EXECUTION COPY
Proprietary & Confidential
ASSIGNMENT AND SECURITY AGREEMENT
ASSIGNMENT AND SECURITY AGREEMENT (this "Security Agreement"), dated as of
June 27, 2001, by XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Trustee of RAC Distribution Statutory Trust
(the "Trustee"), in favor of CITICORP USA, INC., as Agent (the "Agent"), for its
benefit and for the benefit of the Holders from time to time of the Notes and
Certificates (as such terms are defined in the Participation Agreement referred
to below).
Preliminary Statements
A. The Trustee will finance the acquisition of its interests in the
Properties by issuing the Notes and Certificates.
B. It is a condition precedent to the purchase of the Notes and
Certificates and the consummation of the transactions contemplated by the
Operative Documents that the Trustee grant the assignment and security interest
contemplated by this Security Agreement to the Agent for its benefit and for the
benefit of the Holders from time to time of the Notes and the Certificates.
NOW, THEREFORE, in consideration of the agreements contained herein, and in
order to induce the Holders to purchase the Notes and Certificates, the parties
hereto agree as follows:
1. Definitions. All capitalized terms used but not otherwise defined herein
have the meanings assigned to such terms in the Participation Agreement dated as
of June 27, 2001 among Rite Aid Realty Corp., Rite Aid Corporation, the Trustee,
the Persons named therein as Note Holders and Certificate Holders and the Agent
(the "Participation Agreement"). In addition, the rules of construction set
forth in Part I of Appendix A to the Participation Agreement shall apply to this
Security Agreement.
2. Creation of Security Interest. As security for the full payment when due
(whether at stated maturity, by acceleration or otherwise) of all obligations of
the Trustee to the Note Holders, the Certificate Holders and the Agent under the
Operative Documents, whether for principal, interest, Certificate Amount,
Distributions, fees, expenses or otherwise, including any extensions or renewals
thereof or replacements therefor (the "Obligations"), the Trustee hereby
assigns and grants to and creates in favor of the Agent, for its benefit and the
ratable benefit of the Holders from time to time of the Notes and Certificates,
in accordance with the
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priorities set forth in the Participation Agreement, a lien on and first
priority security interest (the "Security Interest") in and to the following
collateral, whether now existing or hereafter acquired: (a) the Parent Guaranty,
(b) the Security Agreement, (c) all of its direct and indirect interests and
rights in, to and under the Intercreditor Agreement and (d) the Lease, including
the Lease Supplements and all rights and remedies of the Trustee as Lessor
thereunder in the event that the Lease is determined to be, and is
recharacterized as, a mortgage, security agreement and/or other financing
document securing or evidencing a financing transaction (collectively, the
"Assigned Agreements"), includ ing (1) all rights of the Trustee (as Lessor or
otherwise) to receive moneys due and to become due under or pursuant to the
Assigned Agreements, (2) all claims of the Trustee for damages arising out of or
for breach of or default under the Assigned Agreements, (3) all rights of the
Trustee to terminate, amend, supplement, modify or waive performance of the
Assigned Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder and (4) all proceeds of any Assigned
Agreement, and (e) such portion of the Properties that do not constitute real
property and are covered by the Mortgages (collectively, the "Covered Property")
and all additions thereto and renewals and replacements thereof and all
substitutions therefor which are now owned or hereafter acquired by the Trustee,
or in which the Trustee has or will have an interest, and all proceeds of the
Covered Property and any rights to any insurance policies covering the Covered
Property (the Covered Property, all proceeds therefrom and the Assigned
Agreements being referred to collectively as the "Collateral"); provided that
until the occurrence of an Event of Default (as defined in the Loan Agreement),
the Trustee may exercise all of its rights, interests and benefits under the
Assigned Agreements in any lawful manner.
3. Rights and Remedies Upon Event of Default. During the continuance of an
Event of Default (as defined in the Loan Agreement), the Agent may, upon the
direction of the Majority Holders in accordance with and subject to the
limitations of Article VI of the Participation Agreement: (i) foreclose this
Security Agreement, and thereafter exercise all of the Trustee's rights,
interests and benefits under the Collateral in any manner permitted by Law and
(ii) exercise in respect of the Collateral, in addition to other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party after default under the Uniform Commercial Code of
the State of New York (the "UCC"), including the right to take possession of and
sell the Covered Property or any portion thereof, and to take such other
measures as the Agent may deem necessary for the care, protection and
preservation thereof. The Trustee will pay to the Agent, as provided in Section
9.13 of the Participation Agreement, any and all reasonable expenses, including
reasonable legal expenses and attorneys' fees, incurred or paid by the Agent in
protecting its interest in the Collateral and in enforcing its rights
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hereunder with respect thereto. Any notice of sale, disposition or other
intended action by the Agent with respect to such of the Collateral as is
governed by the UCC sent to the Trustee in accordance with the provisions hereof
at least five (5) days prior to such action, will constitute reasonable notice
to the Trustee, and the method of sale or disposition or other intended action
set forth or specified in such notice shall conclusively be deemed to be
commercially reasonable within the meaning of the UCC unless objected to by the
Trustee within five (5) days after receipt by the Trustee of such notice. The
proceeds of any disposition of the Collateral will be applied by the Agent to
the payment of the Obligations in such priority and proportions as set forth in
the Participation Agreement. Notwithstanding the foregoing, the Trustee will not
be liable for any deficiency if the proceeds realized from the Collateral are
insufficient to pay the Obligations.
4. No Duty on Agent's Part. The powers conferred on the Agent hereunder are
solely to protect the Agent's interests in the Collateral and will not impose
any duty upon it to exercise any such powers. The Agent will be accountable only
for amounts that it actually receives as a result of the exercise of such
powers, and neither it nor any of its officers, directors, employees or agents
will be responsible to the Trustee or the Holders for any act or failure to act
hereunder, except for its own gross negligence or willful misconduct or as
otherwise provided by applicable Law.
5. Termination; Release of Security Interest. This Security Agreement will
terminate, and all of the Collateral will be released automatically from the
Security Interest granted hereby, upon the satisfaction in full of all of the
Obligations.
6. Miscellaneous.
(a) Successors. This Security Agreement will be binding upon the parties
and their respective successors, assigns and legal representatives.
(b) Notices. Any notice, request, approval, consent, order, instruction,
direction, report or other communication under this Security Agreement given by
either party to the other party will be in writing and will be delivered in the
manner set forth in Section 9.02 of the Participation Agreement.
(c) Amendments. No waiver, amendment or modification of any of the
provisions of this Security Agreement will be valid unless set forth in a
written instrument signed by each of the parties hereto in accordance with the
provisions of Section 9.04 of the Participation Agreement.
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ASSIGNMENT AND SECURITY AGREEMENT
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(d) Interpretation. All section, subsection and paragraph captions are for
convenience of reference only and will not affect the construction of any
provisions hereof.
(e) Applicable Law. THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).
(f) Further Assurances. Each of the parties hereto agrees that it will
promptly and duly execute and deliver to the other party hereto such documents
and assurances and take such further action as such other party may from time to
time reasonably request to carry out more effectively the intent and purpose of
this Security Agreement, or to establish and protect the rights and remedies
created or intended to be created hereunder in favor of any party.
(g) Counterparts. This Security Agreement may be executed in multiple
counterparts, each of which, taken together, will constitute a single fully
executed original.
(h) Exculpation of the Trustee. It is expressly agreed, anything herein to
the contrary notwithstanding, that each and all of the representations,
warranties, covenants, undertakings and agreements herein made on the part of
the Trustee are made and intended not as personal representations, warranties,
covenants, undertakings and agreements by the Trustee, or for the purpose or
with the intention of binding the Trustee, personally, but are made and intended
for the purpose of binding only the Trust Estate. No personal liability or
personal responsibility is assumed by or will at any time be asserted or
enforceable against the Trustee on account of this Security Agreement or on
account of any representation, warranty, covenant, undertaking or agreement of
the Trustee, whether expressed or implied herein, all such personal liability,
if any, being expressly waived and released by the Agent and by all Persons
claiming by, through or under it.
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ASSIGNMENT AND SECURITY AGREEMENT
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IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed by their respective Officers thereunto duly authorized, as
of the day and year first above written.
XXXXX FARGO BANK NORTHWEST, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee of RAC Distribution Statutory Trust
By: ______________________________
Name:
Title:
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ASSIGNMENT AND SECURITY AGREEMENT
Proprietary & Confidential
CITICORP USA, INC., as Agent
By: ______________________________
Name:
Title:
