Exhibit 10.2
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 12, 2000, 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, XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
as administrative agent for the RCF Facility Parties
under the RCF Facility, the PCS Facility Parties
under the PCS Facility Documents and the Exchange
Debt Parties under the Exchange Debt Facility
Documents, THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, as Security Agent for the Xxxxx Facility
Parties under the Xxxxx Facility Documents, STATE
STREET BANK AND TRUST COMPANY, as trustee under the
Exchange Note Indenture for the holders of the
Exchange Notes, and THE SUMITOMO BANK, LIMITED, NEW
YORK BRANCH, as Collateral Agent for the Synthetic
Lease Parties under the Synthetic Lease Documents.
Reference is made to the Senior Loan Documents. Each of the
Subsidiary Guarantors has 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 their obligations under the Senior Subsidiary
Guarantee Agreement, and such Subsidiary Guarantors have pledged collateral
to the Senior Collateral Agent under such agreements.
Reference is made to the Second Priority Debt Documents. Each of
the Subsidiary Guarantors has 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 their obligations under the Second Priority
Subsidiary Guarantee Agreement, and such 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:
"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.
"Event of Default" means any "Event of Default" under the Senior
Credit Facility 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 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 Loan 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 Loan Document or any Second Priority Debt Document
or (B) the commencement of the exercise of remedies in respect of
Collateral, and (y) in either case, receipt by the Second Priority
Collateral Trustee of written notice thereof from the Senior Collateral
Agent (in the case of any such Event of Default arising under the Senior
Loan Documents) or receipt by the Senior Collateral Agent and the Second
Priority Collateral Trustee 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 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, and subject to Section 8.01, the
Senior Collateral Agent and the Majority Senior Parties shall have the
exclusive authority to direct the 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 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 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) [Reserved].
(b) If, following a Triggering Event, any Collateral (other than
any PCS Excluded Assets) 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 Second Priority Representatives in an amount
equal to the Fees thereof which are unpaid as of the applicable
Distribution Date and to any Second Priority Debt Parties which has
theretofore advanced or paid any such Fees in an amount equal to
the amount thereof so advanced or paid by such Second Priority Debt
Party, pro rata based on the amounts of such Fees (or such advance
or payment);
FIFTH: to any Second Priority Representative and any Second
Priority Debt Party to reimburse to 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 Second Priority Representatives, for
distribution to the Second Priority Debt Parties to be applied to
the payment of the Second Priority Debt Obligations, pro rata based
on the amount of Second Priority Debt Obligations then due and
owing, until all the Second Priority Debt Obligations have been
paid in full; and
SEVENTH: 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.
(c) If, following a Triggering Event, any Collateral consisting of
PCS Excluded Assets 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 received in respect of
such Collateral shall be applied as soon as practicable after receipt as
follows:
FIRST: to the Second Priority Collateral Trustee, the Senior
Collateral Agent and the Second Priority Representatives in an
amount equal to the Fees thereof which are properly allocable to
the PCS Excluded Assets and are unpaid as of the applicable
Distribution Date and to any 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 Secured Party, pro rata based
on the amounts of such Fees (or such advance or payment);
SECOND: to the Second Priority Collateral Trustee, any
Representative and any Secured Party to reimburse to the Second
Priority Collateral Trustee, such Representative or such Secured
Party for the amount of any advance made pursuant to Section 2.04
hereof in respect of PCS Excluded Assets (with interest thereon at
the Default Rate), pro rata based on the amount 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, an amount equal to the PCS
Incremental Investment as at the date of such sale or realization;
FOURTH: to the Second Priority Representatives for the PCS
Facility and the Exchange Debt Facility for distribution to the PCS
Facility Parties and the Exchange Debt Parties to be applied to the
payment of the PCS Facility Obligations and Related Exchange Debt
Obligations, pro rata, until all such PCS Facility Obligations and
Related Exchange Debt Obligations have been paid in full;
FIFTH: to the Second Priority Representative for the RCF
Facility and the Exchange Debt Facility for distribution to the RCF
Facility Parties and the Exchange Debt Facility Parties to be
applied to the payment of the RCF Facility Obligations in respect
of Tranche A Loans and Related Exchange Debt Obligations, pro rata,
until all such RCF Facility Obligations and Related Debt
Obligations have been paid in full;
SIXTH: to the Second Priority Representatives for the other
Existing Facilities, to be applied to the payment of the Existing
Facility Obligations, pro rata based upon the amount of Existing
Facility Obligations then due and owing, until the Existing
Facility Obligations have been paid in full;
SEVENTH: to the Second Priority Representative for the
Synthetic Lease Facilities, to be applied to the payment of the
Synthetic Lease Obligations, pro rata, based on the amount of
Synthetic Lease Obligations then due and owing, until the Synthetic
Lease Obligations have been paid in full;
EIGHTH: 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;
NINTH: to the Second Priority Representatives, for the other
Second Priority Facilities for distribution to the other Second
Priority Debt Parties to be applied to the payment of all such
Second Priority Debt Obligations, pro rata based on the amount of
Second Priority Debt Obligations then due and owing, until all such
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.
(d) 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. 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.
(e) Whenever any proceeds are required by the terms hereof to be
distributed to the trustee under the Exchange Note Indenture for
application to the Exchange Note Obligations, such proceeds may be applied
to the payment of such Exchange Note Obligations, utilized to make one or
more offers to repurchase Exchange Notes or held by such trustee as
security for the payment of the Exchange Note Obligations as permitted by
the Exchange Note Indenture.
(f) Notwithstanding the foregoing provisions of Section 4.01(b),
proceeds of PCS Linked Accounts in excess of amounts distributed pursuant
to paragraphs FIRST, SECOND and THIRD of Section 4.01(b) shall be
distributed in accordance with Section 4.01(c).
SECTION 4.02. [RESERVED]
SECTION 4.03. [RESERVED]
SECTION 4.04. 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 4.05. REDUCTION EVENTS; MANDATORY PREPAYMENTS. (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, (x) the Borrower shall, not later
than the Business Day following the date of receipt of such Net Cash
Proceeds, notify the Representatives of such fact and of the amount of such
Net Cash Proceeds, (y) the Borrower shall, not later than the second
Business Day following the date of receipt of such Net Cash Proceeds, cause
the portion of the same required to be applied by the provisions of this
Section to any Debt Facility to be transferred to the Representative for
such Debt Facility for application in accordance with the provisions of
this Agreement and (z) the Borrower shall apply an amount equal to the
largest multiple of $1,000,000 which does not exceed the amount of such Net
Cash Proceeds to the reduction of the Debt Facilities in accordance with
the following:
(i) if such Reduction Event is a PCS Disposition, such Net
Cash Proceeds shall be applied: FIRST, to the ratable prepayment of
loans outstanding under the PCS Facility and Related Exchange Debt,
until the same shall have been prepaid in full; then SECOND, to
prepayment of the Tranche A Loans under the RCF Facility and
Related Exchange Debt, until the same have been prepaid in full;
then THIRD, to the ratable prepayment of other loans under the
Existing Facilities and the Exchange Debt Facility; then FOURTH, to
the ratable payment of the Synthetic Lease Obligations, until the
same have been paid in full; then FIFTH to Reductions of the Senior
Credit Facility, until the Senior Obligation Payment Date; then
SIXTH, to the ratable prepayment of all other outstanding Second
Priority Debt Obligations; provided that, notwithstanding anything
to the contrary in this clause (i), the Net Cash Proceeds of any
PCS Disposition attributable to PCS Linked Accounts shall first be
applied to Reductions of the Senior Credit Facility to the extent
required by Section 2.12(b) of the Senior Credit Facility;
(ii) if such Reduction Event is a Capital Markets
Transaction, such Net Cash Proceeds shall be applied: FIRST, to
Reductions of the Senior Credit Facility, to the extent of the
Required Prepayment Amount; then, SECOND, to prepayment of loans
outstanding under the PCS Facility and Related Exchange Debt, until
the same shall have been prepaid in full; and then, THIRD, in
accordance with paragraph (vii) below;
(iii) if such Reduction Event is a Designated Asset
Disposition, such Net Cash Proceeds shall be applied: FIRST, to
prepayment of loans outstanding under the Exchange Debt Facility,
until the same shall have been prepaid in full; and then, SECOND,
in accordance with paragraph (vi) below;
(iv) if such Reduction Event is a Senior Collateral
Disposition, such Net Cash Proceeds shall be applied: FIRST, to
Reductions of the Senior Credit Facility, to the extent of the
Required Prepayment Amount; and then SECOND, to the ratable
prepayment of the principal of all outstanding Second Priority Debt
Obligations, until the same shall have been prepaid in full;
(v) if such Reduction Event is an Asset Sale of collateral
under the Xxxxxxxxx.xxx Pledge Agreement, such Net Cash Proceeds
shall be applied in accordance with paragraph (vii) below;
(vi) if such Reduction Event is an Asset Sale not covered by
paragraphs (i) through (v) above (or if there are Net Cash Proceeds
in excess of those applied in accordance with paragraph (iii)
above) such Net Cash Proceeds shall be applied: FIRST, to
Reductions of the Senior Credit Facility, to the extent of the
Required Prepayment Amount; and then SECOND, in accordance with
paragraph (vii) below; and
(vii) if there are Net Cash Proceeds of a Reduction Event in
excess of those applied in accordance with paragraphs (ii) through
(vi) above, such Net Cash Proceeds shall be applied: FIRST, to the
ratable prepayment of all loans outstanding under the Existing
Facilities (other than the PCS Facility and Related Exchange Debt),
until such loans shall have been prepaid in full; and then SECOND,
to prepayment of loans outstanding under the PCS Facility and
Related Exchange Debt; and then THIRD, to the prepayment of the
Synthetic Lease Obligations.
