EXECUTION COPY
AMENDED AND RESTATED COLLATERAL TRUST
AND INTERCREDITOR AGREEMENT
AMENDED AND RESTATED COLLATERAL TRUST AND INTERCREDITOR
AGREEMENT dated as of June 27, 2001, as amended and restated as
of May 28, 2003 (as amended, supplemented or otherwise modified
from time to time, this "Agreement"), 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 NORTH AMERICA, INC., a
Delaware corporation ("CNAI"), as senior collateral processing
co-agent, JPMORGAN CHASE BANK, a New York banking corporation
("JPMCB"), as senior collateral processing co-agent (each,
individually in such capacity, a "Senior Collateral Agent", and
collectively, the "Senior Collateral Agents") for the Senior
Secured Parties under the Senior Loan Documents, U.S. BANK AND
TRUST, as trustee under the 12.5% Note Indenture, BNY MIDWEST
TRUST COMPANY, as trustee under the 9.5% Note Indenture and as
trustee under the 8.125% Note Indenture, and each other Second
Priority Representative which becomes a party hereto pursuant
to Section 8.12 hereof.
Reference is made to the Senior Loan Documents. The Subsidiary
Guarantors have entered into the Senior Subsidiary Guarantee Agreement,
pursuant to which they have, jointly and severally, guaranteed the Senior
Obligations for the benefit of each Senior Secured Party. Each of the
Subsidiary Guarantors has also entered into the Senior Subsidiary Security
Agreement, and each other Senior Collateral Document to which it is a party to
secure, among other things, the Senior Obligations, including its obligations
under the Senior Subsidiary Guarantee Agreement, and the Subsidiary Guarantors
have pledged collateral to the Senior Collateral Agents under such agreements.
Reference is made to the Second Priority Debt Documents. The
Subsidiary Guarantors have entered into the Second Priority Subsidiary
Guarantee Agreement, pursuant to which they have, jointly and severally,
guaranteed the Second Priority Debt Obligations for the benefit of each Second
Priority Debt Party. Each of the Subsidiary Guarantors has also entered into
the Second Priority Subsidiary Security Agreement and each other Second
Priority Collateral Document to which it is a party to secure, among other
things, the Second Priority Debt Obligations, including its obligations under
the Second Priority Subsidiary Guarantee Agreement, and the Subsidiary
Guarantors have pledged collateral to the Second Priority Collateral Trustee
under such agreements.
Rite Aid, the Subsidiary Guarantors and the Second Priority
Representatives, on behalf of the Second Priority Debt Parties, have requested
the Second Priority Collateral Trustee to act as collateral trustee for the
Second Priority Debt Parties hereunder and under the Second Priority
Collateral Documents. The Second Priority Collateral Trustee is willing to act
as collateral trustee for the Second Priority Debt Parties hereunder and under
the Second Priority Collateral Documents on the terms and subject to the
conditions set forth in this Agreement.
Accordingly, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Incorporation by Reference. Capitalized terms used but
not defined herein shall have the meanings assigned to such terms in the
Definitions Annex, which is hereby incorporated by reference herein with the
same effect as set forth in its entirety herein.
SECTION 1.02. Certain Definitions. (a) As used in this Agreement, the
capitalized terms defined in the recitals hereto shall have the meanings
specified therein, and the following terms have the meanings specified below:
"Class Debt" is defined in Section 8.12.
"Class Debt Parties" is defined in Section 8.12.
"Class Debt Representative" is defined in Section 8.12.
"Collateral Account" is defined in Section 3.01.
"Definitions Annex" means the Definitions Annex, dated as of May [ ],
2003, annexed hereto (as amended, supplemented or otherwise modified from time
to time).
"Distribution Date" means the date on which any funds are distributed
by the Senior Collateral Agents or the Second Priority Collateral Trustee in
accordance with the provisions of Section 4.01.
"Event of Default" means any "Event of Default" under any Senior Loan
Document or any "Event of Default" under any Second Priority Debt Document.
"Fees" means, with respect to the Second Priority Collateral Trustee,
either 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 (it
being understood that the exercise by the Senior Collateral Agents of their
cash sweep rights pursuant to Section 9.15 of the Senior Credit Agreement
shall not be deemed an exercise of remedies in respect of Collateral) and (y)
in either case, (i) receipt by the Second Priority Collateral Trustee of
written notice thereof from the Senior Collateral Agents (in the case of any
such Event of Default arising under the Senior Loan Documents), or (ii)
receipt by the Senior Collateral Agents 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".
SECTION 1.03. Amendments to Definitions Annex. The parties hereto
hereby agree that any amendment of, supplement to or other modification of any
defined terms in the Definitions Annex annexed hereto shall automatically
cause the same defined term used in any Senior Loan Document and Second
Priority Collateral Document to be similarly so amended, supplemented or
otherwise modified, and the Second Priority Collateral Trustee is hereby
directed to execute any documents necessary to effectuate such amendments,
supplements or modifications to the applicable Second Priority Collateral
Documents.
