XXXXX, INC.
XXXXXX SECURED NOTES DUE FEBRUARY 28, 2002
WAIVER NO. 1 TO NOTE AGREEMENT
RITE AID CORPORATION
WAIVER NO. 1 TO GUARANTY AGREEMENT
As of January 10, 2000
The Prudential Insurance Company of America
0000 Xxxxxx xx xxx Xxxxxxxx -- 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Pruco Life Insurance Company
One Gateway Center, 11th Floor
0-00 Xxxxxxx Xxxxxxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Ladies and Gentlemen:
XXXXX, INC. (hereinafter "XXXXX"), a Delaware corporation, and RITE
AID CORPORATION (hereinafter "RITE AID", and, together with Xxxxx,
collectively, the "COMPANIES") (together with their successors and assigns)
agree with you as follows:
1. PRELIMINARY STATEMENTS.
1.1. NOTE ISSUANCE, ETC.
Xxxxx issued and sold $79,560,908.91 aggregate principal amount of
its 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 (as previously amended pursuant to
Amendment No. 1 to Note Agreement dated as of October 25, 1999, and
Amendment No. 2 to Note Agreement dated as of December 2, 1999, the "NOTE
AGREEMENT"). Rite Aid has entered into a Guaranty Agreement, also dated as
of September 30, 1996 (as previously amended pursuant to Amendment No. 1 to
Guaranty Agreement dated as of October 25, 1999, and Amendment No. 2 to
Guaranty Agreement dated as of December 2, 1999, the "RITE AID GUARANTY")
with the Noteholders, whereby in consideration of the purchase of the Notes
it unconditionally and absolutely guaranteed Xxxxx'x performance of its
obligations under the Note Agreement.
2. DEFINED TERMS.
The following term, as used herein, has the following meaning:
"PUBLIC DEBT" means debt securities of Rite Aid issued pursuant
to an indenture qualified under (or in form suitable for qualification
under) the Trust Indenture Act of 1939, as amended.
All other capitalized terms used herein and not otherwise defined
herein have the meanings ascribed to them in the Note Agreement.
3. WAIVERS.
Subject to Sections 4 and 5 hereof, the Noteholders hereby waive
certain provisions of each of the Note Agreement and the Rite Aid Guaranty
as provided for by this Waiver No. 1 to Note Agreement and Waiver No. 1 to
Guaranty Agreement (collectively, this "WAIVER AGREEMENT") in the manner
specified in Exhibit A. The waivers referred to herein are referred to
herein, collectively, as the "WAIVERS".
4. CONDITIONS TO WAIVERS.
The Waivers granted pursuant to Section 3 hereof are subject to the
following conditions:
(a) Rite Aid shall deliver to the Noteholders the following
items on or prior to the dates specified below:
(i) a monthly forecast of cash receipts and disbursements for
each month, commencing with February, 2000, no later than the first
day of each month in respect of such forecast;
(ii) a monthly reconciliation of actual cash receipts and
disbursements to the forecast for such month delivered pursuant to
clause (i) of this Section 4(a), no later than the 25th day of the
next succeeding month;
(iii) a weekly sales report for each week, commencing with the
week ending January 8, 2000, no later than the 4th day following the
last day of the week in respect of which such sales
report is to be delivered;
(iv) an operating forecast for each month in the fiscal year
ending on or closest to February 28, 2001, no later than March
31, 2000; and
(v) a monthly reconciliation of actual operating results for
each month specified in the operating forecast delivered pursuant to
clause (iv) of this Section 4(a) to the budget for such month, no
later than the 30th day of the next succeeding month, and
(b) Rite Aid shall not directly or indirectly, make or agree to make
any payment to or for the account of any holder of Public Debt, or any
trustee or other representative of any such holder, on account of principal
of, interest on or fees in respect of such Public Debt, except as required
by the terms of such Public Debt as in effect on the date hereof.
5. REPRESENTATIONS AND WARRANTIES OF THE
COMPANIES.
