Exhibit 10.16
Execution Copy
XXXXX, INC.
ADJUSTABLE RATE SENIOR SECURED NOTES DUE AUGUST 15, 2002
AMENDMENT NO. 3 TO NOTE AGREEMENT
RITE AID CORPORATION
AMENDMENT NO. 4 TO GUARANTY AGREEMENT
AMENDMENT NO. 1 TO PUT AGREEMENT
As of June 12, 2000
TO EACH OF THE CURRENT NOTEHOLDERS
NAMED IN ANNEX 1 HERETO:
Ladies and Gentlemen:
XXXXX, INC., a Delaware corporation (hereinafter "XXXXX"), and
RITE AID CORPORATION, a Delaware corporation (hereinafter "RITE AID", and,
together with Xxxxx, collectively, with their successors and assigns, the
"COMPANIES"), agree with you as follows:
1. PRELIMINARY STATEMENTS.
1.1. NOTE ISSUANCE, ETC.
(a) Xxxxx issued and sold $79,560,908.91 aggregate
principal amount of its 7.30% Senior Secured Notes due February
28, 2002 (collectively, the "EXISTING NOTES"; and, as amended by
this Amendment No. 3 to Note Agreement, the "NOTES") pursuant to
the Note Agreement among Xxxxx and each of the Purchasers listed
in Annex 1 thereto (the "NOTEHOLDERS") dated September 30, 1996
(as previously amended pursuant to Amendment No. 1 to Note
Agreement dated as of October 25, 1999 (the "FIRST AMENDMENT"),
and Amendment No. 2 to Note Agreement dated as of December 2,
1999, and as in effect immediately prior to giving effect to the
Amendments provided for by this Amendment No. 3 to Note Agreement,
collectively, the "EXISTING NOTE AGREEMENT").
(b) Rite Aid has entered into a Guaranty Agreement, dated
as of September 30, 1996 (as previously amended pursuant to
Amendment No. 1 to Guaranty Agreement dated as of October 25,
1999, Amendment No. 2 to Guaranty Agreement dated as of December
2, 1999, and Amendment No. 3 to Guaranty Agreement dated as of
February 28, 2000, as in effect immediately prior to giving effect
to the Amendments provided for by this Amendment No. 4 to Guaranty
Agreement, the "EXISTING 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 Existing Note Agreement. Rite Aid has
also entered into a Put Agreement, dated as of September 30, 1996
(as in effect immediately prior to giving effect to the Amendments
provided for by this Amendment No. 1 to Put Agreement, the
"EXISTING PUT AGREEMENT," and together with the Existing Note
Agreement and the Existing Rite Aid Guaranty, the "EXISTING
AGREEMENTS") with the Noteholders, whereby it has agreed to
purchase the Notes from the Noteholders during the existence of an
Event of Default upon receipt of written notice from the
Noteholders.
(c) Certain provisions of the Existing Note Agreement and
the Existing Rite Aid Guaranty have been waived for a limited
period ending on July 11, 2000 pursuant to Waiver No. 1 to Note
Agreement and Waiver No. 1 to Guaranty Agreement, dated as of
January 10, 2000.
(d) The register for the registration and transfer of the
Notes indicates that the Persons named in Annex 1 hereto
(collectively, the "CURRENT NOTEHOLDERS") are currently the
holders of the entire outstanding principal amount of the Notes.
2. DEFINED TERMS.
Capitalized terms used herein and not otherwise defined herein
have the meanings ascribed to them in the Existing Note Agreement or in
Exhibit A hereto.
3. AMENDMENTS.
3.1 AMENDMENTS TO THE EXISTING AGREEMENTS.
(a) Subject to Section 5, the Existing Note Agreement, the
Existing Rite Aid Guaranty and the Existing Put Agreement are amended as
provided for by this Amendment No. 3 to Note Agreement, Amendment No. 4 to
Guaranty Agreement and Amendment No. 1 to Put Agreement (collectively, this
"OMNIBUS AMENDMENT") in the manner specified in Exhibit A. Such amendments
are referred to herein, collectively, as the "AMENDMENTS."
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANIES.
To induce you to enter into this Omnibus Amendment 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 and have all requisite corporate power and authority to
enter into and perform their respective obligations under this Omnibus
Amendment.
