First Amendment, commencing with clause (a) thereof and
continuing through the end of such paragraph, shall also be deemed to
have been amended and restated in its entirety as set forth below in
this paragraph (b), without any surrender and exchange of any such
Note, any notation of such amendment thereon, or any other action
whatsoever. References to the "Note Agreement" in the form of Note
and such outstanding Notes shall be deemed to mean the Note Agreement
as amended by this Amendment Agreement.
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1/ The interest rate is stated to be 9.20% for six months. SHOULD THE RATE
GO UP BY 50 BASIS POINTS IF THE ASSET SALE TARGET IS NOT REACHED BY THE
TARGET DATE (WHICH IS LESS THAN 6 MONTHS FROM THE EFFECTIVE DATE OF THE
FIRST AMENDMENT).
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇, INC. (herein
called the "COMPANY"), a corporation organized and existing
under the State of Delaware, hereby promises to pay to
_____________ or registered assigns, the principal sum of
___________ DOLLARS ($___) on February 28, 2002 with interest
(computed on the basis of a 360-day year of twelve 30- day
months) (a) on the unpaid balance thereof at the rate of seven
and three tenths percent (7.30%) per annum until the Effective
Date of the First Amendment (as defined in the Note Agreement
referred to below) and thereafter at the rate specified in the
first paragraph of the Note Agreement referred to below, such
rate to be effective from the later of (i) the date hereof or
(ii) February 28, 1997, payable monthly on the last day of each
month commencing on March 31, 1997, until the principal hereof
shall have become due and payable, and (b) on any overdue
payment (including any overdue prepayment) of principal, any
overdue payment of Yield-Maintenance Amount (as defined in the
Note Agreement referred to below) and, to the extent permitted
by applicable law, any overdue payment of interest, payable on
demand, at a rate per annum from time to time equal to the
lesser of (A) the highest rate allowed by applicable law, or
(B) the greater of (1) two percent (2.00%) over the rate of
interest then applicable to this Note and (2) two percent
(2.00%) over the rate of interest publicly announced by ▇▇▇▇▇▇
Guaranty Trust Company of New York from time to time in New
York City as its Prime Rate.
2. PUT OPTION FOLLOWING A RATING DECLINE.
(a) Clause (i) of paragraph 4B of the Note Agreement is
hereby amended and restated in its entirety as follows:
(I) RATING DECLINE. In the event that any Senior
Obligations of the Guarantor shall not be rated Investment
Grade by at least two (2) Rating Agencies at any time on or
after November 1, 2000, each Noteholder will have the right to
elect, prior to the Restoration Date, to require the Company to
redeem such Note in whole (but not in part) on the Redemption
Date at a price equal to the Redemption Price.
3. Asset Sale Prepayments. A new paragraph 4H is
hereby added to the Note Agreement to read as follows:
4H SALE OF ASSETS. The Company shall prepay a
principal amount of the Notes equal to the Prudential Pro Rata
Exposure in the amounts and at the times specified in Section 2.10 of
the ▇▇▇▇▇▇ Credit Agreement, together with interest on such principal
amount accrued to the date of prepayment and the Yield- Maintenance
Amount, if any.2/
4. DEFINED TERMS. The following defined terms are hereby added
to paragraph 9B of the Note Agreement:
"CREDIT RATING" means the rating accorded to Senior Public
Obligations of the Guarantor by a Rating Agency.
"EFFECTIVE DATE" has the meaning set forth in
the First Amendment.
"FIRST AMENDMENT" means Amendment No. 1 to Note Agreement and
Amendment No. 1 to Guaranty Agreement, dated as of October 25, 1999,
among the Company, the Guarantor and the holders of the Notes.
"▇▇▇▇▇▇ CREDIT AGREEMENT" means the Amended and Restated Credit
Agreement, dated as of October 25, 1999, among the Guarantor, the
banks from time to time parties thereto, and ▇▇▇▇▇▇ Guaranty Trust
Company of New York, as Agent, as in effect on the Effective Date of
the First Amendment.
"NET CASH PROCEEDS" has the meaning set forth
in the ▇▇▇▇▇▇ Credit Agreement.
