exhibit10-3.htm


     

     

     

    Exhibit
10.3


      Amendment No. 11 to
Receivables Financing Agreement

       

      This
AMENDMENT NO. 11 TO RECEIVABLES FINANCING AGREEMENT, dated as of
February 18, 2009 (this “Amendment
Agreement”), is made by and among Rite Aid Funding II (the “Borrower”), CAFCO,
LLC (“CAFCO”),
CRC FUNDING, LLC (“CRC”), Falcon Asset
Securitization Company LLC (“Falcon”), Variable
Funding Capital Company LLC (“Variable”; together
with CAFCO, CRC and Falcon, the “Investors”),
Citibank, N.A. (“Citibank”), JPMorgan
Chase Bank, N.A. (“JPMorgan”) and
Wachovia Bank, National Association (“Wachovia”; together
with Citibank and JPMorgan, the “Banks”), Citicorp
North America, Inc., as program agent (the “Program Agent”),
Citicorp North America, Inc. (“CNAI”), JPMorgan and
Wachovia, as investor agents (CNAI, JPMorgan and Wachovia, in such capacity, the
“Investor
Agents”), Rite Aid Hdqtrs. Funding, Inc. (the “Collection Agent”),
each of the parties named in Schedule III to the Agreement (as defined below) as
originators (the “Originators”) and The
Bank of New York Mellon, as Trustee.

       

      Preliminary
Statements.  (1) The Borrower, the Investors (other than
CRC), the Program Agent, the Banks, the Investor Agents, the Collection Agent,
the Originators and The Bank of New York Mellon, as Trustee are parties to a
Receivables Financing Agreement, dated as of September 21, 2004, as amended
as of September 20, 2005, December 30, 2005, September 19, 2006,
November 9, 2006, February 20, 2007, August 31, 2007,
September 18, 2007, September 16, 2008, January 15, 2009 and
January 22, 2009 (the “Agreement”;
capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to them in the Agreement).

       

      (2)    The
Borrower, the Investors, the Program Agent, the Banks, the Investor Agents, the
Collection Agent and the Originators wish to amend the Agreement.

       

      NOW,
THEREFORE, the parties agree as follows:

       

      SECTION
1.      Amendments to
Agreement.  As of the Effective Date (as defined below in
Section 2), the Agreement is amended as follows:

       

      1.1     Section
1.01 of the Agreement is amended as follows:

       

      (a)    The
definition of “Alternate Base Rate” is amended by (i) deleting the word “and” at
the end of each sub-clause (i) in each of clauses (a), (b) and (c) therein,
(ii) deleting the period at the end of each sub-clause (ii) in each of
clauses (a), (b) and (c) therein and in lieu thereof inserting the word “; and”,
and (iii) inserting a new sub-clause (iii) in each of clauses (a), (b) and (c)
therein as follows:

       

      “(iii)    the
Eurodollar Rate (without giving effect to clause (b) thereof) for a Fixed Period
of one month beginning on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1.00% per annum.”

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      (b)    The
definition of “Bank Commitment” is amended by (i) deleting the amount
“$325,000,000” in clause (a) thereof and replacing it with the amount
“$173,000,000”, (ii) deleting the amount “$125,000,000” in clause (b)
thereof and replacing it with the amount “$66,000,000”, and (iii) deleting
the amount “$200,000,000” in clause (c) thereof and replacing it with the
amount “$106,000,000”.

       

      (c)    The
definition of “Change in Control” is amended by adding the clause “or the Jean
Coutu Group (PJC) Inc. and its Affiliates” after the term “Affiliates,” in the
fourth line thereof.

       

      (d)    The
definition of “Concentration Limit” is amended by deleting the phrase “higher
amount” in the second line thereof and replacing it with the phrase “higher
percentage”.

       

      (e)    Clause
(ix) of the definition of “Eligible Receivable” is amended by adding the phrase
“(except those created by the Second Lien Credit Agreement)” after the words
“Adverse Claim” appearing therein.

       

      (f)     The
definition of “Eurodollar Rate” is amended by (i) inserting the words “the
higher of (a)” after the words “an interest rate per annum equal to” in the
first sentence thereof, (ii) inserting the words “and (b) 3.00% per annum”
before the period at the end of the first sentence thereof, (iii) deleting the
words “In the event such rate” and inserting in lieu thereof the words “In the
event the rate determined in accordance with clause (a) above”, and (iv)
deleting the words “then the Eurodollar Rate” and inserting in lieu thereof the
words “then the rate determined in accordance with clause (a)
above”.