ARTICLE II
Declaration and Acceptance of Trust; Remedies
SECTION 2.01. Declaration and Acceptance of Trust. The Second
Priority Collateral Trustee hereby declares, and each of Rite Aid, the
Subsidiary Guarantors and the Second Priority Debt Parties agrees, that the
Second Priority Collateral Trustee holds the Trust Estate as trustee in trust
under this Agreement for the benefit of the Second Priority Debt Parties as
provided herein. By acceptance of the benefits of this Agreement, each Second
Priority Debt Party (whether or not a signatory hereto) (i) consents to the
appointment of the Second Priority Collateral Trustee as trustee hereunder,
(ii) confirms that the Second Priority Collateral Trustee shall have the
authority to act as the exclusive agent of such Second Priority Debt Party for
enforcement of any remedies under or with respect to any Second Priority
Collateral Document and the giving or withholding of any consent or approval
relating to any Collateral or any Subsidiary Guarantor's obligations with
respect thereto and (iii) agrees that, except as provided in this Agreement,
it shall not take any action to enforce any of such remedies or give any such
consents or approvals.
SECTION 2.02. Determinations Relating to Collateral. If (i) the
Second Priority Collateral Trustee shall receive any written request from Rite
Aid or any Subsidiary Guarantor under any Second Priority Collateral Document
for consent or approval with respect to any matter or thing relating to any
Collateral or any Subsidiary Guarantor's obligations with respect thereto or
(ii) there shall be due to or from the Second Priority Collateral Trustee
under the provisions of any Second Priority Collateral Document any material
performance or the delivery of any material instrument or (iii) the Second
Priority Collateral Trustee shall become aware of any nonperformance by any
Subsidiary Guarantor of any covenant or any breach of any representation or
warranty set forth in any Second Priority Collateral Document, then, in each
such event, the Second Priority Collateral Trustee shall advise the
Representatives of the matter or thing as to which consent has been requested
or the performance or instrument required to be delivered or the
nonperformance or breach of which the Second Priority Collateral Trustee has
become aware. Until the occurrence of the Senior Obligation Payment Date, the
Senior Collateral Agents 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
Agents 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 Agents 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,
either 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 Agents, 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). If any Secured Party shall receive any funds
which, under this Section 2.04, belong to the Senior Collateral Agents, the
Second Priority Collateral Trustee or any other Secured Party, such Secured
Party shall remit such funds promptly to either 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 Agents, 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 Permitted 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) If, following a Triggering Event, any Collateral is sold or
otherwise realized upon (whether pursuant to the exercise of any remedy set
forth in any Collateral Document, in a Bankruptcy Proceeding or otherwise),
the proceeds in respect of such Collateral shall be applied as soon as
practicable after receipt as follows:
FIRST: to the Second Priority Collateral Trustee and the
Senior Collateral Agents 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 Agents and any other Senior Secured Party to
reimburse to the Second Priority Collateral Trustee, the Senior
Collateral Agents and such other 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 Agents, 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 trustee, administrative agent, security
agent or similar agent under each Second Priority Debt Facility, if
any, in an amount equal to the Fees thereof which are unpaid as of
the applicable Distribution Date and to any Second Priority Debt
Party which has theretofore advanced or paid any such Fees in an
amount equal to the amount thereof so advanced or paid, pro rata
based on the amounts of such Fees (or such advance or payment);
FIFTH: to the trustee, administrative agent, security
agent or similar agent under each Second Priority Debt Facility and
to any Second Priority Debt Party to reimburse such Second Priority
Representative or such Second Priority Debt Party for the amount of
any advance made pursuant to Section 2.04 hereof (with interest
thereon at the Default Rate), pro rata based on the amounts so
advanced;
SIXTH: to the trustee, administrative agent, security
agent or similar agent under each Second Priority Debt Facility 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.
(b) Whenever pursuant to the foregoing provisions of this Section any
proceeds are required to be distributed to any Second Priority Representative,
then the Second Priority Collateral Trustee or the Senior Collateral Agents,
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 Agents, the amount of outstanding
Second Priority Debt Obligations then due and owing to Second Priority Debt
Parties for which each such Second Priority 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 Agents 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.
SECTION 4.02. Payment Provisions. For the purposes of applying the
provisions of Section 4.01, all interest, fees and other amounts to be paid on
any of the Secured Obligations pursuant to the terms of any Secured Document
shall, as among the Secured Parties and regardless of whether any such
interest, fees or other amounts are or would be recognized or allowed as a
claim in any bankruptcy or similar proceeding, be treated as due and owing on
the Secured Obligations.
SECTION 4.03. Certain Mandatory Prepayments of Senior Credit
Agreement. (a) In the event that the Borrower or any of its Subsidiaries shall
at any time, or from time to time (but in the case of any sale or disposition
of Collateral, only prior to the occurrence of a Triggering Event), receive
any Net Cash Proceeds of any Reduction Event, the Borrower shall, in
accordance with and to the extent required by the provisions of the Senior
Credit Agreement, apply an amount equal to such Net Cash Proceeds to
Reductions of the Senior Credit Agreement. So long as no Triggering Event has
occurred and is continuing, Net Cash Proceeds of a Reduction Event in excess
of those applied in accordance with the foregoing provision of this paragraph
shall be applied in accordance with any applicable provisions of the Senior
Loan Documents and Second Priority Debt Documents.
(b) In the event the Borrower or any of its Subsidiaries shall, at
any time after the occurrence of a Triggering Event, receive any Net Cash
Proceeds of any Reduction Event which are attributable to Collateral, such Net
Cash Proceeds shall be subject to and applied in accordance with the
provisions of Section 4.01(a).
(c) Notwithstanding the foregoing, any payment made or to be made by
any Subsidiary Guarantor in respect of Second Priority Debt Obligations
subsequent to the occurrence of a Triggering Event other than from the
proceeds of Collateral shall be subject to, and only made in accordance with,
the subordination provisions of the Second Priority Subsidiary Guarantee
Agreement.