"PRUDENTIAL PRO RATA EXPOSURE" has the meaning set forth
in the ▇▇▇▇▇▇ Credit Agreement.
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2 /Paragraph 4H requires the Company to apply the entire amount of the
asset sale proceeds allocable to the Notes to prepay the principal amount
of the Notes. Funds for payment of interest and Yield-Maintenance Amount
must be found elsewhere. IS THIS THE DEAL, OR SHOULD PRINCIPAL, INTEREST
AND YIELD-MAINTENANCE AMOUNT ALL BE PAYABLE OUT OF ASSET SALE PROCEEDS
ALLOCABLE TO THE NOTES?
"REDUCTION EVENT" has the meaning set forth in the ▇▇▇▇▇▇
Credit Agreement.
"SENIOR PUBLIC OBLIGATIONS" means, with respect to the
Guarantor, Senior Obligations of the Guarantor that have been
registered with the Securities and Exchange Commission pursuant to an
effective registration statement under the Securities Act.
5. AMENDMENTS TO GUARANTY AGREEMENT.
(a) Section 6.2 of the Rite Aid Guaranty is hereby amended and
restated in its entirety as follows:
6.2 AMENDMENT.
(a) This Guarantee may be amended only in a writing
executed by the Guarantor and the Required Holders. Subject to
the next succeeding sentence, the covenants set forth in
Sections 5.7 through 5.13, inclusive, hereof, and the
definitions of defined terms used therein, shall be deemed to
be automatically amended to be identical to the equivalent
covenants and definitions in the ▇▇▇▇▇▇ Credit Agreement
effective upon the effectiveness of any amendment thereto in
the ▇▇▇▇▇▇ Credit Agreement. Any such deemed amendment shall
automatically cease to be effective upon the termination of the
▇▇▇▇▇▇ Credit Agreement or any repayment of all or
substantially all of the indebtedness outstanding thereunder,
if such termination or repayment shall occur within one hundred
eighty (180) days after the effectiveness of such deemed
amendment. In addition, any such deemed amendment shall not
annul or otherwise have any effect on any acceleration of the
Notes pursuant to paragraph 6 of the Note Agreement if such
amendment shall become effective after such acceleration shall
have occurred.
(b) The Guarantor shall provide to each holder of Notes a
copy of each draft of any amendment to the ▇▇▇▇▇▇ Credit
Agreement, and the final executed copy thereof, if any portion
of such proposed amendment would result in an automatic
amendment hereof pursuant to Section 6.2(a). Such drafts and
final executed copy will be furnished to the holders of the
Notes either within one Business Day after the Guarantor's
receipt thereof (if another party shall have prepared the draft
or final executed copy) or simultaneously with the delivery
thereof to any party to the ▇▇▇▇▇▇ Credit Agreement (if the
Guarantor, the Issuer or any of their respective affiliates
shall have prepared such draft or final executed copy).
(c) Neither the Guarantor nor the Issuer, nor any of
their respective affiliates, will directly or indirectly pay or
cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant
any security , to any party to the ▇▇▇▇▇▇ Credit Agreement as
consideration for or as an inducement to the entering into by
any such party of any waiver or amendment of any of the terms
and provisions of the ▇▇▇▇▇▇ Credit Agreement which would
result in an automatic amendment of the provisions hereof
pursuant to Section 6.2(a) hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on the
same terms ratably to each holder of Notes then outstanding.3/
(b) The definition of "Credit Agreement" is deleted from
Section 3.1 of the Guaranty and the following definition is hereby added to
such Section:
"▇▇▇▇▇▇ CREDIT AGREEMENT" means the Amended and Restated Credit
Agreement, dated as of October 25, 1999, among the Guarantor, the
banks from time to time parties thereto, and ▇▇▇▇▇▇ Guaranty Trust
Company of New York, as Agent, as in effect on the Effective Date of
the First Amendment.
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3/ The draft does not provide for the Noteholders to receive
any fee or security if there is an amendment to the ▇▇▇▇▇▇
Credit Agreement which does not result in an automatic
amendment to the Guaranty (e.g., a change in an interest rate).