       

      (g)    The
definition of “Facility Amount” is amended by deleting the amount “$650,000,000”
in the first line thereof and replacing it with the amount
“$345,000,000”.

       

      (h)    The
definition of “Intercreditor Agreement” is amended by replacing the reference to
“September 21, 2004” with a reference to “September 22, 2004”.

       

      (i)     The
definition of “Investor Facility Amount” is amended by (i) deleting the
amount “$325,000,000” in clause (a) thereof and replacing it with the
amount “$173,000,000”, (ii) deleting the amount “$125,000,000” in
clause (b) thereof and replacing it with the amount “$66,000,000”, and
(iii) deleting the amount “$200,000,000” in clause (c) thereof and
replacing it with the amount “$106,000,000”.

       

      (j)     The
definition of “Net Receivables Pool Balance” is amended by deleting the text in
lines 7 to 9 beginning with the words “(A) in the case of” and ending with the
words “all other Obligors”.

       

      (k)    The
definition of “Percentage” is restated in its entirety to read as
follows:

       

      “‘Percentage’ of any
Bank means, (a) with respect to Citibank, 50.1449275%, or such amount as reduced
or increased by any Assignment and Acceptance entered into with an Eligible
Assignee, (b) with respect to JPMorgan, 19.1304348%, or such

       


      
        
           


        

        
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      amount
as reduced or increased by any Assignment and Acceptance entered into with an
Eligible Assignee, (c) with respect to Wachovia, 30.7246377%, or such
amount as reduced or increased by any Assignment and Acceptance entered into
with an Eligible Assignee, or (d) with respect to a Bank that has entered into
an Assignment and Acceptance, the amount set forth therein as such Bank’s
Percentage, or such amount as reduced or increased by an Assignment and
Acceptance entered into between such Bank and an Eligible
Assignee.”

       

      (l)     A
new definition of “Second Lien Agent” is added which reads in its entirety as
follows:

       

      “‘Second Lien Agent’
means CNAI in its capacity as administrative agent and collateral processing
agent under the Second Lien Credit Agreement, and any successor to CNAI
thereunder.”

       

      (m)   A
new definition of “Second Lien Borrowing Base Deficiency” is added which reads
in its entirety as follows:

       

      “‘Second Lien Borrowing Base
Deficiency” means, on any date, the excess, if any, of (x) the “Facility
Principal” (as defined in the Second Lien Credit Agreement), over (y) the
“Borrowing Base” (as defined in the Second Lien Credit Agreement).”

       

      (n)    A
new definition of “Second Lien Credit Agreement” is added which reads in its
entirety as follows:

       

      “‘Second Lien Credit
Agreement’ means that certain Credit Agreement dated as of
February 18, 2009 among the Borrower, the Originators, certain lenders
party thereto, HQ, as collection agent, and the Second Lien Agent, as the same
may be amended, modified or restated from time to time.”

       

      (o)    A
new definition of “Second Lien Intercreditor Agreement” is added which reads in
its entirety as follows:

       

      “‘Second Lien Intercreditor
Agreement’ means that certain Intercreditor Agreement dated as of
February 18, 2009 by and among the Program Agent, the Borrower and the
Second Lien Agent, as the same may be amended, modified or restated from time to
time.”

       

      (p)    The
definition of “Transaction Document” is amended by adding the term “the Second
Lien Intercreditor Agreement,” after the term “the Intercreditor Agreement,” in
the second line thereof.

       


      
        
           


        

        
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      1.2      Section 1.02
of the Agreement is amended by deleting the term “generally accepted accounting
principals” in the second line thereof and replacing it with the term
“GAAP”.

       

      1.3      Section 2.04(a)
of the Agreement is amended by deleting clause (i) thereof, renumbering clause
(ii) thereof as a new clause (i) thereof, deleting the word “and” at the end of
the newly renumbered clause (i) thereof, and inserting a new clause (ii) as
follows:

       

      “(ii)     at
any time that there exists a Second Lien Borrowing Base Deficiency, deposit to
and hold in the Trustee’s Account, in trust for the Beneficiaries and the
Collection Agent, all Collections (which Collections shall thereafter be applied
pursuant to Section 2.04(i)); and”

       

      1.4      Section 2.04(a)(iii)
of the Agreement is amended by inserting the following clause prior to the
semicolon at the end thereof:

       

      “unless
otherwise instructed by the Borrower pursuant to Section 2.04(d) (and if no
such instructions shall have been given by the Borrower, unless otherwise
instructed in writing by the Second Lien Agent, which instructions shall state
that such remaining Collections will be applied to amounts due and owing under
the Second Lien Credit Agreement and otherwise in accordance with the terms of
the Second Lien Credit Agreement)”

       

      1.5      Section 2.04(a)
of the Agreement is amended by inserting the following sentence at the end of
the proviso thereto:

       

      “The
Daily Report delivered by the Collection Agent to the Trustee on each Deposit
Date shall set forth (x) the amount of the Second Lien Borrowing Base Deficiency
and (y) the amount of funds then held in the Trustee’s Account pursuant to any
previous application of clause (ii) of Section 2.04(a) or clause (iii) of
Section 2.04(b).”

       

      1.6      Section 2.04(b)
of the Agreement is amended by inserting the words “during the Revolving Period”
after the first appearance of the words “Fixed Period” in the first sentence
thereof, deleting clause (i) thereof, renumbering clause (ii) thereof as a new
clause (i) thereof, renumbering clause (iii) thereof as a new clause (ii)
thereof, deleting the word “and” at the end of the newly renumbered clause (ii)
thereof, and inserting a new clause (iii) as follows:

       

      “(iii)    at
any time that there exists a Second Lien Borrowing Base Deficiency, deposit to
and hold in the Trustee’s Account, in trust for the Beneficiaries and the
Collection Agent, all Collections (which Collections shall thereafter be applied
pursuant to Section 2.04(i)); and”

       

      1.7      Section 2.04(b)
of the Agreement is amended by inserting the following sentence at the end of
the proviso thereto:

       


      
        
           


        

        
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      “The
Daily Report delivered by the Collection Agent to the Trustee on each Deposit
Date shall set forth (x) the amount of the Second Lien Borrowing Base Deficiency
and (y) the amount of funds then held in the Trustee’s Account pursuant to any
previous application of clause (ii) of Section 2.04(a) or clause (iii) of
Section 2.04(b).”

       

      1.8      Sections 2.04(b)(iv)
and 2.04(c)(iii) of the Agreement are each hereby amended by inserting the
following parenthetical expression prior to the semicolon or period (as
applicable) at the end thereof:

       

      “(unless
otherwise instructed in writing by the Second Lien Agent, which instructions
shall state that such remaining Collections will be applied to amounts due and
owing under the Second Lien Credit Agreement and otherwise in accordance with
the terms of the Second Lien Credit Agreement)”.

       

      1.9      Section
2.04(d) of the Agreement is amended by adding the following phrase prior to the
period at the end thereof:

       

      “for
distribution on account of Facility Principal pursuant to Section
2.04A”.

       

      1.10    The
first paragraph of Section 2.04(e) of the Agreement is amended by inserting
the following proviso prior to the period at the end thereof:

       

      “;
provided, further, that if the
Second Lien Agent shall have otherwise instructed the Trustee in writing as to
the deposit of funds that are to be transferred to the Borrower’s Account or
distributed to the Borrower, the Trustee shall follow such instructions of the
Second Lien Agent, which instructions shall state that such remaining Cure Funds
will be applied to amounts due and owing under the Second Lien Credit Agreement
and otherwise in accordance with the terms of the Second Lien Credit
Agreement.”

       

      1.11    A
new Section 2.04(i) is inserted after Section 2.04(h) as
follows:

       

      “(i)     To
the extent that any amounts have been deposited to the Trustee’s Account
pursuant to Section 2.04(a)(ii) or Section 2.04(b)(iii), such amounts shall be
held in the Trustee’s Account until the earlier of (x) the date on which the
Collection Agent certifies in writing to the Trustee, annexing a Daily Report
evidencing such certification, that there is no Second Lien Borrowing Base
Deficiency, in which case, the Trustee shall promptly deposit into the
Borrower’s Account any amounts then in the Trustee’s Account which were
previously deposited pursuant to Section 2.04(a)(ii) or Section 2.04(b)(iii),
and (y) the date on which the “Cure Period” (as such term is defined in the
Second

       


      
        
           


        

        
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      Lien
Credit Agreement) ends, in which case any amounts then in the Trustee’s Account
which were previously deposited pursuant to Section 2.04(a)(ii) or Section
2.04(b)(iii) shall be available for distribution on the next Distribution Date
pursuant to Section 2.04A and shall be distributed to the Investor Agent’s
Accounts for the ratable distribution to the applicable Investors and Banks, in
reduction of the Facility Principal (regardless of whether such Distribution
Date occurs during the Revolving Period or the Amortization
Period).

       

      1.12    Sections 2.04A(a)(ix)
and 2.04A(b)(viii) of the Agreement are each hereby amended by inserting the
following parenthetical expression prior to the period at the end
thereof:

       

      “(unless
otherwise instructed in writing by the Second Lien Agent, which instructions
shall state that such remaining funds will be applied to amounts due and owing
under the Second Lien Credit Agreement and otherwise in accordance with the
terms of the Second Lien Credit Agreement)”.

       

      1.13    The
last paragraph of Section 2.04A(b) of the Agreement is amended by deleting
the words “provided, however” and
inserting in lieu thereof the following:

       

      “;
provided, however, that if the
Second Lien Agent shall have otherwise instructed the Trustee in writing as to
the deposit of funds that are to be transferred to the Borrower’s Account or
distributed to the Borrower, the Trustee shall follow such instructions of the
Second Lien Agent, which instructions shall state that such remaining funds will
be applied to amounts due and owing under the Second Lien Credit Agreement and
otherwise in accordance with the terms of the Second Lien Credit Agreement;
provided, further,”

       

      1.14    Section 4.01(h)
the Agreement is amended in its entirety to read as follows:

       

      “(h)   
The Borrower is the legal and beneficial owner of the Transferred Assets and
Related Security free and clear of any Adverse Claim except those created by the
Second Lien Credit Agreement.  The Program Agent for the benefit of
the Investors and the Banks has a valid and perfected first priority security
interest in each Transferred Asset now existing or hereafter arising and in the
Related Security and Collections with respect thereto.  No effective
financing statement or other instrument similar in effect covering any
Collateral is on file in any recording office, except those relating to the
Credit Agreement, the Second Lien Credit Agreement and the Indentures, all of
which the Borrower represents relate to security interests that are subject to
the Intercreditor Agreement and the Second Lien Intercreditor

       


      
        
           


        

        
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      Agreement,
those filed by the Second Lien Agent pursuant to the Second Lien Credit
Agreement, those filed in favor of the Program Agent relating to this Agreement
and those filed pursuant to the Purchase Agreements.  Each Transferred
Asset characterized in any Borrower Report or other written statement made by or
on behalf of the Borrower as an Eligible Receivable or Eligible Participation
Interest, or as included in the Net Receivables Pool Balance is, as of the date
of such Borrower Report or other statement (or, if applicable, as of a date
certain specified in such report), an Eligible Receivable or Eligible
Participation Interest, or properly included in the Net Receivables Pool
Balance.”

       

      1.15    Section 5.01(d)
of the Agreement is amended in its entirety to read as follows:

       

      “(d)  Sales, Liens,
Etc.  Except for the security interest created hereunder and
the security interest created under the Second Lien Credit Agreement in favor of
the Second Lien Agent, the Borrower will not sell, assign (by operation of law
or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse
Claim upon or with respect to any Collateral, or upon or with respect to any
account to which any Collections of any Pool Receivable or Participated
Receivable are sent, or assign any right to receive income in respect
thereof.”

       

      1.16    Clauses (xiii)
and (xiv) of Section 5.01(k) of the Agreement are each hereby amended by
deleting the term “Funding Agents” where it appears therein and replacing it
with the term “Investor Agents”.

       

      1.17    Section 5.01(n)
of the Agreement is amended in its entirety to read as follows:

       

      “(n)  Nature of
Business.  The Borrower will not engage in any business other
than the purchase or acquisition of Transferred Assets, Related Security and
Collections from Cayman SPE I and the transactions contemplated by this
Agreement and by the Second Lien Credit Agreement.  The Borrower will
not create or form any Subsidiary.”

       

      1.18    Section
5.01(q) of the Agreement is amended in its entirety to read as
follows:

       

      “(q)  Debt.  The
Borrower will not incur any Debt, other than any Debt incurred pursuant to this
Agreement or the Second Lien Credit Agreement.”

       

      1.19    New
Sections 5.01(u), 5.01(v), 5.01(w) and 5.01(x) are inserted in the appropriate
location as follows:

       

      “(u)    Amendments to the Second
Lien Credit Agreement.  The Borrower may agree or consent to
any amendment, supplement or

       


      
        
           


        

        
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      modification
to the Second Lien Loan Documents (as defined in the Second Lien Intercreditor
Agreement) in accordance with their terms, in each case, without the consent of,
or prior notice to the Program Agent or the First Lien Claimholders (as defined
in the Second Lien Intercreditor Agreement); provided, however, that any
such amendment, supplement or modification shall not, without the consent of the
Program Agent and each Investor Agent:

       

      (i)     increase
the aggregate principal amount of loans or other extensions of credit under the
Second Lien Loan Documents (as defined in the Second Lien Intercreditor
Agreement) or commitments therefor so that the aggregate principal amount of
such loans or other extensions of credit and commitments is in excess of
$225,000,000;

       

      (ii)    modify
the method of computing interest or increase the interest rate (including by any
increase in the “applicable margin” or similar component of the interest rate)
or yield provisions applicable to the Second Lien Obligations (as defined in the
Second Lien Intercreditor Agreement) or any commitment fee, facility fee,
utilization fee, or similar fee so that the combined interest rate and fees are
increased by more than 2% per annum in the aggregate (excluding increases
resulting from (A) increases in the underlying reference rate not caused by
any amendment, supplement or modification of the Second Lien Credit Agreement,
or (B) accrual of interest at the rate applicable following an “Event of
Default” under the Second Lien Credit Agreement as in effect on the date
hereof);

       

      (iii)   change
any representations, warranties, covenants, defaults, events of default or other
provisions (including the addition of defaults or events of default not
contained in the Second Lien Loan Documents (as defined in the Second Lien
Intercreditor Agreement) as of the date hereof) in any manner that makes them
more restrictive as to the Borrower, except to make conforming changes to match
changes made to the First Lien Loan Documents (as defined in the Second Lien
Intercreditor Agreement), on substantially similar economic terms;

       

      (iv)   change
to earlier dates any dates upon which payments of principal or interest are due
thereon or otherwise alter any provisions that decrease the weighted average
life to maturity;

       

      (v)    change
the prepayment, redemption, or defeasance provisions thereof if the effect of
such change is to require any new

       


      
        
           


        

        
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      payment
or accelerate the payment date of any existing payment obligation;
or

       

      (vi)   change
or amend any other term of the Second Lien Loan Documents (as defined in the
Second Lien Intercreditor Agreement) if such change or amendment would result in
a default under this Agreement, increase the obligations of the Borrower or
confer additional rights on any Second Lien Claimholder (as defined in the
Second Lien Intercreditor Agreement) in a manner adverse in any respect to any
of the First Lien Claimholders (as defined in the Second Lien Intercreditor
Agreement).

       

      (v)    Notice of
Amendments.  In the event the Second Lien Loan Documents (as
defined in the Second Lien Intercreditor Agreement) are amended, supplemented or
otherwise modified, the Borrower shall provide a copy of each such amendment,
supplement or modification to the Program Agent at least five (5) Business Days
prior to the effective date thereof.”

       

      (w)   Refinancing of Second Lien
Obligations.  The Borrower will not refinance the Debt under
the Second Lien Credit Agreement unless (i) the Program Agent and each
Investor Agent have consented thereto or the terms of such refinanced Debt, if
contained in an amendment to the Second Lien Credit Agreement, would not require
the consent of the Program Agent and the Investor Agents pursuant to
Section 5.01(u) and (ii) the holders of such refinanced Debt (or an agent
for such holders) agree in writing, at or prior to the time of such refinancing,
to be bound by the terms of the Second Lien Intercreditor
Agreement.

       

      (x)    Prepayment of the Second
Lien Obligations.  The Borrower will not make any optional
prepayment, in whole or in part, of the principal amount of the Debt outstanding
under the Second Lien Credit Agreement unless (i) the Program Agent and
each Investor Agent have consented thereto or (ii) such prepayment is a
prepayment in full in connection with a refinancing permitted by
Section 5.01(w) and the principal amount of the refinanced Debt outstanding
immediately following the refinancing is equal to the principal amount of the
Debt prepaid.

       

      1.20    Section
6.06(d) of the Agreement is amended by (i) deleting the words “, except as
provided in the second to last sentence of this Section 6.06(d)” at the end of
the first paragraph thereof. and (ii) deleting in their entirety the second and
third sentences of the second paragraph thereof.

       


      
        
           


        

        
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      1.21    Section 7.01(d)
of the Agreement is amended by deleting the reference to “5.01(p) or 5.01(q)”
therein and inserting in lieu thereof a reference to “5.01(p), 5.01(q), 5.01(u),
5.01(w) or 5.01(x)”.

       

      1.22    Section 7.01(k)
of the Agreement is amended in its entirety to read as follows:

       

      (k)
(i) An “Event of Termination” or “Facility Termination Date” shall occur under
any Purchase Agreement or any Purchase Agreement shall cease to be in full force
or effect, or (ii) an “Event of Default” shall occur under the Second Lien
Credit Agreement, or (iii) the Second Lien Agent shall deliver to the Program
Agent a notice of the type described in Section 3.1(a)(1) of the Second Lien
Intercreditor Agreement (which triggers the start of the “Standstill Period”
thereunder).”

       

      1.23    Section 7.01(q)
of the Agreement is amended in its entirety to read as follows:

       

      “(q) Any
Governmental Entity Receivables Account Notice or “Governmental Entity
Receivables Account Notice” (as defined in the Second Lien Credit Agreement)
shall be revoked or revised.”

       

      1.24    The
proviso in the final paragraph of Section 7.01 of the Agreement is amended by
(i) deleting the reference to “paragraph (g) of this Section 7.01” and
replacing it with a reference to “paragraph (g) of this Section 7.01 or clause
(iii) of paragraph (k) of this Section 7.01”, and (ii) after the words “the
Commitment Termination Date shall occur”, inserting the words “and, in the case
of an event described in paragraph (g),”.

       

      1.25    Section
11.05 of the Agreement is amended by inserting a new clause (c) in the
appropriate location as follows:

       

      “(c)    The
Collection Agent and each Originator hereby agrees that it will not institute
against, or join any other Person in instituting against, the Borrower any
proceeding of the type referred to in Section 7.01(g) so long as there
shall not have elapsed one year plus one day since the later of the Facility
Termination Date and the date on which all Obligations shall have been paid in
full.”

       

      1.26    A
new Section 11.14 of the Agreement is inserted in the appropriate location as
follows:

       

      Section
11.14     Second Lien Intercreditor
Agreement.  Notwithstanding anything herein to the contrary,
the exercise of certain rights and remedies by the Program Agent hereunder is
subject to the provisions of the Second Lien Intercreditor
Agreement.  In the event of any conflict between the terms of the
Second Lien Intercreditor Agreement and this Agreement, the terms of the Second
Lien Intercreditor Agreement shall govern and control.

       


      
        
           


        

        
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      1.27    Schedule I (Deposit Banks
and Account Banks) to the Agreement is amended by deleting the contents
thereof and inserting in lieu thereof the following:

       

      Mellon
Bank, N.A.

      500
Ross Street, Room 154-1380

      Pittsburgh,
PA 15262-0001

      Attn:
Document Control Group Manager

       

      Account
Number: 0693636

      Account
Number: 103-7294

       

      1.28    Schedule II (Credit and
Collection Policy), and Schedule V (Material
Litigation) to the Agreement are each amended in their entirety to read
as set forth in Schedule II and Schedule V, respectively, to this Amendment
Agreement.

       

      SECTION
2.      Conditions to
Effectiveness  This Amendment Agreement shall become effective
when the following documents have been delivered to the Program Agent, each in
form and substance satisfactory to the Program Agent and the Investor Agents
(the “Effective
Date”):

       

      (a)    fully
executed counterparts of this Amendment Agreement;

       

      (b)    fully
executed counterparts of the Second Lien Intercreditor Agreement;

       

      (c)    fully
executed copies of an amendment and/or restatement of the Intercreditor
Agreement;

       

      (d)    fully
executed counterparts of an omnibus amendment to each of the Parent
Undertakings;

       

      (e)    fully
executed counterparts of amendments to each of the Deposit Account Agreement and
the Governmental Entity Receivables Agreement;

       

      (f)     fully
executed counterparts of an omnibus amendment to each of the Purchase
Agreements;

       

      (g)    copies
of executed copies of the Second Lien Credit Agreement and all related
documents; and

       

      (h)    favorable
opinions of Skadden, Arps, Slate, Meagher & Flom LLP, as counsel for the
Borrower, the Predecessor Purchasers, the Parent and the other Originators, as
to such matters as the Program Agent or any Investor Agent may reasonably
request.

       

      SECTION
3.      Representations and
Warranties.  Each of the Borrower and the Collection Agent
represents and warrants that each of the representations and warranties
contained in Section 4.01 and Section 4.02, respectively, of the
Agreement (after giving effect to this Amendment Agreement) are correct in all
material respects on and as of the date of this Amendment Agreement as though
made on and as of such date.

       


      
        
           


        

        
          11

          
            

          

        

        
           


        

      


      


       

      SECTION
4.      Confirmation of
Agreement.  Each reference in the Agreement to “this Agreement”
or “the Agreement” shall mean the Agreement as amended by this Amendment
Agreement, and as hereafter amended or restated.  Except as herein
expressly amended, the Agreement is ratified and confirmed in all respects and
shall remain in full force and effect in accordance with its terms.

       

      SECTION
5.      Confirmation of Parent
Undertakings.  The Parent, by its signature below, hereby
confirms and agrees that notwithstanding the effectiveness of this Amendment
Agreement, after giving effect to the amendments thereto on the date of the
Amendment Agreement (a) the Parent Undertakings shall continue to be in full
force and effect and shall apply to the Agreement as amended as contemplated by
this Amendment Agreement, and (b) the Parent Undertakings are hereby ratified
and confirmed.

       

      SECTION
6.      Consent to Amendments of
Purchase Agreements.  Pursuant to the provisions of
Section 5.01(m) of each  of the Agreement, the Tertiary Purchase
Agreement and the Secondary Purchase Agreement , each of the Program Agent and
each Investor Agent hereby consents to the amendments to the Purchase Agreements
referred to in clause (f) of Section 2.

       

      SECTION
7.      Authorization of Second Lien
Intercreditor Agreement.  Each Investor, each Bank and each
Investor Agent authorizes the Program Agent to enter into the Second Lien
Intercreditor Agreement as agent on its behalf.

       

      SECTION
8.      Costs and
Expenses.  The Borrower agrees to pay on demand all reasonable
costs and expenses in connection with the preparation, execution and delivery of
this Amendment Agreement and any other documents to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Program Agent, the Investor Agents, the Investors, the Banks and
the Trustee with respect thereto.

       

      SECTION
9.      GOVERNING
LAW.  THIS AMENDMENT AGREEMENT SHALL, IN ACCORDANCE WITH
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK,  BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES THEREOF
THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION.

       

      SECTION
10.    Execution in
Counterparts.  This Amendment Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same
agreement.  Delivery of an executed counterpart of a signature page to
this Amendment Agreement by facsimile or by electronic transmission in portable
document format (.pdf) shall be effective as delivery of a manually executed
counterpart of this Amendment Agreement.

       

      [Remainder
of this page intentionally left blank]

       


      
        
           


        

        
          12

          
            

          

        

        
           


        

      


      IN
WITNESS WHEREOF, the parties have caused this Amendment Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

       

      
        
          
            	 
      	
                    RITE
      AID FUNDING II

                  
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                    By:

                  	/s/
      James J. Comitale	 
      
	 
      	 
      	
                    Name:
      James J. Comitale

                  
	 
      	 
      	
                    Title:   
      Vice President

                  
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                    CAFCO,
      LLC

                  
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                    By:

                  	
                    Citicorp
      North America,

                    Inc.,
      as Attorney-in-Fact

                  
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                    By:

                  	/s/
      Tom Sullivan	 
      
	 
      	 
      	 
      	
                    Name:
      Tom Sullivan

                  
	 
      	 
      	 
      	
                    Title:    Director,
      VP

                  
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                    CRC
      FUNDING, LLC

                  
	 
      	 
      	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    Citicorp
      North America,

                    Inc.,
      as Attorney-in-Fact

                  
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                    By:

                  	/s/
      Tom Sullivan 	 
      
	 
      	 
      	 
      	
                    Name:
      Tom Sullivan

                  
	 
      	 
      	 
      	
                    Title:   
      Director, VP

                  


          

        

      

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


      
        
          
            
              
                
                  
                    	 
      	 
      	 
      	 
      	 
      
	 
      	
                            FALCON
      ASSET SECURITIZATION

                              COMPANY
      LLC

                          
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            By:

                          	
                            JPMorgan
      Chase Bank, N.A., its

                            attorney-in-fact

                          
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            By:

                          	/s/
      John M. Kuhns	 
      
	 
      	 
      	
                            Name: 
      John M. Kuhns

                          	 
      
	 
      	 
      	
                            Title:    
      Exec Director

                          	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            VARIABLE
      FUNDING CAPITAL

                            COMPANY
      LLC

                          
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            By:

                          	
                            Wachovia
      Capital Markets, LLC, as Attorney-in-Fact

                          
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                            By:

                          	/s/
      Douglas R. Wilson, Sr.	 
      
	 
      	 
      	 
      	
                            Name:
      Douglas R. Wilson, Sr.

                          	 
      
	 
      	 
      	 
      	
                            Title:   
      Director

                          	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            CITICORP
      NORTH AMERICA, INC.,

                              as
      Program Agent and as an Investor Agent

                          
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            By:

                          	/s/
      Tom Sullivan	 
      
	 
      	 
      	
                            Name:
      Tom Sullivan

                          	 
      
	 
      	 
      	
                            Title:   
      Director, VP

                          	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                            CITIBANK,
      N.A.

