EXECUTION COPY
COLLATERAL TRUST AND INTERCREDITOR AGREEMENT
COLLATERAL TRUST AND INTERCREDITOR AGREEMENT (as
amended and modified from time to time, this "Agreement")
dated as of June 27, 2001, among RITE AID CORPORATION, a
Delaware corporation ("Rite Aid"), each Subsidiary of Rite Aid
listed on the signature pages hereto or which becomes a party
hereto pursuant to Section 9.11 hereof (each such Subsidiary,
individually, a "Subsidiary Guarantor" and, collectively, the
"Subsidiary Guarantors"), WILMINGTON TRUST COMPANY, a Delaware
banking corporation, as collateral trustee (in such capacity,
the "Second Priority Collateral Trustee") for the holders from
time to time of the Second Priority Debt Obligations, CITICORP
USA, INC., a Delaware corporation ("Citicorp USA"), as
collateral agent (in such capacity, the "Senior Collateral
Agent") for the Senior Secured Parties under the Senior Loan
Documents, STATE STREET BANK AND TRUST COMPANY, as trustee
under the 10.50% Note Indenture for the holders of the 10.50%
Notes and as trustee under the Exchange Note Indenture for the
holders of the Exchange Notes, CITICORP USA, INC., a Delaware
corporation, as agent for the Synthetic Lease Parties under
the Synthetic Lease Documents, and each other Second Priority
Representative which becomes a party hereto pursuant to
Section 10.12 hereof.
Reference is made to the Senior Debt Documents. The Subsidiary
Guarantors have entered into the Senior Subsidiary Guarantee Agreement, pursuant
to which they have, jointly and severally, guaranteed the Senior Obligations for
the benefit of each Senior Secured Party. Each of the Subsidiary Guarantors has
also entered into the Senior Subsidiary Security Agreement, each Senior Mortgage
and each other Senior Collateral Document to which it is a party to secure,
among other things, the Senior Obligations, including its obligations under the
Senior Subsidiary Guarantee Agreement, and the Subsidiary Guarantors have
pledged collateral to the Senior Collateral Agent under such agreements.
Reference is made to the Second Priority Debt Documents. The Subsidiary
Guarantors have entered into the Second Priority Subsidiary Guarantee Agreement,
pursuant to which they have, jointly and severally, guaranteed the Second
Priority Debt Obligations for the benefit of each Second Priority Debt Party.
Each of the Subsidiary Guarantors has also entered into the Second Priority
Subsidiary Security Agreement, each Second Priority Mortgage and each other
Second Priority Collateral Document to which it is a party to secure, among
other things, the Second Priority Debt Obligations, including its obligations
under the Second Priority Subsidiary
Guarantee Agreement, and the Subsidiary Guarantors have pledged collateral to
the Second Priority Collateral Trustee under such agreements.
Rite Aid, the Subsidiary Guarantors, and the Second Priority
Representatives on behalf of the Second Priority Debt Parties, have requested
the Second Priority Collateral Trustee to act as collateral trustee for the
Second Priority Debt Parties hereunder and under the Second Priority Collateral
Documents. The Second Priority Collateral Trustee is willing to act as
collateral trustee for the Second Priority Debt Parties hereunder and under the
Second Priority Collateral Documents on the terms and subject to the conditions
set forth in this Agreement.
Accordingly, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01 Incorporation by Reference. Capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the Definitions
Annex annexed hereto, which is hereby incorporated by reference herein with the
same effect as set forth in its entirety herein.
SECTION 1.02. Certain Definitions. (a) As used in this Agreement, the
capitalized terms defined in the recitals hereto shall have the meanings
specified therein, and the following terms have the meanings specified below:
"Class Debt" is defined in Section 10.12.
"Class Debt Parties" is defined in Section 10.12.
"Class Debt Representative" is defined in Section 10.12.
"Collateral Account" is defined in Section 3.01.
"Definitions Annex" means the Definitions Annex annexed hereto.
"Distribution Date" means the date on which any funds are distributed
by the Senior Collateral Agent or the Second Priority Collateral Trustee in
accordance with the provisions of Section 4.01.
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"Event of Default" means any "Event of Default" under any Senior Debt
Document or any "Event of Default" under any Second Priority Debt Document.
"Fees" means, with respect to the Second Priority Collateral Trustee,
the Senior Collateral Agent, the trustee under the 10.50% Note Indenture or any
Second Priority Representative, any fees, expenses, reimbursements or
indemnifications payable by Rite Aid or any Subsidiary Guarantor to such Person
in such capacity.
"Secured Documents" means (a) each Senior Debt Document and (b) each
Second Priority Debt Document.
"Secured Obligations" means, without duplication, (a) the Senior
Obligations and (b) the Second Priority Debt Obligations.
"Secured Parties" means (a) the Senior Secured Parties and (b) the
Second Priority Debt Parties.
"Triggering Event" means (x) the occurrence of any Event of Default
and, as a result thereof, (A) the acceleration (including any automatic
acceleration in connection with any Bankruptcy Proceeding) of the principal
amount of any Senior Obligations or Second Priority Debt Obligations under the
terms of any Senior Debt Document or any Second Priority Debt Document or (B)
the commencement of the exercise of remedies in respect of Collateral (it being
understood that the exercise by the Senior Collateral Agent of its cash sweep
rights pursuant to Section 9.11 of the Senior Credit Facility shall not be
deemed an exercise of remedies in respect of Collateral) and (y) in either case,
(i) receipt by the Second Priority Collateral Trustee of written notice thereof
from the Senior Collateral Agent or the trustee under the 10.50% Note Indenture,
as the case may be (in the case of any such Event of Default arising under the
Senior Debt Documents), which notice from the Senior Collateral Agent will be
copied to the trustee under the 10.50% Note Indenture, so long as any 10.50%
Note Obligations are outstanding, or (ii) receipt by the Senior Collateral
Agent, the Second Priority Collateral Trustee and (so long as any 10.50% Note
Obligations are outstanding) the trustee under the 10.50% Note Indenture of
written notice thereof from any Second Priority Representative (in the case of
any such Event of Default arising under any Second Priority Debt Document).
"Trust Estate" means the right, title and interest of the Second
Priority Debt Parties under the Second Priority Collateral Documents.
(b) The words "hereof", "herein" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof. All references herein to Articles or Sections
shall, unless otherwise specified, be deemed to refer to
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Articles and Sections of this Agreement. As used in this Agreement, the singular
shall include the plural as the context requires and the following words and
phrases shall have the following meanings: (a) "including" means "including but
not limited to"; (b) "provisions" means "provisions, terms, covenants and/or
conditions"; (c) "lien" means "lien, charge, encumbrance, security interest,
mortgage, deed of trust or deed to secure debt"; (d) "obligation" means
"obligation, duty, covenant and/or condition"; and (e) "any of the Mortgaged
Property" means "the Mortgaged Property or any part thereof or interest
therein".
ARTICLE II
Declaration and Acceptance of Trust; Remedies
SECTION 2.01. Declaration and Acceptance of Trust. The Second Priority
Collateral Trustee hereby declares, and each of Rite Aid, the Subsidiary
Guarantors and the Second Priority Debt Parties agrees, that the Second Priority
Collateral Trustee holds the Trust Estate as trustee in trust under this
Agreement for the benefit of the Second Priority Debt Parties as provided
herein. By acceptance of the benefits of this Agreement, each Second Priority
Debt Party (whether or not a signatory hereto) (i) consents to the appointment
of the Second Priority Collateral Trustee as trustee hereunder, (ii) confirms
that the Second Priority Collateral Trustee shall have the authority to act as
the exclusive agent of such Second Priority Debt Party for enforcement of any
remedies under or with respect to any Second Priority Collateral Document and
the giving or withholding of any consent or approval relating to any Collateral
or any Subsidiary Guarantor's obligations with respect thereto and (iii) agrees
that, except as provided in this Agreement, it shall not take any action to
enforce any of such remedies or give any such consents or approvals.
SECTION 2.02. Determinations Relating to Collateral. If (i) the Second
Priority Collateral Trustee shall receive any written request from Rite Aid or
any Subsidiary Guarantor under any Second Priority Collateral Document for
consent or approval with respect to any matter or thing relating to any
Collateral or any Subsidiary Guarantor's obligations with respect thereto or
(ii) there shall be due to or from the Second Priority Collateral Trustee under
the provisions of any Second Priority Collateral Document any material
performance or the delivery of any material instrument or (iii) the Second
Priority Collateral Trustee shall become aware of any nonperformance by any
Subsidiary Guarantor of any covenant or any breach of any representation or
warranty set forth in any Second Priority Collateral Document, then, in each
such event, the Second Priority Collateral Trustee shall advise the
Representatives of the matter or thing as to which consent has been requested or
the performance or instrument required to be delivered or the nonperformance or
breach of which the Second Priority Collateral Trustee has become aware. Until
the occurrence of the Senior Obligation Payment Date, the Senior Collateral
Agent and the Majority Senior Parties shall have the exclusive authority to
direct the
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Second Priority Collateral Trustee's response to any of the events or
circumstances contemplated in clauses (i), (ii) and (iii) above.
SECTION 2.03. Remedies. (a) Within five Business Days after the
occurrence of a Triggering Event, the Second Priority Collateral Trustee shall
notify each of the Representatives and Rite Aid in writing that a Triggering
Event exists, specifying the nature of such Triggering Event.
(b) Until the Senior Obligation Payment Date, the Senior Collateral
Agent and the Majority Senior Parties shall have the exclusive right to exercise
any right or remedy with respect to the Collateral and shall have the exclusive
right to determine and direct the time, method and place for exercising such
right or remedy or conducting any proceeding with respect thereto. Following the
Senior Obligation Payment Date, the Second Priority Collateral Trustee and the
Second Priority Instructing Group shall have the exclusive right to exercise any
right or remedy with respect to the Collateral, and the Second Priority
Instructing Group shall have the exclusive right to direct the time, method and
place of exercising or conducting any proceeding for the exercise of any right
or remedy available to the Second Priority Collateral Trustee with respect to
the Collateral, or of exercising any trust or power conferred on the Second
Priority Collateral Trustee, or for the taking of any other action authorized by
the Second Priority Collateral Documents; provided, however, that nothing in
this Section shall impair the right of the Second Priority Collateral Trustee in
its discretion to take any action deemed proper by the Second Priority
Collateral Trustee and which is not inconsistent with the terms hereof or any
such direction by the Second Priority Instructing Group.
(c) In the event the Second Priority Collateral Trustee receives
written notice from the Second Priority Instructing Group of any direction given
pursuant to paragraph (b) of this Section, the Second Priority Collateral
Trustee will give prompt written notice thereof to each Second Priority
Representative. The Senior Collateral Agent will give the Second Priority
Collateral Trustee and each Second Priority Representative prompt written notice
of the occurrence of the Senior Obligation Payment Date.
SECTION 2.04. Right to Make Advances. If an advance of funds shall at
any time be required for the preservation or maintenance of any Collateral, the
Senior Collateral Agent, the Second Priority Collateral Trustee or any Secured
Party shall be entitled to make such advance after notice to Rite Aid and the
Representatives of its intention to do so but without notice to any other
Secured Party. Each such advance shall be reimbursed, with interest accrued from
the date such advance was made at the Default Rate, by Rite Aid upon demand by
the Senior Collateral Agent, the Second Priority Collateral Trustee or such
Secured Party, and if Rite Aid fails to comply with any such demand, out of the
proceeds of any Collateral in accordance with the provisions of Section 4.01 (b)
or (c). If any Secured Party shall receive any funds which, under
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this Section 2.04, belong to the Senior Collateral Agent, the Second Priority
Collateral Trustee or any other Secured Party, such Secured Party shall remit
such funds promptly to the Senior Collateral Agent or the Second Priority
Collateral Trustee for distribution to itself or such other Secured Party, as
the case may be, and before such remittance shall hold such funds in trust for
the Senior Collateral Agent, the Second Priority Collateral Trustee or such
other Secured Party, as the case may be.
SECTION 2.05. Nature of Secured Parties' Rights. All of the Secured
Parties shall be bound by any instruction or direction given by the Instructing
Group pursuant to this Agreement.
ARTICLE III
Collateral Accounts
SECTION 3.01. Collateral Accounts. The Second Priority Collateral
Trustee shall establish and, at all times thereafter until all Second Priority
Debt Obligations have been paid in full, there shall be maintained with the
Second Priority Collateral Trustee a separate collateral trust account (each, a
"Collateral Account" and collectively, the "Collateral Accounts") in the name of
each of the Second Priority Representatives for the benefit of the Second
Priority Debt Parties for which such Second Priority Representative is acting.
The Second Priority Collateral Trustee shall deposit in such Collateral Accounts
only such funds as are distributable to the relevant Second Priority
Representative (or Second Priority Debt Parties for which such Representative
acts) in accordance with the provisions of this Agreement. All such funds on
deposit in the Collateral Accounts shall be held, applied and disbursed by the
Second Priority Collateral Trustee as part of the Trust Estate in accordance
with the terms of this Agreement.
SECTION 3.02. Investment of Funds. The Second Priority Collateral
Trustee shall invest and reinvest funds on deposit in the Collateral Accounts at
any time in Temporary Cash Investments as directed in writing by Rite Aid, and
the investment earnings thereon shall, so long as no Event of Default shall have
occurred and be continuing, be paid to Rite Aid monthly; provided, however, that
if any party other than a holder of Second Priority Debt Obligations claims
entitlement to any such investment earnings, the same shall not be released to
Rite Aid but shall continue to be held and reinvested by the Second Priority
Collateral Trustee pending receipt by the Second Priority Collateral Trustee of
joint instructions signed by Rite Aid and such party or a nonappealable court
judgment determining the disposition of such earnings. Rite Aid shall bear the
risk of loss on any investment made hereunder (except for such losses that
result from the gross negligence or wilful misconduct of the Second Priority
Collateral Trustee in failing to follow proper investment instructions given by
Rite Aid pursuant to this Section) and shall, upon demand of the Second Priority
Collateral Trustee to Rite Aid, deliver immediately
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available funds to the Second Priority Collateral Trustee in an amount equal to
such loss or losses.
ARTICLE IV
Application of Certain Amounts
Mandatory Prepayments
SECTION 4.01. Application of Proceeds of Collateral After Triggering
Event. (a) If, following a Triggering Event, any Collateral is sold or otherwise
realized upon (whether pursuant to the exercise of any remedy set forth in any
Collateral Document, in a Bankruptcy Proceeding or otherwise), the proceeds in
respect of such Collateral shall be applied as soon as practicable after receipt
as follows:
FIRST: to the Second Priority Collateral Trustee and the
Senior Collateral Agent in an amount equal to the Fees thereof which
are unpaid as of the applicable Distribution Date and to any Senior
Secured Party which has theretofore advanced or paid any such Fees in
an amount equal to the amount thereof so advanced or paid by such
Senior Secured Party, pro rata based on the amounts of such Fees (or
such advance or payment);
SECOND: to the Second Priority Collateral Trustee, the Senior
Collateral Agent and any Senior Secured Party to reimburse to the
Second Priority Collateral Trustee, the Senior Collateral Agent and
such Senior Secured Party for the amount of any advance made pursuant
to Section 2.04 hereof (with interest thereon at the Default Rate), pro
rata based on the amounts so advanced;
THIRD: to the Senior Collateral Agent, for distribution to the
Senior Secured Parties to be applied to the payment of the Senior
Obligations, pro rata based on the amount of Senior Obligations then
due and owing, until the Senior Obligation Payment Date;
FOURTH: to the agent under the Synthetic Lease Facility and
the trustee, administrative agent, security agent or similar agent
under each Additional Senior Second Priority Debt Facility, if any, and
under each Replacement Senior Second Priority Debt Facility, if any, in
an amount equal to the Fees thereof which are unpaid as of the
applicable Distribution Date and to any Synthetic Lease Party, any
Additional Senior Second Priority Debt Party and any Replacement Senior
Second Priority Debt Party which has theretofore advanced or paid any
such Fees in an amount equal to the amount thereof so advanced or paid
by such Synthetic Lease Party, Additional Senior Second
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Priority Debt Party or Replacement Senior Second Priority Debt Party,
as the case may be, pro rata based on the amounts of such Fees (or such
advance or payment);
FIFTH: to the agent under the Synthetic Lease Facility and the
trustee, administrative agent, security agent or similar agent under
each Additional Senior Second Priority Debt Facility, if any, and under
each Replacement Senior Second Priority Debt Facility, if any, and any
Synthetic Lease Party, any Additional Senior Second Priority Debt Party
and any Replacement Senior Second Priority Debt Party to reimburse such
Second Priority Representative or such Second Priority Debt Party for
the amount of any advance made pursuant to Section 2.04 hereof (with
interest thereon at the Default Rate), pro rata based on the amounts so
advanced;
SIXTH: to the agent under the Synthetic Lease Facility and the
trustee, administrative agent, security agent or similar agent under
each Additional Senior Second Priority Debt Facility, if any, and each
Replacement Senior Second Priority Debt Facility, if any, for
distribution to the Synthetic Lease Parties, the Additional Senior
Second Priority Debt Parties, if any, and the Replacement Senior Second
Priority Debt Parties, if any, to be applied to the payment of the
Synthetic Lease Obligations, the Additional Senior Second Priority Debt
Obligations, if any, and the Replacement Senior Second Priority Debt
Obligations, if any, pro rata based on the amount of Synthetic Lease
Obligations, Additional Senior Second Priority Debt Obligations and
Replacement Senior Second Priority Debt Obligations then due and owing,
until all the Synthetic Lease Obligations, Additional Senior Second
Priority Debt Obligations and Replacement Senior Second Priority Debt
Obligations have been paid in full;
SEVENTH: to the trustee under the Exchange Note Indenture and
the trustee, administrative agent, security agent or similar agent
under each Additional Second Priority Debt Facility, if any, and each
Replacement Second Priority Debt Facility, if any, in an amount equal
to the Fees thereof which are unpaid as of the applicable Distribution
Date and to any Exchange Note Party, any Additional Second Priority
Debt Party and any Replacement Second Priority Debt Party which has
theretofore advanced or paid any such Fees in an amount equal to the
amount thereof so advanced or paid by such Exchange Note Party or
Additional Second Priority Debt Party or Replacement Second Priority
Debt Party, as the case may be, pro rata based on the amounts of such
Fees (or such advance or payment);
EIGHTH: to the trustee under the Exchange Note Indenture and
the trustee, administrative agent, security agent or similar agent
under each Additional Second Priority Debt Facility, if any, and each
Replacement Second Priority Debt Facility, if any, and any Exchange
Note Party, any Additional Second Priority Debt Party and any
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Replacement Second Priority Debt Party to reimburse such Second
Priority Representative or such Second Priority Debt Party for the
amount of any advance made pursuant to Section 2.04 hereof (with
interest thereon at the Default Rate), pro rata based on the amounts so
advanced;
NINTH: to the trustee under the Exchange Note Indenture and
the trustee, administrative agent, security agent or similar agent
under each Additional Second Priority Debt Facility, if any, and each
Replacement Second Priority Debt Facility, if any, for distribution to
the Exchange Note Parties, the Additional Second Priority Debt Parties,
if any, and the Replacement Second Priority Debt Parties, if any, to be
applied to the payment of the Exchange Note Obligations, the Additional
Second Priority Debt Obligations, if any, and the Replacement Second
Priority Debt Obligations, if any, pro rata based on the amount of
Exchange Note Obligations, Additional Second Priority Debt Obligations
and Replacement Second Priority Debt Obligations then due and owing,
until all the Exchange Note Obligations, Additional Second Priority
Debt Obligations and Replacement Second Priority Debt Obligations have
been paid in full; and
TENTH: after payment in full of all Secured Obligations, to
Rite Aid and the Subsidiary Guarantors or their successors or assigns,
as their interests may appear, or to whosoever may be lawfully entitled
to receive the same or as a court of competent jurisdiction may direct.
(b) Whenever pursuant to the foregoing provisions of this Section any
proceeds are required to be distributed to any Second Priority Representative,
then the Second Priority Collateral Trustee or the Senior Collateral Agent, as
the case may be, shall effect such distribution only upon receiving written
notification from the Second Priority Instructing Group as to the identities of
the Second Priority Representatives entitled to receive such distribution and
the amounts or percentages of such distribution to which each such Second
Priority Representative is entitled and, if requested by the Second Priority
Collateral Trustee or the Senior Collateral Agent, the amount of outstanding
Second Priority Debt Obligations then due and owing to Second Priority Debt
Parties for which each such Representative is acting on the basis of which such
amounts to be distributed are to be determined. Whenever pursuant to the
foregoing provisions of this Section any proceeds are required to be distributed
to the Representative for the 10.50% Note Parties, the Senior Collateral Agent
shall effect such distribution only upon receiving written notification from
such Representative, if requested by the Senior Collateral Agent, as to the
amount of 10.50% Note Obligations then due and owing to the 10.50% Note Parties
on the basis of which such amounts to be distributed are to be determined. Each
of the Second Priority Collateral Trustee and the Senior Collateral Agent shall
be fully protected in, and shall not incur or have any liability as a result of,
relying on such written notification received by it.
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(c) Whenever any proceeds are required by the terms hereof to be
distributed to the trustee under the 10.50% Note Indenture for application to
the 10.50% Note Obligations or to the trustee under any indenture governing any
class or series of notes constituting Second Priority Debt Obligations, such
proceeds may be applied to, or held as security for, the payment of such 10.50%
Note Obligations or Second Priority Debt Obligations, as the case may be, or
used to make one or more offers to repurchase 10.50% Notes or notes of such
class or series, as the case may be, in each case as permitted by the 10.50%
Note Indenture or the indenture relating to such class or series of notes, as
the case may be.
SECTION 4.02. Payment Provisions. For the purposes of applying the
provisions of Section 4.01, all interest, fees and other amounts to be paid on
any of the Secured Obligations pursuant to the terms of any Secured Document
shall, as among the Secured Parties and regardless of whether any such interest,
fees or other amounts are or would be recognized or allowed as a claim in any
bankruptcy or similar proceeding, be treated as due and owing on the Secured
Obligations.
SECTION 4.03. Certain Mandatory Prepayments of Senior Credit Facility.
(a) In the event that the Borrower or any of its Subsidiaries shall at any time,
or from time to time (but in the case of any sale or disposition of Collateral,
only prior to the occurrence of a Triggering Event) receive any Net Cash
Proceeds of any Reduction Event, the Borrower shall, in accordance with and to
the extent required by the provisions of the Senior Credit Facility, apply an
amount equal to such Net Proceeds to Reductions of the Senior Credit Facility.
So long as no Triggering Event has occurred and is continuing, Net Cash Proceeds
of a Reduction Event in excess of those applied in accordance with the foregoing
provision of this paragraph shall be applied in accordance with any applicable
provisions of the Senior Debt Documents and Second Priority Debt Documents.
(b) In the event the Borrower or any of its Subsidiaries shall, at any
time after the occurrence of a Triggering Event, receive any Net Cash Proceeds
of any Reduction Event which are attributable to Collateral, such Net Cash
Proceeds shall be subject to and applied in accordance with the provisions of
Section 4.01(a).
(c) Notwithstanding the foregoing, any payment made or to be made by
any Subsidiary Guarantor in respect of Second Priority Debt Obligations
subsequent to the occurrence of a Triggering Event other than from the proceeds
of Collateral shall be subject to, and only made in accordance with, the
subordination provisions of the Second Priority Subsidiary Guarantee Agreement,
provided that this paragraph (c) shall not apply to payments made by Rite Aid
Realty Corp. to the Synthetic Lease Parties from proceeds of the "Properties" or
the "Equipment Collateral" (each as defined on the date hereof in the Synthetic
Lease Documents).
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(d) For the avoidance of doubt, Section 4.03(a) does not itself create
any Lien nor does it alter the priorities of Liens which are created by the
other Senior Debt Documents and Second Priority Debt Documents.
SECTION 4.04. Cash Sweep; Certain Enforcement Proceeds. (a)
Notwithstanding the foregoing provisions of this Article IV, at all times during
a Cash Sweep Period prior to the occurrence of a Triggering Event, the funds on
deposit in the Citibank Concentration Account (as such terms are defined in the
Senior Subsidiary Security Agreement as in effect on the Closing Date) may be
applied in accordance with the provisions of the Senior Credit Facility, as in
effect on the Closing Date. After the occurrence of a Triggering Event, funds on
deposit in the Citibank Concentration Account consisting of proceeds of
Collateral shall be applied in accordance with the provisions of Section
4.01(a). The Borrower and the Subsidiary Guarantors will not deposit funds
representing Net Cash Proceeds from Reduction Events in the Citibank
Concentration Account or into accounts that are swept into the Citibank
Concentration Account pursuant to the Senior Loan Documents.
(b) Notwithstanding the foregoing, for purposes of this Article IV, any
proceeds of enforcement of the Second Priority Subsidiary Guarantee Agreement
against any Subsidiary Guarantor shall be deemed proceeds of Senior Collateral.
ARTICLE V
Subordination
SECTION 5.01. Perfection and Priority of Security Interests. (a) Any
and all security interests, assignments, pledges, mortgages, deeds of trust,
deeds to secure debt and other liens, charges or encumbrances now existing or
hereafter created or arising in favor of the Second Priority Collateral Trustee
for the benefit of the Second Priority Debt Parties with respect to the
Collateral and securing the Second Priority Debt Obligations are expressly
junior in priority, operation and effect to any and all security interests,
assignments, pledges and other liens, charges or encumbrances now existing or
hereafter created or arising in favor of the Senior Collateral Agent for the
benefit of the Senior Secured Parties with respect to the Collateral and
securing the Senior Obligations, notwithstanding anything to the contrary
contained in any agreement or filing to which the Second Priority Collateral
Trustee or any Second Priority Debt Party may now or hereafter be a party, and
regardless of the time, order or method of attachment, recording or perfection
of any financing statements or other security interests, assignments, pledges,
mortgages and other liens, charges or encumbrances or any defect or deficiency
or alleged defect or deficiency in any of the foregoing.
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(b) The Second Priority Representatives, on behalf of themselves and
the other Second Priority Debt Parties, acknowledge that a portion of the Senior
Bank Obligations represent debt that is revolving in nature and that the amount
thereof that may be outstanding at any time or from time to time may be
increased or reduced and subsequently reborrowed, and that the terms of the
Senior Bank Obligations may be modified, extended or amended from time to time,
and the aggregate amount of the Senior Bank Obligations may be increased,
replaced or refinanced, subject to the limitations of Section 7.02 hereof but
otherwise without notice to or consent by the Second Priority Debt Parties and
without affecting the provisions hereof. The lien priorities provided in this
Section 5.01 shall not be altered or otherwise affected by any such amendment,
modification, supplement, extension, repayment, reborrowing, increase,
replacement, renewal, restatement or refinancing of the Senior Bank Obligations,
the other Senior Obligations or the Second Priority Debt Obligations, or any
portion thereof, nor by any action that the Senior Secured Parties or the Second
Priority Debt Parties may take or fail to take in respect of the Collateral in
accordance with this Agreement.
(c) For purposes of perfecting the Second Priority Lien in the
Collateral and the proceeds thereof, the Subsidiary Guarantors and the Senior
Collateral Agent hereby acknowledge that UCC-1 financing statements,
patent/trademark/copyright filings and mortgages or other filings or recordings
covering the Collateral, naming one or more Subsidiary Guarantors as debtor, and
the Second Priority Collateral Trustee, on behalf of the Second Priority Debt
Parties, as secured party, may be filed in appropriate public offices from time
to time.
(i) Each of the Second Priority Representatives and each
Second Priority Debt Party agrees that all UCC-1 financing statements,
patent/trademark/copyright filings (except as provided in clause (ii)
below) or other filings or recordings filed or recorded by or on behalf
of the Second Priority Debt Parties shall be in form satisfactory to
the Senior Collateral Agent and shall contain the following notation:
"The interest of the Secured Party in the collateral described herein
is junior and subordinate to the interests of Citicorp USA, Inc., and
its successors and assigns, as collateral agent for certain secured
parties, including the lenders from time to time party to that certain
Senior Credit Agreement dated as of June 27, 2001, as amended,
refinanced or replaced from time to time, with Rite Aid Corporation in
accordance with the provisions of that certain Collateral Trust and
Intercreditor Agreement dated as of June 27, 2001, among Rite Aid
Corporation, certain subsidiaries of Rite Aid Corporation, Wilmington
Trust Company, as Second Priority Collateral Trustee, Citicorp USA,
Inc., as Senior Collateral Agent, and certain other parties, as Second
Priority Representatives, as amended from time to time."
(ii) In addition, each of the Second Priority Representatives
and each Second Priority Debt Party agrees that all mortgages, deeds of
trust, deeds to secure debt and similar instruments (collectively,
"mortgages") now or hereafter filed against real and/or
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personal property pursuant to any Secured Document in favor of or for
the benefit of the Second Priority Collateral Trustee and/or the Second
Priority Debt Parties shall be in form satisfactory to the Senior
Collateral Agent and shall contain the following provision: "The lien
of this [Mortgage] is junior and subordinate to the lien of any
mortgage now or hereafter granted to Citicorp USA, Inc. and its
successors and assigns, as collateral agent for certain secured
parties, including the lenders from time to time party to that certain
Senior Credit Agreement dated as of June 27, 2001, as amended, replaced
or refinanced from time to time, with Rite Aid Corporation and its
successors and assigns, in accordance with the provisions of that
certain Collateral Trust and Intercreditor Agreement dated as of June
27, 2001, among Rite Aid Corporation, certain subsidiaries of Rite Aid
Corporation, Wilmington Trust Company, as Second Priority Collateral
Trustee, Citicorp USA, Inc., as Senior Collateral Agent, and certain
other parties, as Second Priority Representatives, as amended from time
to time."
(d) The Second Priority Representatives, on behalf of themselves and
the other Second Priority Debt Parties, hereby agree:
(i) to subordinate the Second Priority Collateral Documents to
any lease of any of the Mortgaged Properties to the same extent that
the Senior Collateral Documents are or have been subordinated to such
lease, but without affecting the relative priority of the Senior
Collateral Documents and the Second Priority Collateral Documents,
(ii) to grant nondisturbance rights with respect to any lease
of any of the Mortgaged Properties with respect to which the Senior
Collateral Agent has granted nondisturbance on substantially the same
terms as granted by the Senior Collateral Agent,
(iii) that if all or any portion of a Mortgaged Property is a
leasehold interest, (A) upon termination of any lease creating such
leasehold interest (the "Original Lease"), any right of the Second
Priority Collateral Trustee to request a "new lease" pursuant to the
terms of the Original Lease shall be junior and subordinate to the
right of the Senior Collateral Agent to request such a new lease and
the Second Priority Collateral Trustee shall not exercise any such
right without the prior written consent of the Senior Collateral Agent,
(B) the Second Priority Collateral Trustee shall waive, surrender and
give up any right either the Second Priority Collateral Trustee or the
Second Priority Debt Parties may have to redeem the premises demised by
the Original Lease or to continue the Original Lease for its original
term after the lessee thereunder has been dispossessed or ejected
therefrom by process of law or otherwise and (C) the Senior Lien and
the Second Priority Lien shall remain in force or be reinstated with
the same relative priority that existed with respect to the Original
Lease, and
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(iv) that if the holder or grantor of a Second Priority
Collateral Document pays or discharges any liens prior in right to the
lien created by the Senior Collateral Documents with funds provided by
the Second Priority Collateral Trustee or any Second Priority Debt
Party, neither the Second Priority Collateral Trustee nor any Second
Priority Debt Party shall acquire, by subrogation or otherwise, any
claim superior or equivalent to the lien of the Senior Collateral
Documents so long as any indebtedness secured by the Senior Collateral
Documents remains outstanding.
Notwithstanding anything to the contrary in the Senior Mortgages, the Senior
Collateral Agent and the Senior Secured Parties hereby consent to the assignment
of leases and rents to the Second Priority Collateral Trustee for the Second
Priority Secured Parties contained in the Second Priority Mortgages for the
purpose of securing and discharging the performance by the respective Subsidiary
Guarantors party thereto, provided however, that such assignment is subject to
the terms of this Agreement. The Senior Collateral Agent and the Senior Secured
Parties agree that the terms of each Senior Mortgage and the rights and remedies
of the parties thereto are subject to this Agreement. The Second Priority
Collateral Trustee and the Second Priority Debt Parties agree that the terms of
each Second Priority Mortgage and the rights and remedies of the parties thereto
are subject to this Agreement and subordinated as provided herein.
(e) The Second Priority Representatives, on behalf of themselves and
the other Second Priority Debt Parties, acknowledge and agree with the Senior
Collateral Agent and the Senior Secured Parties that the arrangements described
in clauses (a), (b), (c) and (d) above are solely for the purpose of providing
the Second Priority Debt Parties with a perfected second priority Lien in the
Collateral under the Second Priority Collateral Documents and shall in no way be
construed as imposing any duties or other obligations on the Senior Collateral
Agent.
In furtherance of the foregoing, the Second Priority Representatives and the
Second Priority Debt Parties acknowledge and agree with the Senior Secured
Parties that, at all times following a Triggering Event until the Senior
Obligation Payment Date, the Senior Collateral Agent shall have the right to
sell, transfer or otherwise dispose of or deal with, or cause the Subsidiary
Guarantors to sell, transfer or otherwise dispose of or deal with, the
Collateral as provided in the Senior Collateral Documents without regard to the
security interest of the Second Priority Debt Parties therein, or any rights to
which the Second Priority Debt Parties would otherwise be entitled as a result
of such security interest, the only obligation of the Senior Collateral Agent to
the Second Priority Debt Parties in respect thereof being to deliver to the
Second Priority Collateral Trustee or the Second Priority Representatives
(unless otherwise directed in writing by the Second Priority Collateral Trustee
or by a court of competent jurisdiction) any proceeds remaining from such sale,
transfer or other disposition of such Collateral after the Senior Obligation
Payment Date or, if the Senior Collateral Agent shall still be in possession of
all or any part of such Collateral after such payment and satisfaction in full,
such Collateral or such
14
part thereof remaining, without representation or warranty on the part of the
Senior Collateral Agent or the Senior Secured Parties, provided that nothing
contained in this sentence shall be construed to give rise to, nor shall the
Second Priority Collateral Trustee or the Second Priority Debt Parties have, any
claims whatsoever against the Senior Collateral Agent or any Senior Secured
Party on account of any act or omission to act in connection with the exercise
of any right or remedy of the Senior Collateral Agent with respect to the
Collateral that is permitted by the Collateral Documents (other than with
respect to any claims that may arise as a result of the failure of the Senior
Collateral Agent, after the Senior Obligation Payment Date, to deliver any such
remaining Collateral or proceeds to the Second Priority Collateral Trustee or
the Second Priority Representatives). The Second Priority Representatives, on
behalf of themselves and the other Second Priority Debt Parties, agree that they
shall not, and shall not attempt to, exercise any rights with respect to (A) the
Senior Lien in the Collateral or (B) the Second Priority Lien in the Collateral,
whether pursuant to the Second Priority Collateral Documents or otherwise, until
the Senior Obligation Payment Date; provided that nothing in this sentence (or
elsewhere in the Agreement) shall preclude (x) exercise of the rights expressly
reserved to the Second Priority Collateral Trustee, the Second Priority
Representatives and the Second Priority Debt Parties in accordance with the
terms of this Agreement or (y) the enforcement of this Agreement.
(f) In any Bankruptcy Proceeding, until the Senior Obligation Payment
Date, the Second Priority Collateral Trustee and the Second Priority
Representatives, on behalf of themselves and the other Second Priority Debt
Parties, agree not to take any action whatsoever (including, without limitation,
voting any claim) in respect of or relating to the Second Priority Debt
Obligations, insofar as any such action arises from or relates to the Second
Priority Collateral Documents, the Second Priority Lien or relates to the
Collateral, in any manner that is inconsistent with or adverse to the rights and
priorities of the Senior Secured Parties as set forth herein.
(g) In the event that in any Bankruptcy Proceeding, the Second Priority
Debt Parties shall not have filed a proof of claim in respect of any Second
Priority Debt Obligation by the date ten days prior to the latest date on which
such proof of claim may be filed, the Senior Collateral Agent is hereby
authorized but not obligated, on behalf of any applicable Second Priority Debt
Party, to file such proof of claim; provided that any Second Priority Debt
Parties shall be entitled to amend, vote or otherwise exercise rights in respect
of any such proof of claim so filed by the Senior Collateral Agent to the same
extent as they would be permitted under this Agreement to do so had such proof
of claim been filed by them.
SECTION 5.02. No Interference; No Right to Instruct Senior Collateral
Agent; Payment Over; Reinstatement; Permitted Actions. (a) The Second Priority
Collateral Trustee and the Second Priority Representatives, on behalf of
themselves and the other Second Priority Debt Parties, agree that:
15
(i) they will not take or cause to be taken any action, the
purpose or effect of which is to make any Second Priority Lien pari
passu with, or to give any Second Priority Debt Party or any Second
Priority Representative any preference or priority relative to, the
Senior Lien or the Senior Secured Parties with respect to the
Collateral or any part thereof,
(ii) they will not interfere, hinder or delay, in any manner,
whether by judicial proceedings or otherwise, any sale, transfer or
other disposition of the Collateral by the Senior Collateral Agent or
any other Senior Secured Party or any other action taken by or on
behalf of the Senior Collateral Agent or any Senior Secured Party
permitted to be taken by it pursuant to the Senior Collateral
Documents,
(iii) they have no right to (A) direct the Senior Collateral
Agent or any other Senior Secured Party to exercise any right, remedy
or power with respect to the Collateral or pursuant to the Senior
Collateral Documents or (B) consent to the exercise by the Senior
Collateral Agent or any other Senior Secured Party of any right, remedy
or power with respect to the Collateral or pursuant to the Senior
Collateral Documents,
(iv) they will not institute any suit or assert in any suit,
Bankruptcy Proceeding or other proceeding any claim against the Senior
Collateral Agent or any other Senior Secured Party seeking damages from
or other relief by way of specific performance, instructions or
otherwise, with respect to, and none of the Senior Collateral Agent nor
any other Senior Secured Party shall be liable for, any action taken or
omitted to be taken by the Senior Collateral Agent or the Senior
Secured Parties with respect to the Collateral or pursuant to the
Senior Collateral Documents,
(v) until the Senior Obligation Payment Date, they will not
make any judicial or nonjudicial claim or demand or commence any
judicial or non-judicial proceedings against any Subsidiary Guarantor
under or with respect to any Collateral Document seeking payment or
damages from or other relief by way of specific performance,
instructions or otherwise under or with respect to any Collateral
Document (other than filing a proof of claim) or exercise any right,
remedy or power under or with respect to, or otherwise take any action
to enforce, other than filing a proof of claim, any Collateral
Document; provided, however, that (A) if there is a Bankruptcy
Proceeding with respect to Rite Aid, the Second Priority Collateral
Trustee or any Second Priority Debt Party may make claims under and
seek to enforce the Second Priority Subsidiary Guarantee Agreement,
subject to the subordination provisions thereof and to the other
provisions of this Agreement, and (B) none of the Second Priority
Collateral Trustee, the Second Priority Representatives or any other
Second Priority Debt Party may exercise any right,
16
remedy or power under or with respect to any other Second Priority Debt
Document, or otherwise take any action to enforce rights or remedies
with respect to any Collateral,
(vi) until the Senior Obligation Payment Date, they will not
commence judicial or nonjudicial foreclosure proceedings with respect
to, seek to have a trustee, receiver, liquidator or similar official
appointed for or over, attempt any action to take possession of any
Collateral, exercise any right, remedy or power with respect to, or
otherwise take any action to enforce its interest in or realize upon,
the Collateral or pursuant to the Second Priority Collateral Documents;
provided that nothing in this paragraph (or elsewhere in this
Agreement) shall restrict the right of the Second Priority Collateral
Trustee, any Second Priority Representative or any other Second
Priority Debt Party to request "adequate protection" (within the
meaning of Section 361 of the U.S. Bankruptcy Code) for the interests
of the Second Priority Debt Parties in the Second Priority Collateral
in the event of any Bankruptcy Proceeding on a basis that is not
inconsistent with the rights and priorities of the Senior Secured
Parties as set forth herein, in the Senior Loan Documents and in the
Second Priority Debt Documents,
(vii) they will not seek, and hereby waive any right, to have
the Collateral or any part thereof marshaled upon any foreclosure or
other disposition of the Collateral, and
(viii) they will not attempt, directly or indirectly, whether
by judicial proceedings or otherwise, to challenge the enforceability
of any provision of this Agreement or any Senior Debt Document or the
validity, perfection, priority or enforceability of the Senior Lien.
(b) The Second Priority Representatives, on behalf of themselves and
the other Second Priority Debt Parties, hereby agree that, in the event of a
sale, transfer or other disposition of Collateral following a Triggering Event,
any security interest or lien of the Second Priority Debt Parties in such
Collateral (but not the proceeds thereof to the extent that such proceeds are to
be applied to Second Priority Debt Obligations pursuant to Section 4.01) shall
terminate and be released automatically and without further action if the Senior
Lien in such Collateral is released. The Second Priority Collateral Trustee will
execute and deliver to the Senior Collateral Agent promptly upon request
therefor all necessary instruments and documents to evidence such termination
and release.
(c) Except with respect to proceeds of any sale or other realization on
Collateral received by the Second Priority Representatives pursuant to
distributions made by the Senior Collateral Agent after the occurrence of a
Triggering Event under Section 4.01(a), the Second Priority Representatives, on
behalf of themselves and the other Second Priority Debt Parties, hereby agree
that if any of them shall obtain possession of any of the Collateral, or shall
realize any payment
17
of insurance or condemnation proceeds, proceeds of any sale or other
disposition, rents, profits or other income, reserve or compensation of any kind
in respect of the Collateral, in any case before the Senior Obligation Payment
Date, then it shall hold such Collateral or payment in trust for the Senior
Secured Parties and transfer such Collateral or payment, as the case may be, to
the Senior Collateral Agent for application in accordance with the provisions of
Section 4.01. If, at any time, all or part of any payment with respect to the
Senior Obligations previously made is rescinded for any reason whatsoever, (i)
the Second Priority Collateral Trustee, the Second Priority Representatives and
the Second Priority Debt Parties shall promptly pay over to the Senior
Collateral Agent any payment received by any of them after the occurrence of a
Triggering Event in respect of the Collateral or proceeds thereof, and shall
promptly turn any Collateral then held by any of them over to the Senior
Collateral Agent, in each case to the extent that the Second Priority Debt
Parties would not have been entitled to receive or hold such payment or
Collateral pursuant to the terms of this Agreement had the rescinded payment in
respect of the Senior Obligations never been made in the first instance, and
(ii) the provisions set forth in this Agreement shall be reinstated as if such
rescinded payment had not been made, until the Senior Obligation Payment Date;
provided, however, that the foregoing shall not require the Second Priority Debt
Parties to pay over to the Senior Collateral Agent any payment received by them
or Collateral delivered to them if such payment or delivery is itself rescinded
for any reason (and any such payment or Collateral theretofore paid over to the
Senior Secured Parties pursuant to the foregoing provisions shall be released
and delivered to the appropriate Person to the extent necessary to effect such
rescission.)
(d) With respect to proceeds of any sale or other realization on
Collateral to the extent payable to the Second Priority Representatives for the
benefit of the Second Priority Debt Parties pursuant to Section 4.01(a), the
Senior Collateral Agent, on behalf of itself and the other Senior Secured
Parties, hereby agrees that if any of them shall obtain possession of any of
such proceeds before the time when the Second Priority Debt Obligations have
been paid in full, then it shall hold such proceeds in trust for the holders of
the Second Priority Debt Obligations and transfer such proceeds to the Second
Priority Collateral Trustee.
ARTICLE VI
Certain Agreements
of 10.50% Note Parties
SECTION 6.01. No Interference; No Right to Instruct Senior Collateral
Agent. (a) The Representative for the holders of the 10.50% Notes, on behalf of
itself and the other 10.50% Note Parties, acknowledges that a portion of the
Senior Bank Obligations represent debt that is revolving in nature and that the
amount thereof that may be outstanding at any time or from time
18
to time may be increased or reduced and subsequently reborrowed, and that the
terms of the Senior Bank Obligations may be modified, extended or amended from
time to time, and the aggregate amount of the Senior Bank Obligations may be
increased, replaced or refinanced, subject to the limitations of Section 7.02
hereof but otherwise without notice to or consent by the 10.50% Note Parties and
without affecting the provisions hereof.
(b) The Representative for the holders of the 10.50% Notes on behalf of
itself and the other 10.50% Note Parties, acknowledges and agrees with the
Senior Collateral Agent and the Senior Bank Parties that the provisions of the
Senior Collateral Documents with respect to the Senior Lien securing the 10.50%
Note Obligations are solely for the purpose of providing the 10.50% Note Parties
with a perfected pari passu Senior Lien in the Collateral under the Senior
Collateral Documents and shall in no way be construed as imposing any duties or
other obligations on the Senior Collateral Agent other than with respect to the
application of proceeds from dispositions of Senior Collateral after a
Triggering Event, as set forth in Section 6.01.
In furtherance of the foregoing, the Representative for the holders of the
10.50% Notes, on behalf of itself and the other 10.50% Note Parties,
acknowledges and agrees with the Senior Bank Parties that, at all times
following a Triggering Event until the Senior Bank Obligation Payment Date, the
Senior Collateral Agent shall have the right to sell, transfer or otherwise
dispose of or deal with, or cause the Subsidiary Guarantors to sell, transfer or
otherwise dispose of or deal with, the Collateral as provided in the Senior
Collateral Documents in such manner as the Senior Collateral Agent and the
Majority Senior Parties may determine, the only obligation of the Senior
Collateral Agent to the 10.50% Note Parties in respect thereof being to apply
proceeds of disposition of Senior Collateral as set forth in Section 4.01 and
neither the Representative for the holders of the 10.50% Notes nor the 10.50%
Note Parties shall have any claims whatsoever against the Senior Collateral
Agent or any Senior Bank Party on account of any act or omission to act in
connection with the exercise of any right or remedy of the Senior Collateral
Agent with respect to the Senior Collateral that is permitted by the Senior
Collateral Documents (other than with respect to any claims that may arise as a
result of the failure of the Senior Collateral Agent to apply proceeds in the
manner required by Section 4.01). The Representative for the holders of the
10.50% Notes, on behalf of itself and the other 10.50% Note Parties, agrees that
they shall not, and shall not attempt to, exercise any rights with respect to
the Senior Lien in the Collateral, whether pursuant to the Senior Collateral
Documents or otherwise, until the Senior Obligation Payment Date; provided that
nothing in this sentence (or elsewhere in the Agreement) shall preclude the
enforcement of this Agreement.
(c) In any Bankruptcy Proceeding, until the Senior Obligation Payment
Date, the Representative for the holders of the 10.50% Notes, on behalf of
itself and the other 10.50% Note Parties, agrees not to take any action
whatsoever (including, without limitation, voting any claim) in respect of or
relating to the 10.50% Note Obligations, insofar as any such action arises
19
from or relates to the Senior Collateral Documents, the Senior Lien or relates
to the Collateral, in any manner that is inconsistent with or adverse to the
rights and priorities of the Senior Bank Parties as set forth herein and in the
Senior Collateral Documents.
(d) The Representative for the holders of the 10.50% Notes, on behalf
of itself and the other 10.50% Note Parties, agrees that:
(i) they will not take or cause to be taken any action, the
purpose or effect of which is to give any 10.50% Note Party or any
Representative thereof any preference or priority relative to the
Senior Lien securing the Senior Bank Obligations or the Senior Bank
Parties with respect to the Collateral or any part thereof,
(ii) they will not interfere, hinder or delay, in any manner,
whether by judicial proceedings or otherwise, any sale, transfer or
other disposition of the Collateral by the Senior Collateral Agent or
any other Senior Bank Party or any other action taken by or on behalf
of the Senior Collateral Agent or any Senior Bank Party permitted to be
taken by it pursuant to the Senior Collateral Documents,
(iii) they have no right to (A) direct the Senior Collateral
Agent or any other Senior Bank Party to exercise any right, remedy or
power with respect to the Collateral or pursuant to the Senior
Collateral Documents or (B) consent to the exercise by the Senior
Collateral Agent or any other Senior Bank Party of any right, remedy or
power with respect to the Collateral or pursuant to the Senior
Collateral Documents,
(iv) they will not institute any suit or assert in any suit,
Bankruptcy Proceeding or other proceeding any claim against the Senior
Collateral Agent or any other Senior Bank Party seeking damages from or
other relief by way of specific performance, instructions or otherwise,
with respect to, and none of the Senior Collateral Agent nor any other
Senior Bank Party shall be liable for, any action taken or omitted to
be taken by the Senior Collateral Agent or the Senior Bank Parties with
respect to the Collateral or pursuant to the Senior Collateral
Documents,
(v) until the Senior Bank Obligation Payment Date, they will
not make any judicial or nonjudicial claim or demand or commence any
judicial or non-judicial proceedings against any Subsidiary Guarantor
under or with respect to any Collateral Document seeking payment or
damages from or other relief by way of specific performance,
instructions or otherwise under or with respect to any Collateral
Document (other than filing a proof of claim) or exercise any right,
remedy or power under or with respect to, or otherwise take any action
to enforce, other than filing a proof of claim, any Collateral
Document;
20
(vi) until the Senior Bank Obligation Payment Date, they will
not commence judicial or nonjudicial foreclosure proceedings with
respect to, seek to have a trustee, receiver, liquidator or similar
official appointed for or over, attempt any action to take possession
of any Collateral, exercise any right, remedy or power with respect to,
or otherwise take any action to enforce its interest in or realize
upon, the Collateral or pursuant to the Senior Collateral Documents;
provided that nothing in this paragraph (or elsewhere in this
Agreement) shall restrict the right of the Representative for the
holders of the 10.50% Notes or any other 10.50% Note Party to request
"adequate protection" (within the meaning of Section 361 of the U.S.
Bankruptcy Code) for the interests of the 10.50% Note Parties in the
Senior Collateral in the event of any Bankruptcy Proceeding on a basis
that is not inconsistent with the rights and priorities of the Senior
Bank Parties as set forth herein, in the Senior Loan Documents and in
the Second Priority Debt Documents,
(vii) they will not seek, and hereby waive any right, to have
the Collateral or any part thereof marshaled upon any foreclosure or
other disposition of the Collateral, and
(viii) they will not attempt, directly or indirectly, whether
by judicial proceedings or otherwise, to challenge the enforceability
of any provision of this Agreement or any Senior Debt Document or the
validity, perfection, priority or enforceability of the Senior Lien
securing the Senior Bank Obligations.
ARTICLE VII
Amendments of Documents
Limitations on Facility Amounts
SECTION 7.01. Amendments and Modifications of Senior Loan Documents and
Second Priority Debt Documents. (a) Except as otherwise provided in Section
10.12, unless the Majority Senior Parties have consented thereto in writing,
none of the Borrower, the Subsidiary Guarantors or the Second Priority Debt
Parties will amend, modify or otherwise change, or consent or agree to any
amendment, modification, or other change to, any Second Priority Debt Document
to which it is party if the effect thereof is to (A) increase the principal
amount of, or lending commitments with respect to, indebtedness under such
Second Priority Debt Documents (except as expressly permitted under the Senior
Debt Documents), increase the interest rate or fees payable with respect to any
Second Priority Debt Obligations or change (to earlier dates) any dates upon
which payments of principal or interest are due thereon, (C) change any event of
default or condition to an event of default with respect thereto (other than to
eliminate any such event of default or increase any grace period related
thereto), (D) change the redemption,
21
prepayment or defeasance provisions thereof (or of any guaranty thereof) in any
manner which might be adverse to the interests of any Senior Secured Party, (E)
change any collateral therefor (other than to release such collateral), (F)
increase materially the obligations of the obligor thereunder, (G) add any
covenant or modify any covenant to render it more restrictive (other than
covenants under the Synthetic Lease Documents relating solely to the
"Properties" or the "Equipment Collateral" (each as defined on the date hereof
in the Synthetic Lease Facility) and not constituting financial covenants, or
(H) confer any additional rights on any Second Priority Debt Parties, which
could reasonably be expected to be adverse in any significant respect to any of
the Senior Secured Parties.
(b) Unless the Majority Senior Parties have consented thereto in
writing, none of the Subsidiary Guarantors, the Second Priority Debt Parties or
their Representatives or the Second Priority Collateral Trustee will amend or
modify or consent to any amendment or modification of the Second Priority
Subsidiary Guarantee Agreement.
SECTION 7.02. Limitation on Facility Amounts. None of the Borrower, the
Subsidiary Guarantors and the Senior Bank Parties will amend or modify, or
consent to any amendment or modification of, any Debt Facility to which it is
party if the effect thereof would be to increase the aggregate amount of
indebtedness outstanding (or commitments to lend) thereunder above an amount
equal to (x) the aggregate amount of such indebtedness and lending commitments
outstanding on the Closing Date minus (y) any permanent repayments of such
indebtedness or reductions in such commitments made after the Closing Date;
provided, however, that the foregoing shall not prohibit increases after the
Closing Date in lending commitments and/or loans under the Senior Credit
Facility in an aggregate amount not in excess of $600,000,000.
ARTICLE VIII
Second Priority Collateral Trustee
SECTION 8.01. Delivery of Secured Documents. On the date hereof, Rite
Aid shall deliver to the Second Priority Collateral Trustee a true and complete
copy of each of the Secured Documents as in effect on the date hereof. Promptly
upon the execution thereof, Rite Aid shall deliver to the Second Priority
Collateral Trustee a true and complete copy of any and all amendments,
modifications or supplements to any Secured Document and of any Secured
Documents entered into after the date of this Agreement.
SECTION 8.02. Information as to Holders. Rite Aid shall deliver to the
Second Priority Collateral Trustee at the Closing Date and from time to time
upon request of the Second Priority Collateral Trustee a list setting forth, by
each Secured Document, (i) the aggregate
22
principal amount outstanding thereunder, (ii) the interest rate or rates then in
effect thereunder, and (iii) the names of the holders thereof and the unpaid
principal amount thereof owing to each such holder. Rite Aid shall furnish or
cause to be furnished to the Second Priority Collateral Trustee within 30 days
of a request therefor a list setting forth the name and address of each party to
whom notices must be sent under the Secured Documents, and Rite Aid agrees to
furnish promptly to the Second Priority Collateral Trustee any changes or
additions to such list.
SECTION 8.03. Compensation and Expenses. Rite Aid and each Subsidiary
Guarantor, jointly and severally, agrees to pay to the Second Priority
Collateral Trustee, from time to time upon demand, (i) compensation (which shall
not be limited by any provision of law in regard to compensation of a trustee of
an express trust) for its services hereunder and for administering the Trust
Estate, as heretofore agreed between the Second Priority Collateral Trustee and
Rite Aid, and (ii) all of the reasonable fees, costs and expenses of the Second
Priority Collateral Trustee (including, without limitation, the reasonable fees
and disbursements of its counsel and such special counsel and other
professionals and consultants as the Second Priority Collateral Trustee elects
to retain) (a) arising in connection with the preparation, execution, delivery,
modification and termination of this Agreement, or the enforcement of any
provisions hereof, or (b) incurred or required to be advanced in connection with
the administration of the Trust Estate or the preservation, protection or
defense of the Second Priority Collateral Trustee's rights under this Agreement
and in and to the Collateral and the Trust Estate. The obligations of Rite Aid
under this Section 8.03 shall survive the termination of this Agreement.
SECTION 8.04. Stamp and Other Similar Taxes. Rite Aid agrees to
indemnify and hold harmless the Second Priority Collateral Trustee and each
Secured Party from any present or future claim or liability for any mortgage,
stamp or other similar tax and any penalties or interest with respect thereto,
which may be assessed, levied or collected by any jurisdiction in connection
with this Agreement and the Collateral Documents. The obligations of Rite Aid
under this Section 8.04 shall survive the termination of this Agreement.
SECTION 8.05. Filing Fees, Excise Taxes, etc. Rite Aid agrees to pay or
to reimburse the Second Priority Collateral Trustee for any and all amounts in
respect of all search, filing, recording and registration fees, taxes, excise
taxes and other similar imposts which may be payable or determined to be payable
in respect of the execution, delivery, performance and enforcement of this
Agreement to the extent the same may be paid or reimbursed by Rite Aid without
subjecting the Second Priority Collateral Trustee, the Collateral Agents or any
Secured Party to any civil or criminal liability. The obligations of Rite Aid
under this Section 8.05 shall survive the termination of this Agreement.
SECTION 8.06. Indemnification. (a) Rite Aid and each of the Subsidiary
Guarantors, jointly and severally, agrees to pay, indemnify, and hold the Second
Priority Collateral Trustee
23
harmless from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement and the Collateral Documents;
provided, however, that the Second Priority Collateral Trustee shall not be
indemnified under this clause to the extent such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction to have
resulted from the gross negligence or wilful misconduct of the Second Priority
Collateral Trustee.
(b) In any suit, proceeding or action brought by the Second Priority
Collateral Trustee with respect to the Collateral or for any sum owing in
respect of Secured Obligations, or to enforce the provisions of any Collateral
Document, each of the Subsidiary Guarantors, jointly and severally, shall save,
indemnify and keep the Second Priority Collateral Trustee and each of the
Secured Parties harmless from and against all expense, loss or damage suffered
by reason of any defense, set-off, counterclaim, recoupment or reduction of
liability whatsoever incurred or suffered by the Second Priority Collateral
Trustee or such Secured Party, as the case may be, arising out of a breach by
any Subsidiary Guarantor of any obligation set forth in this Agreement, or any
other Collateral Document and all such obligations of each Subsidiary Guarantor
shall be and remain enforceable against and only against such Subsidiary
Guarantor and shall not be enforceable against the Second Priority Collateral
Trustee or any Secured Party. The provisions of this Section 8.06. shall survive
the termination of this Agreement.
SECTION 8.07. Further Assurances. At any time and from time to time,
upon the written request of the Second Priority Collateral Trustee, and at the
joint and several expense of Rite Aid and the Subsidiary Guarantors, Rite Aid
and each Subsidiary Guarantor shall promptly execute and deliver any and all
such further instruments and documents and take such further action as Second
Priority Collateral Trustee reasonably deems necessary or desirable in obtaining
the full benefits of this Agreement. Without limitation of the foregoing or of
any requirement of any Second Priority Collateral Document, each Subsidiary
Guarantor agrees, from time to time, at its own expense to execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further mortgages, financing statements and continuations thereof, notices
of assignment, transfers, certificates, assurances and other instruments as may
be necessary or desirable, or as the Second Priority Collateral Trustee, and any
Second Priority Representative, or any Second Priority Debt Party through its
administrative agent, may reasonably request from time to time in order (i) to
carry out more effectively the purposes of this Agreement, (ii) to subject to
the liens and security interests created by any of the Second Priority
Collateral Documents in any of the properties, (iii) to perfect and maintain the
validity, effectiveness and priority of any of the Second Priority Collateral
Documents and the liens and security interests intended to be created thereby,
(iv) to better assure, convey, grant, assign, transfer, preserve, protect and
confirm unto the Second Priority Collateral Trustee the rights
24
granted or now or hereafter intended to be granted to the Second Priority
Collateral Trustee under any Second Priority Collateral Document or under any
other instrument executed in connection with any Second Priority Collateral
Document to which it is or may become a party, and (v) to enable the Second
Priority Collateral Trustee to exercise and enforce its rights and remedies
hereunder and under each Second Priority Collateral Document with respect to any
Second Priority Collateral.
SECTION 8.08. Certain Duties. The Second Priority Collateral Trustee's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with such Collateral in the same manner as it
customarily deals with similar collateral of other parties held by it. The
Second Priority Collateral Trustee shall promptly deliver to each of the Second
Priority Representatives a copy of each notice, request, report or other
document delivered to it pursuant to the Second Priority Collateral Documents
(unless the Second Priority Collateral Trustee can reasonably determine that
such Second Priority Representative has already received the same).
SECTION 8.09. Exculpatory Provisions. (a) The Second Priority
Collateral Trustee shall not be responsible in any manner whatsoever for the
correctness of any recitals, statements, representations or warranties herein
contained, all of which are made solely by the Subsidiary Guarantors. The Second
Priority Collateral Trustee makes no representations as to the value or
condition of the Trust Estate or any part thereof, or as to the title of the
Subsidiary Guarantors thereto or as to the security afforded by the Collateral
Documents or this Agreement or as to the validity, execution (except its own
execution thereof), enforceability, legality or sufficiency of the Collateral
Documents or this Agreement or of the Secured Obligations, and the Second
Priority Collateral Trustee shall incur no liability or responsibility with
respect to any such matters. The Second Priority Collateral Trustee shall not be
responsible for insuring the Trust Estate or for the payment of taxes, charges,
assessments or Liens upon the Trust Estate or otherwise as to the maintenance of
the Trust Estate.
(b) The Second Priority Collateral Trustee shall not be required to
ascertain or inquire as to the performance by Rite Aid or any other person of
any of the covenants or agreements contained herein, in any Collateral Document
or in any Secured Document. Whenever it is necessary, or in the opinion of the
Second Priority Collateral Trustee advisable, for the Second Priority Collateral
Trustee to ascertain the amount of Secured Obligations then held by a Secured
Party, the Second Priority Collateral Trustee may rely on a certificate of such
Secured Party as to such amount, and if any Secured Party shall not provide such
information to the Second Priority Collateral Trustee, such Secured Party shall
not be entitled to receive payments hereunder (in which case the amounts
otherwise payable to such Secured Party shall be held in trust for such Secured
Party in the applicable Collateral Account) until such Secured Party has
provided such information to the Second Priority Collateral Trustee.
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(c) The Second Priority Collateral Trustee shall not be personally
liable for any action taken or omitted to be taken by it in accordance with this
Agreement or any Collateral Document or any Secured Document, except for such
actions or omissions that constitute gross negligence or wilful misconduct by
the Second Priority Collateral Trustee. The Second Priority Collateral Trustee
and its affiliates may make credit extensions to, accept deposits from and
generally engage in any kind of business with Rite Aid and its Subsidiaries as
though the Second Priority Collateral Trustee were not the collateral trustee
hereunder. With respect to any Secured Obligations owing to it, the Second
Priority Collateral Trustee shall have the same rights and powers under this
Agreement as any Senior Secured Party or any Second Priority Debt Party, as the
case may be, and may exercise the same as though it were not the collateral
trustee hereunder. The Second Priority Collateral Trustee, in its individual
capacity, may be either a Senior Secured Party or a Second Priority Debt Party.
SECTION 8.10. Delegation of Duties. The Second Priority Collateral
Trustee may execute any of the trusts or powers hereof and perform any duty
hereunder either directly or by or through agents or attorneys-in-fact which it
shall select with due care. The Second Priority Collateral Trustee shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it.
SECTION 8.11. Reliance by Second Priority Collateral Trustee. (a)
Whenever in the administration of the trusts of this Agreement the Second
Priority Collateral Trustee shall deem it necessary or advisable that a matter
be proved or established in connection with the taking of any action hereunder
by the Second Priority Collateral Trustee, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively provided or established by a certificate of an officer of Rite Aid
delivered to the Second Priority Collateral Trustee, and such officers'
certificate shall be full warranty to Second Priority Collateral Trustee for any
action taken, suffered or omitted in reliance thereon.
(b) The Second Priority Collateral Trustee may consult with counsel,
and any opinion of such counsel (which may be in-house counsel for the Second
Priority Collateral Trustee) shall be full and complete authorization and
protection in respect of any action taken or suffered by it hereunder in
accordance therewith. The Second Priority Collateral Trustee shall have the
right at any time to seek instructions concerning the administration of the
Trust Estate from any court of competent jurisdiction.
(c) The Second Priority Collateral Trustee may rely, and shall be fully
protected in acting, upon any resolution, statement, certificate, instrument,
opinion, report, notice, request, consent, order, bond or other paper or
document which it has no reason to believe to be other than genuine and to have
been signed or presented by the proper party or parties or, in the case of
telecopies and telexes, to have been sent by the proper party or parties. The
Second Priority
26
Collateral Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Second Priority Collateral Trustee and conforming to
the requirements of this Agreement or any Collateral Document.
(d) The Second Priority Collateral Trustee shall not be under any
obligation to exercise any of the rights or powers vested in the Second Priority
Collateral Trustee by this Agreement unless the Second Priority Collateral
Trustee shall have been provided adequate security and indemnity against the
costs, expenses and liabilities which may be incurred by it in compliance with
such request or direction, including, without limitation, such reasonable
advances as may be requested by the Second Priority Collateral Trustee.
SECTION 8.12. Limitations on Duties of Second Priority Collateral
Trustee. The Second Priority Collateral Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in accordance with the
direction of the Second Priority Instructing Group. Except as herein otherwise
expressly provided, the Second Priority Collateral Trustee shall not be under
any obligation to take any action which is discretionary with the Second
Priority Collateral Trustee under the provisions hereof except upon the written
request of the Second Priority Instructing Group. The Second Priority Collateral
Trustee shall make available for inspection and copying by any Secured Party
each certificate or other paper furnished to the Second Priority Collateral
Trustee by Rite Aid or any Subsidiary Guarantor under or in respect of this
Agreement, any Collateral Document or any portion of the Trust Estate.
SECTION 8.13. Funds to be Held in Trust. All funds received by the
Second Priority Collateral Trustee under or pursuant to any provision of this
Agreement shall be held in trust for the purposes for which they were paid or
are held in accordance with the provisions hereof.
SECTION 8.14. Resignation of the Second Priority Collateral Trustee.
(a) The Second Priority Collateral Trustee may at any time, by giving 30 days'
prior written notice to Rite Aid and the Secured Parties, resign and be
discharged of the responsibilities hereby created, such resignation to become
effective upon the earlier of (i) 60 days from the date of such notice and (ii)
the appointment of a successor collateral trustee or collateral trustees by the
Second Priority Instructing Group (subject, if no Triggering Event has occurred,
to the approval of the Borrower, which approval shall not to be unreasonably
delayed or withheld). If no successor collateral trustee or collateral trustees
shall be appointed and approved within 60 days from the date of the giving of
the aforesaid notice of resignation, the Second Priority Collateral Trustee
(notwithstanding the termination of all of its other duties and obligations
hereunder by reason of such resignation) shall, or any Senior Secured Party,
Second Priority Debt Party or Rite Aid may, apply to any court of competent
jurisdiction to appoint a successor collateral trustee or collateral trustees
(which may be an individual or individuals) to act until such time, if any, as a
successor
27
collateral trustee or collateral trustees shall have been appointed as above
provided. Any successor collateral trustee or collateral trustees so appointed
by such court shall immediately and without further act be superseded by any
successor collateral trustee or collateral trustees approved by the Second
Priority Instructing Group as above provided.
(b) If at any time the Second Priority Collateral Trustee shall resign
or otherwise become incapable of acting, or if at any time a vacancy shall occur
in the office of Second Priority Collateral Trustee for any other cause, a
successor collateral trustee or collateral trustees may be appointed by the
Second Priority Instructing Group (subject, if no Triggering Event has occurred,
to the approval of the Borrower, which approval shall not to be unreasonably
delayed or withheld), and the powers, duties, authority and title of the
predecessor collateral trustee or collateral trustees terminated and canceled
without procuring the resignation of such predecessor collateral trustee or
collateral trustees, and without any other formality (except as may be required
by applicable law) other than appointment and designation of a successor
collateral trustee or collateral trustees in writing, duly acknowledged,
delivered to the predecessor collateral trustee or collateral trustees, and
filed for record in each public office, if any, in which this Agreement is
required to be filed.
(c) The appointment and designation referred to in Section 8.14(b)
shall, after any required filing, be full evidence of the right and authority to
make the same and of all the facts therein recited, and this Agreement shall
vest in such successor collateral trustee or collateral trustees, without any
further act, deed or conveyance, all of the estate and title of its predecessor
or their predecessors, and upon such filing for record the successor collateral
trustee or collateral trustees shall become fully vested with all the estates,
properties, rights, powers, trusts, duties, authority and title of its
predecessor or their predecessors. Such predecessor or predecessors shall,
nevertheless, on the written request of the Second Priority Instructing Group or
its or their successor collateral trustee or collateral trustees, execute and
deliver an instrument transferring to such successor or successors all the
estates, properties, rights, powers, trusts, duties, authority and title of such
predecessor or predecessors hereunder and shall deliver all securities and funds
held by it or them to such successor collateral trustee or collateral trustees.
(d) Any required filing for record of the instrument appointing a
successor collateral trustees as herein above provided shall be at the expense
of Rite Aid.
SECTION 8.15. Status of Successors to Second Priority Collateral
Trustee. Except as permitted by Section 8.14, every successor to the Second
Priority Collateral Trustee appointed pursuant to Section 8.14 shall be a bank
or trust company in good standing and having power so to act, incorporated under
the laws of the United States or any State thereof or the District of Columbia,
and having its principal corporate trust office within the forty-eight
contiguous States, and shall also have capital, surplus and undivided profits of
not less than $250,000,000.
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SECTION 8.16. Merger of Second Priority Collateral Trustee. Any
corporate Person into which Second Priority Collateral Trustee may be merged, or
with which it may be consolidated, or any company resulting from any merger or
consolidation to which Second Priority Collateral Trustee shall be a party,
shall be Second Priority Collateral Trustee under this Agreement without the
execution or filing of any paper or any further act on the part of the parties
hereto.
SECTION 8.17. Appointment of Additional and Separate Second Priority
Collateral Trustee. Whenever (i) the Second Priority Collateral Trustee shall
deem it necessary or prudent in order to conform to any law of any jurisdiction
in which all or any part of the Collateral shall be situated or to make any
claim or bring any suit with respect to or in connection with the Collateral, or
(ii) the Second Priority Collateral Trustee shall be advised by counsel
satisfactory to it that it is so necessary or prudent in the interest of the
Second Priority Debt Parties, then in any such case, the Second Priority
Collateral Trustee shall execute and deliver from time to time all instruments
and agreements necessary or proper to constitute another bank or trust company
or one or more persons approved by the Second Priority Collateral Trustee either
to act as additional trustee or trustees of all or any part of the Trust Estate,
jointly with the Second Priority Collateral Trustee, or to act as separate
trustee or trustees of all or any part of the Trust Estate, in any such case
with such powers and on substantially the same terms and conditions as set forth
in this Agreement, and to vest in such bank, trust company or person as such
additional trustee or separate trustee, as the case may be, any property, title,
right or power of the Second Priority Collateral Trustee deemed necessary or
advisable by the Second Priority Collateral Trustee. Each of the Subsidiary
Guarantors hereby consents to all actions taken by the Second Priority
Collateral Trustee under the foregoing provisions of this Section 8.17.
SECTION 8.18. Removal of Second Priority Collateral Trustee.
The Second Priority Collateral Trustee may be removed and discharged from the
responsibilities hereby created at any time by the Second Priority Instructing
Group. The Second Priority Instructing Group may appoint a successor trustee
with the consent of Rite Aid (such consent not to be unreasonably withheld). The
removal and discharge of the Second Priority Collateral Trustee shall be
effective upon appointment of such successor trustee and such successor
trustee's acceptance of its appointment.
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ARTICLE IX
Release of Collateral;
Expiration of Certain Rights
SECTION 9.01. Releases of Collateral. At any time during which no
Triggering Event has occurred and is continuing:
(a) If any Collateral is to be disposed of in a disposition
that is permitted by the Senior Debt Documents and the Second Priority
Debt Documents, then the Liens in favor of the Secured Parties under
the Collateral Documents with respect to such Collateral (but not the
proceeds thereof) will be released automatically upon consummation of
such disposition, without the need for any consent or approval by any
Secured Party, and the Second Priority Collateral Trustee, Senior
Collateral Agent, the Representative for the holders of the 10.50%
Notes and the Second Priority Representatives, at the expense of Rite
Aid, shall execute such documents as are reasonably necessary to
effectuate such release.
(b) The Lien of any Collateral Document may, at any time, be
released in whole or in part by the Senior Collateral Agent (in the
case of the Senior Lien) or the Second Priority Collateral Trustee (in
the case of the Second Priority Lien) pursuant to written directions
signed by the Majority Senior Parties (or the Senior Collateral Agent
on behalf of the Majority Senior Parties) or the Second Priority
Instructing Group, respectively; provided that the release of all or
substantially all of the Senior Collateral shall require the written
consent of all Senior Secured Parties and the release of all or
substantially all of the Second Priority Collateral shall require the
written consent of all Second Priority Secured Parties; provided,
further, however, that to the extent the Senior Bank Obligations, the
10.5% Note Obligations, the Synthetic Lease Obligations, the Additional
Senior Second Priority Debt Obligations, if any, the Exchange Note
Obligations, the Additional Second Priority Debt Obligations, if any,
the Replacement Senior Second Priority Debt Obligations, if any, or the
Replacement Second Priority Debt Obligations, if any, are paid in full
(and any commitments related thereto are terminated), the consent of
the related Secured Parties shall not be required for any release,
including a release of all or substantially all, of the Collateral
securing such obligations.
ARTICLE X
Miscellaneous
SECTION 10.01. Amendments, Supplements and Waivers. Except as otherwise
provided in Section 10.12, the Majority Senior Parties and the Second Priority
Instructing Group (and with respect to any such amendment, supplement or waiver
(i) which by the terms of this Agreement requires Rite Aid's consent or which
increases the obligations or reduces the rights of Rite Aid or any Subsidiary
Guarantor, with the consent of Rite Aid, (ii) which by the terms of
30
this Agreement requires the Second Priority Collateral Trustee's consent or
which increases the obligations or reduces the rights of the Second Priority
Collateral Trustee, with the consent of the Second Priority Collateral Trustee
and (iii) which by the terms of this Agreement requires the consent of a
particular Second Priority Representative, or which by its terms adversely
affects the rights of the Senior Secured Parties or the Second Priority Debt
Parties under a particular Senior Facility or Second Priority Facility, as the
case may be, in a manner materially different from its effect on the other
Senior Facility or Second Priority Facilities, as the case may be, with the
consent of the Representative for such Senior Facility or Second Priority
Facility) may from time to time amend, supplement or waive any provision hereof.
Any such amendment, supplement or waiver shall be in writing and shall be
binding upon the Secured Parties and their respective successors and assigns.
SECTION 10.02. Notices. All notices, requests, demands and other
communications provided for or permitted hereunder shall be in writing
(including telecopy communications) and shall be sent by mail, telecopier or
hand delivery:
(i) If to Rite Aid or any Subsidiary Guarantor, to Rite Aid,
at its address at: 00 Xxxxxx Xxxx, Xxxx Xxxx, XX 00000, Attention of
Chief Financial Officer, telecopy 000- 000-0000, or at such other
address as shall be designated by it in a written notice to the other
parties to this Agreement.
(ii) If to the Second Priority Collateral Trustee, to:
Wilmington Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx, XX 00000-0000, Attention of Corporate Trust
Administration, telecopy 000-000-0000, or at such other address as
shall be designated by it in a written notice to the other parties to
this Agreement.
(iii) If to the Senior Collateral Agent, to it at its address
at: 000 Xxxx Xxxxxx, 0-0, Xxx Xxxx, XX 00000, Attention of Xxxxxxx
Xxxx, Vice President, telecopy 000-000-0000, or at such other address
as shall be designated by it in a written notice to the other parties
to this Agreement.
(iv) If to the agent for the Synthetic Lease Parties, to
Citicorp USA, Inc. at its address at: Xxx Xxxxx Xxx, Xxxxx 000, Xxx
Xxxxxx, XX 00000, Attention of Xxx Xxxx, telecopy (000) 000-0000, or at
such other address as shall be designated by it in a written notice to
the other parties to this Agreement.
(v) If to the trustee for the 10.5% Notes, to State Street
Bank and Trust Company at its address at: Xxxxxxx Square, 000 Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxx, XX 00000, Attention of Corporate Trust
Administration, telecopy (000) 000-0000, or at such other
31
address as shall be designated by it in a written notice to the other
parties to this Agreement.
(vi) If to the trustee for the Exchange Notes, to State Street
Bank and Trust Company at its address at: Xxxxxxx Square, 000 Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxx, XX 00000, Attention of Corporate Trust
Administration, telecopy (000) 000-0000, or at such other address as
shall be designated by it in a written notice to the other parties to
this Agreement.
All such notices, requests, demands and communications shall be deemed to have
been duly given or made, when delivered by hand or when telecopied.
SECTION 10.03. Headings. Headings used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
SECTION 10.04. Severability. If any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 10.05. Dealings with the Subsidiary Guarantors. Upon any
application or demand by Rite Aid or any Subsidiary Guarantor to the Second
Priority Collateral Trustee or the Senior Collateral Agent to take or permit any
action under any of the provisions of this Agreement or under any Collateral
Document, Rite Aid or such Subsidiary Guarantor, as appropriate, shall furnish
to the Second Priority Collateral Trustee or the Senior Collateral Agent a
certificate of an appropriate officer stating that all conditions precedent, if
any, provided for in this Agreement or such Collateral Document, as the case may
be, relating to the proposed action have been complied with, except that in the
case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Agreement or any
Collateral Document relating to such particular application or demand, no
additional certificate or opinion need be furnished.
SECTION 10.06. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of each of the parties hereto and each of the Secured
Parties and their respective successors and assigns, and nothing herein or in
any Collateral Document is intended or shall be construed to give any other
person any right, remedy or claim under, to or in respect of this
32
Agreement, the Collateral or the Trust Estate. Each of the Representatives in
respect of each Debt Facility represents that it has the authority to enter into
this Agreement on behalf of the Secured Parties that are party to the Senior
Debt Documents or Second Priority Debt Documents relating to such Facility and
that this Agreement will be binding on such Secured Parties, assuming their due
authorization, execution and delivery of such Senior Debt Documents or Second
Priority Debt Documents.
SECTION 10.07. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT AS REQUIRED BY
MANDATORY PROVISIONS OF LAW.
SECTION 10.08. Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same instrument.
SECTION 10.09. Consent to Jurisdiction and Service of Process. Rite Aid
and each Subsidiary Guarantor hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any Collateral Document, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that, to the extent permitted by
applicable law, all claims in respect of any such action or proceeding may be
heard and determined in such New York State or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that the Senior Collateral
Agent, Second Priority Collateral Trustee or any other Secured Party may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Secured Documents against Rite Aid or any Subsidiary Guarantor or its
properties in the courts of any jurisdiction.
(b) Rite Aid and each Subsidiary Guarantor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any New York State or Federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
33
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.02. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 10.10. Waiver Of Jury Trial. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. Additional Subsidiary Guarantors. Pursuant to Section
5.08 of the Senior Credit Facility, certain Domestic Subsidiaries of Rite Aid
which are acquired or organized after the date of this Agreement are required to
enter into this Agreement as provided therein. Upon execution and delivery by a
Subsidiary of Rite Aid of an instrument in the form of Annex 2, such Subsidiary
shall become a Subsidiary Guarantor hereunder with the same force and effect as
if originally named as a Subsidiary Guarantor herein. The execution and delivery
of such instrument shall not require the consent of any other party hereunder,
and will be acknowledged by the Second Priority Collateral Trustee and the
Senior Collateral Agent. The rights and obligations of each Subsidiary Guarantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Subsidiary Guarantor as a party to this Agreement.
SECTION 10.12 Additional Senior Second Priority Debt; Additional Second
Priority Debt; Replacement Second Priority Debt and Replacement Senior Second
Priority Debt. To the extent, but only to the extent, permitted by the
provisions of the Senior Debt Documents and the Second Priority Debt Documents,
Rite Aid may issue and sell one or more series or classes of (i) Additional
Senior Second Priority Debt in an aggregate principal amount at any time
outstanding not in excess of $93,000,000, (ii) Additional Second Priority Debt
in an aggregate principal amount at any time outstanding not in excess of
$300,000,000, (iii) Replacement Senior Second Priority Debt and (iv) Replacement
Second Priority Debt. Any such class or series of Additional Senior Second
Priority Debt, Additional Second Priority Debt, Replacement Second Priority Debt
or Replacement Senior Second Priority Debt ("Class Debt") may be secured by the
Second Priority Lien and may be Guaranteed by the Subsidiary Guarantors on a
subordinated basis, in each case under and pursuant to the Second Priority
Collateral Documents, if and subject to the condition that the Representative of
any such Class Debt (the "Class
34
Representative"), acting on behalf of the holders of such Class Debt (such
Representative and holders in respect of any Class Debt being referred to as the
"Class Debt Parties"), becomes a party to this Agreement by satisfying the
following conditions:
(i) such Class Representative shall have executed and
delivered an instrument in the form of Annex 3 pursuant to which it
becomes a Representative hereunder, and such Additional Senior Second
Priority Debt, Additional Second Priority Debt, Replacement Second
Priority Debt or Replacement Senior Second Priority Debt, as the case
may be, and the related Class Debt Parties become subject hereto and
bound hereby;
(ii) Rite Aid shall have delivered to the Senior Collateral
Agent and the Second Priority Collateral Trustee true and complete
copies of each of the Additional Senior Second Priority Debt Documents,
Additional Second Priority Debt Documents, Replacement Second Priority
Debt Documents or Replacement Senior Second Priority Debt Documents, as
the case may be, with respect to such Class Debt, certified as being
true and correct by a Financial Officer of Rite Aid;
(iii) all filings, recordations and/or amendments or
supplements to the Second Priority Collateral Documents necessary or
desirable in the opinion of the Second Priority Collateral Trustee to
confirm and perfect the Second Priority Lien's securing the relevant
Additional Senior Second Priority Debt Obligations, Additional Second
Priority Debt Obligations, Replacement Second Priority Debt Obligations
or Replacement Senior Second Priority Debt Obligations, as the case may
be, shall have been made, executed and/or delivered, and all fees and
taxes in connection therewith shall have been paid; and
(iv) the Senior Collateral Agent and the Second Priority
Collateral Trustee shall have received such opinions of outside counsel
to Rite Aid and such Class Representative satisfactory to them and such
other documents relating to the matters referred to in clauses (i),
(ii) and (iii) as either of them may reasonably request, and such
opinions shall be satisfactory in form and substance to the Senior
Collateral Agent and the Second Priority Collateral Trustee.
Notwithstanding anything to the contrary contained herein (including Section
10.01 hereof) or in any Second Priority Collateral Document, any filings,
recordations or amendments or supplements contemplated by clause (iii) above (x)
shall be subject to the prior approval of the Senior Collateral Agent, Second
Priority Collateral Trustee and Rite Aid and (y) in the case of any such
amendment or supplement to a Second Priority Collateral Document, shall be
entered into by Rite Aid, the Subsidiary Guarantors, the Second Priority
Collateral Trustee and consented to by the Senior Collateral Agent and the
relevant Class Representative, but shall not require the
35
consent or approval of any other Senior Secured Party or Second Priority Secured
Party, and shall become effective upon satisfaction of each of the conditions
set forth above.
SECTION 10.13. Bailee for Perfection. The Senior Collateral Agent
hereby acknowledges that, to the extent that it holds, or a third party holds on
its behalf, possession of Collateral pursuant to the Senior Collateral Documents
which is also Collateral under the Second Priority Collateral Documents, such
possession is also for the benefit of the Second Priority Collateral Trustee and
the Second Priority Secured Parties to the extent required to perfect their
security interest in such Collateral. Nothing in the preceding sentence shall be
construed to impose any additional duty on the Senior Collateral Agent with
respect to such Collateral or provide the Second Priority Collateral Trustee or
any Second Priority Secured Party with any rights with respect to such
Collateral beyond those specified in this Agreement.
SECTION 10.14. Termination of Existing Agreements. Reference is made to
the Collateral Trust and Intercreditor Agreement dated as of June 12, 2000 (the
"Existing Intercreditor Agreement"), among Rite Aid, the subsidiary guarantors
party thereto, Wilmington Trust Company, Citicorp USA, Inc., Xxxxxx Guaranty
Trust Company of New York, The Prudential Insurance Company of America, State
Street Bank and Trust Company and The Sumitomo Bank, Limited, New York Branch.
Rite Aid, the subsidiary guarantors, Citicorp USA, Inc. and State Street Bank
and Trust Company, as the sole remaining parties thereto, hereby agree to amend
and restate the Existing Intercreditor Agreement in its entirety with this
Agreement.
36
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
RITE AID CORPORATION,
By________________________________
Name:
Title:
THRIFTY PAYLESS, INC., as a Subsidiary
Guarantor,
By________________________________
Name:
Title:
THE SUBSIDIARY GUARANTORS LISTED ON
ANNEX 1 HERETO,
By________________________________
Name:
Title: Authorized Signatory
WILMINGTON TRUST COMPANY, as Second
Priority Collateral Trustee,
By________________________________
Name:
Title:
37
CITICORP USA, INC., as Senior Collateral Agent,
By________________________________
Name:
Title:
00
XXXXX XXXXXX BANK AND TRUST
COMPANY, as trustee under the 10.50% Note
Indenture,
By_______________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, as trustee under the Exchange Note
Indenture,
By_______________________________
Name:
Title:
39
CITICORP USA, INC., as agent for the Synthetic
Lease Parties under the Synthetic Lease Documents,
By_______________________________
Name:
Title:
40
Annex 1 to the
Collateral Trust and Intercreditor Agreement
Subsidiary Guarantors
000 Xxxxxxxx Xxxxxx Xxxxxxx, LLC
0000 Xxxx Xxxxx Xxxxxx Xxxxx, Xxxxx, LLC
0000 Xxxxxxx Xxxx - Xxxxxxxx Inc.
1740 Associates, LLC
0000 Xxxxxx Xxxx Xxxx - Xxxxxxxxxx Corp.
0000 Xxxxxxxxxxxx Xxxxxx Xxxx -
Xxxxxxxxxxxx Xxxx, Inc.
5277 Associates, Inc.
000 Xxx Xxxxxx Corporation
5600 Superior Properties, Inc.
000-000 Xxxxxxxx Xx. Xxxx.
000 Xxxxx Xxxxxxxx- Xxxxxx, Xxxx, LLC
Xxx & Government Streets- Mobile,
Alabama, LLC
Apex Drug Stores, Inc.
Baltimore/Annapolis Boulevard & Governor Richie Hwy-Glen Burnie, MD, LLC
Broadview and Wallings -Broadview Heights Ohio, Inc.
Xxxxxxx Xxxxxx xxx Xxxx Xxxxxx- Xxxxx, XX, LLC
Dominion Action Four Corporation
Dominion Action One Corporation
Dominion Action Three Corporation
Dominion Action Two Corporation
Dominion Drug Stores Corporation
Drug Fair of PA, Inc.
Drug Fair, Inc.
Eagle Managed Care Corp.
Eighth and Water Streets- Ulrichsville, Ohio, LLC
England Street-Asheland Corporation GDF, Inc.
Gettysburg and Hoover-Dayton, Ohio, LLC
Gratiot & Center- Saginaw Township,
Michigan, LLC
Harco, Inc.
Xxxxx Xxxxxx Xxxxxx Corporation
K&B Alabama Corporation
K&B Florida Corporation
K&B Louisiana Corporation
K&B Mississippi Corporation
K&B Services, Inc.
K&B Tennessee Corporation
K&B Texas Corporation
K&B Trainees, Inc.
K&B, Incorporated
Xxxx & Besthoff, Inc.
Keystone Centers, Inc.
Lakehurst and Broadway Corporation
Xxxxxxxx & Chillicothe Roads- Chesterland, LLC
Xxxxxx & Xxxxxxx LLC
Name Rite, LLC
Northline & Xxx- Xxxxxx- Southgate, LLC
Ocean Acquisition Corporation
P.L.D. Enterprises, Inc.
Xxxxxx Drive and Navy Boulevard Property
Corporation
Paw Paw Lake Road & Paw Paw Avenue-Coloma, Michigan, LLC
PDS-1 Michigan, Inc.
Perry Distributors, Inc.
Perry Drug Stores, Inc.
PL Xpress, Inc.
Portfolio Medical Services, Inc.
Rack Rite Distributors, Inc.
Ram-Utica, Inc.
RDS Detroit, Inc.
Reads, Inc.
Rite Aid Drug Palace, Inc.
Rite Aid Hdqtrs. Corp.
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, Inc.
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.
Rite Aid of West Virginia, Inc.
Rite Aid Realty Corp.
Rite Aid Rome Distribution Center, Inc.
Rite Aid Transport, Inc.
Rite Aid Venturer #1, Inc.
Rite Fund, Inc.
Rite Investments Corporation
RX Choice, Inc.
Script South
Seven Mile and Evergreen- Detroit, LLC
Silver Springs Road- Baltimore, Maryland/One, LLC
Silver Springs Road- Baltimore, Maryland/Two, LLC
Sophie One Corp.
State & Fortification Streets-Jackson, Mississippi, LLC
Xxxxx Xxxxxx xxx Xxxx Xxxx- Xxxxxx, Xxxx, LLC
Super Distributors, Inc.
Super Ice Cream Suppliers, Inc.
Super Laboratories, Inc.
Super Pharmacy Network, Inc.
Super Tobacco Distributors, Inc
The Lane Drug Company
The Xxxx Company
Thrifty Corporation
Thrifty Payless, Inc
Thrifty Wilshire, Inc.
Tyler and Xxxxxxx Roads, Birmingham-Alabama, LLC
Virginia Corporation
W.R.A.C., Inc.
Fairground, LLC
Xxxxxxxxxx'x Enterprises, Inc.
Leader Drugs, Inc.
2
Annex 2 to the
Collateral Trust and Intercreditor Agreement
SUPPLEMENT NO. dated as of , to the
COLLATERAL TRUST AND INTERCREDITOR AGREEMENT dated as of June
27, 2001 (the "Collateral Trust and Intercreditor Agreement"),
among Rite Aid Corporation ("Rite Aid"), certain subsidiaries
of Rite Aid (each a "Subsidiary Guarantor"), Wilmington Trust
Company, a Delaware banking corporation, as Second Priority
Collateral Trustee for the holders from time to time of the
Second Priority Debt Obligations, Citicorp USA, Inc., a
Delaware corporation, as Senior Collateral Agent for the
Senior Secured Parties under the Senior Loan Documents, State
Street Bank and Trust Company, as trustee under the 10.5% Note
Indenture for the holders of the 10.5% Notes and as trustee
under the Exchange Note Indenture for the holders of the
Exchange Notes, Citicorp USA, Inc., a Delaware corporation, as
agent for the Synthetic Lease Parties under the Synthetic
Lease Documents, and each other Second Priority Representative
which becomes a party thereto pursuant to Section 10.12
thereof.
A. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Collateral Trust and
Intercreditor Agreement, including the Definitions Annex referred to therein.
B. The Subsidiary Guarantors have entered into the Collateral Trust and
Intercreditor Agreement. Pursuant to Section 5.08 of the Senior Credit Facility,
certain subsequently acquired or organized Domestic Subsidiaries of Rite Aid are
required to enter into the Collateral Trust and Intercreditor Agreement. Section
10.11 of the Collateral Trust and Intercreditor Agreement provides that such
Subsidiaries may become party to the Collateral Trust and Intercreditor
Agreement by execution and delivery of an instrument in the form of this
Supplement. The undersigned Subsidiary (the "New Subsidiary Guarantor") is
executing this Supplement in accordance with the requirements of the Senior
Credit Facility in order to induce the Senior Banks to make additional
extensions of credit thereunder and as consideration for extensions of credit
previously made, and in accordance with any applicable requirements of the
Second Priority Debt Documents.
Accordingly, the Second Priority Collateral Trustee, the Senior Collateral
Agent and the New Subsidiary Guarantor agree as follows:
SECTION 1. In accordance with Section 10.11 of the Collateral Trust and
Intercreditor Agreement, the New Subsidiary Guarantor by its signature below
becomes a Subsidiary Guarantor under the Collateral Trust and Intercreditor
Agreement with the same force and effect as if originally named therein as a
Subsidiary Guarantor, and the New Subsidiary Guarantor hereby agrees to all the
terms and provisions of the Collateral Trust and Intercreditor Agreement
applicable to it as a Subsidiary Guarantor thereunder. Each reference to a
"Subsidiary Guarantor" in the Collateral Trust and Intercreditor Agreement shall
be deemed to include the New Subsidiary Guarantor. The Collateral Trust and
Intercreditor Agreement is hereby incorporated herein by reference.
SECTION 2. The New Subsidiary Guarantor represents and warrants to the
Second Priority Collateral Trustee, the Senior Collateral Agent and the other
Secured Parties that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts, each of which
shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when each
of the Second Priority Collateral Trustee and the Collateral Agent shall have
received a counterpart of this Supplement that bears the signature of the New
Subsidiary Guarantor. Delivery of an executed signature page to this Supplement
by facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Collateral Trust
and Intercreditor Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Collateral Trust and Intercreditor Agreement shall not in any
way be affected or impaired. The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section 10.02 of the Collateral Trust and Intercreditor
Agreement. All communications and notices hereunder to the New Subsidiary
Guarantor shall be given to it in care of Rite Aid as specified in the
Collateral Trust and Intercreditor Agreement.
SECTION 8. The New Subsidiary Guarantor agrees to reimburse each of the
Second Priority Collateral Trustee and the Senior Collateral Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, other charges and disbursements
2
of counsel for the Second Priority Collateral Trustee and the Senior Collateral
Agent.
IN WITNESS WHEREOF, the New Subsidiary Guarantor, the Second Priority
Collateral Trustee and the Senior Collateral Agent have duly executed this
Supplement to the Collateral Trust and Intercreditor Agreement as of the day and
year first above written.
[NAME OF NEW SUBSIDIARY GUARANTOR],
By________________________________
Name:
Title: Authorized Signatory
Acknowledged by:
WILMINGTON TRUST COMPANY,
as Second Priority Collateral Trustee,
By________________________________
Name:
Title:
CITICORP USA, INC., as Senior Collateral Agent,
By________________________________
Name:
Title:
3
Annex 3 to the
Collateral Trust and Intercreditor Agreement
REPRESENTATIVE SUPPLEMENT NO. dated as of ,
to the COLLATERAL TRUST AND INTERCREDITOR AGREEMENT dated as
of June 27, 2001 (the "Collateral Trust and Intercreditor
Agreement"), among Rite Aid Corporation ("Rite Aid"), certain
subsidiaries of Rite Aid (each a "Subsidiary Guarantor"),
Wilmington Trust Company, a Delaware banking corporation, as
Second Priority Collateral Trustee for the holders from time
to time of the Second Priority Debt Obligations, Citicorp USA,
Inc., a Delaware corporation, as Senior Collateral Agent for
the Senior Secured Parties under the Senior Loan Documents,
State Street Bank and Trust Company, as trustee under the
10.5% Note Indenture for the holders of the 10.5% Notes and as
trustee under the Exchange Note Indenture for the holders of
the Exchange Notes, Citicorp USA, Inc., a Delaware
corporation, as agent for the Synthetic Lease Parties under
the Synthetic Lease Documents, and each other Second Priority
Representative which becomes a party thereto pursuant to
Section 10.12 thereof.
A. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Collateral Trust and
Intercreditor Agreement, including the Definitions Annex referred to therein.
B. As a condition to the ability of Rite Aid to issue Additional Senior
Second Priority Debt, Additional Second Priority Debt, Replacement Senior Second
Priority Debt or Replacement Second Priority Debt and to secure such Class Debt
with the Second Priority Lien and to have such Class Debt guaranteed by the
Subsidiary Guarantors on a subordinated basis, in each case under and pursuant
to the Second Priority Collateral Documents, the Class Representative in respect
of such Class Debt is required to become a Representative under, and such Class
Debt and the Class Debt Parties in respect thereof are required to become
subject to and bound by, the Collateral Trust and Intercreditor Agreement.
Section 10.12 of the Collateral Trust and Intercreditor Agreement provides that
such Class Representative may become a Representive under, and such Class Debt
and such Class Debt Parties may become subject to and bound by, the Collateral
Trust and Intercreditor Agreement, pursuant to the execution and delivery by the
Class Representative of an instrument in the form of this Representative
Supplement and the satisfaction of the other conditions set forth in Section
10.12. The undersigned Class Representative (the "New Representative") is
executing this Representive Supplement in accordance with the requirements of
the Senior Credit Facility and the Second Priority Debt Documents.
Accordingly, the Second Priority Collateral Trustee, the Senior Collateral
Agent and the New Representative agree as follows:
SECTION 1. In accordance with Section 10.12 of the Collateral Trust and
Intercreditor Agreement, the New Representative by its signature below becomes a
Representative under, and the related Class Debt and Class Debt Parties become
subject to and bound by, the Collateral Trust and Intercreditor Agreement with
the same force and effect as if the New Representative had originally been named
therein as a Representative, and the New Representative, on behalf of itself and
such Class Debt Parties, hereby agrees to all the terms and provisions of the
Collateral Trust and Intercreditor Agreement applicable to it as a
Representative and to the Class Debt Parties that it represents. Each reference
to a "Representative" or "Second Priority Representative" in the Collateral
Trust and Intercreditor Agreement shall be deemed to include the New
Representative. The Collateral Trust and Intercreditor Agreement is hereby
incorporated herein by reference.
SECTION 2. The New Representative represents and warrants to the Second
Priority Collateral Trustee, the Senior Collateral Agent and the other Secured
Parties that (i) it has full power and authority to enter into this
Representative Supplement on behalf of itself and the Class Debt Parties that it
purports to represent and (ii) this Representive Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it and the Class Debt Parties that it
represents in accordance with its terms.
SECTION 3. This Representive Supplement may be executed in counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Representive Supplement shall become
effective when each of the Second Priority Collateral Trustee and the Collateral
Agent shall have received a counterpart of this Representive Supplement that
bears the signature of the New Representative. Delivery of an executed signature
page to this Representive Supplement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Representive
Supplement.
SECTION 4. Except as expressly supplemented hereby, the Collateral Trust
and Intercreditor Agreement shall remain in full force and effect.
SECTION 5. THIS REPRESENTATIVE SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this
Representive Supplement should be held invalid, illegal or unenforceable in any
respect, neither party hereto shall be required to comply with such provision
for so long as such provision is held to be invalid, illegal or unenforceable,
but the validity, legality and enforceability of the remaining provisions
contained herein and in the Collateral Trust and Intercreditor Agreement shall
not in any way be affected or impaired. The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
2
SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section 10.02 of the Collateral Trust and Intercreditor
Agreement. All communications and notices hereunder to the New Representative
shall be given to it at the address set forth below its signature hereto.
SECTION 8. Rite Aid agrees to reimburse each of the Second Priority
Collateral Trustee and the Senior Collateral Agent for its reasonable
out-of-pocket expenses in connection with this Representive Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Second Priority Collateral Trustee and the Senior Collateral Agent.
3
IN WITNESS WHEREOF, the New Representative, the Second Priority Collateral
Trustee and the Senior Collateral Agent have duly executed this Representive
Supplement to the Collateral Trust and Intercreditor Agreement as of the day and
year first above written.
[NAME OF NEW REPRESENTATIVE], as [ ]
for the holders of [ ],
By________________________________
Name:
Title: Authorized Signatory
Address for notices:
______________________________
______________________________
attention of: ________________
Telecopy: ____________________
Acknowledged by:
WILMINGTON TRUST COMPANY,
as Second Priority Collateral Trustee,
By________________________________
Name:
Title:
CITICORP USA, INC., as Senior Collateral Agent,
By________________________________
Name:
Title:
4
