SHALL HAVE OCCURRED AND BE CONTINUING AND (Y) ONLY SO LONG AS A
FINANCIAL COVENANT EFFECTIVENESS PERIOD IS THEN OCCURRING, THE CONSOLIDATED
FIXED CHARGE COVERAGE RATIO FOR THE PERIOD OF FOUR CONSECUTIVE FISCAL QUARTERS
MOST RECENTLY ENDED ON OR PRIOR TO THE DATE OF SUCH PAYMENT, CALCULATED ON A PRO
FORMA BASIS AS IF SUCH PAYMENT WERE MADE ON THE LAST DAY OF SUCH PERIOD (AND
EXCLUDING ANY SUCH PAYMENTS PREVIOUSLY MADE PURSUANT TO THIS CLAUSE DURING SUCH
FOUR QUARTER PERIOD BUT ATTRIBUTED FOR PURPOSES OF THIS CALCULATION TO THE LAST
DAY OF A PRIOR PERIOD WHICH DAY DOES NOT OCCUR IN SUCH FOUR QUARTER PERIOD) IS
NOT LESS THAN THE RATIO APPLICABLE TO SUCH PERIOD OF FOUR FISCAL QUARTERS UNDER
SECTION 6.12, (V) THE BORROWER AND THE SUBSIDIARIES MAY MAKE RESTRICTED PAYMENTS
CONSISTING OF THE REPURCHASE OR OTHER ACQUISITION OF SHARES OF, OR OPTIONS TO
PURCHASE SHARES OF, CAPITAL STOCK OF THE BORROWER OR ANY OF ITS SUBSIDIARIES
FROM EMPLOYEES, FORMER EMPLOYEES, DIRECTORS OR FORMER DIRECTORS OF THE BORROWER
OR ANY SUBSIDIARY (OR THEIR PERMITTED TRANSFEREES), IN EACH CASE PURSUANT TO
STOCK OPTION PLANS, STOCK PLANS, EMPLOYMENT AGREEMENTS OR OTHER EMPLOYEE BENEFIT
PLANS APPROVED BY THE BOARD OF DIRECTORS OF THE BORROWER; PROVIDED THAT NO
DEFAULT HAS OCCURRED AND IS CONTINUING; AND PROVIDED FURTHER THAT THE AGGREGATE
AMOUNT OF SUCH RESTRICTED PAYMENTS MADE AFTER THE ORIGINAL RESTATEMENT EFFECTIVE
DATE SHALL NOT EXCEED $10,000,000, (VI) THE SUBSIDIARIES MAY DECLARE AND PAY
CASH DIVIDENDS TO THE BORROWER; PROVIDED THAT THE BORROWER SHALL, WITHIN A
REASONABLE TIME FOLLOWING RECEIPT OF ANY SUCH PAYMENT, USE ALL OF THE PROCEEDS
THEREOF FOR A PURPOSE SET FORTH IN SECTION 5.10(B) (INCLUDING THE PAYMENT OF
DIVIDENDS REQUIRED OR PERMITTED PURSUANT TO THIS SECTION 6.08(A)), (VII) THE
BORROWER AND THE SUBSIDIARIES MAY DECLARE AND PAY CASH DIVIDENDS WITH RESPECT TO
THE EQUITY INTERESTS SET FORTH ON SCHEDULE 6.08(A) TO THE EXTENT, AND ONLY TO
THE EXTENT, REQUIRED PURSUANT TO THE TERMS OF SUCH EQUITY INTERESTS OR ANY OTHER
AGREEMENT IN EFFECT ON THE EFFECTIVE DATE AND (VIII) SO LONG AS NO DEFAULT OR
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR WOULD RESULT THEREFROM, THE
BORROWER MAY REDEEM OR REPURCHASE SHARES OF THE BORROWER'S AND/OR ITS
SUBSIDIARIES' (INCLUDING RITE AID LEASE MANAGEMENT COMPANY'S) PREFERRED STOCK
(A) SOLELY WITH NET CASH PROCEEDS RECEIVED BY THE BORROWER FROM ISSUANCES OF ITS
COMMON STOCK AFTER THE ORIGINAL RESTATEMENT EFFECTIVE DATE, PROVIDED THAT ANY
SUCH REPURCHASE OR REDEMPTION IS EFFECTED WITHIN 150 DAYS AFTER THE RECEIPT OF
SUCH PROCEEDS OR (B) WITH OTHER FUNDS AVAILABLE TO THE BORROWER IF, IMMEDIATELY
AFTER GIVING EFFECT TO ANY SUCH REDEMPTION OR REPURCHASE, THE BORROWER SHALL
HAVE REVOLVER AVAILABILITY OF MORE THAN $100,000,000.
(B)
THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY SUBSIDIARY TO, MAKE OR AGREE
TO PAY OR MAKE, DIRECTLY OR INDIRECTLY, ANY PAYMENT OR OTHER DISTRIBUTION
(WHETHER IN CASH, SECURITIES OR OTHER PROPERTY) OF OR IN RESPECT OF PRINCIPAL OF
OR INTEREST ON ANY INDEBTEDNESS, OR ANY PAYMENT OR OTHER