(d) For the avoidance of doubt, Section 4.03(a) does not itself
create any Lien nor does it alter the priorities of Liens which are created by
the other Senior Loan Documents and Second Priority Debt Documents.
SECTION 4.04. Cash Sweep; Certain Enforcement Proceeds. (a)
Notwithstanding the foregoing provisions of this Article IV, at all times
during a Cash Sweep Period prior to the occurrence of a Triggering Event, the
funds on deposit in the Citibank Concentration Account (as such terms are
defined in the Senior Subsidiary Security Agreement as in effect on the
Restatement Effective Date) may be applied in accordance with the provisions
of the Senior Credit Agreement, as in effect on the Restatement Effective
Date. After the occurrence of a Triggering Event, funds on deposit in the
Citibank Concentration Account consisting of proceeds of Collateral shall be
applied in accordance with the provisions of Section 4.01(a). The Borrower and
the Subsidiary Guarantors will not deposit funds representing Net Cash
Proceeds from Reduction Events in the Citibank Concentration Account or into
accounts that are swept into the Citibank Concentration Account pursuant to
the Senior Loan Documents.
(b) Notwithstanding the foregoing, for purposes of this Article IV,
any proceeds of enforcement of the Second Priority Subsidiary Guarantee
Agreement against any Subsidiary Guarantor shall be deemed proceeds of Senior
Collateral.
ARTICLE V
Subordination
SECTION 5.01. Perfection and Priority of Security Interests. (a) Any
and all security interests, assignments, pledges, mortgages, deeds of trust,
deeds to secure debt and other liens, charges or encumbrances now existing or
hereafter created or arising in favor of the Second Priority Collateral
Trustee for the benefit of the Second Priority Debt Parties with respect to
the Collateral and securing the Second Priority Debt Obligations are expressly
junior in priority, operation and effect to any and all security interests,
assignments, pledges and other liens, charges or encumbrances now existing or
hereafter created or arising in favor of the Senior Collateral Agents 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.
(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, without notice to or consent by the Second Priority Debt Parties
and without affecting the provisions hereof. The lien priorities provided in
this Section 5.01 shall not be altered or otherwise affected by any such
amendment, modification, supplement, extension, repayment, reborrowing,
increase, replacement, renewal, restatement or refinancing of the Senior
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 Agents 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 Agents 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 North America, Inc., and its successors and
assigns, as collateral agent for certain secured parties, including
the lenders from time to time party to that certain Senior Credit
Agreement dated as of June 27, 2001, as amended, refinanced or
replaced from time to time, with Rite Aid Corporation in accordance
with the provisions of that certain Collateral Trust and
Intercreditor Agreement dated as of June 27, 2001, among Rite Aid
Corporation, certain subsidiaries of Rite Aid Corporation, Wilmington
Trust Company, as Second Priority Collateral Trustee, Citicorp North
America, 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"), if any, 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 Agents 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 North America, Inc., and its successors and
assigns, as collateral agent for certain secured parties, including
the lenders from time to time party to that certain Senior Credit
Agreement dated as of June 27, 2001, as amended, replaced or
refinanced from time to time, with Rite Aid Corporation and its
successors and assigns, in accordance with the provisions of that
certain Collateral Trust and Intercreditor Agreement dated as of June
27, 2001, among Rite Aid Corporation, certain subsidiaries of Rite
Aid Corporation, Wilmington Trust Company, as Second Priority
Collateral Trustee, Citicorp North America, 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 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 Mortgaged Properties with respect to which the Senior
Collateral Agents have granted nondisturbance on substantially the
same terms as granted by the Senior Collateral Agents.
(iii) that if all or any portion of any 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 Agents 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
Agents, (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, if any, the
Senior Collateral Agents 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 that shall be contained in the Second
Priority Mortgages for the purpose of securing and discharging the performance
by the Subsidiary Guarantors party thereto, provided, however, that such
assignment shall be subject to the terms of this Agreement. The Senior
Collateral Agents and the Senior Secured Parties agree that the terms of each
Senior Mortgage, if any, entered into after the Restatement Effective Date and
the rights and remedies of the parties thereto shall be subject to this
Agreement. The Second Priority Collateral Trustee and the Second Priority Debt
Parties agree that the terms of each Second Priority Mortgage, if any, entered
into after the Restatement Effective Date and the rights and remedies of the
parties thereto shall be 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 Agents 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 Agents.
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 Agents shall have the
right to sell, transfer or otherwise dispose of or deal with, or cause the
Subsidiary Guarantors to sell, transfer or otherwise dispose of or deal with,
the Collateral as provided in the Senior Collateral Documents without regard
to the security interest of the Second Priority Debt Parties therein, or any
rights to which the Second Priority Debt Parties would otherwise be entitled
as a result of such security interest, the only obligation of the Senior
Collateral Agents to the Second Priority Debt Parties in respect thereof being
to deliver to the Second Priority Collateral Trustee or the Second Priority
Representatives (unless otherwise directed in writing by the Second Priority
Collateral Trustee or by a court of competent jurisdiction) any proceeds
remaining from such sale, transfer or other disposition of such Collateral
after the Senior Obligation Payment Date or, if the Senior Collateral Agents
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 Agents 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 either 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 Agents 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 Agents, 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 this 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, each of the Senior Collateral
Agents are 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 either such
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
Agents; 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 Agents or any other Senior Secured Party or any other
action taken by or on behalf of the Senior Collateral Agents or any
other Senior Secured Party permitted to be taken by it pursuant to
the Senior Collateral Documents;
(iii) they have no right to (A) direct either 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
either 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 either
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 Agents nor any other Senior Secured Party shall be liable
for, any action taken or omitted to be taken by the Senior Collateral
Agents 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) 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 Agents
promptly upon request therefor all necessary instruments and documents to
evidence such termination and release.
(c) Except with respect to proceeds of any sale or other realization
on Collateral received by the Second Priority Representatives pursuant to
distributions made by the Senior Collateral Agents after the occurrence of a
Triggering Event under Section 4.01(a), the Second Priority Representatives,
on behalf of themselves and the other Second Priority Debt Parties, hereby
agree that if any of them shall obtain possession of any of the Collateral, or
shall realize any payment 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 Agents 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 Agents 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 Agents, 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 Agents any payment received by them or Collateral
delivered to them if such payment or delivery is itself rescinded for any
reason (and any such payment or Collateral theretofore paid over to the Senior
Secured Parties pursuant to the foregoing provisions shall be released and
delivered to the appropriate Person to the extent necessary to effect such
rescission.)
(d) With respect to proceeds of any sale or other realization on
Collateral to the extent payable to the Second Priority Representatives for
the benefit of the Second Priority Debt Parties pursuant to Section 4.01(a),
the Senior Collateral Agents, on behalf of themselves and the other Senior
Secured Parties, hereby agree that if any of them shall obtain possession of
any of such proceeds before the time when the Second Priority Debt Obligations
have been paid in full, then it shall hold such proceeds in trust for the
holders of the Second Priority Debt Obligations and transfer such proceeds to
the Second Priority Collateral Trustee.
ARTICLE VI
Second Priority Collateral Trustee
SECTION 6.01. Delivery of Secured Documents. On the Restatement
Effective Date, Rite Aid shall deliver to the Second Priority Collateral
Trustee a true and complete copy of each of the Senior Collateral Documents,
the Senior Credit Agreement and the Second Priority Collateral Documents, each
as in effect on the Restatement Effective Date. 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
Restatement Effective Date.
SECTION 6.02. Information as to Holders. Rite Aid shall deliver to
the Second Priority Collateral Trustee 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 6.03. 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 6.03 shall survive the termination
of this Agreement.
SECTION 6.04. 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 6.04 shall survive the termination of this Agreement.
SECTION 6.05. 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 Senior
Collateral Agents or any Secured Party to any civil or criminal liability. The
obligations of Rite Aid under this Section 6.05 shall survive the termination
of this Agreement.
SECTION 6.06. 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 6.06 shall survive the termination of this Agreement.
SECTION 6.07. 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 6.08. 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 6.09. 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 as determined by a court
of competent jurisdiction. 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 6.10. 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 6.11. 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 6.12. 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 otherwise
expressly provided herein, 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 6.13. 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 6.14. 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 the 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 6.14(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 6.15. Status of Successors to Second Priority Collateral
Trustee. Except as permitted by Section 6.14, every successor to the Second
Priority Collateral Trustee appointed pursuant to Section 6.14 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 6.16. 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 6.17. 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 6.17.
SECTION 6.18. Removal of Second Priority Collateral Trustee. The
Second Priority Collateral Trustee may be removed and discharged from the
responsibilities hereby created at any time by the Second Priority Instructing
Group. The Second Priority Instructing Group may appoint a successor trustee
with the consent of Rite Aid (such consent not to be unreasonably withheld).
The removal and discharge of the Second Priority Collateral Trustee shall be
effective upon appointment of such successor trustee and such successor
trustee's acceptance of its appointment.
ARTICLE VII
Release of Collateral;
Expiration of Certain Rights
SECTION 7.01. Releases of Collateral. At any time during which no
Triggering Event has occurred and is continuing:
(a) If any Collateral is to be disposed of in a disposition that is
permitted by the Senior Loan Documents and the Second Priority Debt Documents,
then the Liens in favor of the Secured Parties under the Collateral Documents
with respect to such Collateral (but not the proceeds thereof) will be
released automatically upon consummation of such disposition, without the need
for any consent or approval by any Secured Party, and the Second Priority
Collateral Trustee, the Senior Collateral Agents and the Second Priority
Representatives, at the expense of Rite Aid, shall execute such documents as
are reasonably necessary to effectuate such release.
(b) Notwithstanding anything to the contrary in any Second Priority
Debt Document, at such time as the Senior Lien in any Collateral is released,
the Second Priority Lien in such Collateral shall automatically terminate and
be released without the need for any action or consent by or from the Second
Priority Collateral Trustee, the Second Priority Instructing Group or any
Second Priority Debt Party so long as (i) no Lien securing any Indebtedness
remains on such Collateral and (ii) after giving effect to any release of the
Second Priority Lien in such Collateral, at least $300,000,000 in aggregate
principal amount of Indebtedness shall remain outstanding under the Senior
Credit Agreement.
