Document:

<PAGE>

                                                                 EXHIBIT 10.25

                    AMENDMENT NO. 3 AND ASSIGNMENT AGREEMENT

                                       to

   THIRD AMENDED AND RESTATED REVOLVING LOAN, GUARANTY AND SECURITY AGREEMENT

                                      among

                           SUPREMA SPECIALTIES, INC.,

                         SUPREMA SPECIALTIES WEST, INC.,

                      SUPREMA SPECIALTIES NORTHEAST, INC.,

                       SUPREMA SPECIALTIES NORTHWEST INC.,

                           THE BANKS SIGNATORY HERETO,

                  FLEET NATIONAL BANK, as Administrative Agent,

                      SOVEREIGN BANK, as Syndication Agent

                                       and

                    MELLON BANK, N.A., as Documentation Agent

                                   Arranged by

                             FLEET SECURITIES, INC.

                          Dated as of September 7, 2001

<PAGE>

                    AMENDMENT NO. 3 AND ASSIGNMENT AGREEMENT

                                       to

             THIRD AMENDED AND RESTATED REVOLVING LOAN, GUARANTY AND
                               SECURITY AGREEMENT

         This AMENDMENT NO. 3 AND ASSIGNMENT AGREEMENT, dated as of September 7,
2001 (this "Amendment"), is by and among FLEET NATIONAL BANK (successor by
merger to Fleet Bank, National Association and as successor to NatWest Bank N.A.
and National Westminster Bank NJ, "Fleet"), SOVEREIGN BANK ("Sovereign"), MELLON
BANK, N.A. ("Mellon"), CITIBANK, N.A. (successor by merger to European American
Bank, "Citibank"), PNC BANK, NATIONAL ASSOCIATION ("PNC"), FIRST PIONEER FARM
CREDIT, ACA ("First Pioneer") and NATIONAL BANK OF CANADA ("NBC" and, together
with Fleet, Sovereign, Mellon, Citibank, PNC and First Pioneer, the "Banks"),
FLEET NATIONAL BANK, successor by merger to Fleet Bank, National Association, as
administrative and collateral agent for the Banks (in such capacity, the
"Agent"), SOVEREIGN BANK, as syndication agent for the Banks (in such capacity
the "Syndication Agent"), MELLON BANK, N.A., as documentation agent for the
Banks (in such capacity the "Documentation Agent"), SUPREMA SPECIALTIES, INC., a
New York corporation (the "Borrower"), SUPREMA SPECIALTIES WEST, INC. ("Suprema
West"), a California corporation, SUPREMA SPECIALTIES NORTHEAST, INC. ("Suprema
Northeast"), a New York corporation and SUPREMA SPECIALTIES NORTHWEST INC.
("Suprema Northwest"), a Delaware corporation (Suprema West, Suprema Northeast
and Suprema Northwest are collectively referred to herein as the "Guarantor")
and NATIONAL CITY BANK, as "Exiting Bank".

RECITALS:

         A. The Borrower, the Banks, the Exiting Bank, the Agent and the
Guarantor have entered into a Third Amended and Restated Revolving Loan,
Guaranty and Security Agreement, dated as of September 23, 1999, as amended by
an Amendment Number 1 and Assignment Agreement dated as of March 10, 2000 and
Amendment Number 2 dated as of December 28, 2000 (as so amended, the "Loan
Agreement").

         B. The Borrower, the Guarantor, the Banks, the Exiting Bank and the
Agent wish to amend the Loan Agreement to permit an increase to the Commitment,
to permit the Exiting Bank to assign its interest to the Banks and to otherwise
amend the Loan Agreement as hereinafter set forth.

         NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration whose receipt and sufficiency are acknowledged, the
Borrower, the Guarantor, the Banks, the Exiting Bank, the Agent, the Syndication
Agent and the Documentation Agent agree as follows:

                                       1
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         Section 1. Definitions. Each capitalized term used but not defined in
this Amendment shall have the meaning ascribed to such term in the Loan
Agreement.

         Section 2. Amendments of Loan Agreement.

         (a) The introductory paragraph of the Loan Agreement is amended to read
in its entirety as follows:

                  THIS THIRD AMENDED AND RESTATED REVOLVING LOAN, GUARANTY AND
         SECURITY AGREEMENT dated as of September 23, 1999, as amended by
         Amendment No. 1 and Assignment Agreement dated as of March 10, 2000,
         Amendment Number 2 dated as of December 28, 2000 and as hereafter
         amended from time to time, is by and among FLEET NATIONAL BANK
         (successor by merger to Fleet Bank, National Association, as successor
         to NatWest Bank N.A. and National Westminster Bank NJ, "Fleet"), having
         an office at 208 Harristown Road, Glen Rock, New Jersey 07452,
         SOVEREIGN BANK ("Sovereign"), having an office at 210 Smith Street,
         Perth Amboy, New Jersey 08861, MELLON BANK, N.A. ("Mellon"), having an
         office at 379 Thornall Street, Edison, New Jersey 08837, CITIBANK, N.A.
         (successor by merger to European American Bank, "Citibank"), having an
         office at 335 Madison Avenue, New York, New York 10017, PNC BANK,
         NATIONAL ASSOCIATION ("PNC"), having an office at 2 Tower Center Blvd,
         East Brunswick, New Jersey 08816, FIRST PIONEER FARM CREDIT, ACA
         ("First Pioneer"), having an office at 174 South Road, Enfield,
         Connecticut 06082 and NATIONAL BANK OF CANADA ("NBC"), having an office
         at 50 Division Street, Somerville, New Jersey 08876 (Fleet, Sovereign,
         Mellon, Citibank, PNC, First Pioneer and NBC, together with any other
         financial institution that becomes a party hereto, are referred to
         herein individually as a "Bank" and collectively as the "Banks"), FLEET
         NATIONAL BANK, as administrative and collateral agent for the Banks
         hereunder (in such capacity, the "Agent"), having an office at 208
         Harristown Road, Glen Rock, New Jersey 07452, SOVEREIGN BANK, as
         syndication agent for the Banks (in such capacity the "Syndication
         Agent") having an office at 210 Smith Street, Perth Amboy, New Jersey
         08861, MELLON BANK, N.A., as documentation agent for the Banks (in such
         capacity the "Documentation Agent") having an office at 379 Thornall
         Street, Edison, New Jersey 08837, SUPREMA SPECIALTIES, INC. (the
         "Borrower"), a New York corporation with its principal place of
         business at 510 East 35th Street, Paterson, New Jersey 07543, SUPREMA
         SPECIALTIES WEST, INC. ("Suprema West"), a California corporation with
         its principal place of business at 14253 South Airport Way, Manteca,
         California 95336, SUPREMA SPECIALTIES NORTHEAST, INC. ("Suprema
         Northeast"), a New York corporation with its principal place of
         business at 30 Main Street, Ogdensburg, New York 13669 and SUPREMA
         SPECIALTIES NORTHWEST INC. ("Suprema Northwest"), a Delaware
         corporation with its principal place of business at 295 South Ash
         Street, Black Foot, Idaho (Suprema West, Suprema Northeast and Suprema
         Northwest Suprema are collectively referred to herein as the
         "Guarantor"). Capitalized terms used herein without definition shall
         have the meanings assigned to such terms in Section 1 hereof.

         (b) A new definition for "Amendment No. 3" shall be added to Section 1
of the Loan Agreement in its correct alphabetical order to read in its entirety
as follows:

                  "Amendment No. 3" means that certain Amendment No. 3 to this
         Agreement dated as of September 7, 2001 among the parties thereto.

                                       2
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         (c) A new definition for "Combined Group" shall be added to Section 1
of the Loan Agreement in its correct alphabetical order to read in its entirety
as follows:

                  "Combined  Group" means A&J Cheese Co., Inc. and JG Noble
        Cheese, Inc., certain account debtors of the Borrower.

         (d) The definition of "Commitment" contained in Section 1 of the Loan
Agreement is amended to read in its entirety as follows:

                  "Commitment" means for the period to, but excluding, the
         Commitment Expiration Date, the commitment of the Banks to make Loans
         to the Borrower pursuant to this Agreement in an aggregate principal
         amount not to exceed at any time outstanding $130,000,000, as such
         amount may be increased pursuant to Section 2.1 and reduced pursuant to
         Section 5.

         (e) A new definition for "Equity Issuance" shall be added to Section 1
of the Loan Agreement in its correct alphabetical order to read in its entirety
as follows:

                  "Equity Issuance" means any offering by the Borrower of its
         common stock, any offering by the Borrower of its preferred stock
         and/or any other equity offering by the Borrower.

         (f) The definition of "Eligible Receivable" contained in Section 1 of
the Loan Agreement is amended by deleting the word "and" at the end of subpart
"(k)" thereof, by replacing the period at the end of subpart "(l)" thereof with
a semicolon and by adding new subparts "(m)" through "(q)" to read in their
entirety as follows:

                  (m) with respect to the Borrowing Base at any time calculated
         for the period beginning September 1, 2001 through and including May
         31, 2002, that portion of the Receivables owed by any single account
         debtor (other than those within the Combined Group) which exceeds
         twenty percent (20%) of all of the Receivables at the time of any such
         determination of the Borrowing Base;

                  (n) with respect to the Borrowing Base at any time calculated
         for the period beginning June 1, 2002 and for all periods thereafter,
         that portion of the Receivables owed by any single account debtor
         (other than those within the Combined Group) which exceeds fifteen
         percent (15%) of all of the Receivables at the time of any such
         determination of the Borrowing Base;

                  (o) with respect to the Borrowing Base at any time calculated
         for the period beginning September 1 2001 through and including
         November 30, 2001, that portion of the Receivables owed by the Combined
         Group which collectively exceeds thirty percent (30%) of all of the
         Receivables at the time of any such determination of the Borrowing
         Base;

                  (p) with respect to the Borrowing Base at any time calculated
         for the period beginning December 1, 2001 and for all periods
         thereafter through and including May 31, 2002, that portion of the
         Receivables owed by the Combined Group which collectively exceeds
         twenty five percent (25%) of all of the Receivables at the time of any
         such determination of the Borrowing Base; and

                                       3
<PAGE>

                  (q) with respect to the Borrowing Base at any time calculated
         for the period beginning June 1 2002 and for all periods thereafter,
         that portion of the Receivables owed by the Combined Group which
         collectively exceeds twenty percent (20%) of all of the Receivables at
         the time of any such determination of the Borrowing Base.

         (g) The definition of "Guarantor" contained in Section 1 of the Loan
Agreement is amended to read in its entirety as follows:

                  "Guarantor" means collectively Suprema Specialties West, Inc.,
         Suprema Specialties Northeast, Inc., Suprema Specialties Northwest Inc.
         and the Losurdo Purchaser (if it is not the Borrower), jointly and
         severally.

         (h) A new definition for "Losurdo" shall be added to Section 1 of the
Loan Agreement in its correct alphabetical order to read in its entirety as
follows:

                  "Losurdo" means Losurdo Foods, Inc.

         (i) A new definition for "Losurdo Purchaser" shall be added to Section
1 of the Loan Agreement in its correct alphabetical order to read in its
entirety as follows:

                  "Losurdo Purchaser" means the Borrower or the Affiliate or
         Subsidiary of the Borrower that is the purchaser of the facility in
         connection with the Losurdo Transaction.

         (j) The definition of "Notes" contained in Section 1 of the Loan
Agreement is amended to read in its entirety as follows:

                  "Notes" means those certain Secured Revolving Notes dated
         September 7, 2001 made by the Borrower in favor of each institution
         that was a Bank as of the date thereof, which Notes were given in
         substitution for certain notes executed prior thereto, but in each case
         not in cancellation, discharge or extinguishment of the indebtedness
         formerly evidenced by such notes, as amended from time to time,
         together with all promissory notes delivered in replacement or
         substitution thereof and any all notes made by the Borrower in favor of
         an institution that becomes a Bank after the Effective Date of
         Amendment No. 3.

         (k) A new definition for "Permitted Losurdo Transaction" shall be added
to Section 1 of the Loan Agreement in its correct alphabetical order to read in
its entirety as follows:

                  "Permitted Losurdo Transaction" means the purchase by the
         Losurdo Purchaser from Losurdo of the furniture, fixtures, equipment
         and real property comprising a certain privately-owned, approximately
         80,000 square foot turn-key cheese production facility located in
         Heuvelton, New York, for an aggregate consideration of not in excess of
         $5,250,000, from which some or all of the property so purchased may be
         sold by the Losurdo Purchaser to a leasing company (or other financing
         entity) and then leased back to the Losurdo Purchaser by such leasing
         company (or other financing entity) pursuant to a sale-leaseback
         arrangement; provided, that, with respect to such described transaction
         (the "Losurdo Transaction"); each of the following conditions shall
         have been satisfied (i) the Losurdo Purchaser shall not have incurred
         any additional Indebtedness to finance such acquisition (other than the
         sale-leaseback arrangement described above), whether in the form of
         seller notes, third party Indebtedness or otherwise; (ii) at the time
         of the Losurdo Transaction no Default or Event of Default exists and no
         Default or Event of Default would occur after giving effect to such
         Losurdo Transaction; (iii) the Borrower shall have delivered to the
         Agent, prior to the consummation of such Losurdo Transaction, fully
         executed copies of the (A) supply agreement between the Borrower and
         Losurdo, (B) the Letter of Intent executed by the Borrower with respect
         to the Losurdo Transaction and (C) purchase agreement and any other
         material documents executed in connection with the Losurdo Transaction

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         and each such document shall be in form and substance reasonably
         satisfactory to the Agent; (iv) the assets being acquired are being
         acquired free and clear of any and all Liens (other than Permitted
         Liens and Liens reasonably satisfactory to the Agent); (v) the Agent
         shall have received such other information or documents as it shall
         have reasonably requested in connection with such Losurdo Transaction;
         (vi) the Losurdo Transaction shall have been consummated in accordance
         with the definitive Losurdo Transaction documents, without any waiver
         or amendment of any material term or condition therein not consented to
         by the Agent (acting with the consent of the Required Banks, if needed)
         and in compliance with all applicable laws and all necessary approvals,
         except where the failure to so comply could not reasonably be expected
         to have a Material Adverse Effect; (vii) all applicable environmental
         issues shall have been addressed in a manner reasonably satisfactory to
         the Agent and (viii) all governmental and third-party consents and
         approvals necessary in connection with each aspect of the Losurdo
         Transaction shall have been obtained (without the imposition of any
         unreasonable conditions) and shall remain in effect, except where the
         failure to obtain same could not reasonably be expected to have a
         Material Adverse Effect; all applicable waiting periods shall have
         expired or been terminated or waived without any material adverse
         action being taken by any authority having jurisdiction; and no law or
         regulation shall be applicable that restrains, prevents or imposes
         material adverse conditions upon any aspect of the Losurdo Transaction
         as reasonably determined by the Borrower.

         (l) Section 2.1 of the Loan Agreement is amended to read in its
entirety as follows:

                  2.1 Commitment; Maximum Credit; Increases to Commitments.

                  (a) Subject to the terms and conditions of this Agreement,
         each Bank severally (but not jointly) agrees to make loans to the
         Borrower (hereinafter collectively referred to as "Loans" and
         individually as a "Loan"), from time to time before the Termination
         Date, in such amounts as Borrower may from time to time request, not to
         exceed at any time outstanding the amount set opposite the Bank's name
         below; provided, that, pursuant to the terms of Section 2.1(b) the
         table set forth below is subject to revision upon written notice from
         the Agent consented to in writing by the Borrower (and upon the Agent's
         distribution of any such notice that includes a revised table, absent
         manifest error the table below shall be deemed amended and
         automatically revised as set forth in such notice); provided, however,
         that in no event shall the aggregate outstanding principal amount of
         Loans at any time outstanding exceed the lesser of (A) the Commitment,
         or (B) the Borrowing Base, each as in effect at the time of such Loan
         (the "Maximum Credit"):

                  Name of Bank                                Amount
                  ------------                                ------
                  Fleet National Bank                         $  30,000,000.00

                  Sovereign Bank                              $  25,000,000.00

                  Mellon Bank, N.A.                           $  22,500,000.00

                  First Pioneer Farm Credit, ACA              $  17,500,000.00

                  National Bank of Canada                     $  15,000,000.00

                  PNC Bank, National Association              $  10,000,000.00

                  Citibank                                    $  10,000,000.00

                                                     TOTAL    $ 130,000,000.00

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         Each Loan shall be made by each Bank in the proportion which that
         Bank's Commitment bears to the total amount of all the Banks'
         Commitments; provided, however, that the failure of any Bank to make
         any requested Loan to be made by it on the date specified for such Loan
         shall not relieve each other Bank of its obligation (if any) to make
         its Loan on such date, but no Bank shall be responsible for the failure
         of any other Bank to make any Loan to be made by such other Bank.
         Subject to the terms hereof, the Borrower may borrow, prepay and
         reborrow, and may continue and convert any Loan in accordance with
         Section 2.5, until the Termination Date. The Banks have no obligation
         to make any Loan on or after the Termination Date.

                  (b) Provided that no Default or Event of Default exists or
         would exist immediately before and after giving effect thereto, the
         Borrower may at any time and from time to time, at its sole cost and
         expense, request any one or more of the Banks to increase its
         Commitment (such decision to increase the Commitment of a Bank to be
         within the sole and absolute discretion of such Bank), or request any
         other institution reasonably satisfactory to the Agent to provide a new
         Commitment, by submitting an Increase Supplement, duly executed by the
         Borrower and each such increasing Bank or other institution agreeing to
         increase its Commitment or provide a new Commitment, as the case may
         be. If such Increase Supplement is in all respects reasonably
         satisfactory to the Agent, the Agent shall execute such Increase
         Supplement and deliver a copy thereof to the Borrower and each such
         increasing Bank or other institution, as the case may be. Upon
         execution and delivery of such Increase Supplement, (i) in the case of
         each such increasing Bank, such increasing Bank's Commitment shall be
         increased to the amount set forth in such Increase Supplement, (ii) in
         the case of each such other institution, such other institution shall
         become a party hereto and shall for all purposes of the Loan Documents
         be deemed a "Bank" with a Commitment in the amount set forth in such
         Increase Supplement, (iii) in each case, the Commitment of such
         increasing Bank or such other institution, as the case may be, shall be
         as set forth in the applicable Increase Supplement, and (iv) the
         Borrower shall contemporaneously therewith execute and deliver to the
         Agent (x) for each Bank providing an increased Commitment, a new Note
         in the amount of such increased Commitment in exchange for the return
         and cancellation of each such Bank's existing Note and (y) for each
         such other institution providing a new Commitment, a Note in the amount
         of its Commitment; provided, however, that:

                           (i)   immediately after giving effect thereto, the
                  aggregate Commitment of all the Banks shall not be in excess
                  of $150,000,000.00;

                          (ii)   unless otherwise agreed to by the Agent, each
                  such increase shall be in an amount not less than $5,000,000
                  or an integral multiple of $1,000,000 in excess thereof;

                           (iii) from the date hereof through the Commitment
                  Expiration Date, the Commitment shall not be increased on more
                  than two (2) occasions;

                           (iv)  if Loans shall be outstanding immediately after
                  giving effect to such increase, each Bank shall be deemed to
                  have automatically assigned or assumed from each other Bank
                  such rights, and shall have been deemed to have automatically
                  assigned to or assumed from or delegated to such other Bank
                  such obligations, in each case without recourse,
                  representation or warranty, as shall cause the outstanding
                  principal balance of its Loans to be an amount equal to its
                  Percentage of the aggregate amount of all outstanding Loans
                  (as used herein, a Bank's "Percentage" shall be determined by
                  dividing the Commitment of such Bank as set forth in Section
                  2.1(a) of the Loan Agreement, by the total Commitment of all
                  the Banks as set forth in such Section 2.1(a); provided, that,

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                  in each case (x) the table utilized with respect to such
                  Section 2.1(a) shall be the revised table distributed by the
                  Agent pursuant to this Section 2.1(b) , (y) the Commitment
                  shall be the increased Commitment of all the Banks as provided
                  by the Agent pursuant to this Section 2.1(b) and (z) the term
                  "Banks" shall include all then existing Banks and any and all
                  such "other institutions" that shall become Banks (as more
                  fully described above)). Each such Bank shall make such
                  payments to, and as directed by, the Agent and the Agent shall
                  make such payments to the Banks in order to cause the
                  outstanding principal balance of the Loans by each Bank to be
                  an amount equal to its Percentage of the aggregate amount of
                  all outstanding Loans after giving effect to the Commitment
                  increase. The Borrower hereby agrees that (x) any amount that
                  a Bank so pays to another Bank pursuant to this Section 2.1(b)
                  shall be entitled to all rights of a Bank under this Agreement
                  and such payments to Banks shall constitute Loans held by each
                  such payor Bank under this Agreement, (y) that each such payor
                  Bank may, to the fullest extent permitted by law, exercise all
                  of its right of payment (including the right of set-off) with
                  respect to such amounts as fully as if such payor Bank had
                  initially advanced the Borrower the amount of such payments
                  and (z) each Bank receiving payment of its Loans pursuant to
                  this Section may treat the assignment of Eurodollar Loans as a
                  prepayment of such Eurodollar Loans for purposes of Section
                  5.4 hereof.

                           (v)   each such other institution shall have
                  delivered to the Agent and the Borrower all forms, if any,
                  that are required to be delivered by such other institution
                  pursuant to this Agreement;

                           (vi)  within two Business Days after the Agent
                  executes and delivers each Increase Supplement in accordance
                  with the terms hereof, the Agent shall revise the table set
                  forth in Section 2.1(a) to reflect the adjustments to the
                  Commitments contemplated by clause (iv) above and shall
                  promptly send a copy thereof to the Banks and the Borrower and
                  upon the Agent's distribution of same, the Commitment of each
                  Bank shall be automatically adjusted to be the Commitment set
                  forth therein;

                           (vii) the Borrower shall have paid to Fleet
                  Securities, Inc., as arranger of the increase of the facility,
                  an arrangement fee satisfactory to Fleet Securities, Inc. and
                  the Borrower; and

                          (viii) the Borrower and the Agent shall have agreed
                  upon an agency fee in an amount satisfactory to the Agent.

                  In connection with any increase to the Commitment pursuant to
                  this Section, the Borrower, the Guarantor, the Agent and each
                  of the Banks hereby consents to the addition of each "other
                  institution" as a Bank under this Agreement with a Commitment
                  as set forth in Section 2.1(a) of this Agreement, as amended
                  and updated by the Agent.

         (m) Section 10.2(b) of the Loan Agreement is amended to read in its
entirety as follows:

                  (b) (i) from time to time as requested by the Agent or any
         Bank, but no more often than twice a year and no less frequently than
         annually (together with the annual certified financial statements
         required to be furnished by the Borrower), provide each Bank with a
         written acknowledgment, in form and substance satisfactory to each
         Bank, from the Borrower's and the Guarantor's accountant acknowledging
         that the Banks are relying on the accountant's professional accounting
         services to the Borrower and Guarantor, and acknowledging the
         Borrower's and Guarantor's knowledge of each Bank's reliance thereon
         and (ii) within 5 days of when received by the Borrower and/or any

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<PAGE>

         Guarantor, provide each Bank with a copy of the annual management
         letter furnished to the Borrower and/or the Guarantor by their
         accountant;

         (n) Section 10.14(c) of the Loan Agreement is amended to read in its
entirety as follows:

                  (c) Consolidated Net Worth. Maintain at all times Consolidated
         Net Worth of not less than $35,000,000, which Consolidated Net Worth
         requirement shall be increased (i) each Fiscal Year end commencing with
         the Fiscal Year ending June 30, 2001 (and which shall be maintained
         during each fiscal quarter of the ensuing Fiscal Year until the end of
         such Fiscal Year at which time it shall again increase accordingly and
         be maintained as aforesaid) by the greater of (A) 50% of Consolidated
         Net Earnings for such Fiscal Year, and (B) $0 and (ii) upon the
         consummation of each Equity Issuance, by an amount equal to 50% of all
         proceeds received by the Borrower in connection with each such Equity
         Issuance (less reasonable expenses and other costs of issuance in
         connection therewith), which increased amount shall be maintained
         during each subsequent fiscal quarter until the required Consolidated
         Net Worth shall again increase pursuant to any of the provisions of
         this subsection 10.14(c).

         (o) Section 10.17 of the Loan Agreement is amended by replacing the
phrase "and (iii) the sale of property pursuant to the Permitted Snake River
Transaction" with the phrase "and (iii) the sale of property pursuant to the
Permitted Snake River Transaction and Losurdo Transaction."

         (p) Section 10.19(vi) of the Loan Agreement is amended to read in its
entirety as follows:

                  (vi) the Permitted Snake River Transaction, the Losurdo
         Transaction and transactions permitted by Sections 10.16 and 10.21
         hereof.

         (q) A new Section 10.32 shall be added to the Loan Agreement
immediately after Section 10.31 and shall read in its entirety as follows:

                  10.31 Losurdo Purchase. Within 30 days of the consummation of
         the Losurdo Transaction, if the Losurdo Purchaser is not the Borrower,
         the Borrower shall (i) ensure that the Losurdo Purchaser executes any
         and all documents reasonably required by the Agent to ensure that the
         Losurdo Purchaser becomes a Guarantor and in connection therewith the
         Agent shall be authorized to file Uniform Commercial Code financing
         statements with respect to all Collateral owned by the Losurdo
         Purchaser, (ii) deliver to the Agent a fully executed Amendment to the
         Pledge Agreement to include the stock of the Losurdo Purchaser under
         such Pledge Agreement, which Amendment shall be substantially similar
         to the Amendment to Pledge Agreement delivered in connection with
         Amendment No. 2, together with one or more certificates representing
         all the issued and outstanding shares of the Losurdo Purchaser and an
         irrevocable power of attorney in the form of Exhibit A to the Pledge
         Agreement or other stock power satisfactory to the Agent, with respect
         to such shares, (iii) take any other action and deliver any other
         documents as is reasonably requested by the Agent and is consistent
         with the requirements of the Agent with respect to new Subsidiaries
         and/or Affiliates of the Borrower, and (iv) deliver to the Agent
         satisfactory evidence of the consummation of the Permitted Losurdo
         Transaction and satisfactory evidence that each of the conditions set
         forth under "Permitted Losurdo Transaction" have been satisfied.

                                       8
<PAGE>

         (r) Section 12.1 (i) of the Loan Agreement is amended to read in its
entirety as follows:

                  (i) Ownership. If (i) the Guarantor ceases to be a wholly
         owned subsidiary of the Borrower, or (ii) Mark Cocchiola is no longer
         actively involved in the day to day management of the Borrower and the
         Guarantor as President in substantially the same manner as presently
         exists; or

         (s) Section 15.3 of the Loan Agreement is amended to read in its
entirety as follows:

                  15.3 Notices. Except as otherwise expressly provided herein,
         all notices hereunder shall be in writing and shall be delivered by
         telecopier, hand, overnight delivery or by mail. Notices given by mail
         shall be deemed to have been given three (3) days after the date sent
         if sent by registered or certified mail, postage prepaid, and:

                  (i)    if to the Borrower and/or the Guarantor, to:

                              Suprema Specialties, Inc.
                              510 East 35th Street
                              Paterson, New Jersey  07543
                              Attn: President

                  (ii)   if to the Agent or Fleet, to:

                              Fleet National Bank
                              208 Harristown Road
                              Glen Rock, New Jersey  07452
                              Attn: Edward J. Waterfield, Senior Vice President

                  (iii)  if to Sovereign, to:

                              Sovereign Bank
                              210 Smith Street
                              Perth Amboy 08861
                              Attn: Owen McKenna, Vice President

                  (iv)   if to Mellon, to:

                              Mellon Bank, N.A.
                              379 Thornall Street
                              Edison, New Jersey  08837
                              Attn: Russ J. Lopinto, Vice President

                  (v)    if to Citibank, to:

                              Citibank, N.A.
                              335 Madison Avenue
                              New York, New York 10017
                              Attn: Mark J. Saeger, Vice President

                                       9
<PAGE>

                  (vi)   if to PNC, to:

                              PNC Bank, National Association
                              2 Tower Center Boulevard
                              East Brunswick, New Jersey 08816
                              Attn: Jeffrey Blakemore, Vice President

                  (vii)  if to First Pioneer, to:

                              First Pioneer Farm Credit, ACA
                              174 South Road
                              Enfield, Connecticut 06082
                              Attention: James M. Papai, Commercial Loan Officer

                  (viii) if to National Bank of Canada, to:

                              National Bank of Canada
                              50 Division Street
                              Somerville, New Jersey 08876
                              Attention: John Leifer, Vice President

         or in the case of any party, such other address as such party may, by
         written notice, received by the Agent, have designated as its address
         for notices and in the case of any institution that became a Bank after
         the Effective Date of Amendment No. 3, such address as shall be
         designated on its assignment agreement or otherwise in writing to the
         Agent. Notices given by (i) telecopier shall be deemed to have been
         given when sent, (ii) hand shall be deemed to have been given the same
         day they have been sent and (iii) overnight delivery shall be deemed to
         have been given the day after they have sent, in each case if properly
         addressed to the party to whom sent, at its address, as aforesaid. The
         Agent shall be entitled to reasonably rely upon any telephonic notices
         purportedly given pursuant to the terms of this Agreement and the
         Borrower and the Guarantor shall hold the Agent harmless from any loss,
         cost or expense ensuing from any such reliance.

         Section 3. Reallocation of Commitments; Notes.

         (a) The total amount of each Bank's Commitment pursuant to the Loan
Agreement shall be the amount set forth in Section 2.1 of the Loan Agreement, as
amended by this Amendment.

         (b) All Loans of each Bank to the Borrower shall be evidenced by a Note
of the Borrower substantially in the form of the existing note payable by the
Borrower to the order of such Bank, with changes necessary to reflect each such
Bank's new commitment (the "Note"), which Note shall amend and restate the
existing Note payable to such Bank.

         (c) Upon the Effective Date, the Commitment of each Bank shall be
automatically adjusted as set forth in this Amendment.

         (d) Each Bank and the Exiting Bank shall hereby assign or assume, as
applicable, from each other Bank and/or the Exiting Bank such rights, and shall
hereby assign or delegate to such other Bank and/or the Exiting Bank such

                                       10
<PAGE>

obligations, in each case without recourse, representation or warranty except as
expressly provided in this Amendment, as shall cause the outstanding principal
balance of its Loans to be an amount equal to its Percentage (which in the case
of the Exiting Bank shall be zero) of the aggregate amount of all outstanding
Loans (as used herein, a Bank's "Percentage" shall be determined by dividing the
Commitment of such Bank as set forth in Section 2.1 of the Loan Agreement, as
amended by this Amendment, by the total Commitments of all the Banks as set
forth in the definition of Commitment, as amended by this Amendment). Each such
Bank shall make such payments to, and as directed by, the Agent and the Agent
shall make such payments to the Banks and/or the Exiting Bank in order to cause
the outstanding principal balance of the Loans by each Bank to be an amount
equal to its Percentage of the aggregate amount of all outstanding Loans. The
Borrower hereby agrees that (i) any Bank that has made payment to another Bank
and/or the Exiting Bank pursuant to this Amendment shall be entitled to all
rights of a Bank under the Agreement and such payments to Banks and/or the
Exiting Bank shall constitute Loans held by each such payor Bank under the Loan
Agreement and that each such payor Bank may, to the fullest extent permitted by
law, exercise all of its right of payment (including the right of set-off) with
respect to such amounts as fully as if such payor Bank had initially advanced
the Borrower the amount of such payments and (ii) each Bank receiving payment of
its Loans pursuant to this Amendment may treat the assignment of Eurodollar
Loans as a prepayment of such Eurodollar Loans for purposes of Section 5.4
hereof.

         Section 4. Conforming Amendments. The Loan Agreement, the Loan
Documents and all agreements, instruments and documents executed and delivered
in connection with any of the foregoing, shall each be deemed to be amended and
supplemented hereby to the extent necessary, if any, to give effect to the
provisions of this Amendment, and each Bank is authorized to annex a copy of
this Amendment to its respective copy of the Loan Agreement. Except as so
amended hereby, the Loan Agreement and the other Loan Documents shall remain in
full force and effect in accordance with their respective terms.

         Section 5. Consent of Noteholders; Amendment to Note Agreement. This
Amendment shall not be effective unless and until the Agent shall have received
a consent to this Amendment binding on each noteholder which may include an
amendment to the Note Agreement and in any event shall be in form and substance
satisfactory to the Administrative Agent and each Bank.

         Section 6. Acknowledgments, Confirmations and Consent.

         (a) The Borrower and each Guarantor (including each Guarantor that
became a Guarantor after September 23, 1999) each acknowledge and confirm that
the Liens granted pursuant to the Loan Agreement secure the indebtedness,
liabilities and obligations of the Borrower to the Banks and the Agent under the
Notes as amended and restated pursuant to this Amendment and under the Loan
Agreement as further amended by this Amendment and under the other Loan

                                       11
<PAGE>

Documents, whether or not so stated in such Loan Agreement and/or other Loan
Document, and that the term "Obligations" as used in the Loan Agreement (or any
other terms used in the Loan Agreement to describe or refer to the indebtedness,
liabilities and obligations of the Borrower to the Banks and the Agent) includes
all other indebtedness, liabilities and obligations of the Borrower under the
Loan Agreement as amended by this Amendment and under the amended and restated
Notes executed in connection with this Amendment. It is expressly agreed that
each of the provisions of Section 8 of the Loan Agreement apply to each party
that became a Guarantor after September 23, 1999 with the same effect as if such
Guarantor were a party to such original Loan Agreement and each such Guarantor
(as well as the Borrower each other Guarantor) hereby reaffirms the grant to the
Agent, for the ratable benefit of the Banks, of a first priority continuing
security interest and Lien in and to all the Assets, as more fully described in
the Loan Agreement.

         (b) Each Guarantor (including each Guarantor that became a Guarantor
after September 23, 1999) consents in all respects to the execution by the
Borrower of this Amendment and acknowledges and confirms that such Guarantor is
a "Guarantor" under the Loan Agreement and continues to guarantee the full
payment and performance of the indebtedness, liabilities and obligations of the
Borrower under the Loan Agreement as further amended by this Amendment and under
the amended and restated Notes executed in connection with this Amendment as
provided in the Loan Agreement, and remain in full force and effect in
accordance with their respective terms.

         Section 7. Representations and Warranties. The Borrower and the
Guarantor, as the case may be, each represents and warrants to the Banks, the
Exiting Bank, the Agent, the Syndication Agent and the Documentation Agent as
follows:

         (a) After giving effect to this Amendment (i) each of the
representations and warranties set forth in Section 9 of the Loan Agreement is
true and correct in all respects as if made on the date of this Amendment,
except for changes in the ordinary course of business which, either singly or in
the aggregate, are not materially adverse to the business or financial condition
of the Borrower or the Guarantor, and (ii) no Default or Event of Default exists
under the Loan Agreement.

         (b) Each of the Borrower and the Guarantor has the power to execute,
deliver and perform, and has taken all necessary corporate action to authorize
the execution, delivery and performance of, this Amendment and the other
agreements, instruments and documents to be executed by it in connection with
this Amendment. No consent or approval of any Person (except for such consents
as have been obtained) and no consent, license, certificate of need, approval,
authorization or declaration of, or filing with, any governmental authority,
bureau or agency is or will be required in connection with the execution,
delivery or performance by the Borrower or the Guarantor, or the validity or
enforceability of this Amendment and the other agreements, instruments and
documents executed in connection with this Amendment.

                                       12
<PAGE>

         (c) The execution, delivery and performance by the Borrower and the
Guarantor of this Amendment and each of the agreements, instruments and
documents executed in connection with this Amendment to which it is a party will
not (i) violate any provision of law, (ii) conflict with or result in a breach
of any order, writ, injunction, ordinance, resolution, decree or other similar
document or instrument of any court or governmental authority, bureau or agency,
domestic or foreign, or the certificate of incorporation or by-laws of the
Borrower or any Guarantor, (iii) create (with or without the giving of notice or
lapse of time, or both) a default under or breach of any agreement, bond, note
or indenture to which the Borrower or any Guarantor is a party or by which any
of them is bound or any of their respective properties or assets is affected, or
(iv) result in the imposition of any Lien of any nature whatsoever upon any of
the properties or assets owned by or used in connection with the business of the
Borrower or any Guarantor, except for the Liens created and granted pursuant to
the Loan Documents.

         (d) This Amendment and each of the other agreements, instruments and
documents executed in connection with this Amendment to which the Borrower or
the Guarantor is a party has been duly executed and delivered by the Borrower or
the Guarantor, as the case may be, and constitutes the valid and legally binding
obligation of the Borrower or the Guarantor, as the case may be, enforceable in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other similar
laws, now or hereafter in effect, relating to or affecting the enforcement of
creditors' rights generally and except that the remedy of specific performance
and other equitable remedies are subject to judicial discretion; provided,
however, that such laws shall not materially interfere with the practical
realization of the benefits of the Security Documents or the Liens created
thereby, except for: (i) possible delay, (ii) situations which may arise under
Chapter II of the U.S. Bankruptcy Code, II U.S.C. ss.ss. 10 1 et seq., and (iii)
equitable orders of any United States Bankruptcy Court.

         (e) Since January 1, 2000, the Borrower has not repurchased any of its
issued and outstanding capital stock in an aggregate amount in excess of that
permitted by the Loan Agreement.

         (f) To the extent the Borrower remains in compliance with the Borrowing
Base, all obligations under the Loan Agreement, as further amended pursuant to
the terms of this Amendment, constitute "Senior Debt" as defined in that certain
Note Agreement dated as of March 9, 1998 with respect to $10,500,000 16.5%
Senior Subordinated Notes Due March 1, 2006.

         (g) As used herein, the term Guarantor means Guarantor as defined in
the Loan Agreement and as amended by this Agreement.

                                       13
<PAGE>

         Section 8. Fees and Expenses; Post Closing Examination.

         (a) The Borrower shall pay the following fees and expenses in
connection with this Amendment:

             (i)   The Borrower shall pay to each increasing Bank a fee in the
         amount of .25% of the amount of the increase, if any, in Bank's
         Commitment set forth in this Amendment from such Bank's Commitment
         prior to the Effective Date of this Amendment, such fee to be payable
         upon execution of this Amendment.

             (ii)  The Borrower agrees to pay the Agent upon demand all
         reasonable expenses, including reasonable fees of attorneys and
         paralegals for the Agent, incurred by the Agent in connection with the
         preparation, negotiation and execution of this Amendment and any
         agreements, instruments and documents executed or furnished in
         connection with this Amendment.

             (iii) The Borrower agrees to pay Fleet Securities, Inc. a fee
         in an amount agreed to between the Borrower and Fleet Securities, Inc.
         in consideration of Fleet Securities, Inc. arranging the increased
         Commitment provided in this Amendment.

         (b) Within 30 days of the date hereof, the Borrower shall permit the
Agent, by or through any of its officers, agents, employees, attorneys or
accountants to inspect and make extracts from the Borrower's books and records.
The cost of the foregoing shall be borne by the Borrower.

         Section 9. Miscellaneous.

         (a) Except as specifically amended by this Amendment, the Loan
Agreement and each of the other agreements, instruments and documents executed
in connection with the Loan Agreement shall remain in full force and effect in
accordance with their respective terms.

         (b) THIS AMENDMENT AND ALL OTHER AGREEMENTS, DOCUMENTS AND INSTRUMENTS
EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY APPLICABLE
TO CONTRACTS EXECUTED IN AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF NEW
JERSEY BY RESIDENTS OF SUCH STATE (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW).

         (c) The provisions of this Amendment are severable, and if any clause
or provision shall be held invalid or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such

                                       14
<PAGE>

clause, provision or part in such jurisdiction and shall not in any manner
affect such clause, provision or part in any other jurisdiction or any other
clause or provision in this Amendment in any jurisdiction.

         (d) This Amendment may be signed in any number of counterparts with the
same effect as if all parties to this Amendment signed the same counterpart.

         (e) This Amendment shall be binding upon and inure to the benefit of
each of the Borrower and the Guarantor and their respective successors and to
the benefit of the Agent, the Banks, the Exiting Bank, the Syndication Agent
and/or the Documentation Agent and their respective successors and assigns. The
rights and obligations of each of the Borrower and the Guarantor under this
Amendment shall not be assigned or delegated without the prior written consent
of the Agent and the Banks, and any purported assignment or delegation without
such consent shall be void.

         Section 10. Effectiveness of Amendment. This Amendment shall become
effective (the "Effective Date") upon the later of (i) delivery from Borrower to
each Bank of a Note in a face amount equal to such Bank's Commitment (as amended
by this Amendment) which note shall amend and restate and be in replacement of
and substitution for its existing promissory note (such amended and restated
promissory note, when executed and delivered, shall be deemed one of the Notes
for all purposes of the Agreement) and documents relating thereto, (ii) receipt
by the Agent of counterparts of this Amendment duly signed by each party hereto,
(iii) the payment of the fees and expenses set forth in Section 8 of this
Amendment, (iv) receipt by the Agent of corporate resolutions and certificates
of good standing with respect to Borrower and Guarantor, (v) receipt by the
Agent of an opinion of counsel to the Borrower and Guarantor substantially
similar to the opinion of counsel provided in connection with Amendment No. 2,
(vi) receipt by the Agent of the consent/amendment referred to in Section 5 of
this Amendment and (vii) receipt by the Agent of such other documents that it
shall reasonably request; provided, that, upon the satisfaction of each of such
conditions, the amendment to Section 12.1(i) of the Agreement (but only such
Section 12.1(i)) shall be effective as of August 1, 2001.

                            [Signature Pages Follow]

                                       15
<PAGE>

         IN WITNESS WHEREOF, the Borrower, the Banks, the Agent, the Syndication
Agent, the Documentation Agent and the Guarantor have signed and delivered this
Amendment No. 3 as of the date first written above.

                                           SUPREMA SPECIALTIES, INC.,
                                           as Borrower

                                           By /s/ Mark Cocchiola
                                              ---------------------------------
                                           Name:  Mark Cocchiola
                                           Title: President

         Each of the guarantors indicated below hereby consents to this
Amendment and reaffirms its continuing obligations under its guarantee as set
forth in the Loan Agreement as amended hereby and all the documents, instruments
and agreements executed pursuant thereto or in connection therewith, without
offset, defense or counterclaim (any such offset, defense or counterclaim as may
exist being hereby irrevocably waived by each such guarantor).

                                           SUPREMA SPECIALTIES WEST, INC.,
                                           as a Guarantor

                                           By /s/ Mark Cocchiola
                                              ---------------------------------
                                           Name:  Mark Cocchiola
                                           Title: President

                                           SUPREMA SPECIALTIES NORTHEAST, INC.,
                                           as a Guarantor

                                           By /s/ Mark Cocchiola
                                              ---------------------------------
                                           Name:  Mark Cocchiola
                                           Title: President

                                           SUPREMA SPECIALTIES NORTHWEST INC.,
                                           as a Guarantor

                                           By /s/ Mark Cocchiola
                                              ---------------------------------
                                           Name:  Mark Cocchiola
                                           Title: President

                                       16
<PAGE>

                                           FLEET NATIONAL BANK,
                                              successor by merger to Fleet Bank,
                                              National Association, as Agent and
                                              as a Bank

                                           By: /s/ Diane Chamberlin
                                               --------------------------------
                                           Name:  Diane Chamberlin
                                           Title: Vice President

                                       17
<PAGE>

                                           SOVEREIGN BANK,
                                              as Syndication Agent and as a Bank

                                           By: /s/ Owen P. McKenna
                                              ---------------------------------
                                           Name:  Owen P. McKenna
                                           Title: Vice President

                                       18
<PAGE>

                                           MELLON BANK, N.A.,
                                              as Documentation Agent and as a
                                              Bank

                                           By: /s/ Russ J. Lopinto
                                              ---------------------------------
                                           Name:  Russ J. Lopinto
                                           Title: Vice President

                                       19
<PAGE>

                                           CITIBANK, N.A.
                                             successor by merger to European
                                             American Bank, as a Bank

                                           By: /s/ Mark Saeger
                                              ---------------------------------
                                           Name:  Mark Saeger
                                           Title: Vice President

                                       20
<PAGE>

                                           PNC BANK, NATIONAL ASSOCIATION,
                                             as a Bank

                                           By: /s/ Jeffrey A. Blakemore
                                              ---------------------------------
                                           Name:  Jeffrey A. Blakemore
                                           Title: Senior Vice President

                                       21
<PAGE>

                                           FIRST PIONEER FARM CREDIT, ACA,
                                             as a Bank

                                           By: /s/ James M. Papai
                                              ---------------------------------
                                           Name:  James M. Papai
                                           Title: Vice President

                                       22
<PAGE>

                                           NATIONAL BANK OF CANADA,
                                             as a Bank

                                           By: /s/ John Geifer   /s/ Karen Gexa
                                              -----------------  --------------
                                           Name:  John Geifer    Karen Grexa
                                           Title: Vice President Vice President

                                       23
<PAGE>

         By its signature below, NATIONAL CITY BANK, agrees to the Amendment as
an Exiting Bank as set forth therein.

                                           NATIONAL CITY BANK,
                                             as an Exiting Bank

                                           By: /s/ Lyle Cunningham
                                              ---------------------------------
                                           Name:  Lyle Cunningham
                                           Title: Vice President

                                       24<PAGE>

                               EXCHANGE AGREEMENT

                  This EXCHANGE AGREEMENT (the "Agreement") is entered into as
of October 3, 2001, by and among Rite Aid Corporation, a Delaware corporation
(the "Company"), and Green Equity Investors III, L.P. (the "Exchanging Holder").

                  WHEREAS, the Company has issued and sold to the Exchanging
Holder, shares of the Company's 8% Series A Cumulative Convertible Pay-In-Kind
Preferred Stock, par value $1.00 per share (the "Series A Preferred Stock"),
which was subsequently converted into shares of the Company's 8% Series B
Cumulative Convertible Pay-In-Kind Preferred Stock, par value $1.00 per share
(the "Series B Preferred Stock"); and

                  WHEREAS, as of September 30, 2001, the Exchanging Holder owns
3,495,990.6242 shares of Series B Preferred Stock, including all accrued and
unpaid dividends which will be paid by the Company in additional shares of
Series B Preferred Stock (the "Series B Shares") and

                  WHEREAS, pursuant to the Certificate of Designation governing
the Series B Preferred Stock, the Company may not issue shares of its common
stock, par value $1.00 per share (the "Common Stock") that are pari passu to the
Series B Preferred Stock without the prior affirmative vote or consent of the
holders of a majority in interest of the Series B Preferred Stock (the "Series B
Preferred Stock Pari Passu Veto"); and

                  WHEREAS, the Company, desires to eliminate the Series B
Preferred Stock Pari Passu Veto; and

                  WHEREAS, pursuant to an offer to exchange, the Company desires
to issue to the Exchanging Holder, and the Exchanging Holder desires to acquire
from the Company, in exchange for all of the Series B Shares, an equal number of
shares of Series D Preferred Stock (the "Series D Shares"), on the terms and
subject to the conditions set forth herein; and

                  NOW, THEREFORE, in consideration for the Company completing a
refinancing of its senior credit agreement and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agree as follows:

<PAGE>

                  1. The Exchange.

                     (a) Exchange. Subject to the terms and conditions hereof,
the Company hereby agrees to issue to the Exchanging Holder one share, including
fractional Shares thereof, of the Company's 8% Series D Cumulative Convertible
Pay-In-Kind Preferred Stock, par value $1.00 per share (the "Series D Preferred
Stock") for every share, including fractional shares, of 8% Series B Pay-In-Kind
Preferred Stock tendered in exchange therefore (the "Exchange").

                     (b) Rights, Terms, Preferences and Designations of the
Series D Preferred Stock. The Series D Preferred Stock will be governed by a
certificate of designation which will be filed by the Company with the Delaware
Secretary of State on or prior to the Closing Date, and the form of which is
attached Exhibit A hereto (the "Series D Certificate of Designation").

                     (c) Registration Rights. The Company and the Exchanging
Holder have previously entered into that certain registration rights agreement
dated as of October 27, 2000 and simultaneous with the consummation of the
Exchange, shall enter into an amendment (the "Amendment" and together with this
Agreement, the "Agreements") to the Registration Rights Agreement, the form of
which is attached as Exhibit B hereto, in order to replace all references in the
Registration Rights Agreement to the Series B Preferred Stock and the Series A
Preferred Stock with the Series D Preferred Stock.

                  2. Closing. The consummation of the Exchange shall take place
at a closing (the "Closing") to be held at the offices of Skadden, Arps, Slate,
Meagher & Flom LLP, Four Times Square, New York, New York, at 9:00 a.m. New York
City time, on October 5, 2001, or at such other time and place as the Company
and the Exchanging Holder mutually agree (the "Closing Date"). At the Closing,
the Company shall deliver to the Exchanging Holder certificates representing the
Series D Shares issued in exchange for and cancellation of the Series B Shares.

                  3. Exchanging Holder Representations. The Exchanging Holder
hereby represents and warrants to the Company as follows:

                     (a) Authorization. The Exchanging Holder has full
partnership power and authority to execute, deliver and perform its obligations
under the Agreements. The execution and delivery of the Agreements have each
been duly and validly authorized, and all necessary partnership action has been
taken to make the Agreements legal, valid and binding obligations of the
Exchanging Holder, enforceable in accordance with their respective terms, except
that the enforcement hereof may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and to general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).

                                       2
<PAGE>

                     (b) Receipt of Information. The Exchanging Holder has
received and reviewed the Agreements, and has received all such information as
it deems necessary and appropriate to enable it to evaluate the financial risk
inherent in making the Exchange and has received satisfactory and complete
information concerning the business and financial condition of the Company in
response to all inquiries in respect thereof.

                     (c) Title to Series B Shares. Immediately prior to the
Closing, the Exchanging Holder will have title to the Series B Shares, including
all accrued and unpaid dividends, being exchanged by it, free and clear of all
claims, liens, title defects and objections or equities of any kind and nature
whatsoever.

                     (d) Investment Representations.

                         (i) The Exchanging Holder is the person who exercises
full investment discretion with respect to the Series B Shares and the
Exchanging Holder has neither purchased nor sold for its account any Series B
Shares since the original issuance thereof.

                         (ii) The Exchanging Holder is acquiring the Series D
Shares hereunder for its own account, and not as a nominee or agent for any
other person, firm or corporation, and not with a view to the sale or
distribution of all or any part thereof in any transaction that would be in
violation of the securities laws of the United States. The Exchanging Holder
does not have any contract, undertaking, agreement or arrangement with any
person, firm or corporation to sell or transfer to such person, firm or
corporation with respect to any Series D Shares.

                         (iii) The Exchanging Holder understands that the Series
D Shares acquired hereunder and the shares of the Company's Common Stock into
which the Series D Shares are convertible (such shares of Common Stock, together
with the Series D Shares, the "Exchange Securities") will not be registered
under the Securities Act of 1933, as amended (the "Act"), in part based upon an
exemption from registration predicated on the accuracy and completeness of its
representations and warranties appearing herein. The Exchanging Holder
understands and acknowledges that, as a result, it will not be permitted to
sell, transfer or assign any of the Series D Shares acquired hereunder until
such Exchange Securities are registered or an exemption from the registration
and prospectus delivery requirements of the Act is available.

                                       3
<PAGE>

                         (iv) The Exchanging Holder agrees that in no event will
it make a disposition of any Exchange Securities or any interest therein, unless
such Exchange Securities are registered under the Act or unless and until (A) it
shall have notified the Company of the proposed disposition and shall have
furnished the Company with a statement of the circumstances surrounding the
proposed disposition, or (B) it shall have furnished the Company with an opinion
of counsel, reasonably satisfactory in form and content to the Company, to the
effect that (x) such disposition will not require registration of such Exchange
Securities under the Act or compliance with applicable state securities laws or
(y) an exemption from the registration requirements of the Act is available and
that all appropriate action necessary for compliance thereunder and under the
applicable state securities laws has been taken.

                         (v) The Exchanging Holder is an "Accredited Investor"
as such term is defined in Rule 501 of Regulation D promulgated under the Act;
does not require the assistance of an investment advisor or other purchaser
representative to participate in the transactions contemplated by the
Agreements; has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of its investment in the
Series D Shares, has the ability to bear the economic risks of its investment
for an indefinite period of time.

                     (e) Section 3(a)(9) Exemption. The Exchanging Holder
acknowledges that the transaction contemplated hereby is intended to be exempt
from registration by virtue of Section 3(a)(9) of the Securities Act of 1933, as
amended. The Exchanging Holder knows of no reason why such exemption would not
be available for the transaction contemplated hereby.

                  4. Representations and Warranties of the Company. The Company
represents and warrants to the Exchanging Holder as follows:

                     (a) Organization, Authority, etc. The Company is a
corporation duly incorporated and validly existing under and by virtue of the
laws of the State of Delaware and has all requisite corporate power to own or
lease and operate its properties and assets and to carry on its business as now
conducted and as proposed to be conducted; is duly qualified or licensed to do
business and is in good standing as a foreign corporation in all jurisdictions
in which it owns or leases property or in which the conduct of its business
requires it so to qualify or be licensed, except where the failure to be so
licensed or qualified could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect with respect to the Company; and has
all requisite corporate power to enter into the Agreements, to issue the Series
D Preferred Stock and to perform its obligations hereunder and thereunder.

                                       4
<PAGE>

                     (b) Corporate Acts and Proceedings. The execution and
delivery of the Agreements and the transactions contemplated hereby and thereby
have been duly and validly authorized, and all necessary corporate action has
been taken to make the Agreements legal, valid and binding obligations of the
Company, enforceable in accordance with their respective terms, except that the
enforcement thereof may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and to general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law).

                     (c) Valid Issuance. When issued in exchange for the Series
B Shares as provided herein, the Series D Shares acquired hereunder will be duly
and validly issued, fully paid and nonassessable.

                  5. Expenses. Each of the Company and the Exchanging Holder
will pay its own expenses incurred in connection with the transactions
contemplated hereby.

                  6. Legends. All certificates representing the Exchange
Securities shall bear the following legends:

                                       5

<PAGE>

                     (a) THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE DISPOSED OF OR TRANSFERRED UNLESS REGISTERED UNDER
SUCH ACT OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

                     (b) Any legend required to be placed thereon by any
applicable state corporation, commercial or securities law.

                  7. Removal of Restrictions on Transfer. Any legend endorsed on
a certificate representing the Exchange Securities and the stop transfer
instructions and record notations with respect to such Exchange Securities shall
be removed in accordance with the terms and conditions of the Registration
Rights Agreement, as amended.

                  8. Series D Preferred Stock Directors. The Company and the
Exchanging Holders agree that upon consummation of the Exchange, Leonard I.
Green and Jonathan D. Sokoloff will no longer serve as the Series B Directors,
as such term is defined in the Series D Certificate of Designation, but will
serve, in the same class and without interruption, as the Series D Directors, as
such term is defined in the Series D Certificate of Designation.

                  9. Miscellaneous.

                     (a) Amendment. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally or by course of
dealing, but only by a statement in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought.

                     (b) Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier, telex, facsimile, telecopier, or similar
writing:

                         (i) If to the Exchanging Holder to GEI, c/o Leonard
Green & Partners, L.P., 1111 Santa Monica Boulevard, Suite 2000, Los Angeles,
California 90025, attention: Jonathan D. Sokoloff, with a copy to Gibson, Dunn
and Crutcher LLP, 333 South Grand Avenue, Los Angeles, California 90071-3197,
attention: Jennifer Bellah Maguire Esq.; and

                                       6
<PAGE>

                         (ii) If to the Company, to Rite Aid Corporation at 30
Hunter Lane, Camp Hill, Pennsylvania 17011, attention: Elliot S. Gerson, Esq.,
Senior Executive Vice President and General Counsel, with a copy to Skadden,
Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York
10036-6522, attention: Stacy J. Kanter, Esq.

                  All such notices and communications shall be deemed to have
been duly given: (i) when delivered by hand, if personally delivered; (ii) five
(5) business days after being deposited in the mail, postage prepaid, if mailed;
(iii) one (1) business day after being timely dispatched postage prepaid, if by
same-day or next-day courier; (iv) when answered back, if telexed; (v) when
receipt acknowledged, if sent by facsimile transmission and (vi) if given by any
other means, when delivered at the addresses referred to in this Section. Any of
the above addresses may be changed by notice made in accordance with this
Section 11(b).

                     (c) Parties in Interest. All the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto,
whether so expressed or not.

                     (d) Headings. The headings of the sections and paragraphs
of this Agreement have been inserted for convenience of reference only and do
not constitute a part of this Agreement.

                     (e) Choice of Law. It is the intention of the parties that
the internal laws of the State of New York should govern the enforceability and
validity of this Agreement, the construction of its terms and the interpretation
of the rights and duties of the parties hereto, regardless of the laws that
might otherwise govern under the applicable provisions of conflict of laws.

                     (f) Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
with the same effect as if all parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and shall
constitute one and the same instrument.

BEFORE EXECUTING THIS AGREEMENT, THE EXCHANGING HOLDER SHOULD CONSULT WITH ITS
TAX ADVISORS REGARDING THE CONSEQUENCES OF THE EXCHANGE AND OWNERSHIP OF THE
SERIES D SHARES.

                                       7
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Exchange Agreement to be executed as of the date first above written.

                                            RITE AID CORPORATION

                                            By:
                                                -------------------------------
                                                Name:
                                                Title:

                                            GREEN EQUITY INVESTORS III, L.P.

                                            By: Leonard Green & Partners, L.P.

                                                By: LGP Management, Inc.

                                                By:
                                                    --------------------------
                                                    Name:
                                                    Title:

                                       8

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