Each prepayment of loans or other Reduction required pursuant to the
foregoing provisions of this Section will be made not later than the second
Business Day following the receipt of the relevant Net Cash Proceeds. Each
prepayment of loans required pursuant to the foregoing provisions of this
Section will be made together with accrued interest to the date of
prepayment and any applicable premium in accordance with the terms of the
applicable Senior Loan Document or Second Priority Debt Document, as the
case may be, but such interest and premium, if any, shall not reduce the
amount of principal required to be prepaid in accordance with this Section.
(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(b) or (c), as applicable.
(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 or Exchange Debt First Priority Collateral shall be
subject to, and only made in accordance with, the subordination provisions
of the Second Priority Subsidiary Guarantee Agreement.
(d) Notwithstanding the foregoing, proceeds of collateral realized
through enforcement of the Liens under the PCS Pledge Agreement, the
Xxxxxxxxx.xxx Pledge Agreement or the Exchange Debt First Priority
Collateral Documents shall be applied in accordance with the terms of such
documents.
(e) For avoidance of doubt, the provisions of Section 4.05(a)
establish dates and amounts of contingent Reductions required to be made by
the Borrower. Section 4.05(a) does not itself create any Lien nor does it
alter the priorities of Liens which are created by the other Senior Loan
Documents and Second Priority Debt Documents.
SECTION 4.06. 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 Section
2.12(d) 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(b) or (c), as
applicable. 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 other than PCS or a Subsidiary
of PCS shall be deemed proceeds of Senior Collateral that do not constitute
PCS Excluded Assets.
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 but
subject, in the case of application of proceeds from the sale of or
realization on PCS Excluded Assets, to the provisions of Section 4.01(c).
(b) The Second Priority Representatives, on behalf of themselves
and the other Second Priority Debt Parties, acknowledge that a portion of
the Senior 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 Obligations may be modified, extended or amended
from time to time, and the aggregate amount of the Senior Obligations may
be increased, replaced or refinanced, all in accordance with Section 6.01
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 either the 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 12, 2000, 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 12, 2000, 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 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 12, 2000, 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 12, 2000, 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
(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 other than:
(i) with respect to the application of proceeds from
dispositions of PCS Excluded Assets, as set forth in Section 4.01(c)
and 5.02(d);
(ii) to transfer to the Second Priority Collateral Trustee
or the Second Priority Representatives (or as a court of competent
jurisdiction may otherwise direct) the proceeds, if any, that
remain following a sale, transfer or other disposition of the
Collateral (other than the PCS Excluded Assets) and the occurrence
of 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 the Senior Obligation Payment Date, such
Collateral or such part thereof remaining, without representation
or warranty on the part of the Senior Collateral Agent or the
Senior Secured Parties.
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 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 (i) to apply proceeds of disposition of PCS Excluded Assets
as set forth in Section 4.01(c) and 5.02(d) and (ii) 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 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:
(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, 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
Loan Document or the validity, perfection, priority or
enforceability of the Senior Lien.
(b) (i) 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. (ii) With respect to the PCS Excluded Assets, the Senior
Collateral Agent, on behalf of itself and the other Senior Debt Parties,
hereby agrees that, in the event of a sale, transfer or other disposition
of the PCS Excluded Assets, the Senior Lien in such Collateral (but not the
proceeds thereof to the extent that such proceeds are to be applied to
Senior Obligations pursuant to Section 4.01) shall terminate and be
released automatically and without further action if the Second Priority
Lien in such assets is released. The Senior Collateral Agent further agrees
to execute and deliver to the Second Priority Representatives 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 (i) payable prior to the occurrence of a
Triggering Event to the Second Priority Representatives for the benefit of
the Second Priority Debt Parties pursuant to Section 4.05 or (ii) 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(b) or (c), 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 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,
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. If, at any time,
all or part of any payment with respect to the Second Priority Debt
Obligations previously made from proceeds from PCS Excluded Assets is
rescinded for any reason whatsoever, (i) the Senior Collateral Agent and
the Senior Secured Parties shall promptly pay over to the Second Priority
Collateral Trustee any payment received by any of them after the occurrence
of a Triggering Event out of such proceeds of PCS Excluded Assets to the
extent that the Senior Secured Parties would not have been entitled to
receive or hold such payment pursuant to the terms of this Agreement had
the rescinded payment in respect of the Second Priority Debt 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 to the
holders of the Second Priority Debt Obligations had not been made, until
the payment and satisfaction in full of the Second Priority Debt
Obligations; provided, however, that the foregoing shall not require the
Senior Collateral Agent and the Senior Secured Parties to pay over to the
Second Priority Collateral Trustee any payment received by them if such
payment is itself rescinded for any reason (and any such payment
theretofore paid over to the Second Priority Collateral Trustee or the
Second Priority Debt Parties pursuant to the foregoing provisions shall be
released and delivered to the appropriate Person to the extent necessary to
effect such rescission).
(e) The Second Priority Representative for the Exchange Debt
Parties and the Exchange Debt Parties agree that prior to the Senior
Obligation Payment Date, they will not exercise any remedies or seek to
enforce their rights under the Exchange Debt First Priority Collateral
Documents in respect of the Exchange Debt First Priority Collateral of any
Subsidiary Guarantor or against any Subsidiary Guarantor unless a
Bankruptcy Proceeding shall have been commenced with respect to either Rite
Aid or such Subsidiary Guarantor; provided that this provision shall not
limit enforcement of the rights of the Exchange Debt Parties to receive
payments from proceeds of Exchange Debt First Priority Collateral.
ARTICLE VI
AMENDMENTS OF DOCUMENTS
LIMITATIONS ON FACILITY AMOUNTS
SECTION 6.01. AMENDMENTS AND MODIFICATIONS OF SENIOR LOAN DOCUMENTS
AND SECOND PRIORITY DEBT DOCUMENTS. (a) Unless the Majority Senior Parties
and the Second Priority Instructing Group have consented thereto in
writing, none of the Borrower, the Subsidiary Guarantors, the Senior Bank
Parties 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 Senior Loan Document, Second Priority Debt Document or Independent
Standby L/C 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 the Senior Loan Documents or Second Priority Debt
Documents, except as expressly permitted by Section 6.02 hereof, (B)
increase the interest rate or fees payable with respect to any Senior
Obligations (other than in respect of additional Senior Obligations
permitted to be incurred pursuant to Section 6.02), Second Priority Debt
Obligations or Independent Standby L/C 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, prepayment or defeasance provisions thereof (or of any guaranty
thereof), (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, or (H) confer any additional rights on any Senior Secured
Parties or any Second Priority Debt Parties, which could reasonably be
expected to be adverse in any significant respect to any of the Senior
Secured Parties or Second Priority Debt Parties; provided that if any such
amendment, modification or other change by its terms adversely affects the
rights of the Second Priority Debt Parties under a particular Second
Priority Facility in a manner different from its effect on the other Second
Priority Facilities, such amendment, modification or other change will not
be effected without the consent of the Second Priority Representative for
each Second Priority Facility so adversely affected.
(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 6.02. LIMITATION ON FACILITY AMOUNTS. None of the Borrower,
the Subsidiary Guarantors, the Senior Bank Parties and the Existing
Facility 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 (i) increases
after the Closing Date in lending commitments and/or loans under the Senior
Credit Facility in an aggregate amount not in excess of $135,000,000, (ii)
the issuance or renewal of Mellon Standby Letters of Credit or Citibank
Standby Letters of Credit, provided that the aggregate amounts thereof
shall not exceed $34,000,000 at any time outstanding, and (iii) the sale by
a Subsidiary of the Borrower after the Closing Date of the Exchange Notes
issued to such Subsidiary on the Closing Date pursuant to the terms of the
Forward Commitment Agreement, as in effect on the Closing Date.
ARTICLE VII
SECOND PRIORITY COLLATERAL TRUSTEE
SECTION 7.01. 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 7.02. INFORMATION AS TO HOLDERS. Rite Aid shall deliver to
the Second Priority Collateral Trustee at the Closing Date from time to
time upon request of the Second Priority Collateral Trustee a list setting
forth, by each Secured Document, (i) the aggregate 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 7.03. 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 7.03 shall
survive the termination of this Agreement.
SECTION 7.04. 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 7.04 shall
survive the termination of this Agreement.
SECTION 7.05. 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 7.05
shall survive the termination of this Agreement.
SECTION 7.06. INDEMNIFICATION. (a) Rite Aid and each of the
Subsidiary Guarantors, jointly and severally, agrees to pay, indemnify, and
hold the Second Priority Collateral Trustee 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 7.06. shall survive the
termination of this Agreement.
SECTION 7.07. 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 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 7.08. 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 7.09. 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.
(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 7.10. 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 7.11. 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 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 7.12. 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 7.13. 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 7.14. 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 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 7.14(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 7.15. STATUS OF SUCCESSORS TO SECOND PRIORITY COLLATERAL
TRUSTEE. Except as permitted by Section 7.14, every successor to the Second
Priority Collateral Trustee appointed pursuant to Section 7.14 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.
SECTION 7.16. 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 7.17. 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 7.17.
ARTICLE VIII
RELEASE OF COLLATERAL;
EXPIRATION OF CERTAIN RIGHTS
SECTION 8.01. RELEASES OF COLLATERAL. At any time during which no
Triggering Event has occurred and is continuing:
(a) If (i) any Collateral is to be disposed of in a
disposition that is specifically permitted by the Senior Loan
Documents and the Second Priority Debt Documents, (ii) Rite Aid
delivers a certificate to such effect to the Second Priority
Collateral Trustee, the Senior Collateral Agent and each Second
Priority Representative at least 3 Business Days before the date of
the requested release, and (iii) neither the Senior Collateral
Agent nor any Second Priority Representative objects before the
date of the requested release that such disposition is prohibited
by the Senior Loan Documents or the Second Priority Debt Documents,
as the case may be, 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 other Secured Party, and the Second Priority
Collateral Trustee, Senior Collateral Agent and the Second Priority
Representatives, at the expense of Rite Aid, shall execute such
documents as are reasonably necessary to effectuate such release.
No such release shall require any consent or approval by any other
Secured Party.
(b) The Lien of any Collateral Document may, at any time, be
released in whole or in part by the Second Priority Collateral
Trustee or the Senior Collateral Agent, as the case may be,
pursuant to written directions signed by the Majority Senior
Parties (or the Senior Collateral Agent on behalf of the Majority
Senior Parties) and the Second Priority Instructing Group; provided
that (i) the release of all or substantially all of the Collateral
shall require the written consent of all Secured Parties, (ii) the
release of any Collateral consisting of PCS Excluded Assets shall
require the written consent of the Representative for the PCS
Facility and (iii) the release of all or substantially all of the
Collateral consisting of PCS Excluded Assets shall require the
written consent of all Second Priority Secured Parties under the
PCS Facility. Except as aforesaid, no such release shall require
any consent or approval by any other Secured Party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. AMENDMENTS, SUPPLEMENTS AND WAIVERS. 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 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 Second Priority Debt Parties under a particular
Second Priority Facility in a manner different from its effect on the other
Second Priority Facilities, with the consent of the Second Priority
Representative for such 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 9.02. 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 212-793- 1290, 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 Second Priority Collateral Trustee, to it at
its address: 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.
(v) If to Xxxxxx Guaranty Trust Company as administrative
agent for the RCF Facility, the PCS Facility, and the Exchange Debt
Facility, to it at its address: X.X. Xxxxxx Services, 000 Xxxxxxx
Xxxxxxxxxx Xxxx, Xxxxxx, XX 00000, Attention of Xxxx Xxxxxx,
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.
(vi) If to The Prudential Insurance Company of America, as
Security Agent for the Xxxxx Facility, to it at its address: Four
Gateway Center, 7th Floor, 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX
00000-0000, Attention of Managing Director, telecopy (973) 802-
2333, or at such other address as shall be designated by it in a
written notice to the other parties to this Agreement.
(vii) If to State Street Bank and Trust Company, as trustee
under the Exchange Note Indenture, to it at its address: Corporate
Trust, Xxxxxxx Square, 23rd Floor, 000 Xxxxxx Xxxxxx, Xxxxxxxx, XX
00000, Attention of Xxxx Xxxxxxxx, 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.
(viii) If to The Sumitomo Bank, Limited, New York Branch, as
Collateral Agent under the Synthetic Lease Facilities, to it at its
address: 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention of Xxx
Xxxxxxxxx, 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 9.03. HEADINGS. Headings used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
SECTION 9.04. 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 9.05. 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 9.06. 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 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 Loan 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 Loan Documents or Second Priority Debt Documents.
SECTION 9.07. 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 9.08. 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 9.09. 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 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.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.02. 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 9.10. 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 9.11. ADDITIONAL SUBSIDIARY GUARANTORS. Pursuant to 5.08(a)
of the Senior Credit Facility and provisions of certain of the Second
Priority Debt Documents, any Domestic Subsidiary of Rite Aid which is
acquired or organized after the date of this Agreement is required to enter
into this Agreement. 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 9.12. LIMITATION OF SCOPE. The provisions of this Agreement
are inapplicable to the Liens created pursuant to the PCS Pledge Agreement,
the Xxxxxxxxx.xxx Pledge Agreement and, except as provided in Section
5.02(e), the Exchange Debt First Priority Collateral Documents. The
provisions of Article V hereof are inapplicable to the rights of the Second
Priority Debt Parties as creditors of Rite Aid (as opposed to any
Subsidiary Guarantor).
SECTION 9.13. CALL OPTION. The Existing Facility Parties, at their
option exercisable by notice from the Second Priority Instructing Group to
the Senior Collateral Agent and the Borrower, shall have the right, at any
time at which an Event of Default under the Senior Credit Facility shall
have occurred and be continuing, to purchase, for a purchase price equal to
the principal amount thereof together with accrued interest thereon,
accrued fees and all other amounts then payable under the Senior Credit
Facility, the Senior Bank Obligations, and in connection therewith, if the
commitments under the Senior Credit Facility are still in effect, to assume
such commitments by assignment and novation, on a date not less than ten
nor more than 30 days subsequent to the date of such notice; provided,
however, that, in connection with any such purchase, the issuing banks
under the Senior Credit Facility shall be relieved of any obligation to
issue additional letters of credit and any outstanding letters of credit
will be replaced, fully cash collateralized for the sole benefit of such
issuing banks or subject to other arrangements satisfactory to such issuing
banks to ensure that they will not suffer any loss in connection therewith.
The Existing Facility Parties will determine among themselves which of them
will participate in and fund such purchase (any such election to
participate being at the sole discretion of each Existing Facility Party),
and any notice of the exercise of the purchase option hereunder will
specify which Existing Facility Parties will be liable for consummating
such purchase. Such Existing Facility Parties will reimburse the Senior
Collateral Agent and the Senior Bank Parties for their reasonable
out-of-pocket expenses (including reasonable fees of counsel) incurred in
connection with the purchase option provided for herein, and the Senior
Collateral Agent, for itself and on behalf of the Senior Bank Parties,
agrees to take all necessary steps to give effect to the exercise of such
option.
SECTION 9.14. 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 9.15. EXCHANGE NOTES HELD BY BORROWER OR SUBSIDIARIES. The
Borrower and each Subsidiary Guarantor hereby acknowledges and agrees that
its and its Subsidiaries' rights (including any and all rights to receive
or retain payments) with respect to any Exchange Notes held by the Borrower
or any Subsidiary shall, for so long as they are so held, (i) be
subordinated to all other Secured Obligations to the same extent as the
Second Priority Debt Obligations are subordinated to the Senior Obligations
with respect to all Collateral (other than PCS Excluded Assets) and (ii) be
treated as if such Exchange Notes are not outstanding for purposes of
determining the requisite votes for any amendments, modifications or
waivers hereunder or under the other Second Priority Collateral Documents
or for giving any directions hereunder or under the other Second Priority
Collateral Documents.
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:
PCS HEALTH SYSTEMS, 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:
CITICORP USA, INC., as Senior Collateral
Agent,
By________________________________
Name:
Title:
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Administrative
Agent for and on behalf of the
RCF Facility Parties, the PCS
Facility Parties and the
Exchange Debt Parties,
By________________________________
Name:
Title:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA, as Security
Agent for and on behalf of the
Xxxxx Facility Parties,
By________________________________
Name:
Title:
THE SUMITOMO BANK, LIMITED, NEW
YORK BRANCH, as Collateral
Agent, for and on behalf of the
Synthetic Lease Parties,
By________________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, as trustee under the Exchange Note
Indenture,
By_______________________________
Name:
Title:
Annex 1 to the
Collateral Trust and Intercreditor Agreement
Subsidiary Guarantors
---------------------
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.
Drug Fair of PA. Inc.
Drug Fair, Inc.
Eagle Managed Care Corp.
GDF, Inc.
Harco, Inc.
The Lane Drug Company
Keystone Centers, Inc.
Ocean Acquisition Corporation
PCS Holding Corporation
Perry Drug Stores, Inc.
Xxxx, Inc.
Rite Aid Funding LLC
Rite Investments Corp.
Rite Aid Drug Palace, Inc.
Rite Aid Rome Distribution Center, Inc.
Rite Aid Transport, Inc.
RX Choice, Inc.
Script South
Thrifty Payless, Inc.
W.R.A.C., Inc.
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 Xxxxx Xx. Xxxx.
Xxxxxxxxx and Wallings -Broadview
Heights Ohio, Inc.
Dominion Action One Corporation
Dominion Action Two Corporation
Dominion Action Three Corporation
Dominion Action Four Corporation
Dominion Drug Stores Corp.
England Street-Asheland Corporation
Xxxxx Xxxxxx Xxxxxx Corporation
Lakehurst and Broadway Corporation
Xxxxxx Drive and Navy Boulevard Property
Corporation
Portfolio Medical Services, Inc.
Rack Rite Distributors, Inc.