(c) Notwithstanding anything to the contrary in any Second Priority
Debt Document, at such time as a Subsidiary Guarantor ceases to guarantee or
be an obligor in respect of, or to pledge any of its assets to secure, any
Senior Obligations, such Subsidiary Guarantor shall be automatically released
from all its obligations under the Second Priority Subsidiary Guarantee
Agreement and the other Second Priority Collateral Documents without the need
for any action or consent by or from the Second Priority Collateral Trustee,
the Second Priority Instructing Group or any Second Priority Debt Party so
long as (i) such Subsidiary Guarantor ceases to guarantee or be an obligor in
respect of, or to pledge its assets to secure, any Indebtedness that is
secured by the Collateral and (ii) after giving effect to any such release, at
least $300,000,000 in aggregate principal amount of Indebtedness shall remain
outstanding under the Senior Credit Agreement.
(d) The Lien of any Collateral Document may, at any time, be released
in whole or in part by the Senior Collateral Agents (in the case of the Senior
Lien) or the Second Priority Collateral Trustee (in the case of the Second
Priority Lien) pursuant to written directions signed by the Majority Senior
Parties (or the Senior Collateral Agents on behalf of the Majority Senior
Parties) or the Second Priority Instructing Group, respectively; provided that
the release of all or substantially all of the Senior Collateral shall require
the written consent of all the Senior Lenders and the release of all or
substantially all of the Second Priority Collateral shall require the written
consent of all Second Priority Secured Parties.
ARTICLE VIII
Miscellaneous
SECTION 8.01. Amendments, Supplements and Waivers. Except as
otherwise provided in Section 8.12, the Majority Senior Parties and the Second
Priority Instructing Group (and with respect to any such amendment, supplement
or waiver (i) which by the terms of this Agreement requires Rite Aid's consent
or which increases the obligations or reduces the rights of Rite Aid or any
Subsidiary Guarantor, with the consent of Rite Aid, (ii) which by the terms of
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 its terms adversely affects the rights of the Second
Priority Debt Parties under a particular Second Priority Facility, as the case
may be, in a manner materially different from its effect on the other Second
Priority Facilities, with the consent of the 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 8.02. 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
General Counsel, telecopy 000-000-0000;
(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;
(iii) If to the Senior Collateral Agents, to them at:
Citicorp North America, Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX
00000, Attention of Sebastien Delasnerie, telecopy 000-000-0000 and
JPMorgan Chase Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention
of Xxxx Xxxxxxxxx, telecopy 000-000-0000;
(iv) If to the trustee for the 12.5% Notes, to U.S. Bank and
Trust, Xxxxxxx Square, 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, XX
00000, Attention of Corporate Trust Administration, telecopy (860)
244-1897;
(v) If to the trustee for the 9.5% Notes, or the 8.125%
Notes, to BNY Midwest Trust Company, 0 Xxxxx XxXxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, XX 00000, Attention of Corporate Trust, telecopy
000-000-0000; and
(vi) If to any other Second Priority Representative, to it
at the address specified by it in the Representative Supplement
delivered by it pursuant to Section 8.12.
All such notices, requests, demands and communications shall be
deemed to have been duly given or made, when delivered by hand or when
telecopied. Any party hereto may from time to time change the address to which
notices are to be given to it hereunder by giving written notice of such new
address to the other parties to this Agreement.
SECTION 8.03. Headings. Headings used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
SECTION 8.04. 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 8.05. 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 Agents 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 Agents 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 8.06. 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 8.07. 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 8.08. 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. Delivery of an
executed signature page to this Agreement by facsimile transmission shall be
as effective as delivery of a manually signed counterpart of this Agreement.
SECTION 8.09. Consent to Jurisdiction and Service of Process. (a)
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 either Senior Collateral Agent, 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 8.02. 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 8.10. 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 8.11. Additional Subsidiary Guarantors. Pursuant to the
Senior Credit Agreement and the Second Priority Debt Documents, certain wholly
owned Domestic Subsidiaries of Rite Aid which are acquired or organized after
the Restatement Effective Date are required to enter into this Agreement as
provided therein. Upon execution and delivery by a Subsidiary of Rite Aid of
an instrument in the form of Annex 2, such Subsidiary shall become a
Subsidiary Guarantor hereunder with the same force and effect as if originally
named as a Subsidiary Guarantor herein. The execution and delivery of such
instrument shall not require the consent of any other party hereunder, and
will be acknowledged by the Second Priority Collateral Trustee and the Senior
Collateral Agents. 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 8.12. Additional Second Priority Debt. To the extent, but
only to the extent, permitted by the provisions of the Senior Loan Documents
and the Second Priority Debt Documents, Rite Aid may issue and sell one or
more series or classes of Second Priority Debt. Any such additional class or
series of Second Priority Debt ("Class Debt") may be secured by the Second
Priority Lien and may be Guaranteed by the Subsidiary Guarantors on a
subordinated basis, in each case under and pursuant to the Second Priority
Collateral Documents, if and subject to the condition that the Representative
of any such Class Debt (the "Class Representative"), acting on behalf of the
holders of such Class Debt (such Representative and holders in respect of any
Class Debt being referred to as the "Class Debt Parties"), becomes a party to
this Agreement by satisfying the following conditions:
(i) such Class Representative shall have executed and
delivered an instrument substantially in the form of Annex 3 (with
such changes as may be approved by the Senior Collateral Agents and
such Class Representative) pursuant to which it becomes a
Representative hereunder, and such Class Debt and the related Class
Debt Parties become subject hereto and bound hereby;
(ii) Rite Aid shall have delivered to the Senior Collateral
Agents and the Second Priority Collateral Trustee true and complete
copies of each of the Second Priority Debt Documents relating to such
Class Debt, certified as being true and correct by a Financial
Officer of Rite Aid;
(iii) all filings, recordations and/or amendments or
supplements to the Second Priority Collateral Documents necessary or
desirable in the opinion of the Second Priority Collateral Trustee to
confirm and perfect the Second Priority Lien's securing the relevant
Second Priority Debt Obligations relating to such Class Debt shall
have been made, executed and/or delivered (or, with respect to any
such filings or recordations, acceptable provisions to perform such
filings or recordings have been taken in the reasonable judgment of
Second Priority Collateral Trustee), and all fees and taxes in
connection therewith shall have been paid;
(iv) the Second Priority Debt Documents relating to such
Class Debt shall provide, in a manner reasonably satisfactory to the
Senior Collateral Agents and the Second Priority Collateral Trustee,
that each Class Debt Party with respect to such Class Debt will be
subject to and bound by the provisions of this Agreement in its
capacity as a holder of such Class Debt; and
(v) the Senior Collateral Agents and the Second Priority
Collateral Trustee shall have received such opinions of outside
counsel to Rite Aid and such Class Representative as any of them may
request and such other documents relating to the matters referred to
in clauses (i), (ii) and (iii) as any of them may reasonably request,
and such opinions and other documents shall be satisfactory in form
and substance to the Senior Collateral Agents and the Second Priority
Collateral Trustee.
