EXECUTION COPY
SENIOR SUBSIDIARY GUARANTEE 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 each of the
subsidiaries listed on Schedule I hereto (each
such subsidiary individually, a "Subsidiary
Guarantor", and collectively, the "Subsidiary
Guarantors") of RITE AID CORPORATION, a
Delaware corporation (the "Borrower"), CITICORP
NORTH AMERICA, INC., a Delaware corporation
("CNAI"), as senior collateral processing
co-agent and JPMORGAN CHASE BANK, a New York
banking corporation ("JPMCB"), as senior
collateral processing co-agent (each,
individually, a "Senior Collateral Agent," and
collectively, the "Senior Collateral Agents")
for the Senior Secured Parties.
Reference is made to the Senior Credit 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, the "Senior Credit
Agreement"), among the Borrower, the lenders from time to time party thereto
(the "Senior Lenders"), CNAI, as administrative agent for the Senior Lenders,
and JPMCB, as syndication agent for the Senior Lenders. Reference is also made
to the Senior Subsidiary Guarantee Agreement dated as of June 27, 2001 (as
amended, supplemented or otherwise modified from time to time prior to the
Restatement Effective Date, the "Original Senior Subsidiary Guarantee
Agreement") among the Subsidiary Guarantors listed on Schedule I thereto and
the subsidiaries of the Borrower that became parties thereto as provided in
Section 21 thereof (collectively, the "Original Subsidiary Guarantors") and
Citicorp USA, Inc., a Delaware corporation, as senior collateral agent (in
such capacity, the "Original Senior Collateral Agent"), pursuant to which the
Original Subsidiary Guarantors agreed to guarantee the payment of the Senior
Obligations (as defined in the Original Senior Subsidiary Guarantee
Agreement). The Original Subsidiary Guarantors and the Original Senior
Collateral Agent now wish to amend and restate the Original Senior Subsidiary
Guarantee Agreement in its entirety as set forth herein to guarantee the
obligations of the Borrower under the Senior Credit Agreement. Capitalized
terms used herein and not defined herein shall have the meanings assigned to
such terms in the Definitions Annex attached as Annex 2 hereto (as amended,
supplemented or otherwise modified from time to time), and if not defined
therein, as defined in the Senior Credit Agreement.
The Senior Lenders have agreed to make Loans to the
Borrower, and the Issuing Banks have agreed to issue Letters of Credit for the
account of the Borrower, pursuant to, and upon the terms and subject to the
conditions specified in, the Senior Credit Agreement. Each of the Subsidiary
Guarantors is a wholly owned subsidiary of the Borrower and acknowledges that
it will derive substantial benefit from the making of the Loans by the Senior
Lenders and the issuance of the Letters of Credit by the Issuing Banks. The
obligations of the Senior Lenders to make Loans and of the Issuing Banks to
issue Letters of Credit are conditioned on, among other things, the execution
and delivery by the Subsidiary Guarantors of a Senior Subsidiary Guarantee
Agreement in the form hereof. As consideration therefor and in order to induce
the Senior Lenders to make Loans and the Issuing Banks to issue Letters of
Credit, the Subsidiary Guarantors are willing to execute this Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. Each Subsidiary Guarantor
unconditionally guarantees, jointly with the other Subsidiary Guarantors and
severally, as a primary obligor and not merely as a surety, the due and
punctual payment of, and the due and punctual performance of, the Senior
Obligations. Each Subsidiary Guarantor agrees that the Senior Obligations may
be extended or renewed, in whole or in part, without notice to or further
assent from it, and that it will remain bound upon its guarantee under this
Agreement notwithstanding any extension or renewal of any Senior Obligation.