Ram-Utica, INC.
Rite Aid Venturer #1, Inc.
Rite Fund, Inc.
The Xxxx Company
Virginia Corporation
K&B, Incorporated
K&B Alabama Corporation
K&B Florida Corporation
K&B Louisiana Corporation
K&B Mississippi Corporation
K&B Services, Incorporated
K&B Tennessee Corporation
K&B Texas Corporation
K&B Trainees, Inc.
Xxxx & Xxxxxxxx, Inc.
Super Beverage of Texas #2, Inc.
Super Beverage of Texas #3, Inc.
Super Beverage of Texas #4, Inc.
Super Beverage of Texas #5, Inc.
Super Beverage of Texas #6, Inc.
Super Distributors, Inc.
Super Ice Cream Suppliers, Inc.
Super Laboratories, Inc.
Super Pharmacy Network, Inc.
Super Tobacco Distributors, Inc.
PCS Health Systems, Inc.
PCS Services, Inc.
PCS Mail Services, Inc.
PCS Mail Service of Fort Worth, Inc.
PCS Mail Service of Birmingham, Inc.
PCS Mail Services of Scottsdale, Inc.
Clinical Pharmaceuticals, Inc.
Apex Drug Stores, Inc.
PDS-1 Michigan, Inc.
RDS Detroit, Inc.
Perry Distributors, Inc.
PL Xpress, Inc.
Thrifty Corporation
P.L.D. Enterprises, Inc.
Rite Aid Lease Management Company
Rite Aid Realty Corp.
Thrifty Wilshire, Inc.
Name Rite LLC
Sophie One Corp.
000 Xxxxxxxx Xxxxxx Xxxxxxx, LLC.
0000 Xxxx Xxxxx Xxxxxx Xxxxx, Xxxxx, LLC
0000 Xxxxxxx Xxxx - Xxxxxxxx Inc.
1740 Associates, LLC
000 Xxxxx Xxxxxxxx- Xxxxxx, Xxxx, LLC
000 Xxxxxxx Xxxxxx- Xxxxxxx, LLC
Xxx & Government Streets- Mobile,
Alabama, LLC
Baltimore/Annapolis Boulevard & Governor
Richie Hwy-Glen Burnie, MD, LLC
Xxxxxxx Xxxxxx xxx Xxxx Xxxxxx- Xxxxx, XX,
LLC
Eighth and Water Streets- Ulrichsville,
Ohio, LLC
Euclid and Wilders Roads- Bay City, LLC
Gettysburg and Hoover-Dayton, Ohio, LLC
Gratiot & Center- Saginaw Township,
Michigan, LLC
Xxxxxxxxxx Xxxxxx & Xxxxx 00xx Xxxxxx-
Monroe, Louisiana, LLC
Main & XxXxxxxxx- Xxxxx, LLC
Xxxxxxxx & Chillicothe Roads- Chesterland,
LLC
Xxxxxx & Xxxxxxx LLC
Northline & Xxx- Xxxxxx- Southgate, LLC
Paw Paw Lake Road & Paw Paw Avenue-
Coloma, Michigan, LLC
Xxxxxxxx Xxxx & Xxxxxxxxxx Xxxxxxxxx-
Xxxxxxxx Xxxxxxx, Xxxx, LLC
Xxxxx 0 xxx Xxxx Xxxx- Fredricksburg,
LLC
Route 202 at Route 124 Jaffrey- New
Hampshire, LLC
Seven Mile and Evergreen- Detroit, LLC
Silver Springs Road- Baltimore, Maryland/
One, LLC
Silver Springs Road- Baltimore, Maryland/
Two, LLC
Xxxxx Xxxxxx xxx Xxxx Xxxx- Xxxxxx, Xxxx,
LLC
State & Fortification Streets- Jackson,
Mississippi, LLC
Tyler and Xxxxxxx Roads, Birmingham-
Alabama, LLC
Annex 2 to the
Collateral Trust and Intercreditor Agreement
DEFINITIONS ANNEX
This is the Definitions Annex referred to in the Senior Loan
Documents (such term and each other capitalized term used herein as defined
below, and if not defined herein, have the meanings assigned to such terms
in the applicable Senior Loan Document or Second Priority Debt Document)
and the Second Priority Debt Documents. The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of
such terms.
References to any agreement or contract are to such agreement or
contract as amended, modified or supplemented from time to time in
accordance with the terms thereof and of each Senior Loan Document and
Second Priority Debt Document containing restrictions or imposing
conditions on the amendment, modification or supplementing of such
agreement or contract.
"Affiliate" means, when used with respect to a specified Person,
another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control
with the Person specified.
"Asset Sale" means any sale, transfer or other disposition
(including pursuant to a Sale and Leaseback Transaction) of any property or
asset of the Borrower or any Subsidiary (including any equity interest in a
Subsidiary), other than a Permitted Disposition.
"Attributable Debt" means, as to any particular Capital Lease or
Sale and Leaseback Transaction under which the Borrower or any Subsidiary
is at the time liable, at any date as of which the amount thereof is to be
determined (i) in the case of a transaction involving a Capital Lease, the
amount on such date of the obligation thereunder that would appear on a
balance sheet prepared as of such date in accordance with generally
accepted accounting principles, or (ii) in the case of a Sale and Leaseback
Transaction not involving a Capital Lease, the then present value of the
minimum rental obligations under such Sale and Leaseback Transaction during
the remaining term thereof (after giving effect to any extensions at the
option of the lessor) computed by discounting the respective rental
payments at the actual interest factor included in such payments or, if
such interest factor cannot be readily determined, at the rate per annum
that would be applicable to a Capital Lease of the Borrower having similar
payment terms. The amount of any rental payment required to be made under
any such Sale and Leaseback Transaction not involving a Capital Lease may
exclude amounts required to be paid by the lessee on account of maintenance
and repairs, insurance, taxes, assessments, utilities, operating and labor
costs and similar charges, whether or not characterized as rent.
"Bankruptcy Proceeding" means any proceeding under Title 11 of the
U.S. Code or any other Federal, state or foreign bankruptcy, insolvency,
reorganization, receivership or similar law.
"Basket Asset Sale" means any sale or disposition (including a Sale
and Leaseback Transaction not involving any Mortgaged Property) of office
locations, stores or other personal or real property (including any
improvements thereon), whether or not constituting Mortgaged Property, or
leasehold interest therein for fair value in the ordinary course of
business consistent with past practice and not inconsistent with the
Borrower's business plan delivered to the Representatives on the Closing
Date, provided, however, that, (i) the aggregate consideration received
therefor (including the fair market value of any non-cash consideration)
shall not exceed $75,000,000 in any fiscal year (calculated without regard
to Sale and Leaseback Transactions permitted by Section 5.14(a), (b) and
(c) of the Senior Credit Facility as in effect on the Closing Date) and
(ii) at least 75% of such consideration shall consist of cash.
"Borrower" means Rite Aid.
"Business Day" means any day other than a Saturday, Sunday or day
on which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Euro-Dollar Loan,
the term "Business Day" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.
"Capital Markets Transaction" means the receipt by the Borrower or
a Subsidiary of proceeds of an issuance in the public or private capital
markets of long-term debt securities, of equity securities or of
equity-linked (e.g., trust preferred) securities (other than any proceeds
in respect of the issuance of Exchange Notes to SPV and the disposition of
such Exchange Notes pursuant to the Forward Commitment Agreement).
"Casualty/Condemnation" means any event that gives rise to
Casualty/Condemnation Proceeds.
"Casualty/Condemnation Proceeds" means
(a) any insurance proceeds under any insurance policies or
otherwise with respect to any casualty or other insured damage to
any assets of the Borrower or its Subsidiaries, and
(b) any proceeds received by the Borrower or any Subsidiary
of any action or proceeding for the taking of any assets of the
Borrower or its Subsidiaries, or any part thereof or interest
therein, for public or quasi-public use under the power of eminent
domain, by reason of any similar public improvement or condemnation
proceeding,
less, in each case (i) any fees, commissions and expenses (including the
costs of adjustment and condemnation proceedings) and other costs paid or
incurred by the Borrower or any Subsidiary in connection therewith, (ii)
income taxes reasonably estimated to be payable as a result of any gain
recognized in connection with the receipt of such payment or proceeds and
(iii) payment of the outstanding amount of any Debt (or Attributable Debt),
other than the Secured Obligations, together with premium or penalty, if
any, and interest thereon (or comparable obligations in respect of
Attributable Debt), that is secured by a Lien on (or if Attributable Debt,
the lease of) the stock or assets in question and that has priority over
both the Senior Lien and the Second Priority Lien and is to be repaid as a
result of receipt of such payments or proceeds; provided, however, that no
such proceeds shall constitute Casualty/Condemnation Proceeds to the extent
that such proceeds are (A) reinvested in other like fixed or capital assets
within 180 days of the Casualty/Condemnation that gave rise to such
proceeds or (B) committed to be reinvested in other like fixed or capital
assets within 180 days of such Casualty/Condemnation, with diligent pursuit
of such reinvestment, and reinvested in such assets within 365 days of such
Casualty/Condemnation.
"Citibank" means Citibank, N.A.
"Citibank Standby L/C Documents" means the reimbursement
agreements, letter of credit applications and other documents relating to
the Citibank Standby Letters of Credit.
"Citibank Standby L/C Obligations" means (a) each payment,
including payments in respect of reimbursements and cash collateralization,
required to be made by Rite Aid under the Citibank Standby L/C Documents in
respect of Citibank Standby Letters of Credit in an aggregate amount at any
time outstanding not in excess of (i) $8,000,000 minus (ii) the cumulative
amount of proceeds of Collateral applied to such obligations as the result
of the exercise of remedies under the Senior Collateral Documents and (b)
all other monetary obligations, including fees, costs, expenses and
indemnities (including interest and monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding)
of Rite Aid or any Obligor under the Citibank Standby L/C Documents to the
extent attributable to the Citibank Standby Letters of Credit referred to
in clause (a).
"Citibank Standby Letters of Credit" means the standby letters of
credit issued for the account of the Borrower by Citibank outstanding on
the Closing Date in an aggregate face amount of approximately $8,000,000,
together with any standby letter of credit (other than any letter of credit
issued under the Senior Credit Facility) hereafter issued by Citibank for
the account of any Obligor, provided that the Citibank Standby Letters of
Credit shall be limited to an amount at any time outstanding not in excess
of (i) $8,000,000 minus (ii) the cumulative amount of proceeds of
Collateral applied as the result of the exercise of remedies under the
Senior Collateral Documents to reimbursement and cash collateralization
obligations in respect of Citibank Standby Letters of Credit.
"Closing Date" means the date on which the Senior Credit Facility,
the amendments and restatements giving rise to the Existing Facilities and
the exchange offer and other transactions giving rise to the Exchange Notes
become effective.
"Collateral" means the Senior Collateral and the Second Priority
Collateral.
"Collateral Documents" means (a) the Senior Collateral Documents
and (b) the Second Priority Collateral Documents.
"Collateral Trust and Intercreditor Agreement" means the Collateral
Trust and Intercreditor Agreement, dated as of June 12, 2000, among Rite
Aid, the Subsidiary Guarantors, the Second Priority Collateral Trustee, the
Senior Collateral Agent and each Second Priority Representative.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "Controlling" and "Controlled" shall have meanings
correlative thereto.
"Debt" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all obligations of such
Person as lessee which are capitalized in accordance with generally
accepted accounting principles, (v) all non-contingent obligations of such
Person to reimburse any bank or other Person in respect of amounts paid
under a letter of credit or similar instrument, (vi) all Debt secured by a
Lien on any asset of such Person, whether or not such Debt is otherwise an
obligation of such Person, and (vii) all Debt of others Guaranteed by such
Person.
"Debt Facility" means any of the Senior Credit Facility, the
Existing Facilities, the Synthetic Lease Facilities and the Exchange Note
Indenture.
"Default Rate" means a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case
may be) equal to the sum of (a) the rate of interest publicly announced by
Citibank in New York, New York, from time to time as its "base rate", plus
(b) 2.00%.
"Designated Asset Disposition" means any sale, transfer or other
disposition of Exchange Debt First Priority Collateral other than a
Permitted Disposition.
"Domestic Subsidiary" means any Subsidiary incorporated or
organized under the laws of the United States of America, any State thereof
or the District of Columbia.
"Xxxxxxxxx.xxx Common Stock" means the common stock of
Xxxxxxxxx.xxx, Inc., a Delaware corporation, owned by Rite Aid.
"Xxxxxxxxx.xxx Pledge Agreement" means the Xxxxxxxxx.xxx Pledge
Agreement dated as of October 25, 1999 and amended and restated as of June
12, 2000, between the Borrower and Xxxxxx Guaranty Trust Company of New
York, as agent thereunder.
"Exchange Debt Facility" means the Exchange Debt Facility dated as
of June 12, 2000 among Rite Aid Corporation, the banks party thereto and
Xxxxxx Guaranty Trust Company of New York, as administrative agent.
"Exchange Debt Facility Documents" means the collective reference
to the "Loan Documents" as defined in the Exchange Debt Facility.
"Exchange Debt First Priority Collateral" means the prescription
files of Rite Aid's Subsidiaries and the proceeds thereof.
"Exchange Debt First Priority Collateral Documents" means the
collective reference to the "First Priority Collateral Documents", as
defined in the Exchange Debt Facility.
"Exchange Debt Obligations" means (i) all principal of and interest
(including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on any loans made
under the Exchange Debt Facility, (ii) all other amounts payable by the
Borrower to the Exchange Debt Parties under the Exchange Debt Facility
Documents, and (iii) any renewals or extensions of any of the foregoing;
provided, however, that the principal amount of indebtedness included in
the Exchange Debt Obligations shall not exceed the maximum amount from time
to time permitted to be outstanding by the Collateral Trust and
Intercreditor Agreement.
"Exchange Debt Parties" means all parties to the Exchange Debt
Facility Documents other than the Obligors or any Affiliate thereof, the
Senior Bank Parties and the Representatives, but including the
administrative agent under the Exchange Debt Facility and the beneficiaries
of each indemnification obligation undertaken by Rite Aid or any other
Obligor under any Exchange Debt Facility Document.
"Exchange Note Documents" means the Exchange Notes and the Exchange
Note Indenture, Exchange and Registration Rights Agreement among the State
Street Bank and Trust, as trustee, Rite Aid and the Subsidiary Guarantors,
and the Forward Commitment Agreement.
"Exchange Note Indenture" means the Indenture dated as of June 12,
2000, among Rite Aid, the Subsidiary Guarantors and State Street Bank and
Trust Company, as trustee, relating to the Exchange Notes.
"Exchange Note Obligations" means (i) all principal of and interest
(including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on the Exchange
Notes, (ii) all other amounts payable by the Borrower to the Exchange Note
Parties under the Exchange Note Documents, and (iii) any renewals or
extensions of any of the foregoing.
"Exchange Note Parties" means all parties to the Exchange Note
Documents and the holders from time to time of the Exchange Notes, in each
case other than the Obligors or any Affiliate thereof, the Senior Bank
Parties and the Representatives, but including the trustee under the
Exchange Note Indentures and the beneficiaries of each indemnification
obligation undertaken by Rite Aid or any other Obligor under any Exchange
Note Document.
"Exchange Notes" means the 10.50% Senior Secured Notes Due 2002 of
Rite Aid (i) issued in exchange for certain 5.50% Notes Due 2000 of Rite
Aid and 6.70% Notes Due 2001 of Rite Aid or (ii) issued on the Closing Date
to SPV and to be transferred to SSB, JPM and their respective transferees
and assignees pursuant to the Forward Commitment Agreement; provided,
however, that the aggregate principal amount of Exchange Notes issued
pursuant to the Forward Commitment Agreement shall not exceed $93,158,000.
"Existing Facilities" means
(a) the PCS Facility;
(b) the RCF Facility;
(c) the Xxxxx Facility; and
(d) the Exchange Debt Facility.
"Existing Facilities Documents" means the collective reference to
(i) the PCS Facility Documents, (ii) the RCF Facility Documents, (iii) the
Xxxxx Facility Documents and (iv) the Exchange Debt Facility Documents.
"Existing Facility Obligations" means the PCS Facility Obligations,
the RCF Facility Obligations, the Xxxxx Facility Obligations and the
Exchange Debt Obligations.
"Existing Facility Parties" means the PCS Facility Parties, the RCF
Facility Parties, the Xxxxx Facility Parties and the Exchange Debt Parties.
"Xxxxx Facility" means the Amendment No. 3 to Note Agreement,
Amendment No. 4 to Guaranty Agreement, Amendment No. 1 to Put Agreement
(the "Omnibus Amendment") dated as of June 12, 2000, relating to the
Adjustable Rate Senior Secured Notes due August 15, 2002 originally issued
by Xxxxx, Inc. and guaranteed by Rite Aid. The "Xxxxx Facility " shall be
deemed to include the Note Agreement dated as of September 30, 1996, among
Xxxxx, Inc., and each of the Purchasers listed in Annex 1 thereto, as
amended through the Closing Date.
"Xxxxx Facility Documents" means (i) the Xxxxx Facility, (ii) the
Guaranty Agreement dated as of September 30, 1996 pursuant to which Rite
Aid guaranteed the obligations of Xxxxx, Inc. under the Xxxxx Facility;
(iii) the Put Agreement dated as of September 30, 1996 entered into by Rite
Aid, and (iv) the Security Agreement dated as of September 30, 1996 entered
into by Xxxxx, Inc. and The Prudential Insurance Company of America as the
Security Agent on behalf of the Xxxxx Facility Parties, in each case as
amended through the Closing Date.
"Xxxxx Facility Obligations" means (i) all outstanding principal
amounts under the Xxxxx Facility Documents, (ii) all interest (including,
without limitation, any interest which accrues after the commencement of
any case, proceeding or other action relating to the bankruptcy, insolvency
or reorganization of the Borrower, whether or not allowed or allowable as a
claim in any such proceeding) on the principal amounts pursuant to clause
(i) of this definition, (iii) any renewals or extensions of any of the
foregoing and (iv) any and all other amounts payable by the Borrower in
respect of the Xxxxx Facility Documents; provided, however, that the
principal amount of indebtedness included in the Xxxxx Facility Obligations
shall not exceed the maximum amount from time to time permitted to be
outstanding by the Collateral Trust and Intercreditor Agreement.
"Xxxxx Facility Parties" means The Prudential Insurance Company of
America and Pruco Life Insurance Company and their successors and assigns
as noteholders and purchasers under the Xxxxx Facility Documents and The
Prudential Insurance Company of America, as Security Agent under the Xxxxx
Facility Documents and its successor or assignee.
"Forward Commitment Agreement" means the Forward Commitment
Agreement dated June 12, 2000, among Rite Aid, SPV, SSB and JPM.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of
any other Person; provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding meaning.
"Indentures" mean, collectively, (a) the Indenture dated as of
December 21, 1998, between Rite Aid and Xxxxxx Trust and Savings Bank, as
trustee, (b) the Indenture dated as of August 1, 1993, between Rite Aid and
Xxxxxx Guaranty Trust Company of New York, as trustee, (c) the Indenture
dated as September 10, 1997, between Rite Aid and Xxxxxx Trust and Savings
Bank, as trustee and (d) the Indenture dated as of September 22, 1998,
between Rite Aid and Xxxxxx Trust and Savings Bank, as trustee.
"Independent Standby L/C Documents" means the Citibank Standby L/C
Documents and the Mellon Standby L/C Documents.
"Independent Standby L/C Obligations" means the Citibank Standby
L/C Obligations and the Mellon Standby L/C Obligations.
"Independent Standby L/C Parties" means Citibank and Mellon Bank in
their capacities as issuers of Independent Standby Letters of Credit.
"Independent Standby Letters of Credit" means the Citibank Standby
Letters of Credit and the Mellon Standby Letters of Credit.
"Instructing Group" means, until the Senior Obligation Payment
Date, the Majority Senior Parties, and thereafter the Second Priority
Instructing Group.
"JPM" means X.X. Xxxxxx Securities, Inc.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset, including, without limitation, the interest of a vendor or
lessor under any conditional sale agreement, Capital Lease or other title
retention agreement relating to such asset.
"Majority Senior Parties" means the Majority Banks, as defined in
the Senior Credit Facility, or with respect to any waiver, amendment or
request, Senior Banks having such amount of unused Revolving Credit
Commitments, Revolving Credit Exposure, unused Term Loan Commitments and
outstanding Term Loans as may be required under the Senior Credit Facility
to approve the same.
"Mellon Bank" means Mellon Bank, N.A.
"Mellon Standby L/C Documents" mean the reimbursement agreements,
letter of credit applications and other documents relating to the Mellon
Standby Letters of Credit.
"Mellon Standby L/C Obligations" means (a) each payment, including
payments in respect of reimbursements and cash collateralization, required
to be made by Rite Aid under the Mellon Standby L/C Documents in respect of
Mellon Standby Letters of Credit in an aggregate amount at any time
outstanding not in excess of (i) $26,000,000 minus (ii) the cumulative
amount of proceeds of Collateral applied to such obligations as the result
of the exercise of remedies under the Senior Collateral Documents and (b)
all other monetary obligations, including fees, costs, expenses and
indemnities (including interest and monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable as a claim in such
proceeding) of Rite Aid under the Mellon Standby L/C Documents to the
extent attributable to the Mellon Standby Letters of Credit referred to in
clause (a).
"Mellon Standby Letters of Credit" means the standby letters of
credit issued for the account of the Borrower by Mellon Bank outstanding on
the Closing Date in an aggregate face amount of $26,000,000, together with
any standby letter of credit (other than any letter of credit issued under
the Senior Credit Facility) hereafter issued by Mellon Bank for the account
of any Obligor provided that the Mellon Standby Letters of Credit shall be
limited to an amount at any time outstanding not in excess of (i)
$26,000,000 minus (ii) the cumulative amount of proceeds of Collateral
applied as the result of the exercise of remedies under the Senior
Collateral Documents to reimbursement and cash collateralization
obligations in respect of Mellon Standby Letters of Credit.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor
to its business of rating debt securities.
"Net Cash Proceeds" means,
(a) with respect to any sale, transfer or other disposition
of any property or asset (a "Disposition"), an amount equal to the
cash proceeds received by the Borrower or any of its Subsidiaries
from or in respect of such Disposition (including, when received,
any cash proceeds received in respect of any noncash proceeds of
any Disposition), less (I) the sum of
(i) reasonable costs and expenses paid or incurred in
connection with such transaction, including, without
limitation, any underwriting brokerage or other customary
selling commissions and reasonable legal, advisory and other
fees and expenses (including title and recording expenses,
associated therewith), payments of unassumed liabilities
relating to the assets sold and any severance and
termination costs;
(ii) the amount of any Debt (or Attributable Debt),
together with premium or penalty, if any, and accrued
interest thereon (or comparable obligations in respect of
Attributable Debt) secured by a Lien on (or if Attributable
Debt, the lease of) any asset disposed of in such
Disposition and discharged from the proceeds thereof, but
only to the extent such Lien has priority over the Senior
Lien, the Second Priority Lien and the Liens under the
Exchange Debt First Priority Collateral Documents;
(iii) any taxes actually paid or to be payable by
such Person (as estimated by a senior financial or
accounting officer of the Borrower, giving effect to the
overall tax position of the Borrower) in respect of such
Disposition;
(iv) the portion of such cash proceeds which the
Borrower determines in good faith and reasonably should be
reserved for post-closing adjustments, including, without
limitation, indemnification payments and purchase price
adjustments, provided, that on the date that all such
post-closing adjustments have been determined, the amount
(if any) by which the reserved amount in respect of such
Disposition exceeds the actual post-closing adjustments
payable by the Borrower or any of the Subsidiary Guarantors
shall constitute Net Cash Proceeds on such date; and
(v) in the case of a PCS Divestiture the sum of (1)
the PCS Incremental Investment as of the date of
consummation of such disposition plus (2) the aggregate Net
Cash Proceeds of PCS Dispositions in the form of Sale and
Leaseback Transactions theretofore applied to prepayments of
the PCS Facility; and
plus (II) in the case of a PCS Divestiture, the PCS Investment
Reduction as of the date of consummation of such transaction;
(b) with respect to any Capital Markets Transaction, an
amount equal to the cash proceeds received by the Borrower or any
of its Subsidiaries from or in respect of such Capital Markets
Transaction, less any reasonable transaction costs; including
investment banking and underwriting fees, discounts and commissions
and any other expenses (including legal fees and expenses)
reasonably incurred by such Person in respect of such Capital
Markets Transaction; and
(c) with respect to receipt of Casualty/Condemnation
Proceeds, the amount thereof.
"Obligors" means Rite Aid, the Subsidiary Guarantors and any other
Person who is liable for any of the Secured Obligations.
"paid in full" means paid in full in cash.
"PCS" means PCS Holding Corporation, a Delaware corporation, and
its successors.
"PCS Common Stock" means the common stock of PCS owned by Rite Aid.
"PCS Disposition" means (i) any sale or other disposition of
capital stock of PCS (or of any non-cash proceeds thereof), (ii) any sale,
lease or other disposition (including a Casualty/Condemnation) by PCS or
any of its Subsidiaries of any asset, other than (y) dispositions of
inventory, cash, cash equivalents and other cash management investments and
obsolete, unused or unnecessary equipment, in each case in the ordinary
course of business, and (z) dispositions to PCS or a wholly-owned
Subsidiary of PCS or (iii) any sale, lease or other disposition (including
a Casualty/Condemnation) of PCS Land.
"PCS Divestiture" means a PCS Disposition as a result of which the
business of PCS is no longer conducted by a Consolidated Subsidiary of the
Borrower.
"PCS/Drugstore Pledged Collateral" means the capital stock of PCS
and Xxxxxxxxx.xxx pledged by Rite Aid under the PCS Pledge Agreement and
the Xxxxxxxxx.xxx Pledge Agreement and all income and profits thereon,
dividends and other payments and distributions with respect thereto and all
proceeds of the foregoing subject to a Lien under such agreements.
"PCS Excluded Assets" means (i) any Collateral consisting of assets
of PCS or a Subsidiary of PCS, other than PCS Linked Accounts, (ii) PCS
Land and (iii) any proceeds of clauses (i) and (ii). For purposes of
Article IV of the Collateral Trust and Intercreditor Agreement, any
proceeds of enforcement of the Senior Subsidiary Guarantee Agreement or the
Second Priority Guarantee Agreement against PCS or a Subsidiary of PCS
(other than with respect to the PCS Linked Accounts and the proceeds
thereof) shall be deemed to be proceeds of Collateral consisting of PCS
Excluded Assets.
"PCS Facility" means the PCS Facility dated as of June 12, 2000,
among Rite Aid, the banks party thereto and Xxxxxx Guaranty Trust Company
of New York, as administrative agent.
"PCS Facility Documents" means the "Loan Documents" as defined in
the PCS Facility.
"PCS Facility Obligations" means (i) all principal of and interest
(including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on any loan made
under the PCS Facility, (ii) all other amounts payable by the Borrower
under the PCS Facility Documents and (iii) any renewals or extensions of
any of the foregoing; provided, however, that the principal amount of
indebtedness included in the PCS Facility Obligations shall not exceed the
maximum amount from time to time permitted to be outstanding by the
Collateral Trust and Intercreditor Agreement.
