EXECUTION COPY
SENIOR SUBSIDIARY SECURITY AGREEMENT
SENIOR SUBSIDIARY SECURITY AGREEMENT, dated as of June 27,
2001, made by the SUBSIDIARY GUARANTORS identified on the
signature pages hereto and any other person that becomes a
Subsidiary Guarantor pursuant to the Senior Credit Facility (as
such term is defined below) (the "Grantors"), in favor of
CITICORP USA, INC., a New York banking corporation, as senior
collateral agent (in such capacity, the "Senior Collateral
Agent") for the Senior Secured Parties.
Reference is made to the Senior Credit Agreement, dated as of June 27,
2001 (as the same may be amended, supplemented or otherwise modified from time
to time, the "Senior Credit Facility"), among Rite Aid, as Borrower, the Senior
Banks parties thereto, the Swingline Banks, the Issuing Banks, the
Administrative Agent, Senior Collateral Agent and the Syndication Agents.
The Senior Banks 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 Facility. Each of the Subsidiary Guarantors has
agreed to guarantee, among other things, all the obligations of the Borrower
under the Senior Credit Facility. In order to induce the Senior Banks to make
the Senior Loans and the Issuing Banks to issue Letters of Credit, the Grantors
have agreed to guarantee the due and punctual payment of the Senior Bank
Obligations and the 10.50% Note Obligations (together, the "Senior Obligations")
pursuant to the terms of the senior subsidiary guarantee agreement dated as of
June 27, 2001 (the "Senior Subsidiary Guarantee Agreement") among the Borrower,
the Subsidiary Guarantors and the Senior Collateral Agent for the benefit of the
Senior Bank Parties and the 10.5% Note Parties (together, the "Senior Secured
Parties").
Accordingly, the Grantors and the Senior Collateral Agent, on behalf of
itself and each Senior Secured Party (and each of their respective successors or
assigns), hereby agree as follows:
SECTION 1. Defined Terms.
SECTION 1.01. Definitions. (a) Unless otherwise defined herein, terms
used herein shall have the meanings given in the Definitions Annex attached as
Annex 2 hereto, or if not defined therein, as defined in or by reference to the
Senior Credit Facility. All terms defined in the New York UCC (as defined
herein) and not defined in this Agreement have the meanings specified therein.
(b) The following terms shall have the following meanings:
"Account Debtor" includes "Account Debtor" as defined in the Senior
Credit Facility and with respect to each Grantor means any person who is or may
become obligated to any Grantor with respect to or on account of an Account.
"Accounts" includes the right to payment of a monetary obligation,
whether or not earned by performance, (i) for property that has been or is to be
sold, leased, licensed, assigned, or otherwise disposed of, (ii) for services
rendered or to be rendered, (iii) for a policy of insurance issued or to be
issued, (iv) for a secondary obligation incurred or to be incurred, (v) for
energy provided or to be provided, (vi) for the use or hire of a vessel under a
charter or other contract, (vii) arising out of the use of a credit or charge
card or information contained on or for use with the card, or (viii) as winnings
in a lottery or other game of chance operated or sponsored by a State,
governmental unit of a State, or person licensed or authorized to operate the
game by a State or governmental unit of a State. The term includes
health-care-insurance receivables. The term does not include (i) rights to
payment evidenced by chattel paper or an instrument, (ii) commercial tort
claims, (iii) deposit accounts, (iv) investment property, (v) letter-of-credit
rights or letters of credit, or (vi) rights to payment for money or funds
advanced or sold, other than rights arising out of the use of a credit or charge
card or information contained on or for use with the card.
"Accounts Receivable" means with respect to each Grantor, all right,
title and interest of such Grantor to Accounts and all of its right, title and
interest in any returned goods, together with all rights, titles, securities and
guaranties with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary in each case whether due or become
due, whether now or hereafter arising in the future.
"Agreement" means this Senior Subsidiary Security Agreement, as the
same may be amended, modified or otherwise supplemented from time to time.
"Blocked Account" means each of the accounts established by the
applicable Grantors listed in Section 4 of Schedule 5 to this Agreement and
maintained with a Blocked Account Bank pursuant to a Blocked Account Agreement.
"Blocked Account Agreement" means any Blocked Account Agreement between
the Senior Collateral Agent and a Blocked Account Bank substantially in the form
of Schedule 6 to this Agreement.
"Blocked Account Bank" means any bank or financial institution that is
satisfactory to the Senior Collateral Agent that executes and delivers to the
Senior Collateral Agent a Blocked Account Agreement.
"Blocked Account Cash Sweep Notice" means a notice in the form attached
as Exhibit A to the Blocked Account Agreement.
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"Cash Management Accounts" mean, collectively, (a) the Blocked
Accounts, (b) the Deposit Accounts, (c) the Concentration Account and (d) the
Citibank Concentration Accounts.
"Cash Management System" means the system of cash management described
in Schedule 5 to this Agreement.
"Cash Sweep Cash Collateral Account" means the collateral account
established as part of the Cash Management System at Citibank and under the sole
dominion and control of the Senior Collateral Agent, Account No. [00000000].
"Cash Sweep Notice" means (a) any Blocked Account Cash Sweep Notice and
(b) the Concentration Account Cash Sweep Notice.
"Cash Sweep Period" means any period in which funds are transferred
from (a) any Blocked Account to the Concentration Account or any Citibank
Concentration Account, as applicable, pursuant to a Blocked Account Cash Sweep
Notice or (b) the Concentration Account to any Citibank Concentration Account
pursuant to a Concentration Account Cash Sweep Notice.
"Citibank Concentration Account" means the account established at
Citibank and under sole dominion and control of the Senior Collateral Agent,
Account No. [00000000], together with any similar account established at
Citibank for the purpose of collecting funds during a Cash Sweep Period.
"Concentration Account" means the cash collateral account established
at The Chase Manhattan Bank and maintained with the Concentration Account Bank
pursuant to a Concentration Account Agreement, Account No. [9102750222].
"Concentration Account Agreement" means a Concentration Account
Agreement between any Subsidiary Guarantor, the Senior Collateral Agent and a
bank or financial institution satisfactory to the Senior Collateral Agent
substantially in the form of Schedule 9 to this Agreement.
"Concentration Account Bank" means the bank or financial institution
that is satisfactory to the Senior Collateral Agent that executes and delivers
to the Senior Collateral Agent a Concentration Account Agreement.
"Concentration Account Cash Sweep Notice" means a notice in the form
attached as Exhibit A to the Concentration Account Agreement.
"Contracts" means with respect to each Grantor, all rights of such
Grantor under all contracts and agreements to which such Grantor is a party or
under which such Grantor has any right, title or interest or to which such
Grantor or any property of such Grantor is subject, as the same may from time to
time be amended, supplemented or otherwise modified, including, without
limitation, (a) all rights of such Grantor to receive moneys due and to become
due to it thereunder or in connection therewith, (b) all rights of such Grantor
to damages arising out of, or
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for, breach or default in respect thereof and (c) all rights of such Grantor to
exercise all remedies thereunder.
"Copyright License" means any written agreement, now or hereafter in
effect, granting any right to any third party under any copyright now or
hereafter owned by any Grantor or that such Grantor otherwise has the right to
license, or granting any right to any Grantor under any copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" means all of the following now owned or hereafter acquired
by any Grantor: (a) all copyright rights in any work subject to the copyright
laws of the United States or any other country, whether as author, assignee,
transferee or otherwise, and (b) all registrations and applications for
registration of any such copyright in the United States or any other country,
including registrations, recordings, supplemental registrations and pending
applications for registration in the United States Copyright Office, including
those listed on Schedule IV.
"Deposit Account" means, collectively, (a) the Lockbox Account and (b)
the Government Lockbox Account, as well as any demand, time, savings, passbook,
or similar account maintained with a bank. The term does not include investment
property or accounts evidenced by an instrument.
"Documents" means with respect to each Grantor, all Instruments, files,
records, ledger sheets, and documents covering or relating to any of the
Accounts, General Intangibles, Inventory or Proceeds.
"Equity Interests" means shares of capital stock, partnership, joint
venture, member or limited liability or unlimited liability company interests,
beneficial interests in a trust or other equity ownership interests in a Person
of whatever nature and rights, warranties or options to acquire any of the
foregoing.
"Event of Default" means an "Event of Default" as defined in any Senior
Loan Document.
"General Intangibles" means all choses in action and causes of action
and all general intangibles of any Grantor of every kind and nature (other than
Accounts) now owned or hereafter acquired by any Grantor, including corporate or
other business records, indemnification claims, contract rights (including
rights under leases, whether entered into as lessor or lessee, Hedging
Agreements and other agreements), Intellectual Property, goodwill,
registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Grantor to secure payment of any of the Accounts.
"Government Lockbox Account" means the deposit account and
corresponding lockbox established at Mellon Bank and maintained with a
Government Lockbox Account Bank, Account No.[0000000].
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"Government Lockbox Account Agreement" means any Government Lockbox
Account Agreement between the Senior Collateral Agent and a Government Lockbox
Account Bank substantially in the form of Schedule 8 to this Agreement.
"Government Lockbox Account Bank" means any bank or financial
institution that is satisfactory to the Senior Collateral Agent that executes
and delivers to the Senior Collateral Agent a Government Lockbox Account
Agreement.
"Indemnitee" means the Senior Secured Parties and their respective
officers, directors, trustees, affiliates and controlling persons.
"Instrument" means an Instrument as defined in the Uniform Commercial
Code, insofar as such Instruments evidence Intercompany Advances, Accounts
Receivable or proceeds of Inventory.
"Intellectual Property" means all inventions, designs, Patents,
Copyrights, Licenses, Trademarks, trade secrets, confidential or proprietary
technical and business information, know-how, show-how or other data or
information, software and databases and all embodiments or fixations thereof and
related documentation, registrations and franchises, and all additions,
improvements and accessions to, and books and records describing or used in
connection with, any of the foregoing.
"Intercompany Advances" means any advances or open accounts owing by
the Borrower or any Subsidiary of the Borrower to any Grantor.
"Inventory" means with respect to each Grantor, all right, title and
interest of such Grantor in and to goods intended for sale or lease by such
Grantor, or consumed in such Grantor's business (including, without limitation,
all operating parts and supplies), together with all raw materials and finished
goods, whether now owned or hereafter acquired or arising.
"License" means any Patent License, Trademark License, Copyright
License or other license or sublicense to which any Grantor is a party,
including those listed on Schedule 4.
"Lockbox Account" means the deposit account and corresponding lockbox
established at Mellon Bank and maintained with the Lockbox Account Bank pursuant
to a Lockbox Account Agreement, Account No. [0000000].
"Lockbox Account Agreement" means any Lockbox Account Agreement between
the Senior Collateral Agent and a Lockbox Account Bank substantially in the form
of Schedule 7 to this Agreement.
"Lockbox Account Bank" means any bank or financial institution that is
satisfactory to the Senior Collateral Agent that executes and delivers to the
Senior Collateral Agent a Lockbox Account Agreement.
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"New York UCC" means the Uniform Commercial Code as from time to time
in effect in the State of New York.
"Patent License" means any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a patent, now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
"Patents" means all of the following now owned or hereafter acquired by
any Grantor: (a) all letters patent of the United States or any other country,
all registrations and recordings thereof, and all applications for letters
patent of the United States or any other country, including registrations,
recordings and pending applications in the United States Patent and Trademark
Office or any similar offices in any other country, including those listed on
Schedule IV, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"Prescription Files" means, as to any Grantor, all right, title and
interest of such Grantor in and to all prescription files maintained by it or on
its behalf, including without limitation all patient profiles, customer lists,
customer information and other records of prescriptions filled by it, in
whatever form and wherever maintained by it or on its behalf, and all goodwill
and other intangible assets arising from the maintenance of such records and the
possession of information contained therein.
"Proceeds" has the meaning specified in Section 9-102 of the New York
UCC.
"Senior Collateral" is defined in Section 2 of this Agreement.
"Senior Collateral Account" means any collateral account established by
the Senior Collateral Agent as provided in Section 5.03 or Section 8.02.
"Trademark License" means any written agreement, now or hereafter in
effect, granting to any third party any right to use any trademark now or
hereafter owned by any Grantor or that any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"Trademarks" means all of the following now owned or hereafter acquired
by any Grantor: (a) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office or
any similar offices in any State of the United
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States or any other country or any political subdivision thereof, and all
extensions or renewals thereof, including those listed on Schedule I, (b) all
goodwill associated therewith or symbolized thereby and (c) all other assets,
rights and interests that uniquely reflect or embody such goodwill.
SECTION 1.2. Other Definitional Provisions. (a) The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section references are to this Agreement unless otherwise
specified. The words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation".
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. Grant of Security Interest. As security for the payment or
performance, as the case may be, in full of the obligations under the Senior
Subsidiary Guarantee Agreement, each Grantor hereby assigns and pledges to the
Senior Collateral Agent, its successors and assigns, for the ratable benefit of
the Senior Secured Parties, and hereby grants to the Senior Collateral Agent,
its successors and assigns, for the ratable benefit of the Senior Secured
Parties, a security interest, in all right, title or interest now owned or at
any time hereafter acquired by such Grantor or in which such Grantor now has or
at any time in the future may acquire any right, title or interest
(collectively, the "Senior Collateral"):
(a) all Accounts Receivable and Chattel Paper;
(b) all Deposit Accounts
(c) the Cash Management Accounts and the cash on deposit therein;
(d) all Contracts;
(e) all Documents;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Prescription Files;
(k) all books and records pertaining to any and all of the foregoing; and
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(l) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing.
Nothing contained in this Section 2 is intended to limit any Grantor's rights to
create Permitted Liens (as defined below). Senior Collateral shall not include
any property specified in Section 2(g) above if the granting of a security
interest therein would jeopardize the Grantor's rights in any pending
intent-to-use applications for Federal Trademark registration.
Each Grantor hereby irrevocably authorizes the Senior Collateral Agent
at any time and from time to time to file in any Uniform Commercial Code
jurisdiction any initial financing statements (including fixture filings) and
amendments thereto that contain the information required by Article 9 of the
Uniform Commercial Code of each applicable jurisdiction for the filing of any
financing statement or amendment, including (a) whether the Grantor is an
organization, the type of organization and any organizational identification
number issued to the Grantor and (b) in the case of a financing statement filed
as a fixture filing or covering Collateral constituting minerals or the like to
be extracted or timber to be cut, a sufficient description of the real property
to which such Collateral relates. The Grantor agrees to provide such information
to the Senior Collateral Agent promptly upon request. In addition, each Grantor
hereby authorizes and agrees that such financing statements may describe the
Senior Collateral in the same manner as described herein or may contain an
indication or description of collateral that describes such property in any
other manner as the Senior Collateral Agent may determine, in its sole
discretion, is necessary, advisable or prudent to ensure the perfection of the
security interest in the Collateral granted to the Senior Collateral Agent
herein, including, without limitation, describing such property as "all assets"
or "all personal property."
Each Grantor also ratifies its authorization for the Senior Collateral
Agent to file in any Uniform Commercial Code jurisdiction any initial financing
statements or amendments thereto if filed prior to the date hereof.
The Senior Collateral Agent is further authorized to file filings with
the United States Patent and Trademark Office or United States Copyright Office
(or any successor office or any similar office in any other country) or other
documents for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest granted by each Grantor, without the signature
of any Grantor, and naming any Grantor or the Grantors as debtors and the Senior
Collateral Agent as secured party.
Such security interests are granted as security only and shall not
subject the Senior Collateral Agent nor any Senior Secured Party to, or in any
way alter or modify, any obligation or liability of any Grantor with respect to
or arising out of the Senior Collateral.
SECTION 3. Representations and Warranties. Each Grantor hereby
represents and warrants, as to itself and the Senior Collateral in which the
security interest is created hereunder, that:
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SECTION 3.01. Title; No Other Liens. Except for the security interest
granted to the Senior Collateral Agent for the ratable benefit of the Senior
Secured Parties pursuant to this Agreement and the other Liens permitted to
exist pursuant to the Senior Credit Facility (the "Permitted Liens"), each
Grantor owns each item of the Senior Collateral free and clear of any and all
Liens or claims of others (or arrangements reasonably satisfactory to the Senior
Collateral Agent have been made for the timely release or discharge of such
Liens). No security agreement, financing statement or other public notice with
respect to all or any part of such Senior Collateral is on file or of record in
any public office, except such as have been filed or will be filed, pursuant to
this Agreement, in favor of the Senior Collateral Agent, for the ratable benefit
of the Senior Secured Parties, or in respect of Permitted Liens (or arrangements
reasonably satisfactory to the Senior Collateral Agent have been made for the
timely termination of such agreement or financing statement). Further, no
Grantor has intentionally entered into any contract, lease or license in
anticipation of this Agreement, which by its terms, validly prohibits the
granting of a security interest herein.
SECTION 3.02. Enforceable Obligation; Perfected, First Priority
Security Interests. This Agreement constitutes a legal, valid and binding
obligation of each Grantor, enforceable against such Grantor in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting creditors' rights
generally and except as enforceability may be limited by general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law), and the security interests granted pursuant to this
Agreement (a) upon completion of the filings and other actions specified in
Schedule 1 hereto (or in the case of Instruments, delivery to the Senior
Collateral Agent or its designee) shall constitute fully perfected security
interests in the Senior Collateral in favor of the Senior Collateral Agent for
the ratable benefit of the Senior Secured Parties, and (b) are prior and
superior in right to all other Liens (other than Permitted Liens, to the extent
that such Permitted Liens are expressly permitted by the Senior Loan Documents
to have priority) on the Senior Collateral in existence on the date hereof.
SECTION 3.03. Inventory. The Inventory owned by such Grantor are kept
at the locations listed in Schedule 2 hereto, which shall be updated from time
to time in accordance with Section 4.05 of this Agreement, or at such other
locations as shall be permitted by Section 4.04.
SECTION 3.04. Chief Executive Office; Jurisdiction of Incorporation. As
of the Closing Date, each Grantor's chief executive office, principal place of
business and jurisdiction of incorporation is located at the locations listed in
Schedule 10 hereto.
SECTION 3.05. Farm Products. None of the Senior Collateral constitutes,
or is the Proceeds of, Farm Products (as such term is defined in the Uniform
Commercial Code).
SECTION 3.06. Intellectual Property. (a) Schedule 4 lists all
Intellectual Property owned (and registered with the U.S. Copyright Office or
the U.S. Patent and Trademark Office) or licensed by such Grantor in its own
name on the date hereof.
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(b) On the date hereof, based on information known, or reasonably
available to such Grantor, all Intellectual Property material to the conduct of
such Grantor's business is valid, subsisting, unexpired and enforceable, has not
been abandoned and does not infringe the intellectual property rights of any
other person.
(c) Except as set forth in Schedule 4, on the date hereof, none of the
Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.
(d) On the date hereof, based on information known, or reasonably
available to such Grantor, no holding decision or judgment has been rendered by
any Governmental Authority which would materially limit, cancel or question the
validity of, or such Grantor's rights in, any Intellectual Property in any
respect that could reasonably be expected to have a Material Adverse Effect.
(e) Except as set forth on Schedule 4, on the date hereof, no action or
proceeding is pending, or, to the knowledge of such Grantor, threatened, on the
date hereof (i) seeking to materially limit, cancel or question the validity of
any Intellectual Property material to the conduct of such Grantor's business or
such Grantor's ownership interest therein, or (ii) which, if adversely
determined, would have a material adverse effect on the value of any
Intellectual Property.
SECTION 4. Covenants. Each Grantor covenants and agrees with the Senior
Secured Parties that, from and after the date of this Agreement until this
Agreement is terminated and the security interests created hereby are released:
SECTION 4.01. Delivery of Instruments. If an Intercompany Advance owned
by such Grantor shall be or become evidenced by any promissory note, or other
Instrument, upon the request of the Senior Collateral Agent, such promissory
note, or other Instrument shall be immediately delivered to the Senior
Collateral Agent, duly indorsed in a manner reasonably satisfactory to the
Senior Collateral Agent, to be held as Senior Collateral pursuant to this
Agreement.
SECTION 4.02. Maintenance of Insurance. Each Grantor shall maintain
insurance policies in accordance with the requirements of Section 5.03 of the
Senior Credit Facility.
SECTION 4.03. Maintenance of Perfected Security Interest; Further
Documentation. (a) Each Grantor shall cause all filings and other actions listed
in Schedule 1 to be taken. Each Grantor shall maintain the security interests
created by this Agreement as first priority perfected security interests subject
only to Permitted Liens, to the extent such Permitted Liens are expressly
permitted by the Senior Loan Documents to have priority, and shall defend such
security interests against all claims and demands of all persons whomsoever
(other than those pursuant to Permitted Liens).
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(b) At any time and from time to time, upon the written request of the
Senior Collateral Agent, and at the sole expense of a Grantor, such Grantor
shall promptly and duly execute and deliver such further instruments and
documents and take such further action as the Senior Collateral Agent may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation statements under
the Uniform Commercial Code in effect in any jurisdiction with respect to the
security interests created hereby.
(c) No Grantor shall intentionally enter into any contract, lease or
license in contemplation of this Agreement, which by its terms would validly
prohibit the grant of a security interest herein.
SECTION 4.04. Changes in Locations, Name, etc. Each Grantor agrees
promptly to notify the Senior Collateral Agent in writing of any change (i) in
its corporate name, (ii) in the location of its chief executive office or its
principal place of business, (iii) in its identity or type of organization, (iv)
in its Federal Taxpayer Identification Number or organizational identification
number or (v) in its jurisdiction of organization. Each Grantor agrees to
promptly provide the Senior Collateral Agent with certified organizational
documents reflecting any of the changes described in the preceding sentence.
Each Grantor agrees not to effect or permit any change referred to in the
preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Senior
Collateral Agent to continue at all times following such change to have a valid,
legal and perfected first priority security interest in all the Collateral.
SECTION 4.05. Further Identification of Senior Collateral. Each
Grantor shall furnish to the Senior Collateral Agent from time to time
statements and schedules further identifying and describing the Senior
Collateral and such other reports in connection with such Senior Collateral as
the Senior Collateral Agent may reasonably request, all in reasonable detail.
SECTION 4.06. Notices. A Grantor shall advise the Senior Collateral
Agent promptly, in reasonable detail, in accordance with Section 13 hereto, of:
(a) any Lien (other than security interests created hereby or
Permitted Liens) on any material portion of the Senior Collateral; and
(b) the occurrence of any other event which could reasonably
be expected to have a material adverse effect on the security interests
created hereby or on the aggregate value of the Senior Collateral.
SECTION 4.07. Senior Collateral Agent's Liabilities and Expenses;
Indemnification. (a) Notwithstanding anything to the contrary provided herein,
neither the Senior Collateral Agent nor any other Senior Secured Party assumes
any liabilities with respect to any claims regarding each Grantor's ownership
(or purported ownership) of, or rights or obligations (or purported rights or
obligations) arising from, the Senior Collateral or any use (or actual or
alleged misuse) whether arising out of any past, current or future event,
circumstance, act or omission or
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otherwise, or any claim, suit, loss, damage, expense or liability of any kind or
nature arising out of or in connection with the Senior Collateral or the
production, marketing, delivery, sale or provision of goods or services under or
in connection with any of the Senior Collateral. All of such liabilities shall,
as between the Senior Collateral Agent, the Senior Secured Parties and the
Grantors, be borne exclusively by the Grantors unless such liability arises from
the gross negligence or willful misconduct of the Senior Collateral Agent or any
Senior Secured Party.
(b) Each Grantor hereby agrees to pay all reasonable expenses of the
Senior Collateral Agent and the other Senior Secured Parties and to indemnify
the Senior Collateral Agent and the other Senior Secured Parties with respect to
any and all losses, claims, damages, liabilities and related expenses in respect
of this Agreement or the Senior Collateral in each case to the extent and under
the circumstances the Borrower is required to do so pursuant to Section 9.03 of
the Senior Credit Facility.
(c) Any amounts payable as provided hereunder shall be additional
Senior Obligations secured hereby and by the other Senior Collateral Documents.
Without prejudice to the survival of any other agreements contained herein, all
indemnification and reimbursement obligations contained herein shall survive the
Senior Obligation Payment Date and the termination of this Agreement.
SECTION 4.08. Intellectual Property. (a) Each relevant Grantor (either
itself or through licensees) will (i) continue to use each Trademark material to
the conduct of such Grantor's business, to the extent that such Grantor's
business operations continue as to the said goods and/or services (subject to
such Grantor's reasonable business judgment), sufficient to avoid unintentional
abandonment of any rights in such Trademarks, (ii) maintain as in the past the
quality of products and services offered under such Trademark, (iii) use such
Trademark with the appropriate notice of registration and all other notices and
legends required by applicable law, (iv) not knowingly adopt or use any xxxx
which is confusingly similar or a colorable imitation of such Trademark unless
the Senior Collateral Agent, for the ratable benefit of the Senior Secured
Parties, shall obtain a perfected security interest in such xxxx pursuant to
this Agreement, and (v) not knowingly (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
Trademark material to the conduct of Grantor's business may become invalidated
or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not do any
act, or omit to do any act, whereby any Patent material to the conduct of
Grantor's business may become forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) will not
knowingly (and will not permit any licensee or sublicensee thereof to) do any
act or knowingly omit to do any act whereby any portion of the Copyrights
material to the conduct of Grantor's business may become invalidated or
otherwise impaired or fall into the public domain.
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(d) Such Grantor (either itself or through licensees) will not do any
act that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other person.
(e) In a status report provided to the Senior Collateral Agent on a
quarterly basis ("Quarterly Status Report"), such Grantor will indicate whether
any application or registration relating to any material Intellectual Property
has been forfeited, abandoned or dedicated to the public, or of any such
determination or development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office or any court or
tribunal in any country) regarding such Grantor's ownership of, or the validity
of, any material Intellectual Property or such Grantor's right to register the
same or to own and maintain the same.
(f) In the Quarterly Status Report provided to the Senior Collateral
Agent pursuant to Section 4.08(e), such Grantor will report whenever such
Grantor, either by itself or through any agent, employee, licensee or designee,
has filed an application for the registration of any Intellectual Property with
the United States Patent and Trademark Office, the United States Copyright
Office or any similar office or agency in any other country or any political
subdivision thereof. Upon request of the Senior Collateral Agent, such Grantor
shall execute and deliver, and have recorded, any and all agreements,
instruments, documents and papers as the Senior Collateral Agent may request to
evidence the Senior Collateral Agent's and Senior Secured Parties' security
interest in any Copyright, Patent or Trademark and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby.
(g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of the Intellectual Property material to the conduct
of Grantor's business, including, without limitation, filing of applications for
renewal, affidavits of use and affidavits of incontestability.
(h) In the event that any Intellectual Property material to the conduct
of Grantor's business is infringed, misappropriated or diluted by a third party,
such Grantor shall (i) take such actions as such Grantor shall reasonably deem
appropriate under the circumstances to protect such Intellectual Property and
(ii) if such Intellectual Property is of material economic value, promptly
notify the Senior Collateral Agent after it learns thereof and take all
reasonable steps to protect its interests, which may include bringing suit for
infringement, misappropriation or dilution, to seek injunctive relief where
appropriate and to recover any and all damages for such infringement,
misappropriation or dilution.
SECTION 4.09. Cash Management System. (a) The Grantors shall at all
times maintain, and each Subsidiary Guarantor shall comply with its obligations
under, the Cash Management System.
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(b) Each Grantor shall use its commercially reasonable efforts
to cause any applicable third party to effectuate the Cash Management System.
SECTION 5. Provisions Relating to Accounts.
SECTION 5.01. Grantors Remain Liable under Accounts. Anything herein
to the contrary notwithstanding, a Grantor shall remain liable under each of the
Accounts to observe and perform all the material conditions and material
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise to each such Account. No Senior
Secured Party shall have any obligation or liability under any Account (or any
agreement giving rise thereto) by reason of or arising out of this Agreement or
the receipt by the Senior Collateral Agent or any Senior Secured Party of any
payment relating to such Account pursuant hereto, nor shall any Senior Secured
Party be obligated in any manner to perform any of the obligations of a Grantor
under or pursuant to any Account (or any agreement giving rise thereto), to make
any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any party
under any Account (or any agreement giving rise thereto), to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
SECTION 5.02. Analysis of Accounts. In addition to its rights under
the Senior Credit Facility, the Senior Collateral Agent shall have the right
upon the occurrence and during the continuance of an Event of Default to make
test verifications of the Accounts in any manner and through any medium that it
considers reasonably advisable, and each Grantor shall furnish all such
assistance and information as the Senior Collateral Agent may reasonably require
in connection with such test verifications. At any time and from time to time
upon the occurrence and during the continuance of an Event of Default, upon the
Senior Collateral Agent's reasonable request and at the expense of each Grantor,
each Grantor shall immediately request and use commercially reasonable efforts
to cause independent public accountants or others reasonably satisfactory to the
Senior Collateral Agent to furnish to the Senior Collateral Agent reports
showing reconciliations, aging and test verifications of, and trial balances
for, the Accounts. Upon the occurrence and during the continuance of an Event of
Default, the Senior Collateral Agent in its own name or in the name of others
may communicate with Account Debtors on the Accounts to verify with them to the
Senior Collateral Agent's reasonable satisfaction the existence, amount and
terms of any Accounts and to direct all payments to the Senior Collateral Agent.
To the extent reasonably practicable the Senior Collateral Agent will seek to
take such actions through third parties.
SECTION 5.03. Collections on Accounts. (a) The Senior Collateral Agent
hereby authorizes each Grantor to collect the Accounts, and the Senior
Collateral Agent may curtail or terminate said authority at any time after the
occurrence and during the continuance of an Event of Default. If required by the
Senior Collateral Agent at any time after the occurrence and during the
continuance of an Event of Default, any payments of Accounts, when collected by
a Grantor during the continuance of such an Event of Default, (i) shall be
forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed
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by such Grantor to the Senior Collateral Agent if required, in a Senior
Collateral Account maintained under the sole dominion and control of and on
terms and conditions reasonably satisfactory to the Senior Collateral Agent,
subject to withdrawal by the Senior Collateral Agent as provided in Section
8.03, and (ii) until so turned over, shall be held by such Grantor in trust for
the Senior Secured Parties, segregated from other funds of such Grantor.
(b) At the Senior Collateral Agent's request after the occurrence and
during the continuance of an Event of Default, each Grantor shall deliver to the
Senior Collateral Agent all original and other documents evidencing, and
relating to, the agreements and transactions which gave rise to the Accounts,
including, without limitation, all original orders, invoices and shipping
receipts.
SECTION 5.04. Representations and Warranties. As of the Closing Date,
the place where each Grantor keeps its records concerning the Accounts is at the
location listed in Schedule 3 hereto.
SECTION 5.05. Covenants. (a) The amount represented by each Grantor to
the Senior Secured Parties from time to time as owing by each account debtor or
by all Account Debtors in respect of the Accounts shall at such time be in all
material respects the correct amount actually owing by such Account Debtor or
debtors thereunder.
(b) Upon the occurrence and during the continuance of an Event of
Default, a Grantor shall not grant any extension of the time of payment of any
of the Accounts Receivable, compromise, compound or settle the same for less
than the full amount thereof, release, wholly or partly, any person liable for
the payment thereof, or allow any credit or discount whatsoever thereon other
than extensions, credits, discounts, compromises or settlements granted or made
in the ordinary course of business.
(c) Unless a Grantor shall deliver prior written notice, identifying
the change of location for its books and records, such Grantor shall not remove
its books and records from the location specified in Schedule 3.
SECTION 5.06. Deposit Accounts. For each deposit account that any
Grantor at any time opens or maintains, such Grantor shall, at the Senior
Collateral Agent's request and option, pursuant to an agreement in form and
substance satisfactory to the Senior Collateral Agent, either (a) cause the
depositary bank to agree to comply at any time with instructions from the Senior
Collateral Agent to such depositary bank directing the disposition of funds from
time to time credited to such deposit account, without further consent of such
Grantor, or (b) arrange for the Senior Collateral Agent to become the customer
of the depositary bank with respect to the deposit account, with the Grantor
being permitted, only with the consent of the Senior Collateral Agent, to
exercise rights to withdraw funds from such deposit account. The provisions of
this paragraph shall not apply to (i) any deposit account for which any Grantor,
the depositary bank and the Senior Collateral Agent have entered into a cash
collateral agreement specially negotiated among such Grantor, the depositary
bank and the Senior Collateral Agent for the specific purpose set forth therein
and (ii) deposit accounts for which the Senior Collateral Agent is the
depositary.
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SECTION 6. [Intentionally Reserved]
SECTION 7. Provisions Relating to Contracts.
SECTION 7.01. Grantors Remain Liable under Contracts. Anything herein
to the contrary notwithstanding, each Grantor shall remain liable under each
Contract to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with and pursuant to
the terms and provisions of such Contract. No Senior Secured Party shall have
any obligation or liability under any Contract by reason of or arising out of
this Agreement or the receipt by any such Senior Secured Party of any payment
relating to such Contract pursuant hereto, nor shall any Senior Secured Party be
obligated in any manner to perform any of the obligations of a Grantor under or
pursuant to any Contract, to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by it or as to the sufficiency
of any performance by any party under any Contract, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
SECTION 7.02. Communication With Contracting Parties. Upon the
occurrence and during the continuance of an Event of Default, the Senior
Collateral Agent in its own name or in the name of its nominee may communicate
with parties to the Contracts to verify with them to the Senior Collateral
Agent's reasonable satisfaction the existence, amount and terms of any
Contracts. To the extent reasonably practicable the Senior Collateral Agent will
seek to take such actions through third parties.
SECTION 8. Remedies.
SECTION 8.01. Notice to Account Debtors and Contract Parties. Upon the
request of the Senior Collateral Agent at any time after the occurrence and
during the continuance of an Event of Default, a Grantor shall notify Account
Debtors on the Accounts and parties to the Contracts that the Accounts and the
Contracts have been assigned to the Senior Collateral Agent for the ratable
benefit of the Senior Secured Parties and that payments in respect thereof
during the continuance of such an Event of Default shall be made directly to the
Senior Collateral Agent.
SECTION 8.02. Proceeds to be Turned Over To Senior Collateral Agent.
In addition to the rights of the Senior Collateral Agent and the Senior Secured
Parties specified in Section 5.03 with respect to payments of Accounts, if an
Event of Default shall occur and be continuing all Proceeds received by a
Grantor consisting of cash, checks and other near-cash items shall upon the
Senior Collateral Agent's request be held by such Grantor in trust for the
Senior Secured Parties, segregated from other funds of such Grantor, and shall,
upon the Senior Collateral Agent's request (it being understood that the
exercise of remedies by the Senior Secured Parties in connection with an Event
of Default under Section 6.01(g) and Section 6.01(h) of the Senior Credit
Facility shall be deemed to constitute a request by the Senior Collateral Agent
for the purposes of this sentence) forthwith upon receipt by such Grantor, be
turned over to the Senior Collateral Agent in the exact form received by such
Grantor (duly indorsed by such Grantor to
16
the Senior Collateral Agent, if required) and held by the Senior Collateral
Agent in a Senior Collateral Account maintained under the sole dominion and
control of the Senior Collateral Agent and on terms and conditions reasonably
satisfactory to the Senior Collateral Agent. All Proceeds while held by the
Senior Collateral Agent in a Senior Collateral Account (or by such Grantor in
trust for the Senior Collateral Agent and the Senior Secured Parties) shall
subject to Section 8.03 continue to be held as collateral security for all the
Senior Obligations and shall not constitute payment thereof until applied as
provided in Section 8.03.
SECTION 8.03. Application of Proceeds. (a) So long as the Collateral
Trust and Intercreditor Agreement is in effect, following a Triggering Event (as
defined therein), the proceeds of any sale or other realization upon any
Collateral will be applied as set forth in the Collateral Trust and
Intercreditor Agreement.
(b) At all times when the Collateral Trust and Intercreditor
Agreement is not in effect, the proceeds of any sale or other realization upon
any Collateral following an Event of Default will be applied as soon as
practicable after receipt as follows:
FIRST: to the Senior Collateral Agent in an amount
equal to the fees and expenses of the Senior Collateral Agent
pursuant to this Agreement and the Senior Credit Facility that
are unpaid as of the applicable date of receipt of such
proceeds, and to any Senior Secured Party which has
theretofore advanced or paid any such fees and expenses of the
Senior Collateral Agent in an amount equal to the amount
thereof so advanced or paid by such Senior Secured Party pro
rata based on the amount of such fees and expenses (or such
advances or payment);
SECOND: to the Senior Collateral Agent to reimburse
any amounts owing to the Senior Collateral Agent pursuant to
Section 9.03;
THIRD: to the Senior Collateral Agent, for
distribution to the Senior Secured Parties to be applied to
the payment of the Senior Obligations then due and owing, pro
rata based on the amount of Senior Obligations then due and
owing (after giving effect to any payments previously made
under this Section), until all of the Senior Obligations then
due and owing have been paid in full; and
FOURTH: after payment in full of all Senior
Obligations, to Rite Aid and the Grantors 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.
SECTION 8.04. Uniform Commercial Code Remedies. If an Event of Default
shall have occurred and be continuing, the Senior Collateral Agent, on behalf of
the Senior Secured Parties may exercise, in addition to all other rights and
remedies granted to them in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Senior Obligations, all rights
and remedies of a senior secured party under the Uniform Commercial Code.
Without limiting the generality of the foregoing, the Senior Collateral Agent,
without demand of
17
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon a
Grantor or any other person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Senior Collateral,
or any part thereof, and/or may forthwith sell, lease, assign, give option or
options to purchase, or otherwise dispose of and deliver the Senior Collateral
or any part thereof (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, at any exchange, broker's board or
office of any Senior Secured Party or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. Any Senior
Secured Party shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Senior Collateral so sold, free of (to the extent
permitted by law) any right or equity of redemption in a Grantor, which right or
equity is hereby, to the extent permitted by law, waived or released. Each
Grantor further agrees, at the Senior Collateral Agent's request, to assemble
the Senior Collateral and make it available to the Senior Collateral Agent at
places which the Senior Collateral Agent shall reasonably select, whether at
such Grantor's premises or elsewhere. The Senior Collateral Agent shall apply
the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses incurred
therein or incidental to the care or safekeeping of any of such Senior
Collateral or reasonably relating to such Senior Collateral or the rights of the
Senior Collateral Agent and the Senior Secured Parties hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Senior Obligations, in accordance with Section 8.03,
and only after such application and after the payment by the Senior Collateral
Agent of any other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the Uniform Commercial Code, need the Senior
Collateral Agent account for the surplus, if any, to such Grantor. If any notice
of a proposed sale or other disposition of such Senior Collateral shall be
required by law, such notice shall be in writing and deemed reasonable and
proper if given at least 10 days before such sale or other disposition.
The Senior Collateral Agent shall have absolute discretion as to the
time of application of any such proceeds, moneys or balances in accordance with
this Agreement. Upon any sale of the Senior Collateral by the Senior Collateral
Agent (including pursuant to a power of sale granted by statute or under a
judicial proceeding), the receipt of the Senior Collateral Agent or of the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Senior Collateral so sold and such purchaser or purchasers
shall not be obligated to see to the application of any part of the purchase
money paid over to the Senior Collateral Agent or such officer or be answerable
in any way for the misapplication thereof.
SECTION 8.05. Grant of License to Use Intellectual Property. For the
purpose of enabling the Senior Collateral Agent to exercise rights and remedies
under this Article at such time as the Senior Collateral Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby grants to the
Senior Collateral Agent an irrevocable, non-exclusive license (exercisable
without payment of royalty or other compensation to the Grantors) to use,
license or sub-license any of the Senior Collateral consisting of Intellectual
Property now
18
owned or hereafter acquired by such Grantor, and wherever the same may be
located, and including in such license reasonable access to all media in which
any of the licensed items may be recorded or stored and to all computer software
and programs used for the compilation or printout thereof. The use of such
license by the Senior Collateral Agent shall be exercised, at the option of the
Senior Collateral Agent, solely upon the occurrence and during the continuation
of an Event of Default; provided that any license, sub-license or other
transaction entered into by the Senior Collateral Agent in accordance herewith
shall be binding upon the Grantors notwithstanding any subsequent cure of an
Event of Default.
SECTION 8.06. Waiver; Deficiency. Each Grantor waives and agrees not
to assert any rights or privileges it may acquire under Section 9-112 of the
Uniform Commercial Code. Each Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Senior Collateral are
insufficient to pay the Senior Obligations and the reasonable fees and
disbursements of any attorneys employed by any Senior Secured Party to collect
such deficiency.
SECTION 8.07. Cash Sweep Remedies. The Senior Collateral Agent, on
behalf of the Senior Secured Parties is entitled to exercise all rights and
remedies granted to them in respect of the Cash Management Accounts in
accordance with Schedule 5 of this Agreement.
SECTION 9. Senior Collateral Agent's Appointment as Attorney-in-Fact;
Senior Collateral Agent's Performance of Grantors' Obligations.
SECTION 9.01. Powers. Each Grantor hereby irrevocably constitutes and
appoints the Senior Collateral Agent and any officer or agent thereof, with full
power of substitution, during the continuance of an Event of Default, as its
true and lawful attorney-in-fact, with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name from time to time in the Senior Collateral Agent's discretion, for the
purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, such Grantor hereby gives the
Senior Collateral Agent the power and right, on behalf of such Grantor, without
notice to or assent by such Grantor, to do the following upon the occurrence and
during the continuance of an Event of Default:
(a) in the name of such Grantor or its own name, or otherwise,
to take possession of and indorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due
under any Account, Instrument, General Intangible or Contract or with
respect to any other Senior Collateral and to file any claim or to take
any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Senior Collateral Agent for the
purpose of collecting any and all such moneys due under any Account,
Instrument, General Intangible or Contract or with respect to any other
Senior Collateral whenever payable;
(b) in the case of any Intellectual Property, execute and
deliver, and have recorded, any and all agreements, instruments,
documents and papers as the Senior
19
Collateral Agent may request to evidence the Senior Collateral Agent's
and the Senior Secured Parties' security interest in such Intellectual
Property and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby;
(c) to pay or discharge taxes and Liens levied or placed on or
threatened against the Senior Collateral (other than Permitted Liens),
to effect any repairs or any insurance called for by the terms of this
Agreement and to pay all or any part of the premiums therefor and the
costs thereof;
(d) to execute, in connection with any sale provided for in
Section 8.04 hereof, any endorsements, assignments or other instruments
of conveyance or transfer with respect to the Senior Collateral;
(e)(i) to direct any party liable for any payment under any of
the Senior Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Senior Collateral Agent or as the
Senior Collateral Agent shall direct; (ii) to ask or demand for,
collect, receive payment of and receipt for, any and all moneys, claims
and other amounts due or to become due at any time in respect of or
arising out of any Senior Collateral; (iii) to sign and indorse any
invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications,
notices and other documents in connection with any of the Senior
Collateral; (iv) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction
to collect the Senior Collateral or any thereof and to enforce any
other right in respect of any Senior Collateral; (v) to defend any
suit, action or proceeding brought against any Grantor with respect to
any Senior Collateral; (vi) to settle, compromise or adjust any such
suit, action or proceeding and, in connection therewith, to give such
discharges or releases as the Senior Collateral Agent may deem
appropriate; (vii) to the extent permitted by applicable law, assign
any Copyright, Patent or Trademark (along with the goodwill of the
business to which any such Copyright, Patent or Trademark pertains);
and (viii) generally, to use, sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Senior
Collateral as fully and completely as though the Senior Collateral
Agent were the absolute owner thereof for all purposes, and to do, at
the Senior Collateral Agent's option and at the expense of such
Grantor, at any time, or from time to time, all acts and things which
the Senior Collateral Agent reasonably deems necessary to protect,
preserve or realize upon such Senior Collateral and the Senior
Collateral Agent's and the Senior Secured Parties' security interests
therein and to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do; and
(f) to file any Uniform Commercial Code financing statement,
or to take such other steps, required to perfect or confirm the
perfection of any security interest described herein.
SECTION 9.02. Performance by Senior Collateral Agent of Grantor's
Obligations. If any Grantor fails to perform or comply with any of its
agreements contained herein, the Senior
20
Collateral Agent, at its option, but without any obligation so to do, may
perform or comply, or otherwise cause performance or compliance, with such
agreement.
SECTION 9.03. Grantor's Reimbursement Obligation. The expenses of the
Senior Collateral Agent and any other Senior Secured Party, as applicable,
reasonably incurred in connection with actions undertaken as provided in this
Section 9, together with interest thereon at a rate per annum equal to the
default rate of interest set forth in Section 2.07 of the Senior Credit
Facility, from the date payment is demanded by the Senior Collateral Agent to
the date reimbursed by such Grantor, shall be payable by the Borrower to the
Senior Collateral Agent on demand.
SECTION 9.04. Ratification; Power Coupled With An Interest. Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof. All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
SECTION 10. Duty of Senior Collateral Agent. The Senior Collateral
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Senior Collateral in its possession, under Section 9-207 of
the Uniform Commercial Code or otherwise, shall be to deal with it in the same
manner as the Senior Collateral Agent deals with similar property for its own
account. No Senior Secured Party nor any of its respective directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Senior Collateral or for any delay in doing so or shall be under
any obligation to sell or otherwise dispose of any Senior Collateral upon the
request of a Grantor or any other person or to take any other action whatsoever
with regard to the Senior Collateral or any part thereof. The powers conferred
on the Senior Secured Parties hereunder are solely to protect the Senior Secured
Parties' interests in the Senior Collateral and shall not impose any duty upon
any Senior Secured Party to exercise any such powers. The Senior Secured Parties
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to any Grantor for any act
or failure to act hereunder, except for their own gross negligence or wilful
misconduct.
SECTION 11. Execution of Financing Statements. Each Grantor authorizes
the Senior Collateral Agent to file financing statements with respect to the
Collateral without the signature of such Grantor in such form and in such filing
offices as the Senior Collateral Agent reasonably determines appropriate to
perfect the security interests of the Senior Collateral Agent under this
Agreement. A carbon, photographic or other reproduction of this Agreement shall
be sufficient as a financing statement for filing in any jurisdiction.
SECTION 12. Authority of Senior Collateral Agent. Each Grantor
acknowledges that the rights and responsibilities of the Senior Collateral Agent
under this Agreement with respect to any action taken by the Senior Collateral
Agent or the exercise or non-exercise by the Senior Collateral Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Senior Collateral
21
Agent and the other Senior Secured Parties, be governed by the Senior Credit
Facility and by such other agreements with respect thereto as may exist from
time to time among them but, as between the Senior Collateral Agent and the
Grantors, the Senior Collateral Agent shall be conclusively presumed to be
acting as agent for the other Senior Secured Parties with full and valid
authority so to act or refrain from acting.
SECTION 13. Notices. All notices, requests and demands to or upon the
Senior Secured Parties or the Grantors under this Agreement shall be given or
made in accordance with Section 9.01 of the Senior Credit Facility and the
relevant section of the 10.50% Note Indenture and addressed as follows:
(a) if to the Senior Collateral Agent, in accordance with
Section 9.01 of the Senior Credit Facility;
(b) if to any Grantor, c/o the Borrower at the address of the
Borrower specified in Annex 2 Senior Credit Facility.
SECTION 14. Security Interest Absolute. All rights of the Senior
Collateral Agent hereunder, the security interest and all obligations of the
Grantors hereunder shall be absolute and unconditional.
SECTION 15. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor 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 Secured Parties and shall survive the
making by the Senior Banks of the Loans, the execution and delivery to the
Senior Banks of the Senior Loan Documents and the issuance of any Letters of
Credit, regardless of any investigation made by the Senior Secured Parties or on
their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or L/C Disbursement, or any
other Senior Obligation is outstanding and unpaid and so long as any Letter of
Credit is outstanding and so long as the Commitments have not been terminated.
SECTION 16. 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 OR ANY OF THE OTHER SENIOR LOAN
DOCUMENTS. 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 AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 16.
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SECTION 17. Jurisdiction; Consent to Service of Process. (a) Each
Grantor 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 the other Senior Loan Documents, 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 any Obligor or any Senior Secured Party may otherwise have to bring
any action or proceeding relating to this Agreement or the other Senior Loan
Documents against any Grantor or any Senior Secured Party or its properties in
the courts of any jurisdiction.
(b) Each Grantor and each Senior Secured Party 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
the other Senior Loan Documents 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 13. 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 18. Release. (a) This Agreement and the security interest
created hereunder shall terminate when all Senior Obligations have been fully
and indefeasibly paid and when the Senior Secured Parties have no further
Commitments under the Senior Credit Facility and no Letters of Credit are
outstanding, at which time the Senior Collateral Agent shall execute and deliver
to each Grantor, or to such person or persons as such Grantor shall reasonably
designate, all Uniform Commercial Code termination statements and similar
documents prepared by such Grantor at its expense which such Grantor shall
reasonably request to evidence such termination. Any execution and delivery of
termination statements or documents pursuant to this Section 18(a) shall be
without recourse to or warranty by the Senior Collateral Agent.
(b) All Senior Collateral used, sold, transferred or otherwise disposed
of in accordance with the terms of the Senior Credit Facility and the Collateral
Trust and Intercreditor Agreement (including pursuant to a waiver or amendment
of the terms thereof) shall be used, sold, transferred or otherwise disposed of
free and clear of the Lien and the security interest created hereunder. In
connection with the foregoing, (i) the Senior Collateral Agent shall execute and
deliver to each Grantor, or to such person or persons as such Grantor shall
reasonably designate, all Uniform Commercial Code termination statements and
similar documents prepared by such Grantor at its expense which such Grantor
shall reasonably request to evidence the release of the
23
Lien and security interest created hereunder with respect to such Senior
Collateral and (ii) any representation, warranty or covenant contained herein
relating to such Senior Collateral shall no longer be deemed to be made with
respect to such used, sold, transferred or otherwise disposed Senior Collateral.
SECTION 19. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. The parties hereunder
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 20. Amendments in Writing; No Waiver. (a) None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except by a written instrument executed by the Grantors and the Senior
Collateral Agent, provided that any provision of this Agreement may be waived by
the Majority Senior Parties pursuant to a letter or agreement executed by the
Senior Collateral Agent or by telecopy transmission from the Senior Collateral
Agent.
(b) No Senior Secured Party shall by any act (except by a written
instrument pursuant to Section 20 hereof) or delay be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or Event of
Default or in any breach of any of the terms and conditions hereof. No failure
to exercise, nor any delay in exercising, on the part of any Senior Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by any Senior Secured Party of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which such Senior Secured Party would otherwise have
on any future occasion.
SECTION 21. Remedies Cumulative. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
SECTION 22. Section Headings. The section and Section headings used in
this Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
SECTION 23. Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of each Grantor and the Senior Secured Parties and their successors and assigns,
provided that this Agreement may not be assigned by any Grantor without the
prior written consent of the Senior Collateral Agent.
24
SECTION 24. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
SECTION 25. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract.
SECTION 26. Additional Grantors. Pursuant to Section 5.08 of the
Senior Credit Facility, certain Domestic Subsidiaries that were not in existence
or not a Domestic Subsidiary on the date thereof are required to enter into this
Agreement as a Grantor upon becoming a Domestic Subsidiary. Upon execution and
delivery, after the date hereof, by the Senior Collateral Agent and such a
Domestic Subsidiary of an instrument in the form of Annex 1, such Domestic
Subsidiary shall become a Grantor hereunder with the same force and effect as if
originally named as a Grantor hereunder. The execution and delivery of any such
instrument shall not require the consent of any Grantor hereunder. The rights
and obligations of each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor as a party to this Agreement.
SECTION 27. Patient Confidentiality. The Senior Collateral Agent hereby
agrees on behalf of itself and each Senior Secured Party and any of their
designees and assigns to, and shall take all reasonable steps to, comply with
all applicable state or federal laws or administrative regulations regarding the
confidentiality of patient records and patient medical information it receives
in connection with the transactions described in this Agreement.
SECTION 28. Collateral Trust and Intercreditor Agreement.
Notwithstanding anything herein to the contrary, the terms of this Agreement,
and the rights of the Senior Collateral Agent and the Senior Secured Parties
hereunder, are subject to the Collateral Trust and Intercreditor Agreement.
25
IN WITNESS WHEREOF, the undersigned has caused this Senior Subsidiary
Security Agreement to be duly executed and delivered as of the date first above
written.
CITICORP USA, INC., as Senior Collateral Agent,
By________________________________
Name:
Title:
EACH OF THE SUBSIDIARIES LISTED ON
SCHEDULE A HERETO, as Grantors,
By________________________________
Name:
Title:
THRIFTY PAYLESS, INC., as Grantor,
By________________________________
Name:
Title:
26
Schedules:
---------
Annex 1 Supplement
Annex 2 Definitions Annex
Schedule A Subsidiary Guarantors
Schedule 1 Filings and Other Actions Required to Perfect Security Interests
Schedule 2 Inventory
Schedule 3 Records of Accounts
Schedule 4 Copyrights and Copyright Licenses; Patents and Patent Licenses; and
Trademarks and Trademark Licenses
Schedule 5 Cash Management System
Schedule 6 Form of Blocked Account Agreement
Schedule 7 Form of Lockbox Account Agreement
Schedule 8 Form of Government Lockbox Account Agreement
Schedule 9 Form of Concentration Agreement
Schedule 10 Perfection Certificate
Annex 1
to the Senior Subsidiary
Security Agreement
SUPPLEMENT NO. dated as of [ ] (this "Supplement") to
the Senior Subsidiary Security Agreement dated as of June 27,
2001 (the "Senior Subsidiary Security Agreement"), between the
SUBSIDIARIES GUARANTORS identified on the signature pages
thereto and any other person that becomes a Subsidiary
Guarantor (the "Grantors"), in favor of CITICORP USA, INC., a
New York banking corporation, as Senior Collateral Agent (the
"Senior Collateral Agent") for the Senior Secured Parties.
A. Reference is made to the (a) Senior Credit Agreement dated as of
June 27, 2001 (as amended or modified from time to time, the "Senior Credit
Agreement"), among Rite Aid, as Borrower, the Senior Banks parties thereto, the
Swingline Banks, the Issuing Banks, the Administrative Agent, the Senior
Collateral Agent and the Syndication Agents and (b) the Senior Subsidiary
Security Agreement dated as of June 27, 2001, among the Subsidiary Guarantors
and the Senior Collateral Agent.
B. Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the Senior Subsidiary Security Agreement,
including the Definitions Annex and the Senior Credit Facility referred to
therein.
C. The Grantors have entered into the Senior Subsidiary Security
Agreement in order to induce the Senior Banks to make Loans and induce the
Issuing Banks to issue Letters of Credit pursuant to, and upon the terms and
subject to the conditions specified in, the Senior Credit Facility. Pursuant to
Section 5.08 of the Senior Credit Facility, certain Domestic Subsidiaries that
were not in existence or not a Domestic Subsidiary on the date thereof are
required to enter into the Senior Subsidiary Security Agreement as a Grantor
upon becoming a Domestic Subsidiary. Section 26 of the Senior Subsidiary
Security Agreement provides that additional Domestic Subsidiaries may become
Grantors under the Senior Subsidiary Security Agreement by execution and
delivery of an instrument in the form of this Supplement. The undersigned (the
"New Grantor") is a Domestic Subsidiary and is executing this Supplement in
accordance with the requirements of the Senior Credit Facility to become a
Grantor under the Senior Subsidiary Security Agreement in order to induce the
Senior Banks 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 Agent and the New Grantor agree as
follows:
SECTION 1. In accordance with Section 26 of the Senior Subsidiary
Security Agreement, the New Grantor by its signature below becomes a Grantor
under the Senior Subsidiary Security Agreement with the same force and effect as
if originally named therein as a Grantor and the New Grantor hereby agrees to
all the terms and provisions of the Senior Subsidiary Security Agreement
applicable to it as a Grantor thereunder. Each reference to a "Grantor" in the
Senior Subsidiary Security Agreement shall be deemed to include the New Grantor.
The Senior Subsidiary Security Agreement is hereby incorporated herein by
reference.
SECTION 2. The New Grantor represents and warrants to the 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, subject to the effects of
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally and equitable principles of general applicability.
SECTION 3. This Supplement may be executed in two or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one instrument. This Supplement shall become
effective when the Senior Collateral Agent shall have received counterparts of
this Supplement that, when taken together, bear the signatures of the New
Grantor and the Senior Collateral Agent.
SECTION 4. Except as expressly supplemented hereby, the Senior
Subsidiary Security Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Senior Subsidiary Security 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 the Senior Credit Facility. All communications and
notices hereunder to the New Grantor shall be given to it c/o the Borrower as
set forth in Section 9.01 of the Senior Credit Facility.
2
IN WITNESS WHEREOF, the New Grantor and the Senior Collateral Agent
have duly executed this Supplement to the Senior Subsidiary Security Agreement
as of the day and year first above written.
[NAME OF NEW GRANTOR],
by ___________________________________
Name:
Title:
CITICORP USA, INC., as Senior Collateral Agent,
by ___________________________________
Name:
Title:
3
Annex 2
to the Senior Subsidiary
Security Agreement
DEFINITIONS ANNEX
Schedule A
to the Senior Subsidiary
Security Agreement
SUBSIDIARY GUARANTORS
Subsidiary Guarantors
---------------------
000 Xxxxxxxx Xxxxxx Xxxxxxx, LLC
0000 Xxxx Xxxxx Xxxxxx Xxxxx, Xxxxx, LLC
1525 Cortyou Road-Brooklyn Inc.
1740 Associates, LLC
0000 Xxxxxx Xxxx Xxxx-Xxxxxxxxxx Corp.
0000 Xxxxxxxxxxxx Xxxxxx Xxxx-Xxxxxxxxxxxx Xxxx, Inc.
5277 Associates, Inc.
000 Xxx Xxxxxx Corporation
5600 Superior Properties, Inc.
000-000 Xxxxxxxx Xx. Xxxx.
000 Xxxxx Xxxxxxxx-Xxxxxx, Xxxx, LLC
Xxx & Government Streets-Mobile, Alabama, LLC
Apex Drug Stores, Inc.
Baltimore/Annapolis Boulevard & Governor Richie Hwy-Glen Burnie, MD, LLC
Broadview and Wallings-Broadview Heights Ohio, Inc.
Xxxxxxx Xxxxxx xxx Xxxx Xxxxxx-Xxxxx, XX, LLC
Dominion Action Four Corporation
Dominion Action One Corporation
Dominion Action Three Corporation
Dominion Action Two Corporation
Dominion Drug Stores Corporation
Drug Fair of PA, Inc.
Drug Fair, Inc.
Eagle Managed Care Corp.
Eighth and Water Streets-Ulrichsville, Ohio, LLC
England Street-Asheland Corporation
GDF, Inc.
Gettysburg and Hoover-Dayton, Ohio, LLC
Gratiot & Center-Saginaw Township, Michigan, LLC
Harco, Inc.
Xxxxx Xxxxxx Xxxxxx Corporation
K&B Alabama Corporation
K&B Florida Corporation
K&B Louisiana Corporation
K&B Mississippi Corporation
K&B Services, Inc.
K&B Tennessee Corporation
K&B Texas Corporation
K&B Trainees, Inc.
K&B, Incorporated
Xxxx & Xxxxxxxx, Inc.
Keystone Centers, Inc.
Lakehurst and Broadway Corporation
Xxxxxxxx & Chillicothe Roads-Chesterland, LLC
Xxxxxx & Xxxxxxx LLC
Name Rite, LLC
Northline & Xxx-Xxxxxx-Southgate, LLC
Ocean Acquisition Corporation
P.L.D. Enterprises, Inc.
Xxxxxx Drive and Navy Boulevard Property Corporation
Paw Paw Lake Road & Paw Paw Avenue-Coloma, Michigan, LLC
PDS-1 Michigan, Inc.
Perry Distributors, Inc.
Perry Drug Stores, Inc.
PL Xpress, Inc.
Portfolio Medical Services, Inc.
Rack Rite Distributors, Inc.
Ram-Utica, Inc.
RDS Detroit, Inc.
Reads, Inc.
Rite Aid Drug Palace, Inc.
Rite Aid Hdqtrs. Corp.
Rite Aid of Alabama, Inc.
Rite Aid of Connecticut, Inc.
Rite Aid of Delaware, Inc.
Rite Aid of Florida, Inc.
Rite Aid of Georgia, Inc.
Rite Aid of Illinois, Inc.
Rite Aid of Indiana, Inc.
Rite Aid of Kentucky, Inc.
Rite Aid of Maine, Inc.
Rite Aid of Maryland, Inc.
Rite Aid of Massachusetts, Inc.
Rite Aid of Michigan, Inc.
Rite Aid of New Hampshire, Inc.
Rite Aid of New Jersey, Inc.
Rite Aid of New York, Inc.
Rite Aid of North Carolina, Inc.
Rite Aid of Ohio, Inc.
Rite Aid of Pennsylvania, Inc.
Rite Aid of South Carolina, Inc.
Rite Aid of Tennessee, Inc.
2
Rite Aid of Vermont, Inc.
Rite Aid of Virginia, Inc.
Rite Aid of Washington, D.C., Inc.
Rite Aid of West Virginia, Inc.
Rite Aid Realty Corp.
Rite Aid Rome Distribution Center, Inc.
Rite Aid Transport, Inc.
Rite Aid Venturer #1, Inc.
Rite Fund, Inc.
Rite Investments Corporation
RX Choice, Inc.
Script South
Seven Mile and Evergreen-Detroit, LLC
Silver Springs Road-Baltimore,
Maryland/One, LLC
Silver Springs Road-Baltimore, Maryland/Two, LLC
Sophie One Corp.
State & Fortification Streets-Jackson, Mississippi, LLC
Xxxxx Xxxxxx xxx Xxxx Xxxx-Xxxxxx, Xxxx, LLC
Super Distributors, Inc.
Super Ice Cream Suppliers, Inc.
Super Laboratories, Inc.
Super Pharmacy Network, Inc.
Super Tobacco Distributors, Inc
The Lane Drug Company
The Xxxx Company
Thrifty Corporation
Thrifty Payless, Inc
Thrifty Wilshire, Inc.
Tyler and Xxxxxxx Roads, Birmingham-Alabama, LLC
Virginia Corporation
W.R.A.C., Inc.
Fairground, LLC
Xxxxxxxxxx'x Enterprises, Inc.
Leader Drugs, Inc.
3
Schedule 1
to the Senior Subsidiary
Security Agreement
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
[Uniform Commercial Code Filings]
[Patent and Trademark Filings]
[Copyright Filings]
Schedule 2
to the Senior Subsidiary
Security Agreement
INVENTORY LOCATIONS
Schedule 3
to the Senior Subsidiary
Security Agreement
RECORDS OF ACCOUNTS
Description
Schedule 4
to the Senior Subsidiary
Security Agreement
COPYRIGHTS REGISTRATIONS AND COPYRIGHT LICENSES
PATENTS AND PATENT LICENSES
TRADEMARK REGISTRATIONS AND TRADEMARK LICENSES
PENDING ACTIONS
Schedule 5
to the Senior Subsidiary
Security Agreement
CASH MANAGEMENT SYSTEM
SECTION 1. Accounts. (a) Each Grantor shall cause:
(i) each Blocked Account Bank to execute and deliver a Blocked
Account Agreement in respect of each Blocked Account by the Closing
Date;
(ii) each Lockbox Account Bank to execute and deliver a
Lockbox Account Agreement in respect of each Lockbox Account by the
Closing Date;
(iii) each Government Lockbox Account Bank to execute and
deliver an Government Lockbox Account Agreement in respect of each
Government Lockbox Account by the Closing Date; and
(iv) each Concentration Account Bank to execute and deliver a
Concentration Account Agreement in respect of the Concentration Account
by the Closing Date.
(b) On each Business Day, each Grantor will transfer, directly
or indirectly substantially all of the funds credited to each of its
depositary accounts in same day funds, to a Blocked Account (including
during a Cash Sweep Period) in accordance with its customary business
practice.
(c) Each Grantor shall cause all payments in the Government Lockbox
Account to be deposited into the Lockbox Account as promptly as possible and in
any event no later than the Business Day on which such payments become available
in the Government Lockbox Account (including during a Cash Sweep Period).
(d) Each Cash Management Account is, and shall remain, under the sole
dominion and control of the Senior Collateral Agent. Each Grantor acknowledges
and agrees that:
(i) during a Cash Sweep Period such Grantor has no right of
withdrawal from any Cash Management Account except that:
(A) the relevant Grantors shall be permitted to instruct
any Blocked Account Bank to transfer all amounts deposited in
or credited to any Blocked Account to the Concentration
Account in accordance with the applicable Blocked Account
Agreement, and
(B) the relevant Grantor shall be permitted to instruct
the Concentration Account Bank to transfer all amounts
deposited in or credited to the Concentration Account in
accordance with the Concentration Account Agreement;
(ii) the funds on deposit in the Cash Management Accounts
shall continue to be collateral security for all of the Senior
Obligations.
(e) Prior to the delivery of a Cash Sweep Notice, the Grantor is free
to withdraw funds on deposit in or credited to the Blocked Accounts and the
Concentration Account in such amounts and with such frequency as the Grantor may
from time to time determine, without notice to or consent from the Senior
Collateral Agent.
SECTION 2. Cash Sweep. (a) The Senior Collateral Agent shall
immediately be entitled to deliver Cash Sweep Notices upon the conditions
specified in Section 9.11(a) in the Senior Credit Facility.
(b) Upon delivery of:
(i) a Blocked Account Cash Sweep Notice from the Senior
Collateral Agent, the balance of each Blocked Account shall be
forwarded to the Concentration Account, each Business Day or the next
Business Day (as permitted by the applicable Blocked Account
Agreement), in same day funds, for so long as such Blocked Account Cash
Sweep Notice shall be in effect; and
(ii) a Concentration Account Cash Sweep Notice from the Senior
Collateral Agent, the balance of the Concentration Account shall be
forwarded to a Citibank Concentration Account, each Business Day (or
the next Business Day (as permitted by the Concentration Account
Agreement)), in same day funds, for so long as such Concentration
Account Cash Sweep Notice shall be in effect.
(c) On each Business Day during a Cash Sweep Period, the Senior
Collateral Agent shall use funds on deposit in any Citibank Concentration
Account as follows:
(i) after the occurrence of a Triggering Event, in accordance
with the provisions of Section 4.01(b) or (c) of the Collateral Trust
and Intercreditor Agreement, as applicable; and
(ii) at any other time, first, to repay the Revolving Credit
Borrowings (without any reduction of the Commitments) and second, to be
deposited into the Cash Sweep Cash Collateral Account for the benefit
of the Senior Secured Parties, as collateral for the payment and
performance of the Senior Obligations. The Senior Collateral Agent
shall have exclusive dominion and control, including the exclusive
right of withdrawal, over the Cash Sweep Cash Collateral Account.
Deposits in the Cash Sweep Cash Collateral Account shall be invested in
2
Temporary Cash Investments, to be selected by the Senior Collateral
Agent in its 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. Upon
termination of any Cash Sweep Period, funds in the Cash Sweep Cash
Collateral Account shall be released to the Concentration Account
within three Business Days after the end of such Cash Sweep Period.
(d) The Senior Collateral Agent shall be required to automatically
rescind any Cash Sweep Notice upon the conditions specified in Section 9.11(b)
of the Senior Credit Facility.
(e) The Senior Collateral Agent reserves the right to send as many Cash
Sweep Notices to the extent that it is entitled to do so under paragraph (a) of
this Section 2.
SECTION 3. Collections. (a) Each Grantor agrees to notify and direct
promptly
(i) subject to paragraph (ii) below, each Account Debtor and
every other Person obligated to make payments to any Blocked Account or
Deposit Account, as applicable, to make all such payments to such
Blocked Account or Deposit Account, as applicable. Each Grantor shall
use all commercially reasonable efforts to cause each Account Debtor
and every other person identified in the preceding sentence to make all
payments owing to any Grantor to a Blocked Account or Deposit Account,
as applicable; and
(ii) each Account Debtor which is a Governmental Entity (and
only such Account Debtors) to make all payments owing to any Grantor to
the Government Lockbox Account.
(b) In the event that any Grantor directly receives any remittances or
payments on Accounts Receivable or any other obligation, notwithstanding the
arrangements for payment directly into the Blocked Accounts or the Deposit
Accounts, such remittances and payments shall be held in trust for the benefit
of the Senior Collateral Agent and the other Senior Secured Parties and shall be
segregated from other funds of such Grantor, subject to the Lien granted by the
Senior Subsidiary Security Agreement, and such Grantor shall cause such
remittances and payments to be deposited into the applicable Blocked Account or
Deposit Account as soon as practicable after such Grantor's receipt thereof.
SECTION 4. Accounts. (a) The following are the Blocked Accounts:
--------------------------------------------------------------------------------
Blocked Account Bank Account Numbers
--------------------------------------------------------------------------------
Bank of America [1233625317]
--------------------------------------------------------------------------------
PNC Bank [8612489237]
--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
Blocked Account Bank Account Numbers
--------------------------------------------------------------------------------
PNC Bank [8550419961]
--------------------------------------------------------------------------------
US Bank [153607068225]
--------------------------------------------------------------------------------
Fleet Bank [9415842956]
--------------------------------------------------------------------------------
Union Bank of CA [1870024297]
--------------------------------------------------------------------------------
(b) The following are the Deposit Accounts:
--------------------------------------------------------------------------------
Account Holder Account Details
--------------------------------------------------------------------------------
Mellon Bank [0693636]
--------------------------------------------------------------------------------
Mellon Bank [1037294]
--------------------------------------------------------------------------------
(c) The following is the Concentration Account:
--------------------------------------------------------------------------------
Account Holder Account Details
--------------------------------------------------------------------------------
The Chase Manhattan Bank [9102750222]
--------------------------------------------------------------------------------
Schedule 6
to the Senior Subsidiary
Security Agreement
[FORM OF]
BLOCKED ACCOUNT AGREEMENT
[Date]
[Blocked Account Bank]
[address]
Ladies and Gentlemen:
Reference is made to (a) account no. [ ] maintained with you (the
"Blocked Account Bank") by [ ] (the "Grantor") into which funds are deposited
from time to time (the "Blocked Account") and (b) the Senior Subsidiary Security
Agreement dated as of June 27, 2001 (as amended, supplemented or otherwise
modified from time to time, the Senior Subsidiary Security Agreement"), among
the Subsidiary Guarantors (such term and each other capitalized term used but
not defined herein having the meaning assigned to such term in the Senior
Subsidiary Security Agreement, including the Definitions Annex and Senior Credit
Facility referred to therein) and the Senior Collateral Agent.
Pursuant to the Senior Subsidiary Security Agreement, the Grantor has
granted to the Senior Collateral Agent, for the benefit of the Senior Secured
Parties, a perfected security interest in certain property of the Grantor,
including, the Blocked Account.
The Grantor hereby transfers to the Senior Collateral Agent exclusive
ownership and control of, and all of its right, title and interest in and to,
the Blocked Account and all funds and other property on deposit therein. By
executing this Blocked Account Agreement, the Blocked Account Bank acknowledges
that the Senior Collateral Agent now has exclusive ownership and control of the
Blocked Account, that all funds in the Blocked Account shall be transferred to
the Senior Collateral Agent as provided herein, that the Blocked Account is
being maintained by the Blocked Account Bank for the benefit of the Senior
Collateral Agent and that all amounts and other property therein are held by the
Blocked Account Bank as custodian for the Senior Collateral Agent.
Except as provided in paragraphs (e), (f) and (l) below, the Blocked
Account shall not be subject to deduction, setoff, banker's lien, counterclaim,
defense, recoupment or any other right in favor of any person or entity other
than the Senior Collateral Agent. By executing this Blocked Account Agreement
the Blocked Account Bank also acknowledges that, as of the date hereof, the
Blocked Account Bank has received no notice of any other pledge or assignment of
the Blocked Account and the Blocked Account Bank agrees with the Senior
Collateral Agent as follows:
(a) Notwithstanding anything to the contrary or any other
agreement relating to the Blocked Account, the Blocked Account is and
will be maintained for the benefit of the Senior Collateral Agent, will
be entitled "Citicorp USA, Inc. as Senior Collateral Agent under the
Senior Subsidiary Security Agreement dated as of June 27, 2001 Account"
and will be subject to written instructions only from an authorized
officer of the Senior Collateral Agent (except as expressly provided
otherwise herein).
(b) The Blocked Account Bank agrees to give the Senior
Collateral Agent prompt notice if the Blocked Account shall become
subject to any writ, judgment, warrant of attachment, execution or
similar process.
(c) [A post office box (the "Lockbox") has been rented in the
name of the Grantor at the [ post office and the address to be used for
such Lockbox is:
[Insert address]
The Blocked Account Bank's authorized representatives will have access
to the Lockbox under the authority given by the Grantor to the post
office and will make regular pick-ups from the Lockbox timed to gain
maximum benefit of early presentation and availability of funds. The
Blocked Account Bank will endorse and process all checks received in
the Lockbox and deposit such checks (to the extent eligible) in the
Blocked Account in accordance with the procedures set forth below .]
(d) The Blocked Account Bank will follow its operating
procedures for the handling of any [checks received from the Lockbox]
or other remittance received in the Blocked Account that contains
restrictive endorsements, irregularities (such as a variance between
the written and numerical amounts), undated or postdated items, missing
signatures, incorrect payees and the like.
(e) The Blocked Account Bank will endorse and process all
eligible checks and other remittance items not covered by paragraph (d)
and deposit such checks and remittance items in the Blocked Account.
2
(f) The Blocked Account Bank will mail all checks returned
unpaid because of uncollected or insufficient funds under appropriate
advice to the Grantor (with a copy of the notification of return to the
Senior Collateral Agent). The Blocked Account Bank may charge the
Blocked Account for the amounts of any returned check that has been
previously credited to the Blocked Account. To the extent insufficient
funds remain in the Blocked Account to cover any such returned check,
the Grantor shall indemnify the Blocked Account Bank for the
uncollected amount of such returned check upon your demand.
(g) The Blocked Account Bank will maintain a record of all
checks and other remittance items received in the Blocked Account on a
daily basis and, in addition to providing the Grantor with photostatic
copies thereof, vouchers, enclosures and the like of such checks and
remittance items, furnish to the Senior Collateral Agent a monthly
statement setting forth the amounts deposited in and withdrawn from the
Blocked Account and shall furnish such other information relating to
the Blocked Account at such times as shall be reasonably requested by
the Senior Collateral Agent to: Citicorp USA, Inc., as Senior
Collateral Agent, [ ], Attention: [ ], with a copy to the Grantor.
(h) Prior to the delivery of a written notice from the Senior
Collateral Agent in the form of Exhibit A hereto (the "Blocked Account
Cash Sweep Notice"), the Grantor is free to withdraw funds from the
Blocked Account in such amounts and with such frequency as the Grantor
may from time to time determine, without notice to or consent from the
Senior Collateral Agent.
(i) From and after delivery to the Blocked Account Bank of a
Blocked Account Cash Sweep Notice and until the Blocked Account Bank is
notified in writing by the Senior Collateral Agent that the Blocked
Account Cash Sweep Notice is no longer in effect (a "Blocked Account
Cash Sweep Period"), the Grantor will have no control over the use of,
or any right to withdraw any amount from, to draw upon, or to otherwise
exercise any power with respect to the Blocked Account, except that the
Grantor shall be permitted to instruct the Blocked Account Bank only
with respect to the transfer of funds from the Blocked Account to the
Concentration Account (as defined below) in accordance with paragraph
(k) below.
(j) During a Blocked Account Cash Sweep Period, the Blocked
Account Bank shall transfer, in same day funds, on each Business Day,
all funds, if any on deposit in, or otherwise to the credit of, the
Blocked Account to the account listed below (the "Concentration
Account") in accordance with paragraph (k) below, provided that funds
on deposit that are subject to collection may be transmitted promptly
upon collection:
ABA Number:
[name and address of Grantor's bank]
3
Account Name:
Concentration Account
Account Number:
Reference:
Attn:
or to such other account as the Senior Collateral Agent may from time
to time, or at any time, designate in writing.
(k) During a Blocked Account Cash Sweep Period, (i) the
Grantor shall provide written instructions to the Blocked Account Bank
on each Business Day to transfer all funds on deposit in, or otherwise
credited to, the Blocked Account to the Concentration Account; (ii) to
the extent there are any available balances in the Blocked Account at
the end of any Business Day which have not been transferred pursuant to
clause (i) of this paragraph, the Grantor shall provide, on the next
Business Day, written instructions for the transfer of such available
balances from the Blocked Account to the Concentration Account; and
(iii) if the Grantor does not provide the written instructions pursuant
to clause (ii) of this paragraph, the Blocked Account Bank shall
automatically initiate such transfer described in clause (ii) of this
paragraph and all other transfers from the Blocked Account to the
Concentration Bank without further direction from the Grantor until
otherwise notified by the Senior Collateral Agent.
(l) All customary service charges and fees with respect to the
Blocked Account shall be debited to the Blocked Account. In the event
insufficient funds remain in the Blocked Account to cover such
customary service charges and fees, the Grantor shall pay and indemnify
the Blocked Account Bank for the amounts of such customary service
charges and fees. Neither the Senior Collateral Agent nor the Senior
Secured Parties shall have any liability for the payment of any such
fees in respect of the Blocked Account.
This letter agreement shall be binding upon and shall inure to the
benefit of the Blocked Account Bank, the Grantor, the Senior Collateral Agent,
the Senior Secured Parties referred to in the Senior Subsidiary Security
Agreement and their respective successors, transferees and assigns of any of the
foregoing. This letter agreement may not be modified or terminated except upon
the mutual consent of the Senior Collateral Agent, the Grantor and the Blocked
Account Bank. The Blocked Account Bank may terminate the letter agreement only
upon 45 days' prior written notice to the Grantor and the Senior Collateral
Agent. The Senior Collateral Agent may terminate this letter agreement at any
time. So long as any Senior Obligations remain outstanding and the Commitments
are still outstanding, upon such termination the Blocked Account Bank shall
close the Blocked Account and transfer all funds in the Blocked Account to the
Senior Collateral Agent at the Concentration Account or as otherwise directed by
the Senior Collateral Agent. After any such termination, the Blocked Account
Bank shall nonetheless remain
4
obligated promptly to transfer to the Concentration Account or as the Senior
Collateral Agent may otherwise direct all funds and other property received in
respect of the Blocked Account.
This letter agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of a signature page to this letter agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this letter agreement.
This letter agreement supersedes all prior agreements, oral or written,
with respect to the subject matter hereof and may not be amended, modified or
supplemented except by a writing signed by the Senior Collateral Agent, the
Grantor and the Blocked Account Bank.
This letter agreement shall be governed by, and construed in accordance
with, the law of the State of New York.
Upon acceptance of this letter agreement it will be the valid and
binding obligation of the Grantor, the Senior Collateral Agent, and the Blocked
Account Bank, in accordance with its terms.
Very truly yours,
[ ].
By:
Name:
Title:
5
CITICORP USA, INC, as Senior Collateral Agent
By:
Name:
Title:
Acknowledged and agreed to as of the date first above written:
[ ]
By:
Name:
Title:
6
Exhibit A
to the Blocked Account Agreement
BLOCKED ACCOUNT CASH SWEEP NOTICE
[Blocked Account Bank]
[Address]
Re: Account No. [ ] (the "Blocked Account")
Ladies and Gentlemen:
Reference is made to the Blocked Account and that certain Blocked
Account Agreement dated June 27, 2001 (as amended, supplemented or otherwise
modified from time to time, the "Blocked Account Agreement") among the Blocked
Account Bank, the Grantor and the Senior Collateral Agent. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned to
them in the Blocked Account Agreement.
The Senior Collateral Agent hereby notifies you that, in accordance
with certain provisions of the Senior Subsidiary Security Agreement, from and
after the date of this notice, you are hereby directed to transfer (by wire
transfer or other method of transfer mutually acceptable to you and the Senior
Collateral Agent) to the Senior Collateral Agent, in same day funds, on each
Business Day, the entire balance in the Blocked Account to the Concentration
Account specified in paragraph (j) of the Blocked Account Agreement (or to such
other account as the Senior Collateral Agent may from time to time, or at any
time, designate in writing) until you are notified in writing by the Senior
Collateral Agent that this Blocked Account Cash Sweep Notice is no longer
effective.
Very truly yours,
CITICORP USA, INC, as Senior Collateral Agent
By:
Name:
Title:
Schedule 7
to the Senior Subsidiary
Security Agreement
[FORM OF]
LOCKBOX ACCOUNT AGREEMENT
[Date]
[Mellon Bank, N.A.
Document Control Manager
Three Mellon Bank Center
Room 3119
Xxxxxxxxxx, XX 00000]
Ladies and Gentlemen:
Reference is made to (a) account number [ ] and corresponding lockbox and
data automation system maintained with you (the "Lockbox Account Bank") by [ ]
(the "Grantor") into which funds are deposited from time to time (the "Lockbox
Account") and (b) the Senior Subsidiary Security Agreement dated as of June 27,
2001 (as further amended, supplemented or otherwise modified from time to time,
the "Senior Subsidiary Security Agreement") among the Subsidiary Guarantors
(such term and each other capitalized term used but not defined herein having
the meaning assigned to such term in the Senior Subsidiary Security Agreement,
including the Definitions Annex and Senior Credit Facility referred to therein)
and the Senior Collateral Agent.
The Grantor hereby confirms its irrevocable and unconditional instruction
to you that, until receipt of a written notice from the Senior Collateral Agent
to the contrary, you shall follow exclusively the instructions of the Senior
Collateral Agent with respect to the Lockbox Account and that the Lockbox
Account shall be under the sole dominion and control of the Senior Collateral
Agent. Notwithstanding anything to the contrary or any other agreement relating
to the Lockbox Account, the Lockbox Account is and will be maintained for the
benefit of the Senior Collateral Agent, will be entitled "Citicorp USA, Inc. as
Senior Collateral Agent under the Senior Subsidiary Agreement dated as of June
27, 2001 Account" and will be subject to written instructions only from an
authorized officer of the Senior Collateral Agent.
The Grantor also hereby notifies you that the Senior Collateral Agent shall
be irrevocably entitled to exercise any and all rights in respect of, or in
connection with, the Lockbox Account, including, without limitation, the right
to specify when payments are
to be made out of, or in connection with, the Lockbox Account. The Senior
Collateral Agent hereby instructs you, until you receive notice from the Senior
Collateral Agent changing this instruction, to transfer, in same day funds, on
each Business Day, all funds, if any on deposit in, or otherwise to the credit
of, the Lockbox Account to the Account listed below, provided that funds on
deposit that are subject to collection may be transmitted properly upon
collection.
ABA Number: ________________________________
[name and address of Grantor's bank]
Account Name: _______________________________
Concentration Account
Account Number: _____________________________
Reference: __________________________________
Attn:________________________________________
[or to such other account as the Senior Collateral Agent and
the Grantor may designate in writing.]
All expenses for the maintenance and provision of services in conjunction
with the Lockbox Account held in the name of the Grantor are the responsibility
of the Grantor. In the event that the Grantor does not pay all service fees due
to the Lockbox Account Bank within thirty (30) days after the due date, the
Lockbox Account Bank is authorized to charge the Lockbox Account for such fees.
In the event the Lockbox Account Bank is unable to obtain sufficient funds from
such charges to cover such fees the Grantor shall indemnify the Lockbox Account
Bank for all then-due fees on the Lockbox Account that have not been paid.
The Grantor and the Senior Collateral Agent agree that the Lockbox Account
Bank may debit the Lockbox Account for any items (including, but not limited to,
checks, drafts, Automatic Clearinghouse (ACH) credits or wire transfers or other
electronic transfers or credits) deposited or credited to the Lockbox Account
which may be returned or otherwise not collected and, subject to the preceding
paragraph, for all charges, fees, commissions and expenses incurred by the
Lockbox Account Bank in providing services or otherwise in connection herewith.
The Lockbox Account Bank may charge the Lockbox Account as permitted herein at
such times as are in accordance with the Lockbox Account Bank's customary
practice for the chargeback of returned items and expenses. In the event the
Lockbox Account Bank is unable to obtain sufficient funds for such charges to
cover returned items, or reversed or returned credits, or any other items not
collected and any other charges, expenses, or commissions incurred by the
Lockbox Account Bank in providing the services (referred to as a "cost" or
"costs"), the Grantor shall indemnify the Lockbox Account Bank for all amounts
related to the above described costs incurred by the Lockbox Account Bank. The
Senior Collateral Agent agrees that if the Grantor has not reimbursed the
Lockbox Account
2
Bank for the amounts described in this paragraph and the Lockbox Account Bank
has transferred funds to the Senior Collateral Agent, then the Senior Collateral
Agent agrees to reimburse the Lockbox Account Bank (for any returned items
described in this paragraph but not for charges, fees or commissions incurred
therewith) within ten business days after demand by the Lockbox Account Bank.
Notwithstanding any other provision of this Agreement, unless the Lockbox
Account Bank is grossly negligent or engages in wilful misconduct in performance
or non-performance in connection with this Agreement and the Lockbox Account,
the Grantor agrees to indemnify and hold the Lockbox Account Bank harmless from
any claims, damages, losses or expenses incurred by any party in connection
herewith; in the event the Lockbox Account Bank breaches the standard of care
set forth herein, the Grantor and the Senior Collateral Agent each expressly
agrees that the Lockbox Account Bank's liability shall be limited to damages
directly caused by such breach and in no event shall the Lockbox Account Bank be
liable for any incidental, indirect, punitive or consequential damages or
attorney's fees whatsoever.
Notwithstanding any other provision of this Agreement, the Lockbox Account
Bank shall not be liable for any failure, inability to perform, or delay in
performance hereunder, if such failure, inability, or delay is due to an act of
God, war, civil commotion, governmental action, fire, explosion, strikes, other
industrial disturbance, equipment malfunction, action, non-action or delayed
action on the part of the Grantor or the Senior Collateral Agent or of any other
entity or any other causes that are beyond the Lockbox Account Bank's reasonable
control.
This Agreement may not be modified or terminated by the Grantor unless, in
the case of a modification, the prior written consent of the Senior Collateral
Agent and the Lockbox Account Bank is obtained and, in the case of termination,
the prior written consent of the Senior Collateral Agent is obtained. The
Lockbox Account Bank may terminate this Agreement upon forty-five (45) days'
prior written notice to the Grantor and the Senior Collateral Agent. The Senior
Collateral Agent may terminate this Agreement at any time. The Grantor's
obligations under this Agreement to indemnify, hold harmless and pay amounts
owed (and the Grantor's obligation to reimburse the Lockbox Account Bank for any
returned items) shall survive the termination of this Agreement.
[This Agreement shall be governed by the laws of the State of New York.]
The terms and conditions of the services, attached as Exhibit A, is made
part of this Agreement with respect to matters not explicitly covered in this
Agreement. To the extent there is a conflict between this Agreement and the
terms and conditions of services, this agreement shall take precedence.
This Agreement shall become effective immediately upon its execution by all
parties hereto. Any notice permitted or required hereunder shall be in writing
and shall be
3
deemed to have been duly given if sent by personal delivery, express or first
class mail, or facsimile addressed, in the case of notice to the Lockbox Account
Bank, to:
[Mellon Bank, N.A.
Document Control Manager
Three Mellon Bank Center
Room 3119
Xxxxxxxxxx, XX 00000]
Phone: (000) 000-0000
Fax: (000) 000-0000
and, in the case of notice to the Grantor, to:
[30 Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Rite Aid Funding LLC/ Rite Aid Treasury]
and, in the case of notice to the Senior Collateral Agent to:
[ ]
Fax: [ ]
Attn: [ ]
or to such other address or addresses as the party to receive notice may provide
in writing to the other party in accordance with this paragraph. The Lockbox
Account Bank shall have no duty or obligation to inquire into the authenticity
or effectiveness of any such notice received pursuant to this Agreement.
Please agree to the terms of, and acknowledge receipt of, this notice by
signing in the space provided below.
Very truly yours,
[NAME OF SUBSIDIARY
GUARANTOR]
By:____________________
Name:
Title:
4
[RITE AID CORPORATION RITE AID OF TENNESSEE, INC.
RITE AID OF ALABAMA, INC. RITE AID OF VERMONT, INC.
RITE AID OF CONNECTICUT, INC. RITE AID OF VIRGINIA, INC.
RITE AID OF DELAWARE, INC. RITE AID OF WEST VIRGINIA, INC.
RITE AID OF WASHINGTON, DC., KEYSTONE CENTERS, INC.
INC RITE AID DRUG PALACE, INC.
RITE AID OF FLORIDA, INC. LANE DRUG COMPANY
RITE AID OF GEORGIA, INC. APEX DRUG STORES, INC.
RITE AID OF INDIANA, INC. PERRY DRUG STORES, INC.
RITE AID OF KENTUCKY, INC. RDS DETROIT, INC.
RITE AID OF MAINE, INC. PDS-1 MICHIGAN, INC.
RITE AID OF MARYLAND, INC. THRIFTY PAYLESS, INC.
RITE AID OF MASSACHUSETTS, HARCO, INC.
INC. K&B ALABAMA CORPORATION
RITE AID OF MICHIGAN, INC. K&B FLORIDA CORPORATION
RITE AID OF NEW HAMPSHIRE, K&B LOUISIANA CORPORATION K&B
INC. MISSISSIPPI CORPORATION
RITE AID OF NEW JERSEY, INC. K&B TEXAS CORPORATION
RITE AID OF NEW YORK, INC. K&B TENNESSEE CORPORATION SUPER
RITE AID OF NORTH CAROLINA, PHARMACY NETWORK,
INC. INC.
RITE AID OF OHIO, INC.
RITE AID OF PENNSYLVANIA, INC.
RITE AID OF SOUTH CAROLINA, By:____________________, on behalf
INC. of each of the above listed companies
Name:
By:____________________, on behalf
of each of the above listed companies
Name:
Agreed and acknowledged:
[MELLON BANK, N.A.]
By:__________________________
Name:
Title:
CITICORP USA, INC., as Senior Collateral Agent
By:__________________________
Name:
Title:
Schedule 8
to the Senior Subsidiary
Security Agreement
GOVERNMENT LOCKBOX ACCOUNT AGREEMENT
[Date]
[Mellon Bank, N.A.
Document Control Manager
Three Mellon Bank Center
Room 3119
Xxxxxxxxxx, XX 00000]
Ladies and Gentlemen:
Reference is made to (a) account no. [ ] and corresponding lockbox and data
automation system maintained with you (the "Government Lockbox Account Bank") by
[ ] (the "Grantor") into which funds are deposited from time to time (the
"Government Lockbox") and (b) the Senior Subsidiary Security Agreement dated as
of June 27, 2001 (as amended, supplemented or otherwise modified from time to
time, the "Senior Subsidiary Security Agreement"), among the Subsidiary
Guarantors (such term and each other capitalized term used and not otherwise
defined herein having the meaning assigned to such term in the Senior Subsidiary
Security Agreement including the Definitions Annex and Senior Credit Facility
referred to therein) and the Senior Collateral Agent.
The Grantor hereby provides the following revocable instruction with
respect to the Government Lockbox Account (the "Standing Revocable
Instruction"): the Government Lockbox Account Bank shall transfer from the
Government Lockbox Account daily, via a zero balance service as described in the
terms and conditions of the services, attached as Exhibit A, all available funds
held in the Government Lockbox Account to account no. [ ] at Mellon Bank, N.A.
in the name of the Grantor for Citicorp USA, Inc., as Senior Collateral Agent
(which account is under the sole dominion and control of the Senior Collateral
Agent). This Standing Revocable Instruction is revocable by the Grantor at any
time and for any reason by providing written instructions to the Government
Lockbox Account Bank, signed by the undersigned (which writing may be by
facsimile and upon which you may conclusively rely), whereupon the Government
Lockbox Account Bank shall follow, without further inquiry, such contrary
written instruction and not the Standing Revocable Instruction.
The Grantor also hereby notifies the Government Lockbox Account Bank that,
as collateral security for the Senior Obligations, the undersigned Subsidiary
Guarantors granted to the Grantor and the Grantor hereby assigns to the Senior
Collateral Agent a continuing security interest in (i) the Government Lockbox
Account, (ii) all contract rights and privileges in respect to the Government
Lockbox Account, (iii) all cash, checks, money orders and other items of value
on deposit in the Government Lockbox Account and (iv) all proceeds of the
foregoing.
All expenses for the maintenance and provision of services in conjunction
with the Government Lockbox Account held in the name of the Grantor are the
responsibility of the Grantor. In the event that the Grantor does not pay all
service fees due to the Government Lockbox Account Bank within thirty (30) days
after the due date, the Government Lockbox Account Bank is authorized to charge
the Government Lockbox Account for such fees. In the event the Government
Lockbox Account Bank is unable to obtain sufficient funds from such charges to
cover such fees the Grantor shall indemnify the Government Lockbox Account Bank
for all then-due fees on the Government Lockbox Account that have not been paid.
The Grantor and the Senior Collateral Agent agree that the Government
Lockbox Account Bank may debit the Government Lockbox Account for any items
(including, but not limited to, checks, drafts, Automatic Clearinghouse (ACH)
credits or wire transfers or other electronic transfers or credits) deposited or
credited to the Government Lockbox Account which may be returned or otherwise
not collected and, subject to the preceding paragraph, for all charges, fees,
commissions and expenses incurred by the Government Lockbox Account Bank in
providing services or otherwise in connection herewith. The Government Lockbox
Account Bank may charge the Government Lockbox Account as permitted herein at
such times as are in accordance with the Government Lockbox Account Bank's
customary practice for the chargeback of returned items and expenses. In the
event the Government Lockbox Account Bank is unable to obtain sufficient funds
for such charges to cover returned items, or reversed or returned credits, or
any other items not collected and any other charges, expenses, or commissions
incurred by the Government Lockbox Account Bank in providing the services
(referred to as a "cost" or "costs") the Grantor shall indemnify the Government
Lockbox Account Bank for all amounts related to the above described costs
incurred by the Government Lockbox Account Bank. The Senior Collateral Agent
agrees that if the Grantor has not reimbursed the Government Lockbox Account
Bank for the amounts described in this paragraph and the Government Lockbox
Account Bank has transferred funds to the Senior Collateral Agent, then the
Senior Collateral Agent agrees to reimburse the Government Lockbox Account Bank
(for any returned items described in this paragraph but not for charges, fees or
commissions incurred therewith) within ten business days after demand by the
Government Lockbox Account Bank.
Notwithstanding any other provision of this Government Lockbox Account
Agreement, unless the Government Lockbox Account Bank is grossly negligent or
engages in wilful misconduct in performance or non-performance in connection
with this
2
Agreement and the Government Lockbox Account, the Grantor agrees to indemnify
and hold the Government Lockbox Account Bank harmless from any claims, damages,
losses or expenses incurred by any party in connection herewith; in the event
the Government Lockbox Account Bank breaches the standard of care set forth
herein, the Grantor and the Senior Collateral Agent each expressly agrees that
the Government Lockbox Account Bank's liability shall be limited to damages
directly caused by such breach and in no event shall the Government Lockbox
Account Bank be liable for any incidental, indirect, punitive or consequential
damages or attorney's fees whatsoever.
Notwithstanding any other provision of this Government Lockbox Account
Agreement, the Government Lockbox Account Bank shall not be liable for any
failure, inability to perform, or delay in performance hereunder, if such
failure, inability, or delay is due to an act of God, war, civil commotion,
governmental action, fire, explosion, strikes, other industrial disturbance,
equipment malfunction, action, non-action or delayed action on the part of the
Grantor or the Senior Collateral Agent or of any other entity or any other
causes that are beyond the Government Lockbox Account Bank's reasonable control.
This Government Lockbox Account Agreement may not be modified or terminated
by the Grantor unless, in the case of a modification, the prior written consent
of the Senior Collateral Agent and the Government Lockbox Account Bank is
obtained and, in the case of termination, the prior written consent of the
Senior Collateral Agent is obtained. The Government Lockbox Account Bank may
terminate this Agreement upon forty-five (45) days' prior written notice to the
Grantor and the Senior Collateral Agent. The Senior Collateral Agent may
terminate this Agreement at any time. The Grantor's obligations under this
Agreement to indemnify, hold harmless and pay amounts owed (and the Senior
Collateral Agent's obligation to reimburse the Government Lockbox Account Bank
for any returned items) shall survive the termination of this Agreement.
This Agreement shall be governed by the laws of the State of New York.
The terms and conditions of the services, attached as Exhibit A, is made
part of this Agreement with respect to matters not explicitly covered in this
Agreement. To the extent there is a conflict between this Agreement and the
terms and conditions of services, this agreement shall take precedence.
This Agreement shall become effective immediately upon its execution by all
parties hereto. Any notice permitted or required hereunder shall be in writing
and shall be deemed to have been duly given if sent by personal delivery,
express or first class mail,
3
or facsimile addressed, in the case of notice to the Government Lockbox Account
Bank, to:
[Mellon Bank, N.A.
Document Control Manager
Three Mellon Bank Center
Room 3119
Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000]
and, in the case of notice to the Grantor, to:
[30 Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Rite Aid Funding LLC/ Rite Aid Treasury]
and, in the case of notice to the Senior Collateral Agent, to:
[ ]
Fax: [ ]
Attn: [ ]
or to such other address or addresses as the party to receive notice may provide
in writing to the other party in accordance with this paragraph. The Government
Lockbox Account Bank shall have no duty or obligation to inquire into the
authenticity or effectiveness of any such notice received pursuant to this
Agreement.
4
Please agree to the terms of, and acknowledge receipt of, this
notice (including, without limitation, the notice of, and consent to, the
security interest referred to in the foregoing paragraph) by signing in the
space provided below.
Very truly yours,
[NAME OF SUBSIDIARY GUARANTOR]
By:____________________
Name:
Title:
[RITE AID CORPORATION
RITE AID OF ALABAMA, INC.
RITE AID OF CONNECTICUT, INC.
RITE AID OF DELAWARE, INC.
RITE AID OF WASHINGTON, DC., INC
RITE AID OF FLORIDA, INC.
RITE AID OF GEORGIA, INC.
RITE AID OF INDIANA, INC.
RITE AID OF KENTUCKY, INC.
RITE AID OF MAINE, INC.
RITE AID OF MARYLAND, INC.
RITE AID OF MASSACHUSETTS, INC.
RITE AID OF MICHIGAN, INC.
RITE AID OF NEW HAMPSHIRE, INC.
RITE AID OF NEW JERSEY, INC.
RITE AID OF NEW YORK, INC.
RITE AID OF NORTH CAROLINA, INC.
RITE AID OF OHIO, INC.
RITE AID OF PENNSYLVANIA, INC.
RITE AID OF SOUTH CAROLINA, INC.
By:___________________, on behalf of
each of the above listed companies
Name:
5
RITE AID OF TENNESSEE, INC.
RITE AID OF VERMONT, INC.
RITE AID OF VIRGINIA, INC.
RITE AID OF WEST VIRGINIA, INC.
KEYSTONE CENTERS, INC.
RITE AID DRUG PALACE, INC.
LANE DRUG COMPANY
APPEX DRUG STORES, INC.
PERRY DRUG STORES, INC.
RDS DETROIT, INC.
PDS-1 MICHIGAN, INC.
THRIFTY PAYLESS, INC.
HARCO, INC.
K&B ALABAMA CORPORATION
K&B FLORIDA CORPORATION
K&B LOUISIANA CORPORATION
K&B MISSISSIPPI CORPORATION
K&B TEXAS CORPORATION
K&B TENNESSEE CORPORATION
SUPER PHARMACY NETWORK, INC.]
By:____________________, on behalf of
each of the above listed companies
Name:
Agreed and acknowledged:
[MELLON BANK, N.A.]
By:__________________________
Name:
Title:
CITICORP USA, INC., as Senior Collateral Agent
By:__________________________
Name:
Title:
6
Schedule 9
to the Senior Subsidiary
Security Agreement
[FORM OF]
CONCENTRATION ACCOUNT AGREEMENT
[Date]
[Concentration Account Bank]
[address]
Ladies and Gentlemen:
Reference is made to (a) account no. [ ] maintained with you (the
"Concentration Account Bank") by [ ] (the "Grantor") into which funds are
deposited from time to time (the "Concentration Account") and (b) the Senior
Subsidiary Security Agreement dated as of June 27, 2001 (as amended,
supplemented or otherwise modified from time to time, the Senior Subsidiary
Security Agreement"), among the Subsidiary Guarantors (such term and each other
capitalized term used but not defined herein having the meaning assigned to such
term in the Senior Subsidiary Security Agreement, including the Definitions
Annex and Senior Credit Facility referred to therein) and the Senior Collateral
Agent.
Pursuant to the Senior Subsidiary Security Agreement, the Grantor has
granted to the Senior Collateral Agent, for the benefit of the Senior Secured
Parties, a perfected security interest in certain property of the Grantor,
including the Concentration Account.
The Grantor hereby transfers to the Senior Collateral Agent exclusive
ownership and control of, and all of its right, title and interest in and to,
the Concentration Account and all funds and other property on deposit therein.
By executing this Concentration Account Agreement, the Concentration Account
Bank acknowledges that the Senior Collateral Agent now has exclusive ownership
and control of the Concentration Account, that all funds in the Concentration
Account shall be transferred to the Senior Collateral Agent as provided herein,
that the Concentration Account is being maintained by the Concentration Account
Bank for the benefit of the Senior Collateral Agent and that all amounts and
other property therein are held by the Concentration Account Bank as custodian
for the Senior Collateral Agent.
Except as provided in paragraphs (e), (f) and (j) below, the Concentration
Account shall not be subject to deduction, setoff, banker's lien, counterclaim,
defense, recoupment or any other right in favor of any person or entity other
than the Senior Collateral Agent. By executing this Concentration Account
Agreement, the Concentration Account Bank also acknowledges that, as of the date
hereof, the Concentration Account Bank has received no notice of any other
pledge or assignment of the Concentration Account and the Concentration Account
Bank agrees with the Senior Collateral Agent as follows:
(a) Notwithstanding anything to the contrary or any other
agreement relating to the Concentration Account, the Concentration Account
is and will be maintained for the benefit of the Senior Collateral Agent,
will be entitled "Citicorp USA, Inc. as Senior Collateral Agent under the
Senior Subsidiary Security Agreement dated as of June 27, 2001 Account" and
will be subject to written instructions only from an authorized officer of
the Senior Collateral Agent (except as expressly provided otherwise
herein).
(b) The Concentration Account Bank agrees to give the Senior
Collateral Agent prompt notice if the Concentration Account shall become
subject to any writ, judgment, warrant of attachment, execution or similar
process.
(c) [A post office box (the "Lockbox") has been rented in the
name of the Grantor at the [ post office and the address to be used for
such Lockbox is:
[Insert address]
The Concentration Account Bank's authorized representatives will have
access to the Lockbox under the authority given by the Grantor to the post
office and will make regular pick-ups from the Lockbox timed to gain
maximum benefit of early presentation and availability of funds. The
Concentration Account Bank will endorse process all checks received in the
Lockbox and deposit such checks (to the extent eligible) in the
Concentration Account in accordance with the procedures set forth below .]
(d) The Concentration Account Bank will follow its usual
operating procedures for the handling of any [checks received from the
Lockbox] or other remittance received in the Concentration Account that
contains restrictive endorsements, irregularities (such as a variance
between the written and numerical amounts), undated or postdated items,
missing signatures, incorrect payees and the like.
(e) The Concentration Account Bank will endorse and process
all eligible checks and other remittance items not covered by paragraph (d)
and deposit such checks and remittance items in the Concentration Account.
2
(f) The Concentration Account Bank will mail all checks
returned unpaid because of uncollected or insufficient funds under
appropriate advice to the Grantor (with a copy of the notification of
return to the Senior Collateral Agent). The Concentration Account Bank may
charge the Concentration Account for the amounts of any returned check that
has been previously credited to the Concentration Account. To the extent
insufficient funds remain in the Concentration Account to cover any such
returned check, the Grantor shall indemnify the Concentration Account Bank
for the uncollected amount of such returned check upon your demand.
(g) The Concentration Account Bank will maintain a record of
all checks and other remittance items received in the Concentration Account
on a daily basis and, in addition to providing the Grantor with photostatic
copies thereof, vouchers, enclosures and the like of such checks and
remittance items, furnish to the Senior Collateral Agent a monthly
statement setting forth the amounts deposited in and withdrawn from the
Concentration Account and shall furnish such other information relating to
the Concentration Account at such times as shall be reasonably requested by
the Senior Collateral Agent to: Citicorp USA, Inc., as Senior Collateral
Agent, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: [ ], with a
copy to the Grantor.
(h) Prior to the delivery of a written notice from the Senior
Collateral Agent in the form of Exhibit A hereto (the "Concentration
Account Cash Sweep Notice"), the Grantor is free to withdraw funds from the
Concentration Account in such amounts and with such frequency as the
Grantor may from time to time determine, without notice to or consent from
the Senior Collateral Agent.
(i) From and after delivery to the Concentration Account Bank
of a Concentration Account Cash Sweep Notice and until the Concentration
Account Bank is notified in writing by the Senior Collateral Agent that the
Concentration Account Cash Sweep Notice is no longer in effect (a
"Concentration Account Cash Sweep Period"), the Grantor will have no
control over the use of, or any right to withdraw any amount from, to draw
upon, or to otherwise exercise any power with respect to the Concentration
Account.
(j) During a Concentration Account Cash Sweep Period, the
Concentration Account Bank shall transfer, in same day funds, on each
Business Day, all funds, if any on deposit in, or otherwise to the credit
of, the Concentration Account to the account listed below (the "Citibank
Concentration Account") or to such other account as the Senior Collateral
Agent may from time to time designate in writing, provided that funds on
deposit that are subject to collection may be transmitted promptly upon
collection to:
ABA Number:____________________________
[Citicorp USA, Inc.
000 Xxxx Xxxxxx
0
Xxx Xxxx, XX 00000]
Account Name: Citibank Concentration Account
Account Number: _________________________
Reference: ______________________________
Attn: ___________________________________
(k) All customary service charges and fees with respect to the
Concentration Account shall be debited to the Concentration Account. In the
event insufficient funds remain in the Concentration Account to cover such
customary service charges and fees, the Grantor shall pay and indemnify the
Concentration Account Bank for the amounts of such customary service
charges and fees. Neither the Senior Collateral Agent nor the Senior
Secured Parties shall have any liability for the payment of any fees or
charges in respect of the Concentration Account.
This letter agreement shall be binding upon and shall inure to the benefit
of the Concentration Account Bank, the Grantor, the Senior Collateral Agent, the
Senior Secured Parties referred to in the Senior Subsidiary Security Agreement
and their respective successors, transferees and assigns of any of the
foregoing. This letter agreement may not be modified or terminated except upon
the mutual consent of the Senior Collateral Agent, the Grantor and the
Concentration Account Bank. The Concentration Account Bank may terminate the
letter agreement only upon 45 days' prior written notice to the Grantor and the
Senior Collateral Agent. The Senior Collateral Agent may terminate this letter
agreement at any time. So long as any Senior Obligations remain outstanding and
the Commitments are still outstanding, upon such termination the Concentration
Account Bank shall close the Concentration Account and transfer all funds in the
Concentration Account to the Senior Collateral Agent at the Citibank
Concentration Account or as otherwise directed by the Senior Collateral Agent.
After any such termination, the Concentration Account Bank shall nonetheless
remain obligated promptly to transfer to the Concentration Account, or as the
Senior Collateral Agent may otherwise direct, all funds and other property
received in respect of the Concentration Account.
This letter agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of a signature page to this letter agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this letter agreement.
This letter agreement supersedes all prior agreements, oral or written,
with respect to the subject matter hereof and may not be amended, modified or
supplemented except by a writing signed by the Senior Collateral Agent, the
Grantor and the Concentration Account Bank.
4
This letter agreement shall be governed by, and construed in accordance
with, the law of the State of New York.
5
Upon acceptance of this letter agreement, it will be the valid and binding
obligation of the Grantor, the Senior Collateral Agent, and the Concentration
Account Bank, in accordance with its terms.
Very truly yours,
[ ].
By: ______________________________
Name:
Title:
CITICORP USA, INC, as Senior Collateral Agent
By: _______________________________
Name:
Title:
Acknowledged and agreed to as of
the date first above written:
[ ]
By: ________________________
Name:
Title:
6
Exhibit A
to the Concentration Account Agreement
CONCENTRATION ACCOUNT CASH SWEEP NOTICE
[Concentration Account Bank]
[Address]
Re: Account No. [ ] (the "Concentration Account")
Ladies and Gentlemen:
Reference is made to the Concentration Account and that certain
Concentration Account Agreement dated June 27, 2001 (as amended, supplemented or
otherwise modified from time to time, the "Concentration Account Agreement")
among the Concentration Account Bank, the Grantor and the Senior Collateral
Agent. Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Concentration Account Agreement.
The Senior Collateral Agent hereby notifies you that, in accordance with
certain provisions of the Senior Subsidiary Security Agreement, from and after
the date of this notice, you are hereby directed to transfer (by wire transfer
or other method of transfer mutually acceptable to you and the Senior Collateral
Agent) to the Senior Collateral Agent, in same day funds, on each Business Day,
the entire balance in the Concentration Account to the Citibank Concentration
Account specified in paragraph (j) of the Concentration Account Agreement (or to
such other account as the Senior Collateral Agent may from time to time, or at
any time, designate in writing) until you are notified in writing by the Senior
Collateral Agent that this Concentration Account Cash Sweep Notice is no longer
effective.
Very truly yours,
CITICORP USA, INC, as Senior Collateral Agent
By: _______________________________
Name:
Title:
Schedule 10
to the Senior Subsidiary
Security Agreement
PERFECTION CERTIFICATE