Anything contained in this Agreement to the contrary
notwithstanding, the obligations of each Subsidiary Guarantor hereunder shall
be
limited to a maximum aggregate amount equal to the greater of:
(a) the direct or indirect benefit to any Subsidiary
Guarantor from the Loans and other extensions of credit under the
Senior Loan Documents, and
(b) the greatest amount that would not render such
Subsidiary Guarantor's obligations hereunder subject to avoidance
under Section 548 of Title 11 of the United States Code or any
comparable provisions of any applicable state law, after giving
effect to all other liabilities of such Subsidiary Guarantor,
contingent or otherwise, that are relevant under such laws
(specifically excluding, however, any liabilities of such
Subsidiary Guarantor (x) in respect of intercompany Indebtedness
and other obligations of the Borrower or Affiliates of the Borrower
to the extent that such Indebtedness or other obligations would be
discharged in an amount equal to the amount paid by such Subsidiary
Guarantor hereunder and (y) under any guarantee of the Second
Priority Debt Obligations) and after giving effect as assets to the
value of any rights to subrogation, contribution, reimbursement,
indemnity or similar rights of such Subsidiary Guarantor pursuant
to (i) applicable law or (ii) any agreement providing for an
equitable allocation among such Subsidiary Guarantor and other
Affiliates of the Borrower of obligations arising under guarantees
by such parties (including the Senior Indemnity, Subrogation and
Contribution Agreement).
SECTION 2. Obligations Not Waived. To the fullest extent
permitted by applicable law, each Subsidiary Guarantor waives presentment to,
demand of payment from and protest to the Borrower of any of the Senior
Obligations, and also waives notice of acceptance of its guarantee under this
Agreement and notice of protest for nonpayment. To the fullest extent
permitted by applicable law, the obligations of each Subsidiary Guarantor
hereunder shall not be affected by (a) the failure of either Senior Collateral
Agent or any other Senior Secured Party to assert any claim or demand or to
enforce or exercise any right or remedy against the Borrower or any other
Subsidiary Guarantor under the provisions of the Senior Credit Agreement, any
other Senior Loan Document or otherwise, (b) any rescission, waiver, amendment
or modification of, or any release from any of the terms or provisions of this
Agreement, any other Senior Loan Document, any guarantee or any other
agreement, including with respect to any other Subsidiary Guarantor under this
Agreement or (c) the failure to perfect any security interest in, or the
release of, any of the security held by or on behalf of the Senior Collateral
Agents or any other Senior Secured Party.
SECTION 3. Security. Each of the Subsidiary Guarantors
authorizes each of the Senior Collateral Agents and each of the other Senior
Secured Parties to (a) take and hold security for the payment of its guarantee
under this Agreement and the Senior Obligations and exchange, enforce, waive
and release any such security, (b) apply such security and direct the order or
manner of sale thereof as they in their sole discretion may determine and (c)
release or substitute any one or more endorsees, other Subsidiary Guarantors
or other Obligors.
SECTION 4. Guarantee of Payment. Each Subsidiary
Guarantor agrees that its guarantee under this Agreement constitutes a
guarantee of payment when due and not of collection, and waives any right to
require that any resort be had by either Senior Collateral Agent or any other
Senior Secured Party to any of the security held for payment of the Senior
Obligations or to any balance of any deposit account or credit on the books of
either Senior Collateral Agent or any other Senior Secured Party in favor of
the Borrower, any other Obligor or any other Person.
SECTION 5. No Discharge or Diminishment of Guarantee. The
obligations of each Subsidiary Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason (other than
the indefeasible payment in full in cash of the Senior Obligations), including
any claim of waiver, release, surrender, alteration or compromise of any of
the Senior Obligations, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Senior Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations
of each Subsidiary Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of either Senior Collateral Agent or any
other Senior Secured Party to assert any claim or demand or to enforce any
remedy under the Senior Credit Agreement, any other Senior Loan Document or
any other agreement, by any waiver or modification of any provision of any
thereof, by any default, failure or delay, wilful or otherwise, in the
performance of any of the Senior Obligations, or by any other act or omission
that may or might in any manner or to any extent vary the risk of any
Subsidiary Guarantor or that would otherwise operate as a discharge of each
Subsidiary Guarantor as a matter of law or equity (other than the indefeasible
payment in full in cash of all the Senior Obligations).
SECTION 6. Defenses of Borrower Waived. To the fullest
extent permitted by applicable law, each of the Subsidiary Guarantors waives
any defense based on or arising out of any defense of the Borrower or the
unenforceability of the Senior Obligations or any part thereof from any cause,
or the cessation from any cause of the liability of the Borrower, other than
the final and indefeasible payment in full in cash of the Senior Obligations.
Each Senior Collateral Agent and any other Senior Secured Party may, at its
election, foreclose on any security held by one or more of them by one or more
judicial or nonjudicial sales, accept an assignment of any such security in
lieu of foreclosure, compromise or adjust any part of the Senior Obligations,
make any other accommodation with the Borrower, any other Subsidiary Guarantor
or any other guarantor or exercise any other right or remedy available to them
against the Borrower, any other Subsidiary Guarantor or any other guarantor,
without affecting or impairing in any way the liability of any Subsidiary
Guarantor hereunder except to the extent the Senior Obligations have been
fully, finally and indefeasibly paid in cash. Pursuant to applicable law, each
of the Subsidiary Guarantors waives any defense arising out of any such
election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other
right or remedy of such Subsidiary Guarantor against the Borrower or any other
Subsidiary Guarantor or guarantor, as the case may be, or any security.
SECTION 7. Agreement to Pay; Subordination. In
furtherance of the foregoing and not in limitation of any other right that
either Senior Collateral Agent or any other Senior Secured Party has at law or
in equity against any Subsidiary Guarantor by virtue hereof, upon the failure
of the Borrower or any other Obligor to pay any Senior Obligation when and as
the same shall become due, whether at maturity, by acceleration, after notice
of prepayment or otherwise, each Subsidiary Guarantor hereby promises to and
will forthwith pay, or cause to be paid, to the Senior Collateral Agents or
such other Senior Secured Party as designated thereby in cash the amount of
such unpaid Senior Obligations. Upon payment by any Subsidiary Guarantor of
any sums to the Senior Collateral Agents or any other Senior Secured Party as
provided above, all rights of such Subsidiary Guarantor against the Borrower
arising as a result thereof by way of right of subrogation, contribution,
reimbursement, indemnity or otherwise, including pursuant to the Senior
Indemnity, Subrogation and Contribution Agreement, shall in all respects be
subordinate and junior in right of payment to the prior indefeasible payment
in full in cash of all the Senior Obligations. In addition, any Indebtedness
and other obligations of the Borrower now or hereafter held by any Subsidiary
Guarantor are hereby subordinated in right of payment to the prior payment in
full of the Senior Obligations. If any amount shall erroneously be paid to any
Subsidiary Guarantor on account of (i) such subrogation, contribution,
reimbursement, indemnity or similar right or (ii) any such Indebtedness or
other obligations of the Borrower, such amount shall be held in trust for the
benefit of the Senior Secured Parties and shall forthwith be paid to the
Senior Collateral Agents to be credited against the payment of the Senior
Obligations, whether matured or unmatured, in accordance with the terms of the
Senior Loan Documents.
SECTION 8. Cash Collateralization of Letter of Credit
Obligations. If any Event of Default shall occur and be continuing, each
Subsidiary Guarantor agrees, jointly and severally, and in addition to its
obligations under Section 1, on the Business Day on which the Borrower
receives notice from the Administrative Agent or Revolving Lenders holding
more than 50% of the aggregate Revolving Credit Exposures (or, if the maturity
of the Loans has been accelerated, Revolving Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit), deposit in an account
maintained by the Administrative Agent, for the benefit of the Revolving
Lenders, an amount in cash equal to the aggregate LC Exposure as of such date
in the manner set forth in Section 2.05(j) of the Senior Credit Agreement.
Such deposits shall be held by the Administrative Agent as collateral for the
payment and performance of the Senior Obligations. The Senior Collateral
Agents shall have exclusive dominion and control, including the exclusive
right of withdrawal, over such account. Such deposits shall be invested in
Permitted Investments, to be selected by the Senior Collateral Agents in their
sole discretion, and interest earned on such deposits shall be deposited in
such account as additional collateral for the payment and performance of the
Senior Obligations. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall (i) automatically be
applied by the Administrative Agent to reimburse the applicable Issuing Bank
for LC Disbursements for which it has not been reimbursed, (ii) be held for
the satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time and (iii) if the maturity of the Loans has been
accelerated, be applied to satisfy other Senior Obligations. If a Subsidiary
Guarantor is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent
not applied as aforesaid) shall be returned to such Subsidiary Guarantor
within three Business Days after all Events of Default have been cured or
waived (or, during a Cash Sweep Period, paid into the Citibank Concentration
Account).
SECTION 9. Information. Each of the Subsidiary Guarantors
assumes all responsibility for being and keeping itself informed of the
Borrower's financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Senior Obligations and the nature,
scope and extent of the risks that such Subsidiary Guarantor assumes and
incurs hereunder, and agrees that none of the Senior Collateral Agents or the
other Senior Secured Parties will have any duty to advise any of the
Subsidiary Guarantors of information known to it or any of them regarding such
circumstances or risks.
SECTION 10. Representations and Warranties. Each of the
Subsidiary Guarantors represents and warrants as to itself that all
representations and warranties relating to it contained in the Senior Credit
Agreement are true and correct.
SECTION 11. Termination. The guarantees made hereunder
(a) shall terminate on the Senior Obligation Payment Date and (b) shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Senior Obligations is rescinded or must
otherwise be restored by any Senior Secured Party or any Subsidiary Guarantor
upon the bankruptcy or reorganization of the Borrower, any Subsidiary
Guarantor or otherwise.
SECTION 12. Binding Effect; Several Agreement;
Assignments. Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the successors and assigns of
such party; and all covenants, promises and agreements by or on behalf of the
Subsidiary Guarantors that are contained in this Agreement shall bind and
inure to the benefit of each party hereto and their respective successors and
assigns. This Agreement shall become effective as to any Subsidiary Guarantor
when a counterpart hereof executed on behalf of such Subsidiary Guarantor
shall have been delivered to the Senior Collateral Agents, and a counterpart
hereof shall have been executed on behalf of the Senior Collateral Agents, and
thereafter shall be binding upon such Subsidiary Guarantor and the Senior
Collateral Agents and their respective successors and assigns, and shall inure
to the benefit of such Subsidiary Guarantor, the Senior Collateral Agents and
the other Senior Secured Parties, and their respective successors and assigns,
except that no Subsidiary Guarantor shall have the right to assign its rights
or obligations hereunder or any interest herein (and any such attempted
assignment shall be void). If all of the Equity Interests in a Subsidiary
Guarantor are sold, transferred or otherwise disposed of pursuant to a
transaction permitted by Section 6.05 of the Senior Credit Agreement, such
Subsidiary Guarantor shall be released from its obligations under this
Agreement without further action. This Agreement shall be construed as a
separate agreement with respect to each Subsidiary Guarantor and may be
amended, modified, supplemented, waived or released with respect to any
Subsidiary Guarantor without the approval of any other Subsidiary Guarantor
and without affecting the obligations of any other Subsidiary Guarantor
hereunder.
SECTION 13. Waivers; Amendment. (a) No failure or delay
of either Senior Collateral Agent in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof
or the exercise of any other right or power. The rights and remedies of the
Senior Collateral Agents hereunder and of the other Senior Secured Parties
under the other Senior Loan Documents are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by any Subsidiary
Guarantor therefrom shall in any event be effective unless the same shall be
permitted by clause (b), and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice
or demand on any Subsidiary Guarantor in any case shall entitle such
Subsidiary Guarantor to any other or further notice or demand in similar or
other circumstances.
(b) Neither this Agreement nor any provision hereof may
be waived, amended or modified except pursuant to a written agreement entered
into between the Subsidiary Guarantors with respect to which such waiver,
amendment or modification relates and the Senior Collateral Agents, with the
prior written consent of the Required Lenders, except as otherwise provided in
the Senior Credit Agreement or the Collateral Trust and Intercreditor
Agreement.
SECTION 14. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 15. Notices. All communications and notices
hereunder shall be in writing and given as provided in Section 9.01 of the
Senior Credit Agreement. All communications and notices hereunder to each
Subsidiary Guarantor shall be given to it in care of the Borrower, at the
address of the Borrower specified in Section 9.01 of the Senior Credit
Agreement.
SECTION 16. Survival of Agreement; Severability. (a) All
covenants, agreements, representations and warranties made by the Subsidiary
Guarantors herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Senior
Loan Document shall be considered to have been relied upon by the Senior
Collateral Agents and the other Senior Secured Parties and shall survive the
making by the Senior Lenders of the Loans and the issuance of the Letters of
Credit by the Issuing Banks regardless of any investigation made by any Senior
Secured Party or on its behalf, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any other fee
or amount payable under this Agreement or any other Senior Loan Document is
outstanding and unpaid or the LC Exposure does not equal zero and as long as
the Commitments have not been terminated.
(b) In the event any one or more of the provisions
contained in this Agreement or in any other Senior Loan Document should be
held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein 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 17. Counterparts. This Agreement may be executed
in counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute a single contract, and shall become
effective as provided in Section 12. Delivery of an executed signature page to
this Agreement by facsimile transmission shall be as effective as delivery of
a manually executed counterpart of this Agreement.
SECTION 18. Rules of Interpretation. The rules of
interpretation specified in Section 1.03 of the Senior Credit Agreement shall
be applicable to this Agreement.
SECTION 19. Jurisdiction; Consent to Service of Process.
(a) 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 County, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any other Senior
Loan Document, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that 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 or any other Senior Secured Party may otherwise have to bring any action
or proceeding relating to this Agreement or any other Senior Loan Document
against any Subsidiary Guarantor or its properties in the courts of any
jurisdiction.
(b) 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
or any other Senior Loan Document 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 15. 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 20. 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, ACTION OR OTHER
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER SENIOR LOAN DOCUMENT. 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 ANY LITIGATION, ACTION OR OTHER PROCEEDING, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER SENIOR LOAN
DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 20.
SECTION 21. Additional Subsidiary Guarantors. Pursuant to
Section 5.11 of the Senior Credit Agreement, certain wholly-owned Domestic
Subsidiaries of the Borrower that were not in existence on the Restatement
Effective Date are required to enter into this Agreement as a Subsidiary
Guarantor upon becoming a wholly owned Domestic Subsidiary. Upon execution and
delivery after the Restatement Effective Date hereof by the Senior Collateral
Agents and such a Subsidiary of an instrument in the form of Annex 1, 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 any instrument adding an additional Subsidiary
Guarantor as a party to this Agreement shall not require the consent of any
other Subsidiary Guarantor hereunder. 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. Notwithstanding any other provision of this Agreement or any
other Senior Loan Document, (i) no Domestic Subsidiary listed on Schedule 5.11
to the Senior Credit Agreement shall be required to become a Subsidiary
Guarantor and (ii) no Domestic Subsidiary shall be required to become a
Subsidiary Guarantor unless and until such time as such Subsidiary has assets
in excess of $1,000,000 or has revenue in excess of $500,000 per annum.
SECTION 22. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Senior Secured Party is hereby
authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other Indebtedness at any
time owing by such Senior Secured Party to or for the credit or the account of
any Subsidiary Guarantor against any or all the obligations of such Subsidiary
Guarantor now or hereafter existing under this Agreement and the other Senior
Loan Documents held by such Senior Secured Party, irrespective of whether or
not such Senior Secured Party shall have made any demand under this Agreement
or any other Senior Loan Document and although such obligations may be
unmatured and regardless of the adequacy of any Collateral. The rights of each
Senior Secured Party under this Section 22 are in addition to other rights and
remedies (including other rights of setoff) which such Senior Secured Party
may have.
SECTION 23. Collateral Trust and Intercreditor Agreement.
Each of the parties to this Agreement acknowledges and agrees, for the benefit
of each other party to the Collateral Trust and Intercreditor Agreement, that
notwithstanding anything herein to the contrary, the terms of this Agreement,
and the rights and remedies of the parties hereto, are subject to the
Collateral Trust and Intercreditor Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Senior Subsidiary Guarantee Agreement as of the day and year first above
written.
EACH OF THE SUBSIDIARIES LISTED ON
SCHEDULE I HERETO, as Grantors,
By________________________________
Name:
Title:
CITICORP NORTH AMERICA, INC., as Senior
Collateral Agent,
By________________________________
Name:
Title:
JPMORGAN CHASE BANK, as Senior Collateral
Agent,
By________________________________
Name:
Title:
Schedule I to the
Senior Subsidiary Guarantee Agreement
Subsidiary Guarantors
Annex 1 to the
Senior Subsidiary Guarantee Agreement
SUPPLEMENT NO. dated as of , to the
Senior Subsidiary Guarantee 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, the
"Senior Subsidiary Guarantee Agreement"), among
each of the subsidiaries listed on Schedule I
thereto (each such subsidiary individually, a
"Subsidiary Guarantor" and collectively, the
"Subsidiary Guarantors") of RITE AID
CORPORATION, a Delaware corporation (the
"Borrower"), and CITICORP NORTH AMERICA, INC.,
a Delaware corporation ("CNAI"), as senior
collateral processing co-agent and JPMORGAN
CHASE BANK ("JPMCB"), a New York banking
corporation, as senior collateral co-agent
(each, individually, a "Senior Collateral
Agent", and collectively, the "Senior
Collateral Agents") for the Senior Secured
Parties.
A. Reference is made to the Senior Credit 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, the "Senior Credit
Agreement"), among the Borrower, the lenders from time to time party thereto
(the "Senior Lenders"), CNAI, as administrative agent for the Senior Lenders
and JPMCB, as syndication agent for the Senior Lenders.
B. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Senior
Subsidiary Guarantee Agreement, including the Definitions Annex (as may be
amended, supplemented or otherwise modified from time to time), and the Senior
Credit Agreement.
C. The Subsidiary Guarantors have entered into the Senior
Subsidiary Guarantee Agreement in order to induce the Senior Lenders to make
Loans and the Issuing Banks to issue Letters of Credit. Pursuant to Section
5.11 of the Senior Credit Agreement, certain Domestic Subsidiaries of the
Borrower that were not in existence or not a Domestic Subsidiary on the
Restatement Effective Date are required to enter into the Senior Subsidiary
Guarantee Agreement as a Subsidiary Guarantor upon becoming a wholly-owned
Domestic Subsidiary. Section 21 of the Senior Subsidiary Guarantee Agreement
provides that additional Subsidiaries of the Borrower may become Subsidiary
Guarantors under the Senior Subsidiary Guarantee Agreement by execution and
delivery of an instrument in the form of this Supplement. The undersigned
Subsidiary of the Borrower (the "New Subsidiary Guarantor") is executing this
Supplement in accordance with the requirements of the Senior Credit Agreement
to become a Subsidiary Guarantor under the Senior Subsidiary Guarantee
Agreement in order to induce the Senior Lenders to make additional Loans and
the Issuing Banks to issue additional Letters of Credit and as consideration
for Loans previously made and Letters of Credit previously issued.
Accordingly, the Senior Collateral Agents and the New
Subsidiary Guarantor agree as follows:
SECTION 1. In accordance with Section 21 of the Senior
Subsidiary Guarantee Agreement, the New Subsidiary Guarantor by its signature
below becomes a Subsidiary Guarantor under the Senior Subsidiary Guarantee
Agreement with the same force and effect as if originally named therein as a
Subsidiary Guarantor and the New Subsidiary Guarantor hereby (a) agrees to all
the terms and provisions of the Senior Subsidiary Guarantee Agreement
applicable to it as a Subsidiary Guarantor thereunder and (b) represents and
warrants that the representations and warranties made by it as a Subsidiary
Guarantor thereunder are true and correct on and as of the Restatement
Effective Date. Each reference to a "Subsidiary Guarantor" in the Senior
Subsidiary Guarantee Agreement shall be deemed to include the New Subsidiary
Guarantor. The Senior Subsidiary Guarantee Agreement is hereby incorporated
herein by reference.
SECTION 2. The New Subsidiary Guarantor represents and
warrants to the Senior Collateral Agents and the other Senior 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 the Senior Collateral Agents shall have received
counterparts of this Supplement that, when taken together, bear the signatures
of the New Subsidiary Guarantor and the Senior Collateral Agents. Delivery of
an executed signature page to this Supplement by facsimile transmission shall
be as effective as delivery of a manually executed counterpart of this
Supplement.
SECTION 4. Except as expressly supplemented hereby, the
Senior Subsidiary Guarantee 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, the validity, legality and enforceability of the remaining
provisions contained herein and in the Senior Subsidiary Guarantee Agreement
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision hereof in a particular jurisdiction
shall not in and of itself affect the validity of such provision in any other
jurisdiction). 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 15 of the Senior Subsidiary
Guarantee Agreement. All communications and notices hereunder to the New
Subsidiary Guarantor shall be given to it at the address set forth under its
signature below, with a copy to the Borrower.
SECTION 8. The New Subsidiary Guarantor agrees to
reimburse the Senior Collateral Agents for their out-of-pocket expenses in
connection with this Supplement, including the fees, disbursements and other
charges of counsel for the Senior Collateral Agents.
IN WITNESS WHEREOF, the New Subsidiary Guarantor and the
Senior Collateral Agents have duly executed this Supplement to the Senior
Subsidiary Guarantee Agreement as of the day and year first above written.
[NAME OF NEW SUBSIDIARY GUARANTOR],
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 2 to the
Senior Subsidiary Guarantee Agreement
DEFINITIONS ANNEX
