EXECUTION COPY
AMENDMENT NO. 1 TO SECOND PRIORITY SUBSIDIARY SECURITY
AGREEMENT, SECOND PRIORITY SUBSIDIARY GUARANTEE AND SECOND
PRIORITY INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT
AMENDMENT NO. 1, dated as of April 15, 2003 (this
"Amendment"), to (i) the SECOND PRIORITY SUBSIDIARY SECURITY
AGREEMENT, dated as of June 27, 2001 (as amended, supplemented or
otherwise modified from time to time, the "Second Priority
Subsidiary Security Agreement"), among each of the subsidiaries
of Rite Aid Corporation ("Rite Aid") identified on the signature
pages thereto and any other person that became a Subsidiary
Guarantor pursuant to the Second Priority Debt Documents
(collectively, the "Grantors") and Wilmington Trust Company, a
Delaware banking corporation, as collateral trustee (in such
capacity, the "Second Priority Collateral Trustee") for the
Second Priority Debt Parties, (ii) the SECOND PRIORITY SUBSIDIARY
GUARANTEE, dated as of June 27, 2001 (as amended, supplemented or
otherwise modified from time to time, the "Second Priority
Subsidiary Guarantee"), among each of the subsidiaries of Rite
Aid listed on Schedule I thereto and any other person that became
a party thereto pursuant to the Second Priority Debt Documents
(collectively, the "Subsidiary Guarantors") and the Second
Priority Collateral Trustee, and (iii) the SECOND PRIORITY
INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT, dated as of
June 27, 2001 (as amended, supplemented or otherwise modified
from time to time, the "Second Priority Indemnity, Subrogation
and Contribution Agreement"), among Rite Aid, the Subsidiary
Guarantors and the Second Priority Collateral Trustee.
RECITALS
A. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Senior Credit Facility
dated as of June 27, 2001 (as amended, supplemented or otherwise modified from
time to time, the "Senior Credit Facility"), among Rite Aid, the Banks (as
defined therein) and Citicorp USA, Inc., as a Swingline Bank, as an Issuing Bank
and as administrative agent and collateral agent for the Banks, as the case may
be.
B. Rite Aid has requested that it be permitted to incur up to
$800,000,000 aggregate principal amount of Additional Second Priority Debt.
C. Rite Aid has requested that the definition of "Additional Second
Priority Debt" be amended in the Definitions Annex to each of the Second
Priority Security Agreement, the Second Priority Subsidiary Guarantee and the
Second Priority
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Indemnity, Subrogation and Contribution Agreement in order to permit Rite Aid to
incur such amount of Additional Second Priority Debt.
D. The parties hereto are willing, subject to the terms and conditions
set forth in this Amendment, to so amend the Second Priority Subsidiary Security
Agreement, the Second Priority Subsidiary Guarantee and the Second Priority
Indemnity, Subrogation and Contribution Agreement.
E. The parties hereto are entering into this Amendment pursuant to
Section 20 of the Second Priority Subsidiary Security Agreement, Section 13(b)
of the Second Priority Subsidiary Guarantee and Section 6(b) of the Second
Priority Indemnity, Subrogation and Contribution Agreement.
AGREEMENTS
In consideration of the foregoing Recitals and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Amendment to the Second Priority Subsidiary Security
Agreement, Second Priority Subsidiary Guarantee and Second Priority Indemnity,
Subrogation and Contribution Agreement. Effective as of the Amendment Effective
Date (as defined below):
(a) the definition of "Additional Second Priority Debt" in the
Definitions Annex to each of the Second Priority Security Agreement, the Second
Priority Subsidiary Guarantee and the Second Priority Indemnity, Subrogation and
Contribution Agreement is hereby amended by replacing the reference in such
definition to "$300,000,000" with a reference to "$800,000,000"; and
(b) the Definitions Annex to each of the Second Priority Security
Agreement, the Second Priority Subsidiary Guarantee and the Second Priority
Indemnity, Subrogation and Contribution Agreement is hereby amended to insert
the following new definitions alphabetically therein:
"12.5% Note Exchange Agreement" means the Note Exchange Agreement
entered into as of June 27, 2001, by and among Rite Aid and the entities listed
on Schedule I to the Agreement relating to the issuance of the Exchange Notes in
exchange for $152,025,000 principal amount of Rite Aid's 10.5% Senior Secured
Notes due 2002.
"12.5% Note Registration Rights Agreement" means the Exchange and
Registration Rights Agreement, dated as of June 27, 2001, among the Company,
each of the Subsidiary Guarantors and the Holders from time to time as provided
therein, as such agreement may be amended from time to time.
Section 2. Representations and Warranties. To induce the other parties
hereto to enter into this Amendment, Rite Aid, each Subsidiary Guarantor and
each Grantor represents and warrants to each of the Majority Senior Parties, the
Second
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Priority Collateral Trustee and each Second Priority Representative that, as of
the Amendment Effective Date:
(a) This Amendment has been duly authorized, executed and delivered by
it and constitutes its valid and binding obligation, enforceable against it in
accordance with its terms.
(b) The representations and warranties of such person set forth in
each Senior Loan Document and Second Priority Collateral Document to which such
person is a party are true and correct in all material respects on and as of the
Amendment Effective Date with the same effect as though made on and as of the
Amendment Effective Date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct as of such earlier
date).
(c) After giving effect to the agreements herein, no Default has
occurred and is continuing.
Section 3. Effectiveness. This Amendment shall become effective on the
first date (the "Amendment Effective Date") on which (i) the Second Priority
Collateral Trustee shall have received counterparts of this Amendment that, when
taken together, bear the signatures of Rite Aid, the Subsidiary Guarantors, the
Grantors and the Second Priority Collateral Trustee, (ii) Amendment No. 5 to the
Senior Credit Facility, dated as of April 14, 2003 (the "Senior Credit Facility
Amendment"), shall have become (or concurrently with the effectiveness of this
Amendment shall become) effective pursuant to its terms and (iii) Amendment No.
1 dated as of April 15, 2003 (the "Intercreditor Agreement Amendment") to the
Collateral Trust and Intercreditor Agreement shall have become (or concurrently
with the effectiveness of this Amendment shall become) effective pursuant to its
terms (and this Amendment shall have been deemed to have become effective
concurrently with the effectiveness of the Senior Credit Facility Amendment).
Section 4. Acknowledgement. Each party hereto acknowledges that (i)
upon the effectiveness of the Senior Credit Facility Amendment, the Majority
Senior Parties have consented to this Amendment pursuant to Section 2 of the
Senior Credit Facility Amendment and (ii) upon the effectiveness of the
Intercreditor Agreement Amendment, the Second Priority Instructing Group has
consented to this Amendment pursuant to Section 2 of the Intercreditor Agreement
Amendment.
Section 5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 6. Reference to Agreements. Except as amended hereby, each of
the Second Priority Subsidiary Security Agreement, the Second Priority
Subsidiary Guarantee and the Second Priority Indemnity, Subrogation and
Contribution Agreement shall remain in full force and effect and each such
agreement is hereby ratified and
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confirmed in all respects. On and after the Amendment Effective Date, each
reference in each of the Second Priority Subsidiary Security Agreement, the
Second Priority Subsidiary Guarantee and the Second Priority Indemnity,
Subrogation and Contribution Agreement to "this Agreement", "hereunder",
"hereof", "herein", or words of like import, and each reference to the Second
Priority Subsidiary Security Agreement, the Second Priority Subsidiary Guarantee
and the Second Priority Indemnity, Subrogation and Contribution Agreement shall
be deemed a reference to each of the Second Priority Subsidiary Security
Agreement, the Second Priority Subsidiary Guarantee and the Second Priority
Indemnity, Subrogation and Contribution Agreement, respectively, as amended
hereby. This Amendment shall constitute a "Second Priority Debt Document" for
all purposes of each of the Second Priority Subsidiary Security Agreement, the
Second Priority Subsidiary Guarantee and the Second Priority Indemnity,
Subrogation and Contribution Agreement and the other Second Priority Debt
Documents.
Section 7. Costs and Expenses. Rite Aid agrees to reimburse each of
the Senior Collateral Agent and the Second Priority Collateral Trustee for its
reasonable out-of-pocket expenses in connection with this Amendment, including
the reasonable fees, charges and disbursements of counsel for each of the Senior
Collateral Agent and the Second Priority Collateral Trustee.
Section 8. Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument.
Delivery of any executed counterpart of a signature page of this Amendment by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart hereof.
Section 9. Headings. The headings of this Amendment are for purposes
of reference only and shall not limit or otherwise affect the meaning hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.
RITE AID CORPORATION,
By:
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Name:
Title:
THE SUBSIDIARIES OF RITE AID
LISTED ON SCHEDULE I HERETO,
By:
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Name:
Title:
WILMINGTON TRUST COMPANY as
Second Priority Collateral Trustee,
By:
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Name:
Title:
SCHEDULE I
Subsidiary Guarantors/Grantors