To induce you to enter into this Waiver Agreement and to consent to
the Waivers, the Companies, jointly and severally, represent and
warrant as follows:
5.1. 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 and have all requisite corporate power and authority to enter
into and perform their respective obligations under this Waiver Agreement.
5.2. LEGAL VALIDITY.
The execution and delivery of this Waiver 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, judgment, 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 Waiver 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 of 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.
6. EFFECTIVENESS OF WAIVERS.
The Waivers shall become effective on such date (the "EFFECTIVE
DATE") as
(i) the Companies and the Noteholders shall have indicated their
written consent to the Waivers by executing and delivering to each other
counterparts of this Waiver Agreement, and
(ii) the Noteholders shall have received evidence satisfactory to
them that substantially identical waivers to any covenant requiring
delivery of financial statements or reports set forth in any other
agreement obligations under which are secured by the Collateral (as such
term is defined in the Amended and Restated Credit Agreement dated as of
October 25, 1999 and amended as of December 2, 1999) shall have become or
shall simultaneously herewith become effective.
7. EXPENSES.
Whether or not the Waivers 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 Waiver,
including, but not limited to, the reasonable fees of your special counsel,
Xxxxxxx Xxxx LLP, incurred in connection with the preparation, negotiation
and delivery of the Waiver Agreement and any other documents related
thereto. Nothing in this Section shall limit the Companies' obligations
pursuant to paragraph 10B of the Note Agreement and Section 6.1 of the Rite
Aid Guaranty.
8. MISCELLANEOUS.
8.1. COUNTERPARTS.
This Waiver 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.
8.2. 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; 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 returning it to the Companies, whereupon it will become a
binding agreement among you and the Companies.
XXXXX, INC.
BY:__________________________
NAME:
TITLE:
RITE AID CORPORATION
BY:__________________________
NAME:
TITLE:
The foregoing Waiver 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
WAIVERS
1. LIMITED WAIVERS TO RITE AID GUARANTY.
The Noteholders hereby waive, for the limited period provided
herein, any default arising under the Rite Aid Guaranty as a result of Rite
Aid's failure to comply with the requirements under Section 5.1(a), Section
5.1(b), Section 5.1(c) or Section 5.1(d) of the Rite Aid Guaranty that Rite
Aid deliver to the Noteholders the financial statements referred to in
Section 5.1(a) or Section 5.1(b) of the Rite Aid Guaranty and the related
officer's certificate and statement of Rite Aid's independent accountants
referred to in Sections 5.1(c) and 5.1(d) of the Rite Aid Guaranty, such
Waivers to be effective solely for the period commencing on January 11,
2000 and ending on July 11, 2000. This Waiver shall be limited precisely as
written, and shall not extend to any delivery requirement under Section
5.1(a), Section 5.1(b), Section 5.1(c) or Section 5.1(d) of the Rite Aid
Guaranty during any other period.
2. WAIVERS TO NOTE AGREEMENT.
The Noteholders hereby waive any Default that would arise under
(a) Section 6(iv) due solely to Rite Aid's failure to deliver to the
Noteholders the financial statements referred to in Section 5.1(a) or
Section 5.1(b) of the Rite Aid Guaranty and the related officer's
certificate and statement of Rite Aid's independent accountants referred to
in Sections 5.1(c) and 5.1(d) of the Rite Aid Guaranty and (b) Section
6(vi) of the Note Agreement solely by reason of a default under any Public
Debt as a result of the failure of Rite Aid to file or deliver financial
statements or reports substantially the same as those described in Section
5.1(a), Section 5.1(b), Section 5.1(c) or Section 5.1(d) of the Rite Aid
Guaranty, such waivers to be effective solely for the period commencing on
January 11, 2000 and ending on July 11, 2000; provided, however, that the
Waiver in clause (b) of this paragraph shall terminate on the earlier of
(i) July 11, 2000 or (ii) the date that is 10 days prior to the earliest
date on which any holder of Public Debt or any trustee or other
representative of any such holder shall have a present right to accelerate
the maturity thereof by reason of any such default waived hereunder. This
Waiver shall be limited precisely as written, and shall not extend to any
Default under any other provision of the Note Agreement during any other
period.