"PCS Facility Parties" means the parties to the PCS Facility
Documents other than the Obligors, the Senior Bank Parties and the
Representatives, but including the administrative agent under the PCS
Facility and the beneficiaries of each indemnification obligation by Rite
Aid or any other Obligor under any PCS Facility Documents.
"PCS Incremental Investment" means, at any date, the amount, if
any, by which the inter-company payable owing by Rite Aid Hdqtrs. Corp. to
PCS at such date is less than such amount as at May 27, 2000. The Borrower
shall promptly notify each of the Representatives following the Closing
Date of such latter amount.
"PCS Investment Reduction" means, at any date, the excess, if any,
of (i) the amount, if any, by which the intercompany payable owing by Rite
Aid Hdqtrs. Corp. to PCS at such date is greater than such amount as at May
27, 2000, over (ii) the cumulative PCS EBITDA, as defined in the Senior
Credit Facility, for the period from May 27, 2000, to such date.
"PCS Land" means the real property described as X.X. 00xx Xxxxxx
and Mountainview Road, Scottsdale, Arizona, together with any improvements
thereon.
"PCS Linked Accounts" means any accounts receivable owed to PCS by
third party insurers in respect of claims generated by other Subsidiaries
of Rite Aid and giving rise to related accounts payable owed by PCS to such
other Subsidiaries of Rite Aid.
"PCS Pledge Agreement" means the PCS Pledge Agreement dated as of
October 25, 1999 and amended and restated as of June 12, 2000, between the
Borrower and Xxxxxx Guaranty Trust Company of New York, as agent
thereunder.
"Permitted Disposition" means any of the following:
(i) dispositions of inventory at retail, cash, cash
equivalents and other cash managing investments and obsolete,
unused, uneconomic or unnecessary equipment, in each case in the
ordinary course of business;
(ii) a disposition to a Subsidiary Guarantor, provided, that
(A) if the property subject to such disposition constitutes
Collateral immediately before giving effect to such disposition,
such property continues to constitute Collateral subject to the
Senior Lien and the Second Priority Lien, and (B) no dispositions
of property will be made to or by PCS or its Subsidiaries except in
the ordinary course of business consistent with past practice;
(iii) a sale or discount, in each case without recourse and
in the ordinary course of business, of overdue Accounts (as defined
in the Senior Credit Facility) arising in the ordinary course of
business, but only to the extent such Accounts are no longer
Eligible Accounts Receivable (as defined in the Senior Credit
Facility) and such sale or discount is in connection with the
compromise or collection thereof consistent with customary industry
practice (and not as part of any bulk sale);
(iv) Basket Asset Sales; and
(v) any disposition of Exchange Notes by SPV to SSB or JPM
(or their respective successors, assigns and affiliates), pursuant
to the Forward Commitment Agreement as in effect on the Closing
Date.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"RCF Facility" means the RCF Facility dated as of June 12, 2000,
among Rite Aid, the banks party thereto and Xxxxxx Guaranty Trust Company
of New York, as administrative agent.
"RCF Facility Documents" means the "Loan Documents" as defined in
the RCF Facility.
"RCF Facility Obligations" means (i) all principal of and interest
(including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, whether or not
allowed or allowable as a claim in any such proceeding) on any loan made
under the RCF Facility, (ii) all other amounts payable by the Borrower to
the RCF Facility Parties under the RCF Facility Documents and (iii) any
renewals or extensions of any of the foregoing; provided, however, that the
principal amount of indebtedness included in the RCF Facility Obligations
shall not exceed the maximum amount from time to time permitted to be
outstanding by the Collateral Trust and Intercreditor Agreement.
"RCF Facility Parties" means the parties to the RCF Facility
Documents other than the Obligors.
"Reduction" means, when applied to any Debt Facility, (i) the
permanent repayment of outstanding loans (or obligations in respect of
Attributable Debt) under such Debt Facility, (ii) the permanent reduction
of outstanding lending commitments under such Debt Facility or (iii) the
permanent cash collateralization of outstanding letters of credit under
such facility (together with the termination of any lending commitments
utilized by such letters of credit).
"Reduction Event" is (i) a PCS Disposition, (ii) a Capital Markets
Transaction, (iii) a Designated Asset Disposition, (iv) a Senior Collateral
Disposition, (v) other Asset Sales or (vi) receipt of other
Casualty/Condemnation Proceeds.
"Related Exchange Debt" means, with respect to any of the Existing
Facilities (other than the Exchange Debt Facility), Debt under the Exchange
Debt Facility issued in exchange for Debt under such Existing Facility.
"Related Exchange Debt Obligation" shall mean Exchange Debt
Obligations in respect of Related Exchange Debt.
"Representatives" means each of the Senior Collateral Agent and the
Second Priority Representatives.
"Required Prepayment Amount" has the meaning assigned to such term
in the Senior Credit Facility, as in effect on the Closing Date.
"Rite Aid" means Rite Aid Corporation, a Delaware corporation, and
its successors.
"Rite Aid Hdqtrs. Corp." means Rite Aid Hdqtrs. Corp., a Delaware
corporation and a Wholly-Owned Consolidated Subsidiary of the Borrower.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor to its business of rating
debt securities.
"Sale and Leaseback Transaction" means the sale or transfer by the
Borrower or any Subsidiary of any office building (including its
headquarters), distribution center, manufacturing plant, warehouse, Store
or equipment now or hereafter owned by the Borrower or any Subsidiary with
the intention that the Borrower or any Subsidiary take back a lease
thereof.
"Second Priority Collateral" means all the "Second Priority
Collateral" as defined in any Second Priority Collateral Documents and
shall also include the Mortgaged Properties and the proceeds thereof, but
shall not in any event include the PCS/Drugstore Pledged Collateral or the
Exchange Debt First Priority Collateral.
"Second Priority Collateral Documents" means the Second Priority
Mortgages, the Second Priority Subsidiary Security Agreement, the Second
Priority Subsidiary Guarantee Agreement, the Second Priority Indemnity,
Subrogation and Contribution Agreement, the Collateral Trust and
Intercreditor Agreement and each of the mortgages, security agreements and
other instruments and documents executed and delivered by any Subsidiary
Guarantor pursuant to any of the foregoing for purposes of providing
collateral security or credit support for any Second Priority Debt
Obligation or obligation under the Second Priority Subsidiary Guarantee
Agreement but specifically excluding the Xxxxxxxxx.xxx Pledge Agreement,
the Exchange Debt First Priority Collateral Documents and the PCS Pledge
Agreement.
"Second Priority Collateral Trustee" means Wilmington Trust
Company, in its capacity as collateral trustee under the Collateral Trust
and Intercreditor Agreement and the Second Priority Collateral Documents,
and its successors.
"Second Priority Debt Documents" means the Existing Facility
Documents, the Exchange Note Documents, the Synthetic Lease Documents and
the Second Priority Collateral Documents.
"Second Priority Debt Obligations" means the collective reference
to the Exchange Debt Obligations, the Exchange Note Obligations, the
Synthetic Lease Obligations, the PCS Facility Obligations, the RCF Facility
Obligations and the Xxxxx Facility Obligations.
"Second Priority Debt Parties" means the Existing Facility Parties,
the Exchange Note Parties, the Synthetic Lease Parties and the Second
Priority Collateral Trustee.
"Second Priority Facilities" means the Exchange Debt Facility, the
Exchange Note Indenture, the Synthetic Lease Facilities, the PCS Facility,
the RCF Facility and the Xxxxx Facility.
"Second Priority Indemnity, Subrogation and Contribution Agreement"
means the Second Priority Indemnity, Subrogation and Contribution
Agreement, dated as of June 12, 2000, among Rite Aid, the Subsidiary
Guarantors and the Second Priority Collateral Trustee.
"Second Priority Instructing Group" means Second Priority
Representatives with respect to Second Priority Facilities under which at
least a majority of the then aggregate amount of Second Priority Debt
Obligations are outstanding.
"Second Priority Lien" means the Liens on the Second Priority
Collateral in favor of the Second Priority Debt Parties under the Second
Priority Collateral Documents.
"Second Priority Mortgages" means the mortgages, deeds of trust,
leasehold mortgages, assignments of leases and rents, modifications and
other security documents which create a Lien in favor of the Second
Priority Collateral Trustee for the benefit of the Second Priority Debt
Parties, delivered pursuant to the Second Priority Debt Documents, each
substantially in the form of Exhibit [ ] to the RCF Facility, with such
changes as are approved by the Senior Collateral Agent and the Second
Priority Representatives.
"Second Priority Representative" means, in respect of each Second
Priority Facility, the trustee under the Exchange Note Indenture and the
administrative agent, security agent or agent under each other Second
Priority Facility and each of their successors in such capacities.
"Second Priority Subsidiary Guarantee Agreement" means the Second
Priority Subsidiary Guarantee Agreement, dated as of June 12, 2000, made by
the Subsidiary Guarantors (including any additional Subsidiary Guarantor
becoming party thereto after the Closing Date) in favor of the Second
Priority Collateral Trustee for the benefit of the Second Priority Debt
Parties.
"Second Priority Subsidiary Security Agreement" means the Second
Priority Subsidiary Security Agreement, dated as of June 12, 2000, made by
the Subsidiary Guarantors (including any additional Subsidiary Guarantor
becoming party thereto after the Closing Date) in favor of the Second
Priority Collateral Trustee for the benefit of the Second Priority Debt
Parties.
"Secured Obligations" means the Senior Obligations and the Second
Priority Debt Obligations.
"Senior Bank" means a "Bank" as defined in the Senior Credit
Facility.
"Senior Bank Obligations" means (i) the principal of each loan made
under the Senior Credit Facility, (ii) all reimbursement and cash
collateralization obligations in respect of letters of credit issued under
the Senior Credit Facility, (iii) all monetary obligations of the Borrower
or any Subsidiary under each Senior Interest Rate Agreement entered into
with any counterparty that was a Senior Bank (or an Affiliate thereof) at
the time such Senior Interest Rate Agreement was entered into, (iv) all
interest on the loans, letter of credit reimbursement, fees and other
obligations under the Senior Credit Facility or such Senior Interest Rate
Agreements (including, without limitation any interest which accrues after
the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower or any Subsidiary
Guarantor, whether or not allowed or allowable as a claim in such
proceeding), (v) all other amounts payable by the Borrower under the Senior
Loan Documents and (vi) all increases, renewals, extensions and
refinancings of the foregoing; provided, however, that the principal amount
of the indebtedness under the Senior Credit Facility included in the Senior
Bank Obligations shall not exceed the maximum amount from time to time
permitted to be outstanding by the Collateral Trust and Intercreditor
Agreement.
"Senior Bank Parties" means each party to the Senior Credit
Facility other than any Obligor, each counterparty to a Senior Interest
Rate Agreement, the beneficiaries of each indemnification obligation
undertaken by Rite Aid or any other Obligor under any Senior Loan Document,
and the successors and permitted assigns of each of the foregoing.
"Senior Collateral" means all the "Senior Collateral" as defined in
any Senior Collateral Document and shall also include the Mortgaged
Properties and the proceeds thereof, but shall not in any event include the
PCS/Drugstore Pledged Collateral and the Exchange Debt First Priority
Collateral.
"Senior Collateral Agent" means Citicorp USA, Inc., in its capacity
as Senior Collateral Agent under the Senior Collateral Documents, and its
successors.
"Senior Collateral Disposition" means (i) any sale, transfer or
other disposition of Senior Collateral (including any property or assets
that would constitute Senior Collateral but for the release of the Senior
Lien with respect thereto in connection with such sale, transfer or other
disposition), other than a PCS Disposition, or a Permitted Disposition or
(ii) a Casualty/Condemnation with respect to Senior Collateral (other than
PCS Excluded Assets).
"Senior Collateral Documents" means the Senior Mortgages, the
Senior Subsidiary Security Agreement, the Senior Subsidiary Guarantee
Agreement, the Senior Indemnity, Subrogation and Contribution Agreement,
the Collateral Trust and Intercreditor Agreement and each of the mortgages,
security agreements and other instruments and documents executed and
delivered by any Subsidiary Guarantor pursuant to any of the foregoing or
pursuant to the Senior Credit Facility or for purposes of providing
collateral security or credit support for any Senior Obligation or
obligation under the Senior Subsidiary Guarantee Agreement.
"Senior Credit Facility" means the Senior Credit Agreement, dated
as of June 12, 2000, among Rite Aid, as Borrower, the Senior Banks, the
Swingline Banks, the Issuing Banks, the Senior Administrative Agent, the
Senior Collateral Agent and the Syndication Agents.
"Senior Indemnity, Subrogation and Contribution Agreement" means
the Senior Indemnity, Subrogation and Contribution Agreement, dated as of
June 12, 2000 among Rite Aid, the Subsidiary Guarantors (including
Subsidiary Guarantors becoming party thereto after the Closing Date) and
the Senior Collateral Agent.
"Senior Interest Rate Agreement" means any Interest Rate Agreement
entered into with Rite Aid or any Subsidiary, if the applicable
counterparty was a Senior Bank or an Affiliate thereof at the time the
Interest Rate Agreement was entered into.
"Senior Lien" means the Liens on the Senior Collateral in favor of
the Senior Secured Parties under the Senior Collateral Documents.
"Senior Loan Documents" means the Senior Credit Facility, the Notes
referred to in the Senior Credit Facility, each Senior Interest Rate
Agreement, and the Senior Collateral Documents.
"Senior Mortgages" means the mortgages, deeds of trust, leasehold
mortgages, assignments of leases and rents, modifications and other
security documents delivered pursuant to the Senior Credit Facility, each
substantially in the form of Exhibit K to the Senior Credit Facility, with
such changes as are approved by the Senior Collateral Agent.
"Senior Obligation Payment Date" means the date on which (i) the
Senior Obligations have been paid in full, (ii) all lending commitments
under the Senior Credit Facility have been terminated and (iii) there are
no outstanding Independent Standby Letters of Credit or letters of credit
issued under the Senior Credit Facility other than such as have been fully
cash collateralized under documents and arrangements satisfactory to the
issuer of such letters of credit.
"Senior Obligations" means (a) the Senior Bank Obligations and (b)
the Independent Standby L/C Obligations.
"Senior Secured Parties" means (a) the Senior Bank Parties and (b)
the Independent Standby L/C Parties.
"Senior Subsidiary Guarantee Agreement" means the Senior Subsidiary
Guarantee Agreement, made by the Subsidiary Guarantors (including
Subsidiary Guarantors that become parties thereto after the Closing Date)
in favor of the Senior Collateral Agent for the benefit of the Senior
Secured Parties.
"Senior Subsidiary Security Agreement" means the Senior Subsidiary
Security Agreement, made by the Subsidiary Guarantors (including Subsidiary
Guarantors that become parties thereto after the Closing Date) in favor of
the Senior Collateral Agent for the benefit of the Senior Secured Parties.
"SPV" means Fiona One Corp., a Delaware corporation and a
wholly-owned Subsidiary of Rite Aid which is organized for the sole purpose
of acquiring Exchange Notes on the Closing Date from Rite Aid and selling
such Exchange Notes to SSB and JPM in accordance with the Forward
Commitment Agreement.
"SSB" means Xxxxxxx Xxxxx Xxxxxx Inc.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by the
Borrower.
"Subsidiary Guarantor" means each Subsidiary that is party to the
Senior Subsidiary Guarantee Agreement, the Second Priority Subsidiary
Guarantee Agreement or any other Senior Collateral Document or Second
Priority Collateral Document.
"Synthetic Lease Documents" means the documents governing the
Synthetic Leases.
"Synthetic Lease Facilities" means certain synthetic leases entered
into by the Subsidiary Guarantors and guaranteed by Rite Aid having an
aggregate discounted present value of approximately $214,000,000, as
amended and restated as of the Closing Date.
"Synthetic Lease Obligations" means all rent and supplemental rent,
all fees and all other expenses or amounts payable by any Obligors to any
Synthetic Lease Parties under any Synthetic Lease Document; provided,
however, that the aggregate amount of the Synthetic Lease Obligations shall
not exceed the maximum amount from time to time permitted to be outstanding
by the Collateral Trust and Intercreditor Agreement.
"Synthetic Lease Parties" means all parties to the Synthetic Lease
Documents other than the Obligors.
"Temporary Cash Investment" means any investment by any Person in
(i) direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof, (ii)
commercial paper rated at least A-1 by S&P and P-1 by Moody's, (iii) time
deposits with, including certificates of deposit issued by, any office
located in the United States of any bank or trust company which is
organized or licensed under the laws of the United States or any state
thereof and has capital, surplus and undivided profits aggregating at least
$500,000,000, (iv) repurchase agreements with respect to securities
described in clause (i) above entered into with an office of a bank or
trust company meeting the criteria specified in clause (iii) above,
provided in each case that such investment matures within one year from the
date of acquisition thereof by such Person or (v) money market mutual funds
at least 90% the assets of which are held in investments referred to in
clauses (i) through (iv) above (except that the maturities of certain
investments held by any such money market funds may exceed one year so long
as the dollar-weighted average life of the investments of such money market
mutual fund is less than one year).
"Uniform Commercial Code" or "UCC" means, unless otherwise
specified, the Uniform Commercial Code as from time to time in effect in
the State of New York.
Annex 3 to the
Collateral Trust and Intercreditor Agreement
SUPPLEMENT NO. dated as of , to the COLLATERAL
TRUST AND INTERCREDITOR AGREEMENT dated as of June
12, 2000 (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, Xxxxxx Guaranty Trust Company of New York,
as administrative agent for the RCF Facility Parties
under the RCF Facility Documents, the PCS Facility
Parties under the PCS Facility Documents and the
Exchange Debt Parties under the Exchange Debt
Facility Documents, The Prudential Insurance Company
of America, as Security Agent for the Xxxxx Facility
Parties under the Xxxxx Facility Documents, State
Street Bank and Trust Company, as trustee under the
Exchange Note Indenture for the holders of the
Exchange Notes, and The Sumitomo Bank, Limited, New
York Branch, as collateral agent for the Synthetic
Lease Parties under the Synthetic Lease Documents.
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(a) of the Senior
Credit Facility and certain provisions of the Second Priority Debt
Documents, any subsequently acquired or organized Domestic Subsidiary of
Rite Aid is required to enter into the Collateral Trust and Intercreditor
Agreement. Section 9.11 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 the 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 9.11 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 9.02 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 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:
