Exhibit 10.2

EXECUTION VERSION

FIRST AMENDMENT AND RESTATEMENT AND WAIVER dated as of June 4, 2007 (this
“Amendment”) to the Amendment and Restatement Agreement dated as of November 8,
2006 (as amended, supplemented or otherwise modified from time to time, the
“Original Amendment and Restatement”) relating to the Credit Agreement dated as
of June 27, 2001, as amended and restated as of September 30, 2005 (the
“Original Credit Agreement”), among Rite Aid Corporation, a corporation
organized under the laws of the State of Delaware (the “Borrower”), the lenders
from time to time party thereto (the “Lenders”), Citicorp North America, Inc.,
as administrative agent and collateral processing agent (in such capacities, the
“Agent”) and Bank of America, N.A., as syndication agent.

WHEREAS the Borrower, the Agent and the Required Lenders have agreed, on the
terms and subject to the conditions set forth herein, to amend and restate the
Original Amendment and Restatement in the manner set forth herein.

WHEREAS the Borrower may form a new wholly owned subsidiary (“Escrow Corp”)
which, if formed, will (i) be the assignee of the Borrower’s rights and
obligations under the Acquisition Agreement (as defined in the Original
Amendment and Restatement), (ii) not be a Subsidiary Loan Party, (iii) issue
notes guaranteed by certain subsidiaries of the Borrower (the “Escrow Notes”)
constituting New Notes (as defined in the Second Restated Credit Agreement) and
will deposit the proceeds thereof into a segregated account under the sole
control of the trustee or other escrow agent (the “Escrow Account”), (iv) grant
a first priority security interest in the Escrow Account for the ratable benefit
of the holders of the Escrow Notes (the “Escrow Account Lien”) and (v) either
(a) merge with and into the Borrower with the Borrower being the surviving
entity and assuming the Escrow Notes (the “Escrow Merger”) or (b) redeem the
Escrow Notes if the Acquisition is not be consummated on or before July 6, 2007
(the “Escrow Note Redemption”).

WHEREAS, if the Borrower forms the Escrow Corp, the Borrower intends to
contribute to Escrow Corp (the “Escrow Contribution”) an amount equal to the
difference between the gross proceeds of the Escrow Notes and the amount that is
100% of the aggregate principal amount of the Escrow Notes on July 6, 2007 plus
accrued interest on the Escrow Notes to (but not including) the date on which
Escrow Corp redeems the Escrow Notes (the transactions described in this and the
next preceding recital and any related transactions are collectively referred to
as the “Escrow Arrangements”).

NOW, THEREFORE, in consideration of the above premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

SECTION 1.   Defined Terms; Interpretation.   (a) Each capitalized term defined
in both the Original Credit Agreement, as amended and restated in the form set
forth in Exhibit A to Annex I hereto (the “First Restated Credit Agreement”) and
the First Restated Credit Agreement, as amended and restated in the form set
forth in Exhibit B to Annex I hereto (the “Second Restated Credit Agreement”)
and not defined herein shall have the meaning assigned to it (a) in respect of
any period prior to the Second Restatement Effective Date, in the First Restated
Credit Agreement and (b) in respect of any period from and after the Second
Restatement Effective Date, the Second Restated Credit Agreement. Each
capitalized term defined in the Second Restated Credit Agreement (and not in the
First Restated Credit Agreement) and not defined herein shall have the meaning
assigned to it in the Second Restated Credit Agreement.

(b)        The rules of construction specified in Section 1.03 of the Second
Restated Credit Agreement also apply to this Amendment.

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

SECTION 2. First Amendment and Restatement to the Original Amendment and
Restatement. Effective as of the First Amendment Effective Date (as defined
below), the Original Amendment and Restatement is hereby amended by restating
the Original Amendment and Restatement in the form of the Amendment and
Restatement Agreement attached as Annex I hereto.

SECTION 3. Waiver. Effective as of the Waiver Effective Date (as defined below),
the Lenders hereby waive compliance with the provisions of the Credit Agreement
by the Borrower and Escrow Corp, to the extent and only to the extent, necessary
to permit the consummation of the Escrow Arrangements (including permitting the
Escrow Corp not to become a Subsidiary Loan Party) until the earlier of (a) the
Second Restatement Effective Date, (b) July 6, 2007 and (c) the Escrow Note
Redemption.

SECTION 4. Representations and Warranties. The Borrower hereby represents and
warrants to the Agent and the Lenders (as defined in the First Restated Credit
Agreement) that as of the First Amendment Effective Date and after giving effect
hereto:

(a)        This Amendment has been duly authorized, executed and delivered by
the Borrower and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

(b)        The representations and warranties set forth in Article III of the
First Restated Credit Agreement are true and correct in all material respects on
and as of the First Amendment Effective Date, with the same effect as though
made on and as of the First Amendment Effective Date, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties were true and correct in all material
respects as of such earlier date).

(c)        No Default (as defined in the First Restated Credit Agreement) or
Event of Default (as defined in the First Restated Credit Agreement) has
occurred and is continuing.

SECTION 5. Effectiveness. (a) The amendment and restatement contemplated by
Section 2 shall become effective as of the first date (the “First Amendment
Effective Date”) on which:

(i)   The Agent shall have received counterparts hereof duly executed and
delivered by each of the Borrower and the Required Lenders.

(ii)  The Agent shall have received a favorable legal opinion of each of
(i) Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Borrower and
(ii) Robert Sari, General Counsel of the Borrower, in each case addressed to the
Agent and the Lenders and dated the First Amendment Effective Date, in
substantially the forms of Exhibits J-1 and J-2 to the Original Credit
Agreement, modified, however, to address this Amendment, and covering such other
matters relating to the Loan Parties, the other Senior Loan Documents, the
Senior Collateral and the transactions contemplated hereby to occur on the First
Amendment Effective Date as the Agent may reasonably request, and otherwise
reasonably satisfactory to the Agent. The Borrower hereby requests such counsel
to deliver such opinions.

(iii) The Agent shall have received such documents and certificates as the Agent
may reasonably request relating to the organization, existence and good standing
of each Loan Party, the authorization of this Amendment and the transactions
contemplated hereby, all in form and substance reasonably satisfactory to the
Agent.

(iv) To the extent invoiced at least two days prior to the date hereof, the
Agent shall have received payment or reimbursement of its reasonable
out-of-pocket expenses in

2

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

connection with this Amendment, including the reasonable fees, charges and
disbursements of counsel for the Agent.

(v)   To the extent invoiced at least two days prior to the date hereof, CGMI
shall have received payment of all fees owed to them by the Borrower in
connection with this Amendment and the transactions contemplated hereby.

(b)        The waiver contemplated by Section 3 shall become effective as of the
first date (the “Waiver Effective Date”) on which the Agent shall have received
counterparts hereof duly executed and delivered by each of the Borrower and the
Required Lenders.

The Agent shall notify the Borrower and the Lenders of the First Amendment
Effective Date and the Waiver Effective Date and such notice shall be conclusive
and binding.

SECTION 6. Effect of Amendment. (a) Except as expressly set forth herein, this
Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, or otherwise affect the rights and remedies of the Agents, the
Issuing Banks or the Lenders under the Original Amendment and Restatement or any
other Senior Loan Document, and shall not alter, modify, amend or in any way
affect any of the terms, conditions, obligations, covenants or agreements
contained in the Original Amendment and Restatement or any other Senior Loan
Document, all of which are ratified and affirmed in all respects and shall
continue in full force and effect. Nothing herein shall be deemed to entitle any
Loan Party to a consent to, or a waiver, amendment, modification or other change
of, any of the terms, conditions, obligations, covenants or agreements contained
in the Original Amendment and Restatement or any other Senior Loan Document in
similar or different circumstances.

(b)        On and after the First Amendment Effective Date, each reference in
the Original Amendment and Restatement to “this Amendment”, “hereunder”,
“hereof”, “herein” or words of like import shall be deemed a reference to this
Amendment. This Amendment shall constitute a “Senior Loan Document” for all
purposes of the First Restated Credit Agreement, the Second Restated Credit
Agreement and the other Senior Loan Documents.

SECTION 7. Expenses. The Borrower agrees to reimburse the Agent for its
reasonable out-of-pocket expenses in connection with this Amendment, including
the reasonable fees, charges and disbursements of counsel for the Agent.

SECTION 8. Governing Law; Counterparts. (a) This Amendment shall be governed by
and construed in accordance with the laws of the State of New York.

(b)        This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute one and the same instrument. Delivery of any executed
counterpart of a signature page to this Amendment by facsimile transmission or
other electronic imaging means shall be as effective as delivery of a manually
executed counterpart hereof.

SECTION 9. Headings. The headings of this Amendment are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

3

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

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
duly executed and delivered by their respective officers as of the date first
above written.

RITE AID CORPORATION,

 

by

/s/ ROBERT B. SARI

 

 

Name:

Robert B. Sari

 

 

Title:

Exec. Vice President, General

 

 

 

Counsel and Secretary

 

CITICORP NORTH AMERICA, INC.,

 

as Agent and a Lender,

 

by

 

 

 

Name:

 

 

 

Title:

 

 

4

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

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
duly executed and delivered by their respective officers as of the date first
above written.

RITE AID CORPORATION,

 

by

 

 

 

Name:

 

 

 

Title:

 

 

CITICORP NORTH AMERICA, INC.,

 

as Agent and Lender,

 

by

/s/ JEFFREY NITZ

 

 

Name:

Jeffrey Nitz

 

 

Title:

Director

 

5

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

Bank of America, N.A.

 

 

 

 

 

by

/s/ CHRISTINE HUTCHINSON

 

 

 

 

 

 

Name:

Christine Hutchinson

 

 

 

 

 

 

Title:

Vice President

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

The CIT Group/Business Credit, Inc.:

 

 

 

/s/ MARK J. LONG

 

 

 

 

 

 

By

Mark J. Long

 

 

 

 

 

 

 

Vice President

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

Citicorp North America Inc.

 

 

 

 

 

by

/s/ JEFFREY NITZ

 

 

 

 

 

 

Name:

Jeffrey Nitz

 

 

 

 

 

 

Title:

Director

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

Citizens Bank of Pennsylvania

 

 

 

 

 

by

/s/ PAUL A. REBHOLZ

 

 

 

 

 

 

Name:

Paul A. Rebholz

 

 

 

 

 

 

Title:

Vice President

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

General Electric Capital Corporation

 

 

 

 

 

by

/s/ AMANDA J. VAN HEYST

 

 

 

 

 

 

Name:

Amanda J. Van Heyst

 

 

 

 

 

 

Title:

Duly Authorized Signatory

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

GMAC Commercial Finance LLC

 

 

 

 

 

by

/s/ MICHAEL MALCANGI

 

 

 

 

 

 

Name:

Michael Malcangi

 

 

 

 

 

 

Title:

Vice President

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

HSBC Business Credit (USA) Inc.

 

 

 

 

 

by

/s/ MATTHEW W. RICKERT

 

 

 

 

 

 

Name:

Matthew W. Rickert

 

 

 

 

 

 

Title:

Vice President

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

LaSalle Retail Finance

 

 

 

 

 

by

/s/ SCOTT J. WOLKOVICH

 

 

 

 

 

 

Name:

Scott J. Wolkovich

 

 

 

 

 

 

Title:

Officer

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

 

 

JPMorgan Chase Bank, N.A.

 

 

by

/s/ CHRISTINE HERRICK

 

 

 

 

 

 

Name:

Christine Herrick

 

 

 

 

 

 

Title:

Vice President

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

 

 

Manufacturers and Traders Trust Company

 

 

by

/s/ TRACEY SAWYER-CALHOUN

 

 

 

 

 

 

Name:

Tracey Sawyer-Calhoun

 

 

 

 

 

 

Title:

Vice President

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

 

 

Merrill Lynch Capital,

 

A Division of Merrill Lynch Business Financial Services Inc.

 

 

by

/s/ JAMES BETZ

 

 

 

 

 

 

Name:

James Betz

 

 

 

 

 

 

Title:

VP

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

 

 

National City Business Credit, Inc.

 

 

by

/s/ KATHRYN ELLERO

 

 

 

 

 

 

Name:

Kathryn Ellero

 

 

 

 

 

 

Title:

Vice President

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

 

 

 

 

North Fork Business Capital Corporation

 

 

by

/s/ ROBERT WALLACE

 

 

 

 

 

 

Name:

Robert Wallace

 

 

 

 

 

 

Title:

Vice President

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

 

 

N M Rothschild & Sons Limited

 

 

by

/s/ N.A. WOOD

 

 

 

 

 

 

Name:

Nicholas Wood

 

 

 

 

 

 

Title:

Director

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

/s/ DR. LEWIS

 

 

 

 

 

 

Name:

Dr. Lewis

 

 

 

 

 

 

Title:

Managing Director

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

AMSOUTH BANK is now REGIONS BANK

To approve the First Amendment and Waiver:

 

Name of Lender:

 

 

 

Regions Bank

 

 

by

/s/ CYNTHIA MARINAS

 

 

 

 

 

 

Name:

Cynthia Marinas

 

 

 

 

 

 

Title:

Attorney In Fact

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

RZB Finance LLC

 

 

 

by

/s/ CHRISTOPH HOEDL

 

 

 

 

 

 

Name:

Christoph Hoedl

 

 

 

 

 

 

Title:

Group Vice President

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

/s/ RANDALL ABRAMS

 

 

 

 

 

 

Name:

Randall Abrams

 

 

 

 

 

 

Title:

Vice President

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

Wachovia Bank, N.A.

 

 

 

by

/s/ THOMAS GRABOSKI

 

 

 

 

 

 

Name:

Thomas Graboski

 

 

 

 

 

 

Title:

Director

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

Wells Fargo Foothill, LLC

 

 

 

by

/s/ MARK BRADFORD

 

 

 

 

 

 

Name:

Mark Bradford

 

 

 

 

 

 

Title:

Vice President

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

U.S. Bank, National Association

 

 

 

by

/s/ [ILLEGIBLE]

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

AVP

 

 

 

 

For any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

Union Bank of California, N.A.

 

 

 

by

/s/ NANCY A. PERKINS

 

 

 

 

 

 

Name:

Nancy A. Perkins

 

 

 

 

 

 

Title:

Vice President

 

 

 

 

LenderFor any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Lender signature page to
the First Amendment to the Rite Aid
Amendment and Restatement Agreement

To approve the First Amendment and Waiver:

 

Name of Lender:

 

UPS Capital Corporation

 

 

 

by

/s/ JOHN P. HOLLOWAY

 

 

 

 

 

 

Name:

John P. Holloway

 

 

 

 

 

 

Title:

Director of Portfilio Management

 

 

 

 

LenderFor any Lender requiring a second signature line:

 

 

by

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

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

Tranche 2 Lender signature page to
the First Amendment to the
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement

Name of Institution:

 

Tranche 2 Term Commitment:

Bank of America, N.A.

 

$221MM

as a Tranche 2 Lender

 

 

by

/s/ CHRISTINE HUTCHINSON

 

 

 

Name:

Christine Hutchinson

 

 

 

Title:

Vice President

 

 

For any Tranche 2 Lender requiring a second
signature line:

 

 

by

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

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

Tranche 2 Lender signature page to
the First Amendment to the
Amendment and Restatement Agreement
relating to the Rite Aid Credit Agreement

Name of Institution:

 

Tranche 2 Term Commitment:

Citicorp North America Inc.

 

$884,000,000

as a Tranche 2 Lender

 

 

by

/s/ JEFFREY NITZ

 

 

 

Name:

Jeffrey Nitz

 

 

 

Title:

Director

 

 

For any Tranche 2 Lender requiring a second
signature line:

 

 

by

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

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

ANNEX I

Amendment and Restatement Agreement

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

AMENDMENT AND RESTATEMENT AGREEMENT dated as of November 8, 2006, as amended and
restated as of June 4, 2007 (this “Amendment”) relating to the Credit Agreement
dated as of June 27, 2001, as amended and restated as of September 30, 2005 (the
“Original Credit Agreement”), among Rite Aid Corporation, a Delaware corporation
(the “Borrower”), the lenders from time to time party thereto (the “Lenders”),
Citicorp North America, Inc., as administrative agent (in such capacity, the
“Administrative Agent”) and collateral processing agent and Bank of America,
N.A., as syndication agent.

RECITALS

A.         Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Original Credit Agreement or, to
the extent specified herein, in the Original Credit Agreement as amended hereby.
The rules of construction specified in Section 1.03 of the Second Restated
Credit Agreement also apply to this Amendment.

B.         The Borrower established a senior secured term loan facility under
the Original Credit Agreement in an aggregate principal amount of $145,000,000
(the “Tranche 1 Term Facility”, the term loans thereunder, “Tranche 1 Term
Loans”), the proceeds of which were utilized (a) to repay Revolving Loans in an
aggregate principal amount of $142,025,000, the proceeds of which were used to
repay $142,025,000 aggregate principal amount of the Borrower’s 12.50% Senior
Secured Notes, which matured on September 15, 2006 (the “12.50% Notes”) and
(b) for general corporate purposes (including the payment of accrued interest).

C.         The Borrower and The Jean Coutu Group (PJC) Inc. (the “Seller”) have
entered into a Stock Purchase Agreement dated as of August 23, 2006 (the
“Acquisition Agreement”), pursuant to which the Borrower intends to acquire (the
“Acquisition”) all the outstanding Equity Interests in The Jean Coutu Group
(PJC) USA, Inc. (“JCG-USA”) or, if the Seller effects the Reorganization (as
defined in the Acquisition Agreement), all the outstanding Equity Interests in
JCG (PJC) USA, LLC (“JCG LLC”), which will acquire all the outstanding Equity
Interests in JCG-USA in such Reorganization. For purposes of this Amendment,
“Holdings” means JCG-USA or, if the Reorganization is effected, JCG LLC. Upon
consummation of the Acquisition, Holdings, together with its subsidiaries, will
own and operate the network of retail drugstores conducting business under the
Eckerd and Brooks tradenames (the “Acquired Business”). On the date on which the
Acquisition is consummated pursuant to the Acquisition Agreement (the
“Acquisition Closing Date”), the Borrower will transfer to the Seller, in
consideration of the Acquisition, (i) $2,300,000,000 in cash, subject to certain
adjustments, including adjustments in respect to working capital (as adjusted,
the “Cash Consideration”) and (ii) 250,000,000 shares of common stock of the
Borrower.

D.         On the Acquisition Closing Date, and in order, among other things, to
finance a portion of the Cash Consideration, the Borrower intends (a) to
establish an additional senior secured term loan facility under the First
Restated Credit Agreement (as defined below) in an aggregate principal amount of
$1,105,000,000 (the “Tranche 2 Term Facility”, the term loans thereunder,
“Tranche 2 Term Loans”), and (b) to (i) issue and sell, in one or more public
offerings or Rule 144A/Regulation S or other private placements, one or more
tranches of notes (the “New Notes”) in an aggregate principal amount (the “Notes
Amount”) equal to $1,220,000,000 or (ii) to the extent the Borrower does not
issue the New Notes in the Notes Amount on or prior to the Acquisition Closing
Date, borrow an amount equal to the Notes Amount minus the aggregate principal
amount of New Notes that are issued pursuant to the immediately preceding clause
(i), from one or more lenders under a new bridge loan facility (the “Bridge
Facility”). The first date following the Acquisition Closing Date on which a
consolidated balance sheet of the Borrower including the assets of the Acquired
Business is filed with the Securities and Exchange Commission, and on which the
applicable conditions set forth in the Second Restated Credit Agreement (as
defined below) are

2

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

satisfied or waived, is referred to as the “Borrowing Base Date”. The proceeds
of the Tranche 2 Term Loans will be used (a) to pay part of the consideration
due to the Seller in connection with the Acquisition, (b) to pay fees and
expenses (including any premiums and amendment fees) incurred in connection with
the Transactions and (c) for general corporate purposes (including the payment
of accrued interest).

E.         The Borrower requested that the Original Credit Agreement be amended
and restated (the “First Amendment and Restatement”) substantially in the form
of Exhibit A to this Amendment (the Original Credit Agreement, as so amended and
restated, the “First Restated Credit Agreement”), effective as of the date on
which the Tranche 1 Term Loans are made, on the terms and subject to the
conditions set forth herein.

F.          The Borrower has further requested that the First Restated Credit
Agreement be further amended and restated (the “Second Amendment and
Restatement”) substantially in the form of Exhibit B to this Amendment (the
First Restated Credit Agreement, as so amended and restated, the “Second
Restated Credit Agreement”), effective as of the Acquisition Closing Date, to
permit the Acquisition, to establish the Tranche 2 Term Facility, the New Notes
and/or the Bridge Facility, to forgo taking a security interest in assets of the
Acquired Business until the Borrowing Base Date and to effect other
modifications to the First Restated Credit Agreement as contemplated hereby.

G.         The Required Lenders, the Collateral Agent and the Administrative
Agent are willing, on the terms and subject to the conditions hereof, to effect
the First Amendment and Restatement, and the Required Lenders (as defined in the
First Restated Credit Agreement) and the Administrative Agent are willing, on
the terms and subject to the conditions hereof, to effect the Second Amendment
and Restatement.

AGREEMENTS

In consideration of the foregoing and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

ARTICLE I

First Amendment and Restatement

SECTION 1.1.   First Amendment and Restatement of Credit Agreement.   (a) The
Original Credit Agreement and the Definitions Annex is hereby amended and
restated, effective as of the First Restatement Effective Date (as defined
below), substantially in the form of the First Restated Credit Agreement
attached as Exhibit A to this Amendment. The schedules to the Original Credit
Agreement are amended in their entirety to read in the form of Exhibit A-1 to
this Amendment (it being understood that all exhibits to the Original Credit
Agreement, in the forms thereof immediately prior to the First Restatement
Effective Date, shall constitute exhibits to the First Restated Credit
Agreement).

(b)        The parties hereto authorize an amendment to the Collateral Trust and
Intercreditor Agreement which conforms the definitions annex in the Collateral
Trust and Intercreditor Agreement to the definitions contained in the First
Restated Credit Agreement.

SECTION 1.2.   Tranche 1 Term Loans.   (a) Subject to the terms and conditions
set forth herein, each lender under the Tranche 1 Term Facility (the “Tranche 1
Lenders”) agrees to make Tranche 1 Term Loans to the Borrower on the First
Restatement Effective Date in a principal amount equal to such Tranche 1
Lender’s Tranche 1 Term Commitment. A Person shall become a Tranche 1 Lender and
a party to the First Restated Credit Agreement by executing and delivering to
the Administrative Agent, on or prior to the First Restatement Effective Date, a
signature page to this Amendment as a “Tranche 1 Lender” setting forth the
amount of Tranche 1 Term Loans that such Person commits to make. The “Tranche 1
Term Commitment” of any Tranche 1 Lender will be the amount of such commitment
set forth

3

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

in its signature page to this Amendment or such lesser amount as is allocated to
it by Citigroup Global Markets Inc. (“CGMI”) and notified to it prior to the
First Restatement Effective Date. The commitments of the Tranche 1 Lenders are
several and no Tranche 1 Lender shall be responsible for any other Tranche 1
Lender’s failure to make Tranche 1 Term Loans.

(b)        The obligations of each Tranche 1 Lender to make Tranche 1 Term Loans
is subject to the satisfaction of the following conditions:

(i)         The conditions set forth in paragraphs (a), (b) and (c) of
Section 4.02 of the First Restated Credit Agreement shall be satisfied on and as
of the First Restatement Effective Date, and the Tranche 1 Lenders shall have
received a certificate of a Financial Officer, dated the First Restatement
Effective Date, to such effect.

(ii)       The Collateral and Guarantee Requirement (as defined in the First
Restated Credit Agreement) shall have been satisfied.

(iii)      The Administrative Agent shall have received a favorable legal
opinion of each of (i) Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the
Borrower and (ii) Robert Sari, General Counsel of the Borrower, in each case
addressed to the Administrative Agent and the Lenders under the First Restated
Credit Agreement and dated the First Restatement Effective Date, in
substantially the forms of Exhibits J-1 and J-2 to the Original Credit
Agreement, modified, however, to address the Tranche 1 Term Loans, this
Amendment and the First Restated Credit Agreement, and covering such other
matters relating to the Loan Parties, the other Senior Loan Documents, the
Senior Collateral and the transactions contemplated hereby to occur on the First
Restatement Effective Date as the Administrative Agent may reasonably request,
and otherwise reasonably satisfactory to the Administrative Agent. The Borrower
hereby requests such counsel to deliver such opinions.

(iv)       The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the good standing of the Borrower and the organization and existence
of each Loan Party, the organizational documents of each Loan Party, the
resolutions of each Loan Party that authorize the transactions contemplated
hereby, the incumbency and authority of the Person or Persons executing and
delivering the Amendment and the other documents contemplated hereby, all in
form and substance reasonably satisfactory to the Administrative Agent.

(v)        The Lenders (as defined in the First Restated Credit Agreement) shall
have received all documentation and other information required by bank
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including the U.S.A. Patriot Act.

(vi)       To the extent deemed necessary or appropriate by the Administrative
Agent, each Senior Collateral Document shall have been amended to provide the
benefits thereof to the Tranche 1 Term Loans and the obligations of the Loan
Parties in connection therewith on the same basis as such benefits are provided
to the Revolving Exposures.

(vii)     Each Loan Party that has not executed and delivered this Amendment
shall have entered into a written instrument reasonably satisfactory to the
Administrative Agent pursuant to which it confirms that it consents to this
Amendment, and that the Senior Collateral Documents to which it is party will
continue to apply in respect of the First Restated Credit Agreement and the
Senior Obligations thereunder.

(viii)    The Borrowing Base Amount on the First Restatement Effective Date
shall be no less than the sum of (A) the aggregate Revolving Exposures on the
First Restatement Effective Date

4

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

and (B) the aggregate principal amount of Tranche 1 Term Loans to be made on the
First Restatement Effective Date. The Administrative Agent shall have received a
completed Borrowing Base Certificate dated the First Restatement Effective Date
and signed by a Financial Officer.

The conditions to effectiveness of the First Amendment and Restatement set forth
in Section 1.3 hereof shall have been satisfied.

SECTION 1.3.   First Restatement Effectiveness.   The First Amendment and
Restatement of the Original Credit Agreement effected hereby shall become
effective as of the first date (the “First Restatement Effective Date”) on which
the following conditions have been satisfied:

(a)        The Administrative Agent (or its counsel) shall have received duly
executed counterparts hereof that, when taken together, bear the signatures of
(i) the Borrower, (ii) each Tranche 1 Lender, (iii) the Required Lenders,
(iv) the Collateral Agent and (v) the Administrative Agent. The aggregate amount
of Tranche 1 Term Commitments shall not exceed $145,000,000.

(b)        The conditions to the making of the Tranche 1 Term Loans set forth in
Section 1.2(b) hereof shall have been satisfied.

(c)        To the extent invoiced, the Administrative Agent shall have received
payment or reimbursement of its reasonable out-of-pocket expenses in connection
with this Amendment, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent.

(d)        CGMI shall have received payment of all fees owed to them by the
Borrower on the First Restatement Effective Date in connection with this
Amendment and the transactions contemplated hereby.

The Administrative Agent shall notify the Borrower, the Tranche 1 Lenders and
the Lenders of the First Restatement Effective Date and such notice shall be
conclusive and binding. Notwithstanding the foregoing, the First Amendment and
Restatement shall not become effective, and the obligations of the Tranche 1
Lenders hereunder to make Tranche 1 Term Loans will automatically terminate, if
each of the conditions set forth or referred to in Sections 1.2(b) and 1.3
hereof has not been satisfied at or prior to 5:00 p.m., New York City time, on
November 15, 2006.

ARTICLE II

Second Amendment and Restatement

SECTION 2.1.   Second Amendment and Restatement of Credit Agreement.   (a) The
First Restated Credit Agreement and the Definitions Annex are hereby amended and
restated, effective as of the Second Restatement Effective Date (as defined
below), substantially in the form of the Second Restated Credit Agreement
attached as Exhibit B to this Amendment. The schedules to the First Restated
Credit Agreement are amended in their entirety to read in the form of
Exhibit B-1 to this Amendment (it being understood that, subject to the
amendments permitted by paragraphs (b), (c) and (d) below, all exhibits to the
First Restated Credit Agreement, in the forms thereof immediately prior to the
Second Restatement Effective Date, shall constitute, together with the Interim
Collateral Documents (as defined in the Second Restated Credit Agreement),
exhibits to the Second Restated Credit Agreement).

5

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

(b) The parties hereto authorize an amendment to the Collateral Trust and
Intercreditor Agreement which conforms the definitions annex in the Collateral
Trust and Intercreditor Agreement to the definitions contained in the Second
Restated Credit Agreement.

(c) Effective as of the Second Restatement Effective Date, the Senior Indemnity,
Subrogation and Contribution Agreement is hereby amended by replacing the first
sentence in Section 12 with the following sentence: “Pursuant to Section 5.11 of
the Senior Credit Agreement, certain wholly-owned Domestic Subsidiaries of the
Borrower that were not in existence on the Restatement Effective Date are
required to enter into the Senior Subsidiary Guarantee Agreement as Subsidiary
Guarantors upon becoming a wholly-owned Domestic Subsidiary.”.

(d) The parties hereto authorize the Administrative Agent to, and the
Administrative Agent may in its sole discretion, modify the Senior Collateral
Documents and the schedules and the exhibits to the Second Restated Credit
Agreement to correct inaccuracies or omissions in the Senior Collateral
Documents and such schedules and exhibits that result from the consummation of
the Transactions (as defined in the Second Restated Credit Agreement); provided
that no such modification shall be material and adverse to the interests of the
Loan Parties or the Lenders (as defined in the Second Restated Credit
Agreement); and provided further, that, no such modification shall become
effective until the lapse of five Business Days after the Agent has distributed
the modified Senior Collateral Documents, schedules and exhibits to the Lenders
(as defined in the Second Restated Credit Agreement) without the Required
Lenders (as defined in the Second Restated Credit Agreement) having objected to
such modification.

SECTION 2.2.   Tranche 2 Term Loans.   (a) Subject to the terms and conditions
set forth herein and in the Second Restated Credit Agreement, each lender under
the Tranche 2 Term Facility (the “Tranche 2 Lenders”) agrees to make its pro
rata share of the Tranche 2 Term Loans, determined based upon such Tranche 2
Lender’s Tranche 2 Term Commitment. A Person shall become a Tranche 2 Lender and
a party to the First Amendment and Restatement and Waiver of this Amendment and
the Second Restated Credit Agreement by executing and delivering to the
Administrative Agent, on or prior to the Second Restatement Effective Date, a
signature page to the First Amendment and Restatement and Waiver of this
Amendment as a “Tranche 2 Lender” setting forth the amount of Tranche 2 Term
Loans that such Person commits to make. The “Tranche 2 Term Commitment” of any
Tranche 2 Lender will be the amount of such commitment set forth in its
signature page to the First Amendment and Restatement and Waiver of this
Amendment or such lesser amount as is allocated to it by CGMI and notified to it
prior to the Second Restatement Effective Date. The commitments of the Tranche 2
Lenders are several and no Tranche 2 Lender shall be responsible for any other
Tranche 2 Lender’s failure to make Tranche 2 Term Loans.

(b) The obligations of each Tranche 2 Lender to make its pro rata share of the
Tranche 2 Term Loans (determined based upon such Tranche 2 Lender’s Tranche 2
Term Commitment) on the Second Restatement Effective Date is subject to the
satisfaction of the following conditions:

(i) The Administrative Agent shall have received a borrowing request in a form
acceptable to the Administrative Agent requesting that the Tranche 2 Lenders
make Tranche 2 Term Loans to the Borrower on the Second Restatement Effective
Date in an aggregate principal amount equal to the Second Restatement Date
Amount.

(ii) The Acquisition shall have been consummated, or shall be consummated
substantially simultaneously with the making of the Tranche 2 Term Loans, in
accordance in all material respects with applicable law and the Acquisition
Agreement and related documentation (and no provision of the Acquisition
Agreement shall have been waived, amended or otherwise modified in a manner
material and adverse to the Lenders without the consent of CGMI).

6

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

(iii) The Borrower shall have received (A) gross cash proceeds from the issuance
or incurrence of Indebtedness of the New Notes, Revolving Loans or additional
term loans under the Section 2.21 of the Second Restated Credit Agreement in an
aggregate amount equal to the Notes Amount or (B) to the extent the Borrower
does not issue the New Notes or incur the Revolving Loans or additional term
loans pursuant to clause (A) in the Notes Amount on or prior to the Second
Restatement Effective Date, the Notes Amount minus the aggregate principal
amount of the New Notes issued and the Revolving Loans and the additional term
loans incurred pursuant to clause (A), in gross cash proceeds from borrowings
under the Bridge Facility.

(iv) The Borrower (A) shall have obtained requisite approval from the Investor
Agents and the Program Agent under the Borrower’s receivables facility under the
Receivables Financing Agreement dated as of September 21, 2004 (the “Receivables
Facility”) for an amendment that will permit the consummation of the
Transactions (as defined in the Second Restated Credit Agreement) without
constituting a Change in Control under the Receivables Facility, will reduce the
requisite availability of Revolving Loans to no more than $100,000,000 until the
Borrowing Base Date and will otherwise permit the consummation of the
Transactions (as defined in the Second Restated Credit Agreement) or (B) shall
have obtained, or substantially simultaneously with the making of the Tranche 2
Term Loans to be made on the Second Restatement Effective Date will obtain, a
new tranche of term loans (the “Receivables Incremental Term Facility”) in an
aggregate principal amount of $400,000,000 under the Second Restated Credit
Agreement.

(v) On the Second Restatement Effective Date, (A) all amounts owing under the
12.50% Notes, the 4.75% Convertible Notes and the 7.125% Notes will have been
repaid in full, (B) Holdings will have outstanding no Indebtedness or preferred
Equity Interests other than (1) its Guarantees of (w) the Second Restated Credit
Agreement including, if applicable, the Receivables Incremental Term Facility,
(x) the New Notes and/or the Bridge Facility, and (y) the Borrower’s 8.125%
Senior Secured Notes due 2010, the Borrower’s 7.50% Senior Secured Notes due
2015, the Borrower’s 7.50% Senior Secured Notes due 2017, the Borrower’s 9.25%
Senior Notes due 2013 and the Borrower’s 8.625% Senior Notes due 2015
(collectively, the “Existing Indebtedness to be Guaranteed”), (2) other
Indebtedness permitted by the Second Restated Credit Agreement and (3) certain
preferred Equity Interests, all of which will be owned by the Borrower, (C) the
subsidiaries of Holdings will have outstanding no Indebtedness or preferred
Equity Interests other than (1) their Guarantees of (x) the Second Restated
Credit Agreement including, if applicable, the Receivables Incremental Term
Facility, (y) the New Notes and/or the Bridge Facility and (z) the Existing
Indebtedness to be Guaranteed, (2) other Indebtedness permitted by the Second
Restated Credit Agreement and (3) solely if the Reorganization is consummated
prior to the Second Restatement Effective Date, certain preferred Equity
Interests in Jean Coutu Holdings (USA) Inc., all of which will be owned by
Holdings (both before and after the consummation of the Reorganization),
(D) Holdings will have outstanding no common Equity Interests other than common
Equity Interests owned by the Borrower and (E) the subsidiaries of Holdings will
have outstanding no common Equity Interests other than common Equity Interests
owned by Holdings or a direct or indirect subsidiary of Holdings.

(vi) Except as expressly contemplated by the Acquisition Agreement, since
March 4, 2006, there shall not have occurred any Purchaser Material Adverse
Effect (as defined in the Acquisition Agreement) or any fact, occurrence,
condition, change, development, effect, circumstance or event that would,
individually or in the aggregate, be reasonably likely to have or result in a
Purchaser Material Adverse Effect (as defined in the Acquisition Agreement).
Since August 23, 2006, there shall not have occurred or come to exist any event,
occurrence, fact, condition, change, development or effect that, individually or
in the aggregate, has had or resulted in or would reasonably be expected to have
or result in a Purchaser Material Adverse Effect (as defined in the

7

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

Acquisition Agreement). Except as expressly contemplated by the Acquisition
Agreement or as set forth in Schedule 2.10 of the Seller Disclosure Schedule (as
defined in the Acquisition Agreement), since May 27, 2006, there shall not have
occurred any Company Material Adverse Effect (as defined in the Acquisition
Agreement) or any fact, occurrence, condition, change, development, effect,
circumstance or event that would, individually or in the aggregate, be
reasonably likely to have or result in a Company Material Adverse Effect (as
defined in the Acquisition Agreement). Since August 23, 2006, there shall not
have occurred or come to exist any event, occurrence, fact, condition, change,
development or effect that, individually or in the aggregate, has had or
resulted in or would reasonably be expected to have or result in a Company
Material Adverse Effect (as defined in the Acquisition Agreement).

(vii) There shall not be any action, suit or proceeding by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any of the
Subsidiaries (including Holdings or any of its subsidiaries) (A) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected to have a Purchaser Material
Adverse Effect (as defined in the Acquisition Agreement), (B) as to which there
is a reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected to have a Company Material Adverse
Effect (as defined in the Acquisition Agreement) or    (C) which would
reasonably be expected to affect the legality, validity or enforceability of the
Senior Loan Documents.

(viii) The Lenders (as defined in the Second Restated Credit Agreement) shall
have received (A) audited consolidated balance sheets and related statements of
operations, shareholders’ equity and cash flows of each of the Borrower and the
Acquired Business for each of the two most recently completed fiscal years (it
being understood that the audit reports for all such financial statements shall
not be subject to any qualifications or limitations with respect to the scope of
the audit), which financial statements for the most recently completed fiscal
year shall not reflect any material and adverse inaccuracy in the financial
statements previously provided to the Lenders (as defined in the Second Restated
Credit Agreement) and (B) unaudited consolidated balance sheets and related
statements of operations and cash flows of each of the Borrower and the Acquired
Business for (1) each subsequent fiscal quarter ended at least 45 days before
the Second Restatement Effective Date and (2) to the extent available (and in
any event without footnotes), each fiscal month after the most recent fiscal
period for which financial statements were received by the Lenders (as defined
in the Second Restated Credit Agreement) as described above and ended at least
30 days before the Second Restatement Effective Date, in each case prepared in
accordance with U.S. generally accepted accounting principles. In addition, the
Lenders (as defined in the Second Restated Credit Agreement) shall have received
a pro forma consolidated balance sheet of the Borrower as of the date of the
most recent balance sheets delivered pursuant to clauses (A) and (B)(1) above,
giving pro forma effect to the Transactions (as defined in the Second Restated
Credit Agreement), which shall not reflect any material and adverse inaccuracy
in the financial statements previously provided to the Lenders (as defined in
the Second Restated Credit Agreement).

(ix) The Lenders (as defined in the Second Restated Credit Agreement) shall have
received consolidated financial projections for the Borrower and its
subsidiaries (including Holdings and its subsidiaries) for the five-year period
ending February 28, 2012, in form and substance reasonably satisfactory to the
Lenders (as defined in the Second Restated Credit Agreement).

(x) All requisite Governmental Authorities and other third Persons shall have
approved or consented to the transactions contemplated hereby to the extent
required and material, all applicable material waiting or appeal periods
(including any extensions thereof) shall have expired and there shall be no
governmental or judicial action, actual or threatened, that could reasonably be

8

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

expected to restrain, prevent or impose materially burdensome conditions on the
transactions contemplated hereby.

(xi) The Collateral and Guarantee Requirement (as defined in the Second Restated
Credit Agreement) and the Interim Collateral and Guarantee Requirement (as
defined in the Second Restated Credit Agreement) shall have been satisfied and
the Administrative Agent shall have received (A) a completed Perfection
Certificate dated the Second Restatement Effective Date and signed by an
executive officer of the Borrower or a Financial Officer, together with all
attachments contemplated    thereby, including the results of a search of the
Uniform Commercial Code (or equivalent) filings made with respect to the Loan
Parties and Holdings and its subsidiaries in the jurisdictions contemplated by
the Perfection Certificate and copies of the financing statements (or similar
documents) disclosed by such search and evidence reasonably satisfactory to the
Administrative Agent that the Liens indicated by such financing statements are
permitted by Section 6.02 of the Second Restated Credit Agreement or have been
released and (B) evidence that the concentration account arrangements
contemplated by the Senior Collateral Documents shall be in full force and
effect.

(xii) Intentionally omitted.

(xiii) The Administrative Agent shall have received reasonably satisfactory
evidence that the insurance required by Section 5.07 of the Second Restated
Credit Agreement is in effect.

(xiv) The Lenders (as defined in the Second Restated Credit Agreement) shall
have received all documentation and other information required by bank
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including the U.S.A. Patriot Act.

(xv) The Administrative Agent shall have received a favorable legal opinion of
each of (A) Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Borrower
and (B) Robert Sari, General Counsel of the Borrower, in each case addressed to
the Administrative Agent and the Lenders under the Second Restated Credit
Agreement and dated the Second Restatement Effective Date, in substantially the
forms of Exhibits J-1 and J-2 to the Original Credit Agreement, modified,
however, to address the Loans (as defined in the Second Restated Credit
Agreement), this Amendment and the Second Restated Credit Agreement, and
covering such other matters relating to the Loan Parties, the other Senior Loan
Documents, the Senior Collateral and the transactions contemplated hereby to
occur on the Second Restatement Effective Date as the Administrative Agent may
reasonably request, and otherwise reasonably satisfactory to the Administrative
Agent. The Borrower hereby requests such counsel to deliver such opinions.

(xvi) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of each Loan Party,
the organizational documents of each Loan Party, the resolutions of each Loan
Party that authorize the transactions contemplated hereby, the incumbency and
authority of the Person or Persons executing and delivering the Amendment and
the other documents contemplated hereby, all in form and substance reasonably
satisfactory to the Administrative Agent.

(xvii) To the extent deemed necessary or appropriate by the Administrative
Agent, each Senior Collateral Document shall have been amended to provide the
benefits thereof to the Tranche 2 Term Loans and the obligations of the Loan
Parties in  connection therewith on the same basis as such benefits are provided
to the Revolving Exposures and the Tranche 1 Term Loans.

(xviii) Each Loan Party that has not executed and delivered this Amendment shall
have entered into a written instrument reasonably satisfactory to the
Administrative Agent pursuant to

9

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

which it confirms that it consents to this Amendment, and that the Senior
Collateral Documents to which it is party will continue to apply in respect of
the Second Restated Credit Agreement and the Senior Obligations thereunder.

(xix) The Borrowing Base Amount on the Second Restatement Effective Date shall
be no less than the sum of (A) the aggregate principal amount of Loans (as
defined in the First Restated Credit Agreement) outstanding on the Second
Restatement Effective Date and (B) the LC Exposure on the Second Restatement
Effective Date. The Administrative Agent shall have received a completed
Borrowing Base Certificate dated the Second Restatement Effective Date and
signed by a Financial Officer.

(xx) After giving effect to the Acquisition and the borrowing of the Tranche 2
Term Loans to be made on the Second Restatement Effective Date, the Estimated
Borrowing Base Amount (as defined in the Second Restated Credit Agreement) on
the Second Restatement Effective Date shall be no less than the sum of (A) the
aggregate principal amount of Loans (as defined in the Second Restated Credit
Agreement) outstanding on the Second Restatement Effective Date and (B) the LC
Exposure on the Second Restatement Effective Date.

(xxi) The Administrative Agent shall have received such valuations and
appraisals of the assets of the Acquired Business that will compose the
Borrowing Base from Hilco Appraisal Services, LLC, Washburn & Associates or any
other valuation or appraisal firm reasonably satisfactory to the Administrative
Agent, which valuations and appraisals shall be reasonably satisfactory to the
Administrative Agent.

(xxii) The Administrative Agent shall have completed a field examination of the
assets of the Acquired Business that will compose the Borrowing Base, the
results of which shall be reasonably satisfactory to the Tranche 2 Term Lenders.

SECTION 2.3.   Second Restatement Effectiveness.   The Second Amendment and
Restatement of the First Restated Credit Agreement effected hereby shall become
effective as of the first date (the “Second Restatement Effective Date”) on
which the following conditions have been satisfied:

(a) The Administrative Agent (or its counsel) shall have received duly executed
counterparts hereof that, when taken together, bear the signatures of (i) the
Borrower, (ii) each Tranche 2 Lender, (iii) the Required Lenders (as defined in
the First Restated Credit Agreement) and (iv) the Administrative Agent. The
aggregate amount of Tranche 2 Term Commitments shall not exceed $1,105,000,000.

(b) The Administrative Agent (or its counsel) shall have received duly executed
counterparts of the Interim Collateral Documents (in each case as defined in the
Second Restated Credit Agreement) that, when taken together, bear the signatures
of each party thereto.

(c) The conditions to the making of the Tranche 2 Term Loans on the Second
Restatement Effective Date set forth in Section 2.2(b) hereof shall have been
satisfied.

(d) To the extent invoiced at least two days prior to the Second Restatement
Effective Date, the Administrative Agent shall have received payment or
reimbursement of its reasonable out-of-pocket expenses in connection with this
Amendment, including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent.

(e) To the extent invoiced at least two days prior to the Second Restatement
Effective Date, CGMI shall have received payment of all fees owed to them by the
Borrower on the Second Restatement Effective Date in connection with this
Amendment and the transactions contemplated hereby.

10

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

The Administrative Agent shall notify the Borrower, the Tranche 2 Lenders and
the Lenders (as defined in the First Restated Credit Agreement) of the Second
Restatement Effective Date and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the Second Amendment and Restatement shall not
become effective, and the obligations of the Tranche 2 Lenders hereunder to make
Tranche 2 Term Loans will automatically terminate, if each of the conditions set
forth or referred to in Sections 2.2(b) and 2.3 hereof has not been satisfied at
or prior to 5:00 p.m., New York City time, on the Outside Date (as defined in
the Acquisition Agreement).

SECTION 2.4.   Additional Amendments.   (a) clause (i) of the proviso in the
definition of “Borrowing Base Amount” in Section 1.01 of the Second Restated
Credit Agreement is amended to replace the amount “$500,000,000” with the amount
“$800,000,000”.

(b) The amendments effected by Section 2.4(a) hereof shall become effective as
of the first date on which the following conditions have been satisfied:

(i) The Second Restatement Effective Date shall have occurred.

(ii) The Administrative Agent (or its counsel) shall have received duly executed
counterparts hereof that, when taken together, bear the signatures of each
Lender (as defined in the Second Restated Credit Agreement).

ARTICLE III

Miscellaneous

SECTION 3.1.   Representations and Warranties.   (a) To induce the other parties
hereto to enter into this Amendment, the Borrower represents and warrants to
each of the Lenders (as defined in the First Restated Credit Agreement) and the
Administrative Agent that,   as of the First Restatement Effective Date and
after giving effect to the transactions and amendments to occur on the First
Restatement Effective Date:

(i) This Amendment has been duly authorized, executed and delivered by the
Borrower and constitutes, and the First Restated Credit Agreement, as amended
and restated hereby on the First Amendment Restatement Date, will constitute,
its legal, valid and binding obligation, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.

(ii) The representations and warranties set forth in Article III of the First
Restated Credit Agreement are true and correct in all material respects on and
as of the First Restatement Effective Date, with the same effect as though made
on and as of the First Restatement Effective Date, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties were true and correct in all material
respects as of such earlier date).

(iii) No Default (as defined in the First Restated Credit Agreement) or Event of
Default (as defined in the First Restated Credit Agreement) has occurred and is
continuing.

(b) To induce the other parties hereto to enter into this Amendment, the
Borrower represents and warrants to each of the Lenders (as defined in the
Second Restated Credit Agreement) and the Administrative Agent that, as of the
Second Restatement Effective Date and after giving effect to the transactions
and amendments to occur on the Second Restatement Effective Date:

(i) This Amendment has been duly authorized, executed and delivered by the
Borrower and constitutes, and the Second Restated Credit Agreement, as amended
and restated hereby on the

11

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

Second Amendment Restatement Date and as further amended by
Section 2.4(a) hereof on the date such amendments become effective pursuant to
Section 2.4(b) hereof, will constitute, its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

(ii) The representations and warranties set forth in Sections 3.01, 3.02, 3.08
and 3.16 of the Second Restated Credit Agreement are true and correct in all
material respects on and as of the Second Restatement Effective Date, with the
same effect as though made on and as of the Second Restatement Effective Date,
except to the extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties were true and
correct in all material respects as of such earlier date). The representations
and warranties set forth in Article III of the Second Restated Credit Agreement
(other than those set forth in Sections 3.01, 3.02, 3.04(c), 3.06(a), 3.08, and
3.16 of the Second Restated Credit Agreement) are true and correct on and as of
the Second Restatement Effective Date, except where the failure of such
representations and warranties to be true and correct has not resulted in and is
not reasonably likely to result in a Purchaser Material Adverse Effect (as
defined in the Acquisition Agreement) or a Company Material Adverse Effect (as
defined in the Acquisition Agreement).

(iii) No Default (as defined in the Second Restated Credit Agreement) or Event
of Default (as defined in the Second Restated Credit Agreement) has occurred and
is continuing.

SECTION 3.2.   Effect of Amendment.   (a) Except as expressly set forth herein,
this Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, or otherwise affect the rights and remedies of, the Lenders or the
Agents under the Original Credit Agreement, the First Restated Credit Agreement,
the Second Restated Credit Agreement or any other Senior Loan Document, and
shall not alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the Original
Credit Agreement, the First Restated Credit Agreement, the Second Restated
Credit Agreement or any other Senior Loan Document, all of which are ratified
and affirmed in all respects and shall continue in full force and effect.
Nothing herein shall be deemed to entitle any Loan Party to a consent to, or a
waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Original
Credit Agreement, the First Restated Credit Agreement, the Second Restated
Credit Agreement or any other Senior Loan Document in similar or different
circumstances. This Amendment shall apply to and be effective only with respect
to the provisions of the Original Credit Agreement, the First Restated Credit
Agreement, the Second Restated Credit Agreement and the other Senior Loan
Documents specifically referred to herein.

(b) On and after the First Restatement Effective Date and the Second Restatement
Effective Date, each reference in the Original Credit Agreement to “this
Agreement”, “hereunder”, “hereof”, “herein”, or words of like import, and each
reference to the Original Credit Agreement, “thereunder”, “thereof”, “therein”
or words of like import in any other Senior Loan Document shall be deemed a
reference to the First Restated Credit Agreement or the Second Restated Credit
Agreement, as the case may be. This Amendment shall constitute a “Senior Loan
Document” for all purposes of the Original Credit Agreement, the First Restated
Credit Agreement, the Second Restated Credit Agreement and the other Senior Loan
Documents.

SECTION 3.3.   Governing Law.   This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.

SECTION 3.4.   Costs and Expenses.   The Borrower agrees to reimburse the
Administrative Agent for its reasonable out-of-pocket expenses in connection
with this Amendment, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent.

12

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

SECTION 3.5.   Counterparts.   This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall    constitute but one and the same instrument.
Delivery of any executed counterpart of a signature page of this Amendment by
facsimile transmission or other electronic imaging means shall be as effective
as delivery of a manually executed counterpart hereof.

SECTION 3.6.   Headings.   The headings of this Amendment are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

13

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

EXHIBIT A

First Restated Credit Agreement

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

EXHIBIT B

Second Restated Credit Agreement

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

 

 

CREDIT AGREEMENT

dated as of June 27, 2001,

as amended and restated as of June 4, 2007,

among

RITE AID CORPORATION,

The Lenders Party Hereto,

CITICORP NORTH AMERICA, INC.,
as Administrative Agent and Collateral Processing Agent,

BANK OF AMERICA, N.A.,
as Syndication Agent,

JPMORGAN CHASE BANK , N.A.,
as Co-Documentation Agent,

WELLS FARGO FOOTHILL, LLC,
as Co-Documentation Agent

and

GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Documentation Agent

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

CITIGROUP GLOBAL MARKETS INC.,
as Lead Arranger and Joint Bookrunner

and

BANC OF AMERICA SECURITIES LLC,
as Joint Bookrunner

 

[CS&M Ref. No. 8500-406]

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

TABLE OF CONTENTS

 

 

 

Page

 

ARTICLE I

 

Definitions

 

SECTION 1.01.

 

Defined Terms

 

 

1

 

 

SECTION 1.02.

 

Classification of Loans and Borrowings

 

 

26

 

 

SECTION 1.03.

 

Terms Generally

 

 

26

 

 

SECTION 1.04.

 

Accounting Terms; GAAP

 

 

27

 

 

SECTION 1.05.

 

Terms Defined in Definitions Annex

 

 

27

 

 

ARTICLE II

 

The Credits

 

SECTION 2.01.

 

Commitments

 

 

27

 

 

SECTION 2.02.

 

Loans and Borrowings

 

 

28

 

 

SECTION 2.03.

 

Requests for Borrowings

 

 

28

 

 

SECTION 2.04.

 

Swingline Loans

 

 

29

 

 

SECTION 2.05.

 

Letters of Credit

 

 

30

 

 

SECTION 2.06.

 

Funding of Borrowings

 

 

34

 

 

SECTION 2.07.

 

Interest Elections

 

 

35

 

 

SECTION 2.08.

 

Termination and Reduction of Commitments

 

 

36

 

 

SECTION 2.09.

 

Repayment of Loans; Evidence of Indebtedness

 

 

36

 

 

SECTION 2.10.

 

Amortization and Repayment of Term Loans

 

 

37

 

 

SECTION 2.11.

 

Prepayment of Loans

 

 

37

 

 

SECTION 2.12.

 

Fees

 

 

39

 

 

SECTION 2.13.

 

Interest

 

 

40

 

 

SECTION 2.14.

 

Alternate Rate of Interest

 

 

40

 

 

SECTION 2.15.

 

Increased Costs

 

 

41

 

 

SECTION 2.16.

 

Break Funding Payments

 

 

41

 

 

SECTION 2.17.

 

Taxes

 

 

42

 

 

SECTION 2.18.

 

Payments Generally; Pro Rata Treatment; Sharing of Setoffs

 

 

43

 

 

SECTION 2.19.

 

Mitigation Obligations; Replacement of Lenders

 

 

44

 

 

SECTION 2.20.

 

Adjustments to Borrowing Base Advance Rates

 

 

45

 

 

SECTION 2.21.

 

Incremental Loans

 

 

45

 

 

ARTICLE III

 

Representations and Warranties

 

SECTION 3.01.

 

Organization; Powers

 

 

46

 

 

SECTION 3.02.

 

Authorization; Enforceability

 

 

46

 

 

SECTION 3.03.

 

Governmental Approvals; No Conflicts

 

 

46

 

 

SECTION 3.04.

 

Financial Condition; No Material Adverse Change

 

 

47

 

 

SECTION 3.05.

 

Properties

 

 

47

 

 

SECTION 3.06.

 

Litigation and Environmental Matters

 

 

47

 

 

SECTION 3.07.

 

Compliance with Laws and Agreements

 

 

47

 

 

SECTION 3.08.

 

Investment and Holding Company Status

 

 

48

 

 

SECTION 3.09.

 

Taxes

 

 

48

 

 

SECTION 3.10.

 

ERISA

 

 

48

 

 

SECTION 3.11.

 

Disclosure; Accuracy of Information

 

 

48

 

 

i

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

 

SECTION 3.12.

 

Subsidiaries

 

 

48

 

 

SECTION 3.13.

 

Insurance

 

 

48

 

 

SECTION 3.14.

 

Labor Matters

 

 

49

 

 

SECTION 3.15.

 

Solvency

 

 

49

 

 

SECTION 3.16.

 

Federal Reserve Regulations

 

 

49

 

 

SECTION 3.17.

 

Security Interests

 

 

49

 

 

SECTION 3.18.

 

Use of Proceeds

 

 

50

 

 

ARTICLE IV

 

Conditions

 

SECTION 4.01.

 

Second Restatement Effective Date

 

 

50

 

 

SECTION 4.02.

 

Each Credit Event

 

 

50

 

 

SECTION 4.03.

 

Borrowing Base Date

 

 

51

 

 

ARTICLE V

 

Affirmative Covenants

 

SECTION 5.01.

 

Financial Statements and Other Information

 

 

52

 

 

SECTION 5.02.

 

Notices of Material Events

 

 

54

 

 

SECTION 5.03.

 

Information Regarding Collateral

 

 

54

 

 

SECTION 5.04.

 

Existence; Conduct of Business

 

 

54

 

 

SECTION 5.05.

 

Payment of Obligations

 

 

55

 

 

SECTION 5.06.

 

Maintenance of Properties

 

 

55

 

 

SECTION 5.07.

 

Insurance

 

 

55

 

 

SECTION 5.08.

 

Books and Records; Inspection and Audit Rights; Collateral and Borrowing Base
Reviews

 

 

56

 

 

SECTION 5.09.

 

Compliance with Laws

 

 

57

 

 

SECTION 5.10.

 

Use of Proceeds and Letters of Credit

 

 

57

 

 

SECTION 5.11.

 

Additional Subsidiaries

 

 

58

 

 

SECTION 5.12.

 

Further Assurances

 

 

58

 

 

SECTION 5.13.

 

Subsidiaries

 

 

58

 

 

SECTION 5.14.

 

Intercompany Transfers

 

 

58

 

 

SECTION 5.15.

 

Inventory Purchasing

 

 

58

 

 

SECTION 5.16.

 

Cash Management System

 

 

59

 

 

SECTION 5.17.

 

Termination of Factoring Transactions

 

 

59

 

 

ARTICLE VI

 

Negative Covenants

 

SECTION 6.01.

 

Indebtedness; Certain Equity Securities

 

 

60

 

 

SECTION 6.02.

 

Liens

 

 

62

 

 

SECTION 6.03.

 

Fundamental Changes

 

 

63

 

 

SECTION 6.04.

 

Investments, Loans, Advances, Guarantees and Acquisitions

 

 

64

 

 

SECTION 6.05.

 

Asset Sales

 

 

65

 

 

SECTION 6.06.

 

Sale and Leaseback Transactions

 

 

66

 

 

SECTION 6.07.

 

Hedging Agreements

 

 

66

 

 

SECTION 6.08.

 

Restricted Payments; Certain Payments of Indebtedness

 

 

66

 

 

SECTION 6.09.

 

Transactions with Affiliates

 

 

68

 

 

SECTION 6.10.

 

Restrictive Agreements

 

 

69

 

 

SECTION 6.11.

 

Amendment of Material Documents

 

 

70

 

 

ii

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

 

SECTION 6.12.

 

Consolidated Fixed Charge Coverage Ratio

 

 

70

 

 

SECTION 6.13.

 

Restrictions on Asset Holdings by the Borrower

 

 

71

 

 

SECTION 6.14.

 

Corporate Separateness

 

 

72

 

 

 

ARTICLE VII

 

Events of Default

 

ARTICLE VIII

 

The Agents

 

ARTICLE IX

Miscellaneous

 

SECTION 9.01.

 

Notices

 

 

76

 

 

SECTION 9.02.

 

Waivers; Amendments

 

 

76

 

 

SECTION 9.03.

 

Expenses; Indemnity; Damage Waiver

 

 

78

 

 

SECTION 9.04.

 

Successors and Assigns

 

 

79

 

 

SECTION 9.05.

 

Survival

 

 

82

 

 

SECTION 9.06.

 

Integration; Effectiveness

 

 

82

 

 

SECTION 9.07.

 

Severability

 

 

82

 

 

SECTION 9.08.

 

Right of Setoff

 

 

83

 

 

SECTION 9.09.

 

Governing Law; Jurisdiction; Consent to Service of Process

 

 

83

 

 

SECTION 9.10.

 

WAIVER OF JURY TRIAL

 

 

83

 

 

SECTION 9.11.

 

Headings

 

 

84

 

 

SECTION 9.12.

 

Confidentiality

 

 

84

 

 

SECTION 9.13.

 

Interest Rate Limitation

 

 

84

 

 

SECTION 9.14.

 

Collateral Trust and Intercreditor Agreement

 

 

84

 

 

SECTION 9.15.

 

Cash Sweep

 

 

85

 

 

SECTION 9.16.

 

Electronic Communications

 

 

85

 

 

SECTION 9.17.

 

USA Patriot Act

 

 

86

 

 

SECTION 9.18.

 

Release of Interim Collateral; Termination of Interim Collateral Documents

 

 

86

 

 

 

iii

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

ANNEXES:

 

 

Annex 1—Definitions Annex

 

 

Annex 2—Subordination Terms

 

 

SCHEDULES:

 

 

Schedule 1.01

—

Subsidiary Loan Parties

Schedule 2.01

—

Commitments

Schedule 3.04

—

Undisclosed Liabilities

Schedule 3.05 (a)

—

Properties

Schedule 3.05(c)

—

Leased Warehouses and Distribution Centers

Schedule 3.06(a)

—

Litigation

Schedule 3.06(b)

—

Environmental Matters

Schedule 3.07

—

Compliance with Laws

Schedule 3.09

—

Taxes

Schedule 3.12

—

Subsidiaries

Schedule 3.13

—

Insurance

Schedule 3.14

—

Labor

Schedule 5.11

—

Subsidiaries

Schedule 6.01(a)(xii)

—

Existing Indebtedness

Schedule 6.01(b)

—

Equity Issuances

Schedule 6.02(xi)

—

Liens

Schedule 6.04

—

Investments

Schedule 6.08(a)

—

Restricted Payments

Schedule 6.09

—

Affiliate Transactions

EXHIBITS:

 

 

Exhibit A-1

—

Form of Term Note

Exhibit A-2

—

Form of Revolving Credit Note

Exhibit B

—

Form of Borrowing Base Certificate

Exhibit C

—

Form of Assignment and Acceptance Agreement

Exhibit D-1

—

Form of Senior Subsidiary Guarantee Agreement

Exhibit D-2

—

Form of Interim Collateral and Guarantee Agreement

Exhibit E

—

Form of Senior Subsidiary Security Agreement

Exhibit F-1

—

Form of Senior Indemnity, Subrogation and Contribution Agreement

Exhibit F-2

—

Form of Interim Indemnity, Subrogation and Contribution Agreement

Exhibit G

—

Form of Second Priority Subsidiary Guarantee Agreement

Exhibit H

—

Form of Second Priority Subsidiary Security Agreement

Exhibit I

—

Form of Second Priority Indemnity, Subrogation and Contribution Agreement

Exhibit J-1

—

Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, Special New York
Counsel to the Borrower

Exhibit J-2

—

Form of Opinion of Robert Sari, General Counsel of the Borrower

 

iv

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

CREDIT AGREEMENT dated as of June 27, 2001, as  amended and restated as of
June 4, 2007 (this “Agreement”),  among RITE AID CORPORATION, a Delaware
corporation, the  LENDERS party hereto, CITICORP NORTH AMERICA, INC., as 
Administrative Agent and Collateral Processing Agent and BANK  OF AMERICA, N.A.,
as Syndication Agent.

On the Effective Date (such term and each other capitalized term used but  not
otherwise defined in this preamble having the meaning assigned to such term in 
Article I below or in the Definitions Annex), the Borrower, the Administrative
Agent, the  Collateral Agent and certain of the Lenders entered into this
Agreement pursuant to  which certain of the Lenders thereunder agreed to extend
credit to the Borrower on a  revolving credit basis and to make term loans to
the Borrower.

On the First Restatement Effective Date, the Tranche 1 Term Lenders  made
Tranche 1 Term Loans in an aggregate principal amount of $145,000,000. The 
parties hereto desire to amend this Agreement and to restate it in its entirety
giving effect  to such amendment.

The Borrower has requested the Tranche 2 Term Lenders to extend credit 
hereunder in the form of Tranche 2 Term Loans in an aggregate principal amount
of  $1,105,000,000, which may be drawn on the Second Restatement Effective Date.

The proceeds of the Tranche 2 Term Loans will be used (i) to pay part of  the
consideration due to the Seller in connection with the Acquisition, (ii) to pay
fees and  expenses (including any premiums and amendment fees) incurred in
connection with the  Transactions, and (iii) for general corporate purposes
(including the payment of accrued  interest). The proceeds of Revolving Loans
and Swingline Loans made on or after the  Second Restatement Effective Date will
be used for general corporate purposes, including  the payment of part of the
consideration due to the Seller in connection with the  Acquisition, the payment
of fees and expenses (including any premiums and amendment  fees) incurred in
connection with the Transactions, the financing of Optional Debt  Repurchases,
permitted capital expenditures, the repurchase of the Borrower’s and/or its 
Subsidiaries’ (including Rite Aid Lease Management Company’s) Preferred Stock
and  permitted Restricted Payments, as more fully described herein. Letters of
Credit will be used solely to support payment obligations of the Borrower and
the Subsidiaries incurred  in the ordinary course of business.

Accordingly, in consideration of the mutual agreements herein contained  and
other good and valuable consideration, the receipt and sufficiency of which are 
hereby acknowledged, the parties hereto agree that this Agreement shall be
amended and  restated to read in its entirety as follows:

ARTICLE I

Definitions

SECTION 1.01.   Defined Terms.   As used in this Agreement, the  following terms
have the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

“Account” means any right to payment for goods sold or leased or for services
rendered, whether or not earned by performance.

“Account Debtor” means, with respect to any Account, the obligor with respect to
such Account.

“Accounts Receivable Advance Rate” means the accounts receivable advance rate
determined in accordance with Section 2.20.

“Acquisition” means the acquisition by the Borrower of all the Equity Interests
in Holdings.

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

“Additional Lender” has the meaning assigned to such term in Section 2.21.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

“Adjustment Date” means the first day of each calendar month.

“Administrative Agent” means CNAI, in its capacity as administrative agent for
the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Agents” means the Administrative Agent and the Collateral Agent.

“Agent Parties” has the meaning assigned to such term in Section 9.16(c).

“Alternate Base Rate” means, for any day, a rate per annum equal to the greater
of (a) the Citibank Base Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Citibank Base Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Citibank Base Rate or the Federal Funds Effective Rate.

“Amendment and Restatement Agreement” means the Amendment and Restatement
Agreement dated November 8, 2006 relating to the Original Agreement.

“Applicable Percentage” means, with respect to any Revolving Lender, the
percentage of the total Revolving Commitments represented by such Lender’s
Revolving Commitment. If the Revolving Commitments have been terminated or
expired, the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.

“Applicable Rate” means, on any day, (a) with respect to any ABR Tranche 2 Term
Loan, a rate per annum of 0.75% and, with respect to any Eurodollar Tranche 2
Term Loan, a rate per annum of 1.75% and (b) with respect to any ABR Loan (other
than a Tranche 2 Term Loan) or Eurodollar Loan (other than a Tranche 2 Term
Loan), as the case may be, the applicable rate per annum set forth below
(expressed in basis points) under the caption “ABR Spread” or “Eurodollar
Spread”, as the case may be, in each case based upon the Average Revolver
Availability determined as of the most recent Adjustment Date; provided that
until the first Adjustment Date occurring after the Original Restatement
Effective Date, the Applicable Rate shall be the applicable rate per annum set
forth below in Category 2; and provided further, that during any period after
the date that is 120 days after the Second Restatement Effective Date but prior
to the Borrowing Base Date, the “Applicable Rate” shall mean (i) with respect to
ABR Tranche 2 Term Loans, a rate per annum of 1.25% and (ii) with respect to
Eurodollar Tranche 2 Term Loans, a rate per annum of 2.25%:

RATING:

 

 

 

ABR Spread
(bps)

 

Eurodollar Spread
(bps)

 

Category 1
Average Revolver Availability greater than $1,250,000,000

 

 

25

 

 

 

125

 

 

Category 2
Average Revolver Availability greater than $500,000,000 but less than or equal
to
$1,250,000,000

 

 

50

 

 

 

150

 

 

Category 3
Average Revolver Availability less than or equal to $500,000,000

 

 

75

 

 

 

175

 

 

 

2

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

“Approved Fund” means (a) with respect to any Lender, a CLO managed by such
Lender or by an Affiliate of such Lender or (b) with respect to any Lender that
is a fund which invests in bank loans and similar extensions of credit, any
other fund that invests in bank loans and similar extensions of credit and is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit C or any other form approved by the Administrative Agent.

“Average Revolver Availability” means, as determined on any Adjustment Date, the
average daily Revolver Availability during the calendar month immediately
preceding such Adjustment Date; provided that the Average Revolver Availability
as determined on the first Adjustment Date occurring after the Original
Restatement Effective Date shall be the average daily Revolver Availability for
the period from the Original Restatement Effective Date to the day immediately
prior to such first Adjustment Date.

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

“Borrower” means Rite Aid Corporation, a Delaware corporation.

“Borrowing” means (a) a Loan of the same Class and Type, made, converted or
continued on the same date and, in the case of a Eurodollar Loan, as to which a
single Interest Period is in effect or (b) a Swingline Loan.

“Borrowing Base Amount” means, with respect to the Borrower, an amount equal to
the sum, without duplication, of the following;

(a)                the Accounts Receivable Advance Rate multiplied by the book
value of Eligible Accounts Receivable; plus

(b)                the Pharmaceutical Inventory Advance Rate multiplied by the
Eligible Pharmaceutical Inventory Value; plus

(c)                the Other Inventory Advance Rate multiplied by the Eligible
Other Inventory Value; plus

(d)                the Script Lists Advance Rate multiplied by the Eligible
Script Lists Value; minus

(e)                a reserve in an aggregate amount equal to the Borrower’s
then-current exposure upon early termination under each of its existing and
future Hedging Agreements; minus

(f) any reserves established by the Collateral Agent in the exercise of its
reasonable judgment to reflect Borrowing Base Factors;

provided, that, for purposes of determining the Borrowing Base Amount at any
date of determination, the amount set forth in clause (d) of this definition
shall not exceed the lesser of (i) $800,000,000 and (ii) 25% of the Borrowing
Base Amount.

The Borrowing Base Amount shall be computed (i) weekly with respect to Eligible
Accounts Receivable and Eligible Inventory stored at any location other than a
distribution center, (ii) monthly with respect to Eligible Inventory stored at a
distribution center and (iii) annually with respect to Eligible Script Lists, in
each case in accordance with Sections 2.20 and 5.01(f). The Borrowing Base
Amount at any time in effect shall be determined by reference to the Borrowing
Base Certificate most recently delivered pursuant to Section 5.01(f).

“Borrowing Base Certificate” means a certificate substantially in the form of
Exhibit B or in such other form as the Agents may approve.

3

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

“Borrowing Base Date” means the first date after the Second Restatement
Effective Date on which the conditions set forth in Section 4.03 have been
satisfied.

“Borrowing Base Factors” means landlord’s liens affecting Eligible Inventory,
factors affecting the saleability or collectability of Eligible Accounts
Receivable and Eligible Inventory at retail or in liquidation, factors affecting
the market value of Eligible Inventory, Eligible Accounts Receivable or Eligible
Script Lists, other impediments to the Collateral Agent’s ability to realize
upon the Eligible Accounts Receivable, the Eligible Inventory or the Eligible
Script Lists and other factors affecting the credit value to be afforded the
Eligible Accounts Receivable, the Eligible Inventory and the Eligible Script
Lists.

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03.

“Bridge Facility” means the bank credit facility, if any, under which loans are
made to the Borrower on the Second Restatement Effective Date in an aggregate
principal amount equal to $1,220,000,000 minus the aggregate principal amount,
if any, of New Notes issued on or prior to the Second Restatement Effective
Date.

“Business Acquisition” means (i) an Investment by the Borrower or any of the
Subsidiaries in any other Person (including an Investment by way of acquisition
of debt or equity securities of any other Person) pursuant to which such Person
shall become a Subsidiary or shall be merged into or consolidated with the
Borrower or any of the Subsidiaries or (ii) an acquisition by the Borrower or
any of the Subsidiaries of the property and assets of any Person (other than the
Borrower or any of the Subsidiaries) that constitute substantially all the
assets of such Person or any division or other business unit of such Person;
provided that the acquisition of prescription files and Stores and the
acquisition of Persons substantially all of whose assets consist of fewer than
10 Stores, in each case in the ordinary course of business and not substantially
inconsistent with the business projections of the Borrower and the Subsidiaries
delivered to the Lenders on or about the Original Restatement Effective Date
shall not constitute a Business Acquisition.

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any Capital Lease, which obligations should
be classified and accounted for as capital leases on a balance sheet of such
Person under GAAP, and the amount of such obligations shall be the capitalized
amount thereof determined in accordance with GAAP.

“Cash Management System” shall have the meaning assigned to such term in the
Senior Subsidiary Security Agreement.

“Cash Sweep Cash Collateral Account” shall have the meaning assigned to such
term in the Senior Subsidiary Security Agreement.

“Cash Sweep Notice” shall have the meaning assigned to such term in the Senior
Subsidiary Security Agreement.

“Cash Sweep Period” shall have the meaning assigned to such term in the Senior
Subsidiary Security Agreement.

“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934, as amended, and the rules of the
SEC thereunder as in effect on the Second Restatement Effective Date) (other
than (i) Green Equity Investors III, L.P. and its Affiliates or (ii) the Seller
and its Affiliates as a result of the Acquisition), of 30% or more of the
outstanding shares of common stock of the Borrower; (b) at the end of any period
of 12 consecutive calendar months, the occupation of a majority of the seats on
the board of directors of the Borrower by Persons who were not members of the
board of directors of the Borrower on the first day of such period; or
(c)         the occurrence of a “Change of Control”, as defined in any Indenture
or other agreement that governs the terms of any Material Indebtedness.

4

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

“Change in Law” means (a) the adoption of any law, rule or regulation after the
Original Restatement Effective Date, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the Original Restatement Effective Date or (c) compliance by any
Lender or any Issuing Bank (or, for purposes of Section 2.15(b), by any lending
office of such Lender or by such Lender’s or such Issuing Bank’s holding
company, if any) with any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority made or issued after the
Original Restatement Effective Date.

“Charges” has the meaning assigned to such term in Section 9.13.

“Citibank Base Rate” means the rate of interest publicly announced by Citibank,
N.A. in New York City from time to time as the Citibank Base Rate.

“Citibank Concentration Account” shall have the meaning assigned to such term in
the Senior Subsidiary Security Agreement.

“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans, Tranche 1
Term Loans, Tranche 2 Term Loans, or Swingline Loans and, when used in reference
to any Commitment, refers to whether such Commitment is a Revolving Commitment,
a Tranche 1 Term Commitment or a Tranche 2 Term Commitment.

“CLO” means any entity (whether a corporation, partnership, trust or otherwise)
that is engaged in making, purchasing, holding or otherwise investing in bank
loans and similar extensions of credit in the ordinary course of its business
and is administered or managed by a Lender or an Affiliate of a Lender.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral Agent” means CNAI, in its capacity as collateral processing agent
for the Lenders.

“Collateral and Guarantee Requirement” means the requirement that:

(a)                the Administrative Agent shall have received from each
Subsidiary Loan Party either (i) a counterpart of, or a supplement to, each
Senior Collateral Document duly executed and delivered on behalf of such Loan
Party or (ii) in the case of any Person that becomes a Subsidiary Loan Party
after the Second Restatement Effective Date, a supplement to each applicable
Senior Collateral Document, in the form specified therein, duly executed and
delivered on behalf of such Subsidiary Loan Party;

(b)                (i) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably requested by
the Administrative Agent to be filed, registered or recorded to create the Liens
intended to be created by the Senior Collateral Documents and perfect such Liens
to the extent required by, and with the priority required by, this Agreement and
the Senior Collateral Documents, shall have been filed, registered or recorded
or delivered to the Administrative Agent for filing, registration or recording
or (ii) the Administrative Agent shall have been provided with all
authorizations, consents and approvals from each Loan Party, Governmental
Authority and other Person reasonably requested by it to file, record or
register all documents and instruments referred to in clause (b)(i) of this
definition; and

(c)                each Loan Party shall have obtained all consents and
approvals required to be obtained by it in connection with the execution and
delivery of all Senior Collateral Documents to which it is a party, the
performance of its obligations thereunder and the granting by it of the Liens
thereunder.

“Commitment” means the Revolving Commitments, the Tranche 1 Term Commitments and
the Tranche 2 Term Commitments, or any combination thereof (as the context
requires).

“Communications” has the meaning assigned to such term in Section 9.16(a).

5

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

“Consolidated Capital Expenditures” means, for any period, the aggregate amount
of expenditures by the Borrower and its Consolidated Subsidiaries for plant,
property and equipment and prescription files during such period (including any
such expenditure by way of acquisition of a Person or by way of assumption of
Indebtedness or other obligations of a Person, to the extent reflected as plant,
property and equipment or as prescription file assets) minus the aggregate
amount of Net Cash Proceeds received by the Borrower and its Consolidated
Subsidiaries from the sale of Stores to third parties pursuant to Sale and
Leaseback Transactions; provided that the aggregate amount of expenditures by
the Borrower and its Consolidated Subsidiaries referred to above shall exclude,
without duplication, (i) any such expenditures made for the replacement or
restoration of assets to the extent financed by Casualty/Condemnation Proceeds
relating to the asset or assets being replaced or restored, (ii) any amounts
paid to any party under a lease entered into in connection with a Sale and
Leaseback Transaction with respect to the termination of such lease and the
reacquisition by the Borrower or any of the Subsidiaries of the property subject
to such lease and (iii) any such expenditures made for the purchase or other
acquisition from a third party of Stores, leases and prescription files, but
only to the extent that an equivalent or greater amount is received from such
third party as consideration for the sale or other disposition to such third
party of Stores, leases and/or prescription files of a substantially equivalent
value closed at substantially the same time as, and entered into as part of a
single related transaction with, such purchase or acquisition (and if a lesser
amount is received from such third party as consideration for such sale or other
disposition, then the amount of Consolidated Capital Expenditures for purposes
hereof shall be the expenditures made net of the consideration received);
provided further that Consolidated Capital Expenditures shall in no case be less
than zero.

“Consolidated EBITDA” means, for any period, without duplication, Consolidated
Net Income for such period, plus (a) to the extent deducted in determining
Consolidated Net Income for such period, the aggregate amount of
(i) consolidated interest expenses, whether cash or non-cash, and charges,
commissions, discounts, yield and other similar fees and charges incurred
pursuant to Factoring Transactions or by Securitization Vehicles in connection
with Securitizations which are payable to any Person other than a Loan Party,
and any other amounts comparable to or in the nature of interest under any
Securitization or Factoring Transaction, including losses on the sale of
Securitization Assets in a Securitization accounted for as a “true sale” or
Factoring Assets in a Factoring Transaction accounted for as a “true sale,”
(ii) provision for income taxes, (iii) depreciation and amortization, (iv) LIFO
Adjustments which reduced such Consolidated Net Income, (v) store closing and
non-cash impairment expenses, (vi) any other nonrecurring charge to the extent
such nonrecurring charge does not involve any cash expenditure during such
period, (vii) non-cash compensation expenses related to stock option and
restricted stock employee benefit plans, (viii) the non-cash interest component,
as adjusted from time to time, in respect of reserves, (ix) all costs, fees,
charges and expenses incurred in connection with the Transactions, (x) all
charges incurred relating to the investigation of the Borrower by the United
States Attorney’s Office and the United States Department of Labor and all
amounts paid in satisfaction of any judgment, fine or settlement resulting
therefrom, (xi) all costs and litigation expenses incurred in connection with
litigation, investigations and other proceedings relating to the business
conduct and practices of the former management of the Borrower and (xii) all
Integration Expenses, and minus (b) to the extent not deducted in determining
Consolidated Net Income for such period, the aggregate amount of (i) any cash
expenditure during such period in connection with which a nonrecurring charge
was taken and added back to Consolidated Net Income pursuant to clause (a) above
in calculating Consolidated EBITDA in any prior period and (ii) LIFO Adjustments
which increased such Consolidated Net Income.

“Consolidated Fixed Charge Coverage Ratio” means, for any period, the ratio of
(i) Consolidated EBITDA plus Consolidated Rent less Consolidated Capital
Expenditures plus Integration Capital Expenditures to (ii) Consolidated Interest
Charges plus Consolidated Rent plus cash dividends paid pursuant to
Section 6.08(a), in each case for such period and determined in accordance with
GAAP.

6

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

“Consolidated Interest Charges” means, for any period, the aggregate amount of
interest charges, whether expensed or capitalized, incurred or accrued during
such period by the Borrower and its Consolidated Subsidiaries, solely to the
extent paid or payable (whether during or after such period) in cash (i) minus
non-cash interest expenses during such period related to (x) litigation
reserves, (y) closed store liability reserves, if any, and (z) self-insurance
reserves and (ii) plus, to the extent not otherwise included in such interest
charges, commissions, discounts, yield and other similar fees and charges
incurred pursuant to Factoring Transactions or by Securitization Vehicles in
connection with Securitizations which are payable to any Person other than a
Loan Party, and any other amounts comparable to or in the nature of interest
under any Securitization or Factoring Transaction, including losses on the sale
of Securitization Assets in a Securitization accounted for as a “true sale” or
Factoring Assets in a Factoring Transaction accounted for as a “true sale”.

“Consolidated Net Income” means, for any period, the net income (or loss) of the
Borrower and its Consolidated Subsidiaries (exclusive of (a) extraordinary items
of gain or loss during such period or gains or losses from Indebtedness
modifications during such period, (b) any gain or loss in connection with any
Asset Sale during such period, other than sales of inventory in the ordinary
course of business, but in the case of any loss only to the extent that such
loss does not involve any current or future cash expenditure, (c) the cumulative
effect of accounting changes during such period and (d) net income or loss
attributable to any Investments in Persons other than Affiliates of the
Borrower), determined on a consolidated basis for such period in accordance with
GAAP.

“Consolidated Rent” means, for any period, the consolidated rental expense of
the Borrower and its Consolidated Subsidiaries for such period, and including in
any event rental costs of closed stores for such period whether or not reflected
as an expense in the determination of Consolidated Net Income for such period.

“Consolidated Subsidiary” means, with respect to any Person, at any date, any
Subsidiary or other entity the accounts of which would, in accordance with GAAP,
be consolidated with those of such Person in its consolidated financial
statements if such statements were prepared as of such date.

“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.

“CNAI” means Citicorp North America, Inc.

“Direct Delivery Vendor” has the meaning assigned to such term in the
Intercompany Inventory Purchase Agreement.

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

“Definitions Annex” means the definitions annex attached hereto as Annex 1 (as
the same may be amended, supplemented or otherwise modified from time to time).

“Deposit Account” shall have the meaning assigned to such term in the Senior
Subsidiary Security Agreement.

“dollars” or “$” refers to lawful money of the United States of America.

“Eligible Accounts Receivable” means, at any date of determination, all Accounts
that satisfy at the time of creation and continue to meet the same at the time
of such determination the criteria established from time to time by the
Collateral Agent in its reasonable judgment to reflect Borrowing Base Factors.
On the Second Restatement Effective Date, those criteria are:

7

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

(a) such Account constitutes an “account” or “chattel paper” within the meaning
of the Uniform Commercial Code of the state in which the Account is located;

(b) all payments on such Account are by the terms of such Account due not later
than 90 days after the date of service (i.e., the transaction date) and are
otherwise on terms that are normal and customary in the business of the Borrower
and the Subsidiaries;

(c) such Account has been billed and has not remained unpaid for more than 120
days following the date of service;

(d) such Account is denominated in dollars;

(e) such Account arose from a completed, outright and lawful sale of goods or
the completed performance of services by the applicable Subsidiary Loan Party
and accepted by the applicable Account Debtor, and the amount of such Account
has been properly recognized as revenue on the books of the applicable
Subsidiary Loan Party;

(f) such Account is owned solely by a Subsidiary Guarantor (and has not been
transferred pursuant to a Securitization or a Factoring Transaction);

(g) the proceeds of such Account are payable solely to a Deposit Account which
(A) is under the control of the Collateral Agent and (B) has not been released
or transferred in accordance with Section 5.16 or otherwise;

(h) such Account arose in the ordinary course of business of the applicable
Subsidiary Loan Party;

(i) not more than 50% of the aggregate amount of Accounts from the same Account
Debtor and any Affiliates thereof remain unpaid for more than 120 days following
the date of service;

(j) to the knowledge of the Borrower and the Subsidiaries, no event of death,
bankruptcy, insolvency or inability to pay creditors generally of the Account
Debtor of such Account has occurred, and no notice thereof has been received;

(k) payment of such Account is not being disputed by the Account Debtor thereof;

(l) such Account complies in all material respects with the requirements of all
applicable laws and regulations, whether Federal, state or local, including the
Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and
Regulation Z of the Federal Reserve Board;

(m) with respect to such Account, the Account Debtor (i) is organized in the
United States (or, if such Account Debtor is not organized in the United States,
such Account is supported by a letter of credit approved by the Collateral Agent
in favor of the applicable Subsidiary Loan Party) and (ii) is not an Affiliate
or Subsidiary or an Affiliate of any of the Subsidiaries;

(n) such Account is subject to a perfected first priority security interest in
favor of the Collateral Agent for the benefit of the Lenders pursuant to the
Senior Collateral Documents and is not subject to any other Lien (other than the
Second Priority Lien);

(o) with respect to any such Account for an amount greater than $5,000,000, the
Account Debtor has not been disapproved by the Required Lenders (based, on the
Required Lenders’ reasonable judgment, upon the creditworthiness of such Account
Debtor);

(p) the representations and warranties contained in the Senior Loan Documents
with respect to such Account are true and correct in all material respects; and

8

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

(q) such Account is in full force and effect and constitutes a legal, valid and
binding obligation of the Account Debtor, enforceable against such Account
Debtor in accordance with its terms.

“Eligible Inventory” means, at any date of determination, all inventory (as
defined in the Uniform Commercial Code) owned by any Subsidiary Loan Party that
satisfies at the time of such determination the criteria established from time
to time by the Collateral Agent in its reasonable judgment to reflect Borrowing
Base Factors. On the Second Restatement Effective Date, Eligible Inventory shall
exclude, without duplication, the following:

(a) any such inventory that has been shipped to a customer, even if on a
consignment or “sale or return” basis, or is otherwise not in the possession or
control of or any Subsidiary Loan Party or a warehouseman or bailee of any
Subsidiary Loan Party;

(b) any inventory against which any Subsidiary Loan Party has taken a reserve,
to the extent of such reserve, to the extent specified by the Collateral Agent
from time to time in its reasonable judgment to reflect Borrowing Base Factors;

(c) any inventory that has been discontinued or is otherwise of a type (SKU) not
currently offered for sale on a regular basis by the Subsidiary Loan Parties
(including any such inventory obtained in connection with a Business
Acquisition) to the extent specified by the Collateral Agent from time to time
in its reasonable judgment to reflect Borrowing Base Factors;

(d) any inventory not located in the United States or otherwise not subject to a
valid and perfected Lien under the Senior Collateral Documents, subject to no
prior or equal Lien;

(e) any supply, scrap or obsolete inventory or inventory that is otherwise
unsaleable;

(f) any inventory that is past its expiration date, is damaged or not in good
condition, is a sample used for marketing purposes or does not meet all material
standards imposed by any governmental authority having regulatory authority over
such inventory, except in each case to the extent of its net realizable value as
determined by the Collateral Agent from time to time in its reasonable judgment;

(g) any inventory that is subject to any licensing, patent, royalty, trademark,
trade name or copyright agreement with any third Person from whom the Borrower
or any of its Subsidiaries has received notice of a dispute in respect of such
agreement, to the extent that the Collateral Agent determines, in its reasonable
judgment, that such dispute could be expected to prevent the sale of such
inventory;

(h) any inventory which is subject to a negotiable document of title which has
not been delivered to the Administrative Agent;

(i) any inventory to the extent that such inventory is not comprised of readily
marketable materials of a type manufactured, consumed or held for resale by the
Subsidiary Loan Parties in the ordinary course of business;

(j) any inventory to the extent that such inventory consists of raw materials,
component parts and/or work-in-progress;

(k) any inventory in respect of which the applicable representations and
warranties in the Senior Loan Documents are not true and correct in all material
respects;

(l) any inventory to which the Subsidiary Loan Parties do not have good title or
any inventory which a Subsidiary Loan Party holds on consignment or on a “sale
or return” basis; and

9

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

(m) any inventory (as notified by the Collateral Agent to the Borrower) that the
Collateral Agent has, in its reasonable judgment, deemed ineligible in order to
reflect Borrowing Base Factors;

provided, however, that no inventory which is stored at a distribution center
leased by the Borrower or any other Person shall be considered “Eligible
Inventory” unless each of the waivers obtained pursuant to the Original
Agreement from the lessor of each leased distribution center of the Subsidiary
Loan Parties of any statutory, common law or contractual landlord’s lien with
respect to any inventory of any Subsidiary Loan Party (other than with respect
to inventory located at leased warehouses having a value in the aggregate not to
exceed $40,000,000) shall be in full force and effect (or the Collateral Agent
shall have granted a waiver to such compliance).

“Eligible Other Inventory Value” means, at any date of determination, an amount
equal to (i) the cost of Eligible Inventory that is Other Inventory (less any
appropriate reserve for obsolete Other Inventory and any profits accrued in
connection with transfers of Other Inventory between the Borrower and the
Subsidiaries or between Subsidiaries) at such date, in dollars, determined in
accordance with GAAP consistently applied and on a basis consistent with that
used in the preparation of the most recent audited consolidated financial
statements of the Borrower and its Consolidated Subsidiaries delivered to the
Lenders pursuant to Section 5.01(a) multiplied by (ii) the Net Orderly
Liquidation Rate with respect to such Other Inventory.

“Eligible Pharmaceutical Inventory Value” means, at any date of determination,
an amount equal to (i) the cost of Eligible Inventory that is Pharmaceutical
Inventory (less any appropriate reserve for obsolete Pharmaceutical Inventory
and any profits accrued in connection with transfers of Pharmaceutical Inventory
between the Borrower and the Subsidiaries or between Subsidiaries) at such date,
in dollars, determined in accordance with GAAP consistently applied and on a
basis consistent with that used in the preparation of the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Lenders pursuant to Section 5.01(a) multiplied by
(ii) the Net Orderly Liquidation Rate with respect to such Pharmaceutical
Inventory.

“Eligible Script Lists” means, at any date of determination, all lists owned and
maintained on such date by the Subsidiary Loan Parties setting forth Persons
(and addresses, telephone numbers or other contact information therefor) who
currently purchase or otherwise obtain, in any Store owned or operated by any
Subsidiary Loan Party, medication required to be dispensed by a licensed
professional.

“Eligible Script Lists Value” means, at any date of determination, the
liquidation value of the Eligible Script Lists in dollars, as most recently
determined in connection with an appraisal performed for purposes of this
Agreement by Washburn & Associates or such other appraisal firm satisfactory to
the Collateral Agent.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.

“Environmental Liability” means all liabilities, obligations, damages, losses,
claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and
costs, (including administrative oversight costs, natural resource damages and
remediation costs), whether contingent or otherwise, arising out of or relating
to: (a) compliance or non-compliance with any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release of
any Hazardous Materials or (e) any contract, agreement or other

10

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

consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

“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. “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA; or (h) the existence of any event or
condition that could reasonably be expected to constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any Plan.

“Estimated Borrowing Base Amount” means the Borrowing Base Amount; provided that
for this purpose the assets and properties of Holdings and its subsidiaries
shall be deemed to have been pledged, on a first priority basis, to the
Collateral Agent for the benefit of the Lenders pursuant to the Senior
Collateral Documents.

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

“Event of Default” has the meaning assigned to such term in Article VII.

“Excess Cash Flow” means, for any fiscal year, without duplication, of:

(a) net cash proceeds from operating activities adjusted by net (repayments to)
proceeds from accounts receivable securitization as reflected in the statement
of cash flows to the financial statements of the Borrower filed with the SEC for
the applicable fiscal year; minus

(b) the sum of (i) Consolidated Capital Expenditures for such fiscal year
(except to the extent attributable to the incurrence of Capital Lease
Obligations or synthetic lease obligations or otherwise financed by incurring
Long-Term Indebtedness (exclusive of Revolving Loans), by issuing Equity
Interests (exclusive of any issuance of Equity Interests to the Borrower or any
of the Subsidiaries and any amounts prepaid pursuant to Section 2.11(c)(ii)),
through the receipt of capital contributions (other than capital contributions
made by the Borrower or any of the Subsidiaries) or

11

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

using the proceeds of any disposition of assets outside the ordinary course of
business or other proceeds not included in Consolidated Net Income) plus
(ii) cash consideration paid during such fiscal year to make acquisitions or
other capital investments (except to the extent financed by incurring Long-Term
Indebtedness (exclusive of Revolving Loans), by issuing Equity Interests (other
than to the Borrower or any of the Subsidiaries), through the receipt of capital
contributions (other than capital contributions made by the Borrower or any of
the Subsidiaries) or using the proceeds of any disposition of assets outside the
ordinary course of business or other proceeds not included in Consolidated Net
Income); minus

(c) the aggregate principal amount of Long-Term Indebtedness repaid or prepaid
(other than Refinancing Indebtedness) by the Borrower and its Consolidated
Subsidiaries during such fiscal year, excluding Indebtedness in respect of
Revolving Loans (except to the extent accompanied by a corresponding reduction
in Revolving Commitments pursuant to Section 2.08) and Letters of Credit.

“Excluded Taxes” means, with respect to any Agent, any Lender, any Issuing Bank
or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction described in clause (a) above and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.19(b)), any withholding tax that (i) is in effect and would apply to
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement (or designates a new lending office), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to any withholding tax
pursuant to Section 2.17(a), or (ii) is attributable to such Foreign Lender’s
failure to comply with Section 2.17(e).

“Existing Guaranteed Unsecured Indebtedness” means Indebtedness outstanding as
of the Second Restatement Effective Date under the 9.25% Notes and the 8.625%
Notes.

“Existing Non-Guaranteed Indebtedness” means Indebtedness outstanding as of the
Second Restatement Effective Date under the Borrower’s 6.125% Notes due 2008,
the Borrower’s 6.875% Senior Debentures due 2013, the Borrower’s 7.70% Notes due
2027 and the Borrower’s 6.875% Notes due 2028.

“Existing Second Priority Debt” means Indebtedness outstanding as of the Second
Restatement Effective Date under the 8.125% Notes, the 7.5% Notes and the 2017
7.5% Notes.

“Factoring Assets” means any accounts receivable owed to the Borrower or any
Subsidiary (whether now existing or arising or acquired in the future) arising
in the ordinary course of business from the sale of goods or services, all
collateral securing such accounts receivable, all contracts and contract rights
and all guarantees or other obligations in respect of such accounts receivable,
all proceeds of such accounts receivable and other assets (including contract
rights) which are of the type customarily transferred in connection with the
factoring of accounts receivable and which are sold, transferred or otherwise
conveyed by the Borrower or a Subsidiary pursuant to a Factoring Transaction
permitted by this Agreement.

“Factoring Notice” means a written notice delivered by the Borrower to the
Administrative Agent at least 30 days after the termination of any
Securitization program indicating that the Borrower or its Subsidiaries intend
to engage in a Factoring Transaction.

12

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

“Factoring Transaction” means any transaction or series of transactions entered
into by the Borrower and any Subsidiaries pursuant to which the Borrower or such
Subsidiaries sells, conveys or otherwise transfers (or purports to sell, convey
or otherwise transfer) Factoring Assets of the Borrower or such Subsidiaries to
a non-related third party factor on market terms as determined in good faith by
the senior management of the Borrower; provided that (i) no portion of any
Indebtedness deemed to exist as a result of such Factoring Transaction (x) is
incurred or Guaranteed by the Borrower or any other Subsidiary (in each case,
other than as permitted pursuant to Section 6.01(a)(xvi)), (y) is recourse to
the Borrower or any other Subsidiary (in each case, other than as permitted
pursuant to Section 6.01(a)(xvi)) and (z) is secured (contingently or otherwise)
by any Lien on assets of the Borrower or any other Subsidiary (other than by the
Factoring Assets to be sold, conveyed or transferred to the third party factor),
(ii) such Factoring Transaction is consummated pursuant to customary contracts,
arrangements or agreements entered into with respect to the sale, purchase and
servicing of Factoring Assets on market terms for similar factoring, and
(iii) in connection with such Factoring Transaction, the third party factor
enters into an intercreditor arrangement reasonably acceptable to the Collateral
Agent.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

“Financial Covenant Effectiveness Period” means each period on or after the
Second Restatement Effective Date commencing on and including any date on which
Revolver Availability is less than $100,000,000 and ending on and excluding the
first day thereafter, if any, which is the 30th consecutive calendar day on
which Revolver Availability is equal to or greater than $100,000,000.

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer, vice president of financial accounting or controller of the
Borrower.

“Financial Statement Delivery Date” means the first date after the Second
Restatement Effective Date on which a consolidated balance sheet of the Borrower
including the assets of Holdings and its subsidiaries is filed with the SEC.

“First Amendment to the Amendment and Restatement” means the First Amendment
dated as of June 4, 2007 to the Amendment and Restatement Agreement.

“First Amendment Effective Date” shall have the meaning assigned to such term in
the First Amendment to the Amendment and Restatement.

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

“GAAP” means generally accepted accounting principles in the United States of
America.

“Government Lockbox Account” shall have the meaning assigned to such term in the
Senior Subsidiary Security Agreement.

“Government Lockbox Account Agreement” shall have the meaning assigned to such
term in the Senior Subsidiary Security Agreement.

“Government Lockbox Account Bank” shall have the meaning assigned to such term
in the Senior Subsidiary Security Agreement.

13

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

“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.

“Grantor” shall have the meaning assigned to such term in the Senior Subsidiary
Security Agreement.

“Hazardous Materials” means (a) petroleum products and byproducts, asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls, radon gas,
chlorofluorocarbons and all other ozone-depleting substances, or (b) any
chemical, material, substance, waste, pollutant or contaminant that is
prohibited, limited or regulated by or pursuant to any Environmental Law.

“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.

“Holdings” means The Jean Coutu Group (PJC) USA, Inc., a corporation organized
under the laws of the State of Delaware or, if the Reorganization (as defined in
the Stock Purchase Agreement dated as of August 23, 2006, pursuant to which the
Borrower intends to acquire all the outstanding Equity Interests in Holdings) is
consummated prior to the Second Restatement Effective Date, JCG (PJC) USA, LLC,
a limited liability company organized under the laws of the State of Delaware.

“HIPAA” has the meaning assigned to such term in Section 3.07.

“Incremental Commitment” has the meaning assigned to such term in Section 2.21.

“Incremental Facility” has the meaning assigned to such term in Section 2.21.

“Incremental Facility Amendment” has the meaning assigned to such term in
Section 2.21.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Inside Indebtedness” means Indebtedness of the Borrower or any Subsidiary
(other than intercompany Indebtedness permitted by Section 6.01(a)(iii)) which
matures on or before the Tranche 2 Term Maturity Date and any portion of any
other Indebtedness subject to scheduled amortization on or before the Tranche 2
Term Maturity Date.

“Integration Capital Expenditures” means, for any period, all capital
expenditures that (a) are directly attributable to the integration of the
acquisition of Holdings and its subsidiaries and (b) will not recur once the
integration of such acquisition of Holdings and its subsidiaries is complete.

“Integration Expenses” means, for any period, all expenses that (a) are directly
attributable to the integration of the acquisition of Holdings and its
subsidiaries and (b) will not recur once the integration of such acquisition of
Holdings and its subsidiaries is complete.

“Interest Election Request” means a request by the Borrower to convert or
continue a Revolving Borrowing or a Term Borrowing in accordance with
Section 2.07.

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a
Swingline Loan), the last day of each March, June, September and December,
(b) with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such

14

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

Interest Period, and (c) with respect to any Swingline Loan, the day that such
Loan is required to be repaid.

“Interest Period” means, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending (x) on the numerically
corresponding day in the calendar month that is one, two, three or six and, if
agreed to by all Lenders in the applicable Class, nine or 12 months thereafter,
(y) in the case of Revolving Loans, seven days thereafter or (z) in the case of
Revolving Loans, six weeks thereafter if, at the time of the relevant Borrowing,
all Lenders participating therein agree to make an interest period of such
duration available, in each case as the Borrower may elect; provided that (i) if
any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day (unless, in the
case of Interest Periods of one, two, three or six months, such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day), (ii) any Interest Period
of one, two, three or six months that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period and (iii) there
shall be no more than two Revolving Loans with a seven day Interest Period at
any time outstanding. For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made and thereafter shall be the
effective date of the most recent conversion or continuation of such Borrowing.

“Interim Collateral and Guarantee Requirement” means the requirement that:

(a) the Administrative Agent shall have received from each of Holdings and its
domestic subsidiaries either (i) a counterpart of, or a supplement to, each
Interim Collateral Document duly executed and delivered on behalf of such party
or (ii) in the case of any Person that becomes a domestic subsidiary of Holdings
after the Second Restatement Effective Date but before the Borrowing Base Date,
a supplement to each applicable Interim Collateral Document, in the form
specified therein, duly executed and delivered on behalf of such party;

(b) the Administrative Agent shall have received from each Subsidiary Loan Party
either (i) a counterpart of, or a supplement to, the Interim Subsidiary Loan
Party Guarantee Agreement duly executed and delivered on behalf of such party or
(ii) in the case of any Person that becomes a Subsidiary Loan Party after the
Second Restatement Effective Date but before the Borrowing Base Date, a
supplement to the Interim Subsidiary Loan Party Guarantee Agreement, in the form
specified therein, duly executed and delivered on behalf of such party;

(c) all outstanding Equity Interests in each domestic subsidiary of Holdings
shall have been pledged pursuant to the Interim Collateral and Guarantee
Agreement and the Collateral Agent shall have received certificates or other
instruments representing all such Equity Interests (to the extent certificated),
together with undated stock powers or other instruments of transfer with respect
thereto endorsed in blank;

(d) (i) all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the
Administrative Agent to be filed, registered or recorded to create the Liens
intended to be created by the Interim Collateral Documents and perfect such
Liens to the extent required by, and with the priority required by, this
Agreement and the Interim Collateral Documents, shall have been filed,
registered or recorded or delivered to the Administrative Agent for filing,
registration or recording or (ii) the Administrative Agent shall have been
provided with all authorizations, consents and approvals from each of Holdings
and its domestic subsidiaries, Governmental Authority and other Person
reasonably requested by it to file, record or register all documents and
instruments referred to in clause (d)(i) of this definition; and

15

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

(e) each of Holdings and its domestic subsidiaries shall have obtained all
consents and approvals required to be obtained by it in connection with the
execution and delivery of all Interim Collateral Documents to which it is a
party, the performance of its obligations thereunder and the granting by it of
the Liens thereunder.

“Inventory” has the meaning assigned to such term in the Intercompany Inventory
Purchase Agreement.

“Investment” by any Person in any other Person means (i) any direct or indirect
loan, advance or other extension of credit or capital contribution to or for the
account of such other Person (by means of any transfer of cash or other property
to any Person or any payment for property or services for the account or use of
any Person, or otherwise), (ii) any direct or indirect purchase or other
acquisition of any Equity Interests, bond, note, debenture or other debt or
equity security or evidence of Indebtedness, or any other ownership interest
(including, any option, warrant or any other right to acquire any of the
foregoing), issued by such other Person, whether or not such acquisition is from
such or any other Person, (iii) any direct or indirect payment by such Person on
a Guarantee of any obligation of or for the account of such other Person or any
direct or indirect issuance by such Person of such a Guarantee (provided,
however, that for purposes of Section 6.04, payments under Guarantees not
exceeding the amount of the Investment attributable to the issuance of such
Guarantee will not be deemed to result in an increase in the amount of such
Investment) or (iv) any other investment of cash or other property by such
Person in or for the account of such other Person. Any repurchase by the
Borrower of its own Equity Interests or Indebtedness shall not constitute an
Investment for purposes of this Agreement. The amount of any Investment shall be
the original principal or capital amount thereof less all returns of principal
or equity thereon (and without adjustment by reason of the financial condition
of such other Person) and shall, if made by the transfer or exchange of property
other than cash, be deemed to have been made in an original principal or capital
amount equal to the fair market value of such property at the time of such
transfer or exchange.

“Issuing Bank Agreement” has the meaning assigned to such term in
Section 2.05(i).

“Issuing Banks” means CNAI, JPMorgan Chase Bank, N.A., Bank of America, N.A. and
any other Lender designated as an Issuing Bank in accordance with the provisions
of Section 2.05(k), in each case in its capacity as an issuer of Letters of
Credit hereunder, and its successors in such capacity as provided in
Section 2.05(i). An Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case
the term “Issuing Banks” shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.

“Joint Venture” means, with respect to any Person, at any date, any other Person
in whom such Person directly or indirectly holds an Investment consisting of an
Equity Interest, and whose financial results would not be consolidated under
GAAP with the financial results of such Person on the consolidated financial
statements of such Person, if such statements were prepared in accordance with
GAAP as of such date.

“LC Commitment” means, with respect to each Issuing Bank, the commitment of such
Issuing Bank to issue Letters of Credit pursuant to Section 2.05. The initial
amount of each Issuing Bank’s LC Commitment is set forth on Schedule 2.01 or in
such Issuing Bank’s Issuing Bank Agreement.

“LC Disbursement” means a payment made by an Issuing Bank pursuant to a Letter
of Credit.

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time. The LC Exposure of any Revolving Lender at any time shall
be its Applicable Percentage of the total LC Exposure at such time.

16

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

“Lenders” means the Persons listed on Schedule 2.01 as having a Revolving
Commitment, a Tranche 1 Term Commitment or a Tranche 2 Term Commitment and any
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance. Unless the context otherwise requires, the term
“Lenders” includes the Swingline Lender.

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

“Leverage Ratio” means, on any date, the ratio of (a) Total Indebtedness as of
such date to (b) Consolidated EBITDA for the period of the four fiscal quarters
most recently completed on or prior to such date.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Page 3750 of the Telerate Service (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for dollar deposits with a maturity comparable to
such Interest Period. In the event that such rate is not available at such time
for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing
for such Interest Period shall be the rate rounded upwards, if necessary, to the
next 1/100 of 1% at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London office of
the Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

“LIFO Adjustments” means, for any period, the net adjustment to costs of goods
sold for such period required by the Borrower’s LIFO inventory method,
determined in accordance with GAAP.

“Loan Parties” means the Borrower and the Subsidiary Loan Parties.

“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.

“Lockbox Account” shall have the meaning assigned to such term in the Senior
Subsidiary Security Agreement.

“Long-Term Indebtedness” means any Indebtedness that, in accordance with GAAP,
constitutes (or, when incurred, constituted) a long-term liability.

“Margin Stock” means “margin stock”, as such term is defined in Regulation U of
the Board.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, properties, condition (financial or otherwise), or prospects
of the Borrower and the Subsidiaries, taken as a whole, (b) the ability of any
Loan Party to perform any of its material obligations under any Senior Loan
Document to which it is a party or (c) the legality, validity or enforceability
of the Senior Loan Documents (including, without limitation, the validity,
enforceability or priority of security interests granted thereunder) or the
rights of or benefits available to the Lenders under any Senior Loan Document.

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Hedging Agreements, of any one
or more of the Borrower and the Subsidiaries in an aggregate principal amount
exceeding $50,000,000. For purposes of this definition, the “principal amount”
of the obligations of the Borrower or any Subsidiary in respect of any Hedging
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that the Borrower or such Subsidiary would be required
to pay if such Hedging Agreement were terminated at such time.

17

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

“Maximum Rate” has the meaning assigned to such term in Section 9.13.

“Multiemployer Plan” means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

“Net Proceeds” means, with respect to any event (a) the cash proceeds received
in respect of such event including (i) any cash received in respect of any
noncash proceeds, but only as and when received, (ii) in the case of a casualty,
insurance proceeds and (iii) in the case of a condemnation or similar event,
condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by the Borrower and the
Subsidiaries to third parties (other than Affiliates) in connection with such
event, (ii) in the case of a sale, transfer or other disposition of an asset
(including pursuant to a sale and leaseback transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments required to be
made by the Borrower and the Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) secured by such asset and (iii) the amount of
all taxes paid (or reasonably estimated to be payable) by the Borrower and the
Subsidiaries, and the amount of any reserves established by the Borrower and the
Subsidiaries to fund contingent liabilities reasonably estimated to be payable,
in each case during the year that such event occurred or the next succeeding
year and that are directly attributable to such event (as determined reasonably
and in good faith by a Financial Officer).

“Net Orderly Liquidation Rate” means, with respect to any type of inventory, at
any date of determination, the net orderly liquidation rate with respect to such
type of inventory, expressed as a percentage of carrying cost after giving
effect to reserves, as determined by Hilco Appraisal Services, LLC (or another
appraisal firm chosen by the Collateral Agent) in connection with the most
recent appraisal of inventory of the Borrower and the Subsidiaries.

“New Notes” means one or more tranches of the Borrower’s notes issued or sold on
or about the Second Restatement Effective Date in one or more public offerings
or Rule 144A/Regulation S offerings or other private placements.

“Offer Period” has the meaning assigned to such term in Section 2.21.

“Operating Subsidiary” has the meaning assigned to such term in the Intercompany
Inventory Purchase Agreement.

“Optional Debt Repurchase” means any optional or voluntary repurchase,
redemption, retirement or defeasance for cash by the Borrower or any Subsidiary
of any publicly-traded Indebtedness of the Borrower.

“Original Agreement” means this Agreement, including all amendments hereto and
waivers hereof effective prior to the Second Restatement Effective Date, as in
effect immediately prior to the Second Restatement Effective Date.

“Other Inventory” means all inventory other than Pharmaceutical Inventory.

“Other Inventory Advance Rate” means the other inventory advance rate determined
in accordance with Section 2.20.

“Other Taxes” means any and all present or future recording, stamp, documentary,
excise, transfer, sales, property or similar taxes, charges or levies arising
from any payment made under any Senior Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, any Senior Loan
Document.

“Outside Indebtedness” means Indebtedness of the Borrower or any Subsidiary
(other than intercompany Indebtedness permitted by Section 6.01(a)(iii)) that
matures after the Tranche 2 Term Maturity Date, including the amount of any
scheduled amortization after the Tranche 2 Term Maturity Date.

18

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

“Parent Undertaking” means an agreement by the Borrower to cause a Subsidiary
other than a Securitization Vehicle to perform its obligations under the
instruments governing a Securitization which agreement (a) contains terms that
are customarily included in securitizations of accounts receivable involving
comparable companies and (b) does not provide for any Guarantee of payment or
other credit support in respect of Securitization Assets or Third Party
Interests.

“Participant” has the meaning assigned to such term in Section 9.04(c)(i).

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

“Perfection Certificate” means a certificate in the form of Schedule 8 to the
Senior Subsidiary Security Agreement or any other form approved by the Agents.

“Permitted Encumbrances” means:

(a) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 5.05;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 60 days or are being
contested in compliance with Section 5.05;

(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations;

(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

(e) judgment liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article VII;

(f) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary;

(g) licenses, sublicenses, leases or subleases granted in the ordinary course of
business with respect to real property; and

(h) landlord Liens arising by law securing obligations not overdue by more than
60 days or being contested in good faith;

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

“Permitted Second Priority Debt” means Second Priority Debt of the Borrower;
provided that (a) the terms of any such Indebtedness, and of any agreement
entered into and of any instrument issued in connection therewith, are otherwise
permitted by the Senior Loan Documents, (b) if such Indebtedness is issued or
incurred to refinance existing Indebtedness, such Indebtedness has a later
maturity and a longer weighted average life than such existing Indebtedness,
(c) 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, (d) 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, (e) 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
(f) notwithstanding clause (ii) of the

19

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

definition of “Second Priority Debt”, such Indebtedness may mature prior to the
date that is three months after the Tranche 2 Term Maturity Date.

“Permitted Unsecured Indebtedness” means unsecured Indebtedness of the Borrower;
provided that (a) the terms of any such Indebtedness, and of any agreement
entered into and of any instrument issued in connection therewith, are otherwise
permitted by the Senior Loan Documents, (b) if such Indebtedness is issued or
incurred to refinance existing Indebtedness, such Indebtedness has a later
maturity and a longer weighted average life than such existing Indebtedness,
(c) 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, (d) 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 and (e) 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.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Pharmaceutical Inventory” means all inventory consisting of products that can
be dispensed only on order of a licensed professional.

“Pharmaceutical Inventory Advance Rate” means the pharmaceutical inventory
advance rate determined in accordance with Section 2.20.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate has any liability or is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

“Platform” has the meaning assigned to such term in Section 9.16(b).

“Preferred Stock” means, with respect to any corporation, capital stock issued
by such corporation that is entitled to a preference or priority, in respect of
dividends or distributions upon liquidation, over some other class of capital
stock issued by such corporation.

“Prepayment Event” means:

(a) any sale, transfer or other disposition (including pursuant to a sale and
leaseback transaction) of any property or asset of the Borrower or any
Subsidiary, other than (i) sales, transfers or other dispositions described in
clauses (i), (iii), (iv), (vi) and (vii) of Section 6.05, (ii) sales, transfers
or other dispositions described in clause (v) of Section 6.05 to the extent the
resulting aggregate Net Proceeds from all such sales, transfers or other
dispositions do not exceed $50,000,000 and (iii) other sales, transfers or
dispositions resulting in aggregate Net Proceeds not exceeding $10,000,000
during any fiscal year of the Borrower; or

(b) any casualty or other insured damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of, any property or
asset of the Borrower or any Subsidiary; or

(c) the issuance by the Borrower or any Subsidiary of any Equity Interests, or
the receipt by the Borrower or any Subsidiary of any capital contribution, other
than (i) any such issuance of Equity Interests to, or receipt of any such
capital contribution from, the Borrower or a Subsidiary or (ii) any such
issuance of Equity Interests to the extent the proceeds of such issuance are
used to fund a Business Acquisition; or

(d) the incurrence by the Borrower or any Subsidiary of any Indebtedness, other
than (i) Indebtedness described in clauses (i), (ii), (iii), (iv), (v), (vi),
(ix), (x), (xi), (xii), (xiii), (xiv), (xv),

20

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

(xvi), (xvii) and (xviii) of Section 6.01(a), (ii) extensions, renewals,
refinancings or replacements of Indebtedness described in clauses (vii) and
(viii) of Section 6.01(a) and (iii) Indebtedness described in clauses (vii) and
(viii) of Section 6.01(a) to the extent the proceeds of such Indebtedness are
used to fund a Business Acquisition.

“Qualified Preferred Stock” means Preferred Stock of the Borrower that does not
require any cash payment (including in respect of redemptions or repurchases),
other than in respect of cash dividends, before the date that is six months
after the Tranche 2 Term Maturity Date.

“Refinancing Indebtedness” means Indebtedness (which shall be deemed to include
Attributable Debt solely for the purposes of this definition) issued or incurred
(including by means of the extension or renewal of existing Indebtedness) to
extend, renew or refinance existing Indebtedness or Attributable Debt
(“Refinanced Debt”); provided that (i) the terms of any such Indebtedness, and
of any agreement entered into and of any instrument issued in connection
therewith, are otherwise permitted by the Senior Loan Documents, (ii) such
extending, renewing or refinancing Indebtedness is in an original aggregate
principal amount not greater than the aggregate principal amount of, and unpaid
interest on, the Refinanced Debt plus the amount of any premiums paid thereon
and fees and expenses associated therewith, (iii) such Indebtedness (x) does not
mature or require scheduled payments of principal prior to the date that is
three months after the Tranche 2 Term Maturity Date and (y) has a later maturity
and a longer weighted average life than the Refinanced Debt, (iv) 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, (v) 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, (vi) if the Refinanced Debt or any Guarantees thereof are
subordinated to the Senior Obligations (or prior to the Borrowing Base Date the
Interim Obligations), such Indebtedness shall be subordinated to the Senior
Obligations or the Interim Obligations, as the case may be, on terms no less
favorable, taken as a whole, to the holders of the Senior Obligations or the
Interim Obligations, as the case may be, than the subordination terms of such
Refinanced Debt or Guarantees thereof (and no Loan Party, Holdings, nor any of
its subsidiaries that has not guaranteed such Refinanced Debt guarantees such
Indebtedness), (vii) 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,
(viii) such Indebtedness is benefited by Guarantees (if any) which, taken as a
whole, are not materially less favorable to the Lenders than the Guarantees (if
any) in respect of such Refinanced Debt, (ix) if such Refinanced Debt or any
Guarantees thereof are secured, such Indebtedness and any Guarantees thereof are
either unsecured or secured only by such property or assets as secured the
Refinanced Debt and Guarantees thereof and not any additional property or assets
of the Borrower or any Subsidiary (other than (A) property or assets acquired
after the issuance or incurrence of such Refinancing Indebtedness that would
have been subject to the Lien securing refinanced Indebtedness if such
Indebtedness had not been refinanced, (B) additions to the property or assets
subject to the Lien and (C) the proceeds of the property or assets subject to
the Lien), (x) if such Refinanced Debt and any Guarantees thereof are unsecured,
such Indebtedness and Guarantees thereof are also unsecured and (xi) any Net
Cash Proceeds of such Indebtedness are used no later than 45 days following
receipt thereof to repay the Refinanced Debt and pay any accrued interest, fees,
premiums (if any) and expenses in connection therewith.

“Register” has the meaning set forth in Section 9.04.

“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.

“Repurchase Expenditures” means, with respect to any Optional Debt Repurchase,
the aggregate amount of expenditures made or required to be made to effect such
Optional Debt Repurchase, including without limitation payments on account of
principal, premium and fees payable to holders of the Indebtedness purchased or
reacquired in connection with such Optional Debt Repurchase, but excluding

21

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

payments representing accrued interest to the date of such Optional Debt
Repurchase and excluding fees and expenses paid to third parties in connection
therewith.

“Required Lenders” means, at any time, Lenders having Revolving Exposures,
outstanding Term Loans and unused Commitments representing more than 50% of the
sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at such time.

“Requirement of Law” means, with respect to any Person, the charter and by-laws
or other organizational or governing documents of such Person, and any law,
rule or regulation (including Environmental Laws, the Code and ERISA) or order,
decree or other determination of an arbitrator or a court or other Governmental
Authority applicable to or binding upon such Person or any of its property or
assets or to which such Person or any of its property or assets is subject.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property, except dividends payable solely in shares of the
Borrower’s common stock or Qualified Preferred Stock) with respect to any Equity
Interests in the Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property, except payments made solely with common equity),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancelation or termination of any Equity
Interests in the Borrower or any Subsidiary or any option, warrant or other
right to acquire any such Equity Interests in the Borrower or any Subsidiary;
provided that in no event shall any exchange of Qualified Preferred Stock with
other Qualified Preferred Stock be deemed a Restricted Payment.

“Revolver Availability” means, on any date of determination, the maximum amount
of Revolving Loans that could be made to the Borrower on such date pursuant to
Section 2.01(b) pursuant to the use of unused Commitments on such date.

“Revolving Availability Period” means the period from and including the Second
Restatement Effective Date to but excluding the earlier of the Revolving/Tranche
1 Term Maturity Date and the date of termination of the Revolving Commitments.

“Revolving Commitment” means, with respect to each Lender, the commitment, if
any, of such Lender to make Revolving Loans and to acquire participations in
Letters of Credit and Swingline Loans hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender’s Revolving Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.08 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender’s Revolving Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Revolving Commitment, as applicable. The aggregate amount of the Lenders’
Revolving Commitments on the Second Restatement Effective Date is
$1,750,000,000.

“Revolving Exposure” means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender’s Revolving Loans and its LC
Exposure and Swingline Exposure at such time.

“Revolving Lender” means a Lender with a Revolving Commitment or, if the
Revolving Commitments have terminated or expired, a Lender with a Revolving
Exposure.

“Revolving Loan” means a Loan made pursuant to clause (b) of Section 2.01.

“Revolving/Tranche 1 Term Maturity Date” means September 30, 2010.

“Script Lists Advance Rate” means the Script Lists advance rate determined in
accordance with Section 2.20.

22

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

“Second Priority Debt” means any Indebtedness (including the 8.125% Notes, 7.5%
Notes and the 2017 7.5% 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 (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 Second Restatement Effective
Date, matures after the date that is three months after the Tranche 2 Term
Maturity Date; provided, however, that (A) such Indebtedness is permitted to be
incurred, secured and Guaranteed on such basis by each Senior Loan 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 Restatement Date Amount” means the aggregate principal amount of Tranche
2 Loans that the Borrower is permitted under instruments governing its
Indebtedness to, on the Second Restatement Effective Date, borrow and secure by
the Liens created under the Interim Collateral Documents.

“Securitization” means any transaction or series of transactions entered into by
the Borrower and any Subsidiaries pursuant to which the Borrower or such
Subsidiaries sell, convey or otherwise transfer (or purport to sell, convey or
otherwise transfer) Securitization Assets to a Securitization Vehicle or another
Subsidiary which sells, conveys or otherwise transfers (or purports to sell,
convey or otherwise transfer) Securitization Assets to a Securitization Vehicle,
and such Securitization Vehicle finances the acquisition of such Securitization
Assets (i) with proceeds from the issuance of Third Party Interests, (ii) with
Sellers’ Retained Interests, (iii) with proceeds from the sale or collection of
Securitization Assets previously purchased by such Securitization Vehicle or
(iv) with proceeds from the sale of Securitization Assets to another
Securitization Vehicle. For purposes of this Agreement, the “amount” or
“principal amount” of any Securitization shall be deemed at any time to be
(1) the aggregate principal or stated amount of the Third Party Interests (which
stated amount may be described as a “net investment”, “capital”, “invested
amount” or similar term reflecting the amount invested in any beneficial
interest constituting a Third Party Interest) incurred or issued pursuant to
such Securitization, in each case outstanding at such time, or (2) in the case
of any Securitization in respect of which no such principal or stated amount is
determinable, the cash purchase price paid by the buyer in connection with its
purchase of Third Party Interests less the amount of collections received in
respect of such Third Party Interests and paid to such buyer, excluding any
amounts applied to purchase fees or discount or in the nature of interest.

“Securitization Assets” means any accounts receivable owed to the Borrower or
any Subsidiary (whether now existing or arising or acquired in the future)
arising in the ordinary course of business from the sale of goods or services,
all collateral securing such accounts receivable, all contracts and contract
rights and all guarantees or other obligations in respect of such accounts
receivable, all proceeds of such accounts receivable and other assets (including
contract rights) which are the type customarily transferred in connection with
securitizations of accounts receivable and which are sold, transferred or
otherwise conveyed (or purported to be sold, transferred or otherwise conveyed)
by the Borrower or a Subsidiary to a Securitization Vehicle in connection with a
Securitization permitted by Sections 6.01 and 6.05.

“Securitization Vehicle” means a Person that is a direct or indirect wholly
owned Subsidiary used solely for the purpose of effecting one or more
Securitizations to which the Borrower and/or Subsidiaries and/or another
Securitization Vehicle transfer Securitization Assets and which, in connection
with such Securitization either issues Third Party Interests or transfers such
Securitization Assets to another Securitization Vehicle that issues Third Party
Interests; provided, in each case, that (i) each such Person shall engage in no
business other than the purchase of Securitization Assets pursuant to
Securitizations permitted by Sections 6.01 and 6.05, the issuance of Third Party
Interests and any activities reasonably related thereto, (ii) no portion of the
Indebtedness or other obligations (contingent or otherwise) of such

23

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

Person (x) is Guaranteed by the Borrower or any other Subsidiary, other than any
Guarantee of obligations (other than of principal of, or interest on,
Indebtedness) that may be deemed to exist solely by virtue of Standard
Securitization Undertakings, (y) is recourse to the Borrower or any other
Subsidiary other than by virtue of Standard Securitization Undertakings and
(z) is secured (contingently or otherwise) by any Lien on assets of the Borrower
or any other Subsidiary other than by virtue of Standard Securitization
Undertakings, (iii) such Person has no contract, agreement, arrangement or
understanding with the Borrower or any other Subsidiary other than (A) customary
contracts, arrangements or agreements entered into with respect to the sale,
purchase and servicing of Securitization Assets on market terms for similar
securitization transactions and (B) Guarantees and pledges of security as
required by the Senior Loan Documents and the Second Priority Debt Documents and
(iv) neither the Borrower nor any Subsidiary has any obligations to maintain or
preserve such Person’s financial condition or cause it to achieve certain levels
of operating results other than pursuant to Standard Securitization
Undertakings.

“Seller” means The Jean Coutu Group (PJC) Inc., a corporation organized under
the laws of Quebec.

“Sellers’ Retained Interests” means the debt or equity interests held by the
Borrower or any Subsidiary in a Securitization Vehicle to which Securitization
Assets have been transferred (or purported to have been transferred) in a
Securitization permitted by Sections 6.01 and 6.05, including any such debt or
equity received in consideration for the Securitization Assets transferred.

“Series E Preferred Stock” means the Borrower’s 7% Series E mandatory
convertible preferred stock issued prior to the Second Restatement Effective
Date.

“Series G Preferred Stock” means the Borrower’s 7% Series G cumulative,
convertible pay-in-kind preferred stock held by Green Equity Investors III, L.P.
or one of its Affiliates on the Second Restatement Effective Date.

“Series H Preferred Stock” means the Borrower’s 6% Series H cumulative,
convertible pay-in-kind preferred stock held by Green Equity Investors III, L.P.
or one of its Affiliates on the Second Restatement Effective Date.

“Series I Preferred Stock” means the Borrower’s 5.5% Series I mandatory
convertible preferred stock issued prior to the Second Restatement Effective
Date.

“Standard Securitization Undertakings” means representations, warranties,
covenants and indemnities made by the Borrower or a Subsidiary in connection
with Securitizations permitted by Sections 6.01 and 6.05 which representations,
warranties, covenants and indemnities are customarily included in
securitizations of accounts receivable involving comparable companies.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages expressed as a
decimal (including any marginal, special, emergency or supplemental reserves)
established by the Board to which the Administrative Agent is subject with
respect to eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

“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 (and, prior to the Borrowing Base Date,
Holdings or any of its subsidiaries).

24

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

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
of which securities or other ownership interests representing more than 50% of
the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.

“Subsidiary” means any subsidiary of the Borrower.

“Subsidiary Loan Party” means each Subsidiary set forth on Schedule 1.01 hereto
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; provided that
(a) no Subsidiary that engages solely in the Borrower’s pharmacy benefits
management business shall be deemed a Subsidiary Loan Party and (b) Holdings and
its subsidiaries shall not be Subsidiary Loan Parties prior to the Borrowing
Base Date.

“Supermajority Lenders” means, at any time, Lenders having Revolving Exposures,
outstanding Term Loans and unused Commitments representing more than 66-2/3% of
the aggregate Revolving Exposures, outstanding Term Loans and unused Commitments
of all Lenders at such time.

“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
at any time shall be its Applicable Percentage of the total Swingline Exposure
at such time.

“Swingline Lender” means CNAI, in its capacity as the lender of Swingline Loans
hereunder.

“Swingline Loan” means a Loan made pursuant to Section 2.04.

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

“Term Loans” means the Tranche 1 Term Loans and the Tranche 2 Term Loans, or any
combination thereof (as the context requires).

“Third Party Interests” means, with respect to any Securitization, notes, bonds
or other debt instruments, beneficial interests in a trust, ownership interests
(including any fractional undivided interests) in a pool or pools of accounts
receivable or other interests or securities issued or sold for cash
consideration by a Securitization Vehicle to banks, investors or other financing
sources (other than the Borrower or its Subsidiaries) the proceeds of which are
used to finance, in whole or in part, the purchase by such Securitization
Vehicle of accounts receivables or other Securitization Assets in a
Securitization.

“Total Indebtedness” means, as of any date, the sum of the aggregate principal
amount of Indebtedness of the Borrower and its Consolidated Subsidiaries
outstanding as of such date, in the amount that would be reflected on a balance
sheet prepared as of such date on a consolidated basis in accordance with GAAP
plus, without duplication, the aggregate outstanding amount of Third Party
Interests (which amount may be described as a “net investment”, “capital”,
“invested amount”, “principal amount” or similar term reflecting the aggregate
amount invested in beneficial interests constituting Third Party Interests).

“Tranche 1 Term Lender” means a Lender with a Tranche 1 Term Commitment or an
outstanding Tranche 1 Term Loan.

“Tranche 2 Term Lender” means a Lender with a Tranche 2 Term Commitment or an
outstanding Tranche 2 Term Loan.

25

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

“Tranche 1 Term Loans” means Loans made or deemed made under clause (a) of
Section 2.01.

“Tranche 2 Term Loans” means Loans made or deemed made under clause (c) of
Section 2.01.

“Tranche 1 Term Commitment” means, with respect to each Lender, the commitment,
if any, of such Lender to make a Tranche 1 Term Loan hereunder on the First
Restatement Effective Date, expressed as an amount representing the maximum
principal amount of the Tranche 1 Term Loans to be made by such Lender
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.08 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender’s Tranche 1 Term Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Tranche 1 Term Commitment, as applicable. The aggregate amount of the Lenders’
Tranche 1 Term Commitments on the First Restatement Effective Date is
$145,000,000.

“Tranche 2 Term Commitment” means, with respect to each Lender, the commitment,
if any, of such Lender to make a Tranche 2 Term Loan hereunder on the Second
Restatement Effective Date, expressed as an amount representing the maximum
principal amount of the Tranche 2 Term Loans to be made by such Lender
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.08 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender’s Tranche 2 Term Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Tranche 2 Term Commitment, as applicable. The aggregate amount of the Lenders’
Tranche 2 Term Commitments on the Second Restatement Effective Date is
$1,105,000,000.

“Tranche 2 Term Maturity Date” means June 4, 2014.

“Transactions” means the execution, delivery and performance by the Borrower,
the Subsidiary Loan Parties and Holdings and its subsidiaries, as applicable, of
the Amendment and Restatement Agreement and each other document contemplated
thereby to be executed on the Second Restatement Effective Date or the Borrowing
Base Date to which it is a party, the borrowing of Tranche 2 Term Loans, the use
of proceeds thereof and the other transactions to be effected on the Second
Restatement Effective Date (including the Acquisition).

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

“USA Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Title IV of ERISA.

SECTION 1.02.   Classification of Loans and Borrowings.   For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a
“Eurodollar Revolving Loan”). Borrowings also may be classified and referred to
by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar
Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

SECTION 1.03.   Terms Generally.   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 (a) any definition of or reference to any
agreement, instrument or other document herein shall be

26

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

construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein);
provided, however, that amendments to the Indentures and the Second Priority
Debt Documents after the Second Restatement Effective Date shall be effective
for purposes of references thereto in this Agreement and the other Senior Loan
Documents only if such amendments are permitted hereunder or are consented to in
writing for such purpose by the Required Lenders (or such other percentage of
the Lenders as may be specified herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (c) 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, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words “asset” and “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.

SECTION 1.04.   Accounting Terms; GAAP.   Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the Second Restatement Effective Date in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.

SECTION 1.05.   Terms Defined in Definitions Annex.   Capitalized terms used in
this Agreement that are not defined in Section 1.01 shall have the meanings
assigned to such terms in the Definitions Annex (but any definition of such a
term in the Definitions Annex shall be disregarded for purposes hereof if such
term is also defined in Section 1.01).

ARTICLE II

The Credits

SECTION 2.01.   Commitments.   (a) Subject to the terms and conditions set forth
herein, each Lender made a Tranche 1 Term Loan to the Borrower on the First
Restatement Effective Date in an aggregate principal amount not exceeding its
Tranche 1 Term Commitment. Amounts repaid or prepayed in respect of Tranche 1
Term Loans may not be reborrowed.

(b) Subject to the terms and conditions set forth herein, each Lender agrees to
make Revolving Loans to the Borrower from time to time during the Revolving
Availability Period in an aggregate principal amount that will not result in
such Lender’s Revolving Exposure exceeding the lesser of (i) such Lender’s
Revolving Commitment and (ii) such Lender’s Applicable Percentage of an amount
equal to (A) the Borrowing Base Amount in effect at such time minus (B) the sum
of (1) the outstanding Tranche 1 Term Loans at such time and (2) prior to the
Borrowing Base Date, zero and from and after the Borrowing Base Date, the
outstanding Tranche 2 Term Loans at such time. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Revolving Loans.

(c) Subject to the terms and conditions set forth herein, each Lender agrees to
make its pro rata share of the Tranche 2 Term Loans to be made to the Borrower
on the Second Restatement Effective Date (determined based upon such Tranche 2
Lender’s Tranche 2 Term Commitment). The aggregate

27

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

principal amount of Tranche 2 Term Loans to be made on the Second Restatement
Effective Date by any Lender shall not exceed such Lender’s Tranche 2 Term
Commitment. Amounts repaid or prepayed in respect of Tranche 2 Term Loans may
not be reborrowed.

SECTION 2.02.   Loans and Borrowings.   (a) Each Loan (other than a Swingline
Loan) shall be made as part of a Borrowing consisting of Loans of the same
Class and Type made by the Lenders ratably in accordance with the amounts of
their Commitments of the applicable Class. The failure of any Lender to make any
Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender’s failure to make Loans
as required.

(b) Subject to Section 2.14, each Revolving Borrowing and Term Borrowing shall
be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may
request in accordance herewith. Each Swingline Loan shall be an ABR Loan. Each
Lender at its option may make any Eurodollar Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan; provided that any
exercise of such option shall not affect the obligation of the Borrower to repay
such Loan in accordance with the terms of this Agreement.

(c) At the commencement of each Interest Period for any Eurodollar Borrowing,
such Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $5,000,000. At the time that each ABR Borrowing is
made, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $5,000,000; provided that an ABR
Revolving Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the total Revolving Commitments or that is required to finance
the reimbursement of an LC Disbursement as contemplated by Section 2.05(e). Each
Swingline Loan shall be in an amount that is an integral multiple of $1,000,000.
Borrowings of more than one Class and Type may be outstanding at the same time;
provided that there shall not at any time be more than a total of 10 Eurodollar
Borrowings outstanding.

(d) Notwithstanding any other provision of this Agreement, the Borrower shall
not be entitled to request, or to elect to convert or continue, any Revolving
Borrowing, Tranche 1 Term Borrowing or Tranche 2 Term Borrowing if the Interest
Period requested with respect thereto would end after the Revolving/Tranche 1
Term Maturity Date or the Tranche 2 Term Maturity Date, as the case may be.

SECTION 2.03.   Requests for Borrowings.   To request a Borrowing, the Borrower
shall notify the Administrative Agent of such request by telephone (a) in the
case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time,
three Business Days before the date of the proposed Borrowing or (b) in the case
of an ABR Borrowing, not later than (1) 10:30 a.m., New York City time, on the
Business Day of the proposed Borrowing, in the case of Borrowings to be made on
the same day as such notice is given or (2) 12:00 noon, New York City time, on
the Business Day before the proposed Borrowing, in the case of all other
Borrowings. Each such telephonic Borrowing Request shall be irrevocable and
shall be confirmed promptly by hand delivery or telecopy to the Administrative
Agent of a written Borrowing Request in a form approved by the Administrative
Agent and signed by the Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.02:

(i) whether the requested Borrowing is to be a Revolving Borrowing, a Tranche 1
Term Borrowing or a Tranche 2 Term Borrowing;

(ii) the aggregate amount of such Borrowing;

(iii) the date of such Borrowing, which shall be a Business Day;

(iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

28

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

(v) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”; and

(vi) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.06.

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04.   Swingline Loans.   (a) Subject to the terms and conditions set
forth herein, the Swingline Lender may, in its sole discretion, make Swingline
Loans to the Borrower from time to time during the Revolving Availability Period
in an aggregate principal amount at any time outstanding that will not result in
(i) the aggregate principal amount of outstanding Swingline Loans exceeding
$100,000,000 or (ii) the sum of the total Revolving Exposures exceeding the
lesser of (A) the total Revolving Commitments at such time and (B) the Borrowing
Base Amount in effect at such time minus the sum of (1) the outstanding Tranche
1 Term Loans at such time and (2) prior to the Borrowing Base Date, zero and
from and after the Borrowing Base Date, the outstanding Tranche 2 Term Loans at
such time; provided that (i) the Swingline Lender shall not be required to make
a Swingline Loan to refinance an outstanding Swingline Loan and (ii) the
Swingline Lender shall not have any obligation, under this Agreement or
otherwise, to make any Swingline Loan requested by the Borrower hereunder and
may, in its sole discretion, decline to make a requested Swingline Loan. Within
the foregoing limits and subject to the terms and conditions set forth herein,
the Borrower may borrow, prepay and reborrow Swingline Loans.

(b) To request a Swingline Loan, the Borrower shall notify the Administrative
Agent of such request by telephone (confirmed by telecopy), not later than
1:00 p.m., New York City time, on the day of a proposed Swingline Loan. Each
such notice shall be irrevocable and shall specify the requested date (which
shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Borrower. The Swingline Lender shall make each
Swingline Loan available to the Borrower by means of a wire transfer to an
account designated by the Borrower (or, in the case of a Swingline Loan made to
finance the reimbursement of an LC Disbursement as provided in Section 2.05(e),
by remittance to the relevant Issuing Bank) by 3:00 p.m., New York City time, on
the requested date of such Swingline Loan.

(c) Interest on each Swingline Loan shall be payable on the Interest Payment
Date with respect thereto.

(d) The Administrative Agent shall (i) at any time when Swingline Loans in an
aggregate principal amount of $10,000,000 or more are outstanding, at the
request of the Swingline Lender in its sole discretion, or (ii) on the date that
is seven days after the date on which a Swingline Loan was made, deliver on
behalf of the Borrower a Borrowing Request pursuant to Section 2.03 for an ABR
Revolving Borrowing in the amount of such Swingline Loans; provided, however,
that the obligations of the Lenders to fund such Borrowing shall not be subject
to the conditions set forth in Section 4.02.

29

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

(e)        The Swingline Lender may by written notice given to the
Administrative Agent not later than 12:00 noon, New York City time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such notice
shall specify the aggregate amount of Swingline Loans in which Revolving Lenders
will participate. Promptly upon receipt of such notice (but no later than
2:00 p.m., New York City time, on such Business Day), the Administrative Agent
will give notice thereof to each Revolving Lender, specifying in such notice
such Lender’s Applicable Percentage of such Swingline Loan or Loans. Each
Revolving Lender hereby absolutely and unconditionally agrees, upon timely
receipt of notice as provided above, to pay to the Administrative Agent, for the
account of the Swingline Lender, such Lender’s Applicable Percentage of such
Swingline Loan or Loans. Each Revolving Lender acknowledges and agrees that its
obligation to acquire participations in Swingline Loans pursuant to this
paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever. Each
Revolving Lender shall comply with its obligation under this paragraph by wire
transfer of immediately available funds, in the same manner as provided in
Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall
apply, mutatis mutandis, to the payment obligations of the Revolving Lenders),
and the Administrative Agent shall promptly pay to the Swingline Lender the
amounts so received by it from the Revolving Lenders. The Administrative Agent
shall notify the Borrower of any participations in any Swingline Loan acquired
pursuant to this paragraph, and thereafter payments in respect of such Swingline
Loan shall be made to the Administrative Agent and not to the Swingline Lender.
Any amounts received by the Swingline Lender from the Borrower (or other Person
on behalf of the Borrower) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent, and any such amounts received by
the Administrative Agent shall be promptly remitted by the Administrative Agent
to the Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear. The
purchase of participations in a Swingline Loan pursuant to this paragraph shall
not relieve the Borrower of any default in the payment thereof.

SECTION 2.05.   Letters of Credit.   (a)   General.   Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of (and the
applicable Issuing Bank, as specified by the Borrower, will issue) Letters of
Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the relevant Issuing Bank, at any time and from time to
time during the Revolving Availability Period. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, an Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.

(b)   Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  
To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the applicable Issuing Bank) to the relevant Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. If requested by an Issuing Bank, the Borrower also
shall submit a letter of credit application on such Issuing Bank’s standard form
in connection with any request for a Letter of Credit. A Letter of Credit shall
be issued, amended, renewed or extended only if (and upon issuance,

30

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

amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the total LC Exposure shall not exceed
$450,000,000, (ii) the amount of the LC Exposure attributable to Letters of
Credit issued by the applicable Issuing Bank will not exceed the LC Commitment
of such Issuing Bank and (iii) the total Revolving Exposures shall not exceed
the lesser of (A) the total Revolving Commitments at such time and (B) the
Borrowing Base Amount in effect at such time minus the sum of (1) the
outstanding Tranche 1 Term Loans at such time and (2) prior to the Borrowing
Base Date, zero and from and after the Borrowing Base Date, the outstanding
Tranche 2 Term Loans at such time.

(c)   Expiration Date.   Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date that is one year after the date
of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Revolving/Tranche 1 Term Maturity Date.

(d)   Participations.   By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the applicable Issuing Bank or the Lenders, such Issuing
Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from such Issuing Bank, a participation in such Letter of Credit in an
amount equal to such Lender’s Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit. In consideration and in
furtherance of the foregoing, each Revolving Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the applicable Issuing Bank, such Lender’s Applicable Percentage of each LC
Disbursement made by such Issuing Bank and not reimbursed by the Borrower on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Borrower for any reason. Each Revolving
Lender acknowledges and agrees that its obligation to acquire participations
pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Letter of Credit or the
occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.

(e)   Reimbursement.   If any Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement
by paying to the Administrative Agent an amount equal to such LC Disbursement
not later than 3:30 p.m., New York City time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 1:00 p.m., New York City time, on the Business Day
immediately following the day that the Borrower receives such notice; provided
that, if such LC Disbursement is not less than $5,000,000, the Borrower may,
subject to the conditions to borrowing set forth herein, request in accordance
with Section 2.03 or 2.04 that such payment be financed with an ABR Revolving
Borrowing or Swingline Loan in an equivalent amount and, to the extent so
financed, the Borrower’s obligation to make such payment shall be discharged and
replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the
Borrower fails to make such payment when due, the Administrative Agent shall
notify each Revolving Lender of the applicable LC Disbursement, the payment then
due from the Borrower in respect thereof and such Lender’s Applicable Percentage
thereof. Promptly following receipt of such notice, each Revolving Lender shall
pay to the Administrative Agent its Applicable Percentage of the payment then
due from the Borrower, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the relevant Issuing Bank the amounts
so received by it from the Revolving Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to such
Issuing Bank or, to the extent that Revolving

31

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

Lenders have made payments pursuant to this paragraph to reimburse such Issuing
Bank, then to such Lenders and such Issuing Bank as their interests may appear.
Any payment made by a Revolving Lender pursuant to this paragraph to reimburse
an Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving
Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and
shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.

(f)   Obligations Absolute.   The Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein or herein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by any Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower’s obligations hereunder. None of
the Administrative Agent, any Lender or any Issuing Bank, or any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
relevant Issuing Bank; provided that the foregoing shall not be construed to
excuse such Issuing Bank from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Borrower to the fullest extent permitted by applicable
law) suffered by the Borrower that are caused by such Issuing Bank’s gross
negligence or wilful misconduct (as determined by a court of competent
jurisdiction by a final and non-appealable judgment) in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that, in the absence of gross
negligence or wilful misconduct on the part of an Issuing Bank (as determined by
a court of competent jurisdiction by a final and non-appealable judgment), such
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, an
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.

(g)   Disbursement Procedures.   The applicable Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The applicable Issuing Bank shall
promptly notify the Administrative Agent and the Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether such Issuing Bank
has made or will make an LC Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse the Issuing Bank and the Revolving Lenders with respect
to any such LC Disbursement.

(h)   Interim Interest.   If an Issuing Bank shall make any LC Disbursement,
then, unless the Borrower shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrower reimburses such LC Disbursement, at
the rate per

32

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

annum then applicable to ABR Revolving Loans; provided that, if the Borrower
fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of
this Section, then Section 2.13(c) shall apply. Interest accrued pursuant to
this paragraph shall be for the account of the applicable Issuing Bank, except
that interest accrued on and after the date of payment by any Revolving Lender
pursuant to paragraph (e) of this Section to reimburse such Issuing Bank shall
be for the account of such Lender to the extent of such payment.

(i)   Resignation or Replacement of the Issuing Bank.   An Issuing Bank may
resign at any time by giving 180 days’ prior written notice to the
Administrative Agent, the Borrower and the Lenders, and an Issuing Bank may be
replaced at any time by written agreement (an “Issuing Bank Agreement”) among
the Borrower, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank, which shall set forth the LC Commitment of such Issuing
Bank. The Administrative Agent shall notify the Lenders of any such replacement
of an Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of an Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.

(j)   Cash Collateralization.   If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall (or shall cause Subsidiary Loan
Parties to) deposit in an account with the Administrative Agent, in the name of
the Administrative Agent and for the benefit of the Lenders, an amount in cash
equal to the total LC Exposure as of such date plus any accrued and unpaid
interest thereon; provided that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to the Borrower or any Subsidiary Loan
Party described in clause (h) or (i) of Article VII. The Borrower also shall (or
shall cause Subsidiary Loan Parties and, prior to the Borrowing Base Date,
Holdings and its subsidiaries to) deposit cash collateral pursuant to this
paragraph as and to the extent required by Section 2.11(b), and any such cash
collateral so deposited and held by the Administrative Agent hereunder shall
constitute part of the Borrowing Base Amount for purposes of determining
compliance with Section 2.11(b). Each such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower under this Agreement. The Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. The Administrative Agent shall, at the Borrower’s
risk and expense, invest all such deposits in Permitted Investments chosen in
the sole discretion of the Administrative Agent after consultation with the
Borrower, provided that no consultation shall be required if a Default has
occurred and is continuing. Other than any interest earned in respect of the
investment of such deposits, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in
such account shall be applied by the Administrative Agent to reimburse each
Issuing Bank for LC Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent of
Revolving Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy the Senior Obligations. If the Borrower is
required to provide an amount of cash

33

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

collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived (or, during a Cash Sweep Period, paid into the Citibank Concentration
Account). If the Borrower is required to provide an amount of cash collateral
hereunder pursuant to Section 2.11(b), such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower as and to the extent that, after
giving effect to such return, the Borrower would remain in compliance with
Section 2.11(b) and no Default shall have occurred and be continuing. Unless and
except to the extent that the deposit of cash collateral directly by the
Borrower would not result in an obligation to grant a security interest in such
cash collateral to the holders of other outstanding Indebtedness of the
Borrower, the Borrower will cause Subsidiary Loan Parties (and, prior to the
Borrowing Base Date, Holdings and its subsidiaries) to deposit all cash
collateral required to be deposited pursuant to this Section 2.05(j) or
Section 2.11(b).

(k)   Additional Issuing Banks   The Borrower may, at any time and from time to
time with the consent of the Administrative Agent (which consent shall not be
unreasonably withheld) and such Lender, designate one or more additional Lenders
to act as an issuing bank under the terms of this Agreement. Any Lender
designated as an issuing bank pursuant to this clause (k) shall be deemed to be
an “Issuing Bank” (in addition to being a Lender) in respect of Letters of
Credit issued or to be issued by such Lender, and, with respect to such Letters
of Credit, such term shall thereafter apply to the other Issuing Banks and such
Lender in its capacity as an Issuing Bank.

(l)   Reporting by Issuing Banks to the Administrative Agent.   At the end of
each week and otherwise upon request of the Administrative Agent, each Issuing
Bank shall provide the Administrative Agent with a certificate identifying the
Letters of Credit issued by such Issuing Bank and outstanding on such date, the
amount and expiration date of each such Letter of Credit, the beneficiary
thereof, the amount, if any, drawn under each such Letter of Credit and any
other information reasonably requested by the Administrative Agent with respect
to such Letters of Credit. The Administrative Agent shall promptly enter all
such information received by it pursuant to this Section 2.05(l) in the
Register.

SECTION 2.06.   Funding of Borrowings.   (a) Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders; provided that Swingline Loans shall be made as provided
in Section 2.04. The Administrative Agent will make such Loans available to the
Borrower by wire transfer, in like funds, to an account designated by the
Borrower in the applicable Borrowing Request. Wire transfers to the Borrower of
all Loans (other than Swingline Loans and same-day ABR Revolving Borrowings)
shall be made no later than 1:00 p.m., New York City time. Wire transfers to the
Borrower of Swingline Loans and same-day ABR Revolving Borrowings shall be made
no later than 4:00 p.m., New York City time.

(b)        Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Revolving Loans. If

34

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

such Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender’s Loan included in such Borrowing.

SECTION 2.07.   Interest Elections.   (a) Each Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing. This Section shall not apply to Swingline Borrowings, which may not
be converted or continued.

(b)        To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required to be made under Section 2.03 if the
Borrower were requesting a Revolving Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery or telecopy to the Administrative Agent of a written Interest
Election Request in a form approved by the Administrative Agent and signed by
the Borrower.

(c)        Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.02 and paragraph (f) of
this Section:

(i)         the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to clauses (iii) and
(iv) below shall be specified for each resulting Borrowing);

(ii)       the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;

(iii)      whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and

(iv)       if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

(d)        Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

(e)        If the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies the Borrower, then, so long as an Event of
Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.

35

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

(f)         A Revolving Borrowing, Tranche 1 Term Borrowing or Tranche 2 Term
Borrowing may not be converted to or continued as a Eurodollar Borrowing if
after giving effect thereto the Interest Period therefor would end after the
Revolving/Tranche 1 Term Maturity Date or the Tranche 2 Term Maturity Date, as
the case may be.

SECTION 2.08.   Termination and Reduction of Commitments.   (a) Unless
previously terminated in accordance with the terms of this Agreement, (i) the
Tranche 1 Term Commitments shall terminate at 5:00 p.m., New York City time on
the First Restatement Effective Date, (ii) the Revolving Commitments shall
terminate on the Revolving/Tranche 1 Term Maturity Date and (iii) the Tranche 2
Term Commitments shall terminate at 5:00 p.m., New York City time on the Second
Restatement Effective Date.

(b)        The Borrower may at any time terminate, or from time to time reduce,
the Commitments of any Class; provided that (i) each reduction of the
Commitments of any Class shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.11,
the total Revolving Exposures would exceed the total Revolving Commitments.

(c)        The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (b) of this Section at least
one Business Day prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each notice delivered by the Borrower pursuant to this
Section shall be irrevocable; provided that a notice of voluntary termination of
the Revolving Commitments delivered by the Borrower may state that such notice
is conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments of any Class shall be
permanent. Each reduction of the Commitments of any Class shall be made ratably
among the Lenders in accordance with their Commitments of such Class.

SECTION 2.09.   Repayment of Loans; Evidence of Indebtedness.   (a) The Borrower
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Tranche 1 Term Lender the then unpaid principal amount of the
Tranche 1 Term Loan of such Lender as provided in Section 2.10, (ii) to the
Administrative Agent for the account of each Revolving Lender the then unpaid
principal amount of each Revolving Loan of such Lender on the Revolving/Tranche
1 Term Maturity Date, (iii) to the Swingline Lender the then unpaid principal
amount of each Swingline Loan on the earlier of (A) the Revolving/Tranche 1 Term
Maturity Date and (B) the date that is seven days after the date on which such
Swingline Loan was made; provided that on each date that a Revolving Borrowing
is made, the Borrower shall repay all Swingline Loans that were outstanding on
the date such Borrowing was requested and (iv) to the Administrative Agent for
the account of each Tranche 2 Term Lender the then unpaid principal amount of
the Tranche 2 Term Loan of such Lender as provided in Section 2.10.

(b)        Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time under this
Agreement.

(c)        The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period, if any, applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender’s share thereof.

36

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

(d)        The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.

(e)        Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in the form attached hereto as Exhibit A-1 or A-2, as applicable,
or in such other form approved by the Administrative Agent and the Borrower.
Thereafter, the Loans evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 9.04) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).

SECTION 2.10.   Amortization and Repayment of Term Loans.   (a) The Borrower
shall repay to the Administrative Agent for the ratable account of the Tranche 2
Term Lenders 0.25% of the initial aggregate principal amount of the Tranche 2
Term Loans on the last Business Day of each March, June, September and December,
commencing on the first such date to occur on or after the first anniversary of
the Second Restatement Effective Date (which installments shall be reduced as a
result of the application of prepayments in accordance with the order of
priority set forth in paragraph (c) of this Section).

(b)        To the extent not previously paid, all Tranche 1 Term Loans shall be
due and payable on the Revolving/Tranche 1 Term Maturity Date. To the extent not
previously paid, all Tranche 2 Term Loans shall be due and payable on the
Tranche 2 Term Maturity Date.

(c)        Any prepayment of a Tranche 2 Term Borrowing pursuant to
Section 2.11(b), (c) or (d) shall be applied to reduce the subsequent scheduled
repayments of such Borrowings to be made pursuant to this Section as follows:
first, in order of their maturity for the next fiscal year after such prepayment
and second, to the extent of any excess, on a pro rata basis to the remaining
scheduled repayments.

(d)        Prior to any repayment of any Term Borrowing hereunder, the Borrower
shall select the Borrowing or Borrowings to be repaid and shall notify the
Administrative Agent by telephone (confirmed by telecopy) of such selection not
later than 11:00 a.m., New York City time, three Business Days before the
scheduled date of such repayment. Each repayment of a Borrowing shall be applied
ratably to the Loans included in the repaid Borrowing. Repayments of Term
Borrowings shall be accompanied by accrued interest on the amount repaid.

SECTION 2.11.   Prepayment of Loans.   (a) The Borrower shall have the right, at
any time and from time to time, to prepay any Borrowing in whole or in part,
subject to the requirements of this Section; provided, however, that any partial
prepayment made pursuant to this Section 2.11(a) shall be in a principal amount
that is a multiple of $1,000,000 and not less than $5,000,000.

(b)   (i)   In the event and on each date that the sum of (A) the total
Revolving Exposures on such date, (B) the outstanding Tranche 1 Term Loans on
such date and (C) if such date is prior to the Borrowing Base Date, zero and, if
such date is on or after the Borrowing Base Date, the outstanding Tranche 2 Term
Loans on such date exceed the then-current Borrowing Base Amount, the Borrower
shall on each such date apply an amount equal to such excess as follows: first,
to prepay Revolving Borrowings or Swingline Loans, second, to the extent of any
remaining excess or, if no Revolving Borrowings or Swingline Loans are
outstanding, to make a deposit in a cash collateral account maintained by the
Administrative Agent pursuant to Section 2.05(j) to be held as security for the
Borrower’s obligations in respect of Letters of Credit and third, to the extent
of any remaining excess, to prepay Term Borrowings on a pro rata basis
(determined based upon the sum of the outstanding Term Loans at such time).

37

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

      (ii)   In the event and on each date that the total Revolving Exposures
exceed the total Revolving Commitments, the Borrower shall on such date apply an
amount equal to such excess first, to prepay Revolving Borrowings or Swingline
Borrowings and second, to the extent of any remaining excess, or if no Revolving
Borrowings or Swingline Loans are outstanding, to a cash collateral account
maintained by the Administrative Agent pursuant to Section 2.05(j) to be held as
security for the Borrower’s obligations in respect of Letters of Credit.

(c)        In the event and on each occasion that any Net Proceeds are received
by or on behalf of the Borrower or any Subsidiary in respect of any Prepayment
Event, the Borrower shall, within three Business Days after such Net Proceeds
are received, prepay Tranche 2 Term Borrowings in an aggregate amount equal to
(i) 100% of the Net Proceeds resulting from prepayment events described in
clauses (a), (b) and (d) of the definition of “Prepayment Event” and (ii) 50% of
the Net Proceeds resulting from prepayment events described in clause (c) of the
definition of “Prepayment Event”; provided that if at the time any (x) Net
Proceeds resulting from prepayment events described in clause (a) of the
definition of “Prepayment Events” are received and the Revolver Availability is
less than $900,000,000 (or, if such time is prior to the Borrowing Base Date,
$475,000,000) or (y) Net Proceeds resulting from any Prepayment Event are
received during a Cash Sweep Period, such Net Proceeds will be applied as
follows: first, to prepay Revolving Borrowings or Swingline Loans and second, to
the extent of any remaining excess, to prepay Tranche 2 Term Borrowings;
provided further that, in the case of any prepayment event described in clause
(a) or (b) of the definition of “Prepayment Event”, if the Borrower shall elect
to apply the Net Proceeds from such event (or a portion thereof specified in
such certificate), within 365 days after receipt of such Net Proceeds, to
acquire real property, equipment or other tangible assets to be used in the
business of the Borrower and the Subsidiaries, and certifying that no Default
has occurred and is continuing, then no prepayment shall be required pursuant to
this paragraph in respect of the Net Proceeds in respect of such event (or the
portion of such Net Proceeds specified in such certificate, if applicable),
except to the extent of any such Net Proceeds therefrom that have not been so
applied by the end of such 365 day period, at which time a prepayment shall be
required in an amount equal to such Net Proceeds that have not been so applied.

(d)        Following the end of each fiscal year of the Borrower, commencing
with the fiscal year ending February 29, 2008, the Borrower shall prepay Tranche
2 Term Borrowings in an aggregate amount equal to (i) if on the last day of such
fiscal year the Leverage Ratio is greater than or equal to 4.50 to 1.00, 50% of
the Excess Cash Flow for such fiscal year, (ii) if on the last day of such
fiscal year the Leverage Ratio is greater than or equal to 4.00 to 1.00 but less
than 4.50 to 1.00, 25% of the Excess Cash Flow for such fiscal year and (iii) if
on the last day of such fiscal year the Leverage Ratio is less than 4.00 to
1.00, 0% of the Excess Cash Flow for such fiscal year. Each prepayment pursuant
to this paragraph shall be made on or before the date on which financial
statements are delivered pursuant to Section 5.01 with respect to the fiscal
year for which Excess Cash Flow is being calculated (and in any event within 90
days after the end of such fiscal year).

(e)        Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid
and shall specify such selection in the notice of such prepayment pursuant to
paragraph (f) of this Section.

(f)         The Borrower shall notify the Administrative Agent (and, in the case
of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed
by telecopy) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of prepayment, (ii) in the case of prepayment of
an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business
Day before the date of prepayment or (iii) in the case of prepayment of a
Swingline Loan, not later than 12:00 noon, New York City time, on the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date, the Borrowings to be prepaid and the principal amount of each
Borrowing or portion

38

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

thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment; provided that, if a
notice of optional prepayment is given in connection with a conditional notice
of termination of the Revolving Commitments as contemplated by Section 2.08,
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Promptly following receipt of any such
notice (other than a notice relating solely to Swingline Loans), the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing of the same Type as provided
in Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to
the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.13.

SECTION 2.12.   Fees.   (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Revolving Lender a commitment fee, which shall
accrue at the rate of 0.25% per annum on the daily unused amount of the
Revolving Commitment of such Lender during the period from and including the
Original Restatement Effective Date to but excluding the date on which such
Commitment terminates. Accrued commitment fees shall be payable in arrears on
the last day of March, June, September and December of each year and on the date
on which the Revolving Commitments terminate, commencing on the first such date
to occur after the Original Restatement Effective Date. All commitment fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day). For purposes of computing commitment fees pursuant to this
Section 2.12(a), a Revolving Commitment of a Lender shall be deemed to be used
to the extent of the outstanding Revolving Loans and LC Exposure of such Lender
(and the Swingline Exposure of such Lender shall be disregarded for such
purpose).

(b)        The Borrower agrees to pay (i) to the Administrative Agent for the
account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate as in effect from time to time for interest on Eurodollar Revolving Loans
on the daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Original Restatement Effective Date to but excluding the later of
the date on which such Lender’s Revolving Commitment terminates and the date on
which such Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank
a fronting fee, which shall accrue at the rate of 0.25% per annum on the daily
outstanding amount of such Issuing Bank’s Letters of Credit during the period
from and including the Original Restatement Effective Date to but excluding the
later of the date of termination of the Revolving Commitments and the date on
which there ceases to be any LC Exposure, as well as such Issuing Bank’s
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Original Restatement Effective Date; provided that all such fees shall be
payable on the date on which the Revolving Commitments terminate and any such
fees accruing after the date on which the Revolving Commitments terminate shall
be payable on demand. Any other fees payable to an Issuing Bank pursuant to this
paragraph shall be payable within 10 days after demand. All participation fees
and fronting fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).

(c)        The Borrower agrees to pay to the Administrative Agent and the
Collateral Agent, for their own accounts, fees payable in the amounts and at the
times separately agreed upon between the Borrower and the Administrative Agent
or the Collateral Agent, as the case may be.

(d)        All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the relevant
Issuing Bank, in the case of fees payable to it) for distribution,

39

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

in the case of commitment fees and participation fees, to the Lenders entitled
thereto. Fees paid shall not be refundable under any circumstances.

SECTION 2.13.   Interest.   (a) The Loans comprising each ABR Borrowing
(including each Swingline Loan) shall bear interest at the Alternate Base Rate
plus the Applicable Rate.

(b)        The Loans comprising each Eurodollar Borrowing shall bear interest at
the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
the Applicable Rate.

(c)        Notwithstanding the foregoing, upon the occurrence and during the
continuation of an Event of Default, at the option of the Administrative Agent
or at the request of the Required Lenders, the Borrower shall pay interest on
all of the Senior Obligations (and, prior to the Borrowing Base Date, the
Interim Obligations) to but excluding the date of actual payment, after as well
as before judgment, (i) in the case of principal, at a rate per annum equal to
2% plus the rate otherwise applicable to such Loan as provided in the preceding
paragraphs of this Section and (ii) in the case of any other amount, at a rate
per annum equal to 2% plus the rate applicable to ABR Revolving Loans as
provided in paragraph (a) of this Section.

(d)        Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and (i) in the case of Tranche 1 Term Loans,
on the Revolving/Tranche 1 Term Maturity Date, (ii) in the case of Revolving
Loans, the earlier of the Revolving/Tranche 1 Term Maturity Date and the date on
which all Revolving Commitments hereunder are terminated and (iii) in the case
of Tranche 2 Term Loans, on the Tranche 2 Term Maturity Date; provided that
(i) interest accrued pursuant to paragraph (c) of this Section shall be payable
on demand, (ii) in the event of any repayment or prepayment of any Loan (other
than a prepayment of an ABR Revolving Loan prior to the end of the Revolving
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion, together with any amounts due and payable
pursuant to Section 2.16.

(e)        All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Citibank Base Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

SECTION 2.14.   Alternate Rate of Interest.   If prior to the commencement of
any Interest Period for a Eurodollar Borrowing:

(a)        the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or

(b)        the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Loans included
in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

40

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

SECTION 2.15.   Increased Costs.   (a) If any Change in Law shall:

(i)         impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate) or any Issuing Bank; or

(ii)       impose on any Lender or any Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans made by
such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or such
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.

(b)        If any Lender or any Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s or such Issuing Bank’s capital or on the capital of
such Lender’s or such Issuing Bank’s holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a
level below that which such Lender or such Issuing Bank or such Lender’s or such
Issuing Bank’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s or such Issuing Bank’s policies and the
policies of such Lender’s or such Issuing Bank’s holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
or such Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or such Issuing Bank or such Lender’s or such
Issuing Bank’s holding company for any such reduction suffered. Each Lender will
promptly notify the Borrower and the Administrative Agent of any event of which
it has knowledge that will entitle such Lender to compensation pursuant to this
Section 2.15; provided that the failure to provide such notification will not
affect such Lender’s rights to compensation hereunder.

(c)        A certificate of a Lender or an Issuing Bank setting forth the amount
or amounts necessary to compensate such Lender or such Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or such Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.

(d)        Failure or delay on the part of any Lender or any Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender’s or such Issuing Bank’s right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender or an Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender or such Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or such Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.

SECTION 2.16.   Break Funding Payments.   In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue
or prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be

41

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

revoked under Section 2.11(f) and is revoked in accordance therewith), or
(d) the assignment of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto as a result of a request by the Borrower
pursuant to Section 2.19, then, in any such event, the Borrower shall compensate
each Lender for the loss, cost and expense attributable to such event. In the
case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be
deemed to consist of an amount determined by such Lender to be the excess, if
any, of (i) the amount of interest which would have accrued on the principal
amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that
would have been applicable to such Loan, for the period from the date of such
event to the last day of the then current Interest Period therefor (or, in the
case of a failure to borrow, convert or continue, for the period that would have
been the Interest Period for such Loan), over (ii) the amount of interest which
would accrue on such principal amount for such period at the interest rate which
such Lender would bid were it to bid, at the commencement of such period, for
dollar deposits of a comparable amount and period from other banks in the
eurodollar market. A certificate of any Lender setting forth any amount or
amounts that such Lender is entitled to receive pursuant to this Section shall
be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.

SECTION 2.17.   Taxes.   (a) Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Senior Loan Document
shall be made free and clear of and without deduction for any Indemnified Taxes
or Other Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Agent, Lender or Issuing Bank (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.

(b)        In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

(c)        The Borrower shall indemnify the Administrative Agent, each Lender
and each Issuing Bank, within 10 days after written demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes paid by the Administrative
Agent, such Lender or such Issuing Bank, as the case may be, on or with respect
to any payment by or on account of any obligation of the Borrower hereunder or
under any other Senior Loan Document (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or an Issuing Bank, or by the Administrative Agent on its
own behalf or on behalf of a Lender or an Issuing Bank, shall be conclusive
absent manifest error.

(d)        As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

42

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

(e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate, provided that such Foreign Lender has
received written notice from the Borrower advising it of the availability of
such exemption or reduction and supplying all applicable documentation.

SECTION 2.18.   Payments Generally; Pro Rata Treatment; Sharing of Setoffs.  
(a) The Borrower shall make each payment required to be made by it hereunder or
under any other Senior Loan Document (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to the time expressly required hereunder or
under such other Senior Loan Document for such payment (or, if no such time is
expressly required, prior to 2:00 p.m., New York City time), on the date when
due, in immediately available funds, without setoff or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 388 Greenwich
Street, New York, NY 10013, except payments to be made directly to an Issuing
Bank or Swingline Lender as expressly provided herein and except that payments
pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the
Persons entitled thereto and payments pursuant to other Senior Loan Documents
shall be made to the Persons specified therein. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
under any Senior Loan Document shall be due on a day that is not a Business Day,
the date for payment shall be extended to the next succeeding Business Day, and,
in the case of any payment accruing interest, interest thereon shall be payable
for the period of such extension. All payments under each Senior Loan Document
shall be made in dollars.

(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.

(c) If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or participations in LC Disbursements or Swingline Loans resulting in
such Lender receiving payment of a greater proportion of the aggregate amount of
its Loans and participations in LC Disbursements and Swingline Loans and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans and participations in LC Disbursements and Swingline
Loans of other Lenders to the extent necessary so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate
relative amounts of principal of and accrued interest on their Loans and
participations in LC Disbursements and Swingline Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or

43

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

participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of setoff and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

(d) Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders or the Issuing Bank hereunder that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or an Issuing Bank, as the case may
be, the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or such Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or such Issuing Bank with interest thereon,
for each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.

(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.18(d) or 9.03(c), then
the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid.

SECTION 2.19.   Mitigation Obligations; Replacement of Lenders.   (a) If any
Lender requests compensation under Section 2.15, or if the Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.

(b) If (i) any Lender requests compensation under Section 2.15, (ii) the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
(iii) any Lender defaults in its obligation to fund Loans hereunder or (iv) any
Lender refuses to consent to any amendment or waiver of any Senior Loan Document
requested by the Borrower that requires the consent of all Lenders, and such
amendment or waiver is consented to by the Supermajority Lenders, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, the Issuing Banks and the Swingline
Lender), which consent shall not unreasonably be withheld, (ii) such Lender
shall have received payment of an amount equal to the outstanding principal of
its Loans and participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and
(iii) in the case of any

44

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

such assignment resulting from a claim for compensation under Section 2.15 or
payments required to be made pursuant to Section 2.17, such assignment will
result in a material reduction in such compensation or payments. A Lender shall
not be required to make any such assignment and delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling
the Borrower to require such assignment and delegation cease to apply.

SECTION 2.20.   Adjustments to Borrowing Base Advance Rates.   (a) As of the
Second Restatement Effective Date, the Accounts Receivable Advance Rate will be
85%, the Pharmaceutical Inventory Advance Rate will be 85%, the Other Inventory
Advance Rate will be 80% and the Scripts List Advance Rate will be 30%.

(b) Any increase in the Pharmaceutical Inventory Advance Rate, the Other
Inventory Advance Rate, the Accounts Receivable Advance Rate or the Script Lists
Advance Rate above that would result in any rate in excess of the initially
applicable rate set forth in Section 2.20(a) will in each case require the
consent of all the Lenders.

(c) The Collateral Agent, in the exercise of its reasonable judgment to reflect
Borrowing Base Factors, may (i) reduce the Accounts Receivable Advance Rate, the
Pharmaceutical Inventory Advance Rate, the Other Inventory Advance Rate and the
Script Lists Advance Rate from time to time and (ii) thereafter increase such
rate to a rate not in excess of the applicable rate set forth in
Section 2.20(a).

(d) The Administrative Agent will give prompt written notice to the Borrower and
the Lenders of any adjustments effected pursuant to this Section 2.20.

SECTION 2.21.   Incremental Loans.   At any time after the Second Restatement
Effective Date prior to the Tranche 2 Term Maturity Date, the Borrower may, by
notice to the Administrative Agent (which shall promptly deliver a copy to each
of the Lenders), request the addition to this Agreement of a new tranche of term
loans, or an incremental revolving credit facility or any combination thereof
(the “Incremental Facilities”); provided, however, that both (x) at the time of
any such request and (y) upon the effectiveness of any such Incremental
Facility, no Default shall exist and the Borrower shall, if a Financial Covenant
Effectiveness Period is then occurring, be in compliance with Section 6.12
(calculated, in the case of clause (y), on a pro forma basis to give effect to
any borrowing under the Incremental Facility and any substantially simultaneous
repayments of Revolving Loans). The Incremental Facilities shall (i) be in an
aggregate principal amount not in excess of $350,000,000, (ii) rank pari passu
in right of payment and of security with the other Loans, (iii) if such
Incremental Facility is a term loan facility, amortize in a manner, and be
subject to mandatory prepayments (if any) on terms, acceptable to the Agents,
and mature no earlier than the Tranche 2 Term Maturity Date, (iv) bear interest
at the market interest rate, as determined at the time such Incremental Facility
becomes effective, (v) have such other pricing as may be agreed by the Borrower
and the Administrative Agent and (vi) otherwise be treated hereunder no more
favorably than the Revolving Loans (or, after the Revolving/Tranche 1 Term
Maturity Date, the Tranche 2 Term Loans); provided, that the terms and
provisions applicable to the Incremental Facilities may provide for additional
or different financial or other covenants applicable only during periods after
the Tranche 2 Term Maturity Date. At no time shall the sum of (i) the aggregate
amount of loans outstanding under the Incremental Facilities at such time,
(ii) the total Revolving Exposure at such time, (iii) the outstanding Tranche 1
Term Loans at such time and (iv) the outstanding Tranche 2 Term Loans at such
time exceed the Borrowing Base Amount (or, if prior to the Borrowing Base Date,
the Estimated Borrowing Base Amount) in effect at such time, and the proceeds of
the Incremental Facilities shall be used solely for the purposes set forth in
Section 5.10 and the preamble. Such notice shall set forth the requested amount
and class of Incremental Facilities, and shall offer each Lender the opportunity
to offer a commitment (the “Incremental Commitment”) to provide a portion of the
Incremental Facility by giving written notice of such offered commitment to the
Administrative Agent and the Borrower within a time period (the “Offer Period”)
to be specified in the Borrower’s notice; provided, however, that no existing
Lender will be

45

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

obligated to subscribe for any portion of such commitments. In the event that,
at the expiration of the Offer Period, Lenders shall have provided commitments
in an aggregate amount less than the total amount of the Incremental Facility
initially requested by the Borrower, the Borrower may request that Incremental
Facility commitments be made in a lesser amount equal to such commitments and/or
shall have the right to arrange for one or more banks or other financial
institutions (any such bank or other financial institution being called an
“Additional Lender”) to extend commitments to provide a portion of the
Incremental Facility in an aggregate amount equal to the unsubscribed amount of
the initial request; provided that each Additional Lender shall be subject to
the approval of the Administrative Agent (such consent not to be unreasonably
withheld); and provided further that the Additional Lenders shall be offered the
opportunity to provide the Incremental Facility only on terms previously offered
to the existing Lenders pursuant to the immediately preceding sentence.
Commitments in respect of Incremental Facilities will become Commitments under
this Agreement pursuant to an amendment to this Agreement (such an amendment, an
“Incremental Facility Amendment”) executed by each of the Borrower and each
Subsidiary Loan Party (and, prior to the Borrowing Base Date, Holdings and each
of its subsidiaries), each Lender agreeing to provide such Commitment, if any,
each Additional Lender, if any, and the Administrative Agent. The effectiveness
of any Incremental Facility Amendment shall be subject to the satisfaction on
the date thereof of each of the conditions set forth in Section 4.02 of the
Original Agreement as in effect immediately prior to the First Restatement
Effective Date.

ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Lenders that:

SECTION 3.01.   Organization; Powers.   Each of the Borrower and the
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.

SECTION 3.02.   Authorization; Enforceability.   The Transactions to be entered
into by each Loan Party are within such Loan Party’s corporate powers and have
been duly authorized by all necessary corporate and, if required, stockholder
action. This Agreement has been duly executed and delivered by the Borrower and
constitutes, and each other Senior Loan Document to which any Loan Party is to
be a party, when executed and delivered by such Loan Party, will constitute, a
legal, valid and binding obligation of the Borrower or such Loan Party (as the
case may be), enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03.   Governmental Approvals; No Conflicts.   The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect and except filings necessary to perfect
Liens created under the Senior Loan Documents, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of the Borrower or any of the Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument evidencing or governing Indebtedness or
any other material agreement binding upon the Borrower or any Subsidiary or its
assets, or give rise to a right thereunder to require any payment to be made by
the Borrower or any Subsidiary, and (d) will not result in the creation

46

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

or imposition of any Lien on any asset of the Borrower or any Subsidiary, except
Liens created under the Senior Loan Documents and the Second Priority Collateral
Documents.

SECTION 3.04.   Financial Condition; No Material Adverse Change.   (a) The
Borrower has heretofore furnished to the Lenders its consolidated balance sheet
and statements of income, stockholders equity and cash flows as of and for the
fiscal year ended March 3, 2007, reported on by Deloitte & Touche LLP. Such
financial statements present fairly the financial position and results of
operations and cash flows of the Borrower and its Consolidated Subsidiaries as
of such dates and for such periods in accordance with GAAP.

(b) Except as disclosed (i) in the financial statements referred to in paragraph
(a) above or the notes thereto, (ii) in the Borrower’s report or Form 10-K for
the fiscal year ended March 3, 2007 or (iii) on Schedule 3.04, after giving
effect to the Transactions, none of the Borrower or the Subsidiaries has, as of
the Second Restatement Effective Date, any material contingent liabilities,
unusual long-term loan commitments or unrealized losses.

(c) Since March 3, 2007, there has been no material adverse change in the
business, assets, operations, properties, condition (financial or otherwise), or
prospects of the Borrower and the Subsidiaries, taken as a whole.

SECTION 3.05.   Properties.   (a) Each of the Borrower and the Subsidiaries has
good and marketable title to, or valid leasehold interests in, all its real and
personal property material to its business, except (i) for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes
and (ii) as set forth on Schedule 3.05(a). All such real and personal property
are free and clear of all Liens, other than Liens permitted by Section 6.02.

(b) Each of the Borrower and the Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Borrower and the
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

(c) Schedule 3.05(c) sets forth the address of every leased warehouse or
distribution center in which inventory owned by the Borrower or any Subsidiary
is located as of the Second Restatement Effective Date.

SECTION 3.06.   Litigation and Environmental Matters.   (a) Except as set forth
on Schedule 3.06(a), there are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any of the
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect or
(ii) that involve any of the Senior Loan Documents or the Transactions.

(b) Except as set forth on Schedule 3.06(b) and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither the Borrower nor any of the
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability,
(iii) has received notice of any claim with respect to any Environmental
Liability or (iv) knows of any basis for any Environmental Liability.

SECTION 3.07.   Compliance with Laws and Agreements.   Except as set forth on
Schedule 3.07, each of the Borrower and the Subsidiaries is in compliance with
all laws, regulations and orders of any Governmental Authority applicable to it
or its property (including, without limitation, the Health

47

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

Insurance Portability and Accountability Act of 1996 (“HIPAA”) and all other
material healthcare laws and regulations) and all indentures, agreements and
other instruments binding upon it or its property or assets, except where the
failure to be so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.

SECTION 3.08.   Investment and Holding Company Status.   Neither the Borrower
nor any of the Subsidiaries is an “investment company” as defined in, or subject
to regulation under, the Investment Company Act of 1940.

SECTION 3.09.   Taxes.   Each of the Borrower and the Subsidiaries has timely
filed or caused to be filed all United States Federal income tax returns and
reports and all other material tax returns and reports required to have been
filed and has paid or caused to be paid all material Taxes due pursuant to such
returns or pursuant to any assessment received by the Borrower or any
Subsidiary, except (i) where the payment of any such Taxes is being contested in
good faith by appropriate proceedings and for which the Borrower or such
Subsidiary, as applicable, has set aside on its books adequate reserves and
(ii) as set forth on Schedule 3.09. The charges, accruals and reserves on the
books of the Borrower and its Consolidated Subsidiaries in respect of Taxes or
charges imposed by a Governmental Authority are, in the opinion of the Borrower,
adequate.

SECTION 3.10.   ERISA.   No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other ERISA Events for which
liability is reasonably expected to result, could reasonably be expected to
result in liability exceeding $50,000,000. The minimum funding standards of
ERISA and the Code with respect to each Plan have been satisfied. The present
value of all accumulated benefit obligations under each Plan (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $50,000,000 the fair market value
of the assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $50,000,000 the fair market value of the assets of all such underfunded
Plans.

SECTION 3.11.   Disclosure; Accuracy of Information.   (a) As of the Second
Restatement Effective Date, none of the reports, financial statements,
certificates or other information furnished by or on behalf of any Loan Party to
any Agent or any Lender in connection with the negotiation of this Agreement or
any other Senior Loan Document or delivered hereunder or thereunder (as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

(b) Each Borrowing Base Certificate that has been or will be delivered to the
Collateral Agent, the Administrative Agent or any Lender is and will be complete
and correct in all material respects.

SECTION 3.12.   Subsidiaries.   Schedule 3.12 sets forth the name of, and the
ownership interest of the Borrower in, each Subsidiary and identifies each
Subsidiary that is a Subsidiary Loan Party, in each case as of the Second
Restatement Effective Date. As of the Second Restatement Effective Date, each of
the Subsidiaries is an “Unrestricted Subsidiary” as defined in, and for all
purposes of, the Indentures.

SECTION 3.13.   Insurance.   Schedule 3.13 sets forth a description of all
liability, property and casualty insurance maintained by or on behalf of the
Borrower and the Subsidiaries as of the Second Restatement Effective Date. As of
the Second Restatement Effective Date, all premiums in respect of such insurance
have been paid. The Borrower and the Subsidiaries have insurance in such amounts
and

48

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

covering such risks and liabilities as are in accordance with normal industry
practice and as required by the Senior Loan Documents. The Borrower reasonably
believes that the insurance maintained by or on behalf of the Borrower and the
Subsidiaries is adequate.

SECTION 3.14.   Labor Matters.   Except as set forth on Schedule 3.14, as of the
Second Restatement Effective Date, there are no strikes, lockouts or slowdowns
against the Borrower or any Subsidiary pending or, to the knowledge of the
Borrower, threatened which could reasonably be expected to result in a Material
Adverse Effect. Except as set forth on Schedule 3.14, the hours worked by and
payments made to employees of the Borrower and the Subsidiaries have not been in
violation in any material respect of the Fair Labor Standards Act or any other
applicable Federal, state, local or foreign law dealing with such matters.
Except as set forth on Schedule 3.14, all payments due from the Borrower or any
Subsidiary, or for which any claim may be made against the Borrower or any
Subsidiary, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of the
Borrower or such Subsidiary. Except as set forth on Schedule 3.14, the
consummation of the Transactions will not give rise to any right of termination
or right of renegotiation on the part of any union under any collective
bargaining agreement to which the Borrower or any Subsidiary is bound.

SECTION 3.15.   Solvency.   Immediately after the consummation of the
Transactions to occur on the Second Restatement Effective Date (including the
making of each Loan made on the Second Restatement Effective Date and after
giving effect to the application of the proceeds of such Loans), (a) the fair
value of the assets of the Borrower and the other Loan Parties, taken as a
whole, at a fair valuation, will exceed their debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of the Borrower and the other Loan Parties, taken as a whole, will
be greater than the amount that will be required to pay the probable liability
of their debts and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured; (c) the Borrower
and the other Loan Parties taken as a whole, will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) the Borrower and the other Loan
Parties will not have unreasonably small capital with which to conduct the
business in which they are engaged as such business is now conducted and is
proposed to be conducted following the Second Restatement Effective Date.

SECTION 3.16.   Federal Reserve Regulations.   (a) Neither the Borrower nor any
Subsidiary is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of buying or carrying Margin Stock.

(b) No part of the proceeds of any Loan or any Letter of Credit will be used by
the Borrower or any Subsidiary, whether directly or indirectly, and whether
immediately, incidentally or ultimately, for any purpose that entails a
violation of, or that is inconsistent with, the provisions of Regulation T, U or
X of the Board.

SECTION 3.17.   Security Interests.   (a) The Senior Subsidiary Security
Agreement is effective to create in favor of the Collateral Agent, for the
ratable benefit of the Senior Secured Parties, a legal, valid and enforceable
security interest in the Senior Collateral subject to such agreement and, when
financing statements in appropriate form are filed in the offices specified on
Schedule 6 to the Perfection Certificate, such security interest shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the grantors thereunder in the Senior Collateral, to the extent
perfection can be obtained by filing Uniform Commercial Code financing
statements, in each case prior and superior in right to any other Person to the
extent perfection can be obtained by filing Uniform Commercial Code financing
statements, other than with respect to the rights of Persons pursuant to Liens
expressly permitted by Section 6.02.

49

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

(b) The Interim Collateral and Guarantee Agreement is effective to create in
favor of the Collateral Agent, for the ratable benefit of the Interim Secured
Parties, a legal, valid and enforceable security interest in the Interim
Collateral subject to such agreement and (i) when the Interim Collateral
constituting certificated securities (as defined in the Uniform Commercial Code)
is delivered to the Collateral Agent thereunder together with instruments of
transfer duly endorsed in blank, the security interest of the Collateral Agent
therein will constitute a fully perfected Lien on, and security interest in, all
right, title and interest of the pledgors in such Interim Collateral, prior and
superior in right to any other Person subject only to Permitted Encumbrances and
(ii) when financing statements in appropriate form are filed in the offices
specified in the Perfection Certificate delivered on the Second Restatement
Effective Date, the security interest of the Collateral Agent will constitute a
fully perfected Lien on and security in all right, title and interest of the
Grantors (as defined in the Interim Collateral Agreement) in the remaining
Interim Collateral to the extent perfection can be obtained by filing Uniform
Commercial Code financing statements, prior and superior in right to any other
Person subject only to Permitted Encumbrances.

SECTION 3.18.   Use of Proceeds.   The Borrower will use the proceeds of the
Loans and will request the issuance of Letters of Credit only for the purposes
specified in the preamble to this Agreement and set forth in Section 5.10.

ARTICLE IV

Conditions

SECTION 4.01.   Second Restatement Effective Date.   Without affecting the
rights of the Borrower or any Subsidiary hereunder at all times prior to the
Second Restatement Effective Date, the amendment and restatement in the form
hereof of the Original Agreement and the obligations of the Lenders to make
Loans and acquire participations in Letters of Credit and Swingline Loans and of
the Issuing Banks to issue Letters of Credit hereunder shall not become
effective until the date on which the conditions set forth in Sections
2.2(b) and 2.3 of the Amendment and Restatement Agreement shall have been
satisfied.

It is understood and agreed that no term of the amendment and restatement
contemplated hereby shall be effective until the Second Restatement Effective
Date occurs, and that the Original Agreement shall continue in full force and
effect without regard to the amendment and restatement contemplated hereby until
the Second Restatement Effective Date.

SECTION 4.02.   Each Credit Event.   The obligation of each Revolving Lender to
make a Revolving Loan on the occasion of any Revolving Borrowing after the
Second Restatement Effective Date, and of each Issuing Bank to issue, amend,
renew or extend any Letter of Credit after the Second Restatement Effective
Date, is subject to receipt of the request therefore in accordance herewith and
to the satisfaction of the following conditions (each Borrowing and each
issuance, amendment, renewal or extension of a Letter of Credit (for purposes of
this Section, an “issuance”) shall be deemed to constitute a representation and
warranty by Borrower on the date thereof as to the matters specified in
paragraphs (a), (b) and (c) of this Section):

(a) the representations and warranties of the Loan Parties contained in each
Senior Loan Document are true and correct in all material respects on and as of
the date of such Borrowing or issuance, before and after giving effect to such
Borrowing or issuance and to the application of the proceeds therefrom, as
though made on and as of such date (except to the extent any such representation
or warranty expressly relates to an earlier date, in which case such
representation and warranty shall have been true and correct in all material
respects as of such earlier date);

(b) no event has occurred and is continuing, or would result from such Borrowing
or issuance or from the application of the proceeds therefrom, that constitutes
a Default or an Event

50

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

of Default and such Borrowing or issuance would not result in a violation of the
amount of secured Indebtedness permitted under the Second Priority Debt
Documents; and

(c) after giving effect to such Borrowing or issuance the Borrowing Base Amount
shall be equal to or greater than the sum of (i) the total Revolving Exposures,
(ii) the outstanding Tranche 1 Term Loans and (iii) if prior to the Borrowing
Base Date, zero and, if on or after the Borrowing Base Date, the outstanding
Tranche 2 Term Loans.

SECTION 4.03.   Borrowing Base Date.   The “Borrowing Base Date” will occur on
the first date on which the following conditions have been satisfied:

(a) The Financial Statement Delivery Date shall have occurred.

(b) The Administrative Agent shall have received a favorable legal opinion of
each of (i) Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Borrower
and (ii) Robert Sari, General Counsel of the Borrower, in each case addressed to
the Administrative Agent and the Lenders and dated as of such date, covering
such matters relating to the Loan Parties, this Agreement, the other Senior Loan
Documents and the Senior Collateral as the Administrative Agent may reasonably
request, and otherwise reasonably satisfactory to the Administrative Agent. The
Borrower hereby requests such counsel to deliver such opinions.

(c) The Collateral and Guarantee Requirement shall have been satisfied in
respect of Holdings and its subsidiaries and the Administrative Agent shall have
received (i) a completed Perfection Certificate dated as of such date and signed
by an executive officer or Financial Officer together with all attachments
contemplated thereby, including the results of a search of the Uniform
Commercial Code (or equivalent) filings made with respect to Holdings and its
subsidiaries in the jurisdictions contemplated by the Perfection Certificate and
copies of the financing statements (or similar documents) disclosed by such
search and (ii) evidence reasonably satisfactory to the Administrative Agent
that the Liens disclosed by such search are permitted by Section 6.02 or have
been released.

(d) Each Subsidiary Loan Party shall have entered into a written instrument
reasonably satisfactory to the Administrative Agent pursuant to which it
confirms that the Senior Collateral Documents to which it is party will continue
to apply in respect of this Agreement and the Senior Obligations (as such term
is defined in respect of the period after the Borrowing Base Date).

(e) After the satisfaction of the Collateral and Guarantee Requirement in
respect of Holdings and its subsidiaries on the Borrowing Base Date, the
Borrowing Base Amount on such date shall be no less than the sum of (i) the
total Revolving Exposures on such date, (ii) the outstanding Tranche 1 Term
Loans on such date and (iii) the outstanding Tranche 2 Term Loans on such date.
The Administrative Agent shall have received a completed Borrowing Base
Certificate dated as of such date and signed by a Financial Officer.

(f) To the extent invoiced, the Administrative Agent shall have received payment
or reimbursement of its reasonable out-of-pocket expenses, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent.

ARTICLE V

Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired, terminated or been cash
collateralized and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:

51

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

SECTION 5.01.   Financial Statements and Other Information.   The Borrower will
furnish to the Administrative Agent and each Lender:

(a) as soon as available and in any event within 105 days (or such earlier date
that is 10 days after the then-current filing deadline for the Borrower’s Annual
Report on Form 10-K) after the end of each fiscal year of the Borrower, its
audited consolidated balance sheet and related statements of income and cash
flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on by
Deloitte & Touche LLP or another registered independent public accounting firm
of recognized national standing (without a “going concern” or like qualification
or exception and without any material qualification or exception as to the scope
of such audit) to the effect that such consolidated financial statements present
fairly in all material respects the financial position, results of operations
and cash flows of the Borrower and its Consolidated Subsidiaries on a
consolidated basis in accordance with GAAP;

(b) as soon as available and in any event within 50 days (or such earlier date
that is five days after the then-current filing deadline for the Borrower’s
Quarterly Report on Form 10-Q) after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower, its consolidated balance sheet as
of the end of such fiscal quarter and related statements of income for such
fiscal quarter and of income and cash flows for the then elapsed portion of such
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year;

(c) concurrently with any delivery of financial statements under clause (a) or
(b) above, a certificate of a Financial Officer (i) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto,
(ii) setting forth reasonably detailed calculations demonstrating (x) compliance
with Section 6.08(c) and (y) the Borrower’s ratio under Section 6.12,
(iii) stating whether any change in GAAP or in the application thereof has
occurred since the date of the Borrower’s audited financial statements referred
to in Section 3.04 and, if any such change has occurred, specifying the effect
of such change on the financial statements accompanying such certificate,
(iv) identifying any Subsidiary formed or acquired since the end of the fiscal
quarter immediately preceding the most recent fiscal quarter covered by such
financial statements, (v) identifying any change in a Subsidiary Loan Party’s
(and, prior to the Borrowing Base Date, Holding’s and any of its subsidiaries’)
name, form of organization or jurisdiction of organization, including as a
result of any merger transaction, since the end of the fiscal quarter
immediately preceding the most recent fiscal quarter covered by such financial
statements, (vi) setting forth the aggregate amount of Optional Debt Repurchases
made by the Borrower during the most recent fiscal quarter covered by such
financial statements, identifying the Indebtedness repurchased, redeemed,
retired or defeased and specifying the provisions of Section 6.08(b) or
(c) pursuant to which each such Optional Debt Repurchase was effected and
quantifying the amounts effected under each such provision, (vii) setting forth
the amount and type of Indebtedness issued or incurred and Securitizations (or
increases in the amounts thereof) and Factoring Transactions consummated during
the most recent fiscal quarter covered by such financial statements,
(viii) identifying, with respect to all Indebtedness of the Borrower and the
Subsidiaries outstanding on the date of the most recent balance sheet included
in such financial statements, the clause of Section 6.01(a) pursuant to which
such Indebtedness is then permitted to be outstanding, (ix) setting forth the
amount of Restricted Payments made during the most recent fiscal quarter covered
by such financial statements and the provision of Section 6.08(a) pursuant to
which such Restricted Payments were made, and (x) setting forth the aggregate
sale price of Eligible Script Lists sold since the most recent date on which the
Eligible Script Lists Value was provided to the Lenders in the event aggregate
sale price for all Eligible Script Lists sold since such date of determination
exceeds 5% of the most recently determined Eligible Script Lists Value;

52

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

(d) concurrently with any delivery of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such financial
statements (i) stating whether they obtained knowledge during the course of
their examination of such financial statements of any Default and
(ii) confirming the calculations set forth in the officer’s certificate
delivered simultaneously therewith pursuant to clause (c)(ii) above (which
certificate may be limited to the extent required by accounting rules or
guidelines);

(e) within three Business Days after the end of each fiscal month of the
Borrower, a certificate of a Financial Officer setting forth in reasonable
detail a description of each disposition of assets not in the ordinary course of
business for which the book value or fair market value of the assets of the
Borrower or the Subsidiaries disposed or the consideration received therefor was
greater than $10,000,000;

(f) within 14 Business Days after the end of each fiscal month of the Borrower,
a Borrowing Base Certificate showing the Borrowing Base Amount as of the close
of business on the last day of such fiscal month, certified as complete and
correct by a Financial Officer; provided that a Borrowing Base Certificate shall
be delivered by the Borrower to the Administrative Agent and each Lender within
four Business Days after the end of a fiscal week of the Borrower if at any time
during such fiscal week the Revolver Availability is less than or equal to
$200,000,000 (with the amount with respect to Eligible Inventory stored at
distribution centers included in the Borrowing Base Amount shown on such
Borrowing Base Certificate delivered under this proviso being the amount
computed as of the close of business on the last day of the Borrower’s most
recent fiscal month for which such amount is available, which computation shall
be completed within 14 Business Days after the end of each fiscal month of the
Borrower);

(g) no later than 60 days following the end of each fiscal year of the Borrower
(or, in the reasonable discretion of the Administrative Agent, no later than 30
days thereafter), forecasts for the Borrower and its Consolidated Subsidiaries
of (i) quarterly consolidated balance sheet data and related consolidated
statements of income and cash flows for each quarter in the next succeeding
fiscal year and (ii) consolidated balance sheet data and related consolidated
statements of income and cash flows for each of the five fiscal years
immediately following such fiscal year (but excluding any fiscal year ending
after 2013);

(h) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by the Borrower or
any Subsidiary with the SEC, or with any national securities exchange, or
distributed by the Borrower to its shareholders generally, as the case may be;
and

(i) promptly following any request therefor, such other information regarding
the financial condition, business or identity of the Borrower or any Subsidiary,
or compliance with the terms of any Senior Loan Document, as any Agent, at the
request of any Lender, may reasonably request, including any information to be
provided pursuant to Section 9.17.

Information required to be delivered pursuant to clauses (a), (b) and (h) shall
be deemed to have been delivered on the date on which the Borrower provides
notice to the Lenders that such information has been posted on the Borrower’s
website on the Internet at www.riteaid.com, at
www.sec.gov/edgar/searchedgar/webusers.htm or at another website identified in
such notice and accessible by the Lenders without charge; provided that (i) such
notice may be included in a certificate delivered pursuant to clause (c) and
(ii) the Borrower shall deliver paper copies of the information referred to in
clauses (a), (b) and (h) to any Lender which requests such delivery.

53

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

SECTION 5.02.   Notices of Material Events.   The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice after any officer of
the Borrower obtains knowledge of any of the following:

(a) the occurrence of any Default;

(b) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting the Borrower or
any Affiliate thereof that could reasonably be expected to result in a Material
Adverse Effect;

(c) the occurrence of any ERISA Event;

(d) any Lien (other than security interests created under any Senior Loan
Document or Second Priority Debt Document or Permitted Encumbrances) on any
material portion of the Senior Collateral (or, prior to the Borrowing Base Date,
the Interim Collateral);

(e) the occurrence of any other event which could reasonably be expected to have
a material adverse effect on the security interests created by the Senior Loan
Documents or on the aggregate value of the Senior Collateral (or, prior to the
Borrowing Base Date, the Interim Collateral); and

(f) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

SECTION 5.03.   Information Regarding Collateral.   (a) The Borrower will
furnish to the Administrative Agent prompt written notice of any change (i) in
any Loan Party’s corporate name, (ii) in the location of any Loan Party’s
jurisdiction of incorporation or organization, (iii) in any Loan Party’s form of
organization or (iv) in any Loan Party’s Federal Taxpayer Identification Number
or other identification number assigned by such Loan Party’s jurisdiction of
incorporation or formation. The Borrower agrees not to effect or permit any
change referred to in the preceding sentence unless all filings have been made
under the Uniform Commercial Code or otherwise that are required in order for
the Administrative Agent to continue at all times following such change to have
a valid, legal and perfected security interest in all the Senior Collateral
(and, prior to the Borrowing Base Date, the Interim Collateral). The Borrower
also agrees promptly to notify the Agents if any material portion of the Senior
Collateral is damaged or destroyed.

(b) Each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to clause (a) of Section 5.01, the
Borrower shall deliver to the Agents a certificate of the chief legal officer of
the Borrower (i) setting forth the information required pursuant to Section 1 of
the Perfection Certificate or confirming that there has been no change in such
information since the date of the Perfection Certificate delivered on the Second
Restatement Effective Date or the date of the most recent certificate delivered
pursuant to this Section and (ii) certifying that all Uniform Commercial Code
financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations, including all refilings,
rerecordings and reregistrations, containing a description of the Senior
Collateral have been filed of record in each governmental, municipal or other
appropriate office in each jurisdiction identified pursuant to clause (i) above
to the extent necessary to protect and perfect the security interests under the
Senior Subsidiary Security Agreement for a period of not less than 18 months
after the date of such certificate (except as noted therein with respect to any
continuation statements to be filed within such period).

SECTION 5.04.   Existence; Conduct of Business.   Except as otherwise permitted
by this Agreement, the Borrower will continue, and will cause each Subsidiary to
continue, to engage in business

54

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

of the same general type as now conducted by the Borrower and the Subsidiaries.
The Borrower will, and will cause each of the Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges, franchises,
patents, copyrights, trademarks and trade names, in each case material to the
conduct of its business; provided that the foregoing shall not prohibit any
merger, consolidation, liquidation, dissolution or sale of assets permitted
under Section 6.03.

SECTION 5.05.   Payment of Obligations.   The Borrower will, and will cause each
of the Subsidiaries to, pay its Indebtedness and other obligations, including
Tax liabilities, which, if unpaid, could result in a material Lien on any of
their properties or assets, before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.

SECTION 5.06.   Maintenance of Properties.   The Borrower will, and will cause
each of the Subsidiaries to, keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear excepted.

SECTION 5.07.   Insurance.   (a) The Borrower will, and will cause each of the
Subsidiaries to, maintain (either in the name of the Borrower or in such
Subsidiary’s own name), with financially sound and reputable insurance companies
insurance in such amounts (with no greater risk retention) and against such
risks as are customarily maintained by companies of established repute engaged
in the same or similar businesses operating in the same or similar locations.
The Borrower will furnish to the Lenders, upon request of the Agents,
information in reasonable detail as to the insurance so maintained.

(b) The Borrower will, and will cause each of the Subsidiaries to, maintain such
insurance in a coverage amount of not less than 90% of the coverage amount as of
the Original Restatement Effective Date, with deductibles, risks covered and
other provisions (other than the amount of premiums) not materially less
favorable to the Borrower and the Subsidiaries as of the Original Restatement
Effective Date.

(c) The Borrower will, and will cause each of the Subsidiary Loan Parties (and,
prior to or on the Borrowing Base Date, Holdings and its subsidiaries) to,
(i) cause all such policies to be endorsed or otherwise amended to include a
“standard” or “New York” lender’s loss payable endorsement, in form and
substance satisfactory to the Agents, which endorsement shall provide that, from
and after the Original Restatement Effective Date if the insurance carrier shall
have received written notice from the Administrative Agent of the occurrence of
an Event of Default, the insurance carrier shall pay all proceeds otherwise
payable to the Borrower and any other Loan Party under such policies directly to
the Collateral Agent for application pursuant to the Collateral Trust and
Intercreditor Agreement; (ii) cause all such policies to provide that neither
the Borrower, the Administrative Agent, either Collateral Agent nor any other
party shall be a coinsurer thereunder and to contain a “Replacement Cost
Endorsement”, without any deduction for depreciation, and such other provisions
as the Agents may reasonably require from time to time to protect their
interests; (iii) deliver broker’s certificates to the Collateral Agent;
(iv) cause each such policy to provide that it shall not be canceled or not
renewed by reason of nonpayment of premium upon not less than 10 days’ prior
written notice thereof by the insurer to the Administrative Agent (giving the
Administrative Agent the right to cure defaults in the payment of premiums) or
for any other reason upon not less than 30 days’ prior written notice thereof by
the insurer to the Administrative Agent; and (v) deliver to the Administrative
Agent, before the cancellation or nonrenewal of any such policy of insurance, a
copy of a renewal or replacement policy (or other evidence of renewal of a
policy previously delivered to the Administrative Agent), together with evidence
reasonably satisfactory to the Agents of payment of the premium therefor.

55

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

(d)        In connection with the covenants set forth in this Section, it is
agreed that:

(i)         none of the Agents, the Lenders, or their agents or employees shall
be liable for any loss or damage insured by the insurance policies required to
be maintained under this Section, and (A) the Borrower and each Subsidiary Loan
Party (and, prior to the Borrowing Base Date, Holdings and each of its
subsidiaries) shall look solely to their insurance companies or any other
parties other than the aforesaid parties for the recovery of such loss or damage
and (B) such insurance companies shall have no rights of subrogation against the
Agents, the Lenders or their agents or employees. If, however, the insurance
policies do not provide waiver of subrogation rights against such parties, as
required above, then the Borrower hereby agrees, to the extent permitted by law,
to waive its right of recovery, if any, against the Agents, the Lenders and
their agents and employees; and

(ii)       the designation of any form, type or amount of insurance coverage by
the Agents or the Required Lenders under this Section shall in no event be
deemed a representation, warranty or advice by the Agents or the Lenders that
such insurance is adequate for the purposes of the business of the Borrower and
the Subsidiaries or the protection of their properties.

(e)        The Borrower will, and will cause each of the Subsidiaries to, permit
any representatives that are designated by a Collateral Agent to inspect the
insurance policies maintained by or on behalf of the Borrower and the
Subsidiaries and inspect books and records related thereto and any properties
covered thereby. The Borrower shall pay the reasonable fees and expenses of any
representatives retained by a Collateral Agent to conduct any such inspection.

SECTION 5.08.   Books and Records; Inspection and Audit Rights; Collateral and
Borrowing Base Reviews.   (a) The Borrower will, and will cause each of the
Subsidiaries to, keep proper books of record and account in which full, true and
correct entries are made of all dealings and transactions in relation to its
business and activities. The Borrower will, and will cause each of the
Subsidiaries to, permit any representatives designated by any Lender (at such
Lender’s expense, unless a Default has occurred and is continuing, in which case
at the Borrower’s expense), and after such Lender has consulted the
Administrative Agent with respect thereto, to visit and inspect its properties,
to examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants,
all at such reasonable times and as often as reasonably requested.

(b)        The Borrower will, and will cause each of the Subsidiaries to, permit
any representatives designated by any Collateral Agent (including any
consultants, field examiners, accountants, lawyers and appraisers retained by
such Collateral Agent) to conduct (i) a field examination of the Senior
Collateral at or about the end of each fiscal quarter of the Borrower, (ii) an
appraisal of the Borrower’s computation of the assets included in the Borrowing
Base Amount and the Estimated Borrowing Base at or about the end of each fiscal
year of the Borrower, (iii) an appraisal of the Eligible Script Lists at or
about the end of the fiscal quarter ending August 31 of each fiscal year of the
Borrower and (iv) other evaluations and appraisals of the Borrower’s computation
of the Borrowing Base Amount and the Estimated Borrowing Base Amount and the
assets included in therein, all at such reasonable times and as often as
reasonably requested. The Borrower shall pay the reasonable fees and expenses of
any representatives retained by any Collateral Agent to conduct any such
evaluation or appraisal. The Administrative Agent shall promptly deliver to the
Lenders copies of all such appraisals and other information provided to the
Borrower in connection with such evaluations and appraisals.

(c)        The Borrower will, and will cause each of the Subsidiaries to, in
connection with any evaluation and appraisal relating to the computation of the
Borrowing Base Amount or the Estimated Borrowing Base Amount, maintain such
additional reserves (for purposes of computing the Borrowing Base Amount or the
Estimated Borrowing Base Amount) in respect of Eligible Accounts Receivable and
Eligible Inventory and make such other adjustments to its parameters for
including Eligible Accounts

56

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

Receivable, Eligible Inventory and Eligible Script Lists in the Borrowing Base
Amount and the Estimated Borrowing Base Amount as the Collateral Agent shall
require based upon the results of such evaluation and appraisal in its
reasonable judgment to reflect Borrowing Base Factors.

SECTION 5.09.   Compliance with Laws.   The Borrower will, and will cause each
of the Subsidiaries to, comply in all material respects with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its
property, including all Environmental Laws, HIPAA and all other material
healthcare laws and regulations, except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings or to the extent
that any failures so to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.

SECTION 5.10.   Use of Proceeds and Letters of Credit.   (a) The proceeds of the
Tranche 2 Term Loans will be used by the Borrower for the purposes set forth in
the preamble hereto.

(b)        The proceeds of the Revolving Loans, Swingline Loans and loans under
the Incremental Facilities made on or after the Second Restatement Effective
Date will be used by the Borrower as set forth in the preamble and for general
corporate purposes, including:

(i)         payment of part of the consideration due to the Seller in connection
with the Acquisition;

(ii)       payment of fees and expenses (including any premiums and amendment
fees) incurred in connection with the Transactions;

(iii)      loans or other transfers to Rite Aid Hdqtrs. Corp. for purposes of
financing inventory purchases pursuant to the Intercompany Inventory Purchase
Agreement and advancing funds to Subsidiary Loan Parties for their general
corporate purposes, including working capital, Consolidated Capital Expenditures
and Business Acquisitions permitted pursuant to Section 6.04;

(iv)       transfers to an operating account for the payment of operating
expenses (including rent, utilities, taxes, wages, repair and similar expenses)
of, and intercompany Investments permitted under Section 6.04 in, the Borrower
or any Subsidiary Loan Party;

(v)        payment by the Borrower of principal, interest, fees and expenses
with respect to its Indebtedness when due (including associated costs, fees and
expenses) and payment of the Borrower’s taxes, administrative, operating and
other expenses;

(vi)       dividends permitted to be made in respect of the Equity Interests
listed on Schedule 6.08(a) or described in Section 6.08(a); (vii) repurchase
shares of the Borrower’s Preferred Stock pursuant to Section 6.08(a);

(viii)    payment of principal, interest, fees and expenses with respect to
Third Party Interests in accordance with the terms thereof; and (ix) the
financing of Optional Debt Repurchases, permitted capital expenditures, the
repurchase of the Borrower’s and/or its Subsidiaries’ (including Rite Aid Lease
Management Company’s) Preferred Stock and permitted Restricted Payments.

(c)        Letters of Credit will be used solely to support payment obligations
of the Borrower and the Subsidiaries incurred in the ordinary course of
business.

(d)        No proceeds of Loans will be used to prepay commercial paper prior to
the maturity thereof and no such proceeds will be used, directly or indirectly,
for the purpose, whether immediate, incidental or ultimate, of buying or
carrying any Margin Stock. The Borrower will ensure that no such use of Loan
proceeds and no issuance of Letters of Credit will entail any violation of
Regulation T, U or X of the Board.

57

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

SECTION 5.11.   Additional Subsidiaries.   If any additional wholly-owned
Domestic Subsidiary is formed or acquired after the Second Restatement Effective
Date, and (i) if such Subsidiary is required to become a Subsidiary Loan Party
hereunder, the Borrower will, within three Business Days after such Subsidiary
is formed or acquired, notify the Administrative Agent and the Lenders thereof
and cause the Collateral and Guarantee Requirement to be satisfied with respect
to such Subsidiary, including each Securitization Vehicle which is a Domestic
Subsidiary, but excluding any Subsidiary that engages solely in the pharmacy
benefits management business, and (ii) if such Subsidiary is a subsidiary of
Holdings and such Subsidiary is formed or acquired prior to the Borrowing Base
Date, the Borrower will, within three Business Days after such Subsidiary is
formed or acquired, notify the Administrative Agent and the Lenders thereof and
cause the Interim Collateral and Guarantee Requirement to be satisfied with
respect to such Subsidiary, including each Securitization Vehicle which is a
Domestic Subsidiary, but excluding any Subsidiary that engages solely in the
pharmacy benefits management business. Notwithstanding any other provision of
this Agreement, (i) no Domestic Subsidiary listed on Schedule 5.11 shall be
required to become a Subsidiary Loan Party (it being understood and agreed that
Schedule 5.11 shall not include any Securitization Vehicle that is a Domestic
Subsidiary), (ii) no Domestic Subsidiary shall be required to become a
Subsidiary Loan Party unless and until such time as such Subsidiary has assets
in excess of $1,000,000 or acquires assets in excess of $1,000,000 or has
revenue in excess of $500,000 per annum and (iii) neither Holdings nor any of
its subsidiaries shall be required to become a Subsidiary Loan Party until the
Borrowing Base Date.

SECTION 5.12.   Further Assurances.   (a) The Borrower will, and will cause each
Subsidiary Loan Party to, execute any and all further documents, financing
statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements, fixture filings,
deeds of trust and other documents), which may be required under any applicable
law, or which any Collateral Agent or the Required Lenders may reasonably
request, to cause the Collateral and Guarantee Requirement to be and remain
satisfied, all at the expense of the Loan Parties. The Borrower also agrees to
provide to the Collateral Agent, from time to time upon request, evidence
reasonably satisfactory to the Collateral Agent as to the perfection and
priority of the Liens created or intended to be created by the Senior Collateral
Documents.

(b)        The Borrower will cause Holdings and each of its domestic
subsidiaries to execute any and all further documents, agreements and
instruments, and take all such further actions, which may be required under any
applicable law, or which any Collateral Agent or the Required Lenders may
reasonably request, to cause the Interim Collateral and Guarantee Requirement to
be and remain satisfied at all times prior to the Borrowing Base Date, all at
the expense of the Borrower. The Borrower also agrees to provide to the
Collateral Agent, from time to time upon request, evidence reasonably
satisfactory to the Collateral Agent as to the perfection and priority of the
Liens created or intended to be created by the Interim Collateral Documents.

SECTION 5.13.   Subsidiaries.   The Borrower will cause all of the Subsidiaries
that own Eligible Accounts Receivable, Eligible Inventory or Eligible Script
Lists (and, prior to the Borrowing Base Date, Holdings and its subsidiaries) to
be and at all times remain “Unrestricted Subsidiaries” as defined in, and for
all purposes of, each of the Effective Date Indentures and will deliver such
documents to the trustees under each such Effective Date Indenture and take such
actions thereunder as may be necessary to effect the foregoing.

SECTION 5.14.   Intercompany Transfers.   The Borrower shall maintain accounting
systems capable of tracing intercompany transfers of funds and other assets.

SECTION 5.15.   Inventory Purchasing.   (a) The Borrower shall, and shall cause
each Subsidiary party to the Intercompany Inventory Purchase Agreement to, at
all times maintain in all material respects the vendor inventory purchasing
system and the intercompany inventory purchasing system in accordance

58

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

with the terms of the Intercompany Inventory Purchase Agreement. The Borrower
shall cause each Subsidiary which owns or acquires any Senior Collateral
consisting of inventory to be party to the Intercompany Inventory Purchase
Agreement. Notwithstanding the foregoing, the Borrower shall only be required to
cause Holdings and its subsidiaries to comply with the foregoing as soon as
reasonably practicable after the Second Restatement Effective Date (but in any
event by the Borrowing Base Date).

(b)        The Borrower shall not permit any Operating Subsidiary to purchase
any Inventory from any Direct Delivery Vendor other than (i) the acquisition of
inventory from McKesson Corporation (or any Persons that replace McKesson
Corporation, in whole or in part, and sell or otherwise provide inventory
substantially similar to inventory sold or otherwise provided by McKesson
Corporation) consistent with past practice and (ii) food-stuffs, beverages,
periodicals, greeting cards and similar items which are either paid for in cash
substantially concurrently with the time of delivery or otherwise consistent
with past practice.

SECTION 5.16.   Cash Management System.   (a) The Borrower will cause each
Subsidiary Loan Party to at all times maintain a Cash Management System that
complies with Schedule 3 of the Senior Subsidiary Security Agreement. The
Borrower will cause each Subsidiary Loan Party to comply with each obligation
thereof under the Cash Management System. The Borrower will cause each
Subsidiary Loan Party to comply with each of its obligations under the Cash
Management System, and shall cause each Subsidiary Loan Party to use its best
efforts to cause any applicable third party to effectuate the Cash Management
System. Notwithstanding the foregoing, the Borrower shall only be required to
cause Holdings and its subsidiaries to comply with the foregoing as soon as
reasonably practicable after the Second Restatement Effective Date (but in any
event by the Borrowing Base Date).

(b)        Each party hereto authorizes the Administrative Agent and the
Collateral Agent to (i) permit the creation by the Grantors of accounts that
receive payments in respect of the Securitization Assets and/or Factoring Assets
(but not other payments) and (ii) release the security interest of the
Collateral Agent for the ratable benefit of the Senior Secured Parties in the
Lockbox Account, the Governmental Lockbox Account and/or any accounts created
pursuant to clause (i) of this paragraph from the Cash Management System and
transfer control of the Lockbox Account, the Governmental Lockbox Account and/or
any accounts created pursuant to clause (i) of this paragraph to (A) any Person
in connection with a Factoring Transaction permitted by this Agreement for so
long as a Factoring Transaction is ongoing or (B) any Person for the benefit of
holders of Third Party Interests in respect of a Securitization permitted by
this Agreement for as long as any Third Party Interests are outstanding.

SECTION 5.17.   Termination of Factoring Transactions.   If an Event of Default
has occurred and the Collateral Agent has elected to exercise any remedies under
the Senior Collateral Documents as a result thereof, the Borrower shall, and
shall cause each of its Subsidiaries to, terminate all existing Factoring
Transactions and cease to engage in any further Factoring Transactions;
provided, however, that neither the Borrower nor any such Subsidiary shall be
required hereby to repurchase any Factoring Assets previously sold, transferred
or otherwise conveyed pursuant to any such Factoring Transaction.

ARTICLE VI

Negative Covenants

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired, terminated or been cash collateralized and
all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:

59

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

SECTION 6.01.   Indebtedness; Certain Equity Securities.   (a) The Borrower will
not, and will not permit any Subsidiary to, create, incur, assume or permit to
exist any Indebtedness, any Attributable Debt in respect of any Sale and
Leaseback Transaction or any Third Party Interests except:

(i)         Indebtedness under the Senior Loan Documents;

(ii)       unsecured Indebtedness of the Borrower that is not Guaranteed by any
Subsidiary, that does not mature or require scheduled payments of principal
prior to the date that is three months after the Tranche 2 Term Maturity Date,
and that has covenants and events of default which are determined in good faith
by the senior management of the Borrower to be on market terms, and Refinancing
Indebtedness issued in respect of such Indebtedness;

(iii)      Indebtedness of the Borrower and the Subsidiaries in respect of
intercompany Investments permitted under Section 6.04; provided that such
Indebtedness is subordinated to the Senior Obligations (and, prior to the
Borrowing Base Date, the Interim Obligations) pursuant to terms substantially
the same as those forth on Annex 2 hereto;

(iv)       Existing Non-Guaranteed Indebtedness;

(v)        Existing Second Priority Debt;

(vi)       Existing Guaranteed Unsecured Indebtedness;

(vii)     Permitted Second Priority Debt incurred after the Second Restatement
Effective Date in an aggregate principal amount, together with the aggregate
principal amount of Indebtedness incurred pursuant to clause (viii) of this
Section 6.01(a), not in excess of $1,500,000,000 at any time outstanding;
provided that the aggregate principal amount of Permitted Second Priority Debt
incurred under this clause which matures or requires scheduled payments of
principal prior to the date that is three months after the Tranche 2 Term
Maturity Date, together with the aggregate principal amount of any Permitted
Unsecured Indebtedness incurred under clause (viii) of this
Section 6.01(a) which matures or requires schedule payments of principal prior
to the date that is three months after the Tranche 2 Term Maturity Date, shall
not exceed $750,000,000 at any time outstanding;

(viii)    Permitted Unsecured Indebtedness incurred after the Second Restatement
Effective Date in an aggregate principal amount, together with the aggregate
principal amount of Indebtedness incurred pursuant to clause (vii) of this
Section 6.01(a), not in excess of $1,500,000,000 at any time outstanding;
provided that the aggregate principal amount of Permitted Unsecured Indebtedness
incurred under this clause which matures or requires scheduled payments of
principal prior to the date that is three months after the Tranche 2 Term
Maturity Date, together with the aggregate principal amount of any Permitted
Second Priority Debt incurred under clause (vii) of this Section 6.01(a) which
matures or requires schedule payments of principal prior to the date that is
three months after the Tranche 2 Term Maturity Date, shall not exceed
$750,000,000 at any time outstanding;

(ix)       Indebtedness secured by Liens on real property or Attributable Debt
incurred in connection with Sale and Leaseback Transactions involving real
property; provided that any such Indebtedness, or any such lease entered into in
connection with the Sale and Leaseback Transaction giving rise to such
Attributable Debt, shall have a maturity date or termination date, as the case
may be, after the date that is three months after the Tranche 2 Term Maturity
Date; and provided further that the aggregate principal amount of Indebtedness
and Attributable Debt incurred pursuant to this clause (ix) shall not exceed
$600,000,000 at any time outstanding;

(x)        Refinancing Indebtedness issued in respect of Indebtedness or
Attributable Debt permitted under clauses (iv), (v), (vi), (xv) and (xviii);

60

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

(xi)       endorsements of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business;

(xii)     Indebtedness for borrowed money and Capital Lease Obligations existing
on the Second Restatement Effective Date (other than Second Priority Debt and
Indebtedness referred to in clauses (ii), (iv), (v) and (vi) above) and set
forth on Schedule 6.01(a)(xii), but not any extensions, renewals, refinancings
or replacements of such Indebtedness;

(xiii)    Capital Lease Obligations with respect to leases existing on the
Second Restatement Effective Date that were accounted for as operating leases on
the Original Restatement Effective Date and thereafter reclassified as Capital
Lease Obligations;

(xiv)     Indebtedness (including Capital Lease Obligations) and Attributable
Debt in respect of Sale and Leaseback Transactions in respect of equipment
financing or leasing in the ordinary course of business of the Borrower and the
Subsidiaries consistent with past practices;

(xv)      purchase money Indebtedness (including Capital Lease Obligations) and
Attributable Debt in respect of Sale and Leaseback Transactions in each case
incurred to finance the acquisition, development, construction or opening of any
Store after the Second Restatement Effective Date; provided that such
Indebtedness or Attributable Debt (A) is incurred not later than 24 months
following the completion of the acquisition, development, construction or
opening of such Store, (B) any Lien securing such Indebtedness or Attributable
Debt is limited to the Store financed with the proceeds thereof, and (C) is
incurred in connection with a transaction that is substantially consistent with
the business plan of the Borrower provided to the Lenders prior to the Second
Restatement Effective Date;

(xvi)     (A) Third Party Interests issued by Securitization Vehicles in
Securitizations permitted by Section 6.05, and Indebtedness represented by such
Third Party Interests and (B) Indebtedness of the Borrower or its Subsidiaries
that may be deemed to exist solely by virtue of a Factoring Transaction
permitted by this Agreement; provided that the aggregate amount of all
Securitizations plus the aggregate amount of Indebtedness permitted by clause
(B) shall not exceed $950,000,000 at any time outstanding;

(xvii)   Indebtedness of Subsidiaries other than Securitization Vehicles that
may be deemed to exist solely by virtue of Standard Securitization Undertakings
entered into by such Subsidiaries as sellers of Securitization Assets in
Securitizations permitted by paragraph (xvi) above;

(xviii)  Indebtedness under the New Notes and/or the Bridge Facility, in an
aggregate principal amount not in excess of the amount equal to $1,220,000,000,
and Guarantees by Subsidiaries of such Indebtedness (and Refinancing
Indebtedness of such Indebtedness);

(xix)     Guarantees by Subsidiaries of the Existing Second Priority Debt (and
Refinancing Indebtedness of Existing Second Priority Debt), the Existing
Guaranteed Unsecured Indebtedness (and Refinancing Indebtedness of Existing
Guaranteed Unsecured Indebtedness) and any Indebtedness under clause (vii) or
(viii) of this Section 6.01(a); and

(xx)      Indebtedness of Holdings in respect of letters of credit assumed in
connection with the Acquisition in an aggregate principal amount not in excess
of (A) $75,000,000 at any time outstanding prior to any date that is 60 days
after the Second Restatement Effective Date and (B) $10,000,000 at any time
outstanding on or after any date that is 60 days after the Second Restatement
Effective Date but prior to 120 days after the Second Restatement Effective
Date.

(b)        The Borrower will not, nor will it permit any Subsidiary to, issue
any Preferred Stock or other preferred Equity Interests, other than Qualified
Preferred Stock of the Borrower, Third Party

61

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

Interests issued by Securitization Vehicles, and other preferred Equity
Interests issued and outstanding on the Second Restatement Effective Date and
set forth on Schedule 6.01(b).

SECTION 6.02.   Liens.   (a) The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:

(i)         Liens created under the Senior Loan Documents;

(ii)       Permitted Encumbrances;

(iii)      any Lien created or permitted by the Second Priority Collateral
Documents with respect to the Second Priority Debt Obligations in favor of the
Second Priority Debt Parties; provided that (A) such Lien is created
simultaneously with or after an equivalent Lien under the Senior Collateral
Documents on the applicable Senior Collateral, (B) such Lien is subject to the
Collateral Trust and Intercreditor Agreement, (C) any Lien on the proceeds of
such Senior Collateral is permitted by the Collateral Trust and Intercreditor
Agreement and (D) such Second Priority Debt Obligations are permitted to be
incurred under Section 6.01(a);

(iv)       intentionally omitted;

(v)        any Lien securing Indebtedness of a Subsidiary owing to a Subsidiary
Loan Party;

(vi)       any Lien securing Attributable Debt and other payment obligations
under leases incurred in connection with a Sale and Leaseback Transaction
permitted pursuant to Section 6.01(a)(xiv) or (xv) and Section 6.06; provided
that such Liens attach only to the equipment, real property or other assets
subject to such Sale and Leaseback Transaction;

(vii)     any Lien on real property securing Indebtedness permitted and incurred
under Section 6.01(a)(ix);

(viii)    any Lien securing Capital Lease Obligations permitted and incurred
under Section 6.01(a)(xiii), provided that such Lien is limited to the equipment
or other property subject to leases existing on the Original Restatement
Effective Date that were subsequently reclassified as Capital Lease Obligations;

(ix)       any Lien on equipment securing Indebtedness incurred to finance such
equipment pursuant to Section 6.01(a)(xiv);

(x)        Liens securing Indebtedness permitted and incurred under
Section 6.01(a)(xv), provided that such Liens apply only to the property or
other assets acquired, developed or constructed, as the case may be, with the
proceeds of such Indebtedness;

(xi)       Liens existing on the Second Restatement Effective Date and
identified on Schedule 6.02(xi); provided, that such Liens do not attach to any
property other than the property identified on such Schedule and secure only the
obligations they secured on the Second Restatement Effective Date;

(xii)     any Lien (A) on Net Cash Proceeds that are required to be applied to
the repayment of Second Priority Debt Obligations in accordance with the
Collateral Trust and Intercreditor Agreement or (B) that arises pursuant to any
provisions in any Second Priority Debt Document equivalent to Section 10.14 of
the 12.5% Note Indenture;

62

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

(xiii)    Liens securing Refinancing Indebtedness permitted under
Section 6.01(a), to the extent that the Indebtedness being refinanced was
originally secured in accordance with this Section 6.02; provided that such Lien
does not apply to any additional property or assets of the Borrower or any
Subsidiary (other than (i) property or assets acquired after the issuance or
incurrence of such Refinancing Indebtedness that would have been subject to the
Lien securing refinanced Indebtedness if such Indebtedness had not been
refinanced, (ii) additions to the property or assets subject to the Lien and
(iii) the proceeds of the property or assets subject to the Lien);

(xiv)     Liens on property or assets acquired pursuant to Section 6.04(vi), (x)
or (xiii); provided that (A) such Liens apply only to the property or other
assets subject to such Liens at the time of such acquisition and (B) such Liens
existed at the time of such acquisition and were not created in contemplation
thereof;

(xv)      put and call agreements with respect to Equity Interests acquired or
created in connection with Joint Ventures permitted pursuant to
Section 6.04(x) or (xiii); provided that neither the Borrower nor any Subsidiary
shall be permitted to enter into any such agreement that requires or, upon the
occurrence of any event or condition, contingent or otherwise, may require the
Borrower or any Subsidiary Loan Party (or, prior to the Borrowing Base Date,
Holdings or any of its subsidiaries) to repurchase Equity Interests,
Indebtedness or otherwise expend any amounts on or prior to the Tranche 2 Term
Maturity Date (other than as permitted under Section 6.04(x) or (xiii));

(xvi)     (A) Liens on Securitization Assets transferred or purported to be
transferred to Securitization Vehicles securing Third Party Interests issued in
Securitizations permitted by Sections 6.01 and 6.05, (B) Liens on account
receivables not purchased by a Securitization Vehicle, which Liens (i) are
granted in connection with Securitizations permitted by Sections 6.01 and 6.05,
(ii) are granted pursuant to Standard Securitization Undertakings, (iii) are
perfected prior to an Event of Default and (iv) secure Third Party Interests
issued in Securitizations permitted by Sections 6.01 and 6.05 and (C) Liens on
Factoring Assets transferred or purported to be transferred in Factoring
Transactions permitted by this Agreement; and

(xvii)   Liens (other than Liens securing Indebtedness) that are not otherwise
permitted under any other provision of this Section 6.02(a); provided, that the
fair market value of the property and assets with respect to which such Liens
are granted shall not at any time exceed $40,000,000.

(b)        Notwithstanding anything in clause (a) of this Section 6.02, the
Borrower may not grant or otherwise permit to exist Liens on any cash or cash
equivalents that secure the Senior Obligations or are otherwise held by the
Lenders or the Administrative Agent pursuant to Section 2.05(k) or 9.15.

SECTION 6.03.   Fundamental Changes.   Without limiting the restrictions on
Business Acquisitions set forth in Section 6.04, the Borrower will not, and will
not permit any Subsidiary Loan Party (or, prior to the Borrowing Base Date,
Holdings or any of its subsidiaries) to, merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or liquidate or dissolve, except that, if at the time thereof and immediately
after giving effect thereto no Default shall have occurred and be continuing
(i) any Person may merge into the Borrower in a transaction in which the
Borrower is the surviving corporation, provided, that if such other Person is a
Subsidiary Loan Party, it shall have no assets that constitute Senior
Collateral, (ii) any Person may merge into a Subsidiary Loan Party in a
transaction in which such Subsidiary Loan Party is the surviving corporation and
(iii) any Subsidiary Loan Party may liquidate or dissolve if such liquidation or
dissolution is not materially disadvantageous to the Lenders; provided that
(A) any such merger involving a Person that is not a whollyowned Subsidiary
immediately prior to such merger shall not be permitted to engage in such merger
unless also permitted by

63

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

Section 6.04 and (B) the Borrower and the applicable Subsidiary Loan Party shall
comply with the provisions of Section 5.11 with respect to any Subsidiary
acquired pursuant to this Section 6.03.

SECTION 6.04.   Investments, Loans, Advances, Guarantees and Acquisitions.   The
Borrower will not, and will not permit any of the Subsidiaries to, make any
Investment in, or Guarantee any obligations of, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit, except:

(i)         Permitted Investments;

(ii)       Investments of the Borrower, the Subsidiary Loan Parties and Holdings
and its subsidiaries set forth on Schedule 6.04;

(iii)      Guarantees of Indebtedness and/or Guarantees consisting of
Indebtedness permitted by Section 6.01;

(iv)       Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;

(v)        Investments by (A) the Borrower or any Subsidiary Loan Party in
Subsidiary Loan Parties and (B) prior to the Borrowing Base Date, Holdings in
its subsidiaries and subsidiaries of Holdings in Holdings or any other
subsidiary of Holdings; provided that the Borrower and such Subsidiary Loan
Party or Holdings and such subsidiary of Holdings, as the case may be, shall
comply with the applicable provisions of Section 5.11 with respect to any newly
formed Subsidiary;

(vi)       Investments consisting of non-cash consideration received in
connection with any Asset Sale permitted by Section 6.05;

(vii)     Investments by the Subsidiaries in the Borrower; provided that the
proceeds of such Investments are used for a purpose set forth in
Section 5.10(b);

(viii)    prior to the Borrowing Base Date, Investments by the Borrower or any
Subsidiary Loan Party in Holdings and its subsidiaries;

(ix)       usual and customary loans and advances to employees, officers and
directors of the Borrower and the Subsidiaries;

(x)        Investments by the Borrower or any of the Subsidiaries in Joint
Ventures in an amount not to exceed $15,000,000 in the aggregate in any fiscal
year of the Borrower;

(xi)       Investments in charitable foundations organized under Section 501(c)
of the Code in an amount not to exceed $7,500,000 in the aggregate in any
calendar year;

(xii)     any Investment consisting of a Hedging Agreement permitted by
Section 6.07;

(xiii)    Business Acquisitions and Investments that are not otherwise permitted
under any other provision of this Section 6.04; provided that (A) at the time of
such Business Acquisition or Investment no Default has occurred and is
continuing or would result therefrom and (B) immediately after giving effect to
any such Business Acquisition or Investment, the Revolver Availability is
greater than $100,000,000;

(xiv)     Investments consisting of Sellers’ Retained Interests in
Securitizations permitted by Sections 6.01 and 6.05; and

(xv) (A) Investments by the Borrower or a Subsidiary in connection with a
Securitization permitted pursuant to this Agreement and (B) any Investment or
other Guarantee that may be

64

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

deemed made by the Borrower due to the fact that a Parent Undertaking has been
entered into in respect of a Securitization permitted pursuant to the Agreement.

SECTION 6.05.   Asset Sales.   The Borrower will not, and will not permit any of
the Subsidiary Loan Parties (and, prior to the Borrowing Base Date, Holdings or
any of its subsidiaries) to, conduct any Asset Sale, including any sale of any
Equity Interest owned by it and any sale of Securitization Assets in connection
with a Securitization, nor will the Borrower permit any of the Subsidiary Loan
Parties (and, prior to the Borrowing Base Date, Holdings or any of its
subsidiaries) to issue any additional Equity Interest in such Subsidiary,
except:

(i)         Permitted Dispositions;

(ii)       any Asset Sale (other than a Sale and Leaseback Transaction, the
issuance of Equity Interests, sales or contributions of Securitization Assets in
a Securitization or sales of Factoring Assets in Factoring Transactions) for
fair value not in the ordinary course of business;

(iii)      any sale, transfer or disposition to a third party of Stores, leases
and prescription files closed at substantially the same time as, and entered
into as part of a single related transaction with, the purchase or other
acquisition from such third party of Stores, leases and prescription files of a
substantially equivalent value;

(iv)       any issuance of (A) Equity Interests of any Subsidiary Loan Party by
such Subsidiary Loan Party to the Borrower or any other Subsidiary Loan Party
and (B) prior to the Borrowing Base Date, any issuance of Equity Interests of
Holdings by Holdings to the Borrower and any issuance of Equity Interests of any
subsidiary of Holdings by such subsidiary to Holdings or any other subsidiary of
Holdings;

(v)        any Sale and Leaseback Transaction permitted pursuant to
Section 6.01(a)(ix), (xiv) or (xv) and Section 6.06;

(vi)       sales or contributions of Securitization Assets to Securitization
Vehicles in connection with Securitizations, provided that (a) each such
Securitization is effected on market terms as determined in good faith by the
senior management of the Borrower, (b) the aggregate amount of all such
Securitizations plus the aggregate amount of Indebtedness permitted by
Section 6.01(a)(xvi)(B) does not exceed $950,000,000 at any time outstanding,
(c) the aggregate amount of the Sellers’ Retained Interests in such
Securitizations does not exceed an amount at any time outstanding that is
customary for similar transactions and (d) the proceeds to each such
Securitization Vehicle from the issuance of Third Party Interests are applied
substantially simultaneously with receipt thereof to the purchase from
Subsidiary Loan Parties of Securitization Assets; provided that, in the case of
clause (d), the Securitization Vehicle may use a portion of such proceeds to pay
a customary collection agent fee in connection with such Securitization to the
extent such fee is permitted pursuant to Section 6.09(f);

(vii)     unless otherwise restricted by Section 5.17, sales of Factoring Assets
in connection with Factoring Transactions; provided that (i) a Factoring Notice
with respect to such Factoring Transaction has been delivered by the Borrower to
the Administrative Agent and (ii) each such Factoring Transaction is effected on
market terms as determined in good faith by the senior management of the
Borrower; and

(viii)    the sale, transfer or other disposition of assets or properties of
Holdings and its subsidiaries required by any Governmental Authority as a
condition to its consent or forbearance from opposing the consummation of the
Transactions.

provided that, with respect to sales, transfers or dispositions under clause
(ii), (v) or (viii), and with respect to any net consideration received from any
transaction described in clause (iii), (1) at least 75% of the

65

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

consideration therefor shall consist of cash and (2) the aggregate fair market
value of all assets sold, transferred or disposed of in reliance upon clauses
(ii) and (v) shall not exceed $200,000,000 in any fiscal year of the Borrower;
provided further that subject to the condition set forth in clause (1) above,
additional assets with an aggregate fair market value not in excess of
$450,000,000 may be sold, transferred or disposed of in any fiscal year of the
Borrower in reliance upon clauses (ii) and (v) if the Borrower reinvests, or
causes the applicable Subsidiary Loan Party (or, prior to the Borrowing Base
Date, if applicable, Holdings or any of its subsidiaries) to reinvest, Net Cash
Proceeds received in connection therewith in Business Acquisitions or the
purchase of Stores or prescription files within 365 days after the receipt
thereof.

SECTION 6.06.   Sale and Leaseback Transactions.   The Borrower will not, and
will not permit any of the Subsidiaries to, enter into any Sale and Leaseback
Transaction, except for Sale and Leaseback Transactions permitted by and
effected pursuant to Section 6.01(a)(ix), (xiv) or (xv) which do not result in
Liens other than Liens permitted pursuant to Section 6.02(a).

SECTION 6.07.   Hedging Agreements.   The Borrower will not, and will not permit
any of the Subsidiaries to, incur or at any time be liable with respect to any
monetary liability under any Hedging Agreements, unless such Hedging Agreements
(i) are entered into for bona fide hedging purposes of the Borrower, any
Subsidiary Loan Party or, prior to the Borrowing Base Date, Holdings or any of
its subsidiaries (as determined in good faith by the senior management of the
Borrower), (ii) correspond in terms of notional amount, duration, currencies and
interest rates, as applicable, to Indebtedness of the Borrower or any Subsidiary
Loan Party (or, prior to the Borrowing Base Date, Holdings or any of its
subsidiaries) permitted to be incurred under Section 6.01(a) or to business
transactions of the Borrower and the Subsidiary Loan Parties (and, prior to the
Borrowing Base Date, Holdings and its subsidiaries) on customary terms entered
into in the ordinary course of business and (iii) do not exceed an amount equal
to the aggregate principal amount of the Senior Obligations and the Second
Priority Debt Obligations (and, prior to the Borrowing Base Date, the Interim
Obligations).

SECTION 6.08.   Restricted Payments; Certain Payments of Indebtedness.   (a) The
Borrower will not, nor will it permit any Subsidiary to, declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment, or incur
any obligation (contingent or otherwise) to do so, except (i) the Borrower may
declare and pay dividends with respect to its common stock or Qualified
Preferred Stock payable solely in additional shares of its common stock or
Qualified Preferred Stock, (ii) Subsidiaries (other than those directly owned,
in whole or part, by the Borrower) may declare and pay dividends ratably with
respect to their common stock, (iii) the Borrower may declare and pay cash
dividends with respect to its common stock and effect repurchases, redemptions
or other Restricted Payments with respect to its common stock, together in an
aggregate amount in any fiscal year of the Borrower not to exceed 50% of
Consolidated Net Income (if positive) for the immediately preceding fiscal year
of the Borrower; provided that immediately prior and after giving effect to any
such payment no Default or Event of Default shall have occurred and be
continuing and, immediately after giving effect to any such payment, the
Borrower shall have Revolver Availability of more than $100,000,000, (iv) the
Borrower may pay cash dividends in an amount not to exceed $60,000,000 in any
fiscal year of the Borrower with respect to the Series E Preferred Stock,
Series I Preferred Stock or any other Qualified Preferred Stock; provided that
(x) immediately prior and after giving effect to any such payment, no Default or
Event of Default shall have occurred and be continuing and (y) only so long as a
Financial Covenant Effectiveness Period is then occurring, the Consolidated
Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters
most recently ended on or prior to the date of such payment, calculated on a pro
forma basis as if such payment were made on the last day of such period (and
excluding any such payments previously made pursuant to this clause during such
four quarter period but attributed for purposes of this calculation to the last
day of a prior period which day does not occur in such four quarter period) is
not less than the ratio applicable to such period of four fiscal quarters under
Section 6.12, (v) the Borrower and the Subsidiaries may make

66

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

Restricted Payments consisting of the repurchase or other acquisition of shares
of, or options to purchase shares of, capital stock of the Borrower or any of
its Subsidiaries from employees, former employees, directors or former directors
of the Borrower or any Subsidiary (or their permitted transferees), in each case
pursuant to stock option plans, stock plans, employment agreements or other
employee benefit plans approved by the board of directors of the Borrower;
provided that no Default has occurred and is continuing; and provided further
that the aggregate amount of such Restricted Payments made after the Original
Restatement Effective Date shall not exceed $10,000,000, (vi) the Subsidiaries
may declare and pay cash dividends to the Borrower; provided that the Borrower
shall, within a reasonable time following receipt of any such payment, use all
of the proceeds thereof for a purpose set forth in Section 5.10(b) (including
the payment of dividends required or permitted pursuant to this
Section 6.08(a)), (vii) the Borrower and the Subsidiaries may declare and pay
cash dividends with respect to the Equity Interests set forth on Schedule
6.08(a) to the extent, and only to the extent, required pursuant to the terms of
such Equity Interests or any other agreement in effect on the Effective Date and
(viii) so long as no Default or Event of Default has occurred and is continuing
or would result therefrom, the Borrower may redeem or repurchase shares of the
Borrower’s and/or its Subsidiaries’ (including Rite Aid Lease Management
Company’s) Preferred Stock (A) solely with Net Cash Proceeds received by the
Borrower from issuances of its common stock after the Original Restatement
Effective Date, provided that any such repurchase or redemption is effected
within 150 days after the receipt of such proceeds or (B) with other funds
available to the Borrower if, immediately after giving effect to any such
redemption or repurchase, the Borrower shall have Revolver Availability of more
than $100,000,000.

(b)        The Borrower will not, nor will it permit any Subsidiary to, make or
agree to pay or make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect of principal of
or interest on any Indebtedness, or any payment or other distribution (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancelation or termination of any Indebtedness, except:

(i)         payments or prepayments of Indebtedness created under the Senior
Loan Documents;

(ii)       payments of regularly scheduled interest and principal payments as
and when due in respect of any Indebtedness permitted pursuant to
Section 6.01(a);

(iii)      prepayments of Indebtedness permitted pursuant to clause (vii),
(viii) or (ix) of Section 6.01(a) with the proceeds of Indebtedness permitted
pursuant to clause (vii), (viii) or (ix) of Section 6.01(a);

(iv)       payments of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness;

(v)        provided no Default has occurred and is continuing or would result
therefrom, Optional Debt Repurchases of Inside Indebtedness and, to the extent
permitted by paragraph (c) of this Section, Optional Debt Repurchases of Outside
Indebtedness;

(vi)       repurchases, exchanges or redemptions of Indebtedness for
consideration consisting solely of common stock of the Borrower or Qualified
Preferred Stock;

(vii)     prepayments of Capital Lease Obligations in connection with the sale,
closing or relocation of Stores;

(viii)    prepayments of Indebtedness in connection with the incurrence of
Refinancing Indebtedness permitted pursuant to Section 6.01(a)(ii) or (x);

(ix)       prepayments of Indebtedness permitted pursuant to
Section 6.01(a)(iii), if permitted by the subordination provisions applicable to
such Indebtedness; and

67

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

(x)        unless an Event of Default shall have occurred and be continuing,
mandatory prepayments of Indebtedness and interest under the New Notes and/or
the Bridge Facility.

(c)        The Borrower and the Subsidiaries will not effect Optional Debt
Repurchases of Outside Indebtedness unless immediately prior and after giving
effect to any such Optional Debt Repurchases, (x) no Default or Event of Default
shall have occurred and be continuing and (y) the Borrower shall have Revolver
Availability of more than $100,000,000.

SECTION 6.09.   Transactions with Affiliates.   The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except:

(a)        payment of compensation to directors, officers, and employees of the
Borrower and the Subsidiaries in the ordinary course of business;

(b)        payments in respect of transactions required to be made pursuant to
agreements or arrangements in effect on the Second Restatement Effective Date
and set forth on Schedule 6.09;

(c)        transactions involving the acquisition of inventory in the ordinary
course of business; provided that (i) the terms of such transaction are (A) set
forth in writing, (B) in the best interests of the Borrower or such Subsidiary,
as the case may be, and (C) no less favorable to the Borrower or such
Subsidiary, as the case may be, than those that could be obtained in a
comparable arm’s length transaction with a Person that is not an Affiliate of
the Borrower or a Subsidiary and, (ii) if such transaction involves aggregate
payments or value in excess of $75,000,000, the board of directors of the
Borrower (including a majority of the disinterested members of the board of
directors) approves such transaction and, in its good faith judgment, believes
that such transaction complies with clauses (i)(B) and (C) of this paragraph;

(d)        (i) transactions between or among the Borrower and/or one or more
Subsidiary Loan Parties, (ii) sales of Securitization Assets to Securitization
Vehicles in Securitizations permitted by Sections 6.01 and 6.05, (iii) prior to
the Borrowing Base Date, transactions between or among (A) the Borrower or any
Subsidiary Loan Party, on one hand, and Holdings or any of its subsidiaries, on
the other hand, (B) Holdings, on one hand, and any subsidiary of Holdings, on
the other hand, and (C) any subsidiary of Holdings, on one hand, and any other
subsidiary of Holdings, on the other hand, (iv) transactions under, involving,
related to and/or in connection with the Acquisition and documents related
thereto including, (A) the Stock Purchase Agreement, dated as of August 23,
2006, by and between the Borrower and The Jean Coutu Group (PJC) Inc., (B) the
Stockholder Agreement, dated as of August 23, 2006, between the Borrower, The
Jean Coutu Group (PJC) Inc., Jean Coutu, Marcelle Coutu, Francois J. Coutu,
Michel Coutu, Louis Coutu, Sylvie Coutu and Marie-Josée Coutu and (C) the
Registration Rights Agreement, dated as of August 23, 2006, by and between the
Borrower and The Jean Coutu Group (PJC) Inc. and (v) the Transition Services
Agreement, dated as of June 4, 2007, by and between the Borrower and the Seller;
provided that the terms of the transactions referred to in clauses (iii),
(iv) and (v) above are in the best interest of the Borrower, such Subsidiary
Loan Party or Holdings or any such subsidiary of Holdings which is a party
thereto, as the case may be;

(e)        issuances of Preferred Stock of the Borrower (and transactions that
are necessary to effect such issuances) in respect of pay-in-kind obligations of
the Borrower relating to Series G Preferred Stock or Series H Preferred Stock;
and

(f)         any other Affiliate transaction not otherwise permitted pursuant to
this Section 6.09; provided that (i) the terms of such transaction are (A) set
forth in writing, (B) in the best interests of the Borrower or such Subsidiary,
as the case may be, and (C) no less favorable to the Borrower or

68

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

such Subsidiary, as the case may be, than those that could be obtained in a
comparable arm’s length transaction with a Person that is not an Affiliate of
the Borrower or a Subsidiary, (ii) if such transaction involves aggregate
payments or value in excess of $25,000,000 in any consecutive 12-month period,
the board of directors of the Borrower (including a majority of the
disinterested members of the board of directors) approves such transaction and,
in its good faith judgment, believes that such transaction complies with clauses
(i)(B) and (C) of this paragraph and (iii) if such transaction (other than any
transaction necessary for the redemption or exchange of the Borrower’s Series G
Preferred Stock or Series H Preferred Stock) involves aggregate payments or
value in excess of $50,000,000 in any consecutive 12-month period, the Borrower
obtains a written opinion from an independent investment banking firm or
appraiser of national prominence, as appropriate, to the effect that such
transaction is fair to the Borrower or such Subsidiary, as the case may be, from
a financial point of view.

SECTION 6.10.   Restrictive Agreements.   (a) The Borrower will not, and will
not permit any Subsidiary to, enter into any agreement which imposes a
limitation on the incurrence by the Borrower and the Subsidiaries of Liens that
(i) would restrict any Subsidiary from granting Liens on any of its assets
(including assets in addition to the then-existing Senior Collateral and, prior
to the Borrowing Base Date, the then-existing Interim Collateral, to secure the
Senior Obligations, the Second Priority Obligations and, prior to the Borrowing
Base Date, the Interim Obligations) or (ii) is more restrictive, taken as a
whole, than the limitation on Liens set forth in this Agreement except, in each
case, (A)(u) the Senior Loan Documents, (w) agreements with respect to
Indebtedness secured by Liens permitted by Section 6.02(a) restricting the
ability to transfer or grant Liens on the assets securing such Indebtedness,
(x) agreements with respect to Second Priority Debt (1) containing provisions
described in clauses (i) and/or (ii) above that are not materially more
restrictive, taken as a whole, than those of the 8.125% Note Indenture as in
effect on the Second Restatement Effective Date or (2) requiring that such
Indebtedness be secured by assets in respect of which Liens are granted to
secure other Indebtedness (provided that in the case of any such assets subject
to a Senior Lien, such Indebtedness will be required to be secured only with a
Second Priority Lien); provided, however, that the Second Priority Debt
Documents relating to any such Indebtedness may not contain terms requiring any
Liens be granted with respect to Senior Collateral consisting of cash or
Permitted Investments pledged pursuant to Section 2.05(j) of this Agreement or
Section 5 of the Senior Subsidiary Guarantee Agreement or otherwise required to
be provided upon the occurrence of a default under any bank credit facility to
secure obligations in respect of letters of credit issued thereunder,
(y) agreements with respect to unsecured Indebtedness governed by indentures or
by credit agreements or note purchase agreements with institutional investors
permitted by this Agreement containing terms that are not materially more
restrictive, taken as a whole, than those of the 9.25% Note Indenture as in
effect on the Second Restatement Effective Date and (z) the New Notes and/or the
Bridge Facility, (B) customary restrictions contained in purchase and sale
agreements limiting the transfer of the subject assets pending closing,
(C) customary non-assignment provisions in leases and other contracts entered
into in the ordinary course of business, (D) pursuant to applicable law,
(E) agreements in effect as of the Second Restatement Effective Date and not
entered into in contemplation of the transactions effected in connection with
the closing of the Original Agreement, (F) the Indentures, in each case when
originally entered into, (G) any restriction existing under agreements relating
to assets acquired by the Borrower or a Subsidiary in a transaction permitted
hereby; provided that such agreements existed at the time of such acquisition,
were not put into place in anticipation of such acquisition and are not
applicable to any assets other than assets so acquired, (H) any restriction
existing under any agreement of a Person acquired as a Subsidiary pursuant to
Section 6.03 or Section 6.04(a)(xiii); provided that any such agreement existed
at the time of such acquisition, was not put into place in anticipation of such
acquisition and was not applicable to any Person or assets other than the Person
or assets so acquired and (I) customary restrictions and conditions contained in
agreements

69

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

relating to Securitizations permitted hereunder, provided that such restrictions
and conditions apply only to Securitization Vehicles and to the Securitization
Assets that are subject to such Securitizations.

(b)        The Borrower will not, and will not permit any Subsidiary to, enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (i) make Restricted Payments in
respect of any Equity Interests of such Subsidiary held by, or pay any
Indebtedness owed to, the Borrower or any other Subsidiary, (ii) make any
Investment in the Borrower or any other Subsidiary, or (iii) transfer any of its
assets to the Borrower or any other Subsidiary, except for (A) any restriction
existing under (1) the Senior Loan Documents or existing on the Second
Restatement Effective Date under the Indentures, (2) the indenture or agreement
governing any Refinancing Indebtedness in respect of Indebtedness set forth in
clause (1) above or (3) agreements with respect to Indebtedness permitted by
this Agreement containing provisions described in clauses (i), (ii) and
(iii) above that are not materially more restrictive, taken as a whole, than
those of the 8.125% Note Indenture or, alternatively, the 9.25% Note Indenture,
in each case as in effect on the Second Restatement Effective Date,
(B) customary non-assignment provisions in leases and other contracts entered
into in the ordinary course of business, (C) as required by applicable law,
(D) customary restrictions contained in purchase and sale agreements limiting
the transfer of the subject assets pending closing, (E) any restriction existing
under agreements relating to assets acquired by the Borrower or a Subsidiary in
a transaction permitted hereby; provided that such agreements existed at the
time of such acquisition, were not put into place in anticipation of such
acquisition and are not applicable to any assets other than assets so acquired,
(F) any restriction existing under any agreement of a Person acquired as a
Subsidiary pursuant to Section 6.03 or Section 6.04(a)(xiii); provided any such
agreement existed at the time of such acquisition, was not put into place in
anticipation of such acquisition and was not applicable to any Person or assets
other than the Person or assets so acquired, (G) agreements with respect to
Indebtedness secured by Liens permitted by Section 6.02 that restrict the
ability to transfer the assets securing such Indebtedness, (H) customary
restrictions and conditions contained in agreements relating to Securitizations
permitted hereunder, provided that such restrictions and conditions apply only
to Securitization Vehicles and to the Securitization Assets that are subject to
such Securitizations and (I) any restriction existing under the New Notes and/or
the Bridge Facility.

SECTION 6.11.   Amendment of Material Documents.   (a) The Borrower will not,
nor will it permit any Subsidiary to, amend, modify or waive any Second Priority
Security Document or any of its rights thereunder without the consent of the
Collateral Agent, other than modifications to such agreements in connection with
(i) the joinder of additional Subsidiary Loan Parties effected by the execution
of supplements to such agreements and (ii) the inclusion of additional Second
Priority Debt permitted pursuant to Section 6.01(a)(vii) constituting Secured
Obligations (as defined in the Second Priority Security Agreement) under such
agreements. The Borrower will not, nor will it permit any Subsidiary to, amend,
modify or waive any instrument governing the New Notes or the Bridge Facility
and any related security documents, or any of its rights under any of the
foregoing without the consent of the Collateral Agent, other than amendments,
modifications and waivers that are not material and adverse to the interests of
the Lenders.

(b)        The Borrower will not, and will not permit any Subsidiary party to
the Intercompany Inventory Purchase Agreement to, amend, terminate, or otherwise
modify the Intercompany Inventory Purchase Agreement in any manner materially
adverse to the Lenders or their interests under the Senior Loan Documents
without the prior written approval of the Collateral Agent; provided, however,
that the foregoing shall not limit the Borrower’s responsibilities pursuant to
Section 3.2 of the Intercompany Inventory Purchase Agreement.

SECTION 6.12.   Consolidated Fixed Charge Coverage Ratio.   The Borrower will
not permit the Consolidated Fixed Charge Coverage Ratio for the period of four
consecutive fiscal quarters most recently

70

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

ended on or prior to any day during a Financial Covenant Effectiveness Period to
be less than the ratio set forth below opposite the period that includes the
last day of such four quarter period:

Four Fiscal Quarter Period Ending

 

 

 

Ratio

 

December 3, 2006 through March 3, 2007

 

1.00 to 1.00

 

March 4, 2007 through June 2, 2007

 

1.00 to 1.00

 

June 3, 2007 through September 1, 2007

 

1.00 to 1.00

 

September 2, 2007 through December 1, 2007

 

1.00 to 1.00

 

December 2, 2007 through March 1, 2008

 

1.00 to 1.00

 

March 2, 2008 through May 31, 2008

 

1.00 to 1.00

 

June 1, 2008 through August 30, 2008

 

1.00 to 1.00

 

August 31, 2008 through November 29, 2008

 

1.05 to 1.00

 

November 30, 2008 through February 28, 2009

 

1.05 to 1.00

 

March 1, 2009 through May 30, 2009

 

1.05 to 1.00

 

May 31, 2009 through August 29, 2009

 

1.05 to 1.00

 

August 30, 2009 through November 28, 2009

 

1.05 to 1.00

 

November 29, 2009 through February 27, 2010

 

1.15 to 1.00

 

February 28, 2010 through May 29, 2010

 

1.15 to 1.00

 

May 30, 2010 through August 28, 2010

 

1.15 to 1.00

 

August 29, 2010 through November 27, 2010

 

1.15 to 1.00

 

November 28, 2010 through February 26, 2011

 

1.15 to 1.00

 

February 27, 2011 through May 28, 2011

 

1.15 to 1.00

 

May 29, 2011 through the Tranche 2 Term Maturity Date

 

1.25 to 1.00

 

 

SECTION 6.13.   Restrictions on Asset Holdings by the Borrower.   The Borrower
will not at any time:

(i)         make or hold any Investments other than investments in the Equity
Interests of the Subsidiaries (including any distributions or other assets
received in respect thereto), intercompany advances to Subsidiaries and
Investments permitted by clause (iii) below;

(ii)       acquire or hold any Stores, other capital assets, inventory or
accounts receivable, other than any real estate which the Borrower holds only as
lessor and which is leased and operated by another Person; or

(iii)      acquire or hold cash, cash equivalents, Permitted Investments or
balances in bank accounts, other than such amounts as are reasonably anticipated
(at the time so acquired or held) to be utilized within five Business Days to
pay costs, expenses and other obligations of the Borrower referred to in
Section 5.10(b).

71

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

SECTION 6.14.   Corporate Separateness.   The Borrower will, and will cause each
Subsidiary to, take all necessary steps to maintain its identity as a separate
legal entity from other Persons and to make it manifest to third parties that it
is an entity with assets and liabilities distinct from those of each of other
Person.

ARTICLE VII

Events of Default

If any of the following events (“Events of Default”) shall occur:

(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

(b) the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement or any other Senior Loan Document, when and as the
same shall become due and payable, and such failure shall continue unremedied
for a period of five days;

(c) any representation or warranty made or deemed made by or on behalf of the
Borrower or any Subsidiary in or in connection with any Senior Loan Document or
any amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Senior Loan Document or any amendment or modification
thereof or waiver thereunder, shall prove to have been incorrect in any material
respect when made or deemed made;

(d) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02(a), 5.10, 5.11, 5.15 or 5.16 or in
Article VI;

(e) any Loan Party (and, prior to the Borrowing Base Date, Holdings or any of
its subsidiaries) shall fail to observe or perform any covenant, condition or
agreement contained in any Senior Loan Document (other than those specified in
clause (a), (b) or (d) of this Article), and such failure shall continue
unremedied (i) in the case of covenants contained in Section 5.08, for five
days, (ii) in the case of covenants contained in Sections 5.01 and 5.02(b),
(c) and (f), for 10 days and (iii) in the case of any other covenant, for a
period of 20 days after notice thereof has been delivered by the Administrative
Agent to the Borrower (which notice shall be given promptly at the request of
any Lender);

(f) the Borrower or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, including any obligation to reimburse letter of credit obligations
or to post cash collateral with respect thereto, when and as the same shall
become due and payable or within any applicable grace period;

(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Subsidiary or its Indebtedness, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment

72

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

of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;

(i) the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding
or file any petition seeking liquidation, reorganization or other relief under
any Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (h) of this Article, (iii) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors or (vi) take any action for the purpose of effecting any of the
foregoing;

(j) the Borrower or any Subsidiary shall become unable to, or admits in writing
its inability or fails to, generally pay its debts as they become due;

(k) one or more judgments for the payment of money in an aggregate amount in
excess of $75,000,000 shall be rendered against the Borrower, any Subsidiary or
any combination thereof and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of the Borrower or any Subsidiary to enforce any such judgment;

(l) (i) the Borrower or any ERISA Affiliate shall fail to pay when due an amount
or amounts aggregating in excess of $15,000,000 which it shall have become
liable to pay under Section 302 or Title IV of ERISA; or notice of intent to
terminate a Plan shall be filed under Title IV of ERISA by the Borrower or any
ERISA Affiliate, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer, any Plan; or a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans
which could cause the Borrower and/or one or more ERISA Affiliates to incur a
current payment obligation in excess of $75,000,000; or (ii) any other ERISA
Event shall have occurred that, in the opinion of the Required Lenders, when
taken together with all other ERISA Events that have occurred, could reasonably
be expected to result in liability of the Borrower, the ERISA Affiliates and the
Subsidiaries in an aggregate amount exceeding $75,000,000;

(m) (i) any Lien purported to be created under any Senior Collateral Document or
Interim Collateral Document shall cease to be a valid and perfected Lien on any
material portion of the Senior Collateral or, prior to the Borrowing Base Date,
the Interim Collateral, as the case may be, with the priority required by the
Senior Loan Documents, except as a result of the sale or other disposition of
the applicable Collateral in a transaction permitted under the Senior Loan
Documents, or the Borrower or any Subsidiary shall so assert in writing, or
(ii) any Senior Loan Document shall become invalid, or the Borrower or any
Subsidiary shall so assert in writing;

(n) a Change in Control shall occur; or

(o) any Subsidiary Loan Party shall amend or revoke any instruction in the
Government Lockbox Account Agreement to any Government Lockbox Account Bank in
respect of a Government Lockbox Account unless (i) the Administrative Agent
shall have given its prior written

73

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

consent or (ii) the Government Lockbox Account is then under the control of any
other Person pursuant to Section 5.16;

then, and in every such event (other than an event with respect to the Borrower
or any Subsidiary Loan Party (or, prior to the Borrowing Base Date, Holdings or
any of its subsidiaries) described in clause (h) or (i) of this Article), and at
any time thereafter during the continuance of such event, the Administrative
Agent may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and (ii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrower
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; and in case of any event with respect to the
Borrower or any Subsidiary Loan Party (and, prior to the Borrowing Base Date,
Holdings or any of its subsidiaries) described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.

ARTICLE VIII

The Agents

Each of the Lenders and each Issuing Bank hereby irrevocably appoints (i) the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms of the Senior Loan Documents, together
with such actions and powers as are reasonably incidental thereto and (ii) the
Collateral Agent as its agent and authorizes the Collateral Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Collateral Agent by the terms of the Senior Loan Documents, together with such
actions and powers as are reasonably incidental thereto.

The financial institutions serving as the Agents hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not an Agent, and such financial
institutions and their Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
any Affiliate of any of the foregoing as if they were not Agents hereunder.

No Agent shall have any duties or obligations except those expressly set forth
in the Senior Loan Documents. Without limiting the generality of the foregoing,
(a) no Agent shall be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing, (b) no Agent
shall have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Senior Loan Documents that such Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 2.20 or 9.02) and (c) except as expressly set forth in the Senior Loan
Documents, no Agent shall have any duty to disclose, and no Agent shall be
liable for the failure to disclose, any information relating to the Borrower or
any of the Subsidiaries that is communicated to or obtained by the financial
institution serving as such Agent or any of its Affiliates in any capacity. No
Agent shall be liable for any action taken or not taken by it with the consent
or at the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in
Section 2.20 or 9.02) or in the absence of its own gross negligence or wilful
misconduct (as determined by a court of competent jurisdiction by final and
non-appealable

74

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

judgment). No Agent shall be deemed to have knowledge of any Default unless and
until written notice thereof is given to such Agent by the Borrower or a Lender,
as applicable, and no Agent shall be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Senior Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Senior Loan Document,
(iv) the validity, enforceability, effectiveness or genuineness of any Senior
Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Senior
Loan Document, other than to confirm receipt of items expressly required to be
delivered to such Agent.

Each 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 believed by it to be genuine and to have been signed
or sent by the proper Person. Each Agent also may rely upon any statement made
to it orally or by telephone and believed by it to be made by the proper Person,
and shall not incur any liability for relying thereon. Any Agent may consult
with legal counsel (who may be counsel for the Borrower), 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.

Each Agent may perform any and all of its duties and exercise any and all of its
rights and powers by or through any one or more sub-agents appointed by such
Agent. Any Agent and any such sub-agent may perform any and all of its duties
and exercise any and all of its rights and powers through their Related Parties.
The exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of any Agent and any such sub-agent, and
shall apply to their activities in connection with the syndication of the credit
facilities provided for herein as well as activities as an Agent.

Subject to the appointment and acceptance of a successor Agent as provided in
this paragraph, any Agent may resign at any time by notifying the Lenders, the
Issuing Banks and the Borrower. Upon any such resignation, the Required Lenders
shall have the right, in consultation with the Borrower, to appoint a successor.
If no successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring Agent gives
notice of its resignation, then the retiring Agent may, on behalf of the Lenders
and the Issuing Banks, appoint a successor Agent (which shall be a financial
institution with an office in New York, New York, or an Affiliate of any such
financial institution). Upon the acceptance of its appointment as an Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
The fees payable by the Borrower to a successor Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and such
successor. After an Agent’s resignation hereunder, the provisions of this
Article and Section 9.03 shall continue in effect for the benefit of such
retiring 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 it was acting
as Agent.

Each Lender acknowledges that it has, independently and without reliance upon
any Agent or any other Lender and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon any Agent or any other Lender 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 Loan Document or related agreement or any document
furnished hereunder or thereunder.

Each party hereto authorizes the Administrative Agent to enter into customary
intercreditor agreements in connection with Securitizations and Factoring
Transactions permitted under this Agreement.

75

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

ARTICLE IX

Miscellaneous

SECTION 9.01.   Notices.   Except in the case of notices and other
communications expressly permitted to be given by telephone, 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) Rite Aid Corporation, 30 Hunter Lane Camp Hill, PA 17011, Attention of
General Counsel (Telecopy No. 717-760-7867; email address: rsari@riteaid.com);

(b) if to the Administrative Agent, (i) in respect of matters of an operational
nature, to Citicorp North America, Inc., 388 Greenwich Street, New York, NY
10013, Attention of Dana Fuski Dugan (Telecopy No. 212-994-0894; email address:
dana.a.fuskidugan@citigroup.com, with a copy to oploanswebadmin@citigroup.com)
and (ii) in respect of all other matters, to Citicorp North America, Inc., 388
Greenwich Street, New York, NY 10013, Attention of Jeffrey Nitz (Telecopy
No. 212-816-2613; email address: jeffrey.nitz@citigroup.com, with a copy to
oploanswebadmin@citigroup.com);

(c) if to the Syndication Agent, to Bank of America, N.A., Bank of America
Retail Group, 40 Broad Street, Boston, MA 02109, Attention of Christine
Hutchinson (Telecopy No. 617-434-4339; email address:
christine.hutchinson@bankofamerica.com);

(d) if to the Issuing Banks, to (i) Citicorp North America, Inc., 388 Greenwich
Street, New York, NY 10013, Attention of Jeffrey Nitz (Telecopy No. 212-
816-2613; email address: jeffrey.nitz@citigroup.com) and (ii) JPMorgan Chase
Bank, N.A., 270 Park Avenue, New York, NY 10017, Attention of Teri Streusand
(Telecopy No. 212-270-6637; email address: teri.streusand@jpmorgan.com);

(e) if to the Swingline Lender, to it at Citicorp North America, Inc., 388
Greenwich Street, New York, NY 10013, Attention of Jeffrey Nitz (Telecopy No:
212-816-2613; email address: jeffrey.nitz@citigroup.com); and

(f) if to any other Lender, to it at its address (or telecopy number) set forth
in its Administrative Questionnaire.

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.

SECTION 9.02.   Waivers; Amendments.   (a) No failure or delay by any Agent, any
Issuing Bank or any Lender in exercising any right or power hereunder or under
any other Senior Loan Document 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 Agents, the Issuing Banks and the Lenders hereunder and
under the other Senior Loan Documents are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provision of any Senior Loan Document or consent to any departure by any Loan
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. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether any Agent, any Lender or any Issuing Bank may
have had notice or knowledge of such Default at the time.

76

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

(b) Neither this Agreement nor any other Senior Loan Document nor any provision
hereof or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrower and the Required Lenders or, in the case of any other Senior Loan
Document, pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, in each case with the consent of the Required Lenders; provided that
(i) no such agreement shall change any provision of any Senior Loan Document in
a manner that by its terms adversely affects the rights of Lenders holding Loans
of any Class differently than those holding Loans of any other Class, without
the written consent of Lenders holding a majority in interest of the outstanding
Loans and unused Commitments of each affected Class and (ii) any waiver,
amendment or modification of this Agreement that by its terms affects the rights
or duties under this Agreement of one or more Classes of Lenders (but not the
other Class or Classes of Lenders) may be effected by an agreement or agreements
in writing entered into by the Borrower and requisite percentage in interest of
the affected Class or Classes of Lenders that would be required to consent
thereto under this Section if such Class  or Classes of Lenders were the only
Class or Classes of Lenders hereunder at the time; and provided further that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce or forgive the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the maturity of any Loan, or any scheduled date of
payment of the principal amount of any Term Loan under Section 2.10, or the
required date of reimbursement of any LC Disbursement, or any date for the
payment of any interest or fees payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of expiration
of any Commitment, without the written consent of each Lender affected thereby,
(iv) amend Section 2.18(b) or (c) in a manner that would alter the pro rata
sharing of payments required thereby, without the written consent of each
Lender, (v) amend the proviso of the definition of “Borrowing Base Amount” or
the definition of “Account Receivable Advance Rate”, “Pharmaceutical Inventory
Advance Rate”, “Other Inventory Advance Rate” or “Script Lists Advance Rate”
without the written consent of each Lender, (vi) subordinate the priority of the
Lien granted to the Collateral Agent pursuant to the Senior Loan Documents
without the written consent of each Lender, (vii) change any of the provisions
of this Section or the percentage set forth in the definition of “Required
Lenders”, “Supermajority Lenders” or any other provision of any Senior Loan
Document specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (viii) release
the Borrower or any Subsidiary Loan Party from its Guarantee under the Senior
Subsidiary Guarantee Agreement (except as expressly provided in the Senior
Subsidiary Guarantee Agreement or in Section 9.18), or limit its liability in
respect of such Guarantee, without the written consent of each Lender,
(ix) prior to the Borrowing Base Date, release any Subsidiary Loan Party from
its Guarantee under the Interim Subsidiary Loan Party Guarantee Agreement
(except as expressly provided in the Interim Subsidiary Loan Party Guarantee
Agreement), or limit its liability in respect of such Guarantee, without the
written consent of each Lender, (x) prior to the Borrowing Base Date, release
Holdings or any of its subsidiaries from its Guarantee under the Interim
Collateral and Guarantee Agreement (except as expressly provided in the Interim
Collateral and Guarantee Agreement), or limit its liability in respect of such
Guarantee, without the written consent of each Lender (xi) release all or
substantially all of the Senior Collateral from the Liens under the Senior
Collateral Documents, without the written consent of each Lender, (xii) prior to
the Borrowing Base Date, release all or substantially all of the Interim
Collateral from the Liens under the Interim Collateral Documents, without the
written consent of each Lender or (xiii) amend Section 2.21 to increase the
permitted Incremental Facilities to in excess of $350,000,000, without the
written consent of the Supermajority Lenders; and provided further, that no such
agreement shall amend, modify or otherwise affect the rights or duties of any
Agent, the Issuing Banks or the Swingline Lender without the prior written
consent of such Agent, the Issuing Banks or the Swingline Lender, as the case
may be.

77

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

Notwithstanding the foregoing, any provision of this Agreement may be amended by
an agreement in writing entered into by the Borrower, the Required Lenders and
the Administrative Agent (and, if their rights or obligations are affected
thereby, the Issuing Banks and the Swingline Lender) if (i) by the terms of such
agreement the Commitment of each Lender not consenting to the amendment provided
for therein shall terminate upon the effectiveness of such amendment and (ii) at
the time such amendment becomes effective, each Lender not consenting thereto
receives payment in full of the principal of and interest accrued on each Loan
made by it and all other amounts owing to it or accrued for its account under
this Agreement.

(c) Notwithstanding the foregoing, (i) Senior Collateral shall be released from
the Lien under the Senior Collateral Documents from time to time as necessary to
effect any sale of Senior Collateral permitted by the Senior Loan Documents, and
the Administrative Agent shall execute and deliver all release documents
reasonably requested to evidence such release; provided that arrangements
satisfactory to the Administrative Agent shall have been made for application of
the cash proceeds thereof in accordance with Section 2.11, if required, and for
the pledge of any non-cash proceeds thereof pursuant to the Senior Collateral
Documents, (ii) the accounts created pursuant to clause (i) of Section 5.16(b),
the Lockbox Account and/or the Governmental Lockbox Account may be released by
the Administrative Agent and transferred in accordance with Section 5.16,
(iii) if a Subsidiary Loan Party ceases to be a Subsidiary in accordance with
this Agreement, or ceases to own any property that constitutes Senior
Collateral, at the request of and at the expense of the Borrower, such
Subsidiary Loan Party shall be released from the Senior Subsidiary Guarantee
Agreement, the Senior Subsidiary Security Agreement and each other Senior Loan
Document to which it is a party and (iv) prior to the Borrowing Base Date, if
Holdings or any of its subsidiaries ceases to be a Subsidiary in accordance with
this Agreement or ceases to own any property that constitutes Interim
Collateral, at the request of and at the expense of the Borrower, such party
shall be released from the Interim Collateral Documents and the Senior Loan
Documents to which it is a party.

SECTION 9.03.   Expenses; Indemnity; Damage Waiver.   (a) The Borrower shall pay
(i) all reasonable out-of-pocket expenses incurred by the Agents and their
Affiliates, including the reasonable fees, charges and disbursements of counsel
for the Agents, in connection with the syndication of the credit facilities
provided for herein, the preparation and administration of the Senior Loan
Documents or any amendments, modifications or waivers of the provisions thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by any Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by any Agent, any Issuing Bank or any Lender,
including the fees, charges and disbursements of counsel for any Agent, any
Issuing Bank or any Lender, in connection with the enforcement or protection of
its rights under or in connection with the Senior Loan Documents, including its
rights under this Section, or in connection with the Loans made or Letters of
Credit issued hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.

(b) The Borrower shall indemnify each Agent, each Issuing Bank and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being
called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including the
fees, charges and disbursements of any counsel for any Indemnitee, incurred by
or asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of any Senior Loan Document, the
performance by the parties to the Senior Loan Documents of their respective
obligations thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by an Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents

78

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

presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property currently or formerly owned or
operated by the Borrower or any of the Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of the Subsidiaries, or
(iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.

(c) To the extent that the Borrower fails to pay any amount required to be paid
by it to any Agent, any Issuing Bank or any Lender under paragraph (a) or (b) of
this Section, each Lender severally agrees to pay to such Agent, such Issuing
Bank or such Lender, as the case may be, such Lender’s pro rata share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against such Agent, such Issuing Bank or
such Lender in its capacity as such. For purposes hereof, a Lender’s “pro rata
share” shall be determined based upon its share of the sum of the total
Revolving Exposures, outstanding Term Loans and unused Commitments at the time.

(d) To the extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Senior Loan Document or any other agreement or instrument
contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.

(e) All amounts due under this Section shall be payable not later than 10
Business Days after written demand therefor.

SECTION 9.04.   Successors and Assigns.   (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
any Issuing Bank that issues any Letter of Credit), except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their successors and assigns
permitted hereby (including any Affiliate of any Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Agents, the Issuing Banks and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans at the time owing to it), with the prior written consent (such
consent not to be unreasonably withheld or delayed) of:

(A) the Borrower; provided that no consent of the Borrower shall be required for
an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an
Event of Default under clause (a), (b), (h), or (i) of Article VII has occurred
and is continuing, any other assignee; and

(B) the Administrative Agent; provided that no consent of the Administrative
Agent shall be required for an assignment to an assignee that is a Lender, an
Affiliate of a Lender or an Approved Fund.

79

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

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender, an Affiliate of a Lender or
an Approved Fund, the amount of the Commitment or Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall not be less than (1) with respect to Revolving Commitments and
Revolving Loans, $5,000,000 and (2) with respect to Tranche 1 Term Loan
Commitments, Tranche 2 Term Commitments, Tranche 1 Term Loans and Tranche 2 Term
Loans, $1,000,000 or, in each case, if smaller, the entire remaining amount of
the assigning Lender’s Commitment or Loans, unless each of the Borrower and the
Administrative Agent shall otherwise consent; provided that (i) no such consent
of the Borrower shall be required if an Event of Default has occurred and is
continuing and (ii) in the event of concurrent assignments to two or more
assignees that are Affiliates of one another, or to two or more Approved Funds
managed by the same investment advisor or by affiliated investment advisors, all
such concurrent assignments shall be aggregated in determining compliance with
this subsection;

(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500; provided that, in the event of concurrent
assignments to two or more assignees that are Affiliates of one another, or by
or to two or more Approved Funds managed by the same investment advisor or by
affiliated investment advisors, only one such fee shall be payable; and

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

(iii) Subject to acceptance and recording thereof pursuant to paragraph
(b)(iv) of this Section, from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 9.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

(iv) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Agents, the Issuing Banks and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrower, any other Agent, any Issuing Bank and any Lender at any reasonable
time and from time to time upon reasonable prior notice.

80

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

(v) Upon its receipt of a duly completed Assignment and Acceptance executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Acceptance
and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.

(vi) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (A) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that its
Commitment and the outstanding balances of its Loans, in each case without
giving effect to assignments thereof that have not become effective, are as set
forth in such Assignment and Acceptance; (B) except as set forth in clause
(A) above, such assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any other Senior Loan Document
or any other instrument or document furnished pursuant hereto or thereto, or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any of the foregoing, or the financial condition of the Loan Parties or the
performance or observance by the Loan Parties of any of their obligations under
this Agreement or under any other Senior Loan Document or any other instrument
or document furnished pursuant hereto or thereto; (C) each of the assignee and
the assignor represents and warrants that it is legally authorized to enter into
such Assignment and Acceptance; (D) such assignee confirms that it has received
a copy of this Agreement, together with copies of any amendments or consents
entered into prior to the date of such Assignment and Acceptance and copies of
the most recent financial statements delivered pursuant to Section 5.01 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(E) such assignee will independently and without reliance upon the Agents, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (F) such assignee
appoints and authorizes the Agents to take such action as agents on its behalf
and to exercise such powers under this Agreement and the other Senior Loan
Documents as are delegated to them by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto; and (G) such assignee
agrees that it will perform in accordance with their terms all the obligations
that by the terms of this Agreement are required to be performed by it as a
Lender.

(c) (i) Any Lender may, without the consent of or notice to the Borrower, the
Agents, the Issuing Banks or the Swingline Lender, sell participations to one or
more banks or other entities (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrower, the Agents, the Issuing Banks and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this 
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to

81

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

Section 9.02(b)(i), (ii) or (iii) that affects such Participant. Subject to
paragraph (c)(ii) of this Section, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.08 as though it
were a Lender, provided such Participant agrees to be subject to
Section 2.18(c) as though it were a Lender.

(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.15 or 2.17 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as
though it were a Lender.

(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including, without limitation, any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(e) In the case of any Lender that is a fund that invests in bank loans, such
Lender may, without the consent of the Borrower or the Administrative Agent,
assign or pledge all or any portion of its rights under the Senior Loan
Documents, including the Loans and promissory notes or any other instrument
evidencing its rights as a Lender under the Senior Loan Documents, to any holder
of, trustee for, or any other representative of holders of obligations owed or
securities issued by such fund, as security for such obligations or securities;
provided that any foreclosure or similar action by such trustee or
representative shall be subject to the provisions of this Section 9.04
concerning assignments.

SECTION 9.05.   Survival.   All covenants, agreements, representations and
warranties made by the Loan Parties in the Senior Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Senior Loan Document shall be considered to have
been relied upon by the other parties hereto and shall survive the execution and
delivery of the Senior Loan Documents and the making of any Loans and issuance
of any Letters of Credit, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that the Administrative Agent, any
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.

SECTION 9.06.   Integration; Effectiveness.   This Agreement, the other Senior
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective as provided in Section 4.01.

SECTION 9.07.   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,

82

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

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.

SECTION 9.08.   Right of Setoff.   If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the  credit or the account of the Borrower
against any of and all the obligations of the Borrower now or hereafter existing
under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.

SECTION 9.09.   Governing Law; Jurisdiction; Consent to Service of Process.  
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

(b) The Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court of the State
of New York sitting in New York County and of the United States District Court
of the Southern District of New York, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to any Senior Loan
Document, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or
any other Senior Loan Document shall affect any right that any Agent, the
Issuing Bank or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or any other Senior Loan Document against the
Borrower or its properties in the courts of any jurisdiction.

(c) The Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Senior Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Senior Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.

SECTION 9.10.   WAIVER OF JURY TRIAL.   EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER SENIOR LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

83

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

SECTION 9.11.   Headings.   Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 9.12.   Confidentiality.   Each of the Agents, the Issuing Banks and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, trustees, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party to this Agreement, (e) in connection with the exercise of
any remedies hereunder or any suit, action or proceeding relating to this
Agreement or any other Senior Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the
Borrower, (h) to any pledgee referred to in Section 9.04(d) or any direct or
indirect contractual counterparty in any Hedging Agreement (or to any such
contractual counterparty’s professional advisor), so long as such pledgee or
contractual counterparty (or such professional advisor) agrees to be bound by
the provisions of this Section 9.12, or (i) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to any Agent, any Issuing Bank or any Lender
on a nonconfidential basis from a source other than the Borrower. For the
purposes of this Section, “Information” means all information received from the
Borrower relating to the Borrower or its business, other than any such
information that is available to any Agent, any Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by the Borrower. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Notwithstanding anything in this Agreement or in any other Senior Loan Document
to the contrary, the Borrower and each Lender (and each employee, representative
or other agent of the Borrower) may disclose to any and all persons, without
limitation of any kind, the U.S. tax treatment and U.S. tax structure of the
Transactions and all materials of any kind (including opinions or other tax
analyses) that are provided to the Borrower relating to such U.S. tax treatment
and U.S. tax structure.

SECTION 9.13.   Interest Rate Limitation.   Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

SECTION 9.14.   Collateral Trust and Intercreditor Agreement.   Each Lender,
each Issuing Bank and each Agent hereby authorizes each Agent to enter into the
Collateral Trust and Intercreditor Agreement, each other Senior Collateral
Document and each other Interim Collateral Document on its behalf, and agrees
that the Administrative Agent and the Collateral Agent may enforce the rights
and remedies of the Lenders under each Senior Loan Document to the extent
provided in the Collateral Trust

84

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

and Intercreditor Agreement, each other Senior Collateral Document and each
other Interim Collateral Document.

SECTION 9.15.   Cash Sweep.   (a) On any day on which (i) an Event of Default
exists or (ii) the lesser of (x) the average Revolving Commitments (after
deducting the average total Revolving Exposure) over any 30-day period and
(y) the average Borrowing Base Amount (after deducting the sum of (1) the
average total Revolving Exposure, (2) the average outstanding Tranche 1 Term
Loans and (3) if prior to the Borrowing Base Date, zero, or if on or after the
Borrowing Base Date, the average outstanding Tranche 2 Term Loans) over any
30-day period, in each case, together with all amounts then on deposit in the
Cash Sweep Cash Collateral Account, is less than $75,000,000, then the
Administrative Agent, upon its determination or upon request by the Required
Lenders, shall immediately be entitled to deliver Cash Sweep Notices.

(b) During a Cash Sweep Period, if (i) there is no Event of Default and (ii) the
lesser of (x) the average Revolving Commitments (after deducting the average
total Revolving Exposure) over any 30-day period and (y) the average Borrowing
Base Amount (after deducting the sum of (1) the average total Revolving
Exposure, (2) the average outstanding Tranche 1 Term Loans and (3) if prior to
the Borrowing Base Date, zero, or if on or after the Borrowing Base Date, the
average outstanding Tranche 2 Term Loans) over any 30-day period, in each case,
together with all amounts then on deposit in the Cash Sweep Cash Collateral
Account, is greater than $100,000,000, then the Administrative Agent shall
automatically rescind any Cash Sweep Notice and shall be prohibited from
delivering any other Cash Sweep Notice (unless and until the occurrence of the
events set forth in paragraph (a) of this Section).

(c) The Administrative Agent reserves the right to send a Cash Sweep Notice on
each occasion of the occurrence of the events set forth in Section 9.15(a).

SECTION 9.16.   Electronic Communications.   (a) Notwithstanding anything in any
Senior Loan Document to the contrary, the Borrower hereby agrees that it will
use its reasonable best efforts to provide to the Administrative Agent all
information, documents and other materials that it is obligated to furnish to
the Administrative Agent pursuant to the Senior Loan Documents, including,
without limitation, all notices, requests, financial statements, financial and
other reports, certificates and other information materials, but excluding any
such communication that (i) relates to a request for a new, or a conversion of
an existing, Borrowing or other extension of credit (including any election of
an interest rate or Interest Period relating thereto), (ii) relates to the
payment of any principal or other amount due under any Senior Loan Document
prior to the scheduled date therefor, (iii) provides notice of any Default or
Event of Default under any Senior Loan Document or (iv) is required to be
delivered to satisfy any condition set forth in Section 4.01 and/or 4.02 (all
such non-excluded communications being referred to herein collectively as the
“Communications”), by transmitting the Communications in an electronic/soft
medium in a format acceptable to the Administrative Agent to
oploanswebadmin@citigroup.com, with a copy to jeffrey.nitz@citigroup.com. In
addition, the Borrower agrees to continue to provide the Communications to the
Administrative Agent in the manner specified in the Senior Loan Documents, but
only to the extent requested by the Administrative Agent.

(b) The Borrower further agrees that the Administrative Agent may make the
Communications available to the Lenders by posting the Communications on
Intralinks, Fixed Income Direct or a substantially similar electronic
transmission system (each such system, a “Platform”). The Borrower acknowledges
that the distribution of material through an electronic medium is not
necessarily secure and that there are confidentiality and other risks associated
with such distribution.

(c) EACH PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS
DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
COMMUNICATIONS, OR THE ADEQUACY OF ANY PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY

85

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

WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT
OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY
THE AGENT PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR ANY PLATFORM. IN NO
EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES
(COLLECTIVELY, THE “AGENT PARTIES”) HAVE ANY LIABILITY TO THE BORROWER, ANY
OTHER LOAN PARTY, ANY LENDER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY
KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR
OTHERWISE) ARISING OUT OF THE BORROWER’S OR THE ADMINISTRATIVE AGENT’S
TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE
LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A
COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT
PARTY’S GROSS NEGLIGENCE OR WILFUL MISCONDUCT.

(d) The Administrative Agent agrees that the receipt of the Communications by it
at its e-mail address set forth in Section 9.01 shall constitute effective
delivery of the Communications to the Administrative Agent for purposes of this
Section. Each Lender agrees that notice to it (as provided in the next sentence)
specifying that the Communications have been posted to a Platform shall
constitute effective delivery of the Communications to such Lender for purposes
of this Section. Each Lender agrees (i) to notify the Administrative Agent in
writing (including by electronic communication) from time to time of such
Lender’s e-mail address to which the foregoing notice may be sent by electronic
transmission and (ii) that the foregoing notice may be sent to such e-mail
address.

(e) Nothing in this Section 9.16 shall prejudice the right of the Administrative
Agent or any Lender to give any notice or other communication pursuant to any
Senior Loan Document in any other manner specified in such Senior Loan Document.

SECTION 9.17.   USA Patriot Act.   Each Lender and each Issuing Bank hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act,
it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or Issuing Bank to identify the
Borrower in accordance with its requirements. The Borrower shall promptly,
following a request by the Administrative Agent, any Lender or any Issuing Bank,
provide all documentation and other information that the Administrative Agent,
such Lender or such Issuing Bank reasonably requests in order to comply with its
ongoing obligations under applicable “know your customer” and anti-money
laundering rules and regulations, including the USA Patriot Act.

SECTION 9.18.   Release of Interim Collateral; Termination of Interim Collateral
Documents.   Upon the occurrence of the Borrowing Base Date, the security
interests granted in the Interim Collateral, and the guarantees made, under the
Interim Collateral Documents shall be automatically released, and the Interim
Collateral Documents shall automatically terminate in accordance with their
terms. In connection with the release of security interests granted in the
Interim Collateral, and the guarantees made, under the Interim Collateral
Documents, the Tranche 2 Lenders hereby authorize the Borrower (or its counsel)
to file, register or record all documents and instruments, including amendments
to Uniform Commercial Code financing statements, required by law, advisable or
reasonably requested by the Borrower, and agree to execute and deliver all
further instruments and documents and take all further action that may be
necessary or that the Borrower may reasonably request in order to effectuate
such release, all at the expense of the Borrower. For the avoidance of doubt,
the foregoing does not authorize the Borrower to take any action that would
result in the release of the security interests granted in the Interim
Collateral under the Interim Collateral Documents prior to the Borrowing Base
Date.

86

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

Schedule 1.01

Subsidiary Loan Parties

112 Burleigh Avenue Norfolk, LLC

1515 West State Street Boise, Idaho, LLC

1740 Associates, L.L.C.

3581 Carter Hill Road—Montgomery Corp.

4042 Warrensville Center Road—Warrensville Ohio, Inc.

5277 Associates, Inc.

537 Elm Street Corp.

5600 Superior Properties, Inc.

657-659 Broad St. Corp.

764 South Broadway—Geneva, Ohio, LLC

Ann & Government Streets—Mobile, Alabama, LLC

Apex Drug Stores, Inc.

Broadview and Wallings—Broadview Heights Ohio, Inc.

Central Avenue and Main Street—Petal, MS, LLC

Eagle Managed Care Corp.

Eighth and Water Streets—Urichsville, Ohio, LLC

England Street—Asheland Corporation

Fairground, L.L.C.

GDF, Inc.

Gettysburg and Hoover—Dayton, Ohio, LLC

Harco, Inc.

K & B Alabama Corporation

K & B Louisiana Corporation

K & B Mississippi Corporation

K & B Services, Incorporated

K & B Tennessee Corporation

K & B, Incorporated

K & B Texas Corporation

Keystone Centers, Inc.

Lakehurst and Broadway Corporation

Mayfield & Chillicothe Roads—Chesterland, LLC

Munson & Andrews, LLC

Name Rite, L.L.C.

Northline & Dix—Toledo—Southgate, LLC

Patton Drive and Navy Boulevard Property Corporation

Paw Paw Lake Road & Paw Paw Avenue—Coloma, Michigan, LLC

PDS-1 Michigan, Inc.

Perry Distributors, Inc.

Perry Drug Stores, Inc.

Ram-Utica, Inc.

RDS Detroit, Inc.

Read’s Inc.

Rite Aid Drug Palace, Inc.

Rite Aid Hdqtrs. Corp.

Rite Aid Hdqtrs. Funding, Inc.

Rite Aid of Alabama, Inc.

Rite Aid of Connecticut, Inc.

Rite Aid of Delaware, Inc.

Rite Aid of Florida, Inc.

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

 

Rite Aid of Georgia, Inc,

Rite Aid of Illinois, Inc.

Rite Aid of Indiana Inc.

Rite Aid of Kentucky, Inc.

Rite Aid of Maine, Inc.

Rite Aid of Maryland, Inc.

Rite Aid of Massachusetts, Inc.

Rite Aid of Michigan, Inc.

Rite Aid of New Hampshire, Inc.

Rite Aid of New Jersey, Inc.

Rite Aid of New York, Inc.

Rite Aid of North Carolina, Inc.

Rite Aid of Ohio, Inc.

Rite Aid of Pennsylvania, Inc.

Rite Aid of South Carolina, Inc.

Rite Aid of Tennessee, Inc.

Rite Aid of Vermont, Inc.

Rite Aid of Virginia, Inc.

Rite Aid of Washington, D.C., Inc.

Rite Aid of West Virginia, Inc.

Rite Aid Realty Corp.

Rite Aid Rome Distribution Center, Inc.

Rite Aid Services, L.L.C.

Rite Aid Transport, Inc.

Rite Fund, Inc.

Rite Investments Corp.

RX Choice, Inc.

Seven Mile and Evergreen—Detroit, LLC

Silver Springs Road—Baltimore, Maryland/One, LLC

Silver Springs Road—Baltimore, Maryland/Two, LLC

State & Fortification Streets—Jackson, Mississippi, LLC

State Street and Hill Road—Gerard, Ohio, LLC

The Lane Drug Company

Thrifty Corporation

Thrifty PayLess, Inc.

Tyler and Sanders Roads, Birmingham—Alabama, LLC

The Jean Coutu Group (PJC) USA, Inc.

PJC Realty N.E. LLC

Brooks Pharmacy, Inc.

PJC of Massachusetts, Inc.

PJC of Cranston, Inc.

PJC of East Providence, Inc.

PJC of Vermont Inc.

PJC of Rhode Island, Inc.

MC Woonsocket, Inc.

P.J.C. Distribution, Inc.

PJC Lease Holdings, Inc.

P.J.C. Realty Co., Inc.

PJC Realty MA, Inc.

P.J.C. of West Warwick, Inc.

JCG Holdings (USA), Inc.

Eckerd Corporation

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

 

Genovese Drug Stores, Inc.

Thrift Drug, Inc.

EDC Licensing, Inc.

Eckerd Fleet, Inc.

EDC Drug Stores, Inc.

Thrift Drug Services, Inc.

Maxi Drug, Inc.

Maxi Green Inc.

Maxi Drug North, Inc.

Maxi Drug South, L.P.

PJC Special Realty Holdings, Inc.

PJC Manchester Realty LLC

PJC Dorchester Realty LLC

PJC Revere Realty LLC

PJC Mansfield Realty LLC

PJC Hyde Park Realty LLC

PJC Haverhill Realty LLC

PJC Peterborough Realty LLC

PJC Providence Realty LLC

PJC New London Realty LLC

PJC East Lyme Realty LLC

PJC Hermitage Realty LLC

JCG (PJC) USA, LLC

 

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

Schedule 2.01: Commitments

Lender

 

 

 

Commitment

 

Citicorp North America, Inc.

 

$

552,500,000

 

Bank of America, N.A.

 

$

552,500,000

 

Total:

 

$

1,105,000,000

 

 

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

Schedule 3.04

Undisclosed Liabilities

None.

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

Schedule 3.05(a)

Properties

None.

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

Schedule 3.05(c)

Leased Warehouses and Distribution Centers

Rite Aid Corporation

 

Harco, Inc.

 

Cottondale Industrial

 

10390 Technology Drive
Cottondale, AL 35453

 

Tuscaloosa

Rite Aid Rome
Distribution Center, Inc.

 

Rite Aid of New York, Inc.

 

New York Distribution Center (Utica)

 

2007 Beechgrove Place
Utica, NY 13501

 

Oneida

Thrifty Payless, Inc.

 

Thrifty PayLess, Inc.

 

Wilsonville Distribution Center

 

29555 S.W. Boones Ferry Road
Wilsonville, OR 97070

 

Clackamas

Thrifty Payless, Inc.

 

Thrifty PayLess, Inc.

 

Woodland Distribution Center

 

280 N. Pioneer Avenue
Woodland, CA 95776

 

Yolo

Rite Aid of West Virginia, Inc.

 

Rite Aid of West Virginia, Inc.

 

Dunbar, WV

 

Charles Avenue and Jordan Street
West Dunbar, WV

 

Kanawa

Rite Aid of Maryland, Inc.

 

Rite Aid of Maryland, Inc.

 

Riverside Business Park

 

1351 Brass Mill Road
Belcamp, MD 21017

 

Harford

Eckerd Corporation

 

Eckerd Corporation

 

Mid-Atlantic

 

355 Walt Sanders Memorial Drive
Shenandoah, GA 30265

 

Coweta

Eckerd Corporation

 

Eckerd Corporation

 

Mid-Atlantic

 

4017 Chesapeake Drive
Charlotte, NC 28216

 

Mecklenburg

Eckerd Corporation

 

Eckerd Corporation

 

Northeast

 

Geoffrey Road and Kresge Road
Fairless Hills, PA 19030-4317

 

Bucks

 

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

Schedule 3.06(a)

Litigation

We are subject from time to time to lawsuits and governmental investigations
arising in the ordinary course of business, including employment related
lawsuits arising form alleged violations of certain State and Federal laws. Some
of these suits purport to have been determined to be class or collective actions
and/or seek substantial damages. In the opinion of our management, these matters
are adequately covered by insurance or, if not so covered, are without merit or
are of such nature or involve amounts that would not have a material adverse
effect on our financial condition, results of operations or cash flows if
decided adversely.

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

Schedule 3.06(b)

Environmental Matters

None.

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

Schedule 3.07

Compliance with Laws

None.

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

Schedule 3.09

Taxes

None.

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

Schedule 3.12

Subsidiaries

Entity Name

 

 

 

Borrower Ownership Interest
(direct or indirect)

 

Subsidiary
Loan Party?

 

 

 

 

 

 

 

112 Burleigh Avenue Norfolk, LLC

 

 

100

%

 

 

Y

 

 

1515 West State Street Boise, Idaho, LLC

 

 

100

%

 

 

Y

 

 

1740 Associates, L.L.C.

 

 

100

%

 

 

Y

 

 

3581 Carter Hill Road—Montgomery Corp.

 

 

100

%

 

 

Y

 

 

4042 Warrensville Center Road—Warrensville Ohio, Inc.

 

 

100

%

 

 

Y

 

 

5277 Associates, Inc.

 

 

100

%

 

 

Y

 

 

537 Elm Street Corp.

 

 

100

%

 

 

Y

 

 

5600 Superior Properties, Inc.

 

 

100

%

 

 

Y

 

 

657-659 Broad St. Corp.

 

 

100

%

 

 

Y

 

 

764 South Broadway—Geneva, Ohio, LLC

 

 

100

%

 

 

Y

 

 

912 Elmwood Avenue—Buffalo, LLC

 

 

100

%

 

 

N

 

 

Ann & Government Streets—Mobile, Alabama, LLC

 

 

100

%

 

 

Y

 

 

Apex Drug Stores, Inc.

 

 

100

%

 

 

Y

 

 

Broadview and Wallings—Broadview Heights Ohio, Inc.

 

 

100

%

 

 

Y

 

 

Central Avenue and Main Street—Petal, MS, LLC

 

 

100

%

 

 

Y

 

 

Drug Palace, Inc.

 

 

100

%

 

 

N

 

 

Eagle Managed Care Corp.

 

 

100

%

 

 

Y

 

 

East Stone Drive and Bloomingdale Pike—Kingsport, Tennessee, LLC       

 

 

100

%

 

 

N

 

 

Eighth and Water Streets—Urichsville, Ohio, LLC

 

 

100

%

 

 

Y

 

 

England Street—Asheland Corporation

 

 

100

%

 

 

Y

 

 

Euclid and Wilder Roads—Bay City, LLC

 

 

100

%

 

 

N

 

 

Fairground, L.L.C.

 

 

100

%

 

 

Y

 

 

Fiona One Corp.

 

 

100

%

 

 

N

 

 

GDF, Inc.

 

 

100

%

 

 

Y

 

 

Gettysburg and Germantown, LLC

 

 

100

%

 

 

N

 

 

Gettysburg and Hoover—Dayton, Ohio, LLC

 

 

100

%

 

 

Y

 

 

Grand River & Fenkell, LLC

 

 

100

%

 

 

N

 

 

Harco, Inc.

 

 

100

%

 

 

Y

 

 

K & B Alabama Corporation

 

 

100

%

 

 

Y

 

 

K & B Louisiana Corporation

 

 

100

%

 

 

Y

 

 

K & B Mississippi Corporation

 

 

100

%

 

 

Y

 

 

K & B Services, Incorporated

 

 

100

%

 

 

Y

 

 

K & B Tennessee Corporation

 

 

100

%

 

 

Y

 

 

K & B, Incorporated

 

 

100

%

 

 

Y

 

 

K&B Texas Corporation

 

 

100

%

 

 

Y

 

 

Keystone Centers, Inc.

 

 

100

%

 

 

Y

 

 

Lakehurst and Broadway Corporation

 

 

100

%

 

 

Y

 

 

Louisville Avenue & North 18th Street—Monroe, Louisiana LLC

 

 

100

%

 

 

N

 

 

Main and McPherson—Clyde, LLC

 

 

100

%

 

 

N

 

 

Mayfield & Chillicothe Roads—Chesterland, LLC

 

 

100

%

 

 

Y

 

 

Munson & Andrews, LLC

 

 

100

%

 

 

Y

 

 

Name Rite, L.L.C.

 

 

100

%

 

 

Y

 

 

1

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

 

Northline & Dix—Toledo—Southgate, LLC

 

 

100

%

 

 

Y

 

 

Patton Drive and Navy Boulevard Property Corporation

 

 

100

%

 

 

Y

 

 

Paw Paw Lake Road & Paw Paw Avenue—Coloma, Michigan, LLC

 

 

100

%

 

 

Y

 

 

PDS-1 Michigan, Inc.

 

 

100

%

 

 

Y

 

 

Perry Distributors, Inc.

 

 

100

%

 

 

Y

 

 

Perry Drug Stores, Inc.

 

 

100

%

 

 

Y

 

 

RA 5—Points, LLC

 

 

100

%

 

 

N

 

 

RA Indian River/Kempsville, LLC

 

 

100

%

 

 

N

 

 

Ram-Utica, Inc.

 

 

100

%

 

 

Y

 

 

RDS Detroit, Inc.

 

 

100

%

 

 

Y

 

 

Read’s Inc.

 

 

99.9

%

 

 

Y

 

 

Richfield Road—Flint, Michigan, LLC

 

 

100

%

 

 

N

 

 

Richmond Road and Monticello Boulevard—Richmond Heights, Ohio, LLC 

 

 

100

%

 

 

N

 

 

Rite Aid Drug Palace, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid Funding I

 

 

100

%

 

 

N

 

 

Rite Aid Funding II

 

 

100

%

 

 

N

 

 

Rite Aid Hdqtrs. Corp.

 

 

100

%

 

 

Y

 

 

Rite Aid Hdqtrs. Funding, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid Lease Management Company

 

 

84

%

 

 

N

 

 

Rite Aid of Alabama, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Connecticut, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Delaware, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Florida, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Georgia, Inc,

 

 

100

%

 

 

Y

 

 

Rite Aid Health Solutions, LLC

 

 

100

%

 

 

N

 

 

Rite Aid of Illinois, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Indiana Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Kentucky, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Maine, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Maryland, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Massachusetts, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Michigan, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of New Hampshire, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of New Jersey, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of New York, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of North Carolina, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Ohio, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Pennsylvania, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of South Carolina, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Tennessee, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Vermont, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Virginia, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of Washington, D.C., Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid of West Virginia, Inc.

 

 

100

%

 

 

Y

 

 

Rite Aid Realty Corp.

 

 

100

%

 

 

Y

 

 

Rite Aid Rome Distribution Center, Inc.

 

 

100

%

 

 

Y

 

 

2

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

 

Rite Aid Services, L.L.C.

 

 

100

%

 

 

Y

 

 

Rite Aid Transport, Inc.

 

 

100

%

 

 

Y

 

 

Rite Fund, Inc.

 

 

100

%

 

 

Y

 

 

Rite Investments Corp.

 

 

100

%

 

 

Y

 

 

Rite Investments Corp., LLC

 

 

100

%

 

 

N

 

 

Route 1 & Hood Road—Fredericksburg, LLC

 

 

100

%

 

 

N

 

 

Route 202 at Route 124 Jaffrey—New Hampshire, LLC

 

 

100

%

 

 

N

 

 

Rx Choice, Inc.

 

 

100

%

 

 

Y

 

 

RX USA, Inc.

 

 

80

%

 

 

N

 

 

Seven Mile and Evergreen—Detroit, LLC

 

 

100

%

 

 

Y

 

 

Silver Springs Road—Baltimore, Maryland/One, LLC

 

 

100

%

 

 

Y

 

 

Silver Springs Road—Baltimore, Maryland/Two, LLC

 

 

100

%

 

 

Y

 

 

State & Fortification Streets—Jackson, Mississippi, LLC

 

 

100

%

 

 

Y

 

 

State Street and Hill Road—Gerard, Ohio, LLC

 

 

100

%

 

 

Y

 

 

The Lane Drug Company

 

 

100

%

 

 

Y

 

 

39/41 Hightstown Road, LLC

 

 

100

%

 

 

N

 

 

Thrifty Corporation

 

 

100

%

 

 

Y

 

 

Thrifty PayLess, Inc.

 

 

100

%

 

 

Y

 

 

Tyler and Sanders Roads, Birmingham—Alabama, LLC

 

 

100

%

 

 

Y

 

 

Brooks Pharmacy, Inc.

 

 

100

%

 

 

Y

 

 

Eckerd Corporation

 

 

100

%

 

 

Y

 

 

EDC Licensing, Inc.

 

 

100

%

 

 

Y

 

 

Genovese Drug Stores, Inc.

 

 

100

%

 

 

Y

 

 

JCG Holdings (USA), Inc.

 

 

100

%

 

 

Y

 

 

Maxi Drug North, Inc.

 

 

100

%

 

 

Y

 

 

Maxi Drug, Inc.

 

 

100

%

 

 

Y

 

 

P.J.C. Distribution, Inc.

 

 

100

%

 

 

Y

 

 

P.J.C. Realty Co., Inc.

 

 

100

%

 

 

Y

 

 

PJC Lease Holdings, Inc.

 

 

100

%

 

 

Y

 

 

PJC Special Realty Holdings, Inc.

 

 

100

%

 

 

Y

 

 

The Jean Coutu Group (PJC) USA, Inc.

 

 

100

%

 

 

Y

 

 

Thrift Drug Services, Inc.

 

 

100

%

 

 

Y

 

 

Thrift Drug, Inc.

 

 

100

%

 

 

Y

 

 

Eckerd Fleet, Inc.

 

 

100

%

 

 

Y

 

 

PJC of Massachusetts, Inc.

 

 

100

%

 

 

Y

 

 

PJC Realty MA, Inc.

 

 

100

%

 

 

Y

 

 

EDC Drug Stores, Inc.

 

 

100

%

 

 

Y

 

 

MC Woonsocket, Inc.

 

 

100

%

 

 

Y

 

 

PJC of Cranston, Inc.

 

 

100

%

 

 

Y

 

 

PJC of East Providence, Inc.

 

 

100

%

 

 

Y

 

 

PJC of Rhode Island, Inc.

 

 

100

%

 

 

Y

 

 

P.J.C. of West Warwick, Inc.

 

 

100

%

 

 

Y

 

 

Maxi Green Inc.

 

 

100

%

 

 

Y

 

 

PJC of Vermont Inc.

 

 

100

%

 

 

Y

 

 

JCG (PJC) USA, LLC

 

 

100

%

 

 

Y

 

 

PJC Dorchester Realty LLC

 

 

100

%

 

 

Y

 

 

PJC East Lyme Realty LLC

 

 

100

%

 

 

Y

 

 

PJC Haverhill Realty LLC

 

 

100

%

 

 

Y

 

 

3

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

 

PJC Hermitage Realty LLC

 

 

100

%

 

 

Y

 

 

PJC Hyde Park Realty LLC

 

 

100

%

 

 

Y

 

 

PJC Manchester Realty LLC

 

 

100

%

 

 

Y

 

 

PJC Mansfield Realty LLC

 

 

100

%

 

 

Y

 

 

PJC New London Realty LLC

 

 

100

%

 

 

Y

 

 

PJC Peterborough Realty LLC

 

 

100

%

 

 

Y

 

 

PJC Providence Realty LLC

 

 

100

%

 

 

Y

 

 

PJC Realty N.E., LLC

 

 

100

%

 

 

Y

 

 

PJC Revere Realty LLC

 

 

100

%

 

 

Y

 

 

PJC Peterborough Realty I1 LLC

 

 

100

%

 

 

N

 

 

PJC Essex Realty LLC

 

 

100

%

 

 

N

 

 

PJC Norwich Realty LLC

 

 

100

%

 

 

N

 

 

Maxi Drug South, L.P.

 

 

100

%

 

 

Y

 

 

 

4

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

Schedule 3.13

SCHEDULE OF CASUALTY-PROPERTY INSURANCE
RITE AID CORPORATION
May 17, 2007—Policy periods ending on 6/1/07 will be renewed

 

COVERAGE

 

POLICY #

 

CARRIER

 

BROKER

 

AMOUNT OF LIMIT

 

POLICY PERIOD

 

ANNUAL
PREM AND/OR RATE

1

 

AIRCRAFT

 

GM 3999738-03

 

ILLINOIS

 

EH&D

 

$200.0 MILLION LIABILITY

 

10/30/06-10/30/07

 

$172,882

 

 

 

 

 

NATIONAL

 

 

 

$50.0 MILLION WAR RISK

 

 

 

 

 

 

 

 

 

INSURANCE

 

 

 

3rd PARTY—NON PASSENGER

 

 

 

 

 

 

 

 

 

COMPANY

 

 

 

$25.0 THOUSAND/PERSON—MED PAY

 

 

 

 

 

 

 

 

 

 

 

 

 

$250.0 THOUSAND ADMITTED LIA.

 

 

 

 

 

 

 

 

 

 

 

 

 

ALL RISK PHYSICAL DAMAGE

 

 

 

 

 

 

 

 

 

 

 

 

 

ALL RISK GROUND AND FLIGHT

 

 

 

 

 

 

 

 

 

 

 

 

 

NO DEDUCTIBLE

 

 

 

 

2

 

AUTOMOBILE

 

TCZJCAP120D8153TIL07

 

TRAVELERS

 

AON

 

$5.0 MILLION CSL

 

01/01/07-01/01/08

 

$766,000

 

 

 

 

 

 

 

 

 

 

NO COLLISION OR COMP

 

 

 

$250,000 DEDUCTIBLE

3

 

OCEAN MARINE

 

NO1208548 002

 

Indemnity

 

AON

 

$4.0 MILLION/VESSEL

 

06/01/07-06/01/08

 

$50,400

 

 

 

 

 

Insurance

 

 

 

$400.0 THOUSAND ON DECK

 

 

 

 

 

 

 

 

 

Company of

 

 

 

$4.0 MILLION PER AIRCRAFT

 

 

 

 

 

 

 

 

 

North America

 

 

 

$50.0 THOUSAND MAIL OR PARCEL POST

 

 

 

 

4

 

3D POLICY

 

429CP0500

 

St. Paul Fire

 

MARSH

 

LIMIT: $10.0 MILLION

 

11/01/06-11/01/07

 

$90,000

 

 

(CRIME)

 

 

 

& Marine

 

 

 

DEDUCTIBLE: $500.0 THOUSAND

 

 

 

 

5

 

D&O

 

713-20-56

 

AIG

 

MARSH

 

$15.0 MILLION

 

03/31/07-03/31/08

 

$1,375,000

 

INCLUDES

 

 

 

 

 

 

 

$2.0 MILLION DEDUCTIBLE

 

 

 

(Includes TRIA)

 

BROOKS/ECKERD

 

 

 

 

 

 

 

 

 

 

 

 

 

D&O EXCESS

 

EC09001183

 

TRAVELERS

 

MARSH

 

$15.0 MILLION

 

03/31/07-03/31/08

 

($440,000

 

 

 

 

 

 

 

 

 

EXCESS OF $15.0 million

 

 

 

Included above)

 

D&O EXCESS

 

DOC9035115-00

 

ZURICH

 

MARSH

 

$10.0 MILLION

 

03/31/07-03/31/08

 

($220,000

 

 

 

 

 

 

 

 

 

EXCESS OF $30.0 MILLION

 

 

 

Included above)

 

 

D&O EXCESS

 

COO7162/002

 

AWAC

 

MARSH

 

$10.0 MILLION

 

03/31/07-03/31/08

 

($165,000

 

 

 

 

 

 

 

 

 

 

EXCESS OF $40.0 MILLION

 

 

 

Included above)

 

D&O EXCESS

 

ELU97350-07

 

XL*

 

MARSH

 

$15.0 MILLION

 

03/31/07-03/31/08

 

($180,000

 

 

 

 

 

 

 

 

 

EXCESS of $50.0 MILLION

 

 

 

Included above)

 

 

 

 

 

 

 

 

 

(*SIDE A EXCESS COVERAGE)

 

 

 

 

 

D&O EXCESS

 

713-44-92

 

AIG*

 

MARSH

 

$10.0 MILLION

 

03/31/07-03/31/08

 

($110,000

 

 

 

 

 

 

 

 

 

EXCESS of $65.0 MILLION

 

 

 

Included above)

 

 

 

 

 

 

 

 

 

(*SIDE OF EXCESS COVERAGE)

 

 

 

 

6

 

Executive Risk

 

A07SC2645000

 

GREAT

 

AON

 

$5.0 MILLION

 

03/19/07-03/19/10

 

$20,075.00

 

 

(Kidnap/Ransom/

 

 

 

AMERICAN

 

 

 

(EACH LOSS)

 

 

 

 

 

 

Extortion)

 

 

 

 

 

 

 

 

 

 

 

 

7

 

FIDUCIARY

 

EC09001185

 

TRAVELERS

 

MARSH

 

$5.0 MILLION

 

03/31/07-03/31/08

 

$52,500

 

LIABILITY

 

 

 

 

 

 

 

$250.0 THOUSAND DEDUCTIBLE

 

 

 

(Includes TRIA)

7A

 

Excess

 

U706-70004

 

U.S.

 

EH&D

 

$5.0 MILLION

 

03/03/06-03/31/07

 

$42,735

 

 

Fiduciary

 

 

 

SPECIALTY

 

 

 

EXCESS OF $5.0 MILLION

 

 

 

 

1

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

 

8

 

ALL RISKS

 

875 5096

 

Lexington

 

AON

 

PRIMARY $5MM

 

06/01/06-06/01/07

 

$2,800,000

 

PROPERTY

 

 

 

Insurance Co

 

 

 

100.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$250,000 / $500,000 DEDUCTIBLE

 

 

 

 

 

ALL RISKS

 

XPP5346960-01

 

Steadfast

 

AON

 

$70MM x $30MM

 

06/01/06-06/01/07

 

$361,111.00

 

PROPERTY

 

 

 

Insurance Co

 

 

 

10.0%

 

 

 

 

 

ALL RISKS

 

875 5093

 

Lexington

 

AON

 

$20MM x $30MM

 

06/01/06-06/01/07

 

$1,031,250.00

 

PROPERTY

 

 

 

Insurance Co

 

 

 

37.5%

 

 

 

 

 

ALL RISKS

 

DPB00524A

 

Everest

 

AON

 

$20MM x $30MM

 

06/01/06-06/01/07

 

$175,000.00

 

PROPERTY

 

 

 

Reinsurance

 

 

 

8.75%

 

 

 

 

 

 

 

 

 

(Bermuda) Ltd

 

 

 

 

 

 

 

 

 

ALL RISKS

 

CRXD 3610949a

 

ACE American

 

AON

 

$20MM x $30MM

 

06/01/06-06/01/07

 

$385,000.00

 

PROPERTY

 

 

 

Insurance Co

 

 

 

17.50%

 

 

 

 

 

ALL RISKS

 

WB0600563

 

Lloyd’s

 

AON

 

$20MM x $30MM

 

06/01/06-06/01/07

 

$370,588.00

 

PROPERTY

 

 

 

 

 

 

 

17.50%

 

 

 

 

 

ALL RISKS

 

78-A3-XP-00000061-00

 

Princeton

 

AON

 

$25MM x $50MM

 

06/01/06-06/01/07

 

$75,000.00

 

PROPERTY

 

 

 

E & S Co

 

 

 

5.00%

 

 

 

 

 

ALL RISKS

 

MAN2X70782

 

Montpelier

 

AON

 

$25MM x $50MM

 

06/01/06-06/01/07

 

$630,000.00

 

PROPERTY

 

 

 

Reinsurance

 

 

 

20.00%

 

 

 

 

 

 

 

 

 

Ltd

 

 

 

 

 

 

 

 

 

ALL RISKS

 

WB0600567

 

Hannover Re

 

AON

 

$25MM x $50MM

 

06/01/06-06/01/07

 

$75,294.00

 

PROPERTY

 

 

 

 

 

 

 

4.00%

 

 

 

 

 

ALL RISKS

 

PDII46450211

 

Lancashire

 

AON

 

$25MM x $50MM

 

06/01/06-06/01/07

 

$250,000.00

 

PROPERTY

 

 

 

Insurance Co

 

 

 

10.00%

 

 

 

 

 

 

 

 

 

Ltd

 

 

 

 

 

 

 

 

 

ALL RISKS

 

WB0600565

 

Lloyd’s

 

AON

 

$25MM x $50MM

 

06/01/06-06/01/07

 

$691,765.00

 

PROPERTY

 

 

 

 

 

 

 

24.50%

 

 

 

 

 

ALL RISKS

 

GEP1617

 

Lloyd’s (GEP)

 

AON

 

$50MM x $50MM

 

06/01/06-6/01/07

 

$125,000.00

 

PROPERY

 

 

 

 

 

 

 

5.00%

 

 

 

 

 

ALL RISKS

 

78-A3-XP-00000062-00

 

Princeton

 

AON

 

$25MM x $75MM

 

06/01/06-6/01/07

 

$60,000.00

 

PROPERTY

 

 

 

E & S Co

 

 

 

5.00%

 

 

 

 

 

ALL RISKS

 

ESP001594900

 

Arch

 

AON

 

$25MM x $75MM

 

06/01/06-06/01/07

 

$70,000.00

 

PROPERTY

 

 

 

Specialty

 

 

 

4.00%

 

 

 

 

 

 

 

 

 

Insurance Co

 

 

 

 

 

 

 

 

 

ALL RISKS

 

12508-1302-PRMAN-

 

Max Re Ltd

 

AON

 

$25MM x $75MM

 

06/01/06-06/01/07

 

$250,000.00

 

PROPERTY

 

2006

 

 

 

 

 

20.00%

 

 

 

 

 

ALL RISKS

 

LHD347355

 

Landmark

 

AON

 

$25MM x $75MM

 

06/01/06-06/01/07

 

$112,500.00

 

PROPERTY

 

 

 

American

 

 

 

6.00%

 

 

 

 

 

ALL RISKS

 

RMP288602087

 

Continental

 

AON

 

$25MM x $75MM

 

06/01/06-06/01/07

 

$300,000.00

 

PROPERTY

 

 

 

Casualty Co

 

 

 

20.00%

 

 

 

 

 

ALL RISKS

 

WB0600564

 

Lloyd’s

 

AON

 

$25MM x $75MM

 

06/01/06-06/01/07

 

$529,412.00

 

PROPERTY

 

 

 

 

 

 

 

30.00%

 

 

 

 

 

ALL RISKS

 

XPP5346960-01

 

Steadfast

 

AON

 

$100MM x $100MM

 

06/01/06-06/01/07

 

$66,667.90

 

PROPERTY

 

 

 

Insurance Co

 

 

 

20.00%

 

 

 

 

 

ALL RISKS

 

78-A3-XP00000063-00

 

Princeton

 

AON

 

$100MM x $100MM

 

06/01/06-06/01/07

 

$60,000.00

 

PROPERTY

 

 

 

E & S Co

 

 

 

15.00%

 

 

 

 

 

ALL RISKS

 

GEP1617

 

Lloyd’s (GEP)

 

AON

 

$100MM x $100MM

 

06/01/06-06/01/07

 

$12,500.00

 

PROPERTY

 

 

 

 

 

 

 

2.50%

 

 

 

 

 

 

ALL RISKS

 

WB0600566

 

Lloyd’s

 

AON

 

$400MM x $100MM

 

06/01/06-06/01/07

 

$80,000.00

 

 

PROPERTY

 

 

 

 

 

 

 

10.00%

 

 

 

 

 

ALL RISKS

 

WB0600583

 

Hannover Re

 

AON

 

$400MM x $100MM

 

06/01/06-06/01/07

 

$40,000.00

 

PROPERTY

 

 

 

 

 

 

 

5.00%

 

 

 

 

2

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

 

 

ALL RISKS

 

WB0600583

 

Swiss Re

 

AON

 

$400MM x $100MM

 

06/01/06-06/01/07

 

$100,000.00

 

PROPERTY

 

 

 

 

 

 

 

12.50%

 

 

 

 

 

ALL RISKS

 

RMP 288602087

 

Continental

 

AON

 

$400MM x $100MM

 

06/01/06-06/01/07

 

$90,000.00

 

PROPERTY

 

 

 

Casualty Co

 

 

 

11.25%

 

 

 

 

 

ALL RISKS

 

OGP9253870

 

Great

 

AON

 

$400MM x $100MM

 

06/01/06-06/01/07

 

$10,000.00

 

PROPERTY

 

 

 

American

 

 

 

1.25%

 

 

 

 

 

 

 

 

 

Insurance Co

 

 

 

 

 

 

 

 

 

ALL RISKS

 

US6333

 

Commonwealth

 

AON

 

$400MM x $100MM

 

06/01/06-06/01/07

 

$40,000.00

 

PROPERTY

 

 

 

Insurance Co

 

 

 

5.00%

 

 

 

 

 

ALL RISKS

 

PDII46450211

 

Lancashire

 

AON

 

$400MM x $100MM

 

06/01/06-06/01/07

 

$140,000.00

 

PROPERTY

 

 

 

Insurance Co

 

 

 

17.50%

 

 

 

 

 

 

 

 

 

Ltd

 

 

 

 

 

 

 

 

 

ALL RISKS

 

XPP5346960-D1

 

Steadfast

 

AON

 

$300MM x $200MM

 

06/01/06-06/01/07

 

$77,778.00

 

PROPERTY

 

 

 

Insurance Co

 

 

 

20.00%

 

 

 

 

 

ALL RISKS

 

78-A3-XP-00000064-00

 

Princeton

 

AON

 

$300MM x $200MM

 

06/01/06-06/01/07

 

$140,000.00

 

PROPERTY

 

 

 

E & S Co

 

 

 

15.00%

 

 

 

 

 

ALL RISKS

 

ESP001594100

 

Arch

 

AON

 

$300MM x $200MM

 

06/01/06-06/01/07

 

$15,000.00

 

PROPERTY

 

 

 

Specialty

 

 

 

2.50%

 

 

 

 

 

 

 

 

 

Insurance Co

 

 

 

 

 

 

 

 

9

 

GENERAL
LIABILITY INC.
DRUGGIST
LIABILITY

 

XSLG21734822

 

ACE AMERICAN
INSURANCE CO.

 

MARSH

 

$4.0 MIL/$15.0 MIL, INCLUDING A
$1.0 MIL/$1.0 MIL CORRIDOR
DEDUCTIBLE EXCESS $2.0 MIL SELF
INSURED RETENTION

 

01/01/07-01/01/08

 

$3,278,283

9A

 

MICHIGAN LIQUOR

 

HD0G21735000

 

ACE AMERICAN

 

MARSH

 

$50,000/$50,000 INCLUDING A

 

01/01/07-01/01/08

 

$5,000

 

LIABILITY

 

 

 

INSURANCE CO.

 

 

 

$50,000 DEDUCTIBLE

 

 

 

 

10

 

UMBRELLA

 

9834593

 

NATIONAL

 

MARSH

 

$50.0 MIL/$50.0 MIL EXCESS ACE’S

 

01/01/07-01/01/08

 

$2,850,000

 

 

LIABILITY (LEAD

 

 

 

UNION FIRE

 

 

 

PRIMARY

 

 

 

 

 

 

LAYER)

 

 

 

INSURANCE

 

 

 

 

 

 

 

 

 

 

UMBRELLA

 

0800009494L107A

 

XL INSURANCE

 

MARSH

 

$50.0 MIL/$50.0 MIL EXCESS AIG’S

 

01/01/07-01/01/08

 

$370,000

 

 

LIABILITY

 

 

 

AMERICA, INC.

 

 

 

UMBRELLA

 

 

 

 

 

 

(2ND LAYER)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UMBRELLA

 

XCPG23575085

 

ACE AMERICAN

 

MARSH

 

$25.0 MIL/$25.0 MIL EXCESS XL’S

 

01/01/07-01/01/08

 

$145,637

 

 

LIABILITY

 

 

 

INSURANCE CO.

 

 

 

UMBRELLA

 

 

 

 

 

 

(3RD LAYER)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UMBRELLA

 

LQ1B7198643017

 

LIBERTY

 

MARSH

 

$25.0 MIL/$25.0 MIL EXCESS ACE’S

 

01/01/07-01/01/08

 

$65,000

 

 

LIABILITY

 

 

 

INSURANCE

 

 

 

UMBRELLA

 

 

 

 

 

 

(4TH LAYER)

 

 

 

UNDERWRITERS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INC.

 

 

 

 

 

 

 

 

11

 

PUNITIVE

 

5247793

 

STARR EXCESS

 

MARSH/

 

$50.0 MIL “WRAPPING AROUND” AIG’S

 

01/01/07-01/01/08

 

$300,000

 

DAMAGES ONLY

 

 

 

INTERNATIONAL

 

BERMUDA

 

LEAD UMBRELLA PROGRAM

 

 

 

 

 

WRAP-AROUND

 

 

 

LIABILITY

 

 

 

 

 

 

 

 

 

POLICY

 

 

 

INS. CO. LTD.

 

 

 

 

 

 

 

 

11A

 

PUNITIVE

 

IE00013373LI07A

 

XL EUROPE

 

MARSH /

 

$50.0 MIL/$50.0 MIL “WRAPPING

 

01/01/07-01/01/08

 

$54,500

 

 

DAMAGES WRAP -

 

 

 

 

 

BERMUDA

 

AROUND” XL’S UMBRELLA PROGRAM

 

 

 

 

 

 

AROUND POLICY

 

 

 

 

 

 

 

 

 

 

 

 

3

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

 

12

 

GENERAL

 

PRIMARY:

 

LIBERTY

 

ALLIANT

 

$5.0 MIL

 

03/14/07-03/14/08

 

$126,705

 

LIABILITY

 

EGL-BO-1$4126-016

 

SURPLUS

 

INSURANCE

 

$15,000.00 SIR/OCCURRENCE

 

 

 

 

 

STRIP MALLS—

 

 

 

INSURANCE

 

SERVICES

 

 

 

 

 

 

 

“COMMON AREAS”

 

 

 

CORP.

 

 

 

 

 

 

 

 

 

 

 

EXCESS:

 

ST. PAUL

 

ALLIANT

 

$5.0 MIL

 

03/14/07-03/14/08

 

$22,786

 

 

 

QI09100320

 

TRAVELERS

 

INSURANCE

 

 

 

 

 

 

 

 

 

 

 

 

 

SERVICES

 

 

 

 

 

 

13

 

N.Y. STATE DBL

 

BINDER

 

AM. GEN/AIG

 

EH&D

 

STATUTORY

 

02/1/03 - OPEN

 

.60/$100 PAYROLL

14

 

WORKMAN’S COMP

 

TC2JUB-120D2216-07 (ALL

 

TRAVELERS

 

A.J.

 

STATUTORY W.C.

 

01/01/07-01/01/08

 

$38,575,000

 

EXCLUDES WV

 

OTHER STATES) TRJUB-

 

 

 

GALLAGHER

 

$2.0 MILLION E.L.

 

 

 

INCLUDES $31.0

 

 

 

121D0449-07 (AZ & MA)

 

 

 

 

 

$500,000 DEDUCTIBLE

 

 

 

MILLION LOSS FUND

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPOSIT

 

 

 

 

 

 

 

 

 

 

 

 

 

INCLUDED ABOVE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14A

 

EXCESS WORKERS

 

TWXJ-UB-120D622-7-07

 

TRAVELERS

 

A.J.

 

LIMIT-STATUTORY-EXCESS WC

 

 

 

 

 

 

(OH, OR & WA)

 

(OH, OR, WA)

 

 

 

GALLAGHER

 

RETAINED LIMIT $500,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIMIT-$2.0 MILLION EXCESS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EMPLOYERS LIABILITY

 

 

 

 

14B

 

EXCESS WORKERS

 

WC10031180-03

 

BREICKSTREET

 

A.J.

 

STATUTORY W.C.

 

01/1/07-01/1/08

 

$291,068.00

 

 

(NV)

 

 

 

MUTUAL

 

GALLAGHER

 

$250,000 DEDUCTIBLE

 

 

 

 

15

 

BONDS

 

VARIOUS

 

VARIOUS

 

AON

 

VARIOUS

 

VARIOUS

 

VARIOUS

16

 

STORAGE TANK

 

7514294

 

COMMERCE &

 

MARSH

 

$5.0 MILLION

 

09/1/06-09/1/07

 

$20,233.76

 

 

THIRD-PARTY

 

 

 

INDUSTRY

 

 

 

$25,000 DEDUCTIBLE

 

 

 

 

 

 

LIABILITY

 

 

 

INSURANCE

 

 

 

 

 

 

 

 

 

 

CORRECTIVE

 

 

 

COMPANY

 

 

 

 

 

 

 

 

 

 

ACTION &

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CLEANUP

 

 

 

 

 

 

 

 

 

 

 

 

17

 

PRIVACY

 

HO TMT 2309903.7

 

LLOYD’S/

 

ALLIANT

 

$10.0 MILLION

 

02/15/07-02/15/08

 

$225,000.00

 

PROTECTION

 

 

 

HISCOX

 

INS.

 

$1.0 MILLION DEDUCTIBLE

 

 

 

 

 

(CYBER

 

 

 

SYNDICATES

 

SERVICES

 

 

 

 

 

 

 

LIABILITY)

 

 

 

LTD.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

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

Schedule 3.14

Labor

None.

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

Schedule 5.11

Excluded Subsidiaries

912 Elmwood Avenue—Buffalo, LLC

Drug Palace, Inc.

East Stone Drive and Bloomingdale Pike—Kingsport, Tennessee, LLC

Euclid and Wilder Roads—Bay City, LLC

Fiona One Corp.

39/41 Hightstown Road, LLC

Gettysburg and Germantown, LLC

Grand River & Fenkell, LLC

Louisville Avenue & North 18th Street—Monroe, Louisiana LLC

Main and McPherson—Clyde, LLC

RA 5-Points, LLC

RA Indian River/Kempsville, LLC

Richfield Road—Flint, Michigan, LLC

Richmond Road and Monticello Boulevard—Richmond Heights, Ohio, LLC

Rite Aid Funding I*

Rite Aid Funding II*

Rite Aid Health Solutions, LLC**

Rite Aid Lease Management Company

Rite Investments Corp., LLC

Route 1 & Hood Road—Fredericksburg, LLC

Route 202 at Route 124 Jaffrey-New Hampshire, LLCR

Rx USA, Inc.

PJC Peterborough Realty II LLC

PJC Essex Realty LLC

PJC Norwich Realty LLC

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

*                    Entities that are part of the Securitization.

**             Entity is Pharmacy Benefit Manager

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

Schedule 6.01(a)(xii)

Existing lndebtedness

 

 

As of 6/1/07

 

 

 

(US Dollars)

 

IDB—Pontiac Whse

 

478,000

 

Rome Note Payable

 

44,012

 

M.H. Parsons and Sons Lumber Co.

 

12,000

 

Emerson’s Pharmacy

 

57,158

 

PL Properties (TPI related)

 

54,441

 

Tandy Corporation

 

581,782

 

Misc. TPI related debt

 

23,540

 

Total Existing lndebtedness excluding Capital Lease Obligations

 

1,250,933

 

Capital Lease Obligations—Rite Aid

 

188,101,000

 

Capital Lease Obligations—Brooks Eckerd

 

22,918,418

 

Total Capital Lease Obligations

 

211,019,418

 

Total Existing lndebtedness including Capital Lease Obligations

 

212,270,351

 

 

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

Schedule 6.01(b)

Equity Issuances

1.   Rite Aid Lease Management Company, 213,000 shares of Class A, Cumulative
Preferred Stock.

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

Schedule 6.02(xi)

Liens

1.                 Liens in favor of GNC with respect to certain inventory,
goods, merchandise and other personal property which may now or hereafter be
placed in the possession of certain Subsidiaries by GNC, or any of its
successors, parents, or affiliates, which are held for sale, nor or hereafter in
the possession, custody or control of such Subsidiary, wherever located, which
are manufactured by GNC, or any of its successors, parent, or affiliates, or
carrying the trade name or trade style of GNC, or any of its successors, parents
or affiliates and all proceeds from the sale or other disposition of the
foregoing.

2.                 Mortgages as set forth in chart following.

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

Mortgages

(Schedule 6.02(xi) continued)

#

 

Store

 

City, State
(County)

 

Title and
Date of
Document

 

Mortgagor

 

Mortgagee

 

Mortgage
Amount

 

Payment Term
(Payment Amount)

 

Comments

1.

 

507

 

Pottsville, PS

(Schuylkill)

 

Mortgage dated 9/22/94

 

Rite Aid of Pennsylvania, Inc.

 

Bima Inc.

 

$600,000

 

Commencing October 22, 1994.

Final payment date: September 22, 2004

($6,661.23 per year)

 

 

2.

 

1768

 

Northampton, PA

(Northampton)

 

Motgage dated 5/6/60

 

Robert Kosc

 

Irving Goldberg and Helen Goldberg

 

$2,000

 

 

 

Payment amount and schedule is not stated in the mortgage.

 

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

Schedule 6.04

Investments

Certain cash and in-kind investments made to date by Rite Aid Hdqtrs. Corp. in
Verispan, L.L.C, a joint venture designed to gather and sell pharmaceutical
data. Rite Aid Hdqtrs. Corp. currently holds an approximate 5% equity interest
in this venture, and has no obligation to make any additional contributions of
capital or assets.

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

Schedule 6.08(a)

Restricted Pavments

1.                 Rite Aid Lease Management Company, 213,000 shares of Class A,
Cumulative Preferred Stock in the quarterly dividend amount of $1.75 per share,

2.                 Rite Aid Risk Management Corp., 1,000 shares of Class C,
Cumulative Participating Voting Preferred Stock and 1,000 shares of Class D,
Cumulative Participating Voting Preferred Stock each in the quarterly dividend
amount of $8.00 per share.*

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

*                    As of the First Restatement Effective Date, these shares
are retired.

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

Schedule 6.09

Affiliate Transactions

1.                 Letter Agreement, effective January 1, 2003, with Leonard
Green & Partners L.P. relating to management services, as the same may be
amended, extended, renewed or restated from time to time, subject to limitations
set forth in Section 6.08.

2.                 Transition Services Agreement, effective on closing of the
transaction to acquire the Brooks and Eckerd drugstore chains, with The Jean
Coutu Group (PJC) Inc. to provide transition services, as the same may be
amended, extended, renewed or restated fiom time to time, subject to the
limitations set forth in section 6.09.

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

ANNEX 1
to Second Restated Credit Agreement

DEFINITIONS ANNEX

This is the Definitions Annex referred to in the Senior Loan Documents and the
Second Priority Debt Documents. Each capitalized term used herein shall have the
meaning assigned to it below or, if not defined herein, the meaning assigned to
it in the applicable Senior Loan Document or Second Priority Debt Document. The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

References to any agreement are to such agreement as amended, modified or
supplemented from time to time in accordance with the terms thereof and of each
Senior Loan Document and Second Priority Debt Document containing restrictions
or imposing conditions on the amendment, modification or supplementing of such
agreement.

“2017 7.5% Notes” means the 7.5% Senior Secured Notes of the Borrower due 2017
issued pursuant to the 2017 7.5% Note Indenture.

“2017 7.5% Note Indenture” means the Indenture dated as of February 21, 2007,
among Rite Aid, the Subsidiary Guarantors and The Bank of New York Trust
Company, N.A., as trustee, relating to the 2017 7.5% Notes.

“4.75% Convertible Notes” means the 4.75% Convertible Notes of the Borrower due
2006 issued pursuant to the 4.75% Note Indenture and any Registered Equivalent
Notes issued on exchange thereof.

“4.75% Note Indenture” means the Indenture dated as of November 19, 2001,
between Rite Aid and BNY Midwest Trust Company, as trustee, relating to the
4.75% Convertible Notes.

“7.5% Notes” means the 7.5% Senior Secured Notes of the Borrower due 2015 issued
pursuant to the 7.5% Note Indenture and any Registered Equivalent Notes issued
in exchange therefor.

“7.5% Note Indenture” means the Indenture dated as of January 11, 2005, among
Rite Aid, the Subsidiary Guarantors and BNY Midwest Trust Company, as trustee,
relating to the 7.5% Notes.

“8.125% Notes” means the 8.125% Senior Secured Notes of the Borrower due 2010
issued pursuant to the 8.125% Note Indenture and any Registered Equivalent Notes
issued in exchange therefor.

“8.125% Note Indenture” means the Indenture dated as of April 22, 2003, among
Rite Aid, the Subsidiary Guarantors and BNY Midwest Trust Company, as trustee,
relating to the 8.125% Notes.

“8.625% Notes” means the 8.625% Senior Notes of the Borrower due 2015 issued
pursuant to the 8.625% Note Indenture.

“8.625% Note Indenture” means the Indenture dated February 21, 2007, among Rite
Aid, the Subsidiary Guarantors and The Bank of New York Trust Company, N.A., as
trustee, relating to the 8.625% Notes.

“9.25% Notes” means the 9.25% Senior Notes of the Borrower due 2013 issued
pursuant to the 9.25% Note Indenture and any Registered Equivalent Notes issued
in exchange therefor.

“9.25% Note Indenture” means the Indenture dated as of May 20, 2003, between
Rite Aid and BNY Midwest Trust Company, as Trustee, relating to the 9.25% Notes.

“9.5% Note Indenture” means the Indenture dated as of February 12, 2003, among
Rite Aid, the Subsidiary Guarantors named therein and BNY Midwest Trust Company,
as trustee, relating to the 9.5% Notes.

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

“9.5% Notes” means the 9.5% Senior Secured Notes of Rite Aid due 2011 issued
pursuant to the 9.5% Note Indenture and any Registered Equivalent Notes issued
in exchange therefor.

“12.5% Note Indenture” means the Indenture dated as of June 27, 2001, among Rite
Aid, the Subsidiary Guarantors and U.S. Bank and Trust, as trustee, relating to
the 12.5% Notes.

“12.5% Notes” means the 12.5% Senior Secured Notes due 2006 of Rite Aid issued
on the Effective Date pursuant to the 12.5% Note Indenture.

“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.

“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.

“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.

“Basket Asset Sale” means any sale, transfer or disposition (including a Sale
and Leaseback Transaction not involving any Mortgaged Property) of office
locations, Stores or other personal or real property (including any improvements
thereon), whether or not constituting Mortgaged Property, or leasehold interest
therein for fair value in the ordinary course of business consistent with past
practice and not inconsistent with the business plan delivered to the Senior
Lenders prior to the Original Restatement Effective Date; provided, however,
that (a) the aggregate consideration received therefor (including the fair
market value of any non-cash consideration) shall not exceed $200,000,000 in any
fiscal year of Rite Aid (calculated without regard to Sale and Leaseback
Transactions permitted by Section 6.01(ix), (xiv) and (xv) of the Senior Credit
Agreement) and (b) except with respect to any net consideration received from
any sale, transfer or disposition to a third Person of Stores, leases and
prescription files closed at substantially the same time as, and entered into as
part of a single related transaction with, the purchase or other acquisition
from such third Person of Stores, leases and prescription files of a
substantially equivalent value, at least 75% of such consideration shall consist
of cash.

“Borrower” means Rite Aid.

2

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

“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; provided, however, that when used in connection with a
Eurodollar Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.

“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.

“Citibank” means Citibank, N.A.

“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, 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.

“Debt Facility” means the Senior Credit Agreement and any Second Priority Debt
Facility, or any combination thereof (as the context requires).

3

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

“Default Rate” means a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be) equal
to the sum of (a) the rate of interest publicly announced by Citibank in New
York, New York, from time to time as its “base rate” plus (b) 2.00%.

“Domestic Subsidiary” means any Subsidiary incorporated or organized under the
laws of the United States of America, any State thereof or the District of
Columbia.

“Effective Date” means June 27, 2001.

“Effective Date Indentures” mean, collectively, (a) the Indenture dated as of
December 21, 1998, between Rite Aid and Harris Trust and Savings Bank, as
trustee and (b) the Indenture dated as of August 1, 1993, between Rite Aid and
Morgan Guaranty Trust Company of New York, as trustee.

“First Restatement Effective Date” means November 8, 2006.

“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.

“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 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.

“Indentures” mean, collectively, the Effective Date Indentures and the
Restatement Date Indentures.

“Instructing Group” means, until the Senior Obligation Payment Date, the
Required Lenders and, thereafter, the Second Priority Instructing Group.

4

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

“Intercompany Inventory Purchase Agreement” means the Intercompany Inventory
Purchase Agreement dated as of June 12, 2000 (as amended), among the Borrower,
Rite Aid Hdqtrs. Corp., the Distribution Subsidiaries named therein and the
Operating Subsidiaries named therein.

“Interim Collateral” means “Collateral”, as defined in any Interim Collateral
Document.

“Interim Collateral and Guarantee Agreement” means the Interim Collateral and
Guarantee Agreement dated as of June 4, 2007, among Holdings and its
subsidiaries (including subsidiaries that become parties thereto after the
Second Restatement Effective Date) and the Senior Collateral Agent.

“Interim Collateral Documents” means the Interim Collateral and Guarantee
Agreement, the Interim Subsidiary Loan Party Guarantee Agreement and each of the
security agreements and other instruments and documents executed and delivered
by the Subsidiary Loan Parties, Holdings or any of their subsidiaries, as
applicable, pursuant to any of the foregoing or pursuant to the Senior Credit
Agreement or for purposes of providing collateral security or credit support for
any Interim Obligation.

“Interim Obligations” means (a) the aggregate principal amount of the Tranche 2
Term Loans outstanding as a result of the borrowings made on the Second
Restatement Effective Date, (b) all interest on such outstanding Tranche 2 Term
Loans (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), (c) all other amounts payable by the Borrower or any
Subsidiary under the Senior Loan Documents in respect of such Tranche 2 Term
Loans and (d) all increases, renewals, extensions and Refinancings of the
foregoing.

“Interim Secured Parties” means the Tranche 2 Lenders and the beneficiaries of
each indemnification obligation undertaken by Rite Aid, any other Loan Party or
Holdings or any of its subsidiaries under any Senior Loan Document in respect of
the Tranche 2 Term Loans, and the successors and permitted assigns of each of
the foregoing.

“Interim Subsidiary Loan Party Guarantee Agreement” means the Interim Subsidiary
Loan Party Guarantee Agreement dated as of June 4, 2007, among the Subsidiary
Loan Parties and the Senior Collateral Agent for the benefit of the Interim
Secured Parties.

“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 securities, any purchase option, call or
similar right of a third party with respect to such securities.

“Majority Senior Parties” means the Required Lenders (as defined in the Senior
Credit Agreement), or with respect to any waiver, amendment or request, Senior
Lenders having such amount of unused Commitments, Revolving Exposures and
outstanding Term Loans as may be required under the Senior Credit Agreement to
approve the same.

“Moody’s” means Moody’s Investors Service, Inc., or any successor to its
business of rating debt securities.

5

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

“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;

(b) with respect to the proceeds received by the Borrower or a Subsidiary from
or in respect of an issuance in the public or private capital markets of
long-term debt securities, of equity securities or of equity-linked (e.g., trust
preferred) securities, an amount equal to the cash proceeds received by the
Borrower or any of the Subsidiaries from or in respect of such issuance, less
any reasonable transaction costs, including investment banking and underwriting
fees, discounts and commissions and any other expenses (including legal fees and
expenses) reasonably incurred by such Person in respect of such issuance;

(c) with respect to any Securitization, an amount equal to the cash proceeds
received by the Borrower or any of the Subsidiary from or in respect of such
Securitization, less any reasonable transaction costs, including investment
banking and underwriting fees, discounts and commissions and any other expenses
(including legal fees and expenses) reasonably incurred by such Person in
respect of such Securitization; and

(d) with respect to a Casualty/Condemnation, the amount of Casualty/Condemnation
Proceeds.

“Obligors” means Rite Aid, the Subsidiary Guarantors, the Subsidiary Loan
Parties and any other Person who is liable for any of the Secured Obligations.

6

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

“Original Restatement Effective Date” means September 30, 2005.

“Permitted Disposition” means any of the following, other than sales of
Securitization Assets in a Securitization:

(a) dispositions of inventory at retail, cash, cash equivalents and other cash
management investments and obsolete, unused, uneconomic or unnecessary equipment
or inventory, in each case in the ordinary course of business;

(b) a disposition to a Subsidiary Loan Party, provided that if the property
subject to such disposition constitutes Collateral immediately before giving
effect to such disposition, such property continues to constitute Collateral
subject to the Senior Lien and the Second Priority Lien;

(c) a sale or discount, in each case without recourse and in the ordinary course
of business, of overdue Accounts (as defined in the Senior Credit Agreement)
arising in the ordinary course of business, but only to the extent such Accounts
are no longer Eligible Accounts Receivable (as defined in the Senior Credit
Agreement) and such sale or discount is in connection with the compromise or
collection thereof consistent with customary industry practice (and not as part
of any bulk sale);

(d) Basket Asset Sales; and

(e) sales of Accounts Receivable (as defined in the Senior Subsidiary Security
Agreement) relating to worker’s compensation claims to collection agencies
pursuant to the Borrower’s customary cash management procedures.

“Permitted Investments” means any investment by any Person in (a) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (b) commercial paper
rated at least A-1 by S&P and P-1 by Moody’s, (c) time deposits with, including
certificates of deposit issued by, any office located in the United States of
any bank or trust company which is organized or licensed under the laws of the
United States or any state thereof and has capital, surplus and undivided
profits aggregating at least $500,000,000, (d) repurchase agreements with
respect to securities described in clause (a) above entered into with an office
of a bank or trust company meeting the criteria specified in clause (c) above,
provided in each case that such investment matures within one year from the date
of acquisition thereof by such Person or (e) money market mutual funds at least
80% the assets of which are held in investments referred to in clauses
(a) through (d) above (except that the maturities of certain investments held by
any such money market funds may exceed one year so long as the dollar-weighted
average life of the investments of such money market mutual fund is less than
one year).

“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).

“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. “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 issued in a dollar for dollar exchange
therefor pursuant to an exchange offer registered with the SEC.

“Representatives” means the Senior Collateral Agent and the Second Priority
Representatives.

7

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

“Restatement Date Indentures” mean, collectively, (a) the 7.5% Note Indenture,
(b) the 2017 7.5% Note Indenture, (c) the 8.125% Note Indenture, (d) the 8.625%
Note Indenture and (e) the 9.25% Note Indenture.

“Rite Aid” means Rite Aid Corporation, a Delaware corporation, and its
successors.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw- Hill
Companies, Inc., or any successor to its business of rating debt securities.

“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.

“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 8.125% Notes, the
7.5% Notes and the 2017 7.5% 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 (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 Original Restatement
Effective Date, matures the date that is three months after the Tranche 2 Term
Maturity Date; provided, however, that (A) such Indebtedness is permitted to be
incurred, secured and Guaranteed on such basis by each Senior Loan 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 10.12 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 Debt, including
the Second Priority Collateral Documents.

“Second Priority Debt Facility” means the indenture or other governing agreement
or instrument with respect to any 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

8

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

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.

“Second Priority Debt Parties” means with respect to any series, issue or class
of Second Priority Debt, the holders of such Debt, 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 Debt, a trustee or agent therefore 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 Instructing Group” means Second Priority Representatives with
respect to Second Priority Debt Facilities under which at least a majority of
the then aggregate amount of Second Priority Debt Obligations are outstanding.

“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 each 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.

“Second Restatement Effective Date” means the date on which the Senior Credit
Agreement becomes effective pursuant to its terms.

“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 Collateral” means all the “Collateral” as defined in any Senior
Collateral Document.

“Senior Collateral Agent” means Citicorp North America, Inc., in its capacity as
the senior collateral processing agent under the Senior Collateral Documents and
the Interim Collateral Documents, as the case may be, and its successors.

“Senior Collateral Disposition” means (a) any sale, transfer or other
disposition of Senior Collateral (including any property or assets that would
constitute Senior Collateral but for the release of the Senior

9

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

Lien with respect thereto in connection with such sale, transfer or other
disposition), other than a Permitted Disposition or (b) a Casualty/Condemnation
with respect to Senior Collateral.

“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 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 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 June 4, 2007
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.

“Senior Hedging Agreement” means any Hedging Agreement entered into with Rite
Aid or any Subsidiary, if the applicable counterparty was a Senior Lender, a
Tranche 2 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, 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;
provided that, prior to the Borrowing Base Date, the term Senior Lender shall
not include any such “Lender” in its capacity as a Tranche 2 Lender.

“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, the Notes referred to
in the Senior Credit Agreement, each Senior Hedging Agreement, the Senior
Collateral Documents and, prior to the Borrowing Base Date, the Interim
Collateral Documents.

“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
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 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

10

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

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; provided that, prior to the Borrowing Base Date,
the term Senior Obligations shall not include any amount included in the
definition of the term Interim Obligations.

“Senior 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; provided that, prior to the
Borrowing Base Date, the term Senior Secured Parties shall not include any
Interim Secured Parties.

“Senior Subsidiary Guarantee Agreement” means the Amended and Restated Senior
Subsidiary Guarantee Agreement, 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, 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.

“Subsidiary” means any subsidiary of the Borrower.

“Subsidiary Guarantor” means each Subsidiary that is party to any Second
Priority 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; provided that (a) no Subsidiary that engages solely in the Borrower’s
pharmacy benefits management business shall be deemed a Subsidiary Loan Party
and (b) Holdings and its subsidiaries shall not be Subsidiary Loan Parties prior
to the Borrowing Base Date.

“Triggering Event” shall have the meaning assigned to such term in the
Collateral Trust and Intercreditor Agreement.

“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.

11

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