4.2. LEGAL VALIDITY.
The execution and delivery of this Omnibus Amendment 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, including any of the
Transaction Documents as defined in Section 5(b)(iii) hereof, 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 Omnibus Amendment 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.
4.3. NO DEFAULTS.
No event has occurred and no condition exists that, upon the
execution and delivery of this Omnibus Amendment, would constitute a
Default or an Event of Default.
5. EFFECTIVENESS OF AMENDMENTS.
(a) The Amendments shall become effective on such date (the
"EFFECTIVE DATE OF THE OMNIBUS AMENDMENT") as 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 Omnibus
Amendment.
(b) The willingness of the Current Noteholders to execute and
deliver this Omnibus Amendment is conditioned upon the following:
(i) the RCF Facility (as in effect on the Effective Date
of the Omnibus Amendment, the "AMENDED XXXXXX CREDIT AGREEMENT"),
dated as of June 12, 2000, among Rite Aid, the banks from time to
time parties thereto, and Xxxxxx Guaranty Trust Company of New
York, as Administrative Agent, shall have been executed and
delivered by the parties thereto in the form attached hereto as
Exhibit C,
(ii) the Second Priority Subsidiary Guarantee, dated as
of June 12, 2000, among each of the Subsidiaries of Rite Aid
parties thereto and Wilmington Trust Company, as collateral
trustee, shall have been executed and delivered by the parties
thereto in the form attached hereto as Exhibit D,
(iii) the other Transaction Documents (as that term is
defined in the Amended Xxxxxx Credit Agreement) shall have been
executed and delivered by the parties thereto,
(iv) the Companies shall have made payment of the fee
payable to the Noteholders pursuant to Section 6 of this Omnibus
Amendment and the expenses to be paid on behalf of the Noteholders
pursuant to Section 7 of this Omnibus Amendment (to the extent a
statement therefor has been presented to the Companies on or prior
to the Effective Date of the Omnibus Amendment),
(v) the Current Noteholders (or their special counsel)
shall have received a favorable opinion of the Chief Counsel or
Assistant Chief Counsel for Rite Aid and the Operating
Subsidiaries and Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special
counsel for the Companies, in form and substance satisfactory to
the Current Noteholders, and
(vi) all proceedings taken in connection with this
Omnibus Amendment and all documents and papers relating hereto
shall be reasonably satisfactory to the Current Noteholders and
their special counsel. The Current Noteholders and their special
counsel shall have received copies of such documents and papers
(whether or not specifically referred to above in this Section 5)
as they may reasonably request in connection therewith, in form
and substance satisfactory to them.
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 of the Omnibus Amendment in an aggregate amount equal to
$158,797.12. 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 Existing 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 the Omnibus
Amendment, 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 Omnibus Amendment and any
other documents related thereto. Nothing in this Section shall limit the
Companies' obligations pursuant to paragraph 10B of the Existing Note
Agreement and Section 6.1 of the Rite Aid Guaranty.
8. MISCELLANEOUS.
8.1. PART OF EXISTING NOTE AGREEMENT, FUTURE REFERENCES, ETC.
This Omnibus Amendment shall be construed in connection
with and as a part of the Existing Note Agreement, the Notes, the
Existing Rite Aid Guaranty and the Existing Put Agreement and,
except as expressly amended by this Omnibus Amendment, all terms,
conditions and covenants contained in the Existing Note Agreement,
the Notes, the Existing Rite Aid Guaranty and the Existing Put
Agreement 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 Omnibus Amendment may refer to the Existing Note
Agreement, the Notes, the Existing Rite Aid Guaranty and the
Existing Put Agreement without making specific reference to this
Omnibus Amendment, but nevertheless all such references shall
include this Omnibus Amendment unless the context otherwise
requires.
8.2. COUNTERPARTS.
This Omnibus Amendment 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 OMNIBUS AMENDMENT 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.
8.4. COLLATERAL TRUST AND INTERCREDITOR AGREEMENT.
Each Current Noteholder hereby authorizes The Prudential
Insurance Company of America ("PRUDENTIAL") as Security Agent and
the Second Priority Collateral Trustee (as defined in the
Collateral Trust and Intercreditor Agreement (the "INTERCREDITOR
AGREEMENT") dated as of June 12, 2000 among Rite Aid, Subsidiaries
of Rite Aid party thereto and various other parties listed on the
signature pages thereto) to enter into the Intercreditor Agreement
and the other Second Priority Collateral Documents (as defined in
the Intercreditor Agreement) on its behalf, and agrees that the
Second Priority Collateral Trustee may enforce the rights and
remedies of the Current Noteholders under each Second Priority
Collateral Document to the extent provided therein. Each Current
Noteholder acknowledges Prudential is acting for it as security
agent under the Xxxxx Facility (as defined in the Intercreditor
Agreement).
8.5. ACCEPTANCE OF APPOINTMENT.
Prudential hereby accepts its appointment under the
Intercreditor Agreement to act as Security Agent for each of the
Current Noteholders; provided that neither such appointment or
acceptance shall impose on Prudential any duties other than the
express duties stated in the Intercreditor Agreement, which shall
be binding on all Current Noteholders.
[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
Omnibus Amendment and returning it to the Companies, whereupon it will
become a binding agreement among you and the Companies.
XXXXX, INC.
BY:__________________________
NAME: XXXX XXXXXXXX
TITLE: PRESIDENT
RITE AID CORPORATION
BY:___________________________
NAME: XXXXXX X. XXXXXX
TITLE: SENIOR EXECUTIVE VICE PRESIDENT AND
GENERAL COUNSEL
The foregoing Omnibus Amendment 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:
ANNEX 1
CURRENT NOTEHOLDERS
The Prudential Insurance Company of America
Pruco Life Insurance Company
EXHIBIT A
AMENDMENTS
1. AMENDMENTS TO EXISTING PUT AGREEMENT.
(a) A new Section 3A is hereby added to the Existing Put Agreement
containing the provisions set forth in Section 2.07(a) and Section 2.07(c)
of the Amended Xxxxxx Credit Agreement, together with the definitions of
the defined terms used therein, mutatis mutandis, as if set forth in full
herein. References to "prepay," "prepayment" or "apply" shall be deemed to
mean the acquisition of the Notes by Rite Aid.
(b) A new Section 3B is hereby added to the Existing Put Agreement
to read as follows:
"3B. PRO RATA PREPAYMENT.
Upon any partial acquisition of the Notes
pursuant to Section 3A, the principal amounts to be so acquired
shall be allocated to all Notes at the time outstanding in
proportion to the respective aggregate principal amounts of the
Notes then outstanding."
(c) Each reference in the Existing Put Agreement to "February 28,
2002" with respect to the maturity date of the Notes is hereby deleted and
there is inserted in lieu thereof "August 15, 2002."
2. AMENDMENTS TO EXISTING NOTE AGREEMENT.
(a) Each reference in the Existing Note Agreement to a fixed rate
of interest with respect to the Notes is hereby deleted and there is
substituted therefor "Adjustable Rate" (except when provisions of this
Section 2(d) apply).
(b) Interest on the Notes shall accrue at the rate provided for in
the First Amendment to, but not including, the Effective Date of the
Omnibus Amendment.
(c) Commencing on and including the Effective Date of the Omnibus
Amendment, interest on the Notes shall accrue at the Adjustable Rate
applicable to an Interest Period of one month and shall be payable on the
last day of such Interest Period.
(d) (i) For any date on which an Event of Default shall have
occurred and be continuing, but only if the Required Holders shall have so
elected by providing notice to the Issuer, interest shall accrue on the
Notes at the Default Rate; and (ii) interest on overdue amounts for any
date on which the election contemplated by clause (i) is not in effect
shall accrue at the Default Rate.
(e) The Notes that are currently outstanding shall bear interest
at the Adjustable Rate, payable as provided in this Section 2, without any
need to surrender or exchange such Notes for new Notes reflecting the
Amendments; provided, however, that any Note issued after the Effective
Date of the Omnibus Amendment shall be in the form of Exhibit B hereto. The
Existing Notes outstanding on the Effective Date of the Omnibus Amendment
are hereby, without any further action required on the part of any other
Person, deemed to be automatically amended to conform to and have the terms
provided in Exhibit B hereto (except that the principal amount and the
payee of each Note shall remain unchanged).
(f) Each reference in the Existing Note Agreement to "February 28,
2002" with respect to the maturity date of the Notes is hereby deleted and
there is inserted in lieu thereof "August 15, 2002."
(g) Each reference in the Existing Note Agreement to "Put
Agreement," the "Rite Aid Guaranty" and the "Notes" shall be deemed to mean
such documents as amended from time to time.
(h) The provisions of paragraph 4B of the Existing Note Agreement,
captioned "Put Option Following a Rating Decline" (and the defined terms
used therein if not used elsewhere in the Existing Note Agreement), are
hereby deleted in their entirety and there is substituted therefor
"[intentionally omitted]".
(i) The provisions of paragraph 4H of the Existing Note Agreement,
captioned "Sale of Assets" (and the defined terms used therein if not used
elsewhere in the Existing Note Agreement), are hereby deleted in their
entirety and there is substituted therefor "[intentionally omitted]".
(j) Paragraph 6 of the Existing Note Agreement, captioned "Events
of Default", is hereby amended as follows:
(i) Subparagraph (iv) is hereby amended and restated in
its entirety as follows:
"(iv) the Company fails to perform or observe
any agreement contained in paragraph 5 hereof, or the
Guarantor fails to perform or observe any agreement
contained in Sections 5.07, 5.10, 5.11, 5.12, 5.13, 5.14,
5.15, 5.16, 5.17, 5.18, 5.19, 5.20, 5.21, 5.22, 5.23,
5.24, 5.25, 5.26 and 5.27 of the Rite Aid Guaranty; or"
(ii) The word "or" shall be added immediately after
subparagraph (xv) thereof and the following subparagraph (xvi)
shall be added:
"(xvi) an Event of Default shall occur under and
as defined in Articles 6.01(l), 6.01(m) and 6.01(n) of
the Amended Xxxxxx Credit Agreement."
(iii) The following sentence shall be added as the last
sentence of such paragraph 6:
"Any Event of Default arising under subparagaph (xvi) of
this paragraph 6 shall remain in existence, regardless of
any waiver of, amendment to, or other action in respect
of, any provision of the Amended Xxxxxx Credit Agreement,
until such time as such Event of Default has been cured
(without giving effect to any such waiver, amendment or
other action) or waived by the Required Holders."
(i) The provisions of paragraph 9A of the Existing Note Agreement,
captioned "Yield-Maintenance Terms," are hereby deleted in their entirety;
there is substituted therefor "[intentionally omitted]"; and all references
to "Yield-Maintenance Amount" and its related definitions throughout the
Existing Note Agreement are hereby deleted.
(j) The definition of "Xxxxxx Credit Agreement" in paragraph 9B of
the Existing Note Agreement, captioned "Other Terms," is hereby amended and
restated in its entirety as follows:
"AMENDED XXXXXX CREDIT AGREEMENT" means the RCF
Facility dated as of June 12, 2000, among the Guarantor,
the banks from time to time parties thereto, and Xxxxxx
Guaranty Trust Company of New York, as Administrative
Agent, as in effect on the Effective Date of the Omnibus
Amendment.
(k) The following definitions are hereby added to paragraph 9B of
the Existing Note Agreement:
"ADJUSTABLE RATE" means a rate of interest equal
to the sum of 3.50% plus the London Interbank Offered
Rate applicable on such date plus at any date on or after
November 1, 2000, .50% unless the Reduction Condition has
been met on or prior to such date.
"DEFAULT RATE" means with respect to each Note,
interest on the outstanding principal amount of such Note
at a rate per annum equal to the sum of 2.0% plus the
Adjustable Rate as in effect on such date.
"EFFECTIVE DATE OF THE OMNIBUS AMENDMENT" means
the date on which the Companies and the Current
Noteholders shall have executed and delivered the Omnibus
Amendment.
"INTEREST PERIOD" shall have the meaning
ascribed to such term in the Amended Xxxxxx Credit
Agreement, except that the Notice of Interest Rate
Election as therein provided is inapplicable and the
Interest Period always shall be one month in duration.
"LONDON INTERBANK OFFERED RATE" means, with
respect to the applicable Interest Period, (i) the rate
per annum (rounded upwards, if necessary, to the next
higher 1/16th of 1%), as determined on the basis of
offered rates for deposits in U.S. dollars, for a period
of time comparable to such Interest Period, which appears
on the Bloomberg page "Currency BBAM 1" as of 11:00 a.m.
London time on the day that is two (2) Business Days
prior to the first day of such Interest Period, or (ii)
if such rate ceases to be reported in accordance with the
above definition on Bloomberg Page "Currency BBAM 1," the
rate per annum quoted by Xxxxxx Guaranty Trust Company of
New York at approximately 11:00 a.m. (New York City time)
on the first day of such Interest Period, commencing on
the first day of such Interest Period, and in an amount
comparable to the aggregate principal amount of the Notes
then outstanding.
"OMNIBUS AMENDMENT" means Amendment No. 3 to
Note Agreement, Amendment No. 4 to Guaranty Agreement,
and Amendment No. 1 to Put Agreement, dated as of June
12, 2000, among the Company, the Guarantor and the
holders of the Notes.
"REDUCTION CONDITION" shall have the meaning
ascribed to such term in the Amended Xxxxxx Credit
Agreement.
(l) Annex 3 to the Existing Note Agreement is hereby
deleted and replaced with the Annex 3 attached hereto.
3. AMENDMENTS TO EXISTING RITE AID GUARANTY.
(a) The definition of "Xxxxxx Credit Agreement" in
Section 3.1 of the Existing Rite Aid Guaranty is hereby amended
and restated in its entirety as follows:
"AMENDED XXXXXX CREDIT AGREEMENT" means the RCF
Facility dated as of June 12, 2000, among the Guarantor,
the banks from time to time parties thereto, and Xxxxxx
Guaranty Trust Company of New York, as Administrative
Agent, as in effect on the Effective Date of the Omnibus
Amendment.
(b) The following definitions are added to Section 3.1 as
follows:
"EFFECTIVE DATE OF THE OMNIBUS AMENDMENT" means
the date on which the Companies and the Current
Noteholders shall have executed and delivered the Omnibus
Amendment.
"OMNIBUS AMENDMENT" means Amendment No. 3 to
Note Agreement, Amendment No. 4 to Guaranty Agreement,
and Amendment No. 1 to Put Agreement, dated as of June
12, 2000, among the Issuer, the Guarantor and the holders
of the Notes.
(c) A new Section 4A is hereby added to the Existing Rite
Aid Guaranty containing the provisions of Article 4 of the Amended
Xxxxxx Credit Agreement, together with the definitions of the
defined terms used therein, mutatis mutandis, as if set forth in
full herein, except that
(i) references to "Loan Document" shall be
deemed to mean the "Omnibus Amendment," except that in
Section 4.03 it shall be deemed to mean the "Omnibus
Amendment and the Existing Note Agreement, the Existing
Rite Aid Guaranty and the Existing Put Agreement, as
amended by the Amendments (as such terms are defined in
the Omnibus Amendment);"
(ii) references to "Note" or "Notes" shall be
deemed to mean the "Notes" as defined in the Omnibus
Amendment;
(iii) references to "Bank" or "Banks" shall be
deemed to mean "Noteholder" or "Noteholders";
(iv) references to "Administrative Agent" shall
be deemed to mean "each Noteholder";
(v) references to "Required Banks" shall be
deemed to mean "Required Holders"; and
(vi) references to "Closing Date" shall be
deemed to mean the "Effective Date of the Omnibus
Amendment."
The representations and warranties set forth in such Section 4A
shall be deemed to have been made to the Noteholders as of the
Effective Date of the Omnibus Amendment.
(d) Section 5 of the Existing Rite Aid Guaranty (and the
defined terms used therein if not used elsewhere in the Existing
Rite Aid Guaranty) is hereby deleted in its entirety and there is
substituted therefor Article 5 of the Amended Xxxxxx Credit
Agreement, together with the definitions of the defined terms used
therein, mutatis mutandis, as if set forth in full herein, except
that
(i) references to "Bank" or "Banks" shall be
deemed to mean "Noteholder" or "Noteholders";
(ii) references to "Administrative Agent" in
Section 5.01(f), Section 5.01(k) and Section 5.03(b)
shall be deemed to mean "each Noteholder"; and
(iii) references to "Default" shall be deemed to
mean both "Default" under the Note Agreement and
"Default" under the Amended Xxxxxx Credit Agreement; and
references to "Event of Default" shall be deemed to mean
both "Event of Default" under the Note Agreement and
"Event of Default" under the Amended Xxxxxx Credit
Agreement.
(e) Each reference in the Existing Rite Aid Guaranty to
"February 28, 2002" with respect to the maturity date of the Notes
is hereby deleted and there is inserted in lieu thereof "August
15, 2002."
(f) All references to "Yield Maintenance Amount" and its
related definitions in the Existing Rite Aid Guaranty are hereby
deleted.
ANNEX 3
REQUIRED AMORTIZATION PAYMENTS
EXHIBIT B
FORM OF NOTE
XXXXX, INC.
ADJUSTABLE RATE SENIOR SECURED NOTES DUE AUGUST 15, 2002
No. R-__________________ PPN: 31771 @ AA 8
$__________________
FOR VALUE RECEIVED, the undersigned, XXXXX, INC. (herein called
the "COMPANY"), a corporation organized and existing under the laws of the
State of Delaware, hereby promises to pay to___________ or registered
assigns, the principal sum of ________DOLLARS ($_______) on August 15, 2002
with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) except as provided in clause (b) of this paragraph, on the
unpaid balance thereof at the Adjustable Rate from the later of (i) the
date hereof or (ii) the Effective Date of the Omnibus Amendment, payable
monthly on the last day of each Interest Period, until the principal hereof
shall have become due and payable and (b) at any time when an Event of
Default shall have occurred and be continuing and the Required Holders have
so elected by providing notice to the Company, at the Default Rate. In
addition, overdue payments of principal (including, without limitation,
prepayments of principal) and, to the extent permitted by law, interest
shall bear interest automatically (without any such notice to the Company),
payable on demand, at the Default Rate. Capitalized terms used and not
defined herein have the respective meanings ascribed thereto in the Note
Agreement referred to below.
Payments of principal are to be made as provided in the
Purchasers' Schedule attached as Annex 1 to the Note Agreement referred to
below or at such other place as the holder hereof shall designate to the
Company, in writing, in lawful money of the United States of America.
This Note is one of an issue of Senior Secured Notes issued
pursuant to the Note Agreement, dated as of September 30, 1996, as amended
(the "NOTE AGREEMENT"), among the Company and the Purchasers of the Notes
named in the Purchasers' Schedule attached as Annex 1 to the Note
Agreement, and the holder hereof is entitled to the benefits and subject to
the provisions thereof. As provided in the Note Agreement, this Note is
subject to prepayment, in whole or from time to time in part, as specified
in the Note Agreement.
This Note is a registered note and, as provided in the Note
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder's attorney duly authorized
in writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name
this Note is registered as the owner hereof for the purpose of receiving
payment and for all other purposes, and the Company shall not be affected
by any notice to the contrary.
The Company agrees to make prepayments of principal on the dates
and in the amounts specified in the Note Agreement.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable
in the manner and with the effect provided in the Note Agreement.
Full and prompt payment of the principal and interest on this
Note, whether at maturity or by acceleration or otherwise, is
unconditionally guarantied pursuant to a certain guaranty agreement
executed and delivered by Rite Aid Corporation, a Delaware corporation, as
further described in the Note Agreement. The holder of this Note is
entitled to all of the benefits of such guaranty agreement.
This Note is secured by certain collateral pursuant to the terms
of a certain security agreement, between the Company and the Security Agent
(as defined in the Note Agreement), dated as of September 30, 1996, and
certain other collateral pursuant to the terms of the Collateral Documents
(as defined in the Amended Xxxxxx Credit Agreement).
ANY TRANSFEREE OF THIS NOTE SHALL BE DEEMED TO HAVE MADE THE
REPRESENTATIONS SET FORTH IN PARAGRAPH 8B OF THE NOTE AGREEMENT OR SHALL BE
DEEMED TO HAVE REPRESENTED THAT ITS ACQUISITION AND HOLDING OF THIS NOTE
WILL NOT CONSTITUTE A "PROHIBITED TRANSACTION" (AS SUCH TERM IS DEFINED IN
SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED).
THIS NOTE IS GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, INTERNAL NEW YORK LAW, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
XXXXX, INC.
By:____________________
Name:
Title:
EXHIBIT C
[Copy of Amended Xxxxxx Credit Agreement]
EXHIBIT D
[Copy of Second Priority Subsidiary Guarantee]
