Exhibit 10.2
 
EXECUTION COPY

 
SENIOR LIEN INTERCREDITOR AGREEMENT
 
Dated as of
 
June 12, 2009
 
Among
 
RITE AID CORPORATION,
 
THE SUBSIDIARY GUARANTORS,
 
CITICORP NORTH AMERICA, INC.,
as Senior Collateral Agent,
 
CITICORP NORTH AMERICA, INC.,
as Authorized Representative under the Senior Credit Agreement,
 
THE BANK OF NEW YORK MELLON TRUST COMPANY
as Authorized Representative under the Initial Additional Senior Debt Facility,
 
and
 
each additional Authorized Representative from time to time party hereto
 

 
 

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SENIOR LIEN INTERCREDITOR AGREEMENT (as amended or supplemented from time to
time, this “Agreement”) dated as of June 12, 2009, among RITE AID CORPORATION, a
Delaware corporation (“Rite Aid”), each Subsidiary of Rite Aid listed on the
signature pages hereto or which becomes a party hereto pursuant to Section 24 of
the Senior Subsidiary Security Agreement (each such Subsidiary, individually a
“Subsidiary Guarantor”, and collectively, the “Subsidiary Guarantors”), CITICORP
NORTH AMERICA, INC., as senior collateral agent for the Senior Secured Parties
(as defined below) (in such capacity, as further defined herein, the “Senior
Collateral Agent”), CITICORP NORTH AMERICA, INC., as Senior Representative for
the Senior Loan Secured Parties (in such capacity and together with its
successors in such capacity, the “Administrative Agent”), The Bank of New York
Mellon Trust Company, N.A., as Senior Representative for the Initial Additional
Senior Debt Parties (in such capacity and together with its successors in such
capacity, the “Initial Additional Senior Representative”), and each additional
Senior Representative from time to time party hereto for the Additional Senior
Debt Parties of the Series with respect to which it is acting in such capacity.
 
In consideration of the mutual agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Senior Collateral Agent, the Administrative Agent (for itself
and on behalf of the Senior Loan Secured Parties), the Initial Additional Senior
Representative (for itself and on behalf of the Initial Additional Senior Debt
Parties) and each additional Senior Representative (for itself and on behalf of
the Additional Senior Debt Parties of the applicable Series) agree as follows:
 
ARTICLE I
 
Definitions
 
SECTION 1.01  Construction; Certain Defined Terms.
 
(a)  The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall”. Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument, other document,
statute or regulation herein shall be construed as referring to such agreement,
instrument, other document, statute or regulation as from time to time amended,
supplemented or otherwise modified, (ii) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, but shall
not be deemed to include the subsidiaries of such Person unless express
reference is made to such subsidiaries, (iii) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (iv) all
references herein to Articles, Sections and Annexes shall be construed to refer
to Articles, Sections and Annexes of this Agreement and (v) unless otherwise
expressly qualified herein, the words “asset” and
 

 
 

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“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.
 
(b)  It is the intention of the Senior Secured Parties of each Series that the
holders of Senior Obligations of such Series (and not the Senior Secured Parties
of any other Series) bear the risk of (i) any determination by a court of
competent jurisdiction that (x) any of the Senior Obligations of such Series are
unenforceable under applicable law or are subordinated to any other obligations
(other than another Series of Senior Obligations), (y) any of the Senior
Obligations of such Series do not have an enforceable security interest in any
of the Senior Collateral securing any other Series of Senior Obligations and/or
(z) any intervening security interest exists securing any other obligations
(other than another Series of Senior Obligations) on a basis ranking prior to
the security interest of such Series of Senior Obligations but junior to the
security interest of any other Series of Senior Obligations or (ii) the
existence of any Senior Collateral for any other Series of Senior Obligations
that is not Shared Collateral (any such condition referred to in the foregoing
clauses (i) or (ii) with respect to any Series of Senior Obligations, an
“Impairment” of such Series).  In the event of any Impairment with respect to
any Series of Senior Obligations, the results of such Impairment shall be borne
solely by the holders of such Series of Senior Obligations, and the rights of
the holders of such Series of Senior Obligations (including, without limitation,
the right to receive distributions in respect of such Series of Senior
Obligations pursuant to Section 2.01) set forth herein shall be modified to the
extent necessary so that the effects of such Impairment are borne solely by the
holders of the Series of such Senior Obligations subject to such
Impairment.  Additionally, in the event the Senior Obligations of any Series are
modified pursuant to applicable law (including, without limitation, pursuant to
Section 1129 of the Bankruptcy Code), any reference to such Senior Obligations
or the Senior Debt Documents governing such Senior Obligations shall refer to
such obligations or such documents as so modified.
 
(c)  Capitalized terms used but not otherwised defined herein shall have the
meanings set forth in the Senior Credit Agreement, including the Definitions
Annex thereto. As used in this Agreement, the following terms have the meanings
specified below:
 
“2009 Restatement Effective Date” means the date on which the amendment and
restatement of the Original Credit Agreement pursuant to the 2009 Amendment and
Restatement Agreement becomes effective pursuant to its terms.
 
“Additional Senior Debt” means any Indebtedness of Rite Aid (other than
Indebtedness constituting Senior Loan Obligations) Guaranteed by the Subsidiary
Guarantors pursuant to the Senior Subsidiary Guarantee Agreement (and not
Guaranteed by any other Subsidiary) with such Guarantees secured by the Senior
Collateral on a pari passu basis (but without regard to control of remedies)
with the Senior Loan Obligations (and not secured by Liens on any other assets
of Rite Aid or any Subsidiary); provided, however, that (i) such Indebtedness is
permitted to be incurred, secured and Guaranteed on such basis by each Senior
Debt Document and Second Priority Debt Document and
 

 
 

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(ii) the Representative for the holders of such Indebtedness shall have become
party to (A) the Collateral Trust and Intercreditor Agreement pursuant to, and
by satisfying the conditions set forth in, Section 8.12 thereof and (B) this
Agreement as the Initial Additional Senior Representative or pursuant to, and by
satisfying the conditions set forth in, Section 5.02(c) hereof.  Additional
Senior Debt shall include any Registered Equivalent Notes and Guarantees thereof
by the Subsidiary Guarantors pursuant to the Senior Subsidiary Guarantee
Agreement issued in exchange thereof.
 
“Additional Senior Debt Documents” means, with respect to any series, issue or
class of Additional Senior Debt, the promissory notes, indentures (which shall
include the Initial Additional Senior Debt Facility if such series of Additional
Senior Debt is the first series of Additional Senior Debt), Collateral Documents
or other operative agreements evidencing or governing such Indebtedness,
including the Senior Collateral Documents.
 
“Additional Senior Debt Facility” means each indenture or other governing
agreement with respect to any Additional Senior Debt.
 
“Additional Senior Debt Obligations” means, with respect to any series, issue or
class of Additional Senior Debt, (a) all principal of, and interest (including,
without limitation, any interest which accrues after the commencement of any
Bankruptcy Proceeding, whether or not allowed or allowable as a claim in any
such proceeding) payable with respect to, such Additional Senior Debt, (b) all
other amounts payable to the related Additional Senior Debt Parties under the
related Additional Senior Debt Documents and (c) any renewals or extensions of
the foregoing.
 
“Additional Senior Debt Parties” means, with respect to any series, issue or
class of Additional Senior Debt, the holders of such Indebtedness, any trustee
or agent therefor under any related Additional Senior Debt Documents and the
beneficiaries of each indemnification obligation undertaken by Rite Aid or any
Obligor under any related Additional Senior Debt Documents, but shall not
include the Obligors or any Controlled Affiliates thereof (unless such Obligor
or Controlled Affiliate is a holder of such Indebtedness, a trustee or agent
therefor or beneficiary of such an indemnification obligation named as such in
an Additional Senior Debt Document).
 
“Administrative Agent” shall have the meaning assigned to such term in the
introductory paragraph of this Agreement.
 
“Affiliate” means, when used with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
 
“Agreement” shall have the meaning assigned to such term in the introductory
paragraph of this Agreement.
 
“Applicable Authorized Representative” means, with respect to any Shared
Collateral, (i) until the Senior Loan Obligation Payment Date, the
Administrative
 

 
 

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Agent and (ii) from and after the Senior Loan Obligation Payment Date, the Major
Additional Senior Representative.
 
“Asset Sale” means any sale, lease, assignment, transfer or other disposition
(including pursuant to a Sale and Leaseback Transaction) of any property or
asset (whether now owned or hereafter acquired, whether in one transaction or a
series of transactions and whether by way of merger or otherwise) of the
Borrower or any Subsidiary (including of any Equity Interest in a Subsidiary).
 
“Attributable Debt” means, as to any particular Capital Lease or Sale and
Leaseback Transaction under which the Borrower or any Subsidiary is at the time
liable, as of any date as of which the amount thereof is to be determined (a) in
the case of a transaction involving a Capital Lease, the amount as of such date
of Capital Lease Obligations with respect thereto and (b) in the case of a Sale
and Leaseback Transaction not involving a Capital Lease, the then present value
of the minimum rental obligations under such Sale and Leaseback Transaction
during the remaining term thereof (after giving effect to any extensions at the
option of the lessor) computed by discounting the rental payments at the actual
interest factor included in such payments or, if such interest factor cannot be
readily determined, at the rate per annum that would be applicable to a Capital
Lease of the Borrower having similar payment terms.  The amount of any rental
payment required to be made under any such Sale and Leaseback Transaction not
involving a Capital Lease may exclude amounts required to be paid by the lessee
on account of maintenance and repairs, insurance, taxes, assessments, utilities,
operating and labor costs and similar charges, whether or not characterized as
rent.  Any determination of any rate implicit in the terms of a Capital Lease or
a lease in a Sale and Leaseback Transaction not involving a Capital Lease made
in accordance with generally accepted financial practices by the Borrower shall
be binding and conclusive absent manifest error.
 
“Authorized Representative” means (i) in the case of any Senior Loan Obligations
or the Senior Loan Secured Parties, the Administrative Agent, (ii) in the case
of the Initial Additional Senior Debt Obligations or the Initial Additional
Senior Debt Parties, the Initial Additional Senior Representative and (iii) in
the case of any Series of Additional Senior Debt Obligations or Additional
Senior Debt Parties that become subject to this Agreement after the date hereof,
the Senior Representative named for such Series in the applicable Joinder
Agreement.
 
“Bankruptcy Code” shall mean Title 11 of the United States Code, as amended.
 
“Bankruptcy Law” shall mean the Bankruptcy Code and any similar Federal, state
or foreign law for the relief of debtors.
 
“Bankruptcy Proceeding” means any proceeding under Title 11 of the U.S. Code or
any other Federal, state or foreign bankruptcy, insolvency, reorganization,
receivership or similar law.
 
“Borrower” means Rite Aid.
 
 
 

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“Business Day” means any day other than a Saturday, Sunday or day on which
commercial banks in New York City or Chicago, Illinois are authorized or
required by law to close.
 
“Capital Lease” means any lease of (or other arrangement conveying the right to
use) real or personal property, or a combination thereof, which, in accordance
with GAAP, should be capitalized on the lessee’s balance sheet.
 
“Casualty/Condemnation” means any event that gives rise to Casualty/
Condemnation Proceeds.
 
“Casualty/Condemnation Proceeds” means
 
(a)  any insurance proceeds under any insurance policies or otherwise with
respect to any casualty or other insured damage to any properties or assets of
the Borrower or the Subsidiaries; and
 
(b)  any proceeds received by the Borrower or any Subsidiary in connection with
any action or proceeding for the taking of any properties or assets of the
Borrower or the Subsidiaries, or any part thereof or interest therein, for
public or quasi-public use under the power of eminent domain, by reason of any
similar public improvement or condemnation proceeding;
 
minus, in each case (i) any fees, commissions and expenses (including the costs
of adjustment and condemnation proceedings) and other costs paid or incurred by
the Borrower or any Subsidiary in connection therewith, (ii) the amount of
income taxes reasonably estimated to be payable as a result of any gain
recognized in connection with the receipt of such payment or proceeds and (iii)
the amount of any Indebtedness (or Attributable Debt), other than the Senior
Obligations, together with premium or penalty, if any, and interest thereon (or
comparable obligations in respect of Attributable Debt), that is secured by a
Lien on (or if Attributable Debt, the lease of) the properties or assets in
question and that has priority over both the Senior Lien and the Second Priority
Lien, that is required to be repaid as a result of the receipt by the Borrower
or a Subsidiary of such payments or proceeds; provided, however, that no such
proceeds shall constitute Casualty/Condemnation Proceeds to the extent that such
proceeds are (A) reinvested in other like fixed or capital assets within 270
days of the Casualty/Condemnation that gave rise to such proceeds or (B)
committed to be reinvested in other like fixed or capital assets within 270 days
of such Casualty/Condemnation, with diligent pursuit of such reinvestment, and
reinvested in such assets within 365 days of such Casualty/ Condemnation.
 