Notwithstanding anything to the contrary contained herein (including
Section 8.01 hereof) or in any Second Priority Collateral Document, any
filings, recordations or amendments or supplements contemplated by clause
(iii) above (x) shall be subject to the prior approval of the Senior
Collateral Agents, Second Priority Collateral Trustee and Rite Aid and (y) in
the case of any such amendment or supplement to a Second Priority Collateral
Document, shall be entered into by Rite Aid, the Subsidiary Guarantors, the
Second Priority Collateral Trustee and consented to by the Senior Collateral
Agents and the relevant Class Representative, but shall not require the
consent or approval of any other Senior Secured Party or Second Priority
Secured Party, and shall become effective upon satisfaction of each of the
conditions set forth above.
SECTION 8.13. Bailee for Perfection. The Senior Collateral Agents
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 Agents 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 8.14. Restatement of Existing Agreement. The parties hereto
confirm that this Agreement constitutes an amendment and restatement of the
Collateral Trust and Intercreditor Agreement dated as of June 27, 2001 (the
"Original Intercreditor Agreement"), among Rite Aid, the subsidiary
guarantor's party thereto, Wilmington Trust Company, Citicorp North America,
Inc., and certain Second Priority Representatives. In accordance with Section
10.12 of the Original Intercreditor Agreement, (i) CNAI, with the consent and
authority of the Majority Senior Parties, and (ii) BNY Midwest Trust Company,
in its capacity as the Second Priority Representative which, by reason of the
9.5% Notes and the 8.125% Notes in the aggregate representing a majority of
the current aggregate amount of outstanding Second Priority Debt Obligations,
constitutes the sole member of the Second Priority Instructing Group (in such
capacity, the "Instructing Party"), hereby consent to the execution and
delivery of, and authorize and instruct the Second Priority Collateral Trustee
to execute and deliver, this Agreement and the other amendments to the Second
Priority Collateral Documents in the forms attached hereto as Annex 4.
Furthermore, as a result of the release of the Senior Mortgages (as defined in
the Original Intercreditor Agreement) contemporaneously herewith, the
Instructing Party hereby (i) consents to the release of the Second Priority
Mortgages and (ii) authorizes and instructs the Second Priority Collateral
Trustee to execute and deliver any and all release documents reasonably
requested by Rite Aid to evidence such release.
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:
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 NORTH AMERICA, INC., as
Senior Collateral Agent,
By________________________________
Name:
Title:
JPMORGAN CHASE BANK, as Senior
Collateral Agent,
By________________________________
Name:
Title:
BNY MIDWEST TRUST COMPANY, as Trustee
under the 9.5% Note Indenture,
By_______________________________
Name:
Title:
BNY MIDWEST TRUST COMPANY, as Trustee
under the 8.125% Note Indenture,
By_______________________________
Name:
Title:
Annex 1 to the
Collateral Trust and Intercreditor Agreement
Subsidiary Guarantors
---------------------
Corporations
------------
1. Thrifty PayLess, Inc.
2. Rite Aid of Vermont, Inc.
3. Rite Aid of Ohio, Inc.
4. Rite Aid of Maine, Inc.
5. Rite Aid of West Virginia, Inc.
6. The Lane Drug Company
7. 0000 Xxxxxxx Xxxx - Xxxxxxxx Inc.
8. 0000 Xxxxxx Xxxx Xxxx - Xxxxxxxxxx Corp.
9. 0000 Xxxxxxxxxxxx Xxxxxx Xxxx - Xxxxxxxxxxxx Xxxx, Inc.
10. 5277 Associates, Inc.
11. 000 Xxx Xxxxxx Corp.
12. 5600 Superior Properties, Inc.
13. 000-000 Xxxxx Xx. Corp.
14. Apex Drug Stores, Inc.
15. Broadview and Wallings - Broadview Heights Ohio, Inc.
16. Dominion Action Four Corporation
17. Dominion Action One Corporation
18. Dominion Action Three Corporation
19. Dominion Action Two Corporation
20. Dominion Drug Stores Corp.
21. Drug Fair of PA, Inc.
22. Drug Fair, Inc.
23. Eagle Managed Care Corp.
24. England Street-Asheland Corporation
25. GDF, Inc.
26. Harco, Inc.
27. K & B Alabama Corporation
28. K&B Florida Corporation
29. K & B Louisiana Corporation
30. K & B Mississippi Corporation
31. K & B Services, Incorporated
32. K & B Tennessee Corporation
33. K&B Texas Corporation
34. K & B, Incorporated
35. Keystone Centers, Inc.
36. Lakehurst and Broadway Corporation
37. Ocean Acquisition Corporation
38. P.L.D. Enterprises, Inc.
39. Xxxxxx Drive and Navy Boulevard Property Corporation
40. PDS-1 Michigan, Inc.
41. Perry Distributors, Inc.
42. Perry Drug Stores, Inc.
43. PL Xpress, Inc.
44. Portfolio Medical Services, Inc.
45. Rack Rite Distributors, Inc.
46. Ram-Utica, Inc.
47. RDS Detroit, Inc.
48. Read's Inc.
49. Rite Aid Drug Palace, Inc.
50. Rite Aid Hdqtrs. Corp.
51. Rite Aid of Alabama, Inc.
52. Rite Aid of Connecticut, Inc.
53. Rite Aid of Delaware, Inc.
54. Rite Aid of Florida, Inc.
55. Rite Aid of Georgia, Inc.
56. Rite Aid of Illinois, Inc.
57. Rite Aid of Indiana, Inc.
58. Rite Aid of Kentucky, Inc.
59. Rite Aid of Maryland, Inc.
60. Rite Aid of Massachusetts, Inc
61. Rite Aid of Michigan, Inc.
62. Rite Aid of New Hampshire, Inc.
63. Rite Aid of New Jersey, Inc.
64. Rite Aid of New York, Inc.
65. Rite Aid of North Carolina, Inc.
66. Rite Aid of Pennsylvania, Inc.
67. Rite Aid of South Carolina, Inc.
68. Rite Aid of Tennessee, Inc.
69. Rite Aid of Virginia, Inc.
70. Rite Aid of Washington, D.C., Inc.
71. Rite Aid Realty Corp.
72. Rite Aid Rome Distribution Center, Inc.
73. Rite Aid Transport, Inc.
74. Rite Aid Venturer #1, Inc.
75. Rite Fund, Inc.
76. Rite Investments Corp.
77. Rx Choice, Inc.
78. Sophie One Corp.
79. Super Ice Cream Supplies, Inc.
80. Super Pharmacy Network, Inc.
81. Super Tobacco Distributors, Inc.
82. The Xxxx Company
83. Thrifty Corporation
84. Virginia Corporation
85. W. R. A. C., Inc.
Limited Liability Companies
---------------------------
1. 000 Xxxxx Xxxxxxxx - Xxxxxx, Xxxx, LLC
2. Eighth and Water Streets - Urichsville, Ohio, LLC
3. Gettysburgh and Hoover-Dayton, Ohio, LLC
4. Xxxxxxxx & Chillicothe Roads - Chesterland, LLC
5. Xxxxxx & Xxxxxxx, LLC
6. Silver Springs Road - Baltimore, Maryland/One, LLC
7. Silver Springs Road - Baltimore, Maryland/Two, LLC
8. Xxxxx Xxxxxx xxx Xxxx Xxxx - Xxxxxx, Xxxx, LLC
9. 000 Xxxxxxxx Xxxxxx Xxxxxxx, LLC
10. 0000 Xxxx Xxxxx Xxxxxx Xxxxx, Xxxxx, LLC
11. 1740 Associates, L.L.C.
12. Xxx & Government Streets - Mobile, Alabama, LLC
13. Baltimore/Annapolis Boulevard and Governor Richie Highway -
Glen Burnie, Maryland, LLC
14. Xxxxxxx Xxxxxx xxx Xxxx Xxxxxx - Xxxxx, XX, LLC
15. Fairground, L.L.C.
16. Xxxxxxx & Xxxxxx - Xxxxxxx Xxxxxxxx, Xxxxxxxx, LLC
17. Name Rite, L.L.C.
18. Northline & Xxx - Xxxxxx - Southgate, LLC
19. Paw Paw Lake Road & Paw Paw Avenue - Coloma, Michigan, LLC
20. Seven Mile and Evergreen - Detroit, LLC
21. State & Fortification Street - Jackson, Mississippi, LLC
22. Tyler and Xxxxxxx Roads, Birmingham - Alabama, LLC
23. Rite Aid Services, L.L.C.
Annex 2 to the
Collateral Trust and Intercreditor Agreement
SUPPLEMENT NO. dated as of ,
to the AMENDED AND RESTATED COLLATERAL TRUST AND
INTERCREDITOR AGREEMENT dated as of June 27,
2001, as amended and restated as of May 28,
2003 (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 North
America, Inc., a Delaware corporation, and
JPMorgan Chase Bank, a New York banking
corporation, as Senior Collateral Agents for
the Senior Secured Parties under the Senior
Loan Documents, and each other Second Priority
Representative from time to time a party
thereto.
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 the Senior Credit Agreement and
certain Second Priority Debt Documents, certain newly acquired or organized
Domestic Subsidiaries of Rite Aid are required to enter into the Collateral
Trust and Intercreditor Agreement. Section 8.11 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 Agreement in order to induce the Senior
Lenders to make additional extensions of credit thereunder and as
consideration for extensions of credit previously made, and in accordance with
any applicable requirements of the Second Priority Debt Documents.
Accordingly, the Second Priority Collateral Trustee, the Senior
Collateral Agent and the New Subsidiary Guarantor agree as follows:
SECTION 1. In accordance with Section 8.11 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 Agents 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 Senior Collateral Agents
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, no 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 8.02 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 Agents for
their 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 Agents.
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 NORTH AMERICA, INC.,
as Senior Collateral Agent,
By_______________________________
Name:
Title:
JPMORGAN CHASE BANK, as Senior
Collateral Agent,
By________________________________
Name:
Title:
Annex 3 to the
Collateral Trust and Intercreditor Agreement
REPRESENTATIVE SUPPLEMENT NO. dated as of ,
to the AMENDED AND RESTATED COLLATERAL TRUST AND
INTERCREDITOR AGREEMENT dated as of June 27, 2001, as
amended and restated as of May 28, 2003 (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
North America, Inc., a Delaware corporation, and JPMorgan
Chase Bank, a New York banking corporation, as Senior
Collateral Agents for the Senior Secured Parties under
the Senior Loan Documents, and the Second Priority
Representative from time to time a party thereto.
A. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Collateral Trust and
Intercreditor Agreement, including the Definitions Annex referred to therein.
B. As a condition to the ability of Rite Aid to issue additional
Second Priority Debt and to secure such Class Debt with the Second Priority
Lien and to have such Class Debt guaranteed by the Subsidiary Guarantors on a
subordinated basis, in each case under and pursuant to the Second Priority
Collateral Documents, the Class Representative in respect of such Class Debt
is required to become a Representative under, and such Class Debt and the
Class Debt Parties in respect thereof are required to become subject to and
bound by, the Collateral Trust and Intercreditor Agreement. Section 8.12 of
the Collateral Trust and Intercreditor Agreement provides that such Class
Representative may become a Representative under, and such Class Debt and such
Class Debt Parties may become subject to and bound by, the Collateral Trust
and Intercreditor Agreement, pursuant to the execution and delivery by the
Class Representative of an instrument in the form of this Representative
Supplement and the satisfaction of the other conditions set forth in Section
8.12. The undersigned Class Representative (the "New Representative") is
executing this Representative Supplement in accordance with the requirements
of the Senior Credit Agreement and the Second Priority Debt Documents.
Accordingly, the Second Priority Collateral Trustee, the Senior
Collateral Agents and the New Representative agree as follows:
SECTION 1. In accordance with Section 8.12 of the Collateral Trust
and Intercreditor Agreement, the New Representative by its signature below
becomes a Representative under, and the related Class Debt and Class Debt
Parties become subject to and bound by, the Collateral Trust and Intercreditor
Agreement with the same force and effect as if the New Representative had
originally been named therein as a Representative, and the New Representative,
on behalf of itself and such Class Debt Parties, hereby agrees to all the
terms and provisions of the Collateral Trust and Intercreditor Agreement
applicable to it as a Representative and to the Class Debt Parties that it
represents. Each reference to a "Representative" or "Second Priority
Representative" in the Collateral Trust and Intercreditor Agreement shall be
deemed to include the New Representative. The Collateral Trust and
Intercreditor Agreement is hereby incorporated herein by reference.
SECTION 2. The New Representative represents and warrants to the
Second Priority Collateral Trustee, the Senior Collateral Agents and the other
Secured Parties that (i) it has full power and authority to enter into this
Representative Supplement, in its capacity as [agent] [trustee], (ii) this
Representative Supplement has been duly authorized, executed and delivered by
it and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with the terms of such Agreement and (iii) the Second
Priority Debt Documents relating to such Class Debt provide that, upon the New
Representatives entry into this Agreement, the Class Debt Parties in respect
of such Class Debt will be subject to and bound by the provisions of the
Collateral Trust and Intercreditor Agreement.
SECTION 3. This Representative 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 Representative
Supplement shall become effective when each of the Second Priority Collateral
Trustee and the Collateral Agent shall have received a counterpart of this
Representative Supplement that bears the signature of the New Representative.
Delivery of an executed signature page to this Representative Supplement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Representative Supplement.
SECTION 4. Except as expressly supplemented hereby, the Collateral
Trust and Intercreditor Agreement shall remain in full force and effect.
SECTION 5. THIS REPRESENTATIVE SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in
this Representative Supplement should be held invalid, illegal or
unenforceable in any respect, no 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 8.02 of the Collateral Trust and
Intercreditor Agreement. All communications and notices hereunder to the New
Representative shall be given to it at the address set forth below its
signature hereto.
SECTION 8. Rite Aid agrees to reimburse each of the Second Priority
Collateral Trustee and the Senior Collateral Agent for its reasonable
out-of-pocket expenses in connection with this Representative 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 Representative, the Second Priority
Collateral Trustee and the Senior Collateral Agent have duly executed this
Representative Supplement to the Collateral Trust and Intercreditor Agreement
as of the day and year first above written.
[NAME OF NEW REPRESENTATIVE], as
[ ] for the holders of
[ ],
By________________________________
Name:
Title: Authorized Signatory
Address for notices:
________________________________
________________________________
attention of: __________________
Telecopy:_______________________
Acknowledged by:
WILMINGTON TRUST COMPANY,
as Second Priority Collateral Trustee,
By________________________________
Name:
Title:
CITICORP NORTH AMERICA, INC.,
as Senior Collateral Agent,
By________________________________
Name:
Title:
JPMORGAN CHASE BANK,
as Senior Collateral Agent,
By________________________________
Name:
Title:
