exhibit10-1.htm


    Exhibit
10.1

     

    EXECUTION
COPY

     

    


     

    


     

    


     

    CREDIT
AGREEMENT

     

    Dated
as of February 18, 2009

     

    Among

     

    


     

    RITE
AID FUNDING II

    as the
Borrower

     

    and

     

    the
Lenders party hereto

     

    and

     

    CITICORP
NORTH AMERICA, INC.

    as the Administrative
Agent

     

    and

     

    RITE
AID HDQTRS. FUNDING, INC.

    as Collection
Agent

     

    and

     

    Each of the Parties named on
Schedule III

    hereto as
Originators

     

    and

     

    CITIGROUP
GLOBAL MARKETS INC.

    as the Sole Lead Arranger
and Sole Bookrunning Manager

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
OF CONTENTS

     

    Page

     

    
      	
              ARTICLE
      I DEFINITIONS

            	
              1

            
	
                          SECTION
      1.01.

            	
              Certain
      Defined Terms

            	
              1

            
	
                          SECTION
      1.02.

            	
              Other
      Terms

            	
              21

            
	 
      	 
      	 
      
	
              ARTICLE
      II AMOUNTS AND TERMS OF THE LOANS

            	
              21

            
	
                          SECTION
      2.01.

            	
              The
      Commitments

            	
              21

            
	
                          SECTION
      2.02.

            	
              Loans
      and Borrowings

            	
              22

            
	
                          SECTION
      2.03.

            	
              Requests
      for Borrowings

            	
              22

            
	
                          SECTION
      2.04.

            	
              Funding
      of Borrowings

            	
              23

            
	
                          SECTION
      2.05.

            	
              Interest
      Elections

            	
              23

            
	
                          SECTION
      2.06.

            	
              Repayment
      of Loans; Evidence of Indebtedness

            	
              25

            
	
                          SECTION
      2.07.

            	
              Repayment
      of Loans

            	
              25

            
	
                          SECTION
      2.08.

            	
              Prepayment
      of Loans

            	
              25

            
	
                          SECTION
      2.09.

            	
              Interest

            	
              27

            
	
                          SECTION
      2.10.

            	
              Alternate
      Rate of Interest

            	
              27

            
	
                          SECTION
      2.11.

            	
              Increased
      Costs

            	
              28

            
	
                          SECTION
      2.12.

            	
              Break
      Funding Payments

            	
              29

            
	
                          SECTION
      2.13.

            	
              Fees

            	
              29

            
	
                          SECTION
      2.14.

            	
              Taxes

            	
              30

            
	
                          SECTION
      2.15.

            	
              Payments
      Generally; Pro Rata Treatment; Sharing of Setoffs

            	
              31

            
	
                          SECTION
      2.16.

            	
              Mitigation
      Obligations; Replacement of Lenders

            	
              33

            
	
                          SECTION
      2.17.

            	
              Security
      Interest

            	
              33

            
	
                          SECTION
      2.18.

            	
              Right
      of Setoff

            	
              34

            
	
                          SECTION
      2.19.

            	
              Settlement
      Procedures

            	
              34

            
	 
      	 
      	 
      
	
              ARTICLE
      III CONDITIONS PRECEDENT

            	
              37

            
	
              ARTICLE
      IV REPRESENTATIONS AND WARRANTIES

            	
              41

            
	
                          SECTION
      4.01.

            	
              Representations
      and Warranties of the Borrower

            	
              41

            
	
                          SECTION
      4.02.

            	
              Representations
      and Warranties of the Collection Agent

            	
              44

            
	 
      	 
      	 
      
	
              ARTICLE
      V COVENANTS

            	
              45

            
	
                          SECTION
      5.01.

            	
              Covenants
      of the Borrower

            	
              45

            
	
                          SECTION
      5.02.

            	
              Covenants
      of the Borrower, the Collection Agent and the Originators

            	
              55

            
	 
      	 
      	 
      
	
              ARTICLE
      VI ADMINISTRATION AND COLLECTION OF RECEIVABLES AND PARTICIPATED
      RECEIVABLES

            	
              56

            
	
                          SECTION
      6.01.

            	
              Designation
      of Collection Agent

            	
              56

            
	
                          SECTION
      6.02.

            	
              Duties
      of Collection Agent

            	
              56

            
	
                          SECTION
      6.03.

            	
              Certain
      Rights of the Administrative Agent

            	
              58

            
	
                          SECTION
      6.04.

            	
              Rights
      and Remedies

            	
              59

            
	
                          SECTION
      6.05.

            	
              Further
      Actions Evidencing the Loans

            	
              59

            
	
                          SECTION
      6.06.

            	
              Covenants
      of the Collection Agent and each Originator

            	
              60

            
	
                          SECTION
      6.07.

            	
              Indemnities
      by the Collection Agent

            	
              61

            
	
                          SECTION
      6.08.

            	
              Representations
      of the Collection Agent

            	
              62

            


    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
      	
                          SECTION
      6.09.

            	
              Establishment
      of Deposit Accounts

            	
              63

            
	
                          SECTION
      6.10.

            	
              Establishment
      of Administrative Agent’s Account and Cure Account

            	
              63

            
	 
      	 
      	 
      
	
              ARTICLE
      VII EVENTS OF DEFAULT

            	
              65

            
	
                          SECTION
      7.01.

            	
              Events
      of Default

            	
              65

            
	 
      	 
      	 
      
	
              ARTICLE
      VIII THE ADMINISTRATIVE AGENT

            	
              69

            
	
                          SECTION
      8.01.

            	
              Authorization
      and Action

            	
              69

            
	
                          SECTION
      8.02.

            	
              Administrative
      Agent’s Reliance, Etc.

            	
              70

            
	
                          SECTION
      8.03.

            	
              Administrative
      Agent and Affiliates

            	
              70

            
	
                          SECTION
      8.04.

            	
              Indemnification
      of Administrative Agent

            	
              70

            
	
                          SECTION
      8.05.

            	
              Delegation
      of Duties

            	
              71

            
	
                          SECTION
      8.06.

            	
              Action
      or Inaction by Administrative Agent

            	
              71

            
	
                          SECTION
      8.07.

            	
              Notice
      of Events of Default

            	
              71

            
	
                          SECTION
      8.08.

            	
              Non-Reliance
      on Administrative Agent and Other Parties

            	
              71

            
	
                          SECTION
      8.09.

            	
              Successor
      Administrative Agent

            	
              72

            
	
                          SECTION
      8.10.

            	
              Reports
      and Notices

            	
              72

            
	 
      	 
      	 
      
	
              ARTICLE
      IX [INTENTIONALLY OMITTED]

            	
              73

            
	
              ARTICLE
      X INDEMNIFICATION

            	
              73

            
	
                          SECTION
      10.01.

            	
              Indemnities
      by the Borrower

            	
              73

            
	 
      	 
      	 
      
	
              ARTICLE
      XI MISCELLANEOUS

            	
              75

            
	
                          SECTION
      11.01.

            	
              Amendments,
      Etc

            	
              75

            
	
                          SECTION
      11.02.

            	
              Notices,
      Etc

            	
              76

            
	
                          SECTION
      11.03.

            	
              Assignability

            	
              76

            
	
                          SECTION
      11.04.

            	
              Costs,
      Expenses and Taxes

            	
              79

            
	
                          SECTION
      11.05.

            	
              Waiver
      of Consequential Damages

            	
              80

            
	
                          SECTION
      11.06.

            	
              Confidentiality

            	
              80

            
	
                          SECTION
      11.07.

            	
              GOVERNING
      LAW

            	
              81

            
	
                          SECTION
      11.08.

            	
              Execution
      in Counterparts

            	
              81

            
	
                          SECTION
      11.09.

            	
              Survival
      of Termination

            	
              81

            
	
                          SECTION
      11.10.

            	
              Consent
      to Jurisdiction

            	
              81

            
	
                          SECTION
      11.11.

            	
              WAIVER
      OF JURY TRIAL

            	
              82

            
	
                          SECTION
      11.12.

            	
              Judgment

            	
              82

            
	
                          SECTION
      11.13.

            	
              USA
      Patriot Act

            	
              82

            
	
                          SECTION
      11.14.

            	
              RFA
      Intercreditor Agreement

            	
              83

            


    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    SCHEDULES

     

    
      	
              SCHEDULE
      I

            	
              -

            	
              Deposit
      Banks and Account Banks

            
	
              SCHEDULE
      II

            	
              -

            	
              Credit
      and Collection Policy

            
	
              SCHEDULE
      III

            	
              -

            	
              Addresses

            
	
              SCHEDULE
      IV

            	
              -

            	
              Months

            
	
              SCHEDULE
      V

            	
              -

            	
              Material
      Litigation

            
	
              SCHEDULE
      VI

            	
              -

            	
              [Intentionally
      Omitted]

            
	
              SCHEDULE
      VII

            	
              -

            	
              Administrative
      Agent’s Account and Cure Account

            
	
              SCHEDULE
      VIII

            	
              -

            	
              Commitments

            


    

    


    ANNEXES

     

    
      	
              ANNEX
      A

            	
              -

            	
              Form
      of Daily Report

            
	
              ANNEX
      A-1

            	
              -

            	
              Form
      of Borrower Report

            
	
              ANNEX
      A-2

            	
              -

            	
              Form
      of Interim Report

            
	
              ANNEX
      B

            	
              -

            	
              Form
      of Deposit Account Agreement

            
	
              ANNEX
      C

            	
              -

            	
              [Intentionally
      Omitted]

            
	
              ANNEX
      D

            	
              -

            	
              Assignment
      and Acceptance

            
	
              ANNEX
      E

            	
              -

            	
              Form
      of Funds Transfer Letter

            
	
              ANNEX
      F

            	
              -

            	
              Form
      of Note

            
	
              ANNEX
      G

            	
              -

            	
              Form
      of Parent Undertaking (Collection Agent)

            
	
              ANNEX
      H

            	
              -

            	
              [Intentionally
      Omitted]

            
	
              ANNEX
      I

            	
              -

            	
              Business
      Associate Addendum

            
	
              ANNEX
      J

            	
              -

            	
              [Intentionally
      Omitted]

            
	
              ANNEX
      K

            	
              -

            	
              Service
      Provider Addendum

            


    

     

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

     

    CREDIT
AGREEMENT

     

    Dated
as of February 18, 2009

     

    RITE
AID FUNDING II, a Cayman Islands exempted company incorporated with limited
liability (the “Borrower”), the
lenders from time to time party hereto (the “Lenders”), CITICORP
NORTH AMERICA, INC., a Delaware corporation (“CNAI”), as
administrative agent and collateral processing agent (in such capacities,
together with any successor in such capacities, the “Administrative
Agent”) for the Lenders, RITE AID HDQTRS. FUNDING, INC., a Delaware
corporation, as Collection Agent, and each of the parties named on
Schedule III hereto as Originators, agree as follows:

     

    PRELIMINARY
STATEMENT.  The Borrower has acquired, and may continue to acquire,
Receivables (as hereinafter defined) and Participation Interests (as hereinafter
defined) from Cayman SPE I (as hereinafter defined), either by purchase or by
contribution to the capital of the Borrower, as determined from time to time by
the Borrower and Cayman SPE I.  The Borrower wishes to obtain loans
from the Lenders which will be secured by, among other things, the Receivables
and Participation Interests.  The Lenders are prepared to make such
loans, in each case on the terms set forth herein.  Accordingly, the
parties agree as follows:

     

    ARTICLE
I

     

    


     

    DEFINITIONS

     

    SECTION
1.01.     Certain Defined
Terms.  As
used in this Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):

     

    “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 Bank” has the
meaning specified in the definition of “Governmental Entity Receivables
Agreement.”

     

    “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 the greater of (a) (i) the Eurodollar Rate for such Interest Period,
multiplied by (ii) the Statutory Reserve Rate, and (b) 3% per
annum.

     

    “Administrative Agent”
has the meaning specified in the introductory paragraph hereof.

     

    “Administrative Agent’s
Account” has the meaning specified in Section 6.10(a).

     

    “Adverse Claim” means
a lien, security interest or other charge or encumbrance, or any other type of
preferential arrangement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Affiliate” means, as
to any Person, any other Person that, directly or indirectly, is in control of,
is controlled by or is under common control with such Person or is a director or
officer of such Person.

     

    “Alternate Base Rate”
means a fluctuating interest rate per annum in effect from time to time that for
any day shall be equal to the highest of: (a) the Base Rate in effect on
such day; (b) the Federal Funds Rate in effect on such day plus 0.50% per
annum; and (c) the Adjusted LIBO Rate (without giving effect to clause (b)
thereof) for an Interest Period of one month beginning on such day (or if such
day is not a Business Day, the immediately preceding Business Day) plus 1.0% per
annum.

     

    “Applicable Margin”
means, at any time,  (a) with respect to any ABR Loan, 11% per annum
and (b) with respect to any Eurodollar Loan, 12% per annum.

     

    “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 agreement entered into by
a Lender, an Eligible Assignee and the Administrative Agent, pursuant to which
such Eligible Assignee may become a party to this Agreement, in substantially
the form of Annex D hereto.

     

    “Base Rate” means the
rate of interest announced publicly by Citibank in New York, New York from
time to time as Citibank’s base rate.

     

    “Beneficiary” means,
as of any date, the Lenders and the Administrative Agent.

     

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

     

    “Borrower Report”
means a report in substantially the form of Annex A-1 hereto and containing such
additional information as the Administrative Agent may reasonably request from
time to time, furnished by the Collection Agent pursuant to Section
6.02(g).

     

    “Borrower’s Account”
means Account No. 304 264 903, Rite Aid Funding II at JPMorgan Chase Bank, N.A.,
1 Chase Manhattan Plaza, New York, NY ABA# 021 000 021.

    


    “Borrowing” means
Loans of the same 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.

     

    “Borrowing Base”
means, at any time, an amount equal to the sum, without duplication, of the
following:

     

    
      
        
          
            
              
                
                  	 
      	
                          (a)

                        	
                          85%
      of the book value of Eligible Receivables; plus

                        


                

              

            

          

           

          
            
              
              

            

            
              2

              
                

              

            

            
              
              

            

          

           

          
            
              
                
                  
                    	 
      	
                            (b)

                          	
                            85%
      of the book value of Eligible Participated Receivables; minus

                          
	 	 	 
	 
      	
                            (c)

                          	
                            any
      reserves established by the Administrative Agent or the Required Lenders
      in its or their discretion exercised in a commercially reasonable manner
      to reflect Borrowing Base Factors; minus

                          
	 	 	 
	 
      	
                            (d)

                          	
                            the
      lesser of (i) the then RFA Borrowing Base and (ii) the then RFA Aggregate
      Bank Commitments (or, if all the “Bank Commitments” of the “Banks” under
      and as defined in the Receivables Financing Agreement have terminated, in
      lieu of clauses (i) and (ii) above, the then aggregate outstanding
      principal amount of the advances made under the Receivables Financing
      Agreement).

                          


                  

                

              

            

          

        

      

       

      The
Administrative Agent, in its discretion exercised in a commercially reasonable
manner to reflect Borrowing Base Factors, may (i) reduce either or both of
the advance rates set forth in clauses (a) and (b) above from time to time
and (ii) thereafter increase either or both of such advance rates to an
advance rate not in excess of the applicable advance rate set forth in
clauses (a) and (b) above.  The Administrative Agent will give
prompt written notice to the Borrower and the Lenders of any adjustments
effected pursuant to the preceding sen

    

    tence.

     

    “Borrowing Base
Factors” means factors affecting the saleability or collectability of any
Eligible Receivables, Eligible Participated Receivables or Participation
Interests, factors affecting the market value of any Eligible Receivables,
Eligible Participated Receivables or Participation Interests, other impediments
to the Administrative Agent’s ability to realize upon any Eligible Receivables,
Eligible Participated Receivables or Participation Interests and other factors
affecting the credit value to be afforded any Eligible Receivables, Eligible
Participated Receivables or Participation Interests.

     

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

     

    “Business Day” means
any day on which (i) banks are not authorized or required to close in New York
City, Chicago, Illinois and Atlanta, Georgia and (ii) if this definition of
“Business Day” is utilized in connection with the Eurodollar Rate, dealings are
carried out 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.

     

    “Capital Lease
Obligation” 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.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Cayman SPE I” means
Rite Aid Funding I, a Cayman Islands exempted company incorporated with limited
liability, incorporated on August 11, 2004 under the name Cayman Resources (21)
Ltd. (registration no. 138720).

     

    “CHAMPUS” means the
Civilian Health and Medical Program of the Uniformed Service, a program of
medical benefits covering former and active members of the uniformed services
and certain of their dependents, financed and administered by the United States
Departments of Defense, Health and Human Services and Transportation and
established pursuant to 10 U.S.C. §§ 1071-1106, and all regulations promulgated
thereunder including without limitation (a) all federal statutes (whether set
forth in 10 U.S.C. §§ 1071-1106 or elsewhere) affecting CHAMPUS and (b) all
rules, regulations (including 32 CFR 199), manuals, orders and administrative,
reimbursement and other guidelines of all Governmental Entities (including,
without limitation, the Department of Health and Human Services, the Department
of Defense, the Department of Transportation, the Assistant Secretary of Defense
(Health Affairs) and the Office of CHAMPUS, or any Person or entity succeeding
to the functions of any of the foregoing) promulgated pursuant to or in
connection with any of the foregoing (whether or not having the force of law) in
each case, as amended, supplemented or otherwise modified from time to
time.

     

    “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
effective date of this Agreement), other than Green Equity Investors III, L.P.
and its Affiliates or The Jean Coutu Group (PJC) Inc. and its Affiliates, of 30%
or more of the outstanding shares of common stock of the Parent; (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 Parent by Persons who were not
members of the board of directors of the Parent 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 Debt.

     

    “Change in Law” means
(a) the adoption of any law, rule or regulation after the date hereof,
(b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date hereof or
(c) compliance by any Lender (or, for purposes of Section 2.11(b), by
any lending office of such Lender or by such Lender’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 date
hereof.

     

    “Citibank” means
Citibank, N.A., a national banking association, its successors and
assigns.

     

    “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.

     

    “CMS” means Centers
for Medicare & Medicaid Services of the Department of Health and Human
Services, and any successor agency.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “CNAI” has the meaning
specified in the introductory paragraph hereof.

     

    “Code” means the
Internal Revenue Code of 1986, as amended from time to time.

     

    “Collateral” has the
meaning specified in Section 2.17.

     

    “Collection Agent”
means at any time the Person then authorized pursuant to Section 6.01 to
administer and collect Receivables and Participated Receivables.

     

    “Collection Agent
Default” means (a) proceeding of the type described in
Section 7.01(g) instituted by or against the Collection Agent (without
giving effect to any grace period provided therein), (b) the failure of the
Collection Agent to pay or deposit any amounts or perform any duties required of
it under this Agreement (after giving effect to any grace period provided in
Section 7.01(a)), or (c) the occurrence of any other Event of Default with
respect to the Collection Agent under this Agreement or any other Transaction
Document which specifically refers to the Collection Agent.

     

    “Collection Agent Fee”
has the meaning specified in Section 2.13(a).

     

    “Collections” means,
with respect to any Receivable or Participated Receivable, all cash collections
and other cash proceeds of such Receivable or Participated Receivable,
including, without limitation, all cash proceeds of Related Security with
respect to such Receivable or Participated Receivable.

     

    “Commitment” means,
with respect to each Lender, the commitment, if any, of such Lender to make a
Loan hereunder on the Effective Date, expressed as an amount representing the
principal amount of the Loan to be made (or deemed to be made) by such Lender
hereunder on the Effective Date, as such commitment may be (a) reduced or
increased from time to time on or prior to the Effective Date pursuant to
assignments by or to such Lender pursuant to Section 11.03, and (b)
otherwise reduced, increased or terminated in accordance with the terms and
conditions hereof.  The initial amount of each Lender’s Commitment is
set forth on Schedule VIII, or in the Assignment and Acceptance pursuant to
which such Lender shall have assumed its Commitment, as
applicable.  The aggregate amount of the Lenders’ Commitments on the
Effective Date is set forth on Schedule VIII.  Each Lender’s
Commitment, if any, shall be zero once such Lender has made its Loan on the
Effective Date.  In any event, no Lender shall have a Commitment after
the Effective Date.

     

    “Concentration Limit”
for any Obligor means (i) so long as such Obligor’s long-term public senior
unsecured and unguaranteed debt securities shall be rated at least BBB- by
S&P or Baa3 by Moody’s and such Obligor is not a Governmental Entity, 20% of
the sum of the Outstanding Balance of Eligible Receivables and the Outstanding
Balance of Eligible Participated Receivables, (ii) so long as such Obligor’s
long-term public senior unsecured and unguaranteed debt securities shall be
rated by S&P or Moody’s, but shall not meet the criteria established in (i)
above, 10% of the sum of the Outstanding Balance of Eligible Receivables and the
Outstanding Balance of Eligible Participated Receivables, and (iii) so long as
such Obligor does not have long-term public senior unsecured and unguaranteed
debt securities that are rated by S&P or Moody’s, 5% of the sum of the
Outstanding Balance of Eligible Receivables and the Outstanding Balance of
Eligible Participated Receivables; provided, however, that, in each case,


     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    the
foregoing percentages shall be determined by the Administrative Agent based on
all of the otherwise Eligible Receivables and Eligible Participated Receivables
prior to giving effect to any eliminations based upon the foregoing
concentration limit.

     

    “Contract” means an
agreement between any Originator and a Person, or between a PBM and a Contract
Payor, pursuant to or under which such Person or Contract Payor shall be
obligated to pay for pharmaceutical merchandise sold by such Originator or its
Affiliates from time to time.

     

    “Contract Payor” means
a Person who is required under its agreement with a PBM to make payments to such
PBM who, in turn, pays such amounts to an Originator on such Person’s
behalf.

     

    “Credit Agreement”
means that certain Credit Agreement dated as of June 27, 2001, as amended and
restated as of July 9, 2008, among Rite Aid Corporation, a Delaware corporation,
the Lenders party thereto, Citicorp North America, Inc., as Administrative Agent
and Collateral Processing Agent, Bank of America, N.A., as Syndication Agent,
and the other Persons party thereto, as the same may be amended, modified or
restated from time to time.

     

    “Credit and Collection
Policy” means those receivables credit and collection policies and
practices of the Borrower and the Originators in effect on the date of this
Agreement and described in Schedule II hereto, as modified in compliance with
this Agreement.

     

    “Cure Account” has the
meaning specified in Section 6.10(b).

     

    “Cure Funds” means the
amounts which, from time to time, are deposited into the Cure
Account.

     

    “Cure Period” means
the period beginning on and including a Non-Compliance Date and ending on but
excluding the earlier of (a) the first Business Day thereafter on which the
Borrowing Base equals or exceeds the aggregate outstanding principal balance of
the Loans and (b) the second consecutive Business Day following the
occurrence of such Non-Compliance Date.

     

    “Daily Report” means
an Officer’s Certificate of the Collection Agent substantially in the form of
Annex A hereto.

     

    “Debt” 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 Debt of others secured by (or for which the holder of such
Debt has an existing right, contingent or otherwise, to be secured by) any
Adverse Claim on property owned or acquired by such Person, whether or not the
Debt secured thereby has been assumed, (f) all Guarantees by such Person of Debt
of others, (g) all Capital Lease Obligations of such Person, (h) all
obligations, contingent or otherwise, of such Person as an account party in


     

    
      
        
        

      

      
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    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
Debt of any Person shall include the Debt 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 of the terms of such Debt
provide that such Person is not liable therefor.

     

    “Default” means an
event that but for notice or lapse of time or both would constitute an Event of
Default.

     

    “Deposit Account”
means an account maintained at a Deposit Bank into which (i) Collections in
the form of checks and other items are deposited that have been sent to one or
more related Lock-Boxes by Obligors that are not Governmental Entities (other
than the Contract Payors paying a PBM) and/or (ii) Collections in the form of
electronic funds transfers and other items are paid directly by Obligors that
are not Governmental Entities (other than the Contract Payors paying a PBM) and
(iii) which is subject to a Deposit Account Agreement.

     

    “Deposit Account
Agreement” means an agreement, in substantially the form of Annex B,
providing for control by the Administrative Agent over one or more Deposit
Accounts and associated Lock-Boxes.

     

    “Deposit Bank” means
any of the banks holding one or more Deposit Accounts.

     

    “Distribution Date”
means the ninth Business Day after the end of each Month.

     

    “Effective Date” means
the date on which the conditions set forth in Article III shall have first been
satisfied.

     

    “E-Mail Report” has
the meaning specified in Section 6.02(g).

     

    “Eligible Assignee”
means (i) CNAI, any Lender or any of their respective Affiliates, (ii) any
Person managed by CNAI, any Lender or any of their respective Affiliates or any
Approved Fund or (iii) any financial or other institution approved by the
Administrative Agent (which approval shall not be unreasonably withheld or
delayed), it being understood and agreed that in the case of clause (iii) above,
the relevant financial or other institution must also be approved by the
Borrower (which approval by the Borrower shall not be unreasonably withheld or
delayed and shall not be required (x) if an Event of Default or a Default has
occurred and is continuing or (y) with respect to any assignment by CNAI or any
of its Affiliates to any institution made prior to the date that is 30 days
after the Effective Date).

     

    “Eligible Institution”
means a depository institution organized under the laws of the United States of
America or any state thereof or the District of Columbia (or any domestic branch
of a foreign bank authorized under any such laws), (a) whose senior long-term
unsecured debt obligations are rated at least A- or better by Standard &
Poor’s and A3 or better by Moody’s, and (b) which is subject to regulation
regarding fiduciary funds on deposit substantially similar to 12 C.F.R. Section
9.10(b), if applicable, and (c) which has a combined capital and surplus of at
least $100,000,000.

     

    
      
        
        

      

      
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    “Eligible Investments”
means book-entry securities entered on the books of the registrar of such
securities and held in the name or on behalf of the Administrative Agent,
negotiable instruments or securities represented by instruments in bearer or
registered form (registered in the name of the Administrative Agent or its
nominee) which evidence:

     

    (a)           readily
marketable direct obligations of the Government of the United States or any
agency or instrumentality thereof or obligations unconditionally guaranteed by
the full faith and credit of the United States;

     

    (b)           insured
demand deposits, time deposits or certificates of deposit of any commercial bank
that (i) is a member of the Federal Reserve System, (ii) issues (or the parent
of which issues) commercial paper rated, at the time of the investment or
contractual commitment to invest therein, as described in clause (d), (iii) is
organized under the laws of the United States or any state thereof and (iv) has
combined capital and surplus of at least $500,000,000;

     

    (c)           repurchase
obligations with a term of not more than ten days for underlying securities of
the types described in clauses (a) and (b) above entered into with any bank of
the type described in clause (b) above;

     

    (d)           commercial
paper (maturing no later than the Business Day prior to the end of any then
applicable Cure Period) having, at the time of the investment or contractual
commitment to invest therein, the highest short-term rating from each of S&P
and Moody’s;

     

    (e)           investments
in no-load money market funds having a rating from each rating agency rating
such fund in its highest investment category (including such funds for which the
Administrative Agent or any of its Affiliates is investment manager or
advisor).

     

    “Eligible Participated
Receivable” means, at any date of determination, a Participated
Receivable which is the subject of a Participation Interest owned by the
Borrower that satisfies at the time of creation and continues to meet the same
at the time of such determination the criteria established from time to time by
the Administrative Agent in its discretion exercised in a commercially
reasonable manner (and, with respect to any criteria added or deleted after the
Effective Date or any modification after the Effective Date to any criteria,
with the prior written consent of the Required Lenders) or by the Required
Lenders in their discretion exercised in a commercially reasonable manner, in
each instance, to reflect Borrowing Base Factors.  On the date hereof,
those criteria are the criteria in paragraphs (a) through (aa) of the definition
of Eligible Receivable subject to each reference therein (in the case of
paragraphs (r) and (s), only the first reference therein) to “Receivable” being
deemed to be a reference to “Participated Receivable”.

     

    “Eligible Participation
Interest” means a Participation Interest with respect to which the
related Participated Receivable is an Eligible Participated
Receivable.

     

    “Eligible Receivable”
means, at any date of determination, a Receivable of the Borrower that satisfies
at the time of creation and continues to meet the same at the time of such
determination the criteria established from time to time by the Administrative
Agent in its discretion exercised in a commercially reasonable manner (and, with
respect to any criteria added or deleted after the Effective Date or any
modification after the Effective Date to any 

     

    
      
        
        

      

      
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    criteria,
with the prior written consent of the Required Lenders) or by the Required
Lenders in their discretion exercised in a commercially reasonable manner, in
each instance, to reflect Borrowing Base Factors.  On the date hereof,
those criteria are:

     

    (a)           such
Receivable constitutes an “account” or a “payment intangible” within the meaning of
Article 9 of the UCC of the applicable jurisdiction governing the perfection of
the security interest created by this Agreement in such Receivable;

     

    (b)           all
payments on such Receivable are by the terms of such Receivable due not later
than 90 days after the date of sale or service, as applicable, (i.e., the
transaction date) and are otherwise on terms that are normal and customary in
the business of the applicable Originator;

     

    (c)           such
Receivable has been billed and has not remained unpaid for more than 120 days
following the date of sale or service, as applicable;

     

    (d)           such
Receivable is denominated and payable only in United States dollars in the
United States;

     

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

     

    (f)           the
Obligor of such Receivable is not a Governmental Entity, except to the extent
payment of such Receivable is governed under the Social Security Act (42 U.S.C.
§ 1395, et seq.), including payments under Medicaid and CHAMPUS or regulated by
CMS, but, the foregoing notwithstanding, not if the Obligor is an Ohio
Governmental Entity;

     

    (g)           the
proceeds of such Receivable are payable solely in accordance with Section
5.01(h);

     

    (h)           such
Receivable arose in the ordinary course of business of the applicable
Originator;

     

    (i)           
not more than 50% of the aggregate amount of Receivables from the same Obligor
and any Affiliates thereof remain unpaid for more than 120 days following the
date of sale or service, as applicable;

     

    (j)           (1)
to the knowledge of the Borrower and the Originators, no event of death,
bankruptcy, insolvency or inability to pay creditors generally of the Obligor of
such Receivable has occurred, and no notice thereof has been received, (2) such
Receivable would not, consistent with the Credit and Collection Policy, be
written off the applicable Originator’s or Borrower’s books as uncollectible and
(3) as to which neither the applicable Originator nor the Borrower has (or
consistent with the Credit and Collection Policy should have) established a
specific reserve for non-payment;

     

    
      
        
        

      

      
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    (k)           payment
of such Receivable is not being disputed by the Obligor thereof and is not
settled on a net basis;

     

    (l)           
such Receivable 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 Receivable, the Obligor (i) is organized in the United States
(or, if such Obligor is not organized in the United States, such Receivable is
supported by a letter of credit approved by the Administrative Agent in favor of
the applicable Originator) and (ii) is not an Affiliate of the Parent, is not a
Subsidiary and is not an Affiliate of any of the Subsidiaries;

     

    (n)           such
Receivable is subject to a perfected second priority security interest in favor
of the Administrative Agent for the benefit of the Lenders pursuant to this
Agreement (subordinate only to the security interest granted under the
Receivables Financing Agreement subject to the terms of the RFA Intercreditor
Agreement) and is not subject to any other Adverse Claim (other than the
aforesaid security interest granted under the Receivables Financing
Agreement);

     

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

     

    (p)           the
representations and warranties contained in this Agreement and the other
Transaction Documents with respect to such Receivable are true and correct in
all material respects;

     

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

     

    (r)           if
the Outstanding Balance of such Receivable, together with the Outstanding
Balance of all other Eligible Receivables and Eligible Participated Receivables
owing by the Obligor thereof or by any of its Affiliates, exceeds the
Concentration Limit applicable to such Obligor, such excess portion shall be
ineligible;

     

    (s)           if
such Receivable is owed by an Obligor to which the Borrower, the Parent or any
Originator is indebted in any way, or which is subject to any right of setoff or
recoupment by the Obligor, the portion of all Eligible Receivables and Eligible
Participated Receivables owing by such Obligor to the extent of such
indebtedness, setoff or recoupment shall be ineligible;

     

    (t)           such
Receivable arises under a Contract (other than a Contract with respect to which
the related Obligor is a Governmental Entity) which (A) does not contain an
enforceable provision requiring the Obligor thereunder to consent to the
transfer, sale or assignment of the Obligor’s payment obligation by the
Originator pursuant to the Originator Purchase Agreement, and (B) if such
Contract is between a PBM and a Contract Payor, does not 

     

    
      
        
        

      

      
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    contain
any enforceable provision prohibiting the transfer, sale or assignment of such
Contract Payor’s payment obligation to the applicable Originator;

     

    (u)           such
Receivable has not been extended, rewritten or otherwise modified from the
original terms thereof (except as permitted by Section 6.02(c));

     

    (v)           the
transfer, sale or assignment of such Receivable in accordance with the
Transaction Documents does not contravene any applicable law, rule or
regulation;

     

    (w)          such
Receivable satisfies all applicable requirements of the Credit and Collection
Policy;

     

    (x)           as
to which Receivable the applicable Originator has, or has the right to use,
valid provider identification numbers and licenses to generate valid Receivables
and all information set forth in the bill and supporting claim documents with
respect to such Receivable is true, complete and correct;

     

    (y)           as
to which Receivable the applicable Originator has, or has the right to use,
valid provider identification numbers and licenses to generate reports with
respect to such Receivable required by the applicable state agency or other
CMS-designated agents or agents of such state agency;

     

    (z)           such
Receivable is not a Medicare Receivable;

     

    (aa)         such
Receivable does not arise from a sale by the applicable Originator from a store
located in Hawaii, Illinois, Minnesota, Montana or New Mexico, unless the
Borrower shall have furnished the Administrative Agent with an opinion of local
counsel, or other evidence satisfactory to it, to the effect that the transfer,
sale and assignment of Receivables and Participation Interests in accordance
with the Transaction Documents from a store located in such state does not
violate any provision of law of such state; and

     

    (bb)         as
to which Receivable, if it is a Part D Receivable, no Obligor thereunder is a
Governmental Entity.

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and the regulations promulgated and rulings issued thereunder.

     

    “ERISA Affiliate”
means any trade or business (whether or not incorporated) that, together with
the Parent, 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
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    any
Plan; (d) the incurrence by the Parent 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 Parent 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
Parent 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 Parent or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Parent 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.

     

    “Eurocurrency
Liabilities” has the meaning assigned to that term in Regulation D of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.

     

    “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.

     

    “Eurodollar Rate”
means, with respect to any Eurodollar Borrowing for any Interest Period, the
rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or another commercially available source
providing quotations of BBA LIBOR as designated by the Administrative Agent from
time to time) at approximately 11:00 a.m. (London time) two Business Days prior
to the commencement of such Interest Period, for U.S. dollar deposits (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period.  In the event that such rate is not available at
such time for any reason, then the “Eurodollar 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.

     

    “Event of Default” has
the meaning specified in Section 7.01.

     

    “Facility Principal”
means, at any time, the aggregate outstanding principal of Loans under this
Agreement.

     

    “Federal Funds Rate”
means, for any day, a fluctuating interest rate per annum equal to 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 for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average (rounded upwards, if necessary, to the next 1/100 of
1%) of the quotations for such day on such transactions received 

     

    
      
        
        

      

      
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    by
the Administrative Agent from three Federal funds brokers of recognized standing
selected by it.

     

    “Fee Agreement” has
the meaning specified in Section 2.13(b).

     

    “Fees” has the meaning
specified in Section 2.13(b).

     

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

     

    “First Lien Loan
Documents” has the meaning specified in the RFA Intercreditor
Agreement.

     

    “Forecast” has the
meaning specified in Section 5.01(k)(xiii).

     

    “Funds Transfer
Letter” means a letter in substantially the form of Annex E hereto
executed and delivered by the Borrower to the Administrative Agent, as the same
may be amended or restated in accordance with the terms thereof.

     

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

     

    “Government
Receivable” means any Originator Receivable with respect to which the
Obligor is a Governmental Entity.

     

    “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.

     

    “Governmental Entity”
means the United States of America, any state, any political subdivision of a
state and any agency or instrumentality of the United States of America or any
state or political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.  Payments from Governmental Entities shall be deemed to
include payments governed under the Social Security Act (42 U.S.C. § 1395, et
seq.), including payments under Medicare, Medicaid and CHAMPUS, and payments
administered or regulated by CMS.

     

    “Governmental Entity
Receivables Account Notice” means a notice contained in a Governmental
Entity Receivables Agreement pursuant to which an Affiliate of the Parent gives
revocable standing instructions to the Account Bank to sweep funds on a daily
basis from the Governmental Entity Receivables Account to (a) prior to the RFA
Termination Date, the RFA Trustee’s Account, and (b) thereafter, to an account
under the sole dominion and control of the Administrative Agent, for the benefit
of the Beneficiaries.

     

    “Governmental Entity
Receivables Agreement” means an agreement between a bank (an “Account Bank”) and
one or more Originators or Affiliates of the Parent with respect to one or more
accounts (each, a “Governmental Entity
Receivables Account”) or associated Lock-

     

    
      
        
        

      

      
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    Boxes
into which Collections on account of Government Receivables are deposited or
remitted and which is subject to a Governmental Entity Receivables Account
Notice.

     

    “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 Debt or other obligation of any 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 Debt 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 Debt or
other obligation or (d) as an account party in respect of any letter of credit
or letter of guaranty issued to support such Debt or obligation; provided, that
the term Guarantee shall not include endorsements for collection or deposit in
the ordinary course of business.

     

    “Hedging Agreement”
means any rate swap transaction, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of the foregoing
transactions) or any combination of the foregoing transactions.

     

    “HQ” means Rite Aid
Hdqtrs. Funding, Inc., a Delaware corporation.

     

    “Indemnified Party”
has the meaning specified in Section 10.01.

     

    “Indentures” means,
collectively, (a) the Indenture dated as of December 21, 1998, between the
Parent and Harris Trust and Savings Bank, as trustee, (b) the Indenture dated as
of August 1, 1993, between the Parent and Morgan Guaranty Trust Company of New
York, as trustee, (c) the Indenture dated as of September 10, 1997, between the
Parent and Harris Trust and Savings Bank, as trustee, (d) the Indenture dated as
of September 22, 1998, between the Parent and Harris Trust and Savings Bank, as
trustee, (e) the Unsecured Note Indenture, (f) the 12.5% Note
Indenture, (g) the 9.5% Note Indenture, (h) the 8.125% Note Indenture, (i)
the 9.25% Note Indenture and (j) the 4.75% Note Indenture, as each of the terms
set forth in clauses (e) through (j) are defined in the Credit
Agreement.

     

    “Interest Payment
Date” means (a) with respect to any ABR Loan, the first day of each
calendar month, and (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
Interest Period.

     

    “Interest Election
Request” means a request by the Borrower to convert or continue a
Borrowing in accordance with Section 2.05.

     

    
      
        
        

      

      
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    “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 months thereafter, 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 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), and (ii) any Interest Period 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.  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 Report” means
a report in substantially the form of Annex A-2 hereto and containing such
additional information as the Administrative Agent may reasonable request from
time to time, furnished by the Collection Agent, pursuant to Section
6.02(g).

     

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

     

    “Lock-Box” means a
post office box either (a) administered by a Deposit Bank for the purpose of
receiving Collections, which is the subject of a Deposit Account Agreement or
(b) which receives Collections of Government Receivables and is associated with
a Governmental Entity Receivables Account that is subject to a Governmental
Entity Receivables Agreement.

     

    “Material Adverse
Effect” means a material adverse effect on (i) the collectibility of the
Receivables and Participated Receivables, (ii) the ability of the Borrower, the
Collection Agent, the Parent, any Predecessor Purchaser, or any Originator to
perform any of its respective material obligations under the Transaction
Documents to which it is a party, (iii) the legality, validity or enforceability
of the Transaction Documents (including, without limitation, the validity,
enforceability or priority of the security interests granted thereunder) or the
rights of or benefits available to the Administrative Agent or the Lenders under
the Transaction Documents or (iv) the business, assets, operations, condition
(financial or otherwise), or prospects of the Parent and its Subsidiaries, taken
as a whole.

     

    “Material Debt” means
Debt (other than the loans and letters of credit under the Credit Agreement), or
obligations in respect of one or more Hedging Agreements, of any one or more of
the Parent and its Subsidiaries in an aggregate principal amount exceeding
$25,000,000.  For purposes of this definition, the “principal amount”
of the obligations of the Parent 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 Parent or such Subsidiary would be required to
pay if such Hedging Agreement were terminated at such time.

     

    “Maturity Date” means
September 14, 2010.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    “Medicaid” means the
medical assistance program established by Title XIX of the Social Security Act
(42 U.S.C. Secs. 1396 et seq.) and any statutes succeeding thereto.

     

    “Medicare” means the
health insurance program for the aged and disabled established by Title XVIII of
the Social Security Act (42 U.S.C. Secs. 1395 et seq.) and any statutes
succeeding thereto.

     

    “Minimum Liquidity
Position” means at any time an amount equal to the sum of (a) the
Revolver Availability (as defined in the Credit Agreement) plus (b) the Parent’s
cash on hand.

     

    “Month” means a fiscal
month of the Parent as set forth on Schedule IV hereto, as such schedule shall
be updated from time to time in accordance with the terms hereof.

     

    “Moody’s” means
Moody’s Investors Service, Inc., and its successors.

     

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

     

    “Non-Compliance Date”
has the meaning set forth in Section 2.08(b).

     

    “Note” means a
promissory note of the Borrower, in substantially the form of Annex F hereto,
evidencing a Loan.

     

    “Obligations” has the
meaning specified in Section 2.17.

     

    “Obligor” means a
Person obligated to make payments pursuant to a Contract; provided, however, if a PBM
acts as agent for Contract Payors and is obligated, pursuant to a Contract, to
turn over to an Originator payments made to it by such Contract Payors, then the
term “Obligor” shall include both such PBM and such Contract
Payors.

     

    “Originator” means
each of the Persons designated as such on Schedule III.

     

    “Originator Participation
Interest” means, with respect to any Originator, a 100% undivided
beneficial interest in such Originator’s right, title and interest, whether now
owned or hereafter arising and wherever located, in, to and under (i) each
Government Receivable owned by such Originator, (ii) all Related Security and
Collections with respect to such Government Receivable and (iii) all proceeds of
such Government Receivable, Related Security and Collections.

     

    “Originator Purchase
Agreement” means the Purchase Agreement, dated as of September 21,
2004, among the Originators, as sellers, and HQ, as purchaser, as the same may
be amended, modified or restated from time to time.

     

    “Originator
Receivable” means the indebtedness of any Obligor resulting from the
provision or sale of pharmaceutical merchandise by any Originator under a
Contract (whether constituting an account, instrument, chattel paper, payment
intangible or general intangible), and 

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    includes
the right to payment of any interest or finance charges and other obligations of
such Obligor with respect thereto.

     

    “Other Companies”
means the Originators, the Predecessor Purchasers and all of their respective
Subsidiaries except the Borrower.

     

    “Outstanding Balance”
of any Originator Receivable at any time means the then outstanding principal
balance thereof.

     

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

     

    “Parent Undertaking
(Collection Agent)” means the Undertaking Agreement, dated as of the date
hereof, in favor of the Lenders and the Administrative Agent and relating to
obligations of the Collection Agent, substantially in the form of Annex G
hereto, as the same may be amended, modified or restated from time to
time.

     

    “Parent Undertaking
(Originators)” means the Undertaking Agreement, dated as of September 21,
2004, made by the Parent in favor of HQ and relating to obligations of the
Originators, as the same may be amended, modified or restated from time to
time.

     

    “Parent Undertakings”
means the Parent Undertaking (Collection Agent) and the Parent Undertaking
(Originators).

     

    “Part D Receivable”
means a Receivable from a Part D Plan Sponsor, as that term is defined in 42 CFR
423.4, arising under and pursuant to the Part D program of
Medicare.  Unless the Administrative Agent notifies the Borrower and
the Collection Agent otherwise, in reliance on any order, judgment, ruling or
interpretation of any court of competent jurisdiction, CMS or other Governmental
Entity having jurisdiction over the matter, Part D Receivables will be deemed
for all purposes of this Agreement not to be Medicare Receivables or Government
Receivables, nor to be owing from a Governmental Entity.

     

    “Participant” has the
meaning assigned to such term in Section 11.03(h).

     

    “Participated
Receivable” means any Originator Receivable which is the subject of a
Participation Interest.

     

    “Participation
Interest” means any Originator Participation Interest which has been
acquired by the Borrower by purchase or capital contribution pursuant to the
Tertiary Purchase Agreement.

     

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

     

    “PBM” means a
pharmaceutical benefits manager which has entered into an agreement with an
Originator to make payments as agent for various insurers and other Persons, on
account of pharmaceutical goods sold by such Originator.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    “Person” means an
individual, partnership, corporation (including a business trust), limited
liability company, joint stock company, trust, unincorporated association, joint
venture or other entity, or a Governmental Entity.

     

    “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 Parent 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.

     

    “Predecessor
Purchasers” means Cayman SPE I and HQ.

     

    “Purchase Agreements”
means, collectively, the Originator Purchase Agreement, the Secondary Purchase
Agreement and the Tertiary Purchase Agreement.

     

    “Ratable Share” means,
at any time in respect of any Lender, the percentage obtained by dividing (a)
prior to the making of the Loans on the Effective Date, the amount of such
Lender’s Commitment at such time by the aggregate amount of the Commitments of
all the Lenders at such time, and (b) thereafter, the outstanding principal
balance of the Loans owing to such Lender at such time by the aggregate
outstanding principal balance of the Loans owing to all the Lenders at such
time.

     

    “Receivable” means any
Originator Receivable (which is not a Government Receivable) that has been
acquired by the Borrower by purchase or by capital contribution pursuant to the
Tertiary Purchase Agreement.

     

    “Receivables Financing
Agreement” means that certain Receivables Financing Agreement, dated as
of September 21, 2004, among the Borrower, the RFA Program Agent, and the
“Investors,” “Banks,” “Investor Agents,” “Collection Agent,” “Originators” and
“Trustee” party thereto from time to time, as amended, supplemented, restated or
otherwise modified from time to time.

     

    “Register” has the
meaning specified in Section 11.03(c).

     

    “Related Security”
means (a) with respect to any Receivable:

     

    (i)           
all of the Borrower’s interest in merchandise, if any, (including returned
merchandise) relating to any sale giving rise to such Receivable;

     

    (ii)           all
security interests or liens and property subject thereto from time to time
purporting to secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together with all financing
statements filed against an Obligor describing any collateral securing such
Receivable;

     

    (iii)          all
guaranties, insurance and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such 

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    Receivable
whether pursuant to the Contract related to such Receivable or otherwise;
and

     

    (iv)          the
Contract and all other books, records and other information (including, without
limitation, computer programs, tapes, discs, punch cards, data processing
software and related property and rights, subject to the rights of any licensors
and to applicable law) relating to such Receivable and the related Obligor;
and

     

    (b)           with
respect to any Participation Interest, the Related Security with respect to the
Government Receivable that is the subject of such Participation Interest
(subject to each reference to “Receivable” in the definition of Related Security
for such purposes being deemed to be a reference to a “Participated
Receivable”).

     

    “Required Lenders”
means, at any time, Lenders whose aggregate Ratable Shares at such time exceed
50%.

     

    “RFA Aggregate Bank
Commitments” means, at any time, the aggregate of the then “Bank
Commitments” (as defined in, and determined in accordance with, the Receivables
Financing Agreement) of all “Banks” (as defined in the Receivables Financing
Agreement) under the Receivables Financing Agreement.

     

    “RFA Borrowing Base”
means, at any time, the then “Borrowing Base” as defined in, and determined in
accordance with, the Receivables Financing Agreement.

     

    “RFA Intercreditor
Agreement” means that certain Intercreditor Agreement dated as of the
date hereof by and among the Administrative Agent and the RFA Program Agent and
acknowledged and agreed to by the Borrower, as the same may be amended, modified
or restated from time to time.

     

    “RFA Program Agent”
means Citicorp North America, Inc., in its capacity as “Program Agent” under the
Receivables Financing Agreement, together with its successors in such
capacity.

     

    “RFA Termination Date”
means the later of the “Facility Termination Date” (as defined in the
Receivables Financing Agreement) and the date on which all “Obligations” (as
defined in the Receivables Financing Agreement) shall be paid in
full.

     

    “RFA Trustee” means
the “Trustee” as defined in the Receivables Financing Agreement.

     

    “RFA Trustee’s
Account” means the “Trustee’s Account” as defined in the Receivables
Financing Agreement.

     

    “S&P” means
Standard and Poor’s, a division of The McGraw-Hill Companies, Inc., and its
successors.

     

    “SEC” means the
Securities and Exchange Commission.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    “Second Lien Loan
Documents” has the meaning specified in the RFA Intercreditor
Agreement.

     

    “Secondary Purchase
Agreement” means the purchase agreement, dated as of September 21,
2004, between HQ, as seller and Cayman SPE I, as purchaser, as the same may be
amended, modified or restated from time to time.

     

    “Senior Collateral
Intercreditor Agreement” means that certain Intercreditor Agreement,
dated as of September 22, 2004, by and among the RFA Program Agent, Cayman SPE
I, the Borrower, the Originators, HQ, Citicorp North America, Inc. and JPMorgan
Chase Bank, as Senior Collateral Agents, and the Administrative Agent (pursuant
to the Senior Collateral Intercreditor Agreement Amendment), as amended by the
Senior Collateral Intercreditor Agreement Amendment and as otherwise amended,
modified or restated from time to time.

     

    “Senior Collateral
Intercreditor Agreement Amendment” means an amendment to the Senior
Collateral Intercreditor Agreement, in form and substance satisfactory to the
Administrative Agent, pursuant to which, among other things, the Administrative
Agent becomes a party to the Senior Collateral Intercreditor Agreement and the
Administrative Agent is generally provided rights similar to (but subordinate
to) those granted to the RFA Program Agent under the Senior Collateral
Intercreditor Agreement.

     

    “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.

     

    “Subsidiary” means any
corporation or other entity of which securities having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the Borrower or an
Originator, as the case may be, or one or more Subsidiaries, or by the Borrower
or an Originator, as the case may be, and one or more Subsidiaries.

     

    “Supermajority
Lenders” means, at any time, Lenders whose aggregate Ratable Shares at
such time exceed 66-2/3%.

     

    “Term” means the
period commencing on the date hereof and ending on the Maturity
Date.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    “Tertiary Purchase
Agreement” means the purchase agreement, dated as of September 21,
2004, between Cayman SPE I, as seller, and the Borrower, as purchaser, as the
same may be amended, modified or restated from time to time.

     

    “Transaction Document”
means any of this Agreement, the Purchase Agreements, the Parent Undertakings,
the Notes, the RFA Intercreditor Agreement, the Senior Collateral Intercreditor
Agreement, the Deposit Account Agreements, the Governmental Entity Receivables
Agreements, the Fee Agreement, each Borrower Report, each Daily Report, each
Interim Report, all amendments to any of the foregoing and all other agreements
and documents delivered and/or related hereto or thereto.

     

    “Transferred Assets”
means all Receivables and all Participation Interests.

     

    “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.

     

    “UCC” means the
Uniform Commercial Code as from time to time in effect in the relevant
jurisdiction.

     

    “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.     Other
Terms.  All
accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles.  All terms
used in Article 9 of the UCC in the State of New York, and not specifically
defined herein, are used herein as defined in such Article 9.

     

    ARTICLE
II

     

    AMOUNTS
AND TERMS OF THE LOANS

     

    SECTION
2.01.     The
Commitments.  On
the terms and conditions hereinafter set forth, each Lender agrees to make a
Loan to the Borrower on the Effective Date in an amount equal to the lesser of
(a) such Lender’s Ratable Share of the then Borrowing Base, and (b) such
Lender’s Commitment.  Notwithstanding anything to the contrary
contained herein (including the immediately preceding sentence) (and without
affecting any other provisions hereof), the funded portion of the Loan to be
made by a Lender on the Effective Date (i.e., the amount advanced by
a Lender to the Borrower on the Effective Date) shall be equal to 97.00% of the
principal amount of such Loan (it being agreed that the full principal amount of
each such Loan will be deemed outstanding on the Effective Date and the Borrower
shall be obligated to repay 100% of the principal amount of each such Loan
(together with interest on such 100% of the principal amount of each such Loan)
as provided herein).  Amounts repaid or prepaid in respect of Loans
may not be reborrowed.  Unless previously terminated in accordance
with the terms of 

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    this
Agreement, the Commitments shall terminate at 5:00 p.m., New York City time, on
February 20, 2009.

     

    SECTION
2.02.      Loans and
Borrowings.

     

    (a)           Each
Loan shall be made as part of a Borrowing consisting of Loans of the same Type
made by the Lenders ratably in accordance with the amounts of their
Commitments.  The failure of any Lender to make the 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 a Loan as
required.

     

    (b)           Subject
to Section 2.10, each Borrowing shall be comprised entirely of ABR Loans or
Eurodollar Loans as the Borrower may request in accordance
herewith.  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.  Borrowings of more than one Type may be outstanding at
the same time; provided that there shall not at any time be more than a total of
3 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 Borrowing if the Interest
Period requested with respect thereto would end after the Maturity
Date.

     

    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) 
      

                    	
                      the
      aggregate amount of such Borrowing;

                    
	 	 	 
	 
      	
                      (ii) 
      

                    	
                      the
      date of such Borrowing, which shall be a Business Day and shall be the
      Effective Date;

                    


            

          

        

      

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      
        
          
            
              	 
      	
                      (iii) 
      

                    	
                      whether
      such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
      and

                    
	 	 	 
	 
      	
                      (iv) 
      

                    	
                      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.”

                    


            

          

        

      

    

     

    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.      Funding of
Borrowings.  (a)  Each
Lender shall make the Loan to be made by it hereunder on the Effective Date by
wire transfer of immediately available funds by 12:00 noon, New York City time,
on the Effective Date to the account of the Administrative Agent designated by
it for such purpose by notice to the Lenders.  The Administrative
Agent will make such Loans available to the Borrower on the Effective Date by
wire transfer, in like funds, to the deposit account designated by the Borrower
in the Funds Transfer Letter.

     

    (b)           Unless
the Administrative Agent shall have received notice from a Lender prior to the
Effective Date that such Lender will not make available to the Administrative
Agent such Lender’s share of the Loans to be made on the Effective Date, 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 Loans 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 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 Loans.  If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Loan
included in the Loans made on the Effective Date.

     

    SECTION
2.05.      Interest
Elections.  (a)  Each
Borrowing initially shall be of the Type specified in the 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,
and the Loans comprising each such portion shall be considered a separate
Borrowing.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (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 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.

     

    (f)           A
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
Maturity Date.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    SECTION
2.06.      Repayment of Loans; Evidence
of Indebtedness.  (a)  The
Borrower hereby unconditionally promises to pay to the Administrative Agent for
the account of each Lender the then unpaid principal amount of the Loan of such
Lender as provided in Section 2.07.

     

    (b)           Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the Debt of the Borrower to such Lender resulting from the
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 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.

     

    (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 the Loan made by it be evidenced by a
Note.  In such event, the Borrower shall prepare, execute and deliver
to such Lender a 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 Annex F, or in such other form approved by the Administrative Agent
and the Borrower.  Thereafter, the Loans evidenced by such Note and
interest thereon shall at all times (including after assignment pursuant to
Section 11.03) be represented by one or more Notes in such form payable to the
order of the payee named therein (or, if such Note is a registered note, to such
payee and its registered assigns).

     

    SECTION
2.07.      Repayment of
Loans.  To
the extent not previously paid, all Loans shall be due and payable on the
Maturity Date together with all accrued but unpaid interest owing hereunder and
all other unpaid Obligations.  If, at any time, the “Commitment
Termination Date” under, and as defined in, the Receivables Financing Agreement
shall occur or be declared or if the Receivables Financing Agreement shall be
terminated for any reason (whether by the Borrower, the RFA Program Agent or
otherwise), then, in any such case, the Borrower shall, concurrently with such
occurrence, declaration or termination, prepay the outstanding principal amount
of the Loans in full together with all accrued but unpaid interest owing
hereunder and all other unpaid Obligations.

     

    SECTION
2.08.      Prepayment of
Loans.  (a)  The
Borrower shall have the right, at any time and from time to time on or after the
date that is six months after the Effective Date, 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 2.08(a) shall
be in a principal amount that is a multiple of $1,000,000 and not less than
$5,000,000.  The Borrower 

     

    
      
        
        

      

      
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    shall
have no right to voluntarily prepay any Borrowing at any time prior to the date
that is six months after the Effective Date.

     

    (b)           In
the event that on any date (each, a “Non-Compliance Date”)
the aggregate outstanding principal balance of the Loans on such date shall
exceed the then Borrowing Base, then, subject to Section 2.19, during the
Cure Period applicable to such Non-Compliance Date, each of the Borrower and the
Collection Agent shall (and the Borrower hereby authorizes the Collection Agent
to) deposit any amount to be distributed to or otherwise received by the
Borrower hereunder or under the Receivables Financing Agreement out of
“Collections” (as defined herein or therein), into the Cure Account (up to an
aggregate amount equaling such excess).  At the end of the Cure Period
corresponding to any Non-Compliance Date, if the aggregate outstanding principal
balance of the Loans on such date exceeds the then Borrowing Base (the amount of
such excess being the “Required Cure Payment
Amount”), (y) the Administrative Agent shall apply all Cure Funds
then on deposit in the Cure Account, up to the applicable Required Cure Payment
Amount, as a prepayment of the Loans (and to the extent the Cure Funds on
deposit in the Cure Account exceeds such Required Cure Payment Amount and there
exists no Default or Event of Default, the Administrative Agent, upon the
Borrower’s written request together with an officer’s certificate of the
Borrower stating that, after taking into account the remittance of the excess
funds in the Cure Account to the Borrower, the Borrowing Base is equal to or
greater than the aggregate outstanding principal balance of the Loans, shall
remit such excess to the Borrower), and (z) to the extent that the prepayment of
the Loans pursuant to the preceding clause (y) is less than the Required Cure
Payment Amount, the Borrower shall prepay the Loans in an amount of the
deficiency.  The Administrative Agent may, at any time during the
continuance of an Event of Default, transfer any and all of the Cure Funds then
on deposit in the Cure Account to the Administrative Agent’s Account for payment
of the Obligations and Collection Agent Fees in the manner set forth in
Section 2.19(c).

     

    (c)           Prior
to any optional or mandatory prepayment hereunder of less than all of the
Borrowings, 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 (d) of this Section.  If the Borrower shall fail to so
specify the Borrowing or Borrowings to be prepaid prior to such prepayment, the
Administrative Agent may apply any such prepayment to such Borrowing or
Borrowings as the Administrative Agent may elect.

     

    (d)           The
Borrower shall notify the Administrative Agent 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, or (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.  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 thereof to be prepaid and,
in the case of a mandatory prepayment, a reasonably detailed calculation of the
amount of such prepayment.  Promptly following receipt of any such
notice, 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 

     

    
      
        
        

      

      
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    in
the prepaid Borrowing.  Prepayments shall be accompanied by accrued
interest on the principal amount being prepaid.

     

    SECTION
2.09.      Interest.  (a)  The
Loans comprising each ABR Borrowing shall bear interest at the Alternate Base
Rate plus the Applicable Margin.

     

    (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 Margin.

     

    (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 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 the highest rate then payable on any of the Loans (or, if there are no Loans
then outstanding, at a rate per annum equal to 2% plus the Alternate Base Rate
plus the Applicable Margin for ABR Loans).

     

    (d)           Accrued
interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and on the 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, 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
2.12.

     

    (e)           All
interest hereunder 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).  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
2.10.      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 

     

    
      
        
        

      

      
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    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.

     

    SECTION
2.11.      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

                  
	 	 	 
	 
      	
                    (ii)

                  	
                    impose
      on any Lender or the London interbank market any other condition affecting
      this Agreement or Eurodollar Loans made by such
  Lender;

                  


          

        

      

    

     

    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 reduce the amount of any sum received or receivable
by such Lender hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender, as the case may be, for such additional costs incurred
or reduction suffered.

     

    (b)           If
any Lender 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 capital
or on the capital of such Lender’s holding company, if any, as a consequence of
this Agreement or the Loans made by such Lender to a level below that which such
Lender or such Lender’s holding company could have achieved but for such Change
in Law (taking into consideration such Lender’s policies and the policies of
such Lender’s holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Lender such additional amount or amounts
as will compensate such Lender or such Lender’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 2.11; provided that
the failure to provide such notification will not affect such Lender’s rights to
compensation hereunder.

     

    (c)           A
certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender 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 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 to demand compensation pursuant to this
Section shall not constitute a waiver of such Lender’s right to demand such
compensation; provided that the Borrower shall not be required to compensate a
Lender pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender notifies the Borrower of
the Change in Law giving rise to such increased costs or reductions and of such
Lender’s intention to claim compensation therefor; provided further that, if the
Change in Law giving rise to such increased costs 

     

    
      
        
        

      

      
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    or
reductions is retroactive, then the 270-day period referred to above shall be
extended to include the period of retroactive effect thereof.

     

    SECTION
2.12.      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, 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 2.16, 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
2.13.      Fees.  (a) The
Borrower shall pay to the Collection Agent a fee (the “Collection Agent
Fee”) of 1% per annum on the average daily Outstanding Balance of the
Receivables and Participated Receivables, from the date of this Agreement until
the date on which all outstanding Obligations shall have been paid in full,
payable in arrears on each Distribution Date.  Upon three Business
Days’ notice to the Borrower and the Administrative Agent, the Collection Agent
(if not an Originator, the Borrower or its designee or an Affiliate of the
Borrower) may elect to be paid, as such fee, another percentage per annum on the
average daily Outstanding Balance of the Receivables and Participated
Receivable, but in no event in excess of 110% of the reasonable costs and
expenses of the Collection Agent in administering and collecting the Receivables
and Participated Receivables.  The Collection Agent Fee shall be
payable only from Collections received by the Borrower pursuant to, and subject
to the priority of payment set forth in, Section 2.19.  The amounts
paid as the “Collection Agent Fee” under, and as defined in, the Receivables
Financing Agreement or any Purchase Agreement shall reduce (but not below zero
dollars), on a dollar-for-dollar basis, the obligation of the Borrower to pay
the Collection Agent Fee pursuant to this Section 2.13(a).

     

    (b)           The
Borrower shall pay to the Administrative Agent for the account of the Persons
entitled thereto certain fees (collectively, the “Fees”) in the amounts
and on the dates set forth in a separate fee agreement of even date herewith
among the Borrower, the Administrative 

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    Agent
and Citigroup Global Markets Inc., as the same may be amended or restated from
time to time (the “Fee
Agreement”).

     

    (c)           If
any portion of the Loans are prepaid prior to the date that is six months before
the Maturity Date, whether pursuant to the second sentence of Section 2.07
or Section 2.08 or otherwise pursuant to this Agreement (including, without
limitation, any required prepayment following the occurrence of an Event of
Default), and whether such prepayment is mandatory or voluntary, the Borrower
shall pay to the Administrative Agent, for the ratable benefit of the Lenders, a
prepayment fee equal to 1.0% of the principal amount of the Loans being so
prepaid, which prepayment fee shall be due and payable on the date of the
applicable prepayment.

     

    SECTION
2.14.      Taxes.  (a) Any
and all payments and deposits required to be made hereunder or under any other
Transaction Document by the Collection Agent or the Borrower shall be made free
and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding net income
taxes that are imposed by the United States and franchise taxes and net income
taxes that are imposed on the Administrative Agent, a Lender or any of its
Affiliates (each of the foregoing, an “Affected Person”) by
the state or foreign jurisdiction under the laws of which such Affected Person
is organized or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as “Taxes”).  If
the Borrower or the Collection Agent shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder to any Affected Person,
(i) the Borrower shall make an additional payment to such Affected Person, in an
amount sufficient so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.14), such
Affected Person receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower or the Collection Agent, as the
case may be, shall make such deductions and (iii) the Borrower or the Collection
Agent, as the case may be, shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable
law.

     

    (b)           In
addition, the Borrower agrees to pay any present or future stamp or other
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under any other
Transaction Document or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any other Transaction Document
(hereinafter referred to as “Other
Taxes”).

     

    (c)           The
Borrower will indemnify each Affected Person for the full amount of Taxes or
Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 2.14) paid by such
Affected Person and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto whether or not such Taxes or Other
Taxes were correctly or legally asserted.  This indemnification shall
be made within thirty days from the date the Affected Person makes written
demand therefor (and a copy of such demand if delivered by other than the
Administrative Agent shall be delivered to the Administrative
Agent).  A certificate as to the amount of such indemnification
submitted to the Borrower and, with respect to any notification 

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    by
any Lender, to the Administrative Agent, setting forth, in reasonable detail,
the basis for and the calculation thereof, shall be conclusive and binding for
all purposes absent manifest error.

     

    (d)           Each
Affected Person which is organized outside the United States and which is
entitled to an exemption from, or reduction of, withholding tax under the laws
of the United States as in effect on the date hereof (or, in the case of any
Person which becomes an Affected Person after the date hereof, on the date on
which it so becomes an Affected Person with respect to any payments under this
Agreement) shall, on or prior to the date hereof (or, in the case of any Person
who becomes an Affected Person after the date hereof, on or prior to the date on
which it so becomes an Affected Person), deliver to the Borrower such
certificates, documents or other evidence, as required by the Internal Revenue
Code of 1986, as amended or Treasury Regulations issued pursuant thereto,
including Internal Revenue Service Form W-8BEN or Form W-8ECI and any other
certificate or statement of exemption required by Treasury Regulation Section
1.1441-1(a) or Section 1.1441-6(c) or any subsequent version thereof, properly
completed and duly executed by such Affected Person as will permit such payments
to be made without withholding or at a reduced rate.  Each such
Affected Person shall from time to time thereafter, upon written request from
the Borrower, deliver to the Borrower any new certificates, documents or other
evidence as described in the preceding sentence as will permit payments under
this Agreement to be made without withholding or at a reduced rate (but only so
long as such Affected Person is legally able to do so).

     

    (e)           The
Borrower shall not be required to pay any amounts to any Affected Person in
respect of Taxes and Other Taxes pursuant to paragraphs (a), (b) and (c) above
if the obligation to pay such amounts is attributable to the failure by such
Affected Person to comply with the provisions of paragraph (d) above; provided, however, that should
an Affected Person become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as such Affected
Person shall reasonably request to assist such Affected Person to recover such
Taxes.

     

    SECTION
2.15.      Payments Generally; Pro Rata
Treatment; Sharing of Setoffs.  (a)  Each
of the Borrower and the Collection Agent shall make each payment or deposit
required to be made by it hereunder or under any other Transaction Document
(whether of principal, interest, fees, or otherwise) prior to the time expressly
required hereunder or under such other Transaction Document for such payment or
deposit (or, if no such time is expressly required, prior to 12:00 noon, New
York City time), on the date when due or when such deposit is required to be
made, 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 390 Greenwich Street, New York, NY 10013, except that
payments pursuant to Sections 2.11, 2.12, 2.14, 10.01 and 11.04 shall be made
directly to the Persons entitled thereto and payments pursuant to other
Transaction 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 or deposit under
any Transaction Document shall be due on a day that is not a Business Day, the
date for payment or deposit shall be extended to the next succeeding Business
Day, and, in the case of any payment or deposit accruing interest, interest
thereon shall be payable for the period 

     

    
      
        
        

      

      
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    of
such extension.  All payments under each Transaction Document shall be
made in United States dollars.

     

    (b)           If
at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest, fees and
other Obligations then due hereunder, such funds shall be applied in the order
of payment of Obligations set forth in Section 2.19.

     

    (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 resulting in such Lender receiving payment of a greater proportion of
the aggregate amount of its 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
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; 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 or on behalf of 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 to any assignee or 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 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 the amount due.  In such event, if the Borrower has not in
fact made such payment, then each of the Lenders severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender 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 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(b), 2.15(d) or 8.04, 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.

     

    
      
        
        

      

      
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    SECTION
2.16.      Mitigation Obligations;
Replacement of Lenders.  (a)  If
any Lender requests compensation under Section 2.11, 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 2.14, 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 2.11 or 2.14, 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 2.11, (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 2.14 or
(iii) any Lender refuses to consent to any amendment or waiver of any
Transaction 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 11.03), 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, 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, 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 such assignment
resulting from a claim for compensation under Section 2.11 or payments
required to be made pursuant to Section 2.14, 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
2.17.      Security
Interest.  To
secure the performance by the Borrower of all the terms, covenants and
agreements on the part of the Borrower (whether as Borrower or otherwise) to be
performed under this Agreement or any document delivered in connection with this
Agreement in accordance with the terms thereof, including, without limitation,
the punctual payment when due of all obligations of the Borrower hereunder or
thereunder, whether for principal, interest, fees, indemnification payments,
expenses or otherwise (all of the foregoing, collectively, the “Obligations”), the
Borrower hereby assigns to the Administrative Agent for its benefit and the
ratable benefit of the Lenders, and hereby grants to the Administrative Agent
for its benefit and the ratable benefit of the Lenders a security interest in,
all of the Borrower’s right, title and interest in and to the following
(collectively, the “Collateral”):  (A)
the Purchase Agreements and the Parent Undertakings, including, without
limitation, (i) all rights of the Borrower to receive moneys due or to become
due under or pursuant to the Purchase Agreements or the Parent Undertakings,
(ii) all security interests and property subject thereto from time to


     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    time
purporting to secure payment of monies due or to become due under or pursuant to
the Purchase Agreements or the Parent Undertakings, (iii) all rights of the
Borrower to receive proceeds of any insurance, indemnity, warranty or guaranty
with respect to the Purchase Agreements or the Parent Undertakings, (iv) claims
of the Borrower for damages arising out of or for breach of or default under the
Purchase Agreements or the Parent Undertakings, and (v) the right of the
Borrower to compel performance and otherwise exercise all remedies thereunder,
(B) all Transferred Assets, whether now owned and existing or hereafter acquired
or arising, the Related Security and Collections with respect thereto and all
other assets of the Borrower, including, without limitation, accounts, chattel
paper, instruments, payment intangibles and general intangibles (as those terms
are defined in the UCC), including undivided interests in any of the foregoing,
(C) the Lock-Boxes and Deposit Accounts and (D) to the extent not included in
the foregoing, all proceeds of any and all of the foregoing.

     

    SECTION
2.18.      Right of
Setoff.  Without
in any way limiting the provisions of Section 2.15(c), the Administrative
Agent and each Lender is hereby authorized (in addition to any other rights it
may have) at any time after the occurrence and during the continuance of an
Event of Default to set-off, appropriate and apply (without presentment, demand,
protest or other notice which are hereby expressly waived) any deposits and any
other indebtedness held or owing by the Administrative Agent or such Lender to,
or for the account of, the Borrower, the Collection Agent or any Originator
against any amount owing by the Borrower, the Collection Agent or such
Originator, respectively, to such Person or to the Administrative Agent on
behalf of such Person (even if contingent or unmatured).

     

    SECTION
2.19.      Settlement
Procedures.  (a)  On
each date that any Obligations remain outstanding (commencing on the date the
Administrative Agent’s Account and the Cure Account have been established, which
accounts shall be established no later than the second Business Day after the
date of this Agreement) on which (x) any amount of Collections are to be
deposited into the Borrower’s Account (as defined in the Receivables Financing
Agreement) (or otherwise to be paid to or on behalf of the Borrower) pursuant to
the Receivables Financing Agreement or are otherwise in the Borrower’s Account
(as defined in the Receivables Financing Agreement) or in the possession or
control of the Borrower or (y) after the RFA Termination Date, any amount
of Collections are received by or on behalf of the Borrower or the Collection
Agent and not otherwise promptly applied to the payment of Obligations, each of
the Borrower and the Collection Agent shall (and the Borrower hereby authorizes
and directs the Collection Agent to) cause such amount to be distributed as
follows:

     

    (A)           If
on such date no Event of Default is continuing:

     

    
      
        
          	 
      	
                  (i)

                	
                  First, if such
      date is not the Maturity Date, to be deposited into the Administrative
      Agent’s Account for the benefit of the Beneficiaries and the Collection
      Agent, an amount equal to the sum of the accrued and unpaid interest, Fees
      and Collection Agent Fees owing hereunder through such date and any unpaid
      expenses of, or other amounts (other than Fees) owing to, the
      Administrative Agent incurred or owing under any Transaction Document
      (such expenses and amounts owing to the Administrative Agent, the “Administrative Agent
      Amounts”), in each case, to the extent the amount then on deposit
      in the Administrative

                


        

      

       

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

       

      
        
          
            
              
                	 
      	 
      	
                        Agent’s
      Account in respect thereof is less than the sum of the accrued and unpaid
      interest, Fees and Collection Agent Fees owing hereunder as of such date
      and the Administrative Agent Amounts;

                      
	 	 	 
	 
      	
                        (ii)

                      	
                        Second, if such
      date is not the Maturity Date and during any Cure Period, to be deposited
      into the Cure Account, an amount equal to the amount then required to be
      deposited into the Cure Account by the Borrower pursuant to
      Section 2.08(b), to be held by the Administrative Agent for the
      benefit of the Beneficiaries and distributed in accordance with
      Section 2.08(b);

                      
	 	 	 
	 
      	
                        (iii)

                      	
                        Third, if such
      date is the Maturity Date, to be deposited into the Administrative Agent’s
      Account for the benefit of the Beneficiaries and the Collection Agent, an
      amount equal to all unpaid principal and interest on the Loans and all
      other unpaid Obligations and unpaid Collection Agent Fees, to the extent
      such amount is not then on deposit in the Administrative Agent’s Account;
      and

                      
	 	 	 
	 
      	
                        (iv)

                      	
                        Thereafter, to
      be deposited into the Borrower’s
Account.

                      


              

            

          

        

      

    

     

     

    (B)           If
on such date an Event of Default is continuing:

     

    
      
        
          
            	 
      	
                    (i)

                  	
                    First, to be
      deposited into the Administrative Agent’s Account for the benefit of the
      Beneficiaries and the Collection Agent, the entire such amount to be
      applied to the payment in full of the Obligations and Collection Agent
      Fees; and

                  
	 	 	 
	 
      	
                    (ii)

                  	
                    Thereafter,
      once all Obligations and Collection Agent Fees have been paid in full, to
      be deposited into the Borrower’s
Account.

                  


          

        

      

    

     

    For
purposes of determining the amount to be deposited into the Administrative
Agent’s Account pursuant to the preceding clause (A)(i) with respect to
interest, Fees and Administrative Agent Amounts, the Administrative Agent shall,
from time to time, provide written notice to the Collection Agent and the
Borrower of the estimated per diem accrual amount of interest and Fees and of
the Administrative Agent Amounts.  The Borrower agrees that it shall
not instruct the Collection Agent to direct the RFA Trustee to hold in the RFA
Trustee’s Account all or a portion of any Collections that otherwise would be
deposited into the Borrower’s Account (as defined in the Receivables Financing
Agreement) pursuant to the terms of the Receivables Financing Agreement if doing
so would reduce the amounts that would otherwise be deposited into the
Administrative Agent’s Account or the Cure Account pursuant to any of clauses
(A) (i), (ii) or (iii) above.  The Borrower hereby authorizes the
Administrative Agent, at any time and from time to time upon the occurrence and
during the continuance of a Default or an Event of Default or if the aggregate
outstanding principal balance of the Loans exceeds the Borrowing Base or if the
Maturity Date shall occur, to instruct the RFA Trustee to disburse to the
Administrative Agent any and all amounts held by or otherwise in the possession
or control of the RFA Trustee (including, without limitation, in the RFA
Trustee’s Account) that are to be deposited into the Borrower’s Account (as
defined in the Receivables Financing Agreement) or otherwise paid to or for the
benefit of the Borrower pursuant to the terms of the Receivables Financing
Agreement.  

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    Any
such amounts received by the Administrative Agent under the preceding sentence
shall be deposited into the Administrative Agent’s Account and distributed in
the manner provided in this Section 2.19.

     

    (b)           On
each date on which any accrued interest, Fees or Collection Agent Fees are due
and payable hereunder or any Administrative Agent Amounts have not been
reimbursed or are due and payable and, in each case, there exists no Event of
Default and such date is not the Maturity Date, the Administrative Agent shall
distribute the amount then on deposit in the Administrative Agent’s Account in
respect thereof to, in the case of any such interest, Fees and Administrative
Agent Amounts, the Administrative Agent or Lender entitled to receive the same
and, in the case of any such Collection Agent Fees, to the Collection Agent;
provided, that
if on any such date there shall be insufficient amounts on deposit in the
Administrative Agent’s Account in respect thereof, such amounts shall be
distributed (i) first, to the
Administrative Agent for Administrative Agent Amounts, (ii) second, to the
Collection Agent (if the Collection Agent is other than an Originator or one of
its Affiliates) for due and payable Collection Agent Fees, (iii) third, ratably to the
Administrative Agent and Lenders entitled to receive same for due and payable
accrued interest and Fees and (iv) fourth, to the
Collection Agent (if the Collection Agent is an Originator or one of its
Affiliates) for due and payable Collection Agent Fees.

     

    (c)           During
the continuance of an Event of Default or if the Maturity Date shall occur, the
Administrative Agent shall distribute the amount on deposit in the
Administrative Agent’s Account to the payment of the Obligations and Collection
Agent Fees in the following order: (i) first, to the
Administrative Agent for Administrative Agent Amounts, (ii) second, to the
Collection Agent (if the Collection Agent is other than an Originator or one of
its Affiliates) for accrued and unpaid Collection Agent Fees, (iii) third, ratably to the
Administrative Agent and Lenders entitled to receive same for accrued and unpaid
interest and Fees, (iv) fourth, ratably to
the Lenders in reduction of the aggregate outstanding principal on the Loans
until such principal is reduced to zero, (v) fifth, ratably to the
Beneficiaries for other unpaid Obligations and (vi) sixth, to the
Collection Agent (if the Collection Agent is an Originator or one of its
Affiliates) for accrued and unpaid Collection Agent Fees.

     

    (d)           Nothing
in this Section 2.19 shall relieve the Borrower of any obligation to pay any
Obligation or Collection Agent Fee hereunder as and when the same shall be due
and payable or to deposit into the Cure Account the amount then required to be
deposited pursuant to Section 2.08(b).  If, on the date any
Obligations or Collection Agent Fees are payable to the Administrative Agent,
any Lender or the Collection Agent hereunder, the amount then on deposit in the
Administrative Agent’s Account in respect thereof is less than the amount
thereof then due and payable, the Borrower shall pay to the Administrative Agent
for the benefit of the relevant Beneficiaries or the Collection Agent, as
applicable, on such due date, the amount of such deficiency.

     

    (e)           If
at any time any payment of any Obligations is rescinded or must otherwise be
returned by a Beneficiary for any reason, effective upon such rescission or
return such payment shall automatically be deemed, as between the Beneficiaries
and the Borrower, never to have occurred, and the Borrower shall be required, to
the extent it received any amounts 

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    under
this Section 2.19 or otherwise, to remit to the Administrative Agent for the
account of the applicable Beneficiaries an amount equal to the rescinded or
returned payment.

     

    ARTICLE
III

     

    CONDITIONS
PRECEDENT

     

    The
effectiveness of this Agreement and the obligations of the Lenders to make the
Loans under this Agreement are subject to the fulfillment, to the satisfaction
of the Administrative Agent, or waiver by the Administrative Agent of the
following conditions precedent on or before February 20, 2009:

     

    (a)           The
Administrative Agent shall have received each of the following, duly executed by
each of the parties thereto, and each in form and substance satisfactory to the
Administrative Agent:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	 
      	
                                          (i)

                                        	
                                          this
      Agreement;

                                        
	 	 	 
	 
      	
                                          (ii)

                                        	
                                          the
      Notes payable to the order of each Lender;

                                        
	 	 	 
	 
      	
                                          (iii)

                                        	
                                          the
      Funds Transfer Letter;

                                        
	 	 	 
	 
      	
                                          (iv)

                                        	
                                          an
      amendment to the Parent Undertaking (Originators) and the assignment
      thereof, in such form as may be required by the Administrative Agent in
      connection with the transactions contemplated hereby;

                                        
	 	 	 
	 
      	
                                          (v)

                                        	
                                          the
      Parent Undertaking (Collection Agent);

                                        
	 	 	 
	 
      	
                                          (vi)

                                        	
                                          an
      agreement of the Process Agent pursuant to which it agrees to act as such
      as called for by Section 11.10(a);

                                        
	 	 	 
	 
      	
                                          (vii)

                                        	
                                          the
      RFA Intercreditor Agreement;

                                        
	 	 	 
	 
      	
                                          (viii)

                                        	
                                          the
      Senior Collateral Intercreditor Agreement Amendment;

                                        
	 	 	 
	 
      	
                                          (ix)

                                        	
                                          the
      Fee Agreement, together with payment of any Fees thereunder required to be
      paid on or before the Effective Date;

                                        
	 	 	 
	 
      	
                                          (x)

                                        	
                                          an
      amendment to the Receivables Financing Agreement in such form as may be
      required by the Administrative Agent in connection with the transactions
      contemplated hereby;

                                        
	 	 	 
	 
      	
                                          (xi)

                                        	
                                          an
      amendment to each of the Purchase Agreements in such form as may be
      required by the Administrative Agent in connection with the transactions
      contemplated hereby;

                                        
	 	 	 
	 	
                                          (xii)

                                        	(1) Deposit
      Account Agreements with each Deposit Bank, (2) Governmental Entity
      Receivables Agreements with each
Account


                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

      

       

      
        
          
            
              	 
      	
                       

                    	
                      Bank,
      and (3) an amendment to the Deposit Account Agreements and Governmental
      Entity Receivables Agreements (as such terms are defined in the
      Receivables Financing Agreement) in such form as may be required by the
      Administrative Agent in connection with the transactions contemplated
      hereby;  and

                    
	 	 	 
	 
      	
                      (xiii)

                    	
                      a
      personal covenant letter from each director and member of each of the
      Borrower and Cayman SPE I agreeing not to introduce, present, vote on,
      adopt or pass any resolution which provides for the winding
      up  of (or has the effect of winding up) the Borrower or Cayman
      SPE I, as applicable, so long as any Commitments or Obligations remain
      outstanding.

                    


            

          

        

      

    

     

    (b)           The
Administrative Agent shall have received the following, each (unless otherwise
indicated), dated the Effective Date:

     

    
      
        
          
            
              
                	 
      	
                        (i)

                      	
                        Certified
      copies of the resolutions (or similar authorization, if not a corporation)
      of the Board of Directors (or similar governing body or Persons, if not a
      corporation) of the Borrower, the Parent, the other Originators, the
      Collection Agent and the Predecessor Purchasers approving this Agreement,
      the Purchase Agreements, the Parent Undertakings and any other Transaction
      Documents to which it is a party and certified copies of all documents
      evidencing other necessary corporate or limited liability company, as the
      case may be, action and governmental approvals, if any, with respect to
      this Agreement, the Purchase Agreements, the Parent Undertakings and any
      such Transaction Documents.  One such certificate will be
      acceptable for any number of such Persons.

                      
	 	 	 
	 
      	
                        (ii)

                      	
                        A
      certificate of the Secretary or Assistant Secretary of the Borrower, the
      Parent, the other Originators, the Collection Agent and the Predecessor
      Purchasers certifying the names and true signatures of their respective
      officers authorized to sign this Agreement, the Purchase Agreements, the
      Parent Undertakings and the other documents to be delivered by it
      hereunder and thereunder.  One such certificate will be
      acceptable for any number of such Persons.

                      
	 	 	 
	 
      	
                        (iii)

                      	
                        A
      copy of the by-laws of the Parent and of the Memorandum and Articles of
      Association of Cayman SPE I and the Borrower, certified by the Secretary
      or Assistant Secretary (or, in the case of Cayman SPE I and the Borrower,
      a director) of the Parent, Cayman SPE I or the Borrower, as the case may
      be.

                      
	 	 	 
	 
      	
                        (iv)

                      	
                        A
      copy of the certificates of incorporation of each of HQ, the Parent and
      the other Originators certified as of a recent date by the Secretary of
      State or other appropriate official of the state of its organization (or a
      certificate from the Secretary or Assistant Secretary of HQ, the Parent
      and the other Originators certifying that their respective certificates of
      incorporation

                      


              

            

          

        

      

       

      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

      
 

      
        
          
            
              
                
                  	 
      	 
      	
                          have
      not been amended or modified from the copies thereof delivered for the
      closing of the Receivables Financing Agreement or, if amended or modified
      since such closing, attaching those amendments and modifications), and a
      certificate as to the good standing of each of the Borrower, Cayman SPE I,
      HQ, the Parent and the other Originators from such Secretary of State or
      other official (or, in the case of the Borrower and Cayman SPE I, the
      equivalent in the jurisdiction of their formation), dated as of a recent
      date.

                        
	 	 	 
	 
      	
                          (v)

                        	
                          Copies
      of proper financing statements (or similar filings to be made outside of
      the United States), duly filed on or before the Effective Date, under the
      UCC and other laws of all jurisdictions that the Administrative Agent may
      deem necessary or desirable in order to perfect the ownership and security
      interests contemplated by this Agreement and the Purchase
      Agreements.

                        
	 	 	 
	 
      	
                          (vi)

                        	
                          Copies
      of proper financing statements (or similar filings to be made outside of
      the United States), if any, necessary to release all security interests
      and other rights of any Person in (i) the Receivables, the Participated
      Receivables, Participation Interests, Contracts or Related Security
      previously granted by the Borrower, any Predecessor Purchaser or any
      Originator and (ii) the Collateral previously granted by the Borrower, in
      each case other than those security interests and financing statements or
      similar filings which are subject and referred to in the Senior Collateral
      Intercreditor Agreement, the RFA Intercreditor Agreement, the Receivables
      Financing Agreement or the other Transaction Documents.

                        
	 	 	 
	 
      	
                          (vii)

                        	
                          Completed
      requests for information (or similar requests to be made outside of the
      United States), dated on or before the Effective Date, listing all
      effective financing statements and other filings filed in the
      jurisdictions referred to in subsection (v) above and in any other
      jurisdictions reasonably requested by the Administrative Agent that name
      the Borrower, any Predecessor Purchaser or any Originator as debtor (in
      the case of any Predecessor Purchaser or any Originator, only to the
      extent requested by the Administrative Agent), together with copies of
      such financing statements and other filings (none of which shall cover any
      Receivables, Participated Receivables, Participation Interests, Contracts,
      Related Security or the Collateral except those relating to the Credit
      Agreement and the Indentures and those filed in connection with the
      transactions contemplated by the Purchase Agreements and the Receivables
      Financing Agreement).

                        
	 	 	 
	 
      	
                          (viii)

                        	
                          Favorable
      opinions of Skadden, Arps, Slate, Meagher & Flom LLP, Chapman &
      Cutler relating to various states’ local perfection issues, Parent general
      counsel, and Maples & Calder, as counsel for the Borrower, the
      Predecessor Purchasers, the Parent and the other Originators, as to such
      matters as the Administrative Agent may reasonably
  request.

                        


                

              

            

          

        

      

       

      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

      

      
 

      
        
          
            	 
      	
                    (ix)

                  	
                    A
      certified copy of the executed Originator Purchase Agreement, Secondary
      Purchase Agreement and Tertiary Purchase Agreement, each, as amended
      through the Effective Date.

                  
	 	 	 
	 
      	
                    (x)

                  	
                    A
      certified copy of the executed Parent Undertaking (Originators), as
      amended through the Effective
Date.

                  


          

        

      

    

     

    (c)           as
of the Effective Date, the following statements shall be true (and acceptance of
the proceeds of the Loans by the Borrower shall be deemed a representation and
warranty by the Borrower, the Parent and the Collection Agent (each as to
itself) that such statements are then true):

     

    
      
        
          
            
              
                
                  	 
      	
                          (i)

                        	
                          The
      representations and warranties contained in Sections 4.01 and 4.02 are
      correct on and as of the Effective Date as though made on and as of such
      date,

                        
	 	 	 
	 
      	
                          (ii)

                        	
                          No
      event has occurred and is continuing, or would result from the making of
      the Loans, that constitutes an Event of Default or an
    Default,

                        
	 	 	 
	 
      	
                          (iii)

                        	
                          There
      shall have been sold or contributed to the purchaser thereunder pursuant
      to each Purchase Agreement, all Originator Receivables arising on or prior
      to such date other than Government Receivables,

                        
	 	 	 
	 
      	
                          (iv)

                        	
                          There
      shall have been sold or contributed to the purchaser under each Purchase
      Agreement, all Participation Interests in all Originator Receivables which
      are Governmental Receivables arising on or prior to such date;
      and

                        
	 	 	 
	 
      	
                          (v)

                        	
                          No
      “Event of Termination” or “Incipient Event of Termination” under, and as
      each is defined in, the Receivables Financing Agreement shall have
      occurred and be
continuing.

                        


                

              

            

          

        

      

    

     

    (d)           the
Administrative Agent shall have received a completed Borrower Report, a
completed Interim Report and a completed Daily Report containing information
covering the most recently ended reporting period for which information is
required pursuant to Section 6.02(g) of the Receivables Financing Agreement and
demonstrating that, after giving effect to the making of the Loans hereunder, no
Event of Default or Default will occur and the Borrowing Base will equal or
exceed the aggregate original principal amount of the Loans and the
Administrative Agent shall be satisfied with the calculation of the borrowing
base under the Receivables Financing Agreement (including, without limitation,
the concentration limits utilized in such calculation).

     

    (e)           in
the reasonable judgment of the Administrative Agent, (i) since March 1,
2008, there shall have been no material adverse change in the business, assets,
liabilities, condition (financial or otherwise), operations or prospects of the
Borrower, Parent, any Originator, HQ or Cayman SPE I, and (ii) since January 22,
2009, there shall have occurred no circumstance, change or condition in the loan
syndication, financial or capital markets generally that could reasonably be
expected to materially impair syndication of the Loans.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    (f)           the
Administrative Agent shall have not discovered or otherwise become aware of any
information not previously disclosed to it that is materially inconsistent with
its understanding, based on the information previously provided to it, of the
business, assets, liabilities, condition (financial or otherwise), operations or
prospects of the Borrower, Parent, any Originator, HQ or Cayman SPE
I.

     

    (g)           the
Administrative Agent shall have had an opportunity to conduct a take-over audit
of the Collateral and the results of such audit shall have been satisfactory to
the Administrative Agent.

     

    (h)           the
Administrative Agent shall have received such other approvals, opinions or
documents as the Administrative Agent may reasonably request.

     

    ARTICLE
IV

     

    REPRESENTATIONS
AND WARRANTIES

     

    SECTION
4.01.      Representations and
Warranties of the Borrower.  The
Borrower hereby represents and warrants as follows, which representations and
warranties shall be deemed repeated on each day during the Term:

     

    (a)           The
Borrower is an exempted company incorporated with limited liability validly
existing and in good standing under the laws of the Cayman Islands, and is duly
qualified to do business, and is in good standing, in every jurisdiction where
the nature of its business requires it to be so qualified.

     

    (b)           The
execution, delivery and performance by the Borrower of the Transaction Documents
to which it is a party and the other documents to be delivered by it hereunder,
including the Borrower’s use of the proceeds of the Loans, (i) are within the
Borrower’s corporate powers, (ii) have been duly authorized by all necessary
corporate action, (iii) do not contravene (1) the Borrower’s Memorandum and
Articles of Association, (2) any law, rule or regulation applicable to the
Borrower, (3) any contractual restriction binding on or affecting the Borrower
or its property or (4) any order, writ, judgment, award, injunction or decree
binding on or affecting the Borrower or its property, and (iv) do not result in
or require the creation of any lien, security interest or other charge or
encumbrance upon or with respect to any of its properties (except for the
interest created pursuant to this Agreement).  Each of the Transaction
Documents to which the Borrower is a party has been duly executed and delivered
by the Borrower.

     

    (c)           No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required for the due execution,
delivery and performance by the Borrower of the Transaction Documents to which
it is a party or any other document to be delivered thereunder, except for the
filing of UCC financing statements which are referred to herein and
therein.

     

    (d)           Each
of the Transaction Documents to which it is a party constitutes the legal, valid
and binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other 

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    similar
laws affecting the rights of creditors generally and general equitable
principles (whether considered in a proceeding at law or in
equity).

     

    (e)           Since
its date of formation, August 11, 2004, there has been no material adverse
change in the business, operations, property, prospects or financial or other
condition of the Borrower.

     

    (f)           Except
as set forth in Schedule V or as otherwise disclosed by the Parent in its
publicly available SEC filings, there is no pending or threatened action,
investigation or proceeding affecting the Borrower, the Parent or any of their
Subsidiaries before any court, governmental agency or arbitrator which if
determined adversely to any of them, could reasonably be expected, individually
or in the aggregate, to result in a Material Adverse Effect.

     

    (g)           No
proceeds of any Loans will be used to acquire any equity security of a class
which is registered pursuant to Section 12 of the Securities Exchange Act of
1934.

     

    (h)           The
Borrower is the legal and beneficial owner of the Transferred Assets and Related
Security free and clear of any Adverse Claim (other than the security interests
therein granted under the Receivables Financing Agreement subject to the RFA
Intercreditor Agreement).  The Administrative Agent for the benefit of
the Lenders has a valid and perfected security interest in each Transferred
Asset now existing or hereafter arising and in the Related Security and
Collections with respect thereto, second only in priority to the security
interests granted under the Receivables Financing Agreement that are the subject
of the RFA Intercreditor Agreement.  No effective financing statement
or other instrument similar in effect covering any Collateral is on file in any
recording office, except (i) those relating to the Credit Agreement and the
Indentures, all of which the Borrower represents relate to security interests
that are subject to the Senior Collateral Intercreditor Agreement, (ii) those
relating to the Receivables Financing Agreement, all of which the Borrower
represents relate to security interests that are subject to the RFA
Intercreditor Agreement, (iii) those filed in favor of the Administrative Agent
relating to this Agreement and (iv) 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
Borrowing Base 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, as properly included in the
Borrowing Base.

     

    (i)           Each
Borrower Report, Interim Report and Daily Report (if prepared by the Borrower or
one of its Affiliates, or to the extent that information contained therein is
supplied by the Borrower or an Affiliate), information, exhibit, financial
statement, document, book, record or report furnished or to be furnished at any
time by or on behalf of the Borrower to the Administrative Agent or the Lenders
in connection with and before or after the date of this Agreement is or will be
accurate in all material respects as of its date or (except as otherwise
disclosed to the Administrative Agent or the Lenders, as the case may be, at
such time) as of the date so furnished (or, if applicable, as of a date certain
specified in such report), and no such document contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements contained therein, in the light
of the circumstances under which they were made, not misleading.

     

    
      
        
        

      

      
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    (j)           The
principal place of business and chief executive office of the Borrower and the
office where the Borrower keeps its records concerning the Transferred Assets
are located at the address or addresses referred to in Section
5.01(b).

     

    (k)           The
names and addresses of all the Deposit Banks and Account Banks, together with
the post office boxes and account numbers of the Lock-Boxes, Deposit Accounts
and Governmental Entity Receivables Accounts, as the case may be, of the
Borrower at such banks, are as specified in Schedule I hereto, as such Schedule
I may be updated from time to time pursuant to Section 5.01(g).  The
Lock-Boxes, Deposit Accounts and Governmental Entity Receivables Accounts, as
the case may be, are the only post office boxes and bank accounts into which
Collections of Receivables and Participated Receivables are deposited or
remitted.  The Borrower has delivered to the Administrative Agent a
fully executed Deposit Account Agreement or Governmental Entity Receivables
Agreement with respect to each Deposit Account, Governmental Entity Receivables
Account and any associated Lock-Boxes.

     

    (l)      
     [Intentionally Omitted].

     

    (m)          The
Borrower is not known by and does not use any tradename or doing-business-as
name.

     

    (n)           The
Borrower has no Subsidiaries.

     

    (o)           (i)
The fair value of the property of the Borrower is greater than the total amount
of liabilities, including contingent liabilities, of the Borrower, (ii) the
present fair salable value of the assets of the Borrower is not less than the
amount that will be required to pay all probable liabilities of the Borrower on
its debts as they become absolute and matured, (iii) the Borrower does not
intend to, and does not believe that it will, incur debts or liabilities beyond
the Borrower’s abilities to pay such debts and liabilities as they mature and
(iv) the Borrower is not engaged in a business or a transaction, and is not
about to engage in a business or a transaction, for which the Borrower’s
property would constitute unreasonably small capital.

     

    (p)           With
respect to each Transferred Asset, the Borrower (i) shall have received such
Transferred Asset as a contribution to the capital of the Borrower by Cayman
SPE I, (ii) shall have purchased such Transferred Asset from Cayman SPE I
in exchange for payment (made by the Borrower to Cayman SPE I in accordance with
the provisions of the Tertiary Purchase Agreement) of cash or (iii) shall have
received such Transferred Asset partially as a capital contribution and
partially for payment in cash, in each case in an amount which constitutes fair
consideration and reasonably equivalent value.  Each such sale
referred to in the preceding sentence shall not have been made for or on account
of an antecedent debt owed by Cayman SPE I to the Borrower.

     

    (q)           Taxes.  The
Borrower has timely filed or caused to be filed all required income tax and
sales 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, except where the payment of any such taxes is being contested in good
faith by appropriate proceedings and for which the Borrower has set aside on its
books adequate reserves.  The charges, accruals and reserves on the


     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    books
of the Borrower in respect of such taxes or charges imposed by a Governmental
Entity are, in the opinion of the Borrower, adequate for the payment
thereof.

     

    SECTION
4.02.      Representations and
Warranties of the Collection Agent.  The
Collection Agent hereby represents and warrants as follows, which
representations and warranties shall be deemed repeated on each day during the
Term:

     

    (a)           The
Collection Agent is a corporation duly incorporated, validly existing and in
good standing under the laws of Delaware, and is duly qualified to do business,
and is in good standing, in every jurisdiction where the nature of its business
requires it to be so qualified, except where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.

     

    (b)           The
execution, delivery and performance by the Collection Agent of this Agreement
and any other documents to be delivered by it hereunder (i) are within the
Collection Agent’s corporate powers, (ii) have been duly authorized by all
necessary corporate action, (iii) do not contravene (1) the Collection
Agent’s charter or by-laws, (2) any law, rule or regulation applicable to the
Collection Agent, (3) any contractual restriction binding on or affecting the
Collection Agent or its property or (4) any order, writ, judgment, award,
injunction or decree binding on or affecting the Collection Agent or its
property, and (iv) do not result in or require the creation of any lien,
security interest or other charge or encumbrance upon or with respect to any of
its properties.  This Agreement has been duly executed and delivered
by the Collection Agent.

     

    (c)           No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required for the due execution,
delivery and performance by the Collection Agent of this Agreement or any other
document to be delivered by it hereunder.

     

    (d)           This
Agreement constitutes the legal, valid and binding obligation of the Collection
Agent enforceable against the Collection Agent in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the rights of creditors generally and general equitable principles
(whether considered in a proceeding at law or in equity).

     

    (e)           Since
March 1, 2008 there has been no material adverse change in the business,
operations, property, prospects or financial or other condition of the
Collection Agent.

     

    (f)           Except
as set forth in Schedule V, there is no pending or threatened action,
investigation or proceeding affecting the Collection Agent or any of its
Subsidiaries before any court, governmental agency or arbitrator which if
determined adversely, could reasonably be expected to result in a Material
Adverse Effect.

     

    (g)           On
each day during the Term, the outstanding principal balance of all Loans (less
the amount of Cure Funds then in the Cure Account) is not greater than the
Borrowing Base.  Each Transferred Asset characterized in any Borrower
Report as an Eligible Receivable or Eligible Participation Interest, or as
included in the Borrowing Base is, as of the date of such Borrower Report (or,
if applicable, as of a date certain specified in such 

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    information),
an Eligible Receivable or Eligible Participation Interest, or properly included
in the Borrowing Base, as applicable.

     

    ARTICLE
V

     

    COVENANTS

     

    SECTION
5.01.      Covenants of the
Borrower.  Until
the Commitments have expired or been terminated and the principal and interest
of each Loan and all other Obligations have been paid in full, the Borrower
covenants and agrees with the Administrative Agent and the Lenders
that:

     

    (a)           Compliance with Laws,
Etc.  The Borrower will comply in all material respects with
all applicable laws, rules, regulations and orders and preserve and maintain its
corporate existence, rights, franchises, qualifications, and privileges except
to the extent that the failure so to comply with such laws, rules and
regulations or the failure so to preserve and maintain such rights, franchises,
qualifications, and privileges could not reasonably be expected to result in a
Material Adverse Effect.

     

    (b)           Offices, Records, Name and
Organization.  The Borrower will keep its principal place of
business and chief executive office and the office where it keeps its records
concerning the Transferred Assets at the address of the Borrower set forth on
Schedule III hereto or, upon 30 days’ prior written notice to the Administrative
Agent, at any other locations within the United States.  The Borrower
will not change its name or its jurisdiction of organization, unless (i) the
Borrower shall have provided the Administrative Agent with at least 30 days’
prior written notice thereof and (ii) no later than the effective date of such
change, all actions reasonably requested by the Administrative Agent to protect
and perfect the security interest in the Transferred Assets have been taken and
completed.  The Borrower also will maintain and implement (or cause
the Collection Agent to maintain or implement) administrative and operating
procedures (including, without limitation, an ability to recreate records
evidencing Transferred Assets and related Contracts in the event of the
destruction of the originals thereof), and keep and maintain (or cause the
Collection Agent to maintain or implement) all documents, books, records and
other information reasonably necessary or advisable for the collection of all
Receivables and Participated Receivables (including, without limitation, records
adequate to permit the daily identification of each Receivable and Participated
Receivables and all Collections of and adjustments to each existing Participated
Receivable).

     

    (c)           Performance and Compliance
with Contracts and Credit and Collection Policy.  The Borrower
will, at its expense, timely and fully perform and comply with all material
provisions, covenants and other promises required to be observed by it under the
Contracts related to the Transferred Assets and timely and fully comply in all
material respects with the Credit and Collection Policy in regard to each of the
Transferred Assets and the related Contract.

     

    (d)           Sales, Liens,
Etc.  Except for the security interest created hereunder in
favor of the Administrative Agent and the security interest created in favor of
the RFA Program Agent under the Receivables Financing Agreement (and which is
subject to the RFA Intercreditor Agreement), the Borrower will not sell, assign
(by operation of law or otherwise) or 

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    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 Receivable or Participated Receivable are sent, or assign any
right to receive income in respect thereof.

     

    (e)           Extension or Amendment of
Receivables and Participated Receivables.  Except as provided
in Section 6.02(c), the Borrower will not (and will not permit the Collection
Agent or any Originator to) extend, amend or otherwise modify the terms of any
Receivable or Participated Receivable, or amend, modify or waive any term or
condition of any Contract related thereto.

     

    (f)           Change in Business or Credit
and Collection Policy.  The Borrower will not make any change
in the character of its business or in the Credit and Collection Policy that
could, in either case, reasonably be expected to result in a Material Adverse
Effect.

     

    (g)           Change in Payment
Instructions to Obligors.  The Borrower will not add or
terminate any bank, post office box or bank account as a Deposit Bank, Account
Bank, Lock-Box, Deposit Account or Governmental Entity Receivables Account from
those listed in Schedule I to this Agreement, or make any change in its
instructions to Obligors regarding payments to be made to the Borrower or
payments to be made to any such account or box, unless the Administrative Agent
shall have received notice of such addition, termination or change (including an
updated Schedule I) and a fully executed Deposit Account Agreement or
Governmental Entity Receivables Agreement with each new Deposit Bank or Account
Bank, as the case may be, or with respect to each new Lock-Box, Deposit Account
or Governmental Entity Receivables Account.

     

    (h)           Deposits to Lock-Boxes,
Deposit Accounts, Governmental Entity Receivables
Accounts.  The Borrower will (or will cause the Collection
Agent or the Originators to) instruct all Obligors that are Governmental
Entities other than Contract Payors to remit all their payments in respect of
Participated Receivables to Governmental Entity Receivables Accounts or
Lock-Boxes associated therewith.  The Borrower will (or will cause the
Collection Agent or the Originators to) instruct all Obligors that are not
Governmental Entities other than Contract Payors to remit all their payments in
respect of Receivables to Deposit Accounts or Lock-Boxes associated
therewith.  If the Borrower shall receive any Collections directly, it
shall immediately (and in any event within one Business Day) deposit the same to
a Deposit Account (in the case of Collections of Receivables) or a Governmental
Entity Receivables Account (in the case of Collections of Participated
Receivables).  The Borrower will not deposit or otherwise credit, or
cause or permit to be so deposited or credited, to any Lock-Box, Deposit Account
or Governmental Entity Receivables Account, cash or cash proceeds other than
Collections of Receivables or Participated Receivables.

     

    (i)        
   [Intentionally
Omitted.]

     

    (j)        
   Further
Assurances.  (i) The Borrower agrees from time to time, at
its expense, promptly to execute and deliver all further instruments and
documents, and to take all further actions, that may be necessary or desirable,
or that the Administrative Agent may reasonably request, to perfect or protect
the security interest granted under this Agreement, or to 

     

    
      
        
        

      

      
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    enable
the Lenders or the Administrative Agent to exercise and enforce their respective
rights and remedies under this Agreement.

     

    
      
        
          	 
      	
                  (ii)

                	
                  The
      Borrower authorizes the Administrative Agent to file financing or
      continuation statements, and amendments thereto and assignments thereof,
      relating to the
Collateral.

                


        

      

    

     

    (k)           Reporting
Requirements.  The Borrower will provide to the Administrative
Agent and the Lenders (in multiple copies, if requested by the Administrative
Agent) the following:

     

    
      
        
          
            
              	 
      	
                      (i)

                    	
                      as
      soon as available and in any event within 50 days (or such earlier date
      that is 5 days after the then-current filing deadline for the Parent’s
      Quarterly Report on Form 10-Q) after the end of each of the first three
      quarters of each fiscal year of the Parent, the Parent’s and its
      consolidated Subsidiaries’ consolidated balance sheet as of the end of
      such quarter and statements of income and cash flows for the then elapsed
      portion of such fiscal year for the period commencing at the end of the
      previous fiscal year and ending with the end of such quarter, certified by
      a Financial Officer of the Parent;

                    
	 	 	 
	 
      	
                      (ii)

                    	
                      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 Parent’s
      Annual Report on Form 10-K) after the end of each fiscal year of the
      Parent, the audited consolidated balance sheet of the Parent and its
      consolidated Subsidiaries 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 other independent public accountants 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 the 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 Parent
      and its consolidated Subsidiaries on a consolidated basis in accordance
      with GAAP;

                    
	 	 	 
	 
      	
                      (iii)

                    	
                      as
      soon as available and in any event within 50 days after the end of each of
      the first three fiscal quarters (or such earlier date that is 5 days after
      the then-current filing deadline for the Parent’s Quarterly Report on Form
      10-Q) and within 105 days after the end of the fourth fiscal quarter of
      each fiscal year (or such earlier date that is 10 days after the
      then-current filing deadline for the Parent’s Annual Report on Form 10-K)
      of the Borrower, a balance sheet of the Borrower as of the end of such
      quarter and a statement of income and cash flows of the Borrower for the
      period commencing at the end of the previous fiscal year and ending with
      the end of such quarter, certified by a Financial Officer of the
      Borrower;

                    


            

          

        

      

       

      
        
          
          

        

        
          47

          
            

          

        

        
          
          

        

      

       

      
        
          
            
              
                
                  
                    
                      	 
      	
                              (iv)

                            	
                              as
      soon as possible and in any event within five days after the occurrence of
      each Event of Default or Default, a statement of a Financial Officer of
      the Borrower setting forth details of such Event of Default or Default and
      the action that the Borrower has taken and proposes to take with respect
      thereto;

                            
	 	 	 
	 
      	
                              (v)

                            	
                              promptly
      after the sending or filing thereof, copies of all reports that the Parent
      sends to any of its security holders, and copies of all reports and
      registration statements that the Parent or any of its Subsidiaries files
      with the SEC or any national securities exchange;

                            
	 	 	 
	 
      	
                              (vi)

                            	
                              promptly
      after the filing or receiving thereof, copies of all reports and notices
      that the Parent or any ERISA Affiliate files under ERISA with the Internal
      Revenue Service or the Pension Benefit Guaranty Corporation or the U.S.
      Department of Labor or that the Parent or any ERISA Affiliate receives
      from any of the foregoing or from any multiemployer plan (within the
      meaning of Section 4001(a)(3) of ERISA) to which the Parent or any ERISA
      Affiliate is or was, within the preceding five years, a contributing
      employer, in each case in respect of the assessment of withdrawal
      liability or an event or condition which could, in the aggregate, result
      in the imposition of liability on the Parent and/or any such ERISA
      Affiliate in excess of $10,000,000;

                            
	 	 	 
	 
      	
                              (vii)

                            	
                              at
      least 30 days prior to any change in the name or jurisdiction of
      organization of the Parent, any Originator or the Borrower, a notice
      setting forth the new name or jurisdiction of organization and the
      effective date thereof;

                            
	 	 	 
	 
      	
                              (viii)

                            	
                              promptly
      after the Borrower obtains knowledge thereof, notice of any “Event of
      Termination”, “Facility Termination Date” or “Commitment Termination Date”
      under any Purchase Agreement or under the Receivables Financing
      Agreement;

                            
	 	 	 
	 
      	
                              (ix)

                            	
                              so
      long as any Loans shall be outstanding, as soon as possible and in any
      event no later than the day of occurrence thereof, notice that any
      Originator has stopped selling to HQ, pursuant to the Originator Purchase
      Agreement, all newly arising or acquired Originator Receivables and
      Participation Interests in Government Receivables; and notice that HQ or
      Cayman SPE I has stopped selling or contributing Receivables and
      Participation Interests in Government Receivables pursuant to the
      Secondary Purchase Agreement or the Tertiary Purchase Agreement, as the
      case may be;

                            
	 	 	 
	 
      	
                              (x)

                            	
                              at
      the time of the delivery of the financial statements provided for in
      clauses (i) and (ii) of this paragraph, a certificate of a Financial
      Officer of the Borrower to the effect that, to the best of such officer’s
      knowledge,
no

                            


                    

                  

                

              

            

          

        

      

       

      
        
          
          

        

        
          48

          
            

          

        

        
          
          

        

      

       

      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      	 
      	
                                  Event
      of Default has occurred and is continuing or, if any Event of Default has
      occurred and is continuing, specifying the nature and extent
      thereof;

                                
	 	 	 
	 
      	
                                  (xi)

                                	
                                  promptly
      after receipt thereof, copies of all notices received by the Borrower from
      any Person under or with respect to any Purchase Agreement or the
      Receivables Financing Agreement;

                                
	 	 	 
	 
      	
                                  (xii)

                                	
                                  at
      least 60 days prior to the end of the last fiscal year of the Parent
      referred to in Schedule IV, a new Schedule IV, setting forth the Months
      for the upcoming fiscal year or years;

                                
	 	 	 
	 
      	
                                  (xiii)

                                	
                                  no
      later than March 15, 2009, a 12-Month adjusted EBITDA and liquidity
      forecast for the Parent (the “Forecast”) in
      form and substance reasonably satisfactory to the Administrative Agent,
      certified by a Financial Officer of the Parent;

                                
	 	 	 
	 
      	
                                  (xiv)

                                	
                                  (A)
      no later than 20 days after the Parent’s fiscal Month-end, a comparison of
      actual results for the prior Month as compared to the Forecast then
      delivered by the Parent and (B) no later than 20 days after the beginning
      of each fiscal quarter of the Parent, a new updated Forecast for such
      fiscal quarter, in each case in form and substance reasonably satisfactory
      to the Administrative Agent, certified by a Financial Officer of the
      Parent;

                                
	 	 	 
	 
      	
                                  (xv)

                                	
                                  contemporaneously
      with sending same under or with respect to the Receivables Financing
      Agreement (but without duplication of any such items delivered by the
      Borrower hereunder), copies of all reports, notices and other
      communications sent by the Borrower to any Person under or with respect to
      the Receivables Financing Agreement or any of the other “Transaction
      Documents” (as defined in the Receivables Financing
      Agreement);

                                
	 	 	 
	 
      	
                                  (xvi)

                                	
                                  promptly
      after the effectiveness thereof, copies of any amendments, modifications
      or waivers under or with respect to the Receivables Financing Agreement or
      any of the other “Transaction Documents” (as defined in the Receivables
      Financing Agreement);

                                
	 	 	 
	 
      	
                                  (xvii)

                                	
                                  promptly
      after the request of the Administrative Agent, information as to the
      amount of funds in the Borrower’s Account (as defined both herein and in
      the Receivables Financing Agreements); and

                                
	 	 	 
	 
      	
                                  (xviii)

                                	
                                  such
      other information respecting the Receivables, Participated Receivables, or
      Participation Interests or the condition or operations, financial or
      otherwise, of the Borrower, the Parent or any other Originator as the
      Administrative Agent or any Lender may from time to time reasonably
      request, to the extent such disclosure is permitted under applicable law,
      rule or
regulation.

                                


                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

    Reports
and financial statements required to be delivered pursuant to clauses (i),
(ii) and (v) of this Section 5.01(k) shall be deemed to have been delivered on
the date on which the Parent posts such reports, or reports containing such
financial statements, on the Parent’s website on the Internet at
http://www.riteaid.com or when such reports, or reports containing such
financial statements, are posted on the SEC’s website at www.sec.gov; provided that the
Parent shall deliver paper copies of the reports and financial statements
referred to in clauses (i), (ii) and (v) of this Section 5.01(k) to the
Administrative Agent or any Lender who requests the Parent to deliver such paper
copies until written notice to cease delivering paper copies is given by the
Administrative Agent or such Lender, as applicable.

     

    The
Borrower and the Originators hereby acknowledge that (a) the Administrative
Agent may make available to the Lenders materials and/or information
(collectively, “Borrower Party
Materials”) provided by or on behalf of any of the Borrower, the
Originators, Parent, HQ and Cayman SPE I (collectively, the “Borrower Parties”)
hereunder by posting the Borrower Party Materials on Intralinks, the Internet or
another similar electronic system (the “Platform”) and
(b) certain of the Lenders may be "public-side" Lenders (i.e., Lenders that
do not wish to receive material non-public information with respect to the
Borrower Parties or any of their securities) (each, a “Public
Lender”).  The Borrower and each Originator agrees that (w) all
Borrower Party Materials that are to be made available to Public Lenders shall
be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean
that the word “PUBLIC” shall appear prominently on the first page thereof; (x)
by marking Borrower Party Materials “PUBLIC,” Borrower and each Originator, on
its behalf and on behalf of each other Borrower Party,  shall be
deemed to have authorized the Administrative Agent and the Lenders to treat such
Borrower Party Materials as not containing any material non-public information
with respect to any Borrower Party or its securities for purposes of United
States federal and state securities laws; (y) all Borrower Party Materials
marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated for distribution of “PUBLIC” materials and/or information;
and (z) the Administrative Agent shall treat any Borrower Party Materials that
are not marked “PUBLIC” as being suitable only for posting on a portion of the
Platform not designated for distribution of “PUBLIC” materials and/or
information and shall not make such Borrower Party Materials available through
the portion of the Platform designated for distribution of “PUBLIC” materials
and/or information.  At the request of the Administrative Agent, the
Borrower shall promptly provide to the Administrative Agent versions of any
non-“PUBLIC” Borrower Party Materials that do not contain material non-public
information with respect to the Borrower Parties and their securities, which
versions shall be suitable for posting through a portion of the Platform
designated for distribution of “PUBLIC” materials and/or
information.  None of the Administrative Agent, any Lender or any
other Indemnified Party shall be liable to any Borrower Party or any of their
respective Affiliates or any of their respective security holders or creditors
for any damages arising from the use by unauthorized Persons of information or
other materials sent though the Platform that are intercepted by such
Persons.

     

    (l)           Separateness.

     

    
      
        
          
            	 
      	
                    (i)

                  	
                    [Intentionally
      Omitted.]

                  
	 	 	 
	 
      	
                    (ii)

                  	
                    The
      Borrower shall not direct or participate in the management of any of the
      Other Companies’ operations or of any other Person’s
      operations.

                  


          

        

      

       

      
        
          
          

        

        
          50

          
            

          

        

        
          
          

        

      

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	 
      	
                                    (iii)

                                  	
                                    The
      Borrower shall conduct its business from an office separate from that of
      the Other Companies and any other Person (but which may be located in the
      same facility as one or more of the Other Companies).  The
      Borrower shall have stationery and other business forms and a mailing
      address and a telephone number separate from that of the Other Companies
      and any other Person.

                                  
	 	 	 
	 
      	
                                    (iv)

                                  	
                                    The
      Borrower shall at all times be adequately capitalized in light of its
      contemplated business.

                                  
	 	 	 
	 
      	
                                    (v)

                                  	
                                    The
      Borrower shall at all times provide for its own operating expenses and
      liabilities from its own funds.

                                  
	 	 	 
	 
      	
                                    (vi)

                                  	
                                    The
      Borrower shall maintain its assets and transactions separately from those
      of the Other Companies and any other Person and reflect such assets and
      transactions in financial statements separate and distinct from those of
      the Other Companies and any other Person and evidence such assets and
      transactions by appropriate entries in books and records separate and
      distinct from those of the Other Companies and any other
      Person.  The Borrower shall hold itself out to the public under
      the Borrower’s own name as a legal entity separate and distinct from the
      Other Companies.  The Borrower shall not hold itself out as
      having agreed to pay, or as being liable, primarily or secondarily, for,
      any obligations of the Other Companies or any other
  Person.

                                  
	 	 	 
	 
      	
                                    (vii)

                                  	
                                    The
      Borrower shall not maintain any joint account with any Other Company or
      any other Person or become liable as a guarantor or otherwise with respect
      to any Debt or contractual obligation of any Other Company or any other
      Person.

                                  
	 	 	 
	 
      	
                                    (viii)

                                  	
                                    The
      Borrower shall not make any payment or distribution of assets with respect
      to any obligation of any Other Company or any other Person or grant an
      Adverse Claim on any of its assets to secure any obligation of any Other
      Company or any other Person.

                                  
	 	 	 
	 
      	
                                    (ix)

                                  	
                                    The
      Borrower shall not make loans, advances or otherwise extend credit to any
      of the Other Companies.

                                  
	 	 	 
	 
      	
                                    (x)

                                  	
                                    The
      Borrower shall comply in all material respects with its organizational
      documents and resolutions.

                                  
	 	 	 
	 
      	
                                    (xi)

                                  	
                                    The
      Borrower shall have recorded any security interests in its Register of
      Mortgages and Charges, with respect to all assets purchased from any of
      the Other Companies.

                                  
	 	 	 
	 
      	
                                    (xii)

                                  	
                                    The
      Borrower shall not engage in any transaction with any of the Other
      Companies, except as permitted by this Agreement and the other Transaction
      Documents.

                                  


                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
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    (m)           Tertiary Purchase
Agreement.  The Borrower will not amend, waive or modify any
provision of the Tertiary Purchase Agreement or waive the occurrence of any
“Event of Termination” under the Tertiary Purchase Agreement, without in each
case the prior written consent of the Administrative Agent; provided, however, that the
Borrower may amend the percentage set forth in the definition of “Discount” in
the Tertiary Purchase Agreement in accordance with the provisions of the
Tertiary Purchase Agreement without the consent of the Administrative Agent,
provided, further, that the
Borrower shall promptly notify the Administrative Agent and each Lender of any
such amendment.  The Borrower will perform all of its obligations
under the Tertiary Purchase Agreement in all material respects and will enforce
the Tertiary Purchase Agreement in accordance with its terms in all material
respects.

     

    (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 the Receivables Financing Agreement.  The Borrower will
not create or form any Subsidiary.

     

    (o)           Mergers,
Etc.  The Borrower will not merge with or into or consolidate
with or into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions), all or substantially all of its
assets (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets or capital stock or other ownership interest of,
or enter into any joint venture or partnership agreement with, any Person, other
than as specifically contemplated by this Agreement and the other Transaction
Documents.

     

    (p)           Distributions,
Etc.  The Borrower will not declare or make any dividend
payment or other distribution of assets, properties, cash, rights, obligations
or securities on account of any shares of any class of equity interests of the
Borrower, or return any capital to its shareholders as such, or purchase,
retire, defease, redeem or otherwise acquire for value or make any payment in
respect of any shares of any class of equity of the Borrower or any warrants,
rights or options to acquire any such shares, now or hereafter outstanding;
provided, however, that the
Borrower may declare and pay cash dividends on its share capital to its
shareholders so long as (i) no Default or Event of Default shall then exist or
would occur as a result thereof, (ii) such dividends are in compliance with all
applicable law including the laws of The Cayman Islands, and (iii) such
dividends have been approved by all necessary and appropriate corporate action
of the Borrower.

     

    (q)           Debt.  The
Borrower will not incur any Debt, other than any Debt incurred pursuant to this
Agreement and any Debt incurred pursuant to the Receivables Financing Agreement;
provided that the aggregate principal amount of Debt outstanding under the
Receivables Financing Agreement shall not at any time exceed $345,000,000 (or,
if less, the First Lien Cap (as defined in the RFA Intercreditor
Agreement)).

     

    (r)           Memorandum and Articles of
Association.  The Borrower will not amend or delete or modify
its Memorandum and Articles of Association, without the prior written consent of
the Administrative Agent.

     

    (s)           Additional
Information.  If additional information is requested by the
Obligor as to a bill or supporting claim documents, the Borrower will cause the
applicable 

     

    
      
        
        

      

      
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    Originator
to promptly provide the same and, if any error has been made with respect to
such information, cause the applicable Originator to promptly correct the same
and, if necessary, to rebill such Originator Receivable.

     

    (t)           Use of
Proceeds.  The Borrower will use the proceeds of the Loans
solely for the purchase of Transferred Assets and Related Security with respect
thereto from Cayman SPE I pursuant to the Tertiary Purchase Agreement, to repay
Debt owing under the Receivables Financing Agreement and to pay transaction
costs, fees and expenses in connection with this Agreement.

     

    (u)           RFA Intercreditor
Agreement.  The Borrower will not take any action in
contravention of the terms of the RFA Intercreditor Agreement and will comply
with all of the terms and provisions thereof applicable to the
Borrower.

     

    (v)           Amendments to First Lien
Loan Documents.  (i) If any amendment, supplement or other
modification of any provision of the First Lien Loan Documents has the effect of
imposing on the Borrower any representations, warranties, covenants, events of
default or remedies that are more restrictive or burdensome to the Borrower than
the terms and provisions of such First Lien Loan Documents as in effect on the
date of this Agreement, or altering any definitions to effect any of the
foregoing, (A) the Required Lenders shall be entitled to require that a
substantially similar amendment be made to the comparable Second Lien Loan
Documents, and (B) the Borrower hereby irrevocably and unconditionally agrees
that at least three (3) Business Days prior to effecting any such amendment,
supplement or other modification of any provision of such First Lien Loan
Documents, the Borrower shall, with respect to the applicable Second Lien Loan
Documents, provide to the Administrative Agent and the Lenders an amendment or
amendments (the “Corresponding
Amendment”) that amends the applicable Second Lien Loan Documents to
effect such modifications on equivalent terms.  The Required Lenders,
at their sole discretion, may accept or decline any Corresponding
Amendment.  If the Required Lenders accept any Corresponding
Amendment, the Borrower hereby irrevocably and unconditionally agrees to effect
the Corresponding Amendment substantially concurrently with the related
amendment, supplement or modification of the First Lien Loan
Documents.

     

     (ii)
The Borrower will not, directly or indirectly, enter into any amendment,
supplement or modification of any of the First Lien Loan Documents (or consent
or agree thereto) if any such amendment, supplement or modification
shall:

     

    (1)           increase
the aggregate principal amount of, without duplication, loans or other
extensions of credit or commitments therefor so that the aggregate principal
amount of such loans or other extensions of credit is in excess of the First
Lien Cap (as defined in the RFA Intercreditor Agreement);

     

    (2)           modify
the method of computing interest or Yield (as defined in the Receivables
Financing Agreement) or increase the interest or Yield rate (including by any
increase in the “applicable margin” or similar component of the interest rate)
or interest or yield provisions applicable to the First Lien Obligations (as
defined in the RFA Intercreditor Agreement) or any commitment fee, program fee,
liquidity fee, or similar 

     

    
      
        
        

      

      
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    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 Receivables Financing Agreement, or (B) accrual of
interest or Yield at the rate applicable following an “Event of Termination”
under and as defined in the Receivables Financing Agreement as in effect on the
date hereof);

     

    (3)           extend
any scheduled amortization payments or the scheduled final maturity of the
Receivables Financing Agreement or make amendments or modifications to
(A) clause (a) of the definition of “Facility Termination Date”
contained in the Receivables Financing Agreement as in effect on the date hereof
to make the date appearing therein later than September 14, 2010, or
(B) clause (a) of the definition of “Commitment Termination Date”
contained in the Receivables Financing Agreement as in effect on the date
hereof, other than the extension of the date appearing therein to a date no
later than September 14, 2010 or (C) clause (d) of such
definition of “Commitment Termination Date” to make the date appearing therein
later than September 14, 2010;

     

    (4)           amend,
modify or have the effect of a modification of the mandatory prepayment
provisions of the Receivables Financing Agreement in a manner that reduces
amounts which would be otherwise required to be used to prepay the First Lien
Obligations (as defined in the RFA Intercreditor Agreement);

     

    (5)           amend
Sections 2.04 or 2.04A of the Receivables Financing Agreement or alter any
instructions in effect on the date hereof directing collections of Collateral to
be remitted to the RFA Trustee’s Account or alter the way collections of
Collateral are to be distributed pursuant to the Receivables Financing Agreement
as in effect on the date hereof;

     

    (6)           modify
or add any covenant or event of default under the First Lien Loan Documents
which directly restricts the Borrower from making payments under the Second Lien
Loan Documents which would otherwise be permitted under the First Lien Loan
Documents as in effect on the date hereof;

     

    (7)           increase
the “Concentration Limit” (as defined in the Receivables Financing Agreement)
applicable to any account debtor (other than, in the event any such
“Concentration Limit” is decreased after the date hereof, increases in such
“Concentration Limit” to a rate no higher than that existing on the date hereof)
or make amendments or modifications to the definitions of “Borrowing Base”,
“Eligible Participated Receivable”, “Eligible Receivable”, “Net Receivables Pool
Balance” or any definitions used therein or applicable thereto contained in the
Receivables Financing Agreement as in effect on the date hereof that have the
effect of increasing the amount of credit available to the Borrower (other than,
in the event a Reserve (as defined in the RFA Intercreditor Agreement) is
increased after the date hereof, decreases in such Reserve to a level no greater
than that existing on the date hereof);

     

    
      
        
        

      

      
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    (8)           make
amendments or modifications to Section 7.01(h) or Section 7.01(s) of
the Receivables Financing Agreement or to the definitions of “Default Ratio”,
“Delinquency Ratio”, “Dilution Ratio”, “Receivable Turnover Days” or any
definitions used therein or applicable thereto contained in the Receivables
Financing Agreement as in effect on the date hereof, if the effect of any such
amendment or modification would be to make the provisions of
Section 7.01(h) or 7.01(s) less restrictive with respect to the Borrower or
the Collateral, or waive compliance with Section 7.01(h) or 7.01(s) of the
Receivables Financing Agreement; or

     

    (9)           amend
or modify the definition of “Amortization Period” contained in the Receivables
Financing Agreement or have the effect of changing the start date of such period
from the way such definition works as of the date hereof.

     

    SECTION
5.02.      Covenants of the Borrower,
the Collection Agent and the Originators.  Until
the Commitments have expired or been terminated and the principal and interest
of each Loan and all other Obligations have been paid in full, each of the
Borrower, the Collection Agent and each Originator will, at their respective
expense, from time to time during regular business hours as requested by the
Administrative Agent permit the Administrative Agent or its agents or
representatives (including independent public accountants, which may be the
Borrower’s or the Parent’s independent public accountants), (i) to conduct
audits of the Receivables, Participated Receivables, the Related Security and
the related books and records and collections systems of the Borrower, the
Collection Agent or such Originator, as the case may be, (ii) to examine and
make copies of and abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in the possession or under the
control of the Borrower, the Collection Agent or such Originator, as the case
may be, relating to Receivables, Participated Receivables and the Related
Security, including, without limitation, the Contracts, and (iii) to visit the
offices and properties of the Borrower, the Collection Agent or such Originator,
as the case may be, for the purpose of examining such materials described in
clause (ii) above, and to discuss matters relating to Receivables, Participated
Receivables and the Related Security or the Borrower’s, the Collection Agent’s
or such Originator’s performance under the Transaction Documents or under the
Contracts with any of the officers or employees of the Borrower, the Collection
Agent or such Originator, as the case may be, having knowledge of such
matters.  In addition, upon the Administrative Agent’s request no more
than four times per year (but without such limitation if an audit deficiency is
described during any such audit), the Administrative Agent will, at the
Borrower’s expense, appoint independent public accountants or other Persons
acceptable to the Administrative Agent (which shall not be the Parent’s or the
Borrower’s independent public accountants who perform regular financial
statement audits for the Parent and its Subsidiaries), to prepare and deliver to
the Administrative Agent and each Lender a written report with respect to the
Receivables, Participated Receivables and the Credit and Collection Policy
(including, in each case, the systems, procedures and records relating thereto)
on a scope and in a form reasonably requested by the Administrative
Agent.  The foregoing to the contrary notwithstanding, prior to the
RFA Termination Date, each audit performed by independent public accountants or
other Persons acceptable to the RFA Program Agent pursuant to the sentence of
Section 5.02 of the Receivables Financing Agreement (as in effect on the
date hereof) corresponding to the preceding sentence shall constitute an audit
under the preceding sentence, provided that the Administrative Agent receives a
copy of the reports and other information provided to the RFA Program Agent in
connection with such audit and 

     

    
      
        
        

      

      
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    such
reports and other information are posted on the Platform.  In
conjunction with the audits, examinations and visits referred to in the first
two sentences of this Section 5.02, the Administrative Agent and its agents,
representatives, advisors or consultants shall have full access during regular
business hours to premises, books and records and members of management as may
be reasonably requested by the Administrative Agent or any such agent,
representative, advisor or consultant in connection with a review of the
business and operations of the Borrower (including budgets, records,
projections, financial information, reports and turnaround plans) and the
Borrower shall at all times cooperate with the reasonable requests of the
Administrative Agent and its agents, representatives, advisors or
consultants.  Until the Commitments have expired or been terminated
and the principal and interest of each Loan and all other Obligations have been
paid in full, the Parent shall continue to report in its filings with the SEC
the borrowing base calculations under the Receivables Financing Agreement in a
manner and at such time as it has historically done and shall additionally
include in such filings the borrowing base calculations under this Agreement in
a similar manner.

     

    ARTICLE
VI

     

    ADMINISTRATION
AND COLLECTION

    OF
RECEIVABLES AND PARTICIPATED RECEIVABLES

     

    SECTION
6.01.      Designation of Collection
Agent.  The
servicing, administration and collection of the Receivables and Participated
Receivables shall be conducted by the Collection Agent so designated hereunder
from time to time.  Until the Administrative Agent gives notice to the
Borrower of the designation of a new Collection Agent in accordance with the
terms hereof, HQ is hereby designated as, and hereby agrees to perform the
duties and obligations of, the Collection Agent pursuant to the terms
hereof.  At any time after the occurrence and during the continuance
of a Collection Agent Default (and then, only after the RFA Termination Date or
earlier if permitted under the RFA Intercreditor Agreement), the Administrative
Agent may and, at the request of the Required Lenders, the Administrative Agent
shall designate as Collection Agent any Person (including itself) to succeed the
Parent or any successor Collection Agent, if such Person shall consent and agree
to the terms hereof.  The Collection Agent may, with the prior consent
of the Administrative Agent, subcontract with any other Person (except that in
the case of an Originator no such consent is required) for the servicing,
administration or collection of the Receivables and Participated
Receivables.  Any such subcontract shall not affect the Collection
Agent’s liability for performance of its duties and obligations pursuant to the
terms hereof, and any such subcontract shall automatically terminate upon
designation of a successor Collection Agent.  The foregoing to the
contrary notwithstanding (but subject to the RFA Intercreditor Agreement), until
the RFA Termination Date, the “Collection Agent” under, and as defined in, the
Receivables Financing Agreement from time to time shall be the Collection Agent
hereunder and the right of the Administrative Agent to designate any successor
Collection Agent shall be subject to the prior right of the RFA Program Agent to
designate the “Collection Agent” under the Receivables Financing
Agreement.

     

    SECTION
6.02.      Duties of Collection
Agent.  (a) The
Collection Agent shall take or cause to be taken all such actions as may be
necessary or advisable to collect each Receivable and Participated Receivable
from time to time, all in accordance in all material respects with applicable
laws, rules and regulations, with reasonable care and diligence, and in


     

    
      
        
        

      

      
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    accordance
with the Credit and Collection Policy.  The Borrower, the
Administrative Agent and the Lenders hereby appoint the Collection Agent, from
time to time designated pursuant to Section 6.01 (including, without limitation,
deemed designated pursuant to the last sentence thereof), as agent for
themselves to enforce their respective rights and interests in the Receivables,
the Participated Receivables, the Participation Interests, the Related Security
and the Collections with respect thereto.  In performing its duties as
Collection Agent, the Collection Agent shall exercise the same care and apply
the same policies as it would exercise and apply if it owned such Receivables or
Participated Receivables and shall act in the best interests of the Borrower,
the Lenders and the Administrative Agent.

     

    (b)           The
Collection Agent shall (i) prior to the RFA Termination Date, administer the
Collections in accordance with the terms and conditions of the Receivables
Financing Agreement and, to the extent not inconsistent with the Receivables
Financing Agreement, this Agreement (including, without limitation, Sections
2.08(b) and 2.19), and (ii) thereafter, administer the Collections in accordance
with the terms and conditions of this Agreement (including, without limitation,
Sections 2.08(b) and 2.19).

     

    (c)           If
no Event of Default or Default shall have occurred and be continuing, HQ, while
it is the Collection Agent, may, in accordance with the Credit and Collection
Policy, extend the maturity or adjust the Outstanding Balance of any Receivable
or Participated Receivable as it deems appropriate to maximize Collections
thereof, or otherwise amend or modify other terms of any Receivable or
Participated Receivable, provided that the classification of any such Receivable
or Participated Receivable as ineligible for inclusion in the Borrowing Base
shall not be affected by any such extension.

     

    (d)           The
Collection Agent shall hold in trust for the Borrower, the Administrative Agent
and each Lender, in accordance with their respective interests, all documents,
instruments and records (including, without limitation, computer tapes or disks)
which evidence or relate to Transferred Assets.  The Collection Agent
shall mark each Originator’s master data processing records evidencing the
Transferred Assets with a legend, acceptable to the Administrative Agent,
evidencing that such Transferred Assets have been sold to the Borrower and
marking the Participated Receivables with a legend, acceptable to the
Administrative Agent, evidencing that such Purchased Receivables are the subject
of a Participation Interest sold to the Borrower.

     

    (e)           The
Collection Agent shall, as soon as practicable following receipt, turn over to
the Person entitled thereto any cash collections or other cash proceeds received
with respect to Receivables and Participated Receivables not constituting
Collateral.

     

    (f)           The
Collection Agent shall, from time to time at the request of the Administrative
Agent, furnish to the Administrative Agent (promptly after any such request)
(i) a calculation of the amounts set aside for or payable to the Investors,
the Banks, the Investor Agents and the Collection Agent (as such terms are
defined in the Receivables Financing Agreement) pursuant to Sections 2.04
and 2.04A of the Receivables Financing Agreement and (ii) information in
reasonable detail as to funds deposited into the Administrative Agent’s Account
and the Cure Account.

     

    
      
        
        

      

      
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    (g)           The
Collection Agent shall:

     

    
      
        
          
            
              
                	 
      	
                        (i)

                      	
                        No
      later than 3:00 p.m. (New York City time) on the seventh Business Day of
      each Month, prepare and forward to the Administrative Agent a Borrower
      Report relating to the Receivables and Participated Receivables
      outstanding on the last day of the immediately preceding
      Month.

                      
	 	 	 
	 
      	
                        (ii)

                      	
                        On
      each Business Day, by no later than 12:00 noon (New York City time),
      provide to the Administrative Agent, a Daily Report as of the prior
      Business Day.

                      
	 	 	 
	 
      	
                        (iii)

                      	
                        [Intentionally
      Omitted].

                      
	 	 	 
	 
      	
                        (iv)

                      	
                        No
      later than 12:00 noon (New York City time) on the fourth Business Day
      following the end of each calendar week of each Month, prepare and deliver
      to the Administrative Agent an Interim Report relating to Receivables and
      Participated Receivables outstanding on the last day of such calendar
      week.

                      


              

            

          

        

      

    

     

    The
Collection Agent shall transmit the Borrower Reports and the Daily Reports to
the Administrative Agent and the Lenders, concurrently by facsimile and by
electronic mail (each an “E-Mail
Report”).  Each E-Mail Report shall be (A) formatted as the
Administrative Agent may designate from time to time and shall be digitally
signed and (B) sent to the Administrative Agent and the Lenders, at an
electronic mail address designated by each of them.

     

    SECTION
6.03.      Certain Rights of the
Administrative Agent.  (a) After
the occurrence and during the continuance of an Event of Default or a Default,
the Administrative Agent may and, at the direction of the Required Lenders,
shall notify the Obligors of Receivables and Participated Receivables, at any
time and at the Borrower’s expense, of the security interest granted under this
Agreement.

     

    (b)           At
any time after the occurrence and during the continuance of an Event of Default
or a Default:

     

    
      
        
          
            	 
      	
                    (i)

                  	
                    The
      Administrative Agent may, and, at the direction of the Required Lenders,
      the Administrative Agent shall to the extent permitted under applicable
      law, direct the Obligors of Receivables and Participated Receivables that
      all payments thereunder be made directly to the Administrative Agent or
      its designee.

                  
	 	 	 
	 
      	
                    (ii)

                  	
                    At
      the Administrative Agent’s request and at the Borrower’s expense, the
      Borrower shall notify each Obligor of Receivables and Participated
      Receivables of the security interest in the Receivables or Participated
      Receivables granted under this Agreement and direct that payments be made
      directly to the Administrative Agent or its
  designee.

                  


          

        

      

    

     

    (c)           At
any time:

     

    
      
        
        

      

      
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                    (i)

                  	
                    At
      the Administrative Agent’s request and at the Borrower’s expense, the
      Borrower and the Collection Agent shall (A) assemble all of the documents,
      instruments and other records (including, without limitation, computer
      tapes and disks) that evidence or relate to the Receivables and
      Participated Receivables and the related Contracts and Related Security,
      or that are otherwise necessary or desirable to collect the Receivables
      and Participated Receivables, and shall make the same available to the
      Administrative Agent at a place selected by the Administrative Agent or
      its designee, and (B) segregate all cash, checks and other instruments
      received by it from time to time constituting Collections of Receivables
      and Participated Receivables in a manner acceptable to the Administrative
      Agent and, promptly upon receipt, remit all such cash, checks and
      instruments, duly indorsed or with duly executed instruments of transfer,
      to the Administrative Agent or its designee.

                  
	 	 	 
	 
      	
                    (ii)

                  	
                    The
      Borrower authorizes the Administrative Agent to take any and all steps in
      the Borrower’s name and on behalf of the Borrower that are necessary or
      desirable, in the determination of the Administrative Agent, to collect
      amounts due under the Receivables and Participated Receivables, including,
      without limitation, endorsing the Borrower’s name on checks and other
      instruments representing Collections of Receivables and Participated
      Receivables and enforcing the Receivables and Participated Receivables and
      the Related Security and related
Contracts.

                  


          

        

      

    

     

    SECTION
6.04.      Rights and
Remedies.  (a) If
the Collection Agent fails to perform any of its obligations under this
Agreement, the Administrative Agent may (but shall not be required to) (after
notice to the Collection Agent and such failure to perform, if capable of being
cured, is not cured within five Business Days after such notice is sent) itself
perform, or cause performance of, such obligation; and the Administrative
Agent’s costs and expenses incurred in connection therewith shall be payable by
the Collection Agent.

     

    (b)           The
Borrower and the Originators shall perform their respective obligations under
the Contracts related to the Receivables, the Participated Receivables or the
Participation Interests and the exercise by the Administrative Agent on behalf
of the Lenders of their rights under this Agreement shall not release the
Originators, the Collection Agent or the Borrower from any of their duties or
obligations with respect to any Receivables, the Participated Receivables or the
Participation Interests or related Contracts.  Neither the
Administrative Agent nor the Lenders shall have any obligation or liability with
respect to any Receivables, the Participated Receivables or the Participation
Interests or related Contracts, nor shall any of them or the Borrower be
obligated to perform the obligations of the Originators thereunder.

     

    (c)           In
the event of any conflict between the provisions of Article VI of this Agreement
and Article VI of any Purchase Agreement, the provisions of Article VI of this
Agreement shall control.

     

    SECTION
6.05.      Further Actions Evidencing
the Loans.  The
Borrower and each Originator agrees from time to time, at its expense, to
promptly execute and deliver all further 

     

    
      
        
        

      

      
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    instruments
and documents, and to take all further actions, that may be reasonably necessary
or desirable, or that the Administrative Agent or the Required Lenders may
reasonably request, to perfect, protect or more fully evidence the security
interest granted hereunder, or to enable the Lenders or the Administrative Agent
to exercise and enforce their respective rights and remedies
hereunder.  Without limiting the foregoing, the Borrower and each
Originator hereby authorizes the filing of any financing statements or
continuation statements, and amendments to financing statements, in any
jurisdictions as the Administrative Agent may reasonably determine are necessary
to perfect the security interest granted to the Administrative Agent pursuant to
Section 2.17 hereof or the interests assigned pursuant to the Originator
Purchase Agreement.  Such financing statements filed against the
Borrower may describe the collateral in the same manner specified in Section
2.17 hereof or in any other manner as the Administrative Agent may reasonably
determine is necessary to ensure the perfection of such security interest,
including, without limitation, describing such property as all assets or all
personal property of the Borrower whether now owned or hereafter
acquired.

     

    SECTION
6.06.      Covenants of the Collection
Agent and each Originator.  (a) [Intentionally
Omitted.]

     

    (b)           Change in Credit and
Collection Policy.  Neither the Collection Agent nor any
Originator will make any change in the Credit and Collection Policy that would
impair the collectibility of a significant amount of the Receivables or
Participated Receivables or the ability of HQ (if it is acting as Collection
Agent) to perform its obligations under this Agreement.  In the event
that the Collection Agent or any Originator makes any change to the Credit and
Collection Policy, it shall, contemporaneously with such change, provide the
Administrative Agent with an updated Credit and Collection Policy and a summary
of all material changes.

     

    (c)           Change in Payment
Instructions to Obligors.  The Collection Agent will not add or
terminate any bank, post office box or bank account as a Deposit Bank, Account
Bank, Lock-Box, Deposit Account or Governmental Entity Receivables Account from
those listed in Schedule I to this Agreement, or make any change in its
instructions to Obligors regarding payments to be made to the Borrower or
payments to be made to any such box or account, unless the Administrative Agent
shall have received notice of such addition, termination or change (including an
updated Schedule I) and a fully executed Deposit Account Agreement, Governmental
Entity Receivables Agreement with each new Deposit Bank or Account Bank or with
respect to each new such box or account.

     

    (d)           Deposits to Governmental
Entity Receivables Accounts, Lock-Boxes and Deposit
Accounts.  The Collection Agent will (or will cause the
Borrower or the Originators to) instruct all Obligors that are Governmental
Entities (other than Contract Payors) to remit all their payments in respect of
Participated Receivables to Governmental Entity Receivables Accounts or
Lock-Boxes associated therewith.  The Collection Agent will (or will
cause the Borrower or the Originator to) instruct all Obligors that are not
Governmental Entities (other than Contract Payors) to remit all their payments
in respect of Receivables to Deposit Accounts or Lock-Boxes associated
therewith.  If the Collection Agent shall receive any Collections
directly, it shall immediately (and in any event within one Business Day)
deposit the same to a Deposit Account or a Governmental Entity Receivables
Account, as the case may be.  The Collection Agent will not deposit or
otherwise credit, or cause or permit to be so deposited or credited, to any
Lock-

     

    
      
        
        

      

      
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    Box,
Deposit Account or Governmental Entity Receivables Account cash proceeds other
than Collections of Receivables or Participated Receivables.

     

    In
furtherance of the foregoing, the Collection Agent (i) represents and warrants
that, prior to the date hereof, it has notified all Obligors that are not
Governmental Entities (other than Contract Payors) to remit all their payments
in respect of Receivables to Deposit Accounts or Lock-Boxes associated therewith
and (ii) agrees to use ongoing commercially reasonable efforts to obtain
compliance with such notice from those Obligors who have failed to so
comply.

     

    (e)           Maintenance of
Records.  The Collection Agent also will maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Receivables and Participated Receivable
and related Contracts in the event of the destruction of the originals thereof),
and keep and maintain all documents, books, records and other information
reasonably necessary or advisable for the collection of all Receivables
(including, without limitation, records adequate to permit the daily
identification of each Receivable and Participated Receivable and all
Collections of and adjustments to each existing Receivable and Participated
Receivable).

     

    SECTION
6.07.      Indemnities by the
Collection Agent.  Without
limiting any other rights that the Administrative Agent, any Lender or any of
their respective Affiliates or members or any of their respective officers,
directors, employees or advisors (each, a “Special Indemnified
Party”) may have hereunder or under applicable law, and in consideration
of its appointment as Collection Agent, the Collection Agent hereby agrees to
indemnify each Special Indemnified Party from and against any and all claims,
losses and liabilities (including reasonable attorneys’ fees) (all of the
foregoing being collectively referred to as “Special Indemnified
Amounts”) arising out of or resulting from any of the following
(excluding, however, (a) Special Indemnified Amounts to the extent found in a
final non-appealable judgment of a court of competent jurisdiction to have
resulted from gross negligence or willful misconduct on the part of such Special
Indemnified Party, (b) recourse for Receivables and Participated Receivables
which are not collected, not paid or uncollectible on account of the insolvency,
bankruptcy or financial inability to pay of the applicable Obligor or (c) any
income taxes or franchise taxes measured by income or any other tax or fee
measured by income incurred by such Special Indemnified Party arising out of or
as a result of this Agreement or the security interest granted hereunder or in
respect of any Receivable, Participated Receivable or any
Contract):

     

    
      
        
          
            	 
      	
                    (i)

                  	
                    any
      representation made or deemed made by the Collection Agent pursuant to
      Section 4.02(g) hereof which shall have been incorrect in any respect when
      made or any other representation or warranty or statement made or deemed
      made by the Collection Agent under or in connection with this Agreement
      which shall have been incorrect in any material respect when
      made;

                  
	 	 	 
	 
      	
                    (ii)

                  	
                    the
      failure by the Collection Agent to comply with any applicable law, rule or
      regulation with respect to any Receivable, Participated Receivable, or
      Contract; or the failure of any Receivable, Participated Receivable, or
      Contract to conform to any such applicable law, rule or
      regulation;

                  


          

        

      

       

      
        
          
          

        

        
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                            (iii)

                          	
                            the
      failure to have filed, or any delay in filing, financing statements or
      other similar instruments or documents under the UCC of any applicable
      jurisdiction or other applicable laws with respect to any Receivables,
      Participated Receivables, the Contracts and the Related Security and
      Collections in respect thereof, whether at the time of any purchase or
      reinvestment or at any subsequent time;

                          
	 	 	 
	 
      	
                            (iv)

                          	
                            any
      failure of the Collection Agent to perform its duties or obligations in
      accordance with the provisions of this Agreement;

                          
	 	 	 
	 
      	
                            (v)

                          	
                            the
      commingling of Collections of Receivables or Participated Receivables at
      any time by the Collection Agent with other funds;

                          
	 	 	 
	 
      	
                            (vi)

                          	
                            any
      breach of an obligation of the Collection Agent reducing or impairing the
      rights of the Administrative Agent or the Lenders with respect to any
      Receivable or Participated Receivable or the value of any Receivable or
      Participated Receivable;

                          
	 	 	 
	 
      	
                            (vii)

                          	
                            any
      Collection Agent Fees or other costs and expenses payable to any
      replacement Collection Agent, to the extent in excess of the Collection
      Agent Fees payable to the Collection Agent hereunder;
or

                          
	 	 	 
	 
      	
                            (viii)

                          	
                            any
      claim brought by any Person other than a Special Indemnified Party arising
      from any activity by the Collection Agent or its Affiliates in servicing,
      administering or collecting any Receivable or Participated
      Receivable.

                          


                  

                

              

            

          

        

      

    

     

    SECTION
6.08.      Representations of the
Collection Agent.  The
Collection Agent hereby represents and warrants as follows:

     

    (a)           Lock Boxes, Deposit Accounts
and Governmental Entity Receivables Accounts.  Specified on
Schedule I hereto (as amended by the Collection Agent from time to time in
accordance with Section 6.09(b)) are (i) the Lock Box numbers, and (ii) the
names, addresses and ABA numbers of all the Deposit Banks and Account Banks,
together with the account numbers of the Deposit Accounts or Governmental Entity
Receivables Accounts, as the case may be, and the name of a contact person at
each Deposit Bank and Account Bank, as the case may be.

     

    (b)           Payment
Instructions.  It has notified (or has caused the Originators
to notify) the Obligor on each Receivable or Participated Receivable other than
Contract Payors to make payments on such Receivable or Participated Receivable
to either one of the Lock Boxes or one of the Deposit Accounts or Governmental
Entity Receivables Account, as applicable.

     

    (c)           Daily Reports, Interim
Reports and Borrower Reports.  Each Daily Report, Interim
Report and Borrower Report delivered by the Collection Agent pursuant to this
Agreement shall be true and correct in all material respects on the date such
report or certificate is delivered.

     

    
      
        
        

      

      
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    SECTION
6.09.      Establishment of Deposit
Accounts.  (a) [Intentionally
Omitted].

     

    (b)           Deposit Accounts and
Governmental Entity Receivables Accounts.  On or prior to the
date of this Agreement, the Collection Agent for the benefit of the
Beneficiaries, shall establish and maintain or cause to be established and
maintained (i) Lock Boxes to which Obligors will remit payments with respect to
Receivables and (ii) Deposit Accounts or Governmental Entity Receivables
Accounts with an Eligible Institution.  Obligors will be directed to
remit payments with respect to their Receivables or Participated Receivables to
a Lock Box, a Deposit Account or a Governmental Entity Receivables Account in
accordance with the terms of Section 6.06(d).  Except as contemplated
by the Transaction Documents (as defined in the Receivables Financing
Agreement), the Lock Boxes (other than those to which only Collections relating
to Participated Receivables of Governmental Entities are directed) and Deposit
Accounts shall be under the sole control of the Administrative Agent for the
benefit of the Beneficiaries, and neither the Borrower, the Collection Agent,
the Parent nor any Person claiming by, through or under the Borrower, the
Collection Agent, or the Parent, shall have any right, title or interest in, or
any right to withdraw any amount from, any Lock Box (other than those to which
only Collections relating to Participated Receivables of Governmental Entities
are directed).  The Collection Agent shall transfer Collections to the
Cure Account or the Administrative Agent’s Account, as applicable, in the manner
set forth in Sections 2.08(b) and 2.19.  Each Deposit Account and
Governmental Entity Receivables Account shall be maintained with documentation
and instructions in form and substance satisfactory to the Administrative
Agent.  The Collection Agent will not (i) make any change in any Lock
Box numbers, the name, address or ABA number of any Deposit Bank or Account
Bank, or the account number of any Deposit Account from that set forth in
Schedule I hereto or (ii) amend any instruction to any Obligor or any
instruction to or agreement with any Deposit Bank or Account Bank with respect
to any Lock Box, Deposit Account or Governmental Entity Receivables Account
(other than to (A) redirect payments of Obligors to a different Lock Box or
Deposit Account, (B) close unused Lock Boxes, Deposit Accounts and Governmental
Entity Receivables Accounts and (C) open new Lock Boxes, Deposit Accounts and
Governmental Entity Receivables Accounts if the Administrative Agent shall have
received executed copies of the Deposit Account Agreements or Governmental
Entity Receivables Agreements with each new Deposit Bank or Account Bank and an
updated Schedule I) unless the Administrative Agent shall have given its prior
consent to such change or amendment.

     

    SECTION
6.10.      Establishment of
Administrative Agent’s Account and Cure Account.  (a)  (1)
The Collection Agent, for the benefit of the Beneficiaries, shall, on or prior
to the second Business Day after the date of this Agreement, establish and
maintain in the name of the Administrative Agent  a non-interest
bearing account accessible only by and under the sole dominion and control of
the Administrative Agent (the “Administrative Agent’s
Account”), which shall be identified as the “Administrative Agent’s
Account for the Rite Aid Funding II Credit Agreement” and shall bear a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Beneficiaries.  The Administrative Agent’s Account
shall initially be established with the Administrative Agent or an Affiliate
thereof and thereafter may only be established or maintained at an Eligible
Institution.  Except as specifically provided in this Agreement, the
Administrative Agent agrees that it shall have no right of set-off or banker’s
lien against and no right to otherwise deduct from any funds held in the
Administrative Agent’s 

     

    
      
        
        

      

      
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    Account
for any amount owed to it by any Beneficiary, the Borrower, any Predecessor
Purchaser or any Originator.  The tax identification number associated
with the Administrative Agent’s Account shall be that of the
Borrower.

     

    
      
        
          	 
      	
                  (ii)

                	
                  At
      the written direction of the Collection Agent (which may be a standing
      direction), funds on deposit in the Administrative Agent’s Account shall
      be invested by the Administrative Agent in Eligible Investments selected
      by the Collection Agent that will mature so that such funds will be
      available to be distributed out of the Administrative Agent’s Account as
      and when required pursuant hereto.  All such Eligible
      Investments shall be held by the Administrative Agent for the benefit of
      the Beneficiaries.  All amounts on deposit in the Administrative
      Agent’s Account (including, all interest and other investment earnings
      (net of losses and investment expenses) on funds on deposit therein) shall
      be applied in accordance with Section 2.19 or as otherwise provided
      herein.

                


        

      

    

     

    (b)           (1)           The
Collection Agent, for the benefit of the Beneficiaries, shall, on or prior to
the second Business Day after the date of this Agreement, establish and maintain
in the name of the Administrative Agent a non-interest bearing account
accessible only by and under the sole dominion and control of the Administrative
Agent (the “Cure
Account”), which shall be identified as the “Cure Account for the Rite
Aid Funding II Credit Agreement” and shall bear a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Beneficiaries.  The Cure Account shall initially be established with
the Administrative Agent or an Affiliate thereof and thereafter may only be
established or maintained at an Eligible Institution.  Except as
specifically provided in this Agreement, the Administrative Agent agrees that it
shall have no right of set-off or banker’s lien against and no right to
otherwise deduct from any funds held in the Cure Account for any amount owed to
it by any Beneficiary, the Borrower, any Predecessor Purchaser or any
Originator.  The tax identification number associated with the Cure
Account shall be that of the Borrower.

     

    
      
        
          	 
      	
                  (ii)

                	
                  At
      the written direction of the Collection Agent (which may be a standing
      direction), funds on deposit in the Cure Account shall be invested by the
      Administrative Agent in Eligible Investments selected by the Collection
      Agent that will mature so that such funds will be available on or before
      the end of any then applicable Cure Period.  All such Eligible
      Investments shall be held by the Administrative Agent for the benefit of
      the Beneficiaries.

                


        

      

    

     

    (c)           The
Administrative Agent, on behalf of the Beneficiaries, shall possess all right,
title and interest in and to all funds on deposit from time to time in, and all
Eligible Investments credited to, the Administrative Agent’s Account and the
Cure Account and in all proceeds thereof.  Each of the Administrative
Agent’s Account and the Cure Account shall be under the sole dominion and
control of the Administrative Agent for the benefit of the
Beneficiaries.  If, at any time, either of the Administrative Agent’s
Account or the Cure Account is held by an institution other than the
Administrative Agent, an Affiliate thereof or an Eligible Institution, the
Administrative Agent (or the Collection Agent, at the direction of the
Administrative Agent and on its behalf) shall within 10 Business Days establish
a new 

     

    
      
        
        

      

      
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    Administrative
Agent’s Account or Cure Account, as applicable, meeting the conditions specified
in paragraph (a)(i) or (b)(i) above, as applicable, and shall transfer any cash
and/or any investments in the applicable existing account to such new
Administrative Agent’s Account or Cure Account, as
applicable.  Neither the Borrower, the Collection Agent nor any Person
or entity claiming by, through or under the Borrower, the Collection Agent or
any such Person or entity shall have any right, title or interest in, or any
right to withdraw any amount from, either of the Administrative Agent’s Account
or Cure Account, except as expressly provided herein.  Once the
Administrative Agent’s Account and the Cure Account have been established, the
Collection Agent shall deliver to the Administrative Agent a Schedule VII which
identifies each of the Administrative Agent’s Account and the Cure Account by
setting forth the identification name of such account, the account number of
each such account, the account designation of each such account and the name and
location of the institution with which such account has been
established.  If a substitute Administrative Agent’s Account or Cure
Account is established pursuant to this Section 6.10, the party establishing
such substitute Administrative Agent’s Account or Cure Account shall promptly
provide to the Collection Agent or the Administrative Agent, as applicable, an
amended Schedule VII, setting forth the relevant information for such substitute
Administrative Agent’s Account or Cure Account.

     

    (d)           At
no time may an amount greater than 10% of the funds on deposit in either of the
Administrative Agent’s Account or the Cure Account be invested in Eligible
Investments (other than obligations of the United States government or agencies
the obligations of which are guaranteed by the United States government or
investments described in clause (e) of the definition of Eligible Investments)
of any single entity or its Affiliates.  Nothing herein shall be
construed to impose any obligation on the Administrative Agent to monitor
compliance with this Section 6.10(d).

     

    (e)           Any
request by the Collection Agent to invest funds on deposit in either of the
Administrative Agent’s Account or the Cure Account shall be in writing (which
may be a standing instruction) and shall state that the requested investment is
an Eligible Investment.

     

    (f)           The
Administrative Agent is hereby authorized, unless otherwise directed by the
Collection Agent, to effect transactions in Eligible Investments through a
capital markets affiliate of the Administrative Agent.

     

    ARTICLE
VII

     

    EVENTS
OF DEFAULT

     

    SECTION
7.01.      Events of
Default.  If
any of the following events (“Events of Default”)
shall occur and be continuing:

     

    (a)           The
Collection Agent (i) shall fail to perform or observe any term, covenant or
agreement under this Agreement (other than as referred to in clause (ii) or
(iii) of this subsection (a)) and such failure, if capable of being cured, shall
remain unremedied for ten days or (ii) shall fail to make when due any payment
or deposit to be made by it under this Agreement and such failure, in the case
of payments on account of interest or Fees only, shall remain unremedied for one
Business Day or (iii) shall fail to deliver any Borrower Report, 

     

    
      
        
        

      

      
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    Interim
Report or Daily Report when required and such failure shall remain unremedied
for one Business Day (provided, that the grace period in this clause (iii) may
not be utilized more than three times in any Month); or

     

    (b)           The
Borrower (i) shall fail to make any payment of principal of any Loan 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, or (ii) shall fail to pay any
interest on any Loan or any fee or other amount (other than an amount referred
to in the preceding clause (i)) payable under this Agreement or any other
Transaction Document when and as the same shall become due and payable, and such
failure shall continue unremedied for one Business Day; or

     

    (c)           Any
representation or warranty (unless such representation or warranty relates
solely to one or more specific Receivables incorrectly characterized as Eligible
Receivables or specific Participated Receivables incorrectly characterized as
Eligible Participated Receivables and immediately following the removal of such
Receivables or Participated Receivables from the Borrowing Base, the outstanding
principal balance of the Loans (less the amount of Cure Funds then in the Cure
Account) is not greater than the Borrowing Base) made or deemed made by the
Borrower, the Parent, any Originator, any Predecessor Purchaser or the
Collection Agent (or any of their respective officers) under or in connection
with this Agreement or any other Transaction Document or any information or
report delivered by the Borrower, the Parent, any Originator, any Predecessor
Purchaser or the Collection Agent pursuant to this Agreement or any other
Transaction Document shall prove to have been incorrect or untrue in any
material respect when made or deemed made or delivered; or

     

    (d)           The
Borrower or any Originator shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement on its part to be performed or
observed and any such failure shall remain unremedied for 10 days provided, that
failure of the Borrower to perform or observe any covenant contained in Sections
5.01(b), 5.01(d), 5.01(g), 5.01(h), 5.01(n), 5.01(o), 5.01(p), 5.01(q), 5.01(u)
or 5.01(v)(ii) shall not be entitled to the benefit of such 10-day period;
or

     

    (e)           The
Borrower, the Parent, the Collection Agent, any Predecessor Purchaser or any
Originator shall fail to pay any principal of or premium or interest on any of
its Debt which is outstanding in a principal amount of at least $25,000,000 in
the aggregate when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or any such Debt shall be declared to be due and payable, or required
to be prepaid (other than by a regularly scheduled required prepayment),
redeemed, purchased or defeased, or an offer to repay, redeem, purchase or
defease such Debt shall be required to be made, in each case prior to the stated
maturity thereof; or

     

    
      
        
        

      

      
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    (f)           The
security interest created pursuant to Section 2.17 shall for any reason cease to
be a valid and perfected second priority security interest in the Collateral
(subordinate only to the security interest granted under the Receivables
Financing Agreement subject to the terms of the RFA Intercreditor
Agreement);

     

    (g)           The
Borrower, the Parent, the Collection Agent, any Predecessor Purchaser or any
Originator shall generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Borrower, the Parent, the Collection Agent, any
Predecessor Purchaser or any Originator seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 60 days, or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall occur; or
any proceeding or petition shall be instituted or adopted for the winding up of
the Borrower or Cayman SPE I (whether or not in the context of a bankruptcy or
insolvency proceeding); or the Borrower, the Parent, the Collection Agent, any
Predecessor Purchaser or any Originator shall take any corporate or other action
to authorize any of the actions set forth above in this subsection (g);
or

     

    (h)           [Intentionally
Omitted]; or

     

    (i)           The
Facility Principal (less the amount of Cure Funds then in the Cure Account)
shall be greater than the Borrowing Base upon the termination of a Cure Period;
or

     

    (j)           There
shall have occurred any event which in the discretion of the Administrative
Agent or the Required Lenders may materially adversely affect the collectibility
of the Receivables or  Participated Receivables or the ability of the
Borrower, the Parent, any Originator or the Collection Agent to collect
Receivables or Participated Receivables or otherwise perform its obligations
under this Agreement and the other Transaction Documents; or

     

    (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
and effect, or (ii) an “Event of Termination” or “Commitment Termination Date”
shall occur under the Receivables Financing Agreement, or the Receivables
Financing Agreement shall cease to be in full force and effect; or

     

    (l)           All
of the outstanding capital shares of the Borrower shall cease to be owned,
directly or indirectly, by the Parent or all of the outstanding capital stock or
shares of any Originator (other than the Parent) or any Predecessor Purchaser
ceases to be owned, directly or indirectly, by the Parent; or a Change in
Control of the Parent shall occur; or

     

    
      
        
        

      

      
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    (m)           One
or more judgments for the payment of money in an aggregate amount in excess of
$25,000,000 (except to the extent covered by insurance as to which the insurer
has acknowledged such coverage in writing) shall be rendered against (i) the
Parent, any Originator, any Predecessor Purchaser or any of their respective
Subsidiaries or any combination thereof or (ii) the Collection Agent or any of
its Subsidiaries or a combination thereof, and the same shall remain
undischarged for a period of 60 consecutive days during which execution shall
not be effectively stayed, or any action shall be taken by a judgment creditor
to attach or levy upon any assets of the Parent, any Originator, any Predecessor
Purchaser or the Collection Agent or any of their respective Subsidiaries to
enforce any such judgment; or

     

    (n)           The
Parent shall fail to maintain a Minimum Liquidity Position at least equal to
$100,000,000; or

     

    (o)           (1) the
Parent or any ERISA Affiliate shall fail to pay when due an amount or amounts
aggregating in excess of $10,000,000 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 Parent 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
Parent and/or one or more ERISA Affiliates to incur a current payment obligation
in excess of $50,000,000; or (ii) any other ERISA Event shall have occurred
that, in the opinion of the Administrative Agent or the Required Lenders, when
taken together with all other ERISA Events that have occurred, could reasonably
be expected to result in liability of the Parent, the ERISA Affiliates and any
Subsidiaries in an aggregate amount exceeding $50,000,000; or

     

    (p)           (1) The
Parent shall fail to make any payment required by a Parent Undertaking, or (ii)
the Parent shall fail to perform or observe any other term, covenant or
agreement contained in a Parent Undertaking and any such failure shall remain
unremedied for 10 days after written notice thereof shall have been given to the
Borrower by the Administrative Agent, or (iii) a Parent Undertaking shall cease
to be in full force and effect; or

     

    (q)           Any
Governmental Entity Receivables Account Notice or “Governmental Entity
Receivables Account Notice” (as defined in the Receivables Financing Agreement)
shall be revoked or revised; or

     

    (r)           A
Collection Agent Default shall occur; or

     

    (s)           [Intentionally
Omitted]; or

     

    (t)           The
PBGC or the Internal Revenue Service shall, or shall indicate its intention to,
file notice of a lien pursuant to Section 4068 of ERISA or Section 6320 of the
Code with regard to the assets of the Parent, the Borrower or any
Originator;

     

    
      
        
        

      

      
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    then,
and in any such event, any or all of the following actions may be taken by
notice to the Borrower:  (x) the Administrative Agent may in its
discretion, and shall, at the direction of the Required Lenders, declare the
Loans then outstanding to be due and payable, and thereupon the principal of the
Loans, together with accrued interest thereon and all fees and other obligations
of the Borrower owing 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, (y) the Administrative Agent may in its
discretion, and shall, at the direction of the Required Lenders, terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and
(z) if such event is a Collection Agent Default, and without limiting any
other right under this Agreement to replace the Collection Agent (but subject to
the terms of the RFA Intercreditor Agreement), the Administrative Agent may in
its discretion, and shall, at the direction of the Required Lenders, designate
another Person to succeed HQ as the Collection Agent; provided, that,
automatically upon the occurrence of any event (without any requirement for the
passage of time or the giving of notice) described in paragraph (g) of this
Section 7.01, the principal of the Loans (together with accrued interest thereon
and all fees and other obligations of the Borrower owing hereunder) shall become
due and payable immediately, the Commitments, if any, shall terminate
immediately, and HQ (if it is then serving as the Collection Agent) shall cease
to be the Collection Agent, and the Administrative Agent or its designee shall
become the Collection Agent.  Upon any such declaration, termination
or designation or upon any such automatic acceleration, termination or
cessation, the Lenders and the Administrative Agent shall have, in addition to
the rights and remedies which they may have under this Agreement, all other
rights and remedies provided after default under the UCC and under other
applicable law, which rights and remedies shall be cumulative.

     

    ARTICLE
VIII

     

    THE
ADMINISTRATIVE AGENT

     

    SECTION
8.01.      Authorization and
Action.  Each
Lender hereby appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Transaction Documents as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such powers as are reasonably
incidental thereto.  Without limiting the generality of the foregoing,
each Lender hereby authorizes the Administrative Agent to enter into the RFA
Intercreditor Agreement and the Senior Collateral Intercreditor Agreement
Amendment and agrees that such Lender shall be bound by the terms and conditions
of the RFA Intercreditor Agreement and the Senior Collateral Intercreditor
Agreement as amended by the Senior Collateral Intercreditor Agreement
Amendment.  The Administrative Agent shall not have any duties other
than those expressly set forth in the Transaction Documents, and no implied
obligations or liabilities shall be read into any Transaction Document, or
otherwise exist, against the Administrative Agent.  The Administrative
Agent does not assume, nor shall it be deemed to have assumed, any obligation
to, or relationship of trust or agency with, the Borrower, any Predecessor
Purchaser, the Parent, the Collection Agent or any other
Originator.  Notwithstanding any provision of this Agreement or any
other Transaction Document, in no event shall the Administrative Agent ever be
required to take any action which exposes the Administrative Agent to personal
liability or which is contrary to any provision of any Transaction Document or
applicable law.

     

    
      
        
        

      

      
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    SECTION
8.02.      Administrative Agent’s
Reliance, Etc.  Neither
the Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them as
Administrative Agent under or in connection with this Agreement (including,
without limitation, the Administrative Agent’s servicing, administering or
collecting Receivables and Participated Receivables as Collection Agent) or any
other Transaction Document, except for its or their own gross negligence or
willful misconduct.  Without limiting the generality of the foregoing,
the Administrative Agent:  (a) may consult with legal counsel
(including counsel for any Lender, the Borrower, any Predecessor Purchaser, the
Parent, any other Originator and the Collection Agent), independent certified
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (b) makes no warranty
or representation to any Lender (whether written or oral) and shall not be
responsible to any Lender for any statements, warranties or representations
(whether written or oral) made in or in connection with this Agreement or any
other Transaction Document; (c) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or any other Transaction Document on the part of
the Borrower, any Predecessor Purchaser, the Parent, any other Originator or the
Collection Agent or to inspect the property (including the books and records) of
the Borrower, any Predecessor Purchaser, the Parent, any other Originator or the
Collection Agent; (d) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any other Transaction Document or any other instrument or
document furnished pursuant hereto or thereto; and (e) shall incur no liability
under or in respect of this Agreement or any other Transaction Document by
acting upon any notice (including notice by telephone), consent, certificate or
other instrument or writing (which may be by telecopier or telex) believed by it
to be genuine and signed or sent by the proper party or parties.

     

    SECTION
8.03.      Administrative Agent and
Affiliates.  The
Person serving as Administrative Agent hereunder shall have the same rights and
powers in its capacity as a “Lender” under this Agreement as any other Lender
and may exercise the same as though it were not the Administrative
Agent.  Such Person and any of its Affiliates may generally engage in
any kind of business with the Borrower, the Parent, any other Originator, any
Predecessor Purchaser, the Collection Agent or any Obligor, any of their
respective Affiliates and any Person who may do business with or own securities
of the Borrower, the Parent, any other Originator, any Predecessor Purchaser,
the Collection Agent or any Obligor or any of their respective Affiliates, all
as if such Person were not the Administrative Agent and without any duty to
account therefor to the Lenders.  Without limiting the foregoing,
(i) the Lenders hereby acknowledge that CNAI is the program agent under the
Receivables Financing Agreement and that, in such capacity, CNAI has or may have
interests, or take actions, that may conflict with the interests of the Lenders
and (ii) the Lenders hereby waive any such conflict of interests and agree
that CNAI, as program agent under the Receivables Financing Agreement, shall
have no duty to disclose to the Lenders or use on behalf of the Lenders any
information whatsoever about or derived from its role or activities in such
capacity.

     

    SECTION
8.04.      Indemnification of
Administrative Agent.  Each
Lender agrees to indemnify the Administrative Agent (to the extent not
reimbursed by the Borrower, the Parent or any other Originator), ratably
according to the respective Ratable Share of such Lender, from 

     

    
      
        
        

      

      
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    and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement or
any other Transaction Document or any action taken or omitted by the
Administrative Agent under this Agreement or any other Transaction Document,
provided that
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent’s gross negligence or
willful misconduct.

     

    SECTION
8.05.      Delegation of
Duties.  The
Administrative Agent may execute any of its duties through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  The Administrative Agent shall not
be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

     

    SECTION
8.06.      Action or Inaction by
Administrative Agent.  The
Administrative Agent shall in all cases be fully justified in failing or
refusing to take action under any Transaction Document unless it shall first
receive such advice or concurrence of the Required Lenders and assurance of its
indemnification by the Lenders, as it deems appropriate.  The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Transaction Document
in accordance with a request or consent or at the direction of the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 11.01) and such request,
consent or direction and any action taken or failure to act pursuant thereto
shall be binding upon all Lenders and the Administrative Agent.  The
Administrative Agent agrees that any consent permitted to be made by it under
the RFA Intercreditor Agreement shall only be made if the Administrative Agent
receives the prior written approval of the Required Lenders
therefor.

     

    SECTION
8.07.      Notice of Events of
Default.  The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or of any Event of Default unless the Administrative
Agent has received notice from any Lender, the Collection Agent, any Originator,
any Predecessor Purchaser or the Borrower stating that a Default or Event of
Default has occurred hereunder and describing such Default or Event of
Default.  If the Administrative Agent receives such a notice, it shall
promptly give notice thereof to each Lender.  The Administrative Agent
shall take such action concerning a Default or an Event of Default as may be
directed by the Required Lenders (or such other number of percentage of the
Lenders as shall be necessary under the circumstances as provided in
Section 11.01) (subject to the other provisions of this Article VIII),
but until the Administrative Agent receives such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, as the Administrative Agent deems advisable and in the best
interests of the Lenders.

     

    SECTION
8.08.      Non-Reliance on
Administrative Agent and Other Parties.  Each
Lender expressly acknowledges that neither the Administrative Agent, any of its
Affiliates nor any of their respective directors, officers, agents or employees
has made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any 

     

    
      
        
        

      

      
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    review
of the affairs of the Borrower, the Collection Agent, any Predecessor
Purchasers, the Parent or any other Originator, shall be deemed to constitute
any representation or warranty by the Administrative Agent.  Each
Lender represents and warrants to the Administrative Agent that, independently
and without reliance upon the Administrative Agent, any of its Affiliates or any
other Lender and based on such documents and information as it has deemed
appropriate, it has made and will continue to make its own appraisal of and
investigation into the business, operations, property, prospects, financial and
other conditions and creditworthiness of the Borrower, the Parent and the other
Originators, and the Loans and its own decision to enter into this Agreement and
to take, or omit, action under this Agreement or any other Transaction
Document.  Except for items expressly required to be delivered under
this Agreement or any other Transaction Document by the Administrative Agent to
any Lender, the Administrative Agent shall not have any duty or responsibility
to provide any Lender with any information concerning the Borrower, the
Collection Agent, any Predecessor Purchaser, the Parent or any other Originator
or any of their Affiliates that comes into the possession of the Administrative
Agent or any of its directors, officers, agents, employees, attorneys-in-fact or
Affiliates.

     

    SECTION
8.09.      Successor Administrative
Agent.  The
Administrative Agent may, upon at least thirty (30) days’ notice to the Borrower
and each Lender, resign as Administrative Agent.  Such resignation
shall not become effective until a successor agent is appointed by the Required
Lenders (with the approval of the Borrower, which approval shall not be
unreasonably withheld and shall not be required if a Default or an Event of
Default has occurred and is continuing) and has accepted such
appointment.  If no successor agent shall have been so appointed by
the Required Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Administrative Agent gives notice of its resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent (which shall be a financial institution with an
office in New York, New York or an Affiliate of any such financial
institution).  Upon such acceptance of its appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall succeed to and become vested with all the
rights and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
the Transaction Documents.  After any retiring Administrative Agent’s
resignation hereunder, the provisions of this Article VIII and Section 6.07 and
Article X shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Administrative Agent.

     

    SECTION
8.10.      Reports and
Notices.  The
Administrative Agent hereby agrees to provide each Lender with copies of all
material notices, reports and other documents provided to the Administrative
Agent by the Borrower or the Collection Agent hereunder which are not otherwise
required to be provided by the Borrower or the Collection Agent directly to the
Lenders in accordance with the terms hereof.  Further, the
Administrative Agent hereby agrees to provide each Lender with copies of any
“Enforcement Notice” delivered to the Administrative Agent pursuant to Section
2.05 of the Senior Collateral Intercreditor Agreement and of any notice of an
“Event of Default” or “Event of Termination” delivered to the Administrative
Agent under Section 2.07 of the Senior Collateral Intercreditor
Agreement.

     

    
      
        
        

      

      
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    ARTICLE
IX

     

    [INTENTIONALLY
OMITTED]

     

    ARTICLE
X

     

    INDEMNIFICATION

     

    SECTION
10.01.    Indemnities by the
Borrower.  Without
limiting any other rights that the Administrative Agent, the Lenders or any of
their respective Affiliates or members or any of their respective officers,
directors, employees or advisors (each, an “Indemnified Party”)
may have hereunder or under applicable law, the Borrower hereby agrees to
indemnify and hold harmless each Indemnified Party from and against any and all
claims, losses and liabilities (including reasonable attorneys’ fees) (all of
the foregoing being collectively referred to as “Indemnified Amounts”)
arising out of or resulting from this Agreement or the other Transaction
Documents or the use of proceeds of the Loans or the security interest granted
hereunder or in respect of any Transferred Asset or any Contract, excluding,
however, (a) Indemnified Amounts to the extent found in a final
non-appealable judgment of a court of competent jurisdiction to have resulted
from gross negligence or willful misconduct on the part of such Indemnified
Party, (b) recourse (except as otherwise specifically provided in this
Agreement) for Transferred Assets which are not collected, not paid or
uncollectible on account of the insolvency, bankruptcy or financial inability to
pay of the applicable Obligor or (c) any income taxes or franchise taxes
measured by income or any other tax or fee measured by income incurred by such
Indemnified Party arising out of or as a result of this Agreement or the
security interest granted hereunder or in respect of any Transferred Asset or
any Contract.  Without limiting or being limited by the foregoing, the
Borrower shall pay on demand to each Indemnified Party any and all amounts
necessary to indemnify such Indemnified Party from and against any and all
Indemnified Amounts relating to or resulting from any of the
following:

     

    
      
        
          
            
              	 
      	
                      (i)

                    	
                      the
      characterization in any Borrower Report or other written statement made by
      or on behalf of the Borrower of any Transferred Asset as an Eligible
      Receivable or Eligible Participation Interest or as included in the
      Borrowing Base which, as of the date on which such information was
      certified, is not an Eligible Receivable or Eligible Participation
      Interest or should not be included in the Borrowing
  Base;

                    
	 	 	 
	 
      	
                      (ii)

                    	
                      any
      representation or warranty or statement made or deemed made by the
      Borrower (or any of its officers) under or in connection with this
      Agreement or any of the other Transaction Documents which shall have been
      incorrect in any material respect when made;

                    
	 	 	 
	 
      	
                      (iii)

                    	
                      the
      failure by the Borrower to comply with any applicable law, rule or
      regulation with respect to any Receivable, Participated Receivable,
      Participated Interest, or the related Contract; or the failure of any
      Receivable, Participated Receivable, Participation Interest, or the
      related Contract to conform to any such applicable law, rule or
      regulation;

                    


            

          

        

      

       

      
        
          
          

        

        
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                                    (iv)

                                  	
                                    the
      failure to vest in the Administrative Agent or the Lenders, as the case
      may be, a perfected security interest in the Collateral free and clear of
      any Adverse Claim (other than the security interests therein granted under
      the Receivables Financing Agreement subject to the RFA Intercreditor
      Agreement);

                                  
	 	 	 
	 
      	
                                    (v)

                                  	
                                    the
      failure to have filed, or any delay in filing, financing statements or
      other similar instruments or documents under the UCC of any applicable
      jurisdiction or other applicable laws with respect to any Transferred
      Assets and the Related Security and Collections in respect thereof,
      whether at the time of any purchase or reinvestment or at any subsequent
      time;

                                  
	 	 	 
	 
      	
                                    (vi)

                                  	
                                    any
      dispute, claim, offset or defense (other than discharge in bankruptcy of
      the Obligor) of the Obligor to the payment of any Receivable or any
      Participated Receivable (including, without limitation, a defense based on
      such Receivable, Participated Receivable, or the related Contract not
      being a legal, valid and binding obligation of such Obligor enforceable
      against it in accordance with its terms), or any other claim resulting
      from the sale of the merchandise or services related to such Receivable or
      Participated Receivable or the furnishing or failure to furnish such
      merchandise or services or relating to collection activities with respect
      to such Receivable or Participated Receivable (if such collection
      activities were performed by the Borrower acting as Collection
      Agent);

                                  
	 	 	 
	 
      	
                                    (vii)

                                  	
                                    any
      failure of the Borrower to perform its duties or obligations in accordance
      with the provisions hereof or to perform its duties or obligations under
      the Contracts;

                                  
	 	 	 
	 
      	
                                    (viii)

                                  	
                                    any
      products liability or other claim arising out of or in connection with
      merchandise, insurance or services which are the subject of any
      Contract;

                                  
	 	 	 
	 
      	
                                    (ix)

                                  	
                                    the
      commingling of Collections of Receivables and Participated Receivables at
      any time with other funds;

                                  
	 	 	 
	 
      	
                                    (x)

                                  	
                                    any
      investigation, litigation or proceeding related to this Agreement or the
      use of proceeds of Loans or in respect of any Receivable, Participated
      Receivable, Participated Interest, Related Security or
      Contract;

                                  
	 	 	 
	 
      	
                                    (xi)

                                  	
                                    any
      failure of the Borrower to comply with its covenants contained in this
      Agreement or any other Transaction Document;

                                  
	 	 	 
	 
      	
                                    (xii)

                                  	
                                    any
      claim brought by any Person other than an Indemnified Party arising from
      any activity by the Borrower in servicing, administering or collecting any
      Receivable or Participated Receivable;

                                  
	 	 	 
	 
      	
                                    (xiii)

                                  	
                                    in
      the case of a Contract between an Originator and a PBM, where such PBM
      acts as an agent for Contract Payors rather than as a principal, the
      inability of the Administrative Agent, as collateral assignee pursuant
      to

                                  


                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
          
          

        

        
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                    this
      Agreement and the other Purchase Agreements of such Contract, to enforce
      any Receivable arising under such contract directly (by contract or by
      operation of law) against such Contract Payor, except to the extent such
      Contract Payor is a Governmental Entity and such enforcement rights are
      limited by the 1972 Amendments to the Social Security Act;
    and

                  
	 	 	 
	 
      	
                    (xiv)

                  	
                    the
      inability of the Administrative Agent or the Lenders to exercise their
      rights under this Agreement to review any Contract which contains a
      confidentiality provision that purports to restrict its ability to do so,
      or any litigation or proceeding relating to any such confidentiality
      provision.

                  


          

        

      

    

     

    ARTICLE
XI

     

    MISCELLANEOUS

     

    SECTION
11.01.    Amendments,
Etc.  No
amendment or waiver of any provision of this Agreement or any other Transaction
Document or consent to any departure by the Borrower, the Parent, HQ (as
Collection Agent or otherwise), any Originator or any Predecessor Purchaser
therefrom shall be effective unless in a writing signed by, with respect to this
Agreement, the Required Lenders or the Administrative Agent with the written
consent of the Required Lenders (and, in the case of any amendment, also signed
by the Borrower, HQ and the Originators party hereto) and, with respect to any
other Transaction Document, the Administrative Agent (with the written consent
of the Required Lenders) (and, in the case of any amendment, also signed by the
other parties thereto); provided, however, that the
signatures of the Borrower, HQ and the Originators party hereto shall not be
required for the effectiveness of any amendment which modifies the
representations, warranties, covenants or responsibilities of the Collection
Agent at any time when the Collection Agent is not an Originator, the Parent or
an Affiliate of such Originator or the Parent or a successor Collection Agent is
designated by the Administrative Agent pursuant to Section 6.01, and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and additionally signed by
(x) the Collection Agent, affect the rights or duties of the Collection
Agent under this Agreement or any other Transaction Document or (y) the
Administrative Agent, affect the rights or duties of the Administrative Agent
under this Agreement or any other Transaction Document; provided further that no
amendment, waiver or consent shall (i) increase the Commitment of any Lender
without the written consent of such Lender or increase the aggregate amount of
the Commitments of the Lenders without the written consent of each Lender,
(ii) reduce or forgive the principal amount of any Loan or reduce the rate
of interest thereon (other than default interest under Section 2.09(c)), or
reduce any fees payable hereunder, without the written consent of each Lender
affected thereby, (iii) postpone the scheduled maturity of any Loan 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 2.15(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 advance rate under either clause (a) or (b) of the definition
of “Borrowing Base” to a percentage greater than the percentage set forth in
such clause on the date hereof or amend either of clauses (c) or (d) of such


     

    
      
        
        

      

      
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    definition
or amend the first sentence of the definitions of “Eligible Participated
Receivable” or “Eligible Receivable”, in each case, without the written consent
of each Lender, (vi) except as contemplated by the RFA Intercreditor
Agreement, the Senior Collateral Intercreditor Agreement, any Deposit Account
Agreement or any Governmental Entity Receivables Agreement, subordinate the
priority of the security interest granted to the Administrative Agent pursuant
to this Agreement 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 Transaction Document specifying the number or percentage of Lenders
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, (viii) release the Parent  from its obligations
under either Parent Undertaking or limit its liability in respect of either
Parent Undertaking, without the written consent of each Lender, (ix) release all
or substantially all of the Collateral from the security interests under the
Transaction Documents, without the written consent of each Lender, (x) change
the order of the waterfall of payments under Sections 2.19 (a), (b), (c), (d) or
(e), without the written consent of each Lender or (xi) change the one-time
funding of the Loans under Section 2.01, without the written consent of each
Lender.  No failure on the part of the Lenders or the Administrative
Agent to exercise, and no delay in exercising, any right hereunder or under any
other Transaction Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder or under any other Transaction
Document preclude any other or further exercise thereof or the exercise of any
other right.

     

    SECTION
11.02.    Notices,
Etc.  All
notices and other communications hereunder shall, unless otherwise stated
herein, be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, to each
party hereto, at its address set forth on Schedule III hereto or at such other
address or telecopy number as shall be designated by such party in a written
notice to the other parties hereto.  All notices and other
communications given to any party hereto shall be deemed to have been given on
the date of receipt.

     

    SECTION
11.03.    Assignability.

     

    (a)           This
Agreement and the Lenders’ rights and obligations herein (including ownership of
the Loan made by it) shall be assignable in whole or in part by the Lenders and
their successors and assigns, with the Borrower’s consent, which shall not be
unreasonably withheld or delayed, provided, that the
Borrower’s consent shall not be required if (i) the assignment shall be to
an Eligible Assignee or by CNAI or any of its Affiliates to any institution made
prior to the date that is 30 days after the Effective Date or (ii) an Event
of Default or a Default has occurred and is continuing.  Each such
assignor shall notify the Administrative Agent and the Borrower of any such
assignment.  Each such assignor may, in connection with any such
assignment, disclose to the assignee or potential assignee any information
relating to the Borrower, the Collection Agent, any Predecessor Purchaser, the
Parent or any other Originator, including the Transferred Assets furnished to
such assignor by or on behalf of the Borrower, the Parent, any other Originator
or by the Administrative Agent; provided that, prior to any such disclosure, the
assignee or potential assignee agrees to preserve the confidentiality of any
such information which is confidential in accordance with the provisions of
Section 11.06 hereof.

     

    
      
        
        

      

      
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    (b)           Each
Lender may assign to any Eligible Assignee all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment and any Loan made by it); provided, however,
that:

     

    
      
        
          
            
              	 
      	
                      (i)

                    	
                      each
      such assignment shall be of a constant, and not a varying, percentage of
      all rights and obligations under this Agreement,

                    
	 	 	 
	 
      	
                      (ii)

                    	
                      except
      in the case of an assignment to a Person described in clause (i) or
      (ii) of the definition of “Eligible Assignee”, the amount being assigned
      pursuant to each such assignment (determined as of the date of the
      Assignment and Acceptance Agreement with respect to such assignment) shall
      in no event be less than the lesser of (x) $1,000,000 and
      (y) all of the assigning Lender’s Commitment or outstanding Loans,
      and

                    
	 	 	 
	 
      	
                      (iii)

                    	
                      the
      parties to each such assignment shall execute and deliver to the
      Administrative Agent, for its acceptance and recording in the Register, an
      Assignment and Acceptance Agreement, together with a processing and
      recordation fee of $2,500; 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.

                    


            

          

        

      

    

     

    Upon
such execution, delivery, acceptance and recording and any necessary consents
required from the Administrative Agent and the Borrower, from and after the
effective date specified in such Assignment and Acceptance Agreement, (x) the
assignee thereunder shall be a party to this Agreement and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance Agreement, have the rights and obligations of a Lender
hereunder and (y) the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance Agreement, relinquish such rights and be released from such
obligations under this Agreement (and, in the case of an Assignment and
Acceptance Agreement covering all or the remaining portion of an assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).

     

    (c)           The
Administrative Agent shall maintain at its address referred to in Section 11.02
of this Agreement a copy of each Assignment and Acceptance Agreement delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitments of, and aggregate outstanding
principal of Loans owned by, each Lender from time to time (the “Register”).  The
entries in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Originators, the Administrative Agent and
the Lenders may treat each person whose name is recorded in the Register as a
Lender under this Agreement for all purposes of this Agreement.  The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior
notice.  Upon its receipt of an Assignment and Acceptance Agreement
executed by an assigning Lender and an Eligible Assignee, the Administrative
Agent shall, if such Assignment and Acceptance Agreement has been completed,
(i) accept such 

     

    
      
        
        

      

      
        77

        
          

        

      

      
        
        

      

    

     

    Assignment
and Acceptance Agreement, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the Borrower.

     

    (d)           Notwithstanding
any other provision of this Section 11.03, any Lender may at any time pledge or
grant a security interest in all or any portion of its rights (including,
without limitation, rights to payment of principal and interest) under this
Agreement to secure obligations of such Lender, including, without limitation,
any pledge or grant to secure obligations to a Federal Reserve Bank, without
notice to or consent of the Borrower or the Administrative Agent; provided that no such
pledge or grant of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or grantee for such Lender
as a party hereto.

     

    (e)           [Intentionally
Omitted].

     

    (f)           This
Agreement and the rights and obligations of the Administrative Agent herein
shall be assignable by the Administrative Agent and its successors and
assigns.

     

    (g)           Neither
the Borrower, the Parent, any Originator or the Collection Agent may assign its
rights or obligations hereunder or under any other Transaction Document or any
interest herein or therein without the prior written consent of the
Administrative Agent and each Lender.

     

    (h)           Each
Lender may, without the consent of the Administrative Agent or the Borrower,
sell participations to one or more banks or other entities (each, a “Participant”) in all
or a portion of its rights and obligations hereunder (including the outstanding
Loans); provided that
following the sale of a participation under this Agreement (i) the
obligations of such Lender shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent 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 any Lender
sells such a participation shall provide that the Participant shall not have any
right to direct the enforcement of this Agreement or the other Transaction
Documents or to approve any amendment, modification or waiver of any provision
of this Agreement or the other Transaction Documents; 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 that
(i) reduces the amount of principal or interest (other than default
interest) that is payable on account of any Loan subject to such participation
or delays any scheduled date for payment thereof or (ii) reduces any fees
payable by the Borrower to such Lender (to the extent relating to payments to
the Participant) or delays any scheduled date for payment of such
fees.  The Borrower acknowledges and agrees that each Lender’s source
of funds may derive in part from its Participants.  Accordingly,
references in Sections 2.11, 2.14, 6.07 and 11.04 and the other terms and
provisions of this Agreement and the other Transaction Documents to
determinations, reserve and capital adequacy requirements, expenses, increased
costs, reduced receipts and the like as they pertain to any Lender shall be
deemed also to include those of its Participants; provided that the
Borrower shall not be required to pay higher costs, expenses and indemnification
amounts pursuant to this sentence than would be required to be paid by the
Borrower in the absence of the sale of any participation by any Lender to a
Participant as 

     

    
      
        
        

      

      
        78

        
          

        

      

      
        
        

      

    

     

    contemplated
by this Section 11.03(h).  Each Lender or the Administrative Agent
may, in connection with any such participation, disclose to Participants and
potential Participants any information relating to the Borrower, the Collection
Agent, any Predecessor Purchaser, the Parent or the Originators, including the
Transferred Assets, furnished to such Lender or the Administrative Agent by or
on behalf of the Borrower; provided that, prior
to any such disclosure, such Participant or potential Participant agrees to
preserve the confidentiality of any such information which is confidential in
accordance with the provisions of Section 11.06 hereof.

     

    (i)           [Intentionally
Omitted].

     

    (j)           Notwithstanding
any other provision of this Section 11.03, none of the rights or obligations
under this Agreement may be assigned in whole or in part unless as of the
effective date of such assignment, the assignee is either (A) a “United States
person” (within the meaning of Section 7701(a)(30) of the Code), or (B) entitled
to a complete exemption from all U.S. withholding taxes with respect to payments
made to such assignee under any Transaction Document.

     

    SECTION
11.04.    Costs, Expenses and
Taxes.

     

    (a)           In
addition to the rights of indemnification granted under Section 10.01
hereof, the Borrower agrees to pay on demand all costs and expenses of the
Administrative Agent and its Affiliates and, to the extent described in
clause (z) below, of the Lenders in connection with the preparation,
negotiation, execution, delivery, syndication, administration (including
periodic auditing and the other activities contemplated in Section 5.02)
and enforcement of this Agreement and the other documents and agreements to be
delivered hereunder, including, without limitation, (x) the reasonable fees
and out-of-pocket expenses of counsel for the Administrative Agent and its
Affiliates with respect thereto and with respect to advising the Administrative
Agent and its Affiliates as to their rights and remedies under this Agreement
and the other Transaction Documents, (y) the costs and expenses of the
Administrative Agent’s due diligence and monitoring of the Collateral,
including, without limitation, field examinations and audits and (z) all
costs and expenses, if any (including reasonable counsel fees and expenses), of
the Administrative Agent, the Lenders and their respective Affiliates in
connection with the enforcement of this Agreement and the other documents and
agreements to be delivered hereunder.

     

    (b)           [Intentionally
Omitted].

     

    (c)           [Intentionally
Omitted].

     

    (d)           Further,
the Borrower agrees to pay any and all breakage and other expenses of the
Administrative Agent and the Lenders (including, without limitation, reasonable
attorneys’ fees and disbursements and the cost including accrued interest, of
terminating or transferring any agreements such as interest rate swaps,
over-the-counter forward agreements and future contracts engaged by the Lenders
or the Administrative Agent) in connection with any reduction of the principal
relating to the funding or maintenance of any Loan (or portion
thereof).

     

    
      
        
        

      

      
        79

        
          

        

      

      
        
        

      

    

     

    SECTION
11.05.    No Proceedings; Waiver of
Consequential Damages.  (a)  Each
of the Collection Agent, the Originators, the Administrative Agent, each Lender,
each assignee of a Loan or any interest therein and each entity which enters
into a commitment to make a Loan or any interest therein or purchase interests
therein 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 91 days since the
RFA Termination Date.

     

    (b)           Each
of the Originators, the Collection Agent and the Borrower agree that no
Indemnified Party shall have any liability to them or any of their
securityholders or creditors in connection with this Agreement, the other
Transaction Documents or the transactions contemplated thereby on any theory of
liability for any special, indirect, consequential or punitive damages
(including, without limitation, any loss of profits, business or anticipated
savings).

     

    SECTION
11.06.                                           Confidentiality

     

    .  i) Each
of the Borrower, each Originator, the Parent and the Collection Agent agrees to
maintain the confidentiality of this Agreement in communications with third
parties and otherwise; provided that this
Agreement may be disclosed (i) to third parties to the extent such
disclosure is made pursuant to a written agreement of confidentiality in form
and substance reasonably satisfactory to the Administrative Agent, (ii) to
the legal counsel and auditors of the Borrower, the Parent and the Collection
Agent if they agree to hold it confidential and (iii) to the extent
required by applicable law or regulation or by any court, regulatory body or
agency having jurisdiction over such party; and provided, further, that such
party shall have no obligation of confidentiality in respect of any information
which may be generally available to the public or becomes available to the
public through no fault of such party.

     

    (b)           Each
Lender and the Administrative Agent agrees to maintain the confidentiality of
all information with respect to the Borrower, each Originator, the Parent or the
Receivables (including the Borrower Reports) furnished or delivered to it
pursuant to this Agreement; provided, that such
information may be disclosed (i) to such party’s legal counsel and auditors
and to such party’s assignees and participants and potential assignees and
participants and their respective counsel if they agree to hold it confidential,
(ii) to the nationally recognized statistical rating agencies,
(iii) to the extent required by applicable law or regulation or by any
court, regulatory body or agency having jurisdiction over such party, and
(iv) to the respective officers, directors, employees, accountants and
advisors of each of the parties referred to in clauses (i) through (ii)
above; and provided, further, that such
party shall have no obligation of confidentiality in respect of any information
which may be generally available to the public or becomes available to the
public through no fault of such party.

     

    (c)           Notwithstanding
any other provision herein or in any other Transaction Document, each Lender and
the Administrative Agent hereby confirms that the Borrower, the Originators and
the Collection Agent (and each employee, representative or other agent of each
such party) may disclose to any and all Persons, without limitation of any kind,
the U.S. tax treatment and U.S. tax structure of the transaction contemplated by
this Agreement and the other Transaction Documents.

     

    
      
        
        

      

      
        80

        
          

        

      

      
        
        

      

    

     

    (d)           Each
of the parties hereto and each successor Collection Agent hereunder agrees to
comply with the requirements of Annex I or (in the case of a successor
Collection Agent) Annex K.

     

    SECTION
11.07.    GOVERNING
LAW.  THIS
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 LAW 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, EXCEPT TO THE EXTENT THAT, PURSUANT TO THE UCC OF THE STATE OF NEW
YORK, THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE
SECURITY INTERESTS OF THE ADMINISTRATIVE AGENT OR THE LENDERS, AS APPLICABLE, IN
THE COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF NEW YORK.

     

    SECTION
11.08.    Execution in
Counterparts.  This
Agreement may be executed in any number of 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.

     

    SECTION
11.09.    Survival of
Termination.  The
provisions of Sections 2.11, 2.12, 6.07, 10.01, 11.04, 11.05, 11.06 and 11.07
shall survive any termination of this Agreement.

     

    SECTION
11.10.    Consent to
Jurisdiction.

     

    (a)           Each
party hereto hereby irrevocably submits to the non-exclusive jurisdiction of any
New York State or Federal court sitting in New York City in any action or
proceeding arising out of or relating to this Agreement or the other Transaction
Documents, and each party hereto hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in such New
York State court or, to the extent permitted by law, in such Federal
court.  The parties hereto hereby irrevocably waive, to the fullest
extent they may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding.  The Borrower hereby
irrevocably appoints CT Corporation (the “Process Agent”), with an office on the
date hereof at 111 Eighth Avenue, 13th Floor, New York, New York 10011, United
States, as its agent to receive on behalf of the Borrower and its property
service of copies of the summons and complaint and any other process which may
be served in any such action or proceeding.  Such service may be made
by mailing or delivering a copy of such process to the Borrower in care of the
Process Agent at the Process Agent’s above address, and the Borrower hereby
irrevocably authorizes and directs the Process Agent to accept such service on
its behalf.  The parties hereto agree 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.

     

    (b)           Each
of the Borrower, the Parent, the Collection Agent and the Originators consents
to the service of any and all process in any such action or proceeding by the
mailing of copies of such process to it at its address specified in Section
11.02.  Nothing in this Section 

     

    
      
        
        

      

      
        81

        
          

        

      

      
        
        

      

    

     

    11.10
shall affect the right of any Lender or the Administrative Agent to serve legal
process in any other manner permitted by law.

     

    (c)           To
the extent that the Borrower has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, the Borrower hereby
irrevocably waives such immunity in respect of its obligations under this
Agreement or any other Transaction Document.

     

    SECTION
11.11.    WAIVER OF
JURY TRIAL.  EACH
PARTY HERETO HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED OR
DELIVERED PURSUANT HERETO.

     

    SECTION
11.12.    Judgment.

     

    (a)           If
for the purposes of obtaining judgment in any court it is necessary to convert a
sum due hereunder in U.S. Dollars into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the judgment creditor could purchase U.S. Dollars with such other
currency at New York, New York on the Business Day preceding that on which final
judgment is given.

     

    (b)           The
obligation of the Borrower in respect of any sum due from it to the Lenders or
the Administrative Agent hereunder shall, notwithstanding any judgment in a
currency other than U.S. Dollars, be discharged only to the extent that on the
Business Day following receipt by the Lenders or the Administrative Agent (as
the case may be) of any sum adjudged to be so due in such other currency, the
Lenders or the Administrative Agent (as the case may be) may in accordance with
normal banking procedures purchase U.S. Dollars with such other currency; if the
U.S. Dollars so purchased are less than the sum originally due to the Lenders or
the Administrative Agent (as the case may be) in U.S. Dollars, the Borrower
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Lenders or the Administrative Agent (as the case may be) against
such loss, and if the U.S. Dollars so purchased exceed the sum originally due to
the Lenders or the Administrative Agent (as the case may be) in U.S. Dollars,
the Lenders or the Administrative Agent (as the case may be) shall remit to the
Borrower such excess.

     

    SECTION
11.13.    USA Patriot
Act.  Each
Lender 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 to identify the
Borrower in accordance with its requirements.  The Borrower shall
promptly, following a request by the Administrative Agent or any Lenders provide
all documentation and other information that the Administrative Agent or such
Lender reasonably requests in order to comply with its 

     

    
      
        
        

      

      
        82

        
          

        

      

      
        
        

      

    

     

    ongoing
obligations under applicable “know your customer” and anti-money laundering
rules and regulations, including the USA Patriot Act.

     

    SECTION
11.14.    RFA Intercreditor
Agreement.  Notwithstanding
anything herein to the contrary, the lien and security interest granted to the
Administrative Agent pursuant to this Agreement and the exercise of any right or
remedy by the Administrative Agent hereunder are subject to the provisions of
the RFA Intercreditor Agreement.  In the event of any conflict between
the terms of the RFA Intercreditor Agreement and this Agreement, the terms of
the RFA Intercreditor Agreement shall govern and control.

     

     

    
      
        
        

      

      
        83

        
          

        

      

      
        
        

      

    

     

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

     

    
      
        	 
      	
                BORROWER:

              	
                RITE
      AID FUNDING II

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                By:

              	/s/
      James J. Comitale
	 
      	 
      	
                Name:

              	James
      J. Comitale
	 	 	Title:	Vice
      President


      

    

    


     

    
      
        
        

      

      
        Signature
Page to Credit Agreement

        
          

        

      

      
        
        

      

    

    


    
      	 
      	
              ADMINISTRATIVE
      AGENT:

            	
              CITICORP
      NORTH AMERICA, INC.,

              as
      Administrative Agent

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
              By:

            	/s/
      Thomas M. Halsch
	 
      	 
      	 
      	
              Name:

            	Thomas M.
      Halsch
	 
      	 
      	 
      	
              Title:

            	Vice
      President


    

    


    
      	 
      	
              LENDERS:

            	
              CITICORP
      NORTH AMERICA, INC.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
              By:

            	 /s/ Thomas M. Halsch
	 
      	 
      	 
      	
              Name:

            	Thomas M. Halsch
	 
      	 
      	 
      	
              Title:

            	Vice
      President


    

    


    
      
        	 
      	
                COLLECTION
      AGENT:

              	
                RITE
      AID HDQTRS. FUNDING, INC.

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                By:

              	/s/ James J. Comitale
	 
      	 
      	 
      	
                Name:

              	 James J. Comitale 
	 
      	 
      	 
      	
                Title:

              	 Vice
      President 


      

    

     

    
 

    
      
        
        

      

      
        Signature
Page to Credit Agreement

        
          

        

      

      
        
        

      

    

    


    
      	 
      	
              ORIGINATORS:

            	
              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 Corp.

              VP
      as to all other originators

            


    

    


    
      
        
        

      

      
        Signature
Page to Credit Agreement

        
          

        

      

      
        
        

      

    

    


     

     

    ANNEX
D

     

     

    FORM
OF

    ASSIGNMENT
AND ACCEPTANCE AGREEMENT

     

    Dated
__________ __, 200___

     

    


    
       Reference
is made to the Credit Agreement, dated as of February 18, 2009, as amended to
date (the “Agreement”), among
RITE AID FUNDING II, as the Borrower, the “Lenders” party thereto from time to
time, CITICORP NORTH AMERICA, INC., a Delaware corporation (“CNAI”), as
Administrative Agent (the “Administrative
Agent”) for the Lenders, RITE AID HDQTRS. FUNDING, INC., a Delaware
corporation, as Collection Agent, and each of the Originators named
therein.  Terms defined in the Agreement are used herein with the same
meaning.

       

      _________________
(the “Assignor”) and
________________ (the “Assignee”) agree as
follows:

       

       1.          Purchase and
Sale.  The Assignor hereby sells and assigns to the Assignee,
and the Assignee hereby purchases and assumes from the Assignor, an interest in
and to all of the Assignor’s rights and obligations under the Agreement as of
the date hereof equal to the percentage (the “Percentage”) interest
specified on the signature page hereto of all outstanding rights and obligations
of all Lenders under the Agreement.  After giving effect to such sale
and assignment, [the Assignee’s Commitment] [the amount of the Loans owned by
the Assignee] will be as set forth in Section 2 of the signature page
hereto.  [As consideration for the sale and assignment contemplated in
this Section 1, the Assignee shall pay to the Assignor on the Effective Date (as
hereinafter defined) in immediately available funds an amount equal to
$_________, representing the purchase price payable by the Assignee for the
Loans sold and assigned to the Assignee under this Section 1.]1

       

       2.          Representations and
Disclaimers of Assignor.  The Assignor

       

      i.           represents
and warrants that it is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear of any adverse
claim;

       

      ii.          makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Agreement or any other instrument or document furnished pursuant thereto or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Agreement or any other instrument or document furnished pursuant thereto;
and

      ___________________________

      1           Include
bracketed text if Assignor holds a portion of Loans on the Effective
Date.

       

      
        
          
          

        

        
          D-1

          
            

          

        

        
          
          

        

      

    

     

    iii.          makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, the Originators, the Collection Agent, the
Parent or Cayman SPE I or the performance or observance by the Borrower, the
Originators, the Collection Agent, the Parent or Cayman SPE I of any of their
obligations under the Agreement or any other instrument or document furnished
pursuant thereto.

     

     3.          Representations and
Agreements of Assignee.  The Assignee

     

    i.           confirms
that it has received a copy of the Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 5.01(k) of the
Agreement and Section 6(c) of each of the Parent Undertakings and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance
Agreement;

     

    ii.           agrees
that it will, independently and without reliance upon the Administrative Agent
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 the Agreement;

     

    iii.           appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under the Agreement and the other Transaction
Documents as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto;

     

    iv.           agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of the Agreement and this Assignment and Acceptance Agreement are
required to be performed by it as a Lender;

     

    v.           specifies
as its address for notices the office set forth beneath its name on the
signature pages hereof;

     

    vi.           represents
that this Assignment and Acceptance Agreement has been duly authorized, executed
and delivered by the Assignee pursuant to its corporate powers and constitutes
the legal, valid and binding obligation of the Assignee; and

     

    vii.          if
the Assignee is organized under the laws of a jurisdiction outside the United
States, (A) attaches the forms prescribed by the Internal Revenue Service
of the United States certifying as to the Assignee’s status for purposes of
determining exemption from United States withholding taxes with respect to all
payments to be made to the Assignee under the Agreement or such other documents
as are necessary to indicate that all such payments are subject to such taxes at
a rate reduced by an applicable tax treaty, and (B) agrees to provide the
Administrative Agent (to the extent permitted by applicable law) with similar
forms for each subsequent tax year of the Assignee in which payments are to be
made to the Assignee under the Agreement.

     

    
      
        
        

      

      
        D-2

        
          

        

      

      
        
        

      

    

     

    4.         Effectiveness of
Assignment.

     

    a.           Following
the execution of this Assignment and Acceptance by the Assignor and the
Assignee, it will be delivered to the Administrative Agent for acceptance and
recording by the Administrative Agent.  The effective date of this
Assignment and Acceptance shall be the date of acceptance thereof by the
Administrative Agent, unless otherwise specified in Section 3 of the signature
page hereto (the “Effective
Date”).

     

    b.           Upon
such acceptance and recording by the Administrative Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Agreement and, to the extent
provided in this Assignment and Acceptance Agreement, have the rights and
obligations of a Lender thereunder and hereunder and (ii) the Assignor
shall, to the extent provided in this Assignment and Acceptance Agreement,
relinquish its rights and be released from its obligations under the
Agreement.

     

    c.           Upon
such acceptance and recording by the Administrative Agent, from and after the
Effective Date, the Administrative Agent, the Borrower or the Collection Agent,
as the case may be, shall make all payments under the Agreement in respect of
the interest assigned hereby (including, without limitation, all payments of
principal, interest and fees with respect thereto) to the
Assignee.  The Assignor and Assignee shall make all appropriate
adjustments in payments under the Agreement for periods prior to the Effective
Date directly between themselves.

     

    5.           GOVERNING
LAW.  THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written, such execution being made on the signature
page hereto.

     

    [Remainder
of this page intentionally left blank]

     

    
      
        
        

      

      
        D-3

        
          

        

      

      
        
        

      

    

    
Signature
Page

    to
Rite Aid Funding II Assignment and Acceptance Agreement

    Dated
__________   ____, 20__

     

    
      	
              Section
      1.

            	 
      
	 
      	
              Percentage:

            	
                ______%

            
	
              Section
      2.

            	 
      
	 
      	
              [Assignee’s
      Commitment:

            	
              $______]

            
	 
      	
              [Aggregate
      Outstanding Principal of

            	 
      
	 
      	
              Loans
      held by the Assignee:

            	
              $______]

            
	
              Section
      3.

            	 
      
	 
      	
              Effective
      Date:2

            	
              ________
      __, 200_

            


    

    


     

    
      	 
      	
              [NAME
      OF ASSIGNOR]

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Title:

            
	 
      	 
      	 
      
	 
      	
              [NAME
      OF ASSIGNEE]

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Title:

            
	 
      	 
      	 
      
	 
      	
              Address
      for Notices:

            
	 
      	 
      	 
      
	 
      	
              [Insert]

            


    

    


    
___________________________

    2           This
date should be no earlier than the date of acceptance by the Administrative
Agent.

     

    
      
        
        

      

      
        D-4

        
          

        

      

      
        
        

      

    

    


    
      	 
      	
              Accepted
      this _____ day of

            
	 
      	
              ________
      __, 200_

            
	 
      	 
      
	 
      	
              CITICORP
      NORTH AMERICA, INC., as Administrative Agent

            
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Title:

            


    

    


    


    
      
        
        

      

      
        D-5

        
          

        

      

      
        
        

      

    

     

    ANNEX
E

     

    [Form
of Funds Transfer Letter]

     

    [Letterhead
of the Borrower]

     

    [Date]

     

    Citicorp
North America, Inc.,

      as
Administrative Agent

    390
Greenwich Street

    New
York, New York  10013

     

    Re:  Funds
Transfers

     

    Gentlemen:

     

    This
letter is the Funds Transfer Letter referred to in the Credit Agreement, dated
as of February 18, 2009, as modified, amended or restated from time to time (the
“Credit Agreement”; terms used in the Credit Agreement, unless otherwise defined
herein, having the meaning set forth therein) among the undersigned, the
Lenders, you, as Administrative Agent for the Lenders, the Collection Agent and
the Originators.

     

    You
are hereby directed to deposit all funds representing proceeds of the Loans to
be made on the Effective Date to [Account Number], at [Name, Address and ABA
Number of Bank].

     

    The
provisions of this Letter may not be changed or amended orally, but only by a
writing in substantially the form of this letter signed by the undersigned and
acknowledged by you.

     

    
      	 
      	
              Very
      truly yours,

            
	 
      	 
      
	 
      	
              Rite
      Aid Funding II

            
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Title:

            


    

    


    Receipt
acknowledged:

     

    CITICORP
NORTH AMERICA, INC.,

     

        as
Administrative Agent

     

    By: ___________________________

          Title:

     

    
      
        
        

      

      
        E-1

        
          

        

      

      
        
        

      

    

    


    Annex
F

     

    NOTE

     

    New
York, New York

     

    
      	
              $______________

            	
              _________,
      2009

            
	 
      	 
      


    

    FOR
VALUE RECEIVED, THE UNDERSIGNED, Rite Aid Funding II, a Cayman Islands exempted
company incorporated with limited liability (the “Borrower”), promises
to pay to the order of [Name of Lender] (“Payee”), the
principal sum of ______________ ($____________) or, if less, the aggregate
unpaid principal amount of all Loans shown on the schedule attached hereto (and
any continuation thereof) and/or in the records of the Payee pursuant to that
certain Credit Agreement, dated as of February 18, 2009 (together with all
amendments, restatements and other modifications, if any, from time to time
thereafter made thereto, the “Credit Agreement”),
among Rite Aid Funding II, as borrower, the “Lenders” party thereto from time to
time, Citicorp North America, Inc., as Administrative Agent, Rite Aid Hdqtrs.
Funding, Inc., as the collection agent, and the parties thereto named as
Originators.

     

    The
Borrower also promises to pay interest on the unpaid principal amount hereof
from time to time outstanding from the date hereof until paid in full, and any
fees, expenses and other amounts due to Payee under the Credit Agreement, at the
rates per annum and on the dates specified in the Credit
Agreement.  In any event, all principal, interest and any fees,
expenses and other amounts due to Payee under the Credit Agreement shall be due
and payable on the Maturity Date.

     

    Payments
of principal, interest and any fees, expenses and other amounts due to Payee
under the Credit Agreement are to be made in lawful money of the United States
of America in same day or immediately available funds to the account designated
by the Administrative Agent from time to time in accordance with the Credit
Agreement.

     

    This
Note is a Note referred to in, and evidences indebtedness incurred under, the
Credit Agreement, and the holder hereof is entitled to the benefits of the
Credit Agreement, to which reference is also made for a description of the
security for this Note and for a statement of the terms and conditions on which
the Borrower is permitted and required to make prepayments and repayments of
principal of the indebtedness evidenced by this Note.  Unless
otherwise defined, capitalized terms used herein have the meanings provided in
the Credit Agreement.

     

    All
parties hereto, whether as makers, endorsers, or otherwise, severally waive
presentment for payment, demand, protest and notice of dishonor.

     

    The
Borrower hereby irrevocably submits to the non-exclusive jurisdiction of any New
York State or Federal court sitting in New York City in any action or proceeding
arising out of or relating to this Note, and the Borrower hereby irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such New York State court or, to the extent permitted by law, in
such Federal court.  The Borrower hereby irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum to
the maintenance of such action or proceeding.  The Borrower agrees
that a final judgment in any such action or 

     

    
      
        
        

      

      
        F-1

        
          

        

      

      
        
        

      

    

     

    proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.

     

    The
Borrower consents to the service of any and all process in any such action or
proceeding by the mailing of copies of such process to it at its address
specified in Section 11.02 of the Credit Agreement.  Nothing in this
Note shall affect the right of the Payee or its assignees to serve legal process
in any other manner permitted by law.

     

    To
the extent that the Borrower has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, the Borrower hereby
irrevocably waives such immunity in respect of its obligations under this
Note.

     

    If
for the purposes of obtaining judgment in any court it is necessary to convert a
sum due hereunder in U.S. Dollars into another currency, the Borrower agrees, to
the fullest extent that it may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures the judgment
creditor could purchase U.S. Dollars with such other currency at New York, New
York on the Business Day preceding that on which final judgment is
given.

     

    The
obligation of the Borrower in respect of any sum due hereunder shall,
notwithstanding any judgment in a currency other than U.S. Dollars, be
discharged only to the extent that on the Business Day following receipt by the
Payee, the Payee may in accordance with normal banking procedures purchase U.S.
Dollars with such other currency; if the U.S. Dollars so purchased are less than
the sum originally due to the Payee in U.S. Dollars, the Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Payee against such loss.

     

    THIS
NOTE 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.

     

    
      	 
      	
              RITE
      AID FUNDING II

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Title:

            


    

    


    


    
      
        
        

      

      
        F-2

        
          

        

      

      
        
        

      

    

    


    


    
      
        	
                Schedule
      attached to Note dated  _________________, 2009 of Rite Aid
      Funding II payable to the order of
      ______________________________________

                 

                 

              
	
                Date of
      Loan/Repayment

                 

              	
                Amount of
      Loan

                 

              	
                Amount of
      Repayment

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              
	 
      	 
      	
                 
      

                 

              


      

    

    
F-3