Document:

Exhibit 10.2

EXECUTION VERSION

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 2
 

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

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

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

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

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

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

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

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

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

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

 3
 

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

	
  

  	
  RITE AID CORPORATION,

  
	
   

  	
  by

  	
  /s/ ROBERT B. SARI

  
	
   

  	
   

  	
  Name:

  	
  Robert B. Sari

  
	
   

  	
   

  	
  Title:

  	
  Exec. Vice President, General

  
	
   

  	
   

  	
   

  	
  Counsel and Secretary

  
	
   

  	
  CITICORP NORTH AMERICA,
  INC.,

  
	
   

  	
  as Agent and a Lender,

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 4
 

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

	
  

  	
  RITE AID CORPORATION,

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title: 

  	
   

  
	
   

  	
  CITICORP
  NORTH AMERICA, INC.,

  
	
   

  	
  as Agent and Lender,

  
	
   

  	
  by

  	
  /s/
  JEFFREY NITZ

  
	
   

  	
   

  	
  Name:

  	
  Jeffrey Nitz

  
	
   

  	
   

  	
  Title: 

  	
  Director

  

 

 5

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
  Bank of
  America, N.A.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ CHRISTINE HUTCHINSON

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Christine Hutchinson

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  	
   

  	
   

  
	
  For
  any Lender requiring a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To
  approve the First Amendment and Waiver:

  	
   

  
	
  The
  CIT Group/Business Credit, Inc.:

  	
   

  
	
   

  	
   

  	
  /s/
  MARK J. LONG

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  Mark J. Long

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Vice President

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
  Citicorp North America
  Inc.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ JEFFREY NITZ

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Jeffrey Nitz

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Director

  	
   

  	
   

  	
   

  	
   

  
	
  For any Lender requiring
  a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
  Citizens Bank of Pennsylvania

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ PAUL A. REBHOLZ

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Paul A. Rebholz

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  	
   

  	
   

  	
   

  	
   

  
	
  For any Lender requiring
  a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
  General
  Electric Capital Corporation

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ AMANDA J. VAN HEYST

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Amanda J. Van Heyst

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Duly Authorized Signatory

  	
   

  	
   

  	
   

  	
   

  
	
  For any Lender requiring
  a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
  GMAC Commercial Finance
  LLC

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ MICHAEL MALCANGI

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Michael Malcangi

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  	
   

  	
   

  
	
  For any Lender requiring
  a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
  HSBC Business Credit
  (USA) Inc.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ MATTHEW W. RICKERT

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Matthew W. Rickert

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  	
   

  	
   

  
	
  For any Lender requiring
  a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
  LaSalle Retail Finance

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ SCOTT J. WOLKOVICH

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Scott J. Wolkovich

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Officer

  	
   

  	
   

  	
   

  	
   

  
	
  For any Lender requiring
  a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
   

  	
   

  
	
  JPMorgan Chase Bank, N.A.

  	
   

  
	
   

  	
  by

  	
  /s/ CHRISTINE HERRICK

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Christine Herrick

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  	
   

  	
   

  
	
  For
  any Lender requiring a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To
  approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
   

  	
   

  
	
  Manufacturers and Traders
  Trust Company

  	
   

  
	
   

  	
  by

  	
  /s/ TRACEY SAWYER-CALHOUN

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Tracey Sawyer-Calhoun

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  	
   

  	
   

  
	
  For
  any Lender requiring a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First
  Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
   

  	
   

  
	
  Merrill Lynch Capital,

  	
   

  
	
  A Division of Merrill Lynch Business Financial
  Services Inc.

  	
   

  
	
   

  	
  by

  	
  /s/ JAMES BETZ

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James Betz

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  VP

  	
   

  	
   

  	
   

  	
   

  
	
  For
  any Lender requiring a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
   

  	
   

  
	
  National City Business
  Credit, Inc.

  	
   

  
	
   

  	
  by

  	
  /s/ KATHRYN ELLERO

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kathryn Ellero

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  	
   

  	
   

  
	
  For
  any Lender requiring a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  North Fork Business
  Capital Corporation

  	
   

  
	
   

  	
  by

  	
  /s/ ROBERT WALLACE

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Robert Wallace

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  	
   

  	
   

  
	
  For
  any Lender requiring a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
   

  	
   

  
	
  N M Rothschild & Sons Limited

  	
   

  
	
   

  	
  by

  	
  /s/ N.A. WOOD

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Nicholas Wood

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Director

  	
   

  	
   

  	
   

  	
   

  
	
  For
  any Lender requiring a second signature line:

  	
   

  
	
   

  	
  by

  	
  /s/ DR. LEWIS

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Dr. Lewis

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

AMSOUTH BANK is now REGIONS BANK

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
   

  	
   

  
	
  Regions Bank

  	
   

  
	
   

  	
  by

  	
  /s/ CYNTHIA MARINAS

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Cynthia Marinas

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Attorney In Fact

  	
   

  	
   

  	
   

  	
   

  
	
  For
  any Lender requiring a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
  RZB Finance LLC

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ CHRISTOPH HOEDL

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Christoph Hoedl

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Group Vice President

  	
   

  	
   

  	
   

  	
   

  
	
  For
  any Lender requiring a second signature line:

  	
   

  
	
   

  	
  by

  	
  /s/ RANDALL ABRAMS

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Randall Abrams

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
  Wachovia Bank, N.A.

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ THOMAS GRABOSKI

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Thomas Graboski

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Director

  	
   

  	
   

  	
   

  	
   

  
	
  For
  any Lender requiring a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
  Wells Fargo Foothill, LLC

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ MARK BRADFORD

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark Bradford

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  	
   

  	
   

  
	
  For
  any Lender requiring a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
  U.S.
  Bank, National Association

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  AVP

  	
   

  	
   

  	
   

  	
   

  
	
  For
  any Lender requiring a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
  Union Bank of
  California, N.A.

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/  NANCY
  A. PERKINS

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Nancy A. Perkins

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  	
   

  	
   

  
	
  LenderFor
  any Lender requiring a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Lender signature page to

the First Amendment to the Rite Aid

Amendment and Restatement Agreement

	
  To approve the First Amendment and Waiver:

  	
   

  
	
  Name of Lender:

  	
   

  
	
  UPS Capital Corporation

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/  JOHN
  P. HOLLOWAY

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John P. Holloway

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Director of Portfilio Management

  	
   

  	
   

  	
   

  	
   

  
	
  LenderFor
  any Lender requiring a second signature line:

  	
   

  
	
   

  	
  by

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Tranche 2 Lender signature page to

the First Amendment to the

Amendment and Restatement Agreement

relating to the Rite Aid Credit Agreement

	
  Name of Institution:

  	
   

  	
  Tranche 2 Term Commitment:

  
	
  Bank of America, N.A.

  	
   

  	
  $221MM

  
	
  as a Tranche 2 Lender

  	
   

  	
   

  
	
  by

  	
  /s/
  CHRISTINE HUTCHINSON

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Christine Hutchinson

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  	
   

  
	
  For any Tranche 2 Lender
  requiring a second

  signature line:

  	
   

  	
   

  
	
  by

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  

 

Tranche
2 Lender signature page to

the First Amendment to the

Amendment and Restatement Agreement

relating to the Rite Aid Credit Agreement

	
  Name of Institution:

  	
   

  	
  Tranche 2 Term Commitment:

  
	
  Citicorp North America Inc.

  	
   

  	
  $884,000,000

  
	
  as a Tranche 2 Lender

  	
   

  	
   

  
	
  by

  	
  /s/ JEFFREY NITZ

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Jeffrey Nitz

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  	
   

  
	
  For any Tranche 2 Lender
  requiring a second

  signature line:

  	
   

  	
   

  
	
  by

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  

 

ANNEX I

Amendment and Restatement
Agreement

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

RECITALS

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

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

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

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

 2
 

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

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

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

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

AGREEMENTS

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

ARTICLE I

First Amendment and
Restatement

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

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

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

 3
 

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

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

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

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

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

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

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

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

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

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

 4
 

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

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

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

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

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

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

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

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

ARTICLE II

Second Amendment and
Restatement

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

 5

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

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

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

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

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

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

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

 6
 

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

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

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

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

 7
 

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

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

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

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

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

 8
 

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

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

(xii) Intentionally
omitted.

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

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

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

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

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

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

 9
 

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

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

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

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

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

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

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

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

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

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

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

 10
 

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

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

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

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

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

ARTICLE III

Miscellaneous

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

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

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

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

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

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

 11
 

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

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

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

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

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

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

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

 12
 

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

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

 13

EXHIBIT A

First Restated Credit Agreement

EXHIBIT B

Second Restated Credit Agreement

   
 

 

CREDIT AGREEMENT

dated as of June 27,
2001,

as amended and restated as
of June 4, 2007,

among

RITE AID CORPORATION,

The Lenders Party Hereto,

CITICORP NORTH AMERICA,
INC.,

as Administrative Agent and Collateral Processing Agent,

BANK OF AMERICA, N.A.,

as Syndication Agent,

JPMORGAN CHASE BANK ,
N.A.,

as Co-Documentation Agent,

WELLS FARGO FOOTHILL, LLC,

as Co-Documentation Agent

and

GENERAL ELECTRIC CAPITAL
CORPORATION,

as Co-Documentation Agent

CITIGROUP GLOBAL MARKETS
INC.,

as Lead Arranger and Joint Bookrunner

and

BANC OF AMERICA SECURITIES
LLC,

as Joint Bookrunner

   
 
 [CS&M Ref. No. 8500-406]

TABLE
OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  	
   

  
	
  ARTICLE
  I

  	
   

  
	
  Definitions

  	
   

  
	
  SECTION 1.01.

  	
   

  	
  Defined Terms

  	
   

  	
   

  	
  1

  	
   

  	
   

  
	
  SECTION 1.02.

  	
   

  	
  Classification of
  Loans and Borrowings

  	
   

  	
   

  	
  26

  	
   

  	
   

  
	
  SECTION 1.03.

  	
   

  	
  Terms Generally

  	
   

  	
   

  	
  26

  	
   

  	
   

  
	
  SECTION 1.04.

  	
   

  	
  Accounting Terms;
  GAAP

  	
   

  	
   

  	
  27

  	
   

  	
   

  
	
  SECTION 1.05.

  	
   

  	
  Terms Defined in
  Definitions Annex

  	
   

  	
   

  	
  27

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
  The Credits

  	
   

  
	
  SECTION 2.01.

  	
   

  	
  Commitments

  	
   

  	
   

  	
  27

  	
   

  	
   

  
	
  SECTION 2.02.

  	
   

  	
  Loans and
  Borrowings

  	
   

  	
   

  	
  28

  	
   

  	
   

  
	
  SECTION 2.03.

  	
   

  	
  Requests for
  Borrowings

  	
   

  	
   

  	
  28

  	
   

  	
   

  
	
  SECTION 2.04.

  	
   

  	
  Swingline Loans

  	
   

  	
   

  	
  29

  	
   

  	
   

  
	
  SECTION 2.05.

  	
   

  	
  Letters of Credit

  	
   

  	
   

  	
  30

  	
   

  	
   

  
	
  SECTION 2.06.

  	
   

  	
  Funding of
  Borrowings

  	
   

  	
   

  	
  34

  	
   

  	
   

  
	
  SECTION 2.07.

  	
   

  	
  Interest
  Elections

  	
   

  	
   

  	
  35

  	
   

  	
   

  
	
  SECTION 2.08.

  	
   

  	
  Termination and
  Reduction of Commitments

  	
   

  	
   

  	
  36

  	
   

  	
   

  
	
  SECTION 2.09.

  	
   

  	
  Repayment of
  Loans; Evidence of Indebtedness

  	
   

  	
   

  	
  36

  	
   

  	
   

  
	
  SECTION 2.10.

  	
   

  	
  Amortization and
  Repayment of Term Loans

  	
   

  	
   

  	
  37

  	
   

  	
   

  
	
  SECTION 2.11.

  	
   

  	
  Prepayment of
  Loans

  	
   

  	
   

  	
  37

  	
   

  	
   

  
	
  SECTION 2.12.

  	
   

  	
  Fees

  	
   

  	
   

  	
  39

  	
   

  	
   

  
	
  SECTION 2.13.

  	
   

  	
  Interest

  	
   

  	
   

  	
  40

  	
   

  	
   

  
	
  SECTION 2.14.

  	
   

  	
  Alternate Rate of
  Interest

  	
   

  	
   

  	
  40

  	
   

  	
   

  
	
  SECTION 2.15.

  	
   

  	
  Increased Costs

  	
   

  	
   

  	
  41

  	
   

  	
   

  
	
  SECTION 2.16.

  	
   

  	
  Break Funding
  Payments

  	
   

  	
   

  	
  41

  	
   

  	
   

  
	
  SECTION 2.17.

  	
   

  	
  Taxes

  	
   

  	
   

  	
  42

  	
   

  	
   

  
	
  SECTION 2.18.

  	
   

  	
  Payments
  Generally; Pro Rata Treatment; Sharing of Setoffs

  	
   

  	
   

  	
  43

  	
   

  	
   

  
	
  SECTION 2.19.

  	
   

  	
  Mitigation
  Obligations; Replacement of Lenders

  	
   

  	
   

  	
  44

  	
   

  	
   

  
	
  SECTION 2.20.

  	
   

  	
  Adjustments to
  Borrowing Base Advance Rates

  	
   

  	
   

  	
  45

  	
   

  	
   

  
	
  SECTION 2.21.

  	
   

  	
  Incremental Loans

  	
   

  	
   

  	
  45

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
  Representations and Warranties

  	
   

  
	
  SECTION 3.01.

  	
   

  	
  Organization; Powers

  	
   

  	
   

  	
  46

  	
   

  	
   

  
	
  SECTION 3.02.

  	
   

  	
  Authorization;
  Enforceability

  	
   

  	
   

  	
  46

  	
   

  	
   

  
	
  SECTION 3.03.

  	
   

  	
  Governmental
  Approvals; No Conflicts

  	
   

  	
   

  	
  46

  	
   

  	
   

  
	
  SECTION 3.04.

  	
   

  	
  Financial Condition;
  No Material Adverse Change

  	
   

  	
   

  	
  47

  	
   

  	
   

  
	
  SECTION 3.05.

  	
   

  	
  Properties

  	
   

  	
   

  	
  47

  	
   

  	
   

  
	
  SECTION 3.06.

  	
   

  	
  Litigation and
  Environmental Matters

  	
   

  	
   

  	
  47

  	
   

  	
   

  
	
  SECTION 3.07.

  	
   

  	
  Compliance with
  Laws and Agreements

  	
   

  	
   

  	
  47

  	
   

  	
   

  
	
  SECTION 3.08.

  	
   

  	
  Investment and
  Holding Company Status

  	
   

  	
   

  	
  48

  	
   

  	
   

  
	
  SECTION 3.09.

  	
   

  	
  Taxes

  	
   

  	
   

  	
  48

  	
   

  	
   

  
	
  SECTION 3.10.

  	
   

  	
  ERISA

  	
   

  	
   

  	
  48

  	
   

  	
   

  
	
  SECTION 3.11.

  	
   

  	
  Disclosure;
  Accuracy of Information

  	
   

  	
   

  	
  48

  	
   

  	
   

  

 i
 

 

	
  SECTION 3.12.

  	
   

  	
  Subsidiaries

  	
   

  	
   

  	
  48

  	
   

  	
   

  
	
  SECTION 3.13.

  	
   

  	
  Insurance

  	
   

  	
   

  	
  48

  	
   

  	
   

  
	
  SECTION 3.14.

  	
   

  	
  Labor Matters

  	
   

  	
   

  	
  49

  	
   

  	
   

  
	
  SECTION 3.15.

  	
   

  	
  Solvency

  	
   

  	
   

  	
  49

  	
   

  	
   

  
	
  SECTION 3.16.

  	
   

  	
  Federal Reserve
  Regulations

  	
   

  	
   

  	
  49

  	
   

  	
   

  
	
  SECTION 3.17.

  	
   

  	
  Security
  Interests

  	
   

  	
   

  	
  49

  	
   

  	
   

  
	
  SECTION 3.18.

  	
   

  	
  Use of Proceeds

  	
   

  	
   

  	
  50

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
  Conditions

  	
   

  
	
  SECTION 4.01.

  	
   

  	
  Second Restatement Effective Date

  	
   

  	
   

  	
  50

  	
   

  	
   

  
	
  SECTION 4.02.

  	
   

  	
  Each Credit Event

  	
   

  	
   

  	
  50

  	
   

  	
   

  
	
  SECTION 4.03.

  	
   

  	
  Borrowing Base
  Date

  	
   

  	
   

  	
  51

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
  Affirmative Covenants

  	
   

  
	
  SECTION 5.01.

  	
   

  	
  Financial Statements and Other Information

  	
   

  	
   

  	
  52

  	
   

  	
   

  
	
  SECTION 5.02.

  	
   

  	
  Notices of
  Material Events

  	
   

  	
   

  	
  54

  	
   

  	
   

  
	
  SECTION 5.03.

  	
   

  	
  Information
  Regarding Collateral

  	
   

  	
   

  	
  54

  	
   

  	
   

  
	
  SECTION 5.04.

  	
   

  	
  Existence;
  Conduct of Business

  	
   

  	
   

  	
  54

  	
   

  	
   

  
	
  SECTION 5.05.

  	
   

  	
  Payment of
  Obligations

  	
   

  	
   

  	
  55

  	
   

  	
   

  
	
  SECTION 5.06.

  	
   

  	
  Maintenance of
  Properties

  	
   

  	
   

  	
  55

  	
   

  	
   

  
	
  SECTION 5.07.

  	
   

  	
  Insurance

  	
   

  	
   

  	
  55

  	
   

  	
   

  
	
  SECTION 5.08.

  	
   

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

  	
   

  	
   

  	
  56

  	
   

  	
   

  
	
  SECTION 5.09.

  	
   

  	
  Compliance with
  Laws

  	
   

  	
   

  	
  57

  	
   

  	
   

  
	
  SECTION 5.10.

  	
   

  	
  Use of Proceeds
  and Letters of Credit

  	
   

  	
   

  	
  57

  	
   

  	
   

  
	
  SECTION 5.11.

  	
   

  	
  Additional
  Subsidiaries

  	
   

  	
   

  	
  58

  	
   

  	
   

  
	
  SECTION 5.12.

  	
   

  	
  Further
  Assurances

  	
   

  	
   

  	
  58

  	
   

  	
   

  
	
  SECTION 5.13.

  	
   

  	
  Subsidiaries

  	
   

  	
   

  	
  58

  	
   

  	
   

  
	
  SECTION 5.14.

  	
   

  	
  Intercompany
  Transfers

  	
   

  	
   

  	
  58

  	
   

  	
   

  
	
  SECTION 5.15.

  	
   

  	
  Inventory
  Purchasing

  	
   

  	
   

  	
  58

  	
   

  	
   

  
	
  SECTION 5.16.

  	
   

  	
  Cash Management
  System

  	
   

  	
   

  	
  59

  	
   

  	
   

  
	
  SECTION 5.17.

  	
   

  	
  Termination of
  Factoring Transactions

  	
   

  	
   

  	
  59

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
  Negative Covenants

  	
   

  
	
  SECTION 6.01.

  	
   

  	
  Indebtedness; Certain Equity Securities

  	
   

  	
   

  	
  60

  	
   

  	
   

  
	
  SECTION 6.02.

  	
   

  	
  Liens

  	
   

  	
   

  	
  62

  	
   

  	
   

  
	
  SECTION 6.03.

  	
   

  	
  Fundamental
  Changes

  	
   

  	
   

  	
  63

  	
   

  	
   

  
	
  SECTION 6.04.

  	
   

  	
  Investments,
  Loans, Advances, Guarantees and Acquisitions

  	
   

  	
   

  	
  64

  	
   

  	
   

  
	
  SECTION 6.05.

  	
   

  	
  Asset Sales

  	
   

  	
   

  	
  65

  	
   

  	
   

  
	
  SECTION 6.06.

  	
   

  	
  Sale and
  Leaseback Transactions

  	
   

  	
   

  	
  66

  	
   

  	
   

  
	
  SECTION 6.07.

  	
   

  	
  Hedging
  Agreements

  	
   

  	
   

  	
  66

  	
   

  	
   

  
	
  SECTION 6.08.

  	
   

  	
  Restricted
  Payments; Certain Payments of Indebtedness

  	
   

  	
   

  	
  66

  	
   

  	
   

  
	
  SECTION 6.09.

  	
   

  	
  Transactions with
  Affiliates

  	
   

  	
   

  	
  68

  	
   

  	
   

  
	
  SECTION 6.10.

  	
   

  	
  Restrictive
  Agreements

  	
   

  	
   

  	
  69

  	
   

  	
   

  
	
  SECTION 6.11.

  	
   

  	
  Amendment of
  Material Documents

  	
   

  	
   

  	
  70

  	
   

  	
   

  

 ii
 

 

	
  SECTION 6.12.

  	
   

  	
  Consolidated
  Fixed Charge Coverage Ratio

  	
   

  	
   

  	
  70

  	
   

  	
   

  
	
  SECTION 6.13.

  	
   

  	
  Restrictions on
  Asset Holdings by the Borrower

  	
   

  	
   

  	
  71

  	
   

  	
   

  
	
  SECTION 6.14.

  	
   

  	
  Corporate
  Separateness

  	
   

  	
   

  	
  72

  	
   

  	
   

  

 

	
  ARTICLE VII

  	
   

  
	
  Events of Default

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
  The Agents

  	
   

  
	
  ARTICLE IX

  
	
  Miscellaneous

  	
   

  
	
  SECTION 9.01.

  	
   

  	
  Notices

  	
   

  	
   

  	
  76

  	
   

  	
   

  
	
  SECTION 9.02.

  	
   

  	
  Waivers; Amendments

  	
   

  	
   

  	
  76

  	
   

  	
   

  
	
  SECTION 9.03.

  	
   

  	
  Expenses; Indemnity;
  Damage Waiver

  	
   

  	
   

  	
  78

  	
   

  	
   

  
	
  SECTION 9.04.

  	
   

  	
  Successors and Assigns

  	
   

  	
   

  	
  79

  	
   

  	
   

  
	
  SECTION 9.05.

  	
   

  	
  Survival

  	
   

  	
   

  	
  82

  	
   

  	
   

  
	
  SECTION 9.06.

  	
   

  	
  Integration;
  Effectiveness

  	
   

  	
   

  	
  82

  	
   

  	
   

  
	
  SECTION 9.07.

  	
   

  	
  Severability

  	
   

  	
   

  	
  82

  	
   

  	
   

  
	
  SECTION 9.08.

  	
   

  	
  Right of Setoff

  	
   

  	
   

  	
  83

  	
   

  	
   

  
	
  SECTION 9.09.

  	
   

  	
  Governing Law;
  Jurisdiction; Consent to Service of Process

  	
   

  	
   

  	
  83

  	
   

  	
   

  
	
  SECTION 9.10.

  	
   

  	
  WAIVER OF JURY TRIAL

  	
   

  	
   

  	
  83

  	
   

  	
   

  
	
  SECTION 9.11.

  	
   

  	
  Headings

  	
   

  	
   

  	
  84

  	
   

  	
   

  
	
  SECTION 9.12.

  	
   

  	
  Confidentiality

  	
   

  	
   

  	
  84

  	
   

  	
   

  
	
  SECTION 9.13.

  	
   

  	
  Interest Rate Limitation

  	
   

  	
   

  	
  84

  	
   

  	
   

  
	
  SECTION 9.14.

  	
   

  	
  Collateral Trust and
  Intercreditor Agreement

  	
   

  	
   

  	
  84

  	
   

  	
   

  
	
  SECTION 9.15.

  	
   

  	
  Cash Sweep

  	
   

  	
   

  	
  85

  	
   

  	
   

  
	
  SECTION 9.16.

  	
   

  	
  Electronic
  Communications

  	
   

  	
   

  	
  85

  	
   

  	
   

  
	
  SECTION 9.17.

  	
   

  	
  USA Patriot Act

  	
   

  	
   

  	
  86

  	
   

  	
   

  
	
  SECTION 9.18.

  	
   

  	
  Release of Interim
  Collateral; Termination of Interim Collateral Documents

  	
   

  	
   

  	
  86

  	
   

  	
   

  

 

 iii

	
  ANNEXES:

  	
   

  	
   

  
	
  Annex 1—Definitions
  Annex

  	
   

  	
   

  
	
  Annex 2—Subordination Terms

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  	
   

  
	
  Schedule 1.01

  	
  —

  	
  Subsidiary Loan Parties

  
	
  Schedule 2.01

  	
  —

  	
  Commitments

  
	
  Schedule 3.04

  	
  —

  	
  Undisclosed Liabilities

  
	
  Schedule 3.05 (a)

  	
  —

  	
  Properties

  
	
  Schedule 3.05(c)

  	
  —

  	
  Leased Warehouses and Distribution Centers

  
	
  Schedule 3.06(a)

  	
  —

  	
  Litigation

  
	
  Schedule 3.06(b)

  	
  —

  	
  Environmental Matters

  
	
  Schedule 3.07

  	
  —

  	
  Compliance with Laws

  
	
  Schedule 3.09

  	
  —

  	
  Taxes

  
	
  Schedule 3.12

  	
  —

  	
  Subsidiaries

  
	
  Schedule 3.13

  	
  —

  	
  Insurance

  
	
  Schedule 3.14

  	
  —

  	
  Labor

  
	
  Schedule 5.11

  	
  —

  	
  Subsidiaries

  
	
  Schedule 6.01(a)(xii)

  	
  —

  	
  Existing Indebtedness

  
	
  Schedule 6.01(b)

  	
  —

  	
  Equity Issuances

  
	
  Schedule 6.02(xi)

  	
  —

  	
  Liens

  
	
  Schedule 6.04

  	
  —

  	
  Investments

  
	
  Schedule 6.08(a)

  	
  —

  	
  Restricted Payments

  
	
  Schedule 6.09

  	
  —

  	
  Affiliate Transactions

  
	
  EXHIBITS:

  	
   

  	
   

  
	
  Exhibit A-1

  	
  —

  	
  Form of Term Note

  
	
  Exhibit A-2

  	
  —

  	
  Form of Revolving Credit Note

  
	
  Exhibit B

  	
  —

  	
  Form of Borrowing Base Certificate

  
	
  Exhibit C

  	
  —

  	
  Form of Assignment and Acceptance Agreement

  
	
  Exhibit D-1

  	
  —

  	
  Form of Senior Subsidiary Guarantee Agreement

  
	
  Exhibit D-2

  	
  —

  	
  Form of Interim Collateral and Guarantee
  Agreement

  
	
  Exhibit E

  	
  —

  	
  Form of Senior Subsidiary Security Agreement

  
	
  Exhibit F-1

  	
  —

  	
  Form of Senior Indemnity, Subrogation and
  Contribution Agreement

  
	
  Exhibit F-2

  	
  —

  	
  Form of Interim Indemnity, Subrogation and
  Contribution Agreement

  
	
  Exhibit G

  	
  —

  	
  Form of Second Priority Subsidiary Guarantee
  Agreement

  
	
  Exhibit H

  	
  —

  	
  Form of Second Priority Subsidiary Security
  Agreement

  
	
  Exhibit I

  	
  —

  	
  Form of Second Priority Indemnity, Subrogation
  and Contribution Agreement

  
	
  Exhibit J-1

  	
  —

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

  
	
  Exhibit J-2

  	
  —

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

  

 

 iv

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

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

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

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

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

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

ARTICLE I

Definitions

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

	
  RATING:

  	
   

  	
   

  	
   

  	
  ABR Spread

  (bps)

  	
   

  	
  Eurodollar Spread

  (bps)

  	
   

  
	
  Category
  1

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

  	
   

  	
   

  	
  25

  	
   

  	
   

  	
   

  	
  125

  	
   

  	
   

  
	
  Category
  2

  Average Revolver Availability greater than $500,000,000 but less than or
  equal to 

  $1,250,000,000

  	
   

  	
   

  	
  50

  	
   

  	
   

  	
   

  	
  150

  	
   

  	
   

  
	
  Category 3

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

  	
   

  	
   

  	
  75

  	
   

  	
   

  	
   

  	
  175

  	
   

  	
   

  

 

 2
 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 3
 

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

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

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

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

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

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

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

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

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

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

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

 4
 

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

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

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

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

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

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

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

“Collateral and Guarantee Requirement” means the requirement
that: 

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

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

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

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

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

 5

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

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

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

 6
 

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

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

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

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

“Control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto. 

“CNAI” means
Citicorp North America, Inc.

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

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

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

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

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

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

 7
 

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

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

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

(d) such Account is denominated in dollars;

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

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

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

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

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

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

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

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

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

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

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

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

 8
 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 9
 

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

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

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

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

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

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

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

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

 10
 

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

“Equity Interests”
means shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person. “ERISA” means the Employee Retirement Income
Security Act of 1974, as amended from time to time.

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

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

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

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

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

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

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

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

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

 11
 

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

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

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

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

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

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

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

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

 12

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

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

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

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

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

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

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

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

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

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

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

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

 13
 

“Governmental Authority”
means the government of the United States of America, any other nation or any
political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

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

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

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

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

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

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

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

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

“Indemnified Taxes”
means Taxes other than Excluded Taxes.

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

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

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

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

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

 14
 

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

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

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

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

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

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

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

 15
 

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

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

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

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

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

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

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

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

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

 16
 

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

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

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

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

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

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

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

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

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

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

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

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

 17
 

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

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

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

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

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

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

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

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

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

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

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

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

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

 18

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

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

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

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

“Permitted Encumbrances” means:

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

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

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

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

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

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

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

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

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

“Permitted Second Priority
Debt” means Second Priority Debt of the Borrower; provided that (a) the terms of any such Indebtedness,
and of any agreement entered into and of any instrument issued in connection
therewith, are otherwise permitted by the Senior Loan Documents, (b) if
such Indebtedness is issued or incurred to refinance existing Indebtedness,
such Indebtedness has a later maturity and a longer weighted average life than
such existing Indebtedness, (c) such Indebtedness bears an interest rate
not in excess of the market interest rate with respect to such type of Indebtedness
as of the time of its issuance or incurrence, (d) at the option of the Borrower,
such Indebtedness may contain market call and make-whole provisions as of the
time of its issuance or incurrence, (e) the senior management of the
Borrower determines in good faith that such Indebtedness contains covenants
(including with respect to amortization and convertibility) and events of
default on market terms and (f) notwithstanding clause (ii) of the 

 19
 

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

“Permitted Unsecured
Indebtedness” means unsecured Indebtedness of the Borrower; provided that (a) the terms of any such Indebtedness,
and of any agreement entered into and of any instrument issued in connection
therewith, are otherwise permitted by the Senior Loan Documents, (b) if
such Indebtedness is issued or incurred to refinance existing Indebtedness,
such Indebtedness has a later maturity and a longer weighted average life than
such existing Indebtedness, (c) such Indebtedness bears an interest rate
not in excess of the market interest rate with respect to such type of Indebtedness
as of the time of its issuance or incurrence, (d) at the option of the Borrower,
such Indebtedness may contain market call and make-whole provisions as of the
time of its issuance or incurrence and (e) the senior management of the
Borrower determines in good faith that such Indebtedness contains covenants
(including with respect to amortization and convertibility) and events of
default on market terms.

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

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

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

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

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

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

“Prepayment Event” means:

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

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

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

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

 20
 

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

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

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

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

“Related Parties”
means, with respect to any specified Person, such Person’s Affiliates and the
directors, officers, employees, agents, trustees and advisors of such Person
and such Person’s Affiliates.

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

 21
 

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

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

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

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

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

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

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

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

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

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

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

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

 22
 

“Second Priority Debt”
means any Indebtedness (including the 8.125% Notes, 7.5% Notes and the 2017
7.5% Notes) incurred by Rite Aid and Guaranteed by the Subsidiary Guarantors on
or after the Effective Date pursuant to the Second Priority Subsidiary
Guarantee Agreement (i) which is secured by the Second Priority Collateral
on a pari passu basis (other than as provided
by the terms of the applicable Second Priority Debt Documents) with the other
Second Priority Debt Obligations and (ii) if issued on or after the Second
Restatement Effective Date, matures after the date that is three months after
the Tranche 2 Term Maturity Date; provided, however, that (A) such Indebtedness is permitted to be
incurred, secured and Guaranteed on such basis by each Senior Loan Document and
each Second Priority Debt Document and (B) the Representative for the
holders of such Second Priority Debt shall have become party to the Collateral
Trust and Intercreditor Agreement pursuant to, and by satisfying the conditions
set forth in, Section 8.12 thereof. Second Priority Debt shall include any
Registered Equivalent Notes issued in exchange thereof.

“Second Restatement Date
Amount” means the aggregate principal amount of Tranche 2 Loans that
the Borrower is permitted under instruments governing its Indebtedness to, on
the Second Restatement Effective Date, borrow and secure by the Liens created
under the Interim Collateral Documents.

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

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

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

 23
 

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

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

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

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

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

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

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

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

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

“Store” means
any retail store (which may include any real property, fixtures, equipment,
inventory and script files related thereto) operated, or to be operated, by any
Subsidiary Loan Party (and, prior to the Borrowing Base Date, Holdings or any
of its subsidiaries).

 24

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

“Subsidiary”
means any subsidiary of the Borrower.

“Subsidiary Loan Party”
means each Subsidiary set forth on Schedule 1.01 hereto
and any wholly-owned Domestic Subsidiary, including any Securitization Vehicle that
is a Domestic Subsidiary, that owns any assets consisting of inventory,
accounts receivable, intellectual property, or script lists; provided that (a) no Subsidiary that engages solely in
the Borrower’s pharmacy benefits management business shall be deemed a
Subsidiary Loan Party and (b) Holdings and its subsidiaries shall not be Subsidiary
Loan Parties prior to the Borrowing Base Date.

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

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

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

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

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

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

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

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

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

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

 25
 

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

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

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

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

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

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

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

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

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

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

SECTION 1.03.   Terms Generally.   The
definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and
effect as the word “shall”. Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be 

 26
 

construed as referring to
such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein); provided, however, that
amendments to the Indentures and the Second Priority Debt Documents after the
Second Restatement Effective Date shall be effective for purposes of references
thereto in this Agreement and the other Senior Loan Documents only if such amendments
are permitted hereunder or are consented to in writing for such purpose by the
Required Lenders (or such other percentage of the Lenders as may be specified herein),
(b) any reference herein to any Person shall be construed to include such Person’s
successors and assigns, (c) the words “herein”, “hereof” and “hereunder”,
and words of similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words “asset” and “property” shall be construed
to have the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract
rights.

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

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

ARTICLE II

The Credits

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

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

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

 27
 

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

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

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

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

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

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

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

(ii) the aggregate amount of such Borrowing;

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

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

 28
 

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

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

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

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

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

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

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

 29

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

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

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

 30
 

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

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

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

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

 31
 

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

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

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

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

 32
 

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

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

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

 33
 

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

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

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

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

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

 34
 

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

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

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

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

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

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

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

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

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

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

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

 35

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

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

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

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

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

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

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

 36
 

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

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

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

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

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

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

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

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

 37
 

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

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

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

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

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

 38
 

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

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

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

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

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

 39
 

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

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

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

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

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

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

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

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

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

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

 40
 

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

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

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

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

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

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

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

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

 41
 

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

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

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

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

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

 42

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

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

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

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

 43
 

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

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

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

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

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

 44
 

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

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

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

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

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

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

 45
 

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

ARTICLE III

Representations and
Warranties

The Borrower represents and warrants to the Lenders
that:

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

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

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

 46
 

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

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

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

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

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

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

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

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

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

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

 47
 

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

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

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

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

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

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

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

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

 48
 

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

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

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

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

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

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

 49

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

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

ARTICLE IV

Conditions

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

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

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

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

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

 50
 

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

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

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

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

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

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

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

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

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

ARTICLE V

Affirmative
Covenants

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

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

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

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

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

 52
 

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

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

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

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

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

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

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

 53
 

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

(a) the occurrence of any Default;

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

(c) the occurrence of any ERISA Event;

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

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

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

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

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

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

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

 54
 

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

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

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

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

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

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

 55

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

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

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

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

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

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

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

 56
 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 58
 

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

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

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

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

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

ARTICLE VI

Negative Covenants

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

 59
 

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

(i)         Indebtedness
under the Senior Loan Documents;

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

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

(iv)       Existing
Non-Guaranteed Indebtedness;

(v)        Existing
Second Priority Debt;

(vi)       Existing
Guaranteed Unsecured Indebtedness;

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

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

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

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

 60
 

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

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

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

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

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

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

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

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

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

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

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

 61
 

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

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

(i)         Liens
created under the Senior Loan Documents;

(ii)       Permitted
Encumbrances;

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

(iv)       intentionally
omitted; 

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

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

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

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

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

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

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

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

 62

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

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

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

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

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

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

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

 63
 

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

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

(i)         Permitted
Investments;

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

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

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

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

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

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

(viii)    prior
to the Borrowing Base Date, Investments by the Borrower or any Subsidiary Loan
Party in Holdings and its subsidiaries;

(ix)       usual
and customary loans and advances to employees, officers and directors of the
Borrower and the Subsidiaries;

(x)        Investments
by the Borrower or any of the Subsidiaries in Joint Ventures in an amount not
to exceed $15,000,000 in the aggregate in any fiscal year of the Borrower;

(xi)       Investments
in charitable foundations organized under Section 501(c) of the Code in an
amount not to exceed $7,500,000 in the aggregate in any calendar year;

(xii)     any
Investment consisting of a Hedging Agreement permitted by Section 6.07;

(xiii)    Business
Acquisitions and Investments that are not otherwise permitted under any other
provision of this Section 6.04; provided that (A) at
the time of such Business Acquisition or Investment no Default has occurred and
is continuing or would result therefrom and (B) immediately after giving
effect to any such Business Acquisition or Investment, the Revolver
Availability is greater than $100,000,000;

(xiv)     Investments
consisting of Sellers’ Retained Interests in Securitizations permitted by
Sections 6.01 and 6.05; and

(xv) (A) Investments by the Borrower or a
Subsidiary in connection with a Securitization permitted pursuant to this
Agreement and (B) any Investment or other Guarantee that may be 

 64
 

deemed made by the
Borrower due to the fact that a Parent Undertaking has been entered into in
respect of a Securitization permitted pursuant to the Agreement.

SECTION 6.05.   Asset
Sales.   The Borrower will not, and will not permit any of the
Subsidiary Loan Parties (and, prior to the Borrowing Base Date, Holdings or any
of its subsidiaries) to, conduct any Asset Sale, including any sale of any
Equity Interest owned by it and any sale of Securitization Assets in connection
with a Securitization, nor will the Borrower permit any of the Subsidiary Loan
Parties (and, prior to the Borrowing Base Date, Holdings or any of its
subsidiaries) to issue any additional Equity Interest in such Subsidiary,
except:

(i)         Permitted
Dispositions;

(ii)       any
Asset Sale (other than a Sale and Leaseback Transaction, the issuance of Equity
Interests, sales or contributions of Securitization Assets in a Securitization
or sales of Factoring Assets in Factoring Transactions) for fair value not in
the ordinary course of business;

(iii)      any
sale, transfer or disposition to a third party of Stores, leases and prescription
files closed at substantially the same time as, and entered into as part of a
single related transaction with, the purchase or other acquisition from such third
party of Stores, leases and prescription files of a substantially equivalent value;

(iv)       any
issuance of (A) Equity Interests of any Subsidiary Loan Party by such
Subsidiary Loan Party to the Borrower or any other Subsidiary Loan Party and (B) prior
to the Borrowing Base Date, any issuance of Equity Interests of Holdings by
Holdings to the Borrower and any issuance of Equity Interests of any subsidiary
of Holdings by such subsidiary to Holdings or any other subsidiary of Holdings;

(v)        any
Sale and Leaseback Transaction permitted pursuant to Section 6.01(a)(ix),
(xiv) or (xv) and Section 6.06;

(vi)       sales
or contributions of Securitization Assets to Securitization Vehicles in
connection with Securitizations, provided that (a) each
such Securitization is effected on market terms as determined in good faith by
the senior management of the Borrower, (b) the aggregate amount of all
such Securitizations plus the
aggregate amount of Indebtedness permitted by Section 6.01(a)(xvi)(B) does
not exceed $950,000,000 at any time outstanding, (c) the aggregate amount
of the Sellers’ Retained Interests in such Securitizations does not exceed an
amount at any time outstanding that is customary for similar transactions and (d) the
proceeds to each such Securitization Vehicle from the issuance of Third Party
Interests are applied substantially simultaneously with receipt thereof to the
purchase from Subsidiary Loan Parties of Securitization Assets; provided that, in the case of clause (d), the Securitization
Vehicle may use a portion of such proceeds to pay a customary collection agent
fee in connection with such Securitization to the extent such fee is permitted
pursuant to Section 6.09(f);

(vii)     unless
otherwise restricted by Section 5.17, sales of Factoring Assets in
connection with Factoring Transactions; provided that (i) a
Factoring Notice with respect to such Factoring Transaction has been delivered
by the Borrower to the Administrative Agent and (ii) each such Factoring
Transaction is effected on market terms as determined in good faith by the
senior management of the Borrower; and

(viii)    the
sale, transfer or other disposition of assets or properties of Holdings and its
subsidiaries required by any Governmental Authority as a condition to its
consent or forbearance from opposing the consummation of the Transactions.

provided that, with respect to
sales, transfers or dispositions under clause (ii), (v) or (viii), and
with respect to any net consideration received from any transaction described
in clause (iii), (1) at least 75% of the 

 65
 

consideration therefor shall consist of cash and (2) the
aggregate fair market value of all assets sold, transferred or disposed of in
reliance upon clauses (ii) and (v) shall not exceed $200,000,000 in
any fiscal year of the Borrower; provided  further that subject to the condition set forth in clause (1) above,
additional assets with an aggregate fair market value not in excess of
$450,000,000 may be sold, transferred or disposed of in any fiscal year of the
Borrower in reliance upon clauses (ii) and (v) if the Borrower reinvests,
or causes the applicable Subsidiary Loan Party (or, prior to the Borrowing Base
Date, if applicable, Holdings or any of its subsidiaries) to reinvest, Net Cash
Proceeds received in connection therewith in Business Acquisitions or the
purchase of Stores or prescription files within 365 days after the receipt
thereof.

SECTION 6.06.   Sale and Leaseback Transactions.   The
Borrower will not, and will not permit any of the Subsidiaries to, enter into
any Sale and Leaseback Transaction, except for Sale and Leaseback Transactions
permitted by and effected pursuant to Section 6.01(a)(ix), (xiv) or (xv)
which do not result in Liens other than Liens permitted pursuant to Section 6.02(a).

SECTION 6.07.   Hedging Agreements.   The
Borrower will not, and will not permit any of the Subsidiaries to, incur or at
any time be liable with respect to any monetary liability under any Hedging
Agreements, unless such Hedging Agreements (i) are entered into for bona
fide hedging purposes of the Borrower, any Subsidiary Loan Party or, prior to
the Borrowing Base Date, Holdings or any of its subsidiaries (as determined in
good faith by the senior management of the Borrower), (ii) correspond in terms
of notional amount, duration, currencies and interest rates, as applicable, to Indebtedness
of the Borrower or any Subsidiary Loan Party (or, prior to the Borrowing Base
Date, Holdings or any of its subsidiaries) permitted to be incurred under
Section 6.01(a) or to business transactions of the Borrower and the
Subsidiary Loan Parties (and, prior to the Borrowing Base Date, Holdings and
its subsidiaries) on customary terms entered into in the ordinary course of
business and (iii) do not exceed an amount equal to the aggregate principal
amount of the Senior Obligations and the Second Priority Debt Obligations (and,
prior to the Borrowing Base Date, the Interim Obligations).

SECTION 6.08.   Restricted
Payments; Certain Payments of Indebtedness.   (a) The
Borrower will not, nor will it permit any Subsidiary to, declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment, or incur
any obligation (contingent or otherwise) to do so, except (i) the Borrower
may declare and pay dividends with respect to its common stock or Qualified
Preferred Stock payable solely in additional shares of its common stock or
Qualified Preferred Stock, (ii) Subsidiaries (other than those directly
owned, in whole or part, by the Borrower) may declare and pay dividends ratably
with respect to their common stock, (iii) the Borrower may declare and pay
cash dividends with respect to its common stock and effect repurchases,
redemptions or other Restricted Payments with respect to its common stock,
together in an aggregate amount in any fiscal year of the Borrower not to
exceed 50% of Consolidated Net Income (if positive) for the immediately
preceding fiscal year of the Borrower; provided that immediately
prior and after giving effect to any such payment no Default or Event of Default
shall have occurred and be continuing and, immediately after giving effect to
any such payment, the Borrower shall have Revolver Availability of more than
$100,000,000, (iv) the Borrower may pay cash dividends in an amount not to
exceed $60,000,000 in any fiscal year of the Borrower with respect to the Series E
Preferred Stock, Series I Preferred Stock or any other Qualified Preferred
Stock; provided that (x) immediately prior
and after giving effect to any such payment, no Default or Event of Default
shall have occurred and be continuing and (y) only so long as a Financial
Covenant Effectiveness Period is then occurring, the Consolidated Fixed Charge
Coverage Ratio for the period of four consecutive fiscal quarters most recently
ended on or prior to the date of such payment, calculated on a pro forma basis
as if such payment were made on the last day of such period (and excluding any
such payments previously made pursuant to this clause during such four quarter
period but attributed for purposes of this calculation to the last day of a
prior period which day does not occur in such four quarter period) is not less than
the ratio applicable to such period of four fiscal quarters under Section 6.12,
(v) the Borrower and the Subsidiaries may make 

 66
 

Restricted Payments
consisting of the repurchase or other acquisition of shares of, or options to
purchase shares of, capital stock of the Borrower or any of its Subsidiaries
from employees, former employees, directors or former directors of the Borrower
or any Subsidiary (or their permitted transferees), in each case pursuant to
stock option plans, stock plans, employment agreements or other employee
benefit plans approved by the board of directors of the Borrower; provided that no Default has occurred and is continuing; and
provided  further
that the aggregate amount of such Restricted Payments made after the Original
Restatement Effective Date shall not exceed $10,000,000, (vi) the Subsidiaries
may declare and pay cash dividends to the Borrower; provided
that the Borrower shall, within a reasonable time following receipt of any such
payment, use all of the proceeds thereof for a purpose set forth in Section 5.10(b) (including
the payment of dividends required or permitted pursuant to this Section 6.08(a)),
(vii) the Borrower and the Subsidiaries may declare and pay cash dividends
with respect to the Equity Interests set forth on Schedule 6.08(a) to the
extent, and only to the extent, required pursuant to the terms of such Equity
Interests or any other agreement in effect on the Effective Date and (viii) so
long as no Default or Event of Default has occurred and is continuing or would
result therefrom, the Borrower may redeem or repurchase shares of the Borrower’s
and/or its Subsidiaries’ (including Rite Aid Lease Management Company’s)
Preferred Stock (A) solely with Net Cash Proceeds received by the Borrower
from issuances of its common stock after the Original Restatement Effective
Date, provided that any such repurchase or
redemption is effected within 150 days after the receipt of such proceeds or (B) with
other funds available to the Borrower if, immediately after giving effect to
any such redemption or repurchase, the Borrower shall have Revolver
Availability of more than $100,000,000.

(b)        The
Borrower will not, nor will it permit any Subsidiary to, make or agree to pay
or make, directly or indirectly, any payment or other distribution (whether in cash,
securities or other property) of or in respect of principal of or interest on
any Indebtedness, or any payment or other distribution (whether in cash,
securities or other property), including any sinking fund or similar deposit,
on account of the purchase, redemption, retirement, acquisition, cancelation or
termination of any Indebtedness, except:

(i)         payments
or prepayments of Indebtedness created under the Senior Loan Documents;

(ii)       payments
of regularly scheduled interest and principal payments as and when due in
respect of any Indebtedness permitted pursuant to Section 6.01(a);

(iii)      prepayments
of Indebtedness permitted pursuant to clause (vii), (viii) or (ix) of Section 6.01(a) with
the proceeds of Indebtedness permitted pursuant to clause (vii), (viii) or
(ix) of Section 6.01(a);

(iv)       payments
of secured Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;

(v)        provided
no Default has occurred and is continuing or would result therefrom, Optional
Debt Repurchases of Inside Indebtedness and, to the extent permitted by
paragraph (c) of this Section, Optional Debt Repurchases of Outside Indebtedness;

(vi)       repurchases,
exchanges or redemptions of Indebtedness for consideration consisting solely of
common stock of the Borrower or Qualified Preferred Stock;

(vii)     prepayments
of Capital Lease Obligations in connection with the sale, closing or relocation
of Stores;

(viii)    prepayments
of Indebtedness in connection with the incurrence of Refinancing Indebtedness
permitted pursuant to Section 6.01(a)(ii) or (x);

(ix)       prepayments
of Indebtedness permitted pursuant to Section 6.01(a)(iii), if permitted
by the subordination provisions applicable to such Indebtedness; and

 67
 

(x)        unless
an Event of Default shall have occurred and be continuing, mandatory
prepayments of Indebtedness and interest under the New Notes and/or the Bridge
Facility.

(c)        The
Borrower and the Subsidiaries will not effect Optional Debt Repurchases of
Outside Indebtedness unless immediately prior and after giving effect to any
such Optional Debt Repurchases, (x) no Default or Event of Default shall
have occurred and be continuing and (y) the Borrower shall have Revolver
Availability of more than $100,000,000.

SECTION 6.09.   Transactions
with Affiliates.   The Borrower will not, and will not permit
any Subsidiary to, directly or indirectly, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except:

(a)        payment
of compensation to directors, officers, and employees of the Borrower and the
Subsidiaries in the ordinary course of business;

(b)        payments
in respect of transactions required to be made pursuant to agreements or
arrangements in effect on the Second Restatement Effective Date and set forth
on Schedule 6.09;

(c)        transactions
involving the acquisition of inventory in the ordinary course of business; provided that (i) the terms of such transaction are (A) set
forth in writing, (B) in the best interests of the Borrower or such
Subsidiary, as the case may be, and (C) no less favorable to the Borrower
or such Subsidiary, as the case may be, than those that could be obtained in a comparable
arm’s length transaction with a Person that is not an Affiliate of the Borrower
or a Subsidiary and, (ii) if such transaction involves aggregate payments
or value in excess of $75,000,000, the board of directors of the Borrower
(including a majority of the disinterested members of the board of directors)
approves such transaction and, in its good faith judgment, believes that such
transaction complies with clauses (i)(B) and (C) of this paragraph;

(d)        (i) transactions
between or among the Borrower and/or one or more Subsidiary Loan Parties, (ii) sales
of Securitization Assets to Securitization Vehicles in Securitizations
permitted by Sections 6.01 and 6.05, (iii) prior to the Borrowing Base
Date, transactions between or among (A) the Borrower or any Subsidiary
Loan Party, on one hand, and Holdings or any of its subsidiaries, on the other
hand, (B) Holdings, on one hand, and any subsidiary of Holdings, on the other
hand, and (C) any subsidiary of Holdings, on one hand, and any other subsidiary
of Holdings, on the other hand, (iv) transactions under, involving, related
to and/or in connection with the Acquisition and documents related thereto including,
(A) the Stock Purchase Agreement, dated as of August 23, 2006, by and
between the Borrower and The Jean Coutu Group (PJC) Inc., (B) the Stockholder
Agreement, dated as of August 23, 2006, between the Borrower, The Jean
Coutu Group (PJC) Inc., Jean Coutu, Marcelle Coutu, Francois J. Coutu, Michel
Coutu, Louis Coutu, Sylvie Coutu and Marie-Josée Coutu and (C) the Registration
Rights Agreement, dated as of August 23, 2006, by and between the Borrower
and The Jean Coutu Group (PJC) Inc. and (v) the Transition Services Agreement,
dated as of June 4, 2007, by and between the Borrower and the Seller; provided that the terms of the transactions referred to in
clauses (iii), (iv) and (v) above are in the best interest of the
Borrower, such Subsidiary Loan Party or Holdings or any such subsidiary of
Holdings which is a party thereto, as the case may be;

(e)        issuances
of Preferred Stock of the Borrower (and transactions that are necessary to
effect such issuances) in respect of pay-in-kind obligations of the Borrower
relating to Series G Preferred Stock or Series H Preferred Stock; and

(f)         any
other Affiliate transaction not otherwise permitted pursuant to this Section 6.09;
provided that (i) the terms of such
transaction are (A) set forth in writing, (B) in the best interests
of the Borrower or such Subsidiary, as the case may be, and (C) no less
favorable to the Borrower or 

 68
 

such Subsidiary, as the
case may be, than those that could be obtained in a comparable arm’s length transaction
with a Person that is not an Affiliate of the Borrower or a Subsidiary, (ii) if
such transaction involves aggregate payments or value in excess of $25,000,000
in any consecutive 12-month period, the board of directors of the Borrower
(including a majority of the disinterested members of the board of directors)
approves such transaction and, in its good faith judgment, believes that such transaction
complies with clauses (i)(B) and (C) of this paragraph and (iii) if
such transaction (other than any transaction necessary for the redemption or exchange
of the Borrower’s Series G Preferred Stock or Series H Preferred
Stock) involves aggregate payments or value in excess of $50,000,000 in any consecutive
12-month period, the Borrower obtains a written opinion from an independent
investment banking firm or appraiser of national prominence, as appropriate, to
the effect that such transaction is fair to the Borrower or such Subsidiary, as
the case may be, from a financial point of view.

SECTION 6.10.   Restrictive
Agreements.   (a) The Borrower will not, and will not
permit any Subsidiary to, enter into any agreement which imposes a limitation
on the incurrence by the Borrower and the Subsidiaries of Liens that (i) would
restrict any Subsidiary from granting Liens on any of its assets (including
assets in addition to the then-existing Senior Collateral and, prior to the
Borrowing Base Date, the then-existing Interim Collateral, to secure the Senior
Obligations, the Second Priority Obligations and, prior to the Borrowing Base
Date, the Interim Obligations) or (ii) is more restrictive, taken as a
whole, than the limitation on Liens set forth in this Agreement except, in each
case, (A)(u) the Senior Loan Documents, (w) agreements with respect
to Indebtedness secured by Liens permitted by Section 6.02(a) restricting
the ability to transfer or grant Liens on the assets securing such
Indebtedness, (x) agreements with respect to Second Priority Debt (1) containing
provisions described in clauses (i) and/or (ii) above that are not
materially more restrictive, taken as a whole, than those of the 8.125% Note Indenture
as in effect on the Second Restatement Effective Date or (2) requiring
that such Indebtedness be secured by assets in respect of which Liens are
granted to secure other Indebtedness (provided that
in the case of any such assets subject to a Senior Lien, such Indebtedness will
be required to be secured only with a Second Priority Lien); provided, however, that
the Second Priority Debt Documents relating to any such Indebtedness may not
contain terms requiring any Liens be granted with respect to Senior Collateral consisting
of cash or Permitted Investments pledged pursuant to Section 2.05(j) of
this Agreement or Section 5 of the Senior Subsidiary Guarantee Agreement
or otherwise required to be provided upon the occurrence of a default under any
bank credit facility to secure obligations in respect of letters of credit
issued thereunder, (y) agreements with respect to unsecured Indebtedness
governed by indentures or by credit agreements or note purchase agreements with
institutional investors permitted by this Agreement containing terms that are
not materially more restrictive, taken as a whole, than those of the 9.25% Note
Indenture as in effect on the Second Restatement Effective Date and (z) the
New Notes and/or the Bridge Facility, (B) customary restrictions contained
in purchase and sale agreements limiting the transfer of the subject assets
pending closing, (C) customary non-assignment provisions in leases and
other contracts entered into in the ordinary course of business, (D) pursuant
to applicable law, (E) agreements in effect as of the Second Restatement
Effective Date and not entered into in contemplation of the transactions
effected in connection with the closing of the Original Agreement, (F) the
Indentures, in each case when originally entered into, (G) any restriction
existing under agreements relating to assets acquired by the Borrower or a
Subsidiary in a transaction permitted hereby; provided
that such agreements existed at the time of such acquisition, were not put into
place in anticipation of such acquisition and are not applicable to any assets
other than assets so acquired, (H) any restriction existing under any
agreement of a Person acquired as a Subsidiary pursuant to Section 6.03 or
Section 6.04(a)(xiii); provided that
any such agreement existed at the time of such acquisition, was not put into place
in anticipation of such acquisition and was not applicable to any Person or
assets other than the Person or assets so acquired and (I) customary
restrictions and conditions contained in agreements 

 69
 

relating to
Securitizations permitted hereunder, provided that such
restrictions and conditions apply only to Securitization Vehicles and to the Securitization
Assets that are subject to such Securitizations.

(b)        The
Borrower will not, and will not permit any Subsidiary to, enter into or suffer
to exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary to (i) make Restricted Payments in respect of
any Equity Interests of such Subsidiary held by, or pay any Indebtedness owed
to, the Borrower or any other Subsidiary, (ii) make any Investment in the
Borrower or any other Subsidiary, or (iii) transfer any of its assets to
the Borrower or any other Subsidiary, except for (A) any restriction
existing under (1) the Senior Loan Documents or existing on the Second
Restatement Effective Date under the Indentures, (2) the indenture or
agreement governing any Refinancing Indebtedness in respect of Indebtedness set
forth in clause (1) above or (3) agreements with respect to Indebtedness
permitted by this Agreement containing provisions described in clauses (i), (ii) and
(iii) above that are not materially more restrictive, taken as a whole,
than those of the 8.125% Note Indenture or, alternatively, the 9.25% Note
Indenture, in each case as in effect on the Second Restatement Effective Date, (B) customary
non-assignment provisions in leases and other contracts entered into in the
ordinary course of business, (C) as required by applicable law, (D) customary
restrictions contained in purchase and sale agreements limiting the transfer of
the subject assets pending closing, (E) any restriction existing under agreements
relating to assets acquired by the Borrower or a Subsidiary in a transaction permitted
hereby; provided that such agreements existed at
the time of such acquisition, were not put into place in anticipation of such
acquisition and are not applicable to any assets other than assets so acquired,
(F) any restriction existing under any agreement of a Person acquired as a
Subsidiary pursuant to Section 6.03 or Section 6.04(a)(xiii); provided any such agreement existed at the time of such
acquisition, was not put into place in anticipation of such acquisition and was
not applicable to any Person or assets other than the Person or assets so
acquired, (G) agreements with respect to Indebtedness secured by Liens
permitted by Section 6.02 that restrict the ability to transfer the assets
securing such Indebtedness, (H) customary restrictions and conditions
contained in agreements relating to Securitizations permitted hereunder, provided that such restrictions and conditions apply only to
Securitization Vehicles and to the Securitization Assets that are subject to
such Securitizations and (I) any restriction existing under the New Notes and/or
the Bridge Facility.

SECTION 6.11.   Amendment
of Material Documents.   (a) The Borrower will not, nor
will it permit any Subsidiary to, amend, modify or waive any Second Priority
Security Document or any of its rights thereunder without the consent of the Collateral
Agent, other than modifications to such agreements in connection with (i) the
joinder of additional Subsidiary Loan Parties effected by the execution of
supplements to such agreements and (ii) the inclusion of additional Second
Priority Debt permitted pursuant to Section 6.01(a)(vii) constituting
Secured Obligations (as defined in the Second Priority Security Agreement)
under such agreements. The Borrower will not, nor will it permit any Subsidiary
to, amend, modify or waive any instrument governing the New Notes or the Bridge
Facility and any related security documents, or any of its rights under any of
the foregoing without the consent of the Collateral Agent, other than amendments,
modifications and waivers that are not material and adverse to the interests of
the Lenders.

(b)        The
Borrower will not, and will not permit any Subsidiary party to the Intercompany
Inventory Purchase Agreement to, amend, terminate, or otherwise modify the
Intercompany Inventory Purchase Agreement in any manner materially adverse to
the Lenders or their interests under the Senior Loan Documents without the
prior written approval of the Collateral Agent; provided,
however, that the foregoing shall not
limit the Borrower’s responsibilities pursuant to Section 3.2 of the
Intercompany Inventory Purchase Agreement.

SECTION 6.12.   Consolidated
Fixed Charge Coverage Ratio.   The Borrower will not permit the
Consolidated Fixed Charge Coverage Ratio for the period of four consecutive
fiscal quarters most recently 

 70
 

ended
on or prior to any day during a Financial Covenant Effectiveness Period to be
less than the ratio set forth below opposite the period that includes the last
day of such four quarter period:

	
  Four Fiscal Quarter Period Ending

  	
   

  	
   

  	
   

  	
  Ratio

  	
   

  
	
  December 3, 2006 through March 3, 2007

  	
   

  	
  1.00 to 1.00

  	
   

  
	
  March 4, 2007 through June 2, 2007

  	
   

  	
  1.00 to 1.00

  	
   

  
	
  June 3, 2007 through September 1, 2007

  	
   

  	
  1.00 to 1.00

  	
   

  
	
  September 2, 2007 through December 1, 2007

  	
   

  	
  1.00 to 1.00

  	
   

  
	
  December 2, 2007 through March 1, 2008

  	
   

  	
  1.00 to 1.00

  	
   

  
	
  March 2, 2008 through May 31, 2008

  	
   

  	
  1.00 to 1.00

  	
   

  
	
  June 1, 2008 through August 30, 2008

  	
   

  	
  1.00 to 1.00

  	
   

  
	
  August 31, 2008 through November 29, 2008

  	
   

  	
  1.05 to 1.00

  	
   

  
	
  November 30, 2008 through February 28,
  2009

  	
   

  	
  1.05 to 1.00

  	
   

  
	
  March 1, 2009 through May 30, 2009

  	
   

  	
  1.05 to 1.00

  	
   

  
	
  May 31, 2009 through August 29, 2009

  	
   

  	
  1.05 to 1.00

  	
   

  
	
  August 30, 2009 through November 28, 2009

  	
   

  	
  1.05 to 1.00

  	
   

  
	
  November 29, 2009 through February 27,
  2010

  	
   

  	
  1.15 to 1.00

  	
   

  
	
  February 28, 2010 through May 29, 2010

  	
   

  	
  1.15 to 1.00

  	
   

  
	
  May 30, 2010 through August 28, 2010

  	
   

  	
  1.15 to 1.00

  	
   

  
	
  August 29, 2010 through November 27, 2010

  	
   

  	
  1.15 to 1.00

  	
   

  
	
  November 28, 2010 through February 26,
  2011

  	
   

  	
  1.15 to 1.00

  	
   

  
	
  February 27, 2011 through May 28, 2011

  	
   

  	
  1.15 to 1.00

  	
   

  
	
  May 29, 2011 through the Tranche 2 Term Maturity
  Date

  	
   

  	
  1.25 to 1.00

  	
   

  

 

SECTION 6.13.   Restrictions
on Asset Holdings by the Borrower.   The Borrower will not at
any time:

(i)         make
or hold any Investments other than investments in the Equity Interests of the
Subsidiaries (including any distributions or other assets received in respect
thereto), intercompany advances to Subsidiaries and Investments permitted by
clause (iii) below;

(ii)       acquire
or hold any Stores, other capital assets, inventory or accounts receivable,
other than any real estate which the Borrower holds only as lessor and which is
leased and operated by another Person; or

(iii)      acquire
or hold cash, cash equivalents, Permitted Investments or balances in bank
accounts, other than such amounts as are reasonably anticipated (at the time so
acquired or held) to be utilized within five Business Days to pay costs,
expenses and other obligations of the Borrower referred to in Section 5.10(b).

 71

SECTION 6.14.   Corporate Separateness.   The Borrower will, and will cause
each Subsidiary to, take all necessary steps to maintain its identity as a
separate legal entity from other Persons and to make it manifest to third
parties that it is an entity with assets and liabilities distinct from those of
each of other Person.

ARTICLE
VII

Events
of Default

If any of the following
events (“Events of Default”) shall occur:

(a) the Borrower
shall fail to pay any principal of any Loan or any reimbursement obligation in
respect of any LC Disbursement when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment
thereof or otherwise;

(b) the Borrower
shall fail to pay any interest on any Loan or any fee or any other amount
(other than an amount referred to in clause (a) of this Article) payable
under this Agreement or any other Senior Loan Document, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of five days;

(c) any
representation or warranty made or deemed made by or on behalf of the Borrower
or any Subsidiary in or in connection with any Senior Loan Document or any
amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Senior Loan Document or any amendment or modification
thereof or waiver thereunder, shall prove to have been incorrect in any
material respect when made or deemed made;

(d) the Borrower
shall fail to observe or perform any covenant, condition or agreement contained
in Section 5.02(a), 5.10, 5.11, 5.15 or 5.16 or in Article VI;

(e) any Loan Party
(and, prior to the Borrowing Base Date, Holdings or any of its subsidiaries)
shall fail to observe or perform any covenant, condition or agreement contained
in any Senior Loan Document (other than those specified in clause (a), (b) or
(d) of this Article), and such failure shall continue unremedied (i) in
the case of covenants contained in Section 5.08, for five days, (ii) in
the case of covenants contained in Sections 5.01 and 5.02(b), (c) and (f),
for 10 days and (iii) in the case of any other covenant, for a period of
20 days after notice thereof has been delivered by the Administrative Agent to
the Borrower (which notice shall be given promptly at the request of any
Lender);

(f) the Borrower or
any Subsidiary shall fail to make any payment (whether of principal or interest
and regardless of amount) in respect of any Material Indebtedness, including
any obligation to reimburse letter of credit obligations or to post cash
collateral with respect thereto, when and as the same shall become due and
payable or within any applicable grace period;

(g) any event or
condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause any
Material Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to
secured Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;

(h) an involuntary
proceeding shall be commenced or an involuntary petition shall be filed seeking
(i) liquidation, reorganization or other relief in respect of the Borrower
or any Subsidiary or its Indebtedness, or of a substantial part of its assets,
under any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment 

 72
 

of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the Borrower
or any Subsidiary or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall be entered;

(i) the Borrower or
any Subsidiary shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent
to the appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for the Borrower or any Subsidiary or for a substantial
part of its assets, (iv) file an answer admitting the material allegations
of a petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

(j) the Borrower or
any Subsidiary shall become unable to, or admits in writing its inability or
fails to, generally pay its debts as they become due;

(k) one or more
judgments for the payment of money in an aggregate amount in excess of
$75,000,000 shall be rendered against the Borrower, any Subsidiary or any
combination thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of the Borrower or any Subsidiary to enforce any such judgment;

(l) (i) the
Borrower or any ERISA Affiliate shall fail to pay when due an amount or amounts
aggregating in excess of $15,000,000 which it shall have become liable to pay
under Section 302 or Title IV of ERISA; or notice of intent to terminate a
Plan shall be filed under Title IV of ERISA by the Borrower or any ERISA
Affiliate, any plan administrator or any combination of the foregoing; or the
PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in respect
of, or to cause a trustee to be appointed to administer, any Plan; or a condition
shall exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Plan must be terminated; or there shall occur a complete
or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans which could cause the
Borrower and/or one or more ERISA Affiliates to incur a current payment
obligation in excess of $75,000,000; or (ii) any other ERISA Event shall
have occurred that, in the opinion of the Required Lenders, when taken together
with all other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower, the ERISA Affiliates and the Subsidiaries
in an aggregate amount exceeding $75,000,000;

(m) (i) any Lien
purported to be created under any Senior Collateral Document or Interim
Collateral Document shall cease to be a valid and perfected Lien on any
material portion of the Senior Collateral or, prior to the Borrowing Base Date,
the Interim Collateral, as the case may be, with the priority required by the
Senior Loan Documents, except as a result of the sale or other disposition of the
applicable Collateral in a transaction permitted under the Senior Loan Documents,
or the Borrower or any Subsidiary shall so assert in writing, or (ii) any
Senior Loan Document shall become invalid, or the Borrower or any Subsidiary
shall so assert in writing;

(n) a Change in
Control shall occur; or

(o) any Subsidiary
Loan Party shall amend or revoke any instruction in the Government Lockbox
Account Agreement to any Government Lockbox Account Bank in respect of a
Government Lockbox Account unless (i) the Administrative Agent shall have
given its prior written 

 73
 

consent
or (ii) the Government Lockbox Account is then under the control of any
other Person pursuant to Section 5.16;

then, and in every such
event (other than an event with respect to the Borrower or any Subsidiary Loan
Party (or, prior to the Borrowing Base Date, Holdings or any of its subsidiaries)
described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times: (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or
in part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower;
and in case of any event with respect to the Borrower or any Subsidiary Loan
Party (and, prior to the Borrowing Base Date, Holdings or any of its
subsidiaries) described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.

ARTICLE
VIII

The
Agents

Each of the Lenders and
each Issuing Bank hereby irrevocably appoints (i) the Administrative Agent
as its agent and authorizes the Administrative Agent to take such actions on
its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Senior Loan Documents, together with such actions and
powers as are reasonably incidental thereto and (ii) the Collateral Agent
as its agent and authorizes the Collateral Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Collateral Agent by
the terms of the Senior Loan Documents, together with such actions and powers
as are reasonably incidental thereto.

The financial institutions
serving as the Agents hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it
were not an Agent, and such financial institutions and their Affiliates may
accept deposits from, lend money to and generally engage in any kind of business
with the Borrower or any Subsidiary or any Affiliate of any of the foregoing as
if they were not Agents hereunder.

No Agent shall have any
duties or obligations except those expressly set forth in the Senior Loan
Documents. Without limiting the generality of the foregoing, (a) no Agent
shall be subject to any fiduciary or other implied duties, regardless of whether
a Default has occurred and is continuing, (b) no Agent shall have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Senior Loan
Documents that such Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 2.20 or 9.02) and
(c) except as expressly set forth in the Senior Loan Documents, no Agent
shall have any duty to disclose, and no Agent shall be liable for the failure
to disclose, any information relating to the Borrower or any of the
Subsidiaries that is communicated to or obtained by the financial institution
serving as such Agent or any of its Affiliates in any capacity. No Agent shall
be liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section 2.20
or 9.02) or in the absence of its own gross negligence or wilful misconduct (as
determined by a court of competent jurisdiction by final and non-appealable 

 74
 

judgment).
No Agent shall be deemed to have knowledge of any Default unless and until written
notice thereof is given to such Agent by the Borrower or a Lender, as
applicable, and no Agent shall be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or
in connection with any Senior Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Senior Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Senior Loan
Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any
Senior Loan Document, other than to confirm receipt of items expressly required
to be delivered to such Agent.

Each Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the
proper Person. Each Agent also may rely upon any statement made to it orally or
by telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. Any Agent may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts.

Each Agent may perform any
and all of its duties and exercise any and all of its rights and powers by or
through any one or more sub-agents appointed by such Agent. Any Agent and any
such sub-agent may perform any and all of its duties and exercise any and all
of its rights and powers through their Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of any Agent and any such sub-agent, and shall apply to
their activities in connection with the syndication of the credit facilities
provided for herein as well as activities as an Agent.

Subject to the appointment
and acceptance of a successor Agent as provided in this paragraph, any Agent
may resign at any time by notifying the Lenders, the Issuing Banks and the
Borrower. Upon any such resignation, the Required Lenders shall have the right,
in consultation with the Borrower, to appoint a successor. If no successor
shall have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders and the
Issuing Banks, appoint a successor Agent (which shall be a financial
institution with an office in New York, New York, or an Affiliate of any such
financial institution). Upon the acceptance of its appointment as an Agent
hereunder by a successor, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
The fees payable by the Borrower to a successor Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor. After an Agent’s resignation hereunder, the provisions of
this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Agent, its sub-agents and their respective Related Parties
in respect of any actions taken or omitted to be taken by any of them while it
was acting as Agent.

Each Lender acknowledges
that it has, independently and without reliance upon any Agent or any other
Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this Agreement.
Each Lender also acknowledges that it will, independently and without reliance
upon any Agent or any other Lender and based on such documents and information
as it shall from time to time deem appropriate, continue to make its own decisions
in taking or not taking action under or based upon this Agreement, any other Senior
Loan Document or related agreement or any document furnished hereunder or thereunder.

Each party hereto
authorizes the Administrative Agent to enter into customary intercreditor
agreements in connection with Securitizations and Factoring Transactions
permitted under this Agreement.

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ARTICLE
IX

Miscellaneous

SECTION 9.01.   Notices.   Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopy, as
follows:

(a) Rite Aid
Corporation, 30 Hunter Lane Camp Hill, PA 17011, Attention of General Counsel
(Telecopy No. 717-760-7867; email address: rsari@riteaid.com);

(b) if to the
Administrative Agent, (i) in respect of matters of an operational nature,
to Citicorp North America, Inc., 388 Greenwich Street, New York, NY 10013,
Attention of Dana Fuski Dugan (Telecopy No. 212-994-0894; email
address: dana.a.fuskidugan@citigroup.com, with a copy to oploanswebadmin@citigroup.com)
and (ii) in respect of all other matters, to Citicorp North America, Inc.,
388 Greenwich Street, New York, NY 10013, Attention of Jeffrey Nitz (Telecopy No. 212-816-2613;
email address: jeffrey.nitz@citigroup.com, with a copy to oploanswebadmin@citigroup.com);

(c) if to the Syndication Agent, to Bank of
America, N.A., Bank of America Retail Group, 40 Broad Street, Boston, MA 02109,
Attention of Christine Hutchinson (Telecopy No. 617-434-4339;
email address: christine.hutchinson@bankofamerica.com);

(d) if to the Issuing Banks, to (i) Citicorp
North America, Inc., 388 Greenwich Street, New York, NY 10013, Attention
of Jeffrey Nitz (Telecopy No. 212- 816-2613; email address:
jeffrey.nitz@citigroup.com) and (ii) JPMorgan Chase Bank, N.A., 270 Park
Avenue, New York, NY 10017, Attention of Teri Streusand (Telecopy No. 212-270-6637;
email address: teri.streusand@jpmorgan.com);

(e) if to the Swingline Lender, to it at Citicorp
North America, Inc., 388 Greenwich Street, New York, NY 10013, Attention
of Jeffrey Nitz (Telecopy No: 212-816-2613; email address:
jeffrey.nitz@citigroup.com); and

(f) if to any other Lender, to it at its address
(or telecopy number) set forth in its Administrative Questionnaire.

Any party hereto may
change its address or telecopy number for notices and other communications
hereunder by notice to the other parties hereto. All notices and other communications
given to any party hereto in accordance with the provisions of this Agreement
shall be deemed to have been given on the date of receipt.

SECTION 9.02.   Waivers; Amendments.   (a) No failure or delay by
any Agent, any Issuing Bank or any Lender in exercising any right or power
hereunder or under any other Senior Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power,
or any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Agents, the Issuing Banks and
the Lenders hereunder and under the other Senior Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of any Senior Loan Document or consent to any
departure by any Loan Party therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. Without limiting the generality of the foregoing,
the making of a Loan or issuance of a Letter of Credit shall not be construed
as a waiver of any Default, regardless of whether any Agent, any Lender or any
Issuing Bank may have had notice or knowledge of such Default at the time.

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(b) Neither this
Agreement nor any other Senior Loan Document nor any provision hereof or
thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by
the Borrower and the Required Lenders or, in the case of any other Senior Loan
Document, pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, in each case with the consent of the Required Lenders; provided that (i) no such agreement shall change any provision
of any Senior Loan Document in a manner that by its terms adversely affects the
rights of Lenders holding Loans of any Class differently than those
holding Loans of any other Class, without the written consent of Lenders
holding a majority in interest of the outstanding Loans and unused Commitments
of each affected Class and (ii) any waiver, amendment or modification
of this Agreement that by its terms affects the rights or duties under this
Agreement of one or more Classes of Lenders (but not the other Class or Classes
of Lenders) may be effected by an agreement or agreements in writing entered into
by the Borrower and requisite percentage in interest of the affected Class or
Classes of Lenders that would be required to consent thereto under this Section
if such Class  or Classes of Lenders were
the only Class or Classes of Lenders hereunder at the time; and provided further that no such agreement shall (i) increase
the Commitment of any Lender without the written consent of such Lender, (ii) reduce
or forgive the principal amount of any Loan or LC Disbursement or reduce the
rate of interest thereon, or reduce any fees payable hereunder, without the
written consent of each Lender affected thereby, (iii) postpone the
maturity of any Loan, or any scheduled date of payment of the principal amount
of any Term Loan under Section 2.10, or the required date of reimbursement
of any LC Disbursement, or any date for the payment of any interest or fees
payable hereunder, or reduce the amount of, waive or excuse any such payment,
or postpone the scheduled date of expiration of any Commitment, without the
written consent of each Lender affected thereby, (iv) amend Section 2.18(b) or
(c) in a manner that would alter the pro
rata sharing of payments required thereby, without the written
consent of each Lender, (v) amend the proviso of the definition of “Borrowing
Base Amount” or the definition of “Account Receivable Advance Rate”, “Pharmaceutical
Inventory Advance Rate”, “Other Inventory Advance Rate” or “Script Lists
Advance Rate” without the written consent of each Lender, (vi) subordinate
the priority of the Lien granted to the Collateral Agent pursuant to the Senior
Loan Documents without the written consent of each Lender, (vii) change
any of the provisions of this Section or the percentage set forth in the
definition of “Required Lenders”, “Supermajority Lenders” or any other
provision of any Senior Loan Document specifying the number or percentage of
Lenders (or Lenders of any Class) required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (or each Lender of such Class, as the case
may be), (viii) release the Borrower or any Subsidiary Loan Party from its
Guarantee under the Senior Subsidiary Guarantee Agreement (except as expressly
provided in the Senior Subsidiary Guarantee Agreement or in Section 9.18),
or limit its liability in respect of such Guarantee, without the written consent
of each Lender, (ix) prior to the Borrowing Base Date, release any
Subsidiary Loan Party from its Guarantee under the Interim Subsidiary Loan
Party Guarantee Agreement (except as expressly provided in the Interim
Subsidiary Loan Party Guarantee Agreement), or limit its liability in respect
of such Guarantee, without the written consent of each Lender, (x) prior
to the Borrowing Base Date, release Holdings or any of its subsidiaries from
its Guarantee under the Interim Collateral and Guarantee Agreement (except as
expressly provided in the Interim Collateral and Guarantee Agreement), or limit
its liability in respect of such Guarantee, without the written consent of each
Lender (xi) release all or substantially all of the Senior Collateral from the
Liens under the Senior Collateral Documents, without the written consent of
each Lender, (xii) prior to the Borrowing Base Date, release all or
substantially all of the Interim Collateral from the Liens under the Interim
Collateral Documents, without the written consent of each Lender or (xiii)
amend Section 2.21 to increase the permitted Incremental Facilities to in excess
of $350,000,000, without the written consent of the Supermajority Lenders; and provided further, that no such agreement shall amend, modify
or otherwise affect the rights or duties of any Agent, the Issuing Banks or the
Swingline Lender without the prior written consent of such Agent, the Issuing
Banks or the Swingline Lender, as the case may be. 

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Notwithstanding the
foregoing, any provision of this Agreement may be amended by an agreement in
writing entered into by the Borrower, the Required Lenders and the
Administrative Agent (and, if their rights or obligations are affected thereby,
the Issuing Banks and the Swingline Lender) if (i) by the terms of such
agreement the Commitment of each Lender not consenting to the amendment
provided for therein shall terminate upon the effectiveness of such amendment
and (ii) at the time such amendment becomes effective, each Lender not
consenting thereto receives payment in full of the principal of and interest
accrued on each Loan made by it and all other amounts owing to it or accrued
for its account under this Agreement.

(c) Notwithstanding
the foregoing, (i) Senior Collateral shall be released from the Lien under
the Senior Collateral Documents from time to time as necessary to effect any
sale of Senior Collateral permitted by the Senior Loan Documents, and the Administrative
Agent shall execute and deliver all release documents reasonably requested to
evidence such release; provided that
arrangements satisfactory to the Administrative Agent shall have been made for
application of the cash proceeds thereof in accordance with Section 2.11,
if required, and for the pledge of any non-cash proceeds thereof pursuant to
the Senior Collateral Documents, (ii) the accounts created pursuant to clause
(i) of Section 5.16(b), the Lockbox Account and/or the Governmental
Lockbox Account may be released by the Administrative Agent and transferred in
accordance with Section 5.16, (iii) if a Subsidiary Loan Party ceases
to be a Subsidiary in accordance with this Agreement, or ceases to own any
property that constitutes Senior Collateral, at the request of and at the
expense of the Borrower, such Subsidiary Loan Party shall be released from the
Senior Subsidiary Guarantee Agreement, the Senior Subsidiary Security Agreement
and each other Senior Loan Document to which it is a party and (iv) prior
to the Borrowing Base Date, if Holdings or any of its subsidiaries ceases to be
a Subsidiary in accordance with this Agreement or ceases to own any property
that constitutes Interim Collateral, at the request of and at the expense of
the Borrower, such party shall be released from the Interim Collateral
Documents and the Senior Loan Documents to which it is a party.

SECTION 9.03.   Expenses; Indemnity; Damage Waiver.   (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the Agents
and their Affiliates, including the reasonable fees, charges and disbursements
of counsel for the Agents, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of the
Senior Loan Documents or any amendments, modifications or waivers of the
provisions thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by any Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by any Agent, any Issuing Bank or any Lender, including
the fees, charges and disbursements of counsel for any Agent, any Issuing Bank or
any Lender, in connection with the enforcement or protection of its rights
under or in connection with the Senior Loan Documents, including its rights
under this Section, or in connection with the Loans made or Letters of Credit
issued hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.

(b) The Borrower
shall indemnify each Agent, each Issuing Bank and each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of any
Senior Loan Document, the performance by the parties to the Senior Loan Documents
of their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by an Issuing Bank
to honor a demand for payment under a Letter of Credit if the documents 

 78
 

presented
in connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property currently or formerly owned or
operated by the Borrower or any of the Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of the Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory
and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent jurisdiction
by final and nonappealable judgment to have resulted from the gross negligence
or wilful misconduct of such Indemnitee.

(c) To the extent
that the Borrower fails to pay any amount required to be paid by it to any
Agent, any Issuing Bank or any Lender under paragraph (a) or (b) of
this Section, each Lender severally agrees to pay to such Agent, such Issuing
Bank or such Lender, as the case may be, such Lender’s pro rata share (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that
the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against such Agent,
such Issuing Bank or such Lender in its capacity as such. For purposes hereof,
a Lender’s “pro rata share” shall
be determined based upon its share of the sum of the total Revolving Exposures,
outstanding Term Loans and unused Commitments at the time.

(d) To the extent
permitted by applicable law, the Borrower shall not assert, and hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any
other Senior Loan Document or any other agreement or instrument contemplated
hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of
the proceeds thereof.

(e) All amounts due
under this Section shall be payable not later than 10 Business Days after
written demand therefor.

SECTION 9.04.   Successors
and Assigns.   (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
any Issuing Bank that issues any Letter of Credit), except that the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their successors and assigns
permitted hereby (including any Affiliate of any Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Agents, the Issuing Banks and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

(b) (i) Subject
to the conditions set forth in paragraph (b)(ii) below, any Lender may
assign to one or more assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitments and the
Loans at the time owing to it), with the prior written consent (such consent
not to be unreasonably withheld or delayed) of:

(A) the Borrower; provided that no consent of the Borrower shall be required
for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or,
if an Event of Default under clause (a), (b), (h), or (i) of
Article VII has occurred and is continuing, any other assignee; and

(B) the
Administrative Agent; provided that
no consent of the Administrative Agent shall be required for an assignment to
an assignee that is a Lender, an Affiliate of a Lender or an Approved Fund.

 79

(ii) Assignments shall be subject to the
following additional conditions:

(A) except in the case of an assignment to a
Lender, an Affiliate of a Lender or an Approved Fund, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than (1) with
respect to Revolving Commitments and Revolving Loans, $5,000,000 and (2) with
respect to Tranche 1 Term Loan Commitments, Tranche 2 Term Commitments, Tranche
1 Term Loans and Tranche 2 Term Loans, $1,000,000 or, in each case, if smaller,
the entire remaining amount of the assigning Lender’s Commitment or Loans,
unless each of the Borrower and the Administrative Agent shall otherwise
consent; provided that (i) no such consent
of the Borrower shall be required if an Event of Default has occurred and is
continuing and (ii) in the event of concurrent assignments to two or more
assignees that are Affiliates of one another, or to two or more Approved Funds
managed by the same investment advisor or by affiliated investment advisors,
all such concurrent assignments shall be aggregated in determining compliance
with this subsection;

(B) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement;

(C) the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance, together
with a processing and recordation fee of $3,500; provided
that, in the event of concurrent assignments to two or more assignees that are
Affiliates of one another, or by or to two or more Approved Funds managed by
the same investment advisor or by affiliated investment advisors, only one such
fee shall be payable; and

(D) the assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire.

(iii) Subject to acceptance and recording thereof
pursuant to paragraph (b)(iv) of this Section, from and after the
effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment and Acceptance
covering all of the assigning Lender’s rights and obligations under this Agreement,
such Lender shall cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer
by a Lender of rights or obligations under this Agreement that does not comply
with this Section 9.04 shall be treated for purposes of this Agreement as
a sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (c) of this Section.

(iv) The Administrative Agent, acting for this
purpose as an agent of the Borrower, shall maintain at one of its offices a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).
The entries in the Register shall be conclusive, and the Borrower, the Agents,
the Issuing Banks and the Lenders may treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall
be available for inspection by the Borrower, any other Agent, any Issuing Bank
and any Lender at any reasonable time and from time to time upon reasonable
prior notice.

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(v) Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender and an assignee, the
assignee’s completed Administrative Questionnaire (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative
Agent shall accept such Assignment and Acceptance and record the information
contained therein in the Register. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this paragraph.

(vi) By executing and delivering an Assignment
and Acceptance, the assigning Lender thereunder and the assignee thereunder
shall be deemed to confirm to and agree with each other and the other parties
hereto as follows: (A) such assigning Lender warrants that it is the legal
and beneficial owner of the interest being assigned thereby free and clear of
any adverse claim and that its Commitment and the outstanding balances of its
Loans, in each case without giving effect to assignments thereof that have not
become effective, are as set forth in such Assignment and Acceptance; (B) except
as set forth in clause (A) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Senior Loan Document or any other instrument or document
furnished pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of any of the foregoing, or
the financial condition of the Loan Parties or the performance or observance by
the Loan Parties of any of their obligations under this Agreement or under any
other Senior Loan Document or any other instrument or document furnished
pursuant hereto or thereto; (C) each of the assignee and the assignor
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance; (D) such assignee confirms that it has received
a copy of this Agreement, together with copies of any amendments or consents
entered into prior to the date of such Assignment and Acceptance and copies of
the most recent financial statements delivered pursuant to Section 5.01
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance; (E) such assignee will independently and without reliance upon
the Agents, such assigning Lender or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (F) such assignee appoints and authorizes the Agents to take
such action as agents on its behalf and to exercise such powers under this Agreement
and the other Senior Loan Documents as are delegated to them by the terms hereof
and thereof, together with such powers as are reasonably incidental thereto;
and (G) such assignee agrees that it will perform in accordance with their
terms all the obligations that by the terms of this Agreement are required to
be performed by it as a Lender.

(c) (i) Any Lender may, without the consent
of or notice to the Borrower, the Agents, the Issuing Banks or the Swingline
Lender, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (A) such
Lender’s obligations under this Agreement shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the Borrower, the Agents, the
Issuing Banks and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce this  Agreement and to approve
any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to 

 81
 

Section 9.02(b)(i), (ii) or
(iii) that affects such Participant. Subject to paragraph (c)(ii) of
this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.08 as though it were a Lender,
provided such Participant agrees to be subject to Section 2.18(c) as
though it were a Lender.

(ii) A Participant shall not be entitled to
receive any greater payment under Section 2.15 or 2.17 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.17 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the benefit
of the Borrower, to comply with Section 2.17(e) as though it were a
Lender.

(d) Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including, without limitation, any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall
not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

(e) In the case of any Lender that is a fund that
invests in bank loans, such Lender may, without the consent of the Borrower or
the Administrative Agent, assign or pledge all or any portion of its rights
under the Senior Loan Documents, including the Loans and promissory notes or
any other instrument evidencing its rights as a Lender under the Senior Loan
Documents, to any holder of, trustee for, or any other representative of
holders of obligations owed or securities issued by such fund, as security for
such obligations or securities; provided that
any foreclosure or similar action by such trustee or representative shall be subject
to the provisions of this Section 9.04 concerning assignments.

SECTION 9.05.   Survival.   All covenants, agreements,
representations and warranties made by the Loan Parties in the Senior Loan
Documents and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement or any other Senior Loan Document shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Senior Loan Documents and the making
of any Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the Administrative
Agent, any Issuing Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the
expiration or termination of the Letters of Credit and the Commitments or the termination
of this Agreement or any provision hereof.

SECTION 9.06.   Integration; Effectiveness.   This
Agreement, the other Senior Loan Documents and any separate letter agreements
with respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating
to the subject matter hereof. This Agreement shall become effective as provided
in Section 4.01.

SECTION 9.07.   Severability.   Any
provision of this Agreement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, 

 82
 

illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

SECTION 9.08.   Right of Setoff.   If
an Event of Default shall have occurred and be continuing, each Lender and each
of its Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Lender or Affiliate to or for the  credit or the account of the Borrower against
any of and all the obligations of the Borrower now or hereafter existing under
this Agreement held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement and although such obligations
may be unmatured. The rights of each Lender under this Section are in
addition to other rights and remedies (including other rights of setoff) which
such Lender may have.

SECTION 9.09.   Governing Law; Jurisdiction; Consent
to Service of Process.   (a) This Agreement shall be
construed in accordance with and governed by the law of the State of New York.

(b) The Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Senior Loan Document, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Senior Loan Document shall affect any
right that any Agent, the Issuing Bank or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Senior
Loan Document against the Borrower or its properties in the courts of any
jurisdiction.

(c) The Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Senior Loan Document in any court referred to in paragraph (b) of
this Section. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

(d) Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section 9.01.
Nothing in this Agreement or any other Senior Loan Document will affect the
right of any party to this Agreement to serve process in any other manner
permitted by law.

SECTION 9.10.   WAIVER OF JURY TRIAL.   EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER SENIOR
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED
ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 83
 

SECTION 9.11.   Headings.   Article and
Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this
Agreement.

SECTION 9.12.   Confidentiality.   Each
of the Agents, the Issuing Banks and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers,
trustees, employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be informed
of the confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Senior Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the
consent of the Borrower, (h) to any pledgee referred to in Section 9.04(d) or
any direct or indirect contractual counterparty in any Hedging Agreement (or to
any such contractual counterparty’s professional advisor), so long as such
pledgee or contractual counterparty (or such professional advisor) agrees to be
bound by the provisions of this Section 9.12, or (i) to the extent
such Information (i) becomes publicly available other than as a result of
a breach of this Section or (ii) becomes available to any Agent, any
Issuing Bank or any Lender on a nonconfidential basis from a source other than
the Borrower. For the purposes of this Section, “Information”
means all information received from the Borrower relating to the Borrower or
its business, other than any such information that is available to any Agent,
any Issuing Bank or any Lender on a nonconfidential basis prior to disclosure
by the Borrower. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its obligation
to do so if such Person has exercised the same degree of care to maintain the confidentiality
of such Information as such Person would accord to its own confidential information.
Notwithstanding anything in this Agreement or in any other Senior Loan Document
to the contrary, the Borrower and each Lender (and each employee, representative
or other agent of the Borrower) may disclose to any and all persons, without
limitation of any kind, the U.S. tax treatment and U.S. tax structure of the Transactions
and all materials of any kind (including opinions or other tax analyses) that are
provided to the Borrower relating to such U.S. tax treatment and U.S. tax
structure.

SECTION 9.13.   Interest
Rate Limitation.   Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the “Charges”),
shall exceed the maximum lawful rate (the “Maximum Rate”)
which may be contracted for, charged, taken, received or reserved by the Lender
holding such Loan in accordance with applicable law, the rate of interest payable
in respect of such Loan hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan but
were not payable as a result of the operation of this Section shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender.

SECTION 9.14.   Collateral
Trust and Intercreditor Agreement.   Each Lender, each Issuing
Bank and each Agent hereby authorizes each Agent to enter into the Collateral
Trust and Intercreditor Agreement, each other Senior Collateral Document and each
other Interim Collateral Document on its behalf, and agrees that the
Administrative Agent and the Collateral Agent may enforce the rights and
remedies of the Lenders under each Senior Loan Document to the extent provided
in the Collateral Trust 

 84
 

and Intercreditor
Agreement, each other Senior Collateral Document and each other Interim Collateral
Document.

SECTION 9.15.   Cash
Sweep.   (a) On any day on which (i) an Event of Default
exists or (ii) the lesser of (x) the average Revolving Commitments
(after deducting the average total Revolving Exposure) over any 30-day
period and (y) the average Borrowing Base Amount (after deducting the sum
of (1) the average total Revolving Exposure, (2) the average
outstanding Tranche 1 Term Loans and (3) if prior to the Borrowing Base
Date, zero, or if on or after the Borrowing Base Date, the average outstanding
Tranche 2 Term Loans) over any 30-day period, in each case, together with
all amounts then on deposit in the Cash Sweep Cash Collateral Account, is less
than $75,000,000, then the Administrative Agent, upon its determination or upon
request by the Required Lenders, shall immediately be entitled to deliver Cash
Sweep Notices.

(b) During a Cash
Sweep Period, if (i) there is no Event of Default and (ii) the lesser
of (x) the average Revolving Commitments (after deducting the average total
Revolving Exposure) over any 30-day period and (y) the average
Borrowing Base Amount (after deducting the sum of (1) the average total
Revolving Exposure, (2) the average outstanding Tranche 1 Term Loans and (3) if
prior to the Borrowing Base Date, zero, or if on or after the Borrowing Base
Date, the average outstanding Tranche 2 Term Loans) over any 30-day
period, in each case, together with all amounts then on deposit in the Cash
Sweep Cash Collateral Account, is greater than $100,000,000, then the Administrative
Agent shall automatically rescind any Cash Sweep Notice and shall be prohibited
from delivering any other Cash Sweep Notice (unless and until the occurrence of
the events set forth in paragraph (a) of this Section).

(c) The
Administrative Agent reserves the right to send a Cash Sweep Notice on each
occasion of the occurrence of the events set forth in Section 9.15(a).

SECTION 9.16.   Electronic
Communications.   (a) Notwithstanding anything in any
Senior Loan Document to the contrary, the Borrower hereby agrees that it will
use its reasonable best efforts to provide to the Administrative Agent all information,
documents and other materials that it is obligated to furnish to the Administrative
Agent pursuant to the Senior Loan Documents, including, without limitation, all
notices, requests, financial statements, financial and other reports, certificates
and other information materials, but excluding any such communication that (i) relates
to a request for a new, or a conversion of an existing, Borrowing or other extension
of credit (including any election of an interest rate or Interest Period
relating thereto), (ii) relates to the payment of any principal or other
amount due under any Senior Loan Document prior to the scheduled date therefor,
(iii) provides notice of any Default or Event of Default under any Senior
Loan Document or (iv) is required to be delivered to satisfy any condition
set forth in Section 4.01 and/or 4.02 (all such non-excluded communications
being referred to herein collectively as the “Communications”),
by transmitting the Communications in an electronic/soft medium in a format
acceptable to the Administrative Agent to oploanswebadmin@citigroup.com, with a
copy to jeffrey.nitz@citigroup.com. In addition, the Borrower agrees to
continue to provide the Communications to the Administrative Agent in the
manner specified in the Senior Loan Documents, but only to the extent requested
by the Administrative Agent.

(b) The Borrower
further agrees that the Administrative Agent may make the Communications
available to the Lenders by posting the Communications on Intralinks, Fixed
Income Direct or a substantially similar electronic transmission system (each
such system, a “Platform”). The Borrower
acknowledges that the distribution of material through an electronic medium is
not necessarily secure and that there are confidentiality and other risks
associated with such distribution.

(c) EACH PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE”. THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR
COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF ANY PLATFORM, AND EXPRESSLY
DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY
OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY 

 85
 

WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NONINFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER
CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN CONNECTION WITH THE
COMMUNICATIONS OR ANY PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR
ANY OF ITS AFFILIATES OR ANY OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
ADVISORS OR REPRESENTATIVES (COLLECTIVELY, THE “AGENT PARTIES”) HAVE ANY
LIABILITY TO THE BORROWER, ANY OTHER LOAN PARTY, ANY LENDER OR ANY OTHER PERSON
OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR
INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES
(WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE BORROWER’S OR THE ADMINISTRATIVE
AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE
EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE
JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM
SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILFUL MISCONDUCT.

(d) The Administrative
Agent agrees that the receipt of the Communications by it at its e-mail address
set forth in Section 9.01 shall constitute effective delivery of the
Communications to the Administrative Agent for purposes of this Section. Each
Lender agrees that notice to it (as provided in the next sentence) specifying
that the Communications have been posted to a Platform shall constitute effective
delivery of the Communications to such Lender for purposes of this Section. Each
Lender agrees (i) to notify the Administrative Agent in writing (including
by electronic communication) from time to time of such Lender’s e-mail address
to which the foregoing notice may be sent by electronic transmission and (ii) that
the foregoing notice may be sent to such e-mail address.

(e) Nothing in this Section 9.16
shall prejudice the right of the Administrative Agent or any Lender to give any
notice or other communication pursuant to any Senior Loan Document in any other
manner specified in such Senior Loan Document.

SECTION 9.17.   USA
Patriot Act.   Each Lender and each Issuing Bank hereby notifies
the Borrower that pursuant to the requirements of the USA Patriot Act, it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender or Issuing Bank to identify the
Borrower in accordance with its requirements. The Borrower shall promptly,
following a request by the Administrative Agent, any Lender or any Issuing
Bank, provide all documentation and other information that the Administrative
Agent, such Lender or such Issuing Bank reasonably requests in order to comply
with its ongoing obligations under applicable “know your customer” and anti-money
laundering rules and regulations, including the USA Patriot Act.

SECTION 9.18.   Release
of Interim Collateral; Termination of Interim Collateral Documents.   Upon
the occurrence of the Borrowing Base Date, the security interests granted in
the Interim Collateral, and the guarantees made, under the Interim Collateral
Documents shall be automatically released, and the Interim Collateral Documents
shall automatically terminate in accordance with their terms. In connection with
the release of security interests granted in the Interim Collateral, and the
guarantees made, under the Interim Collateral Documents, the Tranche 2 Lenders
hereby authorize the Borrower (or its counsel) to file, register or record all
documents and instruments, including amendments to Uniform Commercial Code
financing statements, required by law, advisable or reasonably requested by the
Borrower, and agree to execute and deliver all further instruments and
documents and take all further action that may be necessary or that the
Borrower may reasonably request in order to effectuate such release, all at the
expense of the Borrower. For the avoidance of doubt, the foregoing does not
authorize the Borrower to take any action that would result in the release of
the security interests granted in the Interim Collateral under the Interim
Collateral Documents prior to the Borrowing Base Date.

 86

Schedule 1.01

Subsidiary
Loan Parties

	
  112 Burleigh Avenue Norfolk,
  LLC

  
	
  1515 West State Street Boise, Idaho, LLC

  
	
  1740 Associates, L.L.C.

  
	
  3581
  Carter Hill Road—Montgomery Corp.

  
	
  4042 Warrensville Center Road—Warrensville
  Ohio, Inc.

  
	
  5277 Associates, Inc.

  
	
  537 Elm Street Corp.

  
	
  5600 Superior Properties, Inc.

  
	
  657-659 Broad St. Corp.

  
	
  764 South Broadway—Geneva,
  Ohio, LLC

  
	
  Ann & Government Streets—Mobile,
  Alabama, LLC

  
	
  Apex Drug Stores, Inc.

  
	
  Broadview and Wallings—Broadview
  Heights Ohio, Inc.

  
	
  Central Avenue and Main Street—Petal,
  MS, LLC

  
	
  Eagle Managed Care Corp.

  
	
  Eighth and Water Streets—Urichsville,
  Ohio, LLC

  
	
  England Street—Asheland Corporation

  
	
  Fairground, L.L.C.

  
	
  GDF, Inc.

  
	
  Gettysburg and Hoover—Dayton,
  Ohio, LLC

  
	
  Harco, Inc.

  
	
  K & B Alabama Corporation

  
	
  K & B Louisiana Corporation

  
	
  K & B Mississippi Corporation

  
	
  K & B Services, Incorporated

  
	
  K & B Tennessee Corporation

  
	
  K & B, Incorporated

  
	
  K & B Texas Corporation

  
	
  Keystone Centers, Inc.

  
	
  Lakehurst and Broadway Corporation

  
	
  Mayfield & Chillicothe
  Roads—Chesterland,
  LLC

  
	
  Munson & Andrews,
  LLC

  
	