“Cash Sweep Period” shall have the meaning assigned to such term in the Senior
Subsidiary Security Agreement.
 
“Citibank” means Citibank, N.A.
 
“Citibank Concentration Account” shall have the meaning assigned to such term in
the Senior Subsidiary Security Agreement.
 

 
 

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“CNAI” means Citicorp North America, Inc.
 
“Collateral” means the Senior Collateral and the Second Priority Collateral.
 
“Collateral Documents” means the Senior Collateral Documents and the Second
Priority Collateral Documents.
 
“Collateral Trust and Intercreditor Agreement” means the Amended and Restated
Collateral Trust and Intercreditor Agreement, dated as of June 27, 2001, as
amended and restated as of May 28, 2003, as further amended and restated as of
June 5, 2009 (as amended, supplemented or otherwise modified from time to time),
among Rite Aid, the Subsidiary Guarantors, the Second Priority Collateral
Trustee, the Senior Collateral Agent and each other Representative.
 
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or
otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.
 
“Controlling Secured Parties” means, with respect to any Shared Collateral, the
Series of Senior Secured Parties whose Senior Representative is the Applicable
Authorized Representative for such Shared Collateral.
 
“Debt Facility” means any Senior Facility and any Second Priority Debt Facility,
or any combination thereof (as the context requires).
 
“DIP Financing” shall have the meaning assigned to such term in Section 2.05(b).
 
“DIP Financing Liens” shall have the meaning assigned to such term in
Section 2.05(b).
 
“DIP Lenders” shall have the meaning assigned to such term in Section 2.05(b).
 
“Effective Date” means June 27, 2001.
 
“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person.
 
“Event of Default” means an “Event of Default” as defined in the Senior Credit
Agreement or any Additional Senior Debt Facility and, at any time when the
Collateral Trust and Intercreditor Agreement remains in effect, shall also
include any “Event of Default” as defined in any Second Priority Debt Facility.
 
 
 

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“GAAP” means generally accepted accounting principles in the United States of
America.
 
“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
 
“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
 
“Hedging Agreement” means any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
 
“Impairment” shall have the meaning assigned to such term in Section 1.01(b).
 
“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person under conditional
sale or other title retention agreements relating to property acquired by such
Person, (d) all obligations of such Person in respect of the deferred purchase
price of property or services (excluding current accounts payable incurred in
the ordinary course of business), (e) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed,
(f) all Guarantees by such Person of Indebtedness of others, (g) all Capital
Lease Obligations of such Person, (h) all obligations, contingent or otherwise,
of such Person as an account
 

 
 

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party in respect of letters of credit and letters of guaranty and (i) all
obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances.  The Indebtedness of any Person shall include the Indebtedness of
any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.
 
“Initial Additional Senior Debt Facility” means that certain Indenture dated as
of June 12, 2009, among Rite Aid, the Subsidiary Guarantors identified therein
and The Bank of New York Mellon Trust Company, N.A., as trustee.
 
“Initial Additional Senior Debt Obligations” means the Additional Senior Debt
Obligations pursuant to the Initial Additional Senior Debt Facility.
 
“Initial Additional Senior Debt Parties” means the holders of any Initial
Additional Senior Debt Obligations and the Initial Additional Senior
Representative.
 
“Initial Additional Senior Representative” shall have the meaning assigned to
such term in the introductory paragraph to this Agreement.
 
“Insolvency or Liquidation Proceeding” means:
 
(a)  any case commenced by or against Rite Aid or any Subsidiary Guarantor under
any Bankruptcy Law, any other proceeding for the reorganization,
recapitalization or adjustment or marshalling of the assets or liabilities of
Rite Aid or any Subsidiary Guarantor, any receivership or assignment for the
benefit of creditors relating to Rite Aid or any Subsidiary Guarantor or any
similar case or proceeding relative to Rite Aid or any Subsidiary Guarantor or
its creditors, as such, in each case whether or not voluntary; or
 
(b)  any liquidation, dissolution, marshalling of assets or liabilities or other
winding up of or relating to Rite Aid or any Subsidiary Guarantor, in each case
whether or not voluntary and whether or not involving bankruptcy or insolvency,
except for any liquidation or dissolution permitted under the Senior Debt
Documents.
 
“Intervening Creditor” shall have the meaning assigned to such term in
Section 2.01(a).
 
“Joinder Agreement” means the documents required to be delivered by a Senior
Representative to the Senior Collateral Agent pursuant to Section 5.13 in order
to establish an additional Series of Senior Obligations and Senior Secured
Parties hereunder.
 
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, Capital Lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of
 

 
 

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securities, any purchase option, call or similar right of a third party with
respect to such securities.
 
“Loan Parties” means the Borrower and the Subsidiary Loan Parties.
 
“Loans” means the loans made by the Lenders to the Borrower pursuant to the
Senior Credit Agreement (including, unless the context otherwise requires, Other
Revolving Loans and Other Term Loans).
 
“Net Cash Proceeds” means:
 
(a)  with respect to any Asset Sale, an amount equal to the cash proceeds
received by the Borrower or any of the Subsidiaries from or in respect of such
Asset Sale (including, when received, any cash proceeds received in respect of
any noncash proceeds of any Asset Sale), less the sum of
 
(i) reasonable costs and expenses paid or incurred in connection with such
transaction, including, without limitation, any underwriting brokerage or other
customary selling commissions and reasonable legal, advisory and other fees and
expenses (including title and recording expenses, associated therewith),
payments of unassumed liabilities relating to the assets sold and any severance
and termination costs;
 
(ii) the amount of any Indebtedness (or Attributable Debt), together with
premium or penalty, if any, and accrued interest thereon (or comparable
obligations in respect of Attributable Debt) secured by a Lien on (or if
Attributable Debt, the lease of) any asset disposed of in such Asset Sale and
discharged from the proceeds thereof, but only to the extent such Lien has
priority over the Senior Lien and the Second Priority Lien;
 
(iii) any taxes actually paid or to be payable by such Person (as estimated by a
senior financial or accounting officer of the Borrower, giving effect to the
overall tax position of the Borrower) in respect of such Asset Sale; and
 
(iv) the portion of such cash proceeds which the Borrower determines in good
faith and reasonably should be reserved for post-closing adjustments, including,
without limitation, indemnification payments and purchase price adjustments,
provided, that on the date that all such post-closing adjustments have been
determined, the amount (if any) by which the reserved amount in respect of such
Asset Sale exceeds the actual post-closing adjustments payable by the Borrower
or any of the Subsidiary Loan Parties shall constitute Net Cash Proceeds on such
date; and
 
(b)  with respect to a Casualty/Condemnation, the amount of
Casualty/Condemnation Proceeds.
 

 
 

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“Non-Controlling Authorized Representative” means, at any time with respect to
any Shared Collateral, any Authorized Representative that is not the Applicable
Authorized Representative at such time with respect to such Shared Collateral.
 
“Non-Controlling Secured Parties” means, with respect to any Shared Collateral,
the Senior Secured Parties that are not Controlling Secured Parties with respect
to such Shared Collateral.
 
“Obligors” means Rite Aid, the Subsidiary Guarantors, the Subsidiary Loan
Parties and any other Person who is liable for any of the Secured Obligations.
 
“Original Restatement Effective Date” means September 30, 2005.
 
“Permitted First Priority Debt” means any Indebtedness incurred by the Borrower
and Guaranteed by the Subsidiary Guarantors pursuant to the Senior Subsidiary
Guarantee Agreement and not Guaranteed by any other Subsidiary which is secured
by the Senior Collateral pursuant to the Senior Collateral Documents on a pari
passu basis (but without regard to control of remedies) with the Senior Loan
Obligations and is not secured by any other assets of the Borrower or any
Subsidiary; provided, however, that (a) such Indebtedness is permitted to be
incurred, secured and Guaranteed on such basis by each Senior Debt Document and
each Second Priority Debt Document, (b) such Indebtedness constitutes
Refinancing Indebtedness in respect of Term Loans or other Loans, Revolving
Commitments or Other Revolving Commitments, Permitted First Priority Debt
incurred pursuant to Section 6.01(a)(i) of the  Senior Credit Agreement or any
combination of the foregoing, (c) such Indebtedness has a later maturity and a
longer weighted average life than the Refinanced Debt (as defined in
“Refinancing Indebtedness”) in respect of which such Indebtedness is Refinancing
Indebtedness, (d) such Indebtedness bears an interest rate not in excess of the
market interest rate with respect to such type of Indebtedness as of the time of
its issuance or incurrence, (e) at the option of the Borrower, such Indebtedness
may contain market call and make-whole provisions as of the time of its issuance
or incurrence, (f) the senior management of the Borrower determines in good
faith that such Indebtedness contains covenants (including with respect to
amortization and convertibility) and events of default on market terms and
(g) the Representative for the holders of such Indebtedness shall have become
party to (i) the Collateral Trust and Intercreditor Agreement pursuant to, and
by satisfying the conditions set forth in, Section 8.12 thereof and (ii) this
Agreement as the Initial Additional Senior Representative or pursuant to, and by
satisfying the conditions set forth in, Section 5.02(c) hereof.  Permitted First
Priority Debt shall include any Registered Equivalent Notes and Guarantees
thereof by the Subsidiary Guarantors pursuant to the Senior Subsidiary Guarantee
Agreement issued in exchange thereof.
 
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
 
“Possessory Collateral” means any Shared Collateral in the possession of the
Senior Collateral Agent (or its agents or bailees), to the extent that
possession thereof
 

 
 

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perfects a Lien thereon under the Uniform Commercial Code of any jurisdiction.
Possessory Collateral includes any Certificated Securities, Promissory Notes,
Instruments, and Chattel Paper, in each case, delivered to or in the possession
of the Senior Collateral Agent under the terms of the Senior Collateral
Documents. All capitalized terms used in this definition and not defined
elsewhere in this Agreement have the meanings assigned to them in the UCC.
 
“Proceeds” shall have the meaning assigned to such term in Section 2.01.
 
“Reduction” means, when applied to any Debt Facility, (a) the permanent
repayment of outstanding loans (or obligations in respect of Attributable Debt)
under such Debt Facility, (b) the permanent reduction of outstanding lending
commitments under such Debt Facility or (c) the permanent cash collateralization
of outstanding letters of credit under such facility (together with the
termination of any lending commitments utilized by such letters of credit).
 
“Reduction Event” means any Asset Sale or Casualty/Condemnation.
 
“Refinance” means, with respect to any issuance of indebtedness, to replace,
renew, extend, refinance, repay, refund, repurchase, redeem, defease or retire,
or to issue Indebtedness in exchange or as a replacement therefor, including any
successive Refinancing.  “Refinanced” and “Refinancing” shall have correlative
meanings.
 
“Registered Equivalent Notes” means, with respect to any notes originally issued
in a Rule 144A or other private placement transaction under the Securities Act
of 1933, substantially identical notes (having the same Guarantees) issued in a
dollar for dollar exchange therefor pursuant to an exchange offer registered
with the SEC.
 
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the directors, officers, employees, agents, trustees and advisors
of such Person and such Person’s Affiliates.
 
“Representatives” means the Senior Representatives and the Second Priority
Representatives.
 
“Rite Aid” shall have the meaning assigned to such term in the introductory
paragraph of this Agreement.
 
“Sale and Leaseback Transaction” means any arrangement whereby the Borrower or a
Subsidiary shall sell or transfer any office building (including its
headquarters), distribution center, manufacturing plant, warehouse, Store,
equipment or other property, real or personal, now or hereafter owned by the
Borrower or a Subsidiary with the intention that the Borrower or any Subsidiary
rent or lease the property sold or transferred (or other property of the buyer
or transferee substantially similar thereto).
 
“SEC” means the United States Securities and Exchange Commission and any
successor agency thereto.
 

 
 

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“Second Priority Collateral” means all the “Second Priority Collateral” as
defined in any Second Priority Collateral Document.
 
“Second Priority Collateral Documents” means the Second Priority Subsidiary
Security Agreement, the Second Priority Subsidiary Guarantee Agreement, the
Second Priority Indemnity, Subrogation and Contribution Agreement, the
Collateral Trust and Intercreditor Agreement and each of the security agreements
and other instruments and documents executed and delivered by any Subsidiary
Guarantor pursuant to any of the foregoing for purposes of providing collateral
security or credit support for any Second Priority Debt Obligation or obligation
under the Second Priority Subsidiary Guarantee Agreement.
 
“Second Priority Collateral Trustee” means Wilmington Trust Company, in its
capacity as collateral trustee under the Collateral Trust and Intercreditor
Agreement and the Second Priority Collateral Documents, and its successors.
 
“Second Priority Debt” means any Indebtedness (including the 2017 7.5% Notes and
the 2016 10.375% Notes) incurred by Rite Aid and Guaranteed by the Subsidiary
Guarantors on or after the Effective Date pursuant to the Second Priority
Subsidiary Guarantee Agreement (i) which is secured by the Second Priority
Collateral on a pari passu basis (but without regard to control of remedies)
(other than as provided by the terms of the applicable Second Priority Debt
Documents) with the other Second Priority Debt Obligations and (ii) if issued on
or after the 2009 Restatement Effective Date, matures after the date that is 90
days after the Latest Maturity Date in effect on the date of issuance of such
Indebtedness; provided, however, that (A) such Indebtedness is permitted to be
incurred, secured and Guaranteed on such basis by each Senior Debt Document and
each Second Priority Debt Document and (B) the Representative for the holders of
such Second Priority Debt shall have become party to the Collateral Trust and
Intercreditor Agreement pursuant to, and by satisfying the conditions set forth
in, Section 8.12 thereof.  Second Priority Debt shall include any Registered
Equivalent Notes issued in exchange thereof.
 
“Second Priority Debt Documents” means, with respect to any series, issue or
class of Second Priority Debt, the promissory notes, indentures and other
operative agreements or instruments evidencing or governing such Indebtedness,
including the Second Priority Collateral Documents.
 
“Second Priority Debt Facility” means the indenture or other governing agreement
or instrument with respect to any class or series of Second Priority Debt.
 
“Second Priority Debt Obligations” means, with respect to any series, issue or
class of Second Priority Debt, (a) all principal of, and interest (including,
without limitation, any interest which accrues after the commencement of any
Bankruptcy Proceeding, whether or not allowed or allowable as a claim in any
such proceeding) payable with respect to, such Second Priority Debt, (b) all
other amounts payable to the related Second Priority Debt Parties under the
related Second Priority Debt Documents and (c) any renewals or extensions of the
foregoing.
 

 
 

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“Second Priority Debt Parties” means, with respect to any series, issue or class
of Second Priority Debt, the holders of such Indebtedness, any trustee or agent
therefor under any related Second Priority Debt Documents and the beneficiaries
of each indemnification obligation undertaken by Rite Aid or any Obligor under
any related Second Priority Debt Documents, but shall not include the Loan
Parties or any Controlled Affiliates thereof (unless such Loan Party or
Controlled Affiliate is a holder of such Indebtedness, a trustee or agent
therefor or beneficiary of such an indemnification obligation named as such in a
Second Priority Debt Document).
 
“Second Priority Indemnity, Subrogation and Contribution Agreement” means the
Amended and Restated Second Priority Indemnity, Subrogation and Contribution
Agreement, dated as of June 27, 2001, as amended and restated as of May 28,
2003, among Rite Aid, the Subsidiary Guarantors and the Second Priority
Collateral Trustee.
 
“Second Priority Lien” means the Liens on the Second Priority Collateral in
favor of the Second Priority Debt Parties under the Second Priority Collateral
Documents.
 
“Second Priority Representative” means, in respect of a Second Priority Debt
Facility, the trustee, administrative agent, security agent or similar agent
under such Second Priority Debt Facility, as the case may be, and each of their
successors in such capacities.
 
“Second Priority Subsidiary Guarantee Agreement” means the Amended and Restated
Second Priority Subsidiary Guarantee Agreement, dated as of June 27, 2001, as
amended and restated as of May 28, 2003, made by the Subsidiary Guarantors
(including any additional Subsidiary Guarantor becoming party thereto after the
Original Restatement Effective Date) in favor of the Second Priority Collateral
Trustee for the benefit of the Second Priority Debt Parties.
 
“Second Priority Subsidiary Security Agreement” means the Amended and Restated
Second Priority Subsidiary Security Agreement, dated as of June 27, 2001, as
amended and restated as of May 28, 2003, made by the Subsidiary Guarantors
(including any additional Subsidiary Guarantor becoming party thereto after the
Original Restatement Effective Date) in favor of the Second Priority Collateral
Trustee for the benefit of the Second Priority Debt Parties.
 
“Secured Obligations” means the Senior Obligations and the Second Priority Debt
Obligations.
 
“Secured Parties” means the Senior Secured Parties and the Second Priority Debt
Parties.
 
“Senior Class Debt” shall have the meaning assigned to such term in
Section 5.13.
 

 
 

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“Senior Class Debt Parties” shall have the meaning assigned to such term in
Section 5.13.
 
“Senior Class Debt Representative” shall have the meaning assigned to such term
in Section 5.13.
 
“Senior Collateral” means all the “Senior Collateral” or “Collateral” as defined
in any Senior Collateral Document.
 
“Senior Collateral Agent” means Citicorp North America, Inc., in its capacity as
senior collateral agent for the Senior Secured Parties under the Senior
Collateral Documents, and any successor thereof or replacement senior collateral
agent appointed in accordance with the terms of the Senior Subsidiary Security
Agreement, the Collateral Trust and Intercreditor Agreement and this Agreement.
 
“Senior Collateral Documents” means the Senior Subsidiary Security Agreement,
the Senior Subsidiary Guarantee Agreement, the Senior Indemnity, Subrogation and
Contribution Agreement, the Collateral Trust and Intercreditor Agreement, this
Agreement (upon and after the initial execution and delivery hereof by the
initial parties hereto) and each of the security agreements and other
instruments and documents executed and delivered by any Subsidiary Guarantor
pursuant to any of the foregoing or pursuant to the Senior Credit Agreement or
any Additional Senior Debt Facility for purposes of providing collateral
security or credit support for any Senior Obligation or obligation under the
Senior Subsidiary Guarantee Agreement.
 
“Senior Credit Agreement” means the Amended and Restated Senior Credit
Agreement, dated as of June 27, 2001, as amended and restated as of July 9,
2008, as further amended and restated as of June 5, 2009, and as may be further
amended, restated or otherwise modified from time to time, among Rite Aid, the
Senior Lenders, the Tranche 2 Lenders, Citicorp North America, Inc., as
administrative agent and as Senior Collateral Agent and Bank of America, N.A.,
as syndication agent for the Senior Lenders and the Tranche 2 Lenders, and the
other parties thereto.
 
“Senior Debt Documents” means (a) the Senior Loan Documents and (b) any
Additional Senior Debt Documents.
 
“Senior Facilities” means the Senior Credit Agreement and any Additional Senior
Debt Facilities.
 
“Senior Hedging Agreement” means any Hedging Agreement entered into with Rite
Aid or any Subsidiary, if the applicable counterparty was a Senior Lender or an
Affiliate thereof (a) on the Original Restatement Effective Date, in the case of
any Hedging Agreement entered into prior to the Original Restatement Effective
Date or (b) at the time the Hedging Agreement was entered into, in the case of
any Hedging Agreement entered into on or after the Original Restatement
Effective Date.
 
“Senior Indemnity, Subrogation and Contribution Agreement” means the Amended and
Restated Senior Indemnity, Subrogation and Contribution Agreement,
 

 
 

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dated as of June 27, 2001, as amended and restated as of May 28, 2003, among
Rite Aid, the Subsidiary Guarantors (including Subsidiary Guarantors becoming
party thereto after the Original Restatement Effective Date) and the Senior
Collateral Agent.
 
“Senior Lender” means a “Lender” as defined in the Senior Credit Agreement.
 
“Senior Lien” means the Liens on the Senior Collateral in favor of the Senior
Secured Parties under the Senior Collateral Documents.
 
“Senior Loan Documents” means the Senior Credit Agreement, any promissory notes
issued to any Senior Lender pursuant to the Senior Credit Agreement, each Senior
Hedging Agreement, each Refinancing Amendment, each Loan Modification Agreement
and the Senior Collateral Documents.
 
“Senior Loan Obligation Payment Date” means the date on which (a) the Senior
Loan Obligations have been paid in full, (b) all lending commitments under the
Senior Credit Agreement have been terminated and (c) there are no outstanding
letters of credit issued under the Senior Credit Agreement other than such as
have been fully cash collateralized under documents and arrangements
satisfactory to the issuer of such letters of credit.
 
“Senior Loan Obligations” means (a) the principal of each loan made under the
Senior Credit Agreement, (b) all reimbursement and cash collateralization
obligations in respect of letters of credit issued under the Senior Credit
Agreement, (c) all monetary obligations of the Borrower or any Subsidiary under
each Senior Hedging Agreement entered into (i) prior to the Original Restatement
Effective Date with any counterparty that was a Senior Lender (or an Affiliate
thereof) on the Original Restatement Effective Date or (ii) on or after the
Original Restatement Effective Date with any counterparty that was a Senior
Lender (or an Affiliate thereof) at the time such Senior Hedging Agreement was
entered into, (d) all interest on the loans, letter of credit reimbursement,
fees and other obligations under the Senior Credit Agreement or such Senior
Hedging Agreements (including, without limitation any interest which accrues
after the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, any Subsidiary Loan
Party, Holdings or any of its subsidiaries, whether or not allowed or allowable
as a claim in such proceeding), (e) all other amounts payable by the Borrower or
any Subsidiary under the Senior Loan Documents and (f) all increases, renewals,
extensions and Refinancings of the foregoing.
 
“Senior Loan Secured Parties” means each party to the Senior Credit Agreement
other than any Loan Party, each counterparty to a Senior Hedging Agreement, the
beneficiaries of each indemnification obligation undertaken by Rite Aid or any
other Loan Party under any Senior Loan Document, and the successors and
permitted assigns of each of the foregoing.
 

 
 

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“Senior Obligation Payment Date” means the date on which (a) the Senior
Obligations have been paid in full, (b) all lending commitments under the Senior
Debt Documents have been terminated and (c) there are no outstanding letters of
credit issued under the Senior Debt Documents other than such as have been fully
cash collateralized under documents and arrangements satisfactory to the issuer
of such letters of credit.
 
“Senior Obligations” means the Senior Loan Obligations and any Additional Senior
Debt Obligations.
 
“Senior Representative” means, in respect of a Senior Facility, the trustee,
administrative agent, collateral agent, security agent or similar agent under
such Senior Facility, as the case may be, and each of their successors in such
capacities.
 
“Senior Secured Parties” means the Senior Loan Secured Parties and any
Additional Senior Debt Parties.
 
“Senior Subsidiary Guarantee Agreement” means the Amended and Restated Senior
Subsidiary Guarantee Agreement dated as of June 5, 2009, made by the Subsidiary
Guarantors (including Subsidiary Guarantors that become parties thereto after
the Original Restatement Effective Date) in favor of the Senior Collateral Agent
for the benefit of the Senior Secured Parties, as such agreement may be amended,
supplemented or otherwise modified from time to time.
 
“Senior Subsidiary Security Agreement” means the Amended and Restated Senior
Subsidiary Security Agreement dated as of June 5, 2009, made by the Subsidiary
Guarantors (including Subsidiary Guarantors that become parties thereto after
the Original Restatement Effective Date) in favor of the Senior Collateral Agent
for the benefit of the Senior Secured Parties, as such agreement may be amended,
supplemented or otherwise modified from time to time.
 
“Series” means (a) with respect to the Senior Secured Parties, each of (i) the
Senior Loan Secured Parties (in their capacities as such), (ii) the Initial
Additional Senior Debt Parties (in their capacities as such) and (iii) the
Additional Senior Debt Parties that become subject to this Agreement after the
date hereof that are represented by a common Authorized Representative (in its
capacity as such for such Additional Senior Debt Parties) and (b) with respect
to any Senior Obligations, each of (i) the Senior Loan Obligations, (ii) the
Initial Additional Senior Debt Obligations and (iii) the Additional Senior Debt
Obligations incurred pursuant to any Additional Senior Debt Facility, which
pursuant to any Joinder Agreement, are to be represented hereunder by a common
Authorized Representative (in its capacity as such for such Additional Senior
Debt Obligations).
 
“Shared Collateral” means, at any time, Senior Collateral in which the holders
of two or more Series of Senior Obligations (or their respective Authorized
Representatives) hold a valid and perfected security interest at such time.  If
more than two Series of Senior Obligations are outstanding at any time and the
holders of fewer
 

 
 

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than all Series of Senior Obligations hold a valid and perfected security
interest in any Senior Collateral at such time, then such Senior Collateral
shall constitute Shared Collateral for those Series of Senior Obligations the
holders of which hold a valid and perfected security interest in such Senior
Collateral at such time and shall not constitute Shared Collateral for any
Series of Senior Obligations the holders of which do not have a valid and
perfected security interest in such Senior Collateral at such
time.  Notwithstanding the foregoing, all cash and cash equivalents that secure
the Senior Loan Obligations, or are otherwise held by the Senior Lenders, the
Administrative Agent or the Senior Collateral Agent, pursuant to Section 2.05(j)
of the Senior Credit Agreement shall be deemed not to constitute Shared
Collateral until applied pursuant to Section 2.05(j) of the Senior Credit
Agreement to satisfy any Senior Obligations other than Senior Obligations in
respect of LC Disbursements or other LC Exposure.
 
“Store” means any retail store (which may include any real property, fixtures,
equipment, inventory and script files related thereto) operated, or to be
operated, by any Subsidiary Loan Party.
 
“Subsidiary” means any subsidiary of the Borrower.
 
“Subsidiary Guarantor” means each Subsidiary that is party to any Second
Priority Collateral Document or Senior Collateral Document.
 
“Subsidiary Loan Party” means each Subsidiary set forth on Schedule 1.01 to the
Senior Credit Agreement and any wholly-owned Domestic Subsidiary, including any
Securitization Vehicle that is a Domestic Subsidiary, that owns any assets
consisting of inventory, accounts receivable, intellectual property, or script
lists, subject to the terms of Section 5.11 of the Senior Credit Agreement;
provided that no Subsidiary that engages solely in the Borrower’s pharmacy
benefits management business shall be deemed a Subsidiary Loan Party.
 
“Triggering Event” means (x) the occurrence of any Event of Default and, as a
result thereof, (A) the acceleration (including any automatic acceleration in
connection with any Bankruptcy Proceeding) of the principal amount of any Senior
Obligations or Second Priority Debt Obligations under the terms of any Senior
Debt Document or any Second Priority Debt Document or (B) the commencement of
the exercise of remedies in respect of Collateral (it being understood that the
exercise by the Senior Collateral Agent of their cash sweep rights pursuant to
Section 9.15 of the Senior Credit Agreement shall not be deemed an exercise of
remedies in respect of Collateral) and (y) in either case, (i) receipt by the
Senior Collateral Agent and the Second Priority Collateral Trustee of written
notice thereof from any Senior Representative (in the case of any such Event of
Default arising under any Senior Debt Document), or (ii) receipt by the Senior
Collateral Agent and the Second Priority Collateral Trustee of written notice
thereof from any Second Priority Representative (in the case of any such Event
of Default arising under any Second Priority Debt Document).
 

 
 

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“Uniform Commercial Code” or “UCC” means, unless otherwise specified, the
Uniform Commercial Code as from time to time in effect in the State of New York.
 
ARTICLE II
 
Priorities and Agreements with Respect to Shared Collateral
 
SECTION 2.01   Priority of Claims.
 
(a)  Anything contained herein or in any of the Senior Debt Documents to the
contrary notwithstanding (but subject to Sections 1.01(b) and 2.01(d) and (e)),
if an Event of Default has occurred and is continuing, and the Senior Collateral
Agent or any Senior Secured Party is taking action to enforce rights in respect
of any Shared Collateral, or any distribution is made in respect of any Shared
Collateral in any Bankruptcy Proceeding of any Subsidiary Guarantor or any
Senior Secured Party receives any payment pursuant to any intercreditor
agreement (other than this Agreement) with respect to any Shared Collateral, the
proceeds of any sale, collection or other liquidation of any such Senior
Collateral by any Senior Secured Party or received by the Senior Collateral
Agent or any Senior Secured Party pursuant to any such intercreditor agreement
with respect to such Shared Collateral and proceeds of any such distribution
(subject, in the case of any such distribution, to the sentence immediately
following) to which the Senior Obligations are entitled under any intercreditor
agreement (other than this Agreement) (all proceeds of any sale, collection or
other liquidation of any Senior Collateral and all proceeds of any such
distribution being collectively referred to as “Proceeds”), shall be applied (i)
at any time when the Collateral Trust and Intercreditor Agreement remains in
effect, as provided in Section 4.01 of the Collateral Trust and Intercreditor
Agreement, and (ii) at any other time, (A) FIRST, to the fees and expenses of,
and reimbursements and indemnification owed to, the Senior Collateral Agent
pursuant to the Senior Subsidiary Security Agreement and the Senior Credit
Agreement 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, and reimbursements and indemnification owed to, 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, expenses,
reimbursements and indemnifications (or such advances or payment), (B) SECOND,
to reimburse any amounts owing to the Senior Collateral Agent pursuant to
Section 8.03 of the Senior Subsidiary Security Agreement, (C) THIRD, subject to
Sections 1.01(b) and 2.01(d) and (e), 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 the Senior Obligation Payment Date, and (D) FOURTH, to Rite Aid
and the Subsidiary Guarantors or their successors or assigns, as their interests
may appear, or to whosoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct. Notwithstanding the foregoing, with
respect to any Shared Collateral for which a third party (other than a Senior
Secured Party) has a lien or security interest that is junior in priority to the
security interest of any Series of Senior Obligations but senior (as determined
by appropriate legal proceedings in the case of any dispute) to the security
 

 
 

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interest of any other Series of Senior Obligations (such third party an
“Intervening Creditor”), the value of any Shared Collateral or Proceeds which
are allocated to such Intervening Creditor shall be deducted on a ratable basis
solely from the Shared Collateral or Proceeds to be distributed in respect of
the Series of Senior Obligations with respect to which such third party lien or
security interest exists.
 
(b)  It is acknowledged that the Senior Obligations of any Series may, subject
to the limitations set forth in the then extant Senior Debt Documents and the
Second Priority Debt Documents, be increased, extended, renewed, replaced,
restated, supplemented, restructured, repaid, refunded, Refinanced or otherwise
amended or modified from time to time, all without affecting the priorities set
forth in Section 2.01(a) or the provisions of this Agreement defining the
relative rights of the Senior Secured Parties of any Series.
 
(c)  Notwithstanding the date, time, method, manner or order of grant,
attachment or perfection of any Liens securing any Series of Senior Obligations
granted on the Shared Collateral and notwithstanding any provision of the
Uniform Commercial Code of any jurisdiction, or any other applicable law or the
Senior Debt Documents or any defect or deficiencies in the Liens securing the
Senior Obligations of any Series or any other circumstance whatsoever (but, in
each case, subject to Sections 1.01(b) and 2.01(d) and (e)), each Senior Secured
Party hereby agrees that the Liens securing each Series of Senior Obligations on
any Shared Collateral shall be pari passu and of equal priority and nothing
contained in this Agreement shall affect the priority of the Second Priority
Liens set forth in the Collateral Trust and Intercreditor Agreement or any other
rights of or obligations owed to a Second Priority Debt Party (in its capacity
as such) contained in the Collateral Trust and Intercreditor Agreement or
otherwise.
 
(d)  Notwithstanding anything in this Agreement or the other Senior Collateral
Documents to the contrary, (i) any Shared Collateral consisting of cash or cash
equivalents that secure the Senior Loan Obligations or are otherwise held by the
Senior Lenders, the Administrative Agent or the Senior Collateral Agent pursuant
to Section 2.05(j) of the Senior Credit Agreement shall be applied as specified
in such Section of the Senior Credit Agreement and (ii) at all times during a
Cash Sweep Period prior to the occurrence of a Triggering Event, the funds on
deposit in the Citibank Concentration Account may be applied in accordance with
the provisions of the Senior Credit Agreement, as in effect on the 2009
Restatement Effective Date.  After the occurrence of a Triggering Event, funds
on deposit in the Citibank Concentration Account consisting of proceeds of
Senior Collateral shall be applied in accordance with the provisions of Section
2.01(a).
 
(e)  In the event that Rite Aid or any of its Subsidiaries shall at any time, or
from time to time (but in the case of any sale or disposition of Senior
Collateral, only prior to the occurrence of a Triggering Event), receive any Net
Cash Proceeds of any Reduction Event (other than Net Cash Proceeds required by
the Senior Credit Agreement to be applied to prepay Revolving Borrowings, Other
Revolving Borrowings or Swingline Loans (without permanent reductions of related
lending commitments) at any time when the Revolver Availability is less than the
amount specified in Section 2.11(c)
 

 
 

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of the Senior Credit Agreement or during a Cash Sweep Period), an amount equal
to such Net Cash Proceeds shall, in accordance with and to the extent required
by the provisions of the Senior Credit Agreement and, to the extent not
inconsistent with the provisions of the Senior Credit Agreement, the other
Senior Debt Documents, be applied to Reductions to the Senior Facilities
established under the Senior Credit Agreement and the other Senior Debt
Documents.  So long as no Triggering Event has occurred and is continuing, Net
Cash Proceeds of a Reduction Event in excess of those applied in accordance with
the foregoing provision of this paragraph shall be applied in accordance with
any applicable provisions of the Senior Debt Documents and Second Priority Debt
Documents.  In the event Rite Aid or any of its Subsidiaries shall, at any time
after the occurrence of a Triggering Event, receive any Net Cash Proceeds of any
Reduction Event which are attributable to Senior Collateral, such Net Cash
Proceeds shall be subject to and applied in accordance with the provisions of
Section 2.01(a).
 
SECTION 2.02   Actions With Respect to Shared Collateral; Prohibition on
Contesting Liens.
 
(a)  With respect to any Shared Collateral, (i) only the Senior Collateral Agent
(and the Administrative Agent, as set forth in Section 2.01(d)) shall act or
refrain from acting with respect to the Shared Collateral (including with
respect to any intercreditor agreement with respect to any Shared Collateral),
and then (in the case of the Senior Collateral Agent) only on the instructions
of the Applicable Authorized Representative, (ii) the Senior Collateral Agent
shall not follow any instructions with respect to such Shared Collateral
(including with respect to any intercreditor agreement with respect to any
Shared Collateral) from any Non-Controlling Authorized Representative (or any
other Senior Secured Party other than the Applicable Authorized Representative
and the Controlling Secured Parties) and (iii) no Non-Controlling Authorized
Representative or other Senior Secured Party (other than the Applicable
Authorized Representative and the Controlling Secured Parties) shall or shall
instruct the Senior Collateral Agent to, commence any judicial or nonjudicial
foreclosure proceedings with respect to, seek to have a trustee, receiver,
liquidator or similar official appointed for or over, attempt any action to take
possession of, exercise any right, remedy or power with respect to, or otherwise
take any action to enforce its security interest in or realize upon, or take any
other action available to it in respect of, any Shared Collateral (including
with respect to any intercreditor agreement with respect to any Shared
Collateral), whether under any Senior Collateral Document, applicable law or
otherwise, it being agreed that only the Senior Collateral Agent, acting on the
instructions of the Applicable Authorized Representative and in accordance with
the applicable Senior Collateral Documents, shall be entitled to take any such
actions or exercise any such remedies with respect to Shared Collateral.
Notwithstanding the equal priority of the Liens, the Senior Collateral Agent
(acting on the instructions of the Applicable Authorized Representative) may
deal with the Shared Collateral without regard to the equal priority Lien of the
Non-Controlling Secured Parties on such Senior Collateral. No Non-Controlling
Authorized Representative or Non-Controlling Secured Party will contest, protest
or object to any foreclosure proceeding or action brought by the Senior
Collateral Agent, Applicable Authorized Representative or Controlling Secured
Party or any other exercise by the Senior Collateral Agent, Applicable
Authorized Representative
 

 
 

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or Controlling Secured Party of any rights and remedies relating to the Shared
Collateral, or to cause the Senior Collateral Agent to do so. The foregoing
shall not be construed to limit the rights and priorities of any Senior Secured
Party, Senior Collateral Agent or Authorized Representative with respect to any
collateral not constituting Shared Collateral.
 
(b)  Each of the Authorized Representatives agrees that it will not accept any
Lien on any collateral for the benefit of any Series of Senior Obligations
(other than funds deposited for the discharge or defeasance of any Additional
Senior Debt Facility) other than pursuant to the Senior Collateral Documents and
pursuant to Section 2.05(j) of the Senior Credit Agreement or, after the Senior
Loan Obligation Payment Date, any equivalent provision of any other Senior
Facility, and by executing this Agreement (or a Joinder Agreement), each
Authorized Representative and the Series of Senior Secured Parties for which it
is acting hereunder agree to be bound by the provisions of this Agreement and
the other Senior Collateral Documents applicable to it.
 
(c)  Each of the Senior Secured Parties agrees that it will not (and hereby
waives any right to) question or contest or support any other Person in
questioning or contesting, in any proceeding (including any Insolvency or
Liquidation Proceeding), the perfection, priority, validity, attachment, or
enforceability of a Lien held by or on behalf of any of the Senior Secured
Parties in all or any part of the Senior Collateral, or the provisions of this
Agreement; provided that nothing in this Agreement shall be construed to prevent
or impair the rights of any of the Senior Collateral Agent or any Authorized
Representative to enforce this Agreement.
 
SECTION 2.03  No Interference; Payment Over.
 
(a)  Each Senior Secured Party agrees that (i) it will not challenge or question
in any proceeding the validity or enforceability of any Senior Obligations of
any Series or any Senior Collateral Document or the validity or enforceability
of the priorities, rights or duties established by or other provisions of this
Agreement; (ii) it will not take or cause to be taken any action the purpose or
intent of which is, or could be, to interfere, hinder or delay, in any manner,
whether by judicial proceedings or otherwise, any sale, transfer or other
disposition of the Shared Collateral by the Senior Collateral Agent,
(iii) except as provided in Section 2.02, it shall have no right to (A) direct
the Senior Collateral Agent or any other Senior Secured Party to exercise any
right, remedy or power with respect to any Shared Collateral (including pursuant
to any intercreditor agreement) or (B) consent to the exercise by the Senior
Collateral Agent or any other Senior Secured Party of any right, remedy or power
with respect to any Shared Collateral, (iv) it will not institute any suit or
assert in any suit, bankruptcy, insolvency or other proceeding any claim against
the Senior Collateral Agent or any other Senior Secured Party seeking damages
from or other relief by way of specific performance, instructions or otherwise
with respect to any Shared Collateral, and none of the Senior Collateral Agent,
any Applicable Authorized Representative or any other Senior Secured Party shall
be liable for any action taken or omitted to be taken by the Senior Collateral
Agent, such Applicable Authorized Representative or other Senior Secured Party
with respect to any Shared Collateral in accordance with the provisions of this
Agreement, (v) it will not
 

 
 

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seek, and hereby waives any right, to have any Shared Collateral or any part
thereof marshaled upon any foreclosure or other disposition of such Senior
Collateral and (vi) it will not attempt, directly or indirectly, whether by
judicial proceedings or otherwise, to challenge the enforceability of any
provision of this Agreement; provided that nothing in this Agreement shall be
construed to prevent or impair the rights of any of the Senior Collateral Agent
or any other Senior Secured Party to enforce this Agreement.
 
(b)  Each Senior Secured Party whose Senior Obligations arise under any Senior
Facility hereby agrees that if it shall obtain possession of any Shared
Collateral or shall realize any proceeds or payment in respect of any such
Shared Collateral pursuant to any Senior Collateral Document or by the exercise
of any rights available to it under applicable law or in any Insolvency or
Liquidation Proceeding or through any other exercise of remedies (including
pursuant to any intercreditor agreement) at any time prior to the Senior
Obligation Payment Date (determined, solely for this purpose, as if such Senior
Facility did not exist), then it shall hold such Shared Collateral, proceeds or
payment in trust for the other Senior Secured Parties and promptly transfer such
Shared Collateral, proceeds or payment, as the case may be, to the Senior
Collateral Agent, to be distributed in accordance with the provisions of
Section 2.01.
 
SECTION 2.04  Automatic Release of Liens; Amendments to Senior Collateral
Documents.
 
(a)  If, at any time the Senior Collateral Agent forecloses upon or otherwise
exercises remedies against any Shared Collateral resulting in a sale or
disposition thereof, then (whether or not any Insolvency or Liquidation
Proceeding is pending at the time) the Liens in favor of the Senior Collateral
Agent for the benefit of each Series of Senior Secured Parties upon such Shared
Collateral will automatically be released and discharged; provided that any
proceeds of any Shared Collateral realized therefrom shall be applied pursuant
to Section 2.01 and the Senior Subsidiary Security Agreement.
 
(b)  Each Senior Secured Party agrees that the Senior Collateral Agent may enter
into any amendment (and, upon request by the Senior Collateral Agent, each
Authorized Representative shall sign a consent to such amendment) to any Senior
Collateral Document, so long as the Senior Collateral Agent receives a
certificate of Rite Aid stating that such amendment is permitted by the terms of
each then extant Senior Debt Document.  Additionally, each Senior Secured Party
agrees that the Senior Collateral Agent may enter into any amendment (and, upon
request by the Senior Collateral Agent, each Authorized Representative shall
sign a consent to such amendment) to any Senior Collateral Document solely as
such Senior Collateral Document relates to a particular Series of Senior
Obligations so long as (x) such amendment is in accordance with the Senior Debt
Document pursuant to which such Series of Senior Obligations was incurred and
(y) such amendment does not adversely affect the Senior Secured Parties of any
other Series.  Notwithstanding the foregoing, no amendment to any Senior
Collateral Document entered into by the Senior Collateral Agent pursuant to this
Section 2.04(b) will (i) release all or substantially all of the Senior
Collateral from the Liens under the Senior Collateral Documents without the
written
 

 
 

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consent of each Authorized Representative or (ii) change the pro rata
application of the proceeds of the Senior Collateral required by Section 7.03 of
the Senior Subsidiary Security Agreement.
 
(c)  Each Authorized Representative agrees to execute and deliver (at the sole
cost and expense of the Subsidiary Guarantors) all such authorizations and other
instruments as shall reasonably be requested by the Senior Collateral Agent to
evidence and confirm any release of Shared Collateral or amendment to any Senior
Collateral Document provided for in this Section.
 
SECTION 2.05  Certain Agreements With Respect to Bankruptcy or Insolvency
Proceedings.
 
(a)  This Agreement shall continue in full force and effect notwithstanding the
commencement of any Bankruptcy Proceeding by or against Rite Aid or any of its
subsidiaries.
 
(b)  If Rite Aid or any Subsidiary Guarantor shall become subject to a
Bankruptcy Proceeding and shall, as debtor(s)-in-possession, move for approval
of financing (“DIP Financing”) to be provided by one or more lenders (the “DIP
Lenders”) under Section 364 of the Bankruptcy Code or any equivalent provision
of any other Bankruptcy Law or the use of cash Senior Collateral under
Section 363 of the Bankruptcy Code or any equivalent provision of any other
Bankruptcy Law, each Senior Secured Party agrees that it will raise no objection
to any such financing or to the Liens on the Shared Collateral securing the same
(“DIP Financing Liens”) or to any use of cash Senior Collateral that constitutes
Shared Collateral, unless any Controlling Secured Party, or an Authorized
Representative of any Controlling Secured Party, shall then oppose or object to
such DIP Financing or such DIP Financing Liens or use of cash Senior Collateral
(and (i) to the extent that such DIP Financing Liens are senior to the Liens on
any such Shared Collateral for the benefit of the Controlling Secured Parties,
each Non-Controlling Secured Party will subordinate its Liens with respect to
such Shared Collateral on the same terms as the Liens of the Controlling Secured
Parties (other than any Liens of any Senior Secured Parties constituting DIP
Financing Liens) are subordinated thereto, and (ii) to the extent that such DIP
Financing Liens rank pari passu with the Liens on any such Shared Collateral
granted to secure the Senior Obligations of the Controlling Secured Parties,
each Non-Controlling Secured Party will confirm the priorities with respect to
such Shared Collateral as set forth herein), in each case so long as (A) the
Senior Secured Parties of each Series retain the benefit of their Liens on all
such Shared Collateral pledged to the DIP Lenders, including proceeds thereof
arising after the commencement of such proceeding, with the same priority
vis-a-vis all the other Senior Secured Parties (other than any Liens of the
Senior Secured Parties constituting DIP Financing Liens) as existed prior to the
commencement of the Bankruptcy Proceeding, (B) the Senior Secured Parties of
each Series are granted Liens on any additional Senior Collateral pledged to any
Senior Secured Parties as adequate protection or otherwise in connection with
such DIP Financing or use of cash Senior Collateral, with the same priority
vis-a-vis the Senior Secured Parties as set forth in this Agreement, (C) if any
amount of such DIP Financing or cash collateral is applied to repay any of the
Senior
 

 
 

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Obligations, such amount is applied pursuant to Section 2.01, and (D) if any
Senior Secured Parties are granted adequate protection, including in the form of
periodic payments, in connection with such DIP Financing or use of cash
collateral, the proceeds of such adequate protection is applied pursuant to
Section 2.01; provided that the Senior Secured Parties of each Series shall have
a right to object to the grant of a Lien to secure the DIP Financing over any
collateral subject to Liens in favor of the Senior Secured Parties of such
Series or its Authorized Representative that shall not constitute Shared
Collateral; and provided, further, that the Senior Secured Parties receiving
adequate protection shall not object to any other Senior Secured Party receiving
adequate protection comparable to any adequate protection granted to such Senior
Secured Parties in connection with a DIP Financing or use of cash
collateral.  This Section shall not affect the priority of the Second Priority
Liens set forth in the Collateral Trust and Intercreditor Agreement or any other
rights of a Second Priority Debt Party (in its capacity as such) contained in
the Collateral Trust and Intercreditor Agreement or otherwise.
 
SECTION 2.06  Reinstatement. In the event that any of the Senior Obligations
shall be paid in full and such payment or any part thereof shall subsequently,
for whatever reason (including an order or judgment for disgorgement of a
preference under Title 11 of the United States Code, or any similar law, or the
settlement of any claim in respect thereof), be required to be returned or
repaid, the terms and conditions of this Article II shall, subject to the
provisions of Section 1.01(b), be fully applicable thereto until all such Senior
Obligations shall again have been paid in full in cash.
 
SECTION 2.07  Insurance. As between the Senior Secured Parties, the Senior
Collateral Agent, acting at the direction of the Applicable Authorized
Representative, shall have the right, to the extent authorized by the Senior
Subsidiary Security Agreement, to adjust or settle any insurance policy or claim
covering or constituting Shared Collateral in the event of any loss thereunder
and to approve any award granted in any condemnation or similar proceeding
affecting the Shared Collateral.
 
SECTION 2.08  Refinancings. The Senior Obligations of any Series may be
Refinanced, in whole or in part, with other Senior Obligations, in each case,
without notice to, or the consent (except to the extent a consent is otherwise
required to permit the refinancing transaction under any Senior Debt Document)
of any Senior Secured Party of any other Series, all without affecting the
priorities provided for herein or the other provisions hereof; provided that the
Authorized Representative of the holders of any such Refinancing indebtedness
shall have executed a Joinder Agreement on behalf of the holders of such
Refinancing indebtedness.
 
SECTION 2.09  Possessory Collateral Agent as Gratuitous Bailee for Perfection.
 
(a)  The Senior Collateral Agent agrees to hold any Shared Collateral
constituting Possessory Collateral that is part of the Senior Collateral in its
possession or control (or in the possession or control of its agents or bailees)
as gratuitous bailee for the benefit of each other Senior Secured Party solely
for the purpose of perfecting the security interest granted in such Possessory
Collateral, if any, pursuant to the applicable
 

 
 

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Senior Collateral Documents, in each case, subject to the terms and conditions
of this Section 2.09. Pending delivery to the Senior Collateral Agent, each
other Authorized Representative agrees to hold any Shared Collateral
constituting Possessory Collateral, from time to time in its possession, as
gratuitous bailee for the benefit of each other Senior Secured Party, solely for
the purpose of perfecting the security interest granted in such Possessory
Collateral, if any, pursuant to the applicable Senior Collateral Documents, in
each case, subject to the terms and conditions of this Section 2.09.
 
(b)  The duties or responsibilities of the Senior Collateral Agent and each
other Authorized Representative under this Section 2.09 shall be limited solely
to holding any Shared Collateral constituting Possessory Collateral as
gratuitous bailee for the benefit of each other Senior Secured Party for
purposes of perfecting the Lien held by such Senior Secured Parties therein.
 
ARTICLE III
 
Existence and Amounts of Liens and Obligations
 
Whenever the Senior Collateral Agent or any Authorized Representative shall be
required, in connection with the exercise of its rights or the performance of
its obligations hereunder, to determine the existence or amount of any Senior
Obligations of any Series, or the Shared Collateral subject to any Lien securing
the Senior Obligations of any Series, it may request that such information be
furnished to it in writing by each other Authorized Representative and shall be
entitled to make such determination on the basis of the information so
furnished; provided, however, that if an Authorized Representative shall fail or
refuse reasonably promptly to provide the requested information, the requesting
Senior Collateral Agent or Authorized Representative shall be entitled to make
any such determination by such method as it may, in the exercise of its good
faith judgment, determine, including by reliance upon a certificate of Rite
Aid.  The Senior Collateral Agent and each Authorized Representative may rely
conclusively, and shall be fully protected in so relying, on any determination
made by it in accordance with the provisions of the preceding sentence (or as
otherwise directed by a court of competent jurisdiction) and shall have no
liability to any Subsidiary Guarantor, any Senior Secured Party or any other
person as a result of such determination.
 
ARTICLE IV
 
The Senior Collateral Agent
 
SECTION 4.01  Appointment and Authority.
 
(a)  Each Senior Representative, on behalf of the Senior Secured Parties
represented by it, hereby irrevocably appoints Citicorp North America, Inc. (and
any successor thereto as Senior Collateral Agent pursuant to the definition of
the term “Senior Collateral Agent”) to act on its behalf as the Senior
Collateral Agent hereunder and under each of the other Senior Collateral
Documents and authorizes the Senior Collateral Agent to take such actions on its
behalf and to exercise such powers as are delegated to the
 

 
 

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Senior Collateral Agent by the terms hereof or thereof, including for purposes
of acquiring, holding and enforcing any and all Liens on Senior Collateral
granted by any Subsidiary Guarantor to secure any of the Senior Obligations,
together with such powers and discretion as are reasonably incidental thereto.
In this connection, the Senior Collateral Agent and any co-agents, sub-agents
and attorneys-in-fact appointed by the Senior Collateral Agent pursuant to
Section 4.05 for purposes of holding or enforcing any Lien on the Senior
Collateral (or any portion thereof) granted under any of the Senior Collateral
Documents, or for exercising any rights and remedies thereunder at the direction
of the Applicable Authorized Representative), shall be entitled to the benefits
of all provisions of this Article IV and Article VIII of the Senior Credit
Agreement and the equivalent provision of any Additional Senior Debt Facility
(as though such co-agents, sub-agents and attorneys-in-fact were the “Senior
Collateral Agent” under the Senior Collateral Documents) as if set forth in full
herein with respect thereto.
 
(b)  Upon execution and delivery of an instrument substantially in the form of
Annex 2 by an additional Senior Class Debt Representative in accordance with
Section 5.13, each then-existing Senior Class Debt Representative (the “Existing
Debt Representatives”) hereby authorizes and directs the Senior Collateral Agent
to execute and deliver such instrument substantially in the form of Annex 2 and
any other Senior Collateral Documents (and acknowledges that any Senior
Collateral Documents previously executed and delivered will be deemed to have
been executed and delivered) on behalf of all Existing Debt Representatives and
acknowledges and agrees that upon execution and delivery of such instrument
substantially in the form of Annex 1 and such other Senior Collateral Documents,
if any, the Senior Collateral Agent will act in its capacity as Senior
Collateral Agent for all Existing Debt Representatives and such additional
Senior Class Debt Representative.
 
(c)  Each Non-Controlling Secured Party acknowledges and agrees that the Senior
Collateral Agent shall be entitled, for the benefit of the Senior Secured
Parties, to sell, transfer or otherwise dispose of or deal with any Shared
Collateral as provided herein and in the Senior Collateral Documents, without
regard to any rights to which the Non-Controlling Secured Parties would
otherwise be entitled as a result of the Senior Obligations held by such
Non-Controlling Secured Parties. Without limiting the foregoing, each
Non-Controlling Secured Party agrees that none of the Senior Collateral Agent,
the Applicable Authorized Representative or any other Senior Secured Party shall
have any duty or obligation first to marshal or realize upon any type of Shared
Collateral (or any other Senior Collateral securing any of the Senior
Obligations), or to sell, dispose of or otherwise liquidate all or any portion
of such Shared Collateral (or any other Senior Collateral securing any Senior
Obligations), in any manner that would maximize the return to the
Non-Controlling Secured Parties, notwithstanding that the order and timing of
any such realization, sale, disposition or liquidation may affect the amount of
proceeds actually received by the Non-Controlling Secured Parties from such
realization, sale, disposition or liquidation. Each of the Senior Secured
Parties waives any claim it may now or hereafter have against the Senior
Collateral Agent or the Authorized Representative of any other Series of Senior
Obligations or any other Senior Secured Party of any other Series arising out of
(i) any actions which the Senior Collateral Agent, any Authorized Representative
or any Senior Secured Party takes or omits to take
 

 
 

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(including actions with respect to the creation, perfection or continuation of
Liens on any Senior Collateral, actions with respect to the foreclosure upon,
sale, release or depreciation of, or failure to realize upon, any of the Senior
Collateral and actions with respect to the collection of any claim for all or
any part of the Senior Obligations from any account debtor, guarantor or any
other party) in accordance with the Senior Collateral Documents or any other
agreement related thereto or to the collection of the Senior Obligations or the
valuation, use, protection or release of any security for the Senior
Obligations, (ii) any election by any Applicable Authorized Representative or
any holders of Senior Obligations, in any proceeding instituted under the
Bankruptcy Code, of the application of Section 1111(b) of the Bankruptcy Code or
(iii) subject to Section 2.05, any borrowing by, or grant of a security interest
or administrative expense priority under Section 364 of the Bankruptcy Code by,
Rite Aid or any of its subsidiaries, as debtor-in-possession. Notwithstanding
any other provision of this Agreement, the Senior Collateral Agent shall not
accept any Shared Collateral in full or partial satisfaction of any Senior
Obligations pursuant to Section 9-620 of the Uniform Commercial Code of any
jurisdiction, without the consent of each Authorized Representative representing
holders of Senior Obligations for whom such Senior Collateral constitutes Shared
Collateral.
 
SECTION 4.02  Rights as a Senior Secured Party.
 
The Person serving as the Senior Collateral Agent hereunder shall have the same
rights and powers in its capacity as a Senior Secured Party under any Series of
Senior Obligations that it holds as any other Senior Secured Party of such
Series and may exercise the same as though it were not the Senior Collateral
Agent and the term “Senior Secured Party” or “Senior Secured Parties” or (as
applicable) “Senior Loan Secured Party”, “Senior Loan Secured Parties”,
“Additional Senior Debt Party” or “Additional Senior Debt Parties” shall, unless
otherwise expressly indicated or unless the context otherwise requires, include
the Person serving as the Senior Collateral Agent hereunder in its individual
capacity. Such Person and its Affiliates may accept deposits from, lend money
to, act as the financial advisor or in any other advisory capacity for and
generally engage in any kind of business with Rite Aid or any Subsidiary or
other Affiliate thereof as if such Person were not the Senior Collateral Agent
hereunder and without any duty to account therefor to any other Senior Secured
Party.
 
SECTION 4.03  Exculpatory Provisions.
 
(a)  The Senior Collateral Agent shall not have any duties or obligations except
those expressly set forth herein and in the other Senior Collateral Documents.
Without limiting the generality of the foregoing, the Senior Collateral Agent:
 
 
(i)
shall not be subject to any fiduciary or other implied duties, regardless of
whether an Event of Default has occurred and is continuing;

 
 
(ii)
shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Senior Collateral Documents that the Senior
Collateral Agent is required to exercise as

 

 
 

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    directed in writing by the Applicable Authorized Representative; provided
that the Senior Collateral Agent shall not be required to take any action that,
in its opinion or the opinion of its counsel, may expose the Senior Collateral
Agent to liability or that is contrary to any Senior Collateral Document or
applicable law;      
 
(iii)
shall not, except as expressly set forth herein and in the other Senior
Collateral Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to Rite Aid or any of its
Affiliates that is communicated to or obtained by the Person serving as the
Senior Collateral Agent or any of its Affiliates in any capacity;

 
 
(iv)
shall not be liable for any action taken or not taken by it (i) with the consent
or at the request of the Applicable Authorized Representative or (ii) in the
absence of its own gross negligence or willful misconduct or (iii) in reliance
on a certificate of an authorized officer of Rite Aid stating that such action
is permitted by the terms of this Agreement. The Senior Collateral Agent shall
be deemed not to have knowledge of any Event of Default under any Series of
Senior Obligations unless and until notice describing such Event Default is
given to the Senior Collateral Agent by the Authorized Representative of such
Senior Obligations or Rite Aid; and

 
 
(v)
shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement or any other Senior Collateral Document, (ii) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any default or event of default under any Senior
Debt Document, (iv) the validity, enforceability, effectiveness or genuineness
of this Agreement, any other Senior Collateral Document or any other agreement,
instrument or document, or the creation, perfection or priority of any Lien
purported to be created by the Senior Collateral Documents, (v) the value or the
sufficiency of any Senior Collateral for any Series of Senior Obligations, or
(i) the satisfaction of any condition set forth in any Senior Debt Document,
other than to confirm receipt of items expressly required to be delivered to the
Senior Collateral Agent.

 
SECTION 4.04  Reliance by Senior Collateral Agent.
 
The Senior Collateral Agent shall be entitled to rely upon, and shall not incur
any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or
 

 
 

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intranet website posting or other distribution) believed by it to be genuine and
to have been signed, sent or otherwise authenticated by the proper Person.  The
Senior Collateral Agent also may rely upon any statement made to it orally or by
telephone and believed by it to have been made by the proper Person, and shall
not incur any liability for relying thereon. The Senior Collateral Agent may
consult with legal counsel (who may be counsel for Rite Aid), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
 
SECTION 4.05  Delegation of Duties.
 
The Senior Collateral Agent may perform any and all of its duties and exercise
its rights and powers hereunder or under any other Senior Collateral Document by
or through any one or more sub-agents appointed by the Senior Collateral Agent.
The Senior Collateral Agent and any such sub-agent may perform any and all of
its duties and exercise its rights and powers by or through their respective
Affiliates. The exculpatory provisions of this Article shall apply to any such
sub-agent and to the Affiliates of the Senior Collateral Agent and any such
sub-agent.
 
SECTION 4.06  Resignation of Senior Collateral Agent.
 
The Senior Collateral Agent may at any time give notice of its resignation as
Senior Collateral Agent under this Agreement and the other Senior Collateral
Documents to each Authorized Representative and Rite Aid.  Upon receipt of any
such notice of resignation, the Applicable Authorized Representative shall have
the right, in consultation with Rite Aid, to appoint a successor, which shall be
a bank with an office in the United States, or an Affiliate of any such bank
with an office in the United States. If no such successor shall have been so
appointed by the Applicable Authorized Representative and shall have accepted
such appointment within 30 days after the retiring Senior Collateral Agent gives
notice of its resignation, then the retiring Senior Collateral Agent may, on
behalf of the Senior Secured Parties, appoint a successor Senior Collateral
Agent meeting the qualifications set forth above; provided that if the Senior
Collateral Agent shall notify Rite Aid and each Authorized Representative that
no qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (a) the retiring
Senior Collateral Agent shall be discharged from its duties and obligations
hereunder and under the other Senior Collateral Documents (except that in the
case of any Senior Collateral security held by the Senior Collateral Agent on
behalf of the Senior Secured Parties under any of the Senior Collateral
Documents, the retiring Senior Collateral Agent shall continue to hold such
Senior Collateral security solely for purposes of maintaining the perfection of
the security interests of the Senior Secured Parties therein until such time as
a successor Senior Collateral Agent is appointed but with no obligation to take
any further action at the request of the Applicable Authorized Representative or
any other Senior Secured Parties) and (b) all payments, communications and
determinations provided to be made by, to or through the Senior Collateral Agent
shall instead be made by or to each Authorized Representative directly, until
such time as the Applicable Authorized Representative appoints a successor
Senior Collateral Agent as provided for above in this
 

 
 

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Section. Upon the acceptance of a successor’s appointment as Senior Collateral
Agent hereunder and under the Senior Collateral Documents, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring (or retired) Senior Collateral Agent, and the retiring
Senior Collateral Agent shall be discharged from all of its duties and
obligations hereunder or under the other Senior Collateral Documents (if not
already discharged therefrom as provided above in this Section).  After the
retiring Senior Collateral Agent’s resignation hereunder and under the other
Senior Collateral Documents, the provisions of this Article and Article VIII of
the Senior Credit Agreement and the equivalent provision of any Additional
Senior Debt Facility shall continue in effect for the benefit of such retiring
Senior Collateral Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while the
retiring Senior Collateral Agent was acting as Senior Collateral Agent.  Upon
any notice of resignation of the Senior Collateral Agent hereunder and under the
other Senior Collateral Documents, Rite Aid agrees to use commercially
reasonable efforts to transfer (and maintain the validity and priority of) the
Liens in favor of the retiring Senior Collateral Agent under the Senior
Collateral Documents to the successor Senior Collateral Agent.
 
SECTION 4.07  Non-Reliance on Senior Collateral Agent and other Senior Secured
Parties.
 
Each Senior Secured Party acknowledges that it has, independently and without
reliance upon the Senior Collateral Agent, any Authorized Representative or any
other Senior Secured Party or any of their Affiliates and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Senior Debt
Documents.  Each Senior Secured Party also acknowledges that it will,
independently and without reliance upon the Senior Collateral Agent, any
Authorized Representative or any other Senior Secured Party or any of their
Affiliates and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Senior Debt Document
or any related agreement or any document furnished hereunder or thereunder.
 
SECTION 4.08  Senior Collateral and Guaranty Matters.
 
Each of the Senior Secured Parties irrevocably authorizes the Senior Collateral
Agent, at its option and in its discretion,
 
(a)  to release any Lien on any property granted to or held by the Senior
Collateral Agent under any Senior Collateral Document in accordance with
Section 2.04 or upon receipt of a written request from Rite Aid stating that the
release of such Lien is permitted by the terms of each then extant Senior Debt
Document;
 
(b)  to release any Subsidiary Guarantor from its obligations under the Senior
Collateral Documents upon receipt of a written request from Rite Aid stating
that such release is permitted by the terms of each then extant Senior Debt
Document.
 

 
 

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ARTICLE V
 
Miscellaneous
 
SECTION 5.01  Notices. All notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:
 
(a)  if to the Senior Collateral Agent or the Administrative Agent, to it at 388
Greenwich Street, New York, NY 10013, Attention of Thomas Halsch, Telecopy No.
(646) 328-3784;
 
(b)  if to the Initial Additional Senior Representative, to it at 2 North
LaSalle Street, Suite 1020, Chicago, IL 60602, Attention: Corporate Trust
Administration (Telecopy No. (312) 827-8542);
 
(c)  if to any other Senior Representative, to it at the address set forth in
the applicable Joinder Agreement.
 
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt (if
a Business Day) and on the next Business Day thereafter (in all other cases) if
delivered by hand or overnight courier service or sent by telecopy or on the
date five Business Days after dispatch by certified or registered mail if
mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 5.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 5.01.
As agreed to in writing among the Senior Collateral Agent and each Authorized
Representative from time to time, notices and other communications may also be
delivered by e-mail to the e-mail address of a representative of the applicable
person provided from time to time by such person.
 
SECTION 5.02  Waivers; Amendment; Joinder Agreements.
 
(a)  No failure or delay on the part of any party hereto in exercising any right
or power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.  The
rights and remedies of the parties hereto are cumulative and are not exclusive
of any rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by any party therefrom
shall in any event be effective unless the same shall be permitted by paragraph
(b) of this Section, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given.  No notice or demand
on any party hereto in any case shall entitle such party to any other or further
notice or demand in similar or other circumstances.
 

 
 

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(b)  Neither this Agreement nor any provision hereof may be terminated, waived,
amended or modified (other than pursuant to any Joinder Agreement) except
pursuant to an agreement or agreements in writing entered into by each
Authorized Representative and the Senior Collateral Agent (and with respect to
any such termination, waiver, amendment or modification which by the terms of
this Agreement requires Rite Aid’s consent or which increases the obligations or
reduces the rights of Rite Aid or any Subsidiary Guarantor, with the consent of
Rite Aid).
 
(c)  Notwithstanding the foregoing, without the consent of any Senior Secured
Party, any Authorized Representative may become a party hereto by execution and
delivery of a Joinder Agreement in accordance with Section 5.13 and upon such
execution and delivery, such Authorized Representative and the Additional Senior
Debt Parties and Additional Senior Debt Obligations of the Series for which such
Authorized Representative is acting shall be subject to the terms hereof and the
terms of the other Senior Collateral Documents applicable thereto.
 
(d)  Notwithstanding the foregoing, without the consent of any other Authorized
Representative or Senior Secured Party, the Senior Collateral Agent may effect
amendments and modifications to this Agreement to the extent necessary to
reflect any incurrence of any Additional Senior Debt in compliance with the
Senior Debt Documents and the Second Priority Debt Documents.
 
SECTION 5.03  Parties in Interest. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, as well as the other Senior Secured Parties, all of whom are intended
to be bound by, and to be third party beneficiaries of, this Agreement.
 
SECTION 5.04  Survival of Agreement. All covenants, agreements, representations
and warranties made by any party in this Agreement shall be considered to have
been relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement.
 
SECTION 5.05  Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original but all of which when taken together shall
constitute a single contract. Delivery of an executed signature page to this
Agreement by facsimile or electronic transmission shall be effective as delivery
of a manually signed counterpart of this Agreement.
 
SECTION 5.06  Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.  The
parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
 

 
 

--------------------------------------------------------------------------------

 

SECTION 5.07  Governing Law; Jurisdiction.
 
(a)  This Agreement shall be construed in accordance with and governed by the
law of the State of New York.
 
SECTION 5.08  Submission To Jurisdiction Waivers; Consent to Service of Process.
The Senior Collateral Agent and each Authorized Representative, on behalf of
itself and the Senior Secured Parties of the Series for whom it is acting,
irrevocably and unconditionally :
 
(a)  submits for itself and its property in any legal action or proceeding
relating to this Agreement and the Senior Collateral Documents, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America in the Southern District of New York, and
appellate courts from any thereof;
 
(b)  consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;
 
(c)  agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Person (or its
Authorized Representative) at the address referred to in 5.01;
 
(d)  agrees that nothing herein shall affect the right of any other party hereto
(or any Senior Secured Party) to effect service of process in any other manner
permitted by law or shall limit the right of any party hereto (or any Senior
Secured Party) to sue in any other jurisdiction; and
 
(e)  waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section 5.08 any special, exemplary, punitive or consequential damages.
 
SECTION 5.09  WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
 
SECTION 5.10  Headings. Article, Section and Annex headings used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
 
SECTION 5.11  Conflicts. In the event of any conflict or inconsistency between
the provisions of this Agreement and the provisions of any of the other Senior
 

 
 

--------------------------------------------------------------------------------

 

Debt Documents or Senior Collateral Documents, the provisions of this Agreement
shall control.
 
SECTION 5.12  Provisions Solely to Define Relative Rights. The provisions of
this Agreement are and are intended solely for the purpose of defining the
relative rights of the Senior Secured Parties in relation to one another.  None
of Rite Aid, any Subsidiary Guarantor or any other creditor thereof shall have
any rights or obligations hereunder, except as expressly provided in this
Agreement (provided that nothing in this Agreement (other than Section 2.04,
2.05, 2.08, 2.09 or Article V) is intended to or will amend, waive or otherwise
modify the provisions of the Senior Credit Agreement or any Additional Senior
Debt Facilities), and none of Rite Aid or any Subsidiary Guarantor may rely on
the terms hereof (other than Sections 2.04, 2.05, 2.08, 2.09 and
Article V).  Nothing in this Agreement is intended to or shall impair the
obligations of any Subsidiary Guarantor, which are absolute and unconditional,
to pay the Senior Obligations as and when the same shall become due and payable
in accordance with their terms.
 
SECTION 5.13  Additional Senior Debt.  To the extent, but only to the
extent  permitted by the provisions of the Senior Debt Documents and the Second
Priority Debt Documents, Rite Aid may incur or issue and sell one or more series
or classes of Senior Facilities.  Any such additional class or series of
Additional Senior Debt (the “Senior Class Debt”) may be secured by the Senior
Lien and may be Guaranteed by the Subsidiary Guarantors on a senior basis, in
each case under and pursuant to the Senior Collateral Documents, if and subject
to the condition that the Representative of any such Senior Class Debt (each, a
“Senior Class Debt Representative”), acting on behalf of the holders of such
Senior Class Debt (such Representative and holders in respect of any Senior
Class Debt being referred to as the “Senior Class Debt Parties”), becomes a
party to this Agreement by satisfying the conditions set forth in clauses (i)
through (v) of the immediately succeeding paragraph.
 
In order for a Senior Class Debt Representative to become a party to this
Agreement,
 
 
(i)
such Senior Class Debt Representative, the Senior Collateral Agent and each
Subsidiary Guarantor shall have executed and delivered an instrument
substantially in the form of Annex 2 (with such changes as may be approved by
the Senior Collateral Agent and such Senior Class Representative) pursuant to
which such Senior Class Debt Representative becomes an Authorized Representative
hereunder, and the Senior Class Debt in respect of which such Senior Class Debt
Representative is the Representative and the related Senior Class Debt Parties
become subject hereto and bound hereby;

 
 
(ii)
Rite Aid shall have delivered to the Senior Collateral Agent and the Second
Priority Collateral Trustee true and complete copies of each of the Senior Debt
Documents relating to such Senior Class Debt, certified as being true and
correct by a Financial Officer of Rite Aid;

 

 
 

--------------------------------------------------------------------------------

 

 
(iii)
all filings, recordations and/or amendments or supplements to the Senior
Collateral Documents necessary or desirable in the reasonable judgment of the
Senior Collateral Agent to confirm and perfect the Senior Liens securing the
relevant Senior Obligations relating to such Senior Class Debt shall have been
made, executed and/or delivered (or, with respect to any such filings or
recordations, acceptable provisions to perform such filings or recordings have
been taken in the reasonable judgment of the Senior Collateral Agent), and all
fees and taxes in connection therewith shall have been paid;

 
 
(iv)
the Senior Debt Documents, as applicable, relating to such Senior Class Debt
shall provide, in a manner reasonably satisfactory to the Senior Collateral
Agent, that each Senior Class Debt Party with respect to such Senior Class Debt
will be subject to and bound by the provisions of this Agreement in its capacity
as a holder of such Senior Class Debt; and

 
 
(v)
the Senior Collateral Agent and the Second Priority Collateral Trustee shall
have received such opinions of outside counsel to Rite Aid and such Senior Class
Debt Representative as any of them may request and such other documents relating
to the matters referred to in clauses (i), (ii) and (iii) as any of them may
reasonably request, and such opinions and other documents shall be reasonably
satisfactory in form and substance to the Senior Collateral Agent and the Second
Priority Collateral Trustee.

 
SECTION 5.14 Integration. This Agreement together with the other Senior Debt
Documents, including the Senior Collateral Documents, represents the agreement
of each of the Subsidiary Guarantors and the Senior Secured Parties with respect
to the subject matter hereof and there are no promises, undertakings,
representations or warranties by any Subsidiary Guarantor, the Senior Collateral
Agent, any Authorized Representative or any other Senior Secured Party relative
to the subject matter hereof not expressly set forth or referred to herein or in
the other Senior Debt Documents or the Senior Collateral Documents.
 
SECTION 5.15 Rights of Authorized Representatives. Any trustee or other
Authorized Representative under any Additional Senior Debt Facility that becomes
a party hereto shall have all the rights, privileges, protections, immunities,
benefits and indemnities granted to it under the applicable indenture or other
agreement that constitutes such Additional Senior Debt Facility as if such
rights, privileges, protections, immunities, benefits and indemnities were set
forth herein in full.
 
[Remainder of this page intentionally left blank]
 

 
 

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
 

 
RITE AID CORPORATION,
                 
By
 
/s/ Marc A. Strassler
   
Name:
Marc A. Strassler
   
Title:
Executive Vice President, General
     
Counsel and Secretary
       

     
THE SUBSIDIARY GUARANTORS LISTED ON ANNEX 1 HERETO,
                 
By
 
/s/ Marc A. Strassler
   
Name:
Marc A. Strassler
   
Title:
Authorized Person
               

[Signature Page to Senior Lien Intercreditor Agreement]
 
 

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CITICORP NORTH AMERICA, INC.,
as Administrative Agent and Senior Collateral Agent
                 
By
 
/s/ David Leland
   
Name:
David Leland
   
Title:
Vice President
               

 
 

--------------------------------------------------------------------------------

 

 
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Initial Additional
Senior Representative
                 
By
 
/s/ D. G. Donovan
   
Name:
D. G. Donovan
   
Title:
Vice President
               

 
 

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Annex 2 to the
Senior Lien Intercreditor Agreement

SUBSIDIARY GUARANTORS
 

 
1.
112 Burleigh Avenue Norfolk, LLC

 
2.
1515 West State Street Boise, Idaho, LLC

 
3.
1740 Associates, L.L.C.

 
4.
3581 Carter Hill Road–Montgomery Corp.

 
5.
4042 Warrensville Center Road – Warrensville Ohio, Inc.

 
6.
5277 Associates, Inc.

 
7.
537 Elm Street Corp.

 
8.
5600 Superior Properties, Inc.

 
9.
657-659 Broad St. Corp.

 
10.
764 South Broadway-Geneva, Ohio, LLC

 
11.
Ann & Government Streets - Mobile, Alabama, LLC

 
12.
Apex Drug Stores, Inc.

 
13.
Broadview and Wallings-Broadview Heights Ohio, Inc.

 
14.
Brooks Pharmacy, Inc.

 
15.
Central Avenue and Main Street - Petal, MS, LLC

 
16.
Eagle Managed Care Corp.

 
17.
Eckerd Corporation

 
18.
Eckerd Fleet, Inc.

 
19.
EDC Drug Stores, Inc.

 
20.
Eighth and Water Streets – Urichsville, Ohio, LLC

 
21.
England Street-Asheland Corporation

 
22.
Fairground, L.L.C.

 
23.
GDF, Inc.

 

 
 
 

--------------------------------------------------------------------------------

 

24.
Genovese Drug Stores, Inc.

 
25.
Gettysburg and Hoover-Dayton, Ohio, LLC

 
26.
Harco, Inc.

 
27.
K & B Alabama Corporation

 
28.
K & B Louisiana Corporation

 
29.
K & B Mississippi Corporation

 
30.
K & B Services, Incorporated

 
31.
K & B Tennessee Corporation

 
32.
K&B Texas Corporation

 
33.
K & B, Incorporated

 
34.
Keystone Centers, Inc.

 
35.
Lakehurst and Broadway Corporation

 
36.
Maxi Drug North, Inc.

 
37.
Maxi Drug South, L.P.

 
38.
Maxi Drug, Inc.

 
39.
Maxi Green Inc.

 
40.
Mayfield & Chillicothe Roads – Chesterland, LLC

 
41.
MC Woonsocket, Inc.

 
42.
Munson & Andrews, LLC

 
43.
Name Rite, L.L.C.

 
44.
Northline & Dix – Toledo – Southgate, LLC

 
45.
P.J.C. Distribution, Inc.

 
46.
P.J.C. Realty Co., Inc.

 
47.
Patton Drive and Navy Boulevard Property Corporation

 
48.
Paw Paw Lake Road & Paw Paw Avenue–Coloma, Michigan, LLC

 

 
 

--------------------------------------------------------------------------------

 

49.
PDS-1 Michigan, Inc.

 
50.
Perry Distributors, Inc.

 
51.
Perry Drug Stores, Inc.

 
52.
PJC Dorchester Realty LLC

 
53.
PJC East Lyme Realty LLC

 
54.
PJC Haverhill Realty LLC

 
55.
PJC Hermitage Realty LLC

 
56.
PJC Hyde Park Realty LLC

 
57.
PJC Lease Holdings, Inc.

 
58.
PJC Manchester Realty LLC

 
59.
PJC Mansfield Realty LLC

 
60.
PJC New London Realty LLC

 
61.
PJC of Cranston, Inc.

 
62.
PJC of East Providence, Inc.

 
63.
PJC of Massachusetts, Inc.

 
64.
PJC of Rhode Island, Inc.

 
65.
PJC of Vermont Inc.

 
66.
P.J.C. of West Warwick, Inc.

 
67.
PJC Peterborough Realty LLC

 
68.
PJC Providence Realty LLC

 
69.
PJC Realty MA, Inc.

 
70.
PJC Realty N.E. LLC

 
71.
PJC Revere Realty LLC

 
72.
PJC Special Realty Holdings, Inc.

 
73.
Ram-Utica, Inc.

 

 
 

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74.
RDS Detroit, Inc.

 
75.
Read's Inc.

 
76.
Rite Aid Drug Palace, Inc.

 
77.
Rite Aid Hdqtrs. Corp.

 
78.
Rite Aid of Alabama, Inc.

 
79.
Rite Aid of Connecticut, Inc.

 
80.
Rite Aid of Delaware, Inc.

 
81.
Rite Aid of Florida, Inc.

 
82.
Rite Aid of Georgia, Inc.

 
83.
Rite Aid of Illinois, Inc.

 
84.
Rite Aid of Indiana, Inc.

 
85.
Rite Aid of Kentucky, Inc.

 
86.
Rite Aid of Maine, Inc.

 
87.
Rite Aid of Maryland, Inc.

 
88.
Rite Aid of Massachusetts, Inc.

 
89.
Rite Aid of Michigan, Inc.

 
90.
Rite Aid of New Hampshire, Inc.

 
91.
Rite Aid of New Jersey, Inc.

 
92.
Rite Aid of New York, Inc.

 
93.
Rite Aid of North Carolina, Inc.

 
94.
Rite Aid of Ohio, Inc.

 
95.
Rite Aid of Pennsylvania, Inc.

 
96.
Rite Aid of South Carolina, Inc.

 
97.
Rite Aid of Tennessee, Inc.

 
98.
Rite Aid of Vermont, Inc.

 

 
 

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99.
Rite Aid of Virginia, Inc.

 
100.
Rite Aid of Washington, D.C., Inc.

 
101.
Rite Aid of West Virginia, Inc.

 
102.
Rite Aid Realty Corp.

 
103.
Rite Aid Rome Distribution Center, Inc.

 
104.
Rite Aid Services, L.L.C.

 
105.
Rite Aid Transport, Inc.

 
106.
RX Choice, Inc.

 
107.
Seven Mile and Evergreen – Detroit, LLC

 
108.
Silver Springs Road – Baltimore, Maryland/One, LLC

 
109.
Silver Springs Road – Baltimore, Maryland/Two, LLC

 
110.
State & Fortification Streets – Jackson, Mississippi, LLC

 
111.
State Street and Hill Road – Gerard, Ohio, LLC

 
112.
The Lane Drug Company

 
113.
Thrift Drug Services, Inc.

 
114.
Thrift Drug, Inc.

 
115.
Thrifty Corporation

 
116.
Thrifty PayLess, Inc.

 
117.
Tyler and Sanders Roads, Birmingham - Alabama, LLC

 
118.
Rite Aid Payroll Management, Inc.

 
119.
Rite Aid Online Store, Inc.

 
120.
Rite Fund, Inc.

 
121.
Rite Investments Corp.

 
122.
Rite Aid Hdqtrs. Funding, Inc.

 
123.
EDC Licensing, Inc.

 

 
 

--------------------------------------------------------------------------------

 

124.
JCG Holdings (USA), Inc.

 
125.
JCG (PJC) USA, LLC

 
126.
The Jean Coutu Group (PJC) USA, Inc.

 

 
 

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Annex 2 to the
Senior Lien Intercreditor Agreement

REPRESENTATIVE SUPPLEMENT NO.    dated as of     , to the SENIOR LIEN
INTERCREDITOR AGREEMENT dated as of June 12, 2009 (the “Senior Lien
Intercreditor Agreement”), among Citicorp North America, Inc., a Delaware
corporation (“CNAI”),  as Senior Collateral Agent for the Senior Secured Parties
under the Senior Collateral Documents, CNAI, as Authorized Representative under
the Senior Credit Agreement, The Bank of New York Mellon Trust Company, N.A., as
Initial Additional Authorized Representative, and the additional Authorized
Representatives from time to time a party thereto.
 
A.  Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Senior Lien Intercreditor Agreement,
including the Definitions Annex referred to therein.
 
B.  As a condition to the ability of Rite Aid to issue Additional Senior Debt
and to secure such Senior Class Debt with the Senior Lien and to have such
Senior Class Debt guaranteed by the Subsidiary Guarantors on a senior basis, in
each case under and pursuant to the Senior Collateral Documents, the Senior
Class Debt Representative in respect of such Senior Class Debt is required to
become an Authorized Representative under, and such Senior Class Debt and the
Senior Class Debt Parties in respect thereof are required to become subject to
and bound by, the Senior Lien Intercreditor Agreement.  Section 5.13 of the
Senior Lien Intercreditor Agreement provides that such Senior Class Debt
Representative may become an Authorized Representative under, and such Senior
Class Debt and such Senior Class Debt Parties may become subject to and bound
by, the Senior Lien Intercreditor Agreement, pursuant to the execution and
delivery by the Senior Class Representative of an instrument in the form of this
Representative Supplement and the satisfaction of the other conditions set forth
in Section 5.13 of the Senior Lien Intercreditor Agreement.  The undersigned
Senior Class Debt Representative (the “New Representative”) is executing this
Representative Supplement in accordance with the requirements of the Senior Debt
Documents.
 
Accordingly, the Senior Collateral Agent and the New Representative agree as
follows:
 
SECTION 1.  In accordance with Section 5.13 of the Senior Lien Intercreditor
Agreement, the New Representative by its signature below becomes an Authorized
Representative under, and the related Senior Class Debt and Senior Class Debt
Parties become subject to and bound by, the Senior Lien Intercreditor Agreement
with the same force and effect as if the New Representative had originally been
named therein as an Authorized Representative, and the New Representative, on
behalf of itself and such Senior Class Debt Parties, hereby agrees to all the
terms and provisions of the Senior Lien Intercreditor Agreement applicable to it
as a Senior Representative and Authorized Representative and to the Senior Class
Debt Parties that it represents as Additional Senior Debt Parties.  Each
reference to a “Representative”, “Senior Representative” or “Authorized
Representative” in the Senior Lien Intercreditor
 

 
 

--------------------------------------------------------------------------------

 

Agreement shall be deemed to include the New Representative.  The Senior Lien
Intercreditor Agreement is hereby incorporated herein by reference.
 
The New Representative and [Citicorp North America, Inc.], on behalf of the
Senior Secured Parties, hereby irrevocably (i) appoint [Citicorp North America,
Inc.] as Senior Collateral Agent for purposes of the Senior Lien Intercreditor
Agreement and the other Senior Collateral Documents, (ii) authorize the Senior
Collateral Agent to take such actions on its behalf and to exercise such powers
as are delegated to the Senior Collateral Agent in the Senior Collateral
Documents, together with such actions and powers as are reasonably incidental
thereto, and (iii) authorize the Senior Collateral Agent to execute any Senior
Collateral Documents on behalf of all Senior Secured Parties and to take such
other actions to maintain and preserve the security interests granted pursuant
to any Senior Collateral Documents.  The New Representative hereby acknowledges
and agrees that the Senior Collateral Agent in its capacity as such shall be
acting on its behalf and on behalf of all other Senior Secured Parties.

SECTION 2.  The New Representative represents and warrants to the Senior
Collateral Agent and the other Senior Secured Parties that (i) it has full power
and authority to enter into this Representative Supplement, in its capacity as
[agent] [trustee], (ii) this Representative Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with the terms of such
Agreement and (iii) the Additional Senior Debt Documents relating to such Senior
Class Debt provide that, upon the New Representative’s entry into this
Agreement, the Senior Class Debt Parties in respect of such Senior Class Debt
will be subject to and bound by the provisions of the Senior Lien Intercreditor
Agreement as Additional Senior Debt Parties.
 
SECTION 3.  This Representative Supplement may be executed in counterparts, each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This Representative Supplement shall become
effective when the Senior Collateral Agent shall have received a counterpart of
this Representative Supplement that bears the signature of the New
Representative.  Delivery of an executed signature page to this Representative
Supplement by facsimile transmission shall be effective as delivery of a
manually signed counterpart of this Representative Supplement.
 
SECTION 4.  Except as expressly supplemented hereby, the Senior Lien
Intercreditor Agreement shall remain in full force and effect.
 
SECTION 5.  THIS REPRESENTATIVE SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
SECTION 6.  In case any one or more of the provisions contained in this
Representative Supplement should be held invalid, illegal or unenforceable in
any respect, no party hereto shall be required to comply with such provision for
so long as such provision is held to be invalid, illegal or unenforceable, but
the validity, legality and
 

 
 

--------------------------------------------------------------------------------

 

enforceability of the remaining provisions contained herein and in the Senior
Lien Intercreditor Agreement shall not in any way be affected or impaired.  The
parties hereto shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
 
SECTION 7.  All communications and notices hereunder shall be in writing and
given as provided in Section 5.01 of the Senior Lien Intercreditor
Agreement.  All communications and notices hereunder to the New Representative
shall be given to it at the address set forth below its signature hereto.
 
By acknowledging and agreeing to this Representative Supplement, each of the
Subsidiary Guarantors party hereto hereby (i) reaffirms the security interests
granted pursuant to the Senior Subsidiary Security Agreement and grants a
security interest in all of its right, title and interest in the Senior
Collateral (as defined in the Senior Subsidiary Security Agreement), whether now
owned or hereafter acquired, to secure the Senior Obligations and
(ii) authorizes the filing of any financing statements describing the Senior
Collateral in any manner the Senior Collateral Agent chooses, including, without
limitation, describing such Senior Collateral as “all assets of debtor, whether
now owned or hereafter acquired,” “all personal property of debtor, whether now
owned or hereafter acquired” or using words of similar import.
 

 
 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the New Representative and the Senior Collateral Agent have
duly executed this Representative Supplement to the Senior Lien Intercreditor
Agreement as of the day and year first above written.
 

 
[NAME OF NEW REPRESENTATIVE], as
[                 ] for the holders of
[                                  ],
                 
By
       
Name:
     
Title:
Authorized Signatory
                       

 
Address for notices:
                                           
attention of:
             
Telecopy:
 

Acknowledged by:

CITICORP NORTH AMERICA, INC.,
as Senior Collateral Agent,

By
     
Name:
     
Title:
   

THE SUBSIDIARY GUARANTORS
LISTED ON SCHEDULE 1 HERETO,

By
     
Name:
     
Title:
   

 
 

--------------------------------------------------------------------------------

 
Schedule 1 to Annex 2  to the
Senior Lien Intercreditor Agreement

Subsidiary Guarantors