                          
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                            By:

                          	/s/
      Tom Sullivan	 
      
	 
      	 
      	
                            Name:
      Tom Sullivan

                          	 
      
	 
      	 
      	
                            Title:   
      Director, VP

                          	 
      


                  

                

              

            

          

        

      

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


      
        
          
            
              
                
                  
                    
                      
                        	 
      	
                                JPMORGAN
      CHASE BANK, N.A.

                                  as
      a Bank and as an Investor Agent

                              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                By:

                              	/s/
      John M. Kuhns	 
      
	 
      	 
      	
                                Name:
      John M. Kuhns

                              	 
      
	 
      	 
      	
                                Title:   
      Exec Director

                              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                WACHOVIA
      BANK, NATIONAL ASSOCIATION

                                  as
      a Bank and as an Investor Agent

                              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                By:

                              	/s/
      Michael J. Landry	 
      
	 
      	 
      	
                                Name: 
      Michael J. Landry

                              	 
      
	 
      	 
      	
                                Title:    
      Vice President

                              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                RITE
      AID HDQTRS. FUNDING INC.

                              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                By:

                              	/s/
      James J. Comitale	 
      
	 
      	 
      	
                                Name:
      James J. Comitale

                              	 
      
	 
      	 
      	
                                Title:   
      Vice President

                              	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                THE
      BANK OF NEW YORK MELLON

                                  as
      Trustee

                              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
                                By:

                              	/s/
      Jared Fischer	 
      
	 
      	 
      	
                                Name:
      Jared Fischer

                              	 
      
	 
      	 
      	
                                Title:   
      Assistant Treasurer

                              	 
      


                      

                    

                  

                

              

            

          

        

      

      


      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      
        	 
      	
                RITE
      AID CORPORATION

              
	 
      	
                RITE
      AID OF CONNECTICUT, INC.

              
	 
      	
                RITE
      AID OF DELAWARE, INC.

              
	 
      	
                RITE
      AID OF GEORGIA, INC.

              
	 
      	
                RITE
      AID OF INDIANA, INC.

              
	 
      	
                RITE
      AID OF KENTUCKY, INC.

              
	 
      	
                RITE
      AID OF MAINE, INC.

              
	 
      	
                RITE
      AID OF MARYLAND, INC.

              
	 
      	
                RITE
      AID OF MICHIGAN, INC.

              
	 
      	
                RITE
      AID OF NEW HAMPSHIRE, INC.

              
	 
      	
                RITE
      AID OF NEW JERSEY, INC.

              
	 
      	
                RITE
      AID OF NEW YORK, INC.

              
	 
      	
                RITE
      AID OF OHIO, INC.

              
	 
      	
                RITE
      AID OF PENNSYLVANIA, 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.

              
	 
      	
                KEYSTONE
      CENTERS, INC.

              
	 
      	
                THE
      LANE DRUG COMPANY

              
	 
      	
                RITE
      AID DRUG PALACE, INC.

              
	 
      	
                THRIFTY
      PAYLESS, INC.

              
	 
      	
                HARCO,
      INC.

              
	 
      	
                PERRY
      DRUG STORES, INC.

              
	 
      	
                APEX
      DRUG STORES, INC.

              
	 
      	
                PDS-1
      MICHIGAN, INC.

              
	 
      	
                RDS
      DETROIT, INC.

              
	 
      	
                K
      & B ALABAMA CORPORATION

              
	 
      	
                K
      & B LOUISIANA CORPORATION

              
	 
      	
                K
      & B MISSISSIPPI CORPORATION

              
	 
      	
                K
      & B TENNESSEE CORPORATION

              
	 
      	
                ECKERD
      CORPORATION

              
	 
      	
                GENOVESE
      DRUG STORES, INC.

              
	 
      	
                EDC
      DRUG STORES, INC.

              
	 
      	
                MAXI
      DRUG, INC.

              
	 
      	
                MAXI
      DRUG SOUTH, L.P.

              
	 
      	
                MAXI
      DRUG NORTH, INC.

              
	 
      	
                MAXI
      GREEN, INC.

              
	 
      	
                THRIFT
      DRUG, INC.

              


      

      


      
        
          
            
              
                
                  
                    	 	 	 	 
	 	 	 	 
	 
      	
                            By:

                          	/s/
      Robert B. Sari	 
      
	 
      	 
      	
                            Name:
      Robert B. Sari

                          	 
      
	 
      	 
      	
                            Title:   
      Exec. VP and Gen. Counsel of Rite Aid

                                      
      Corporation

                                       VP
      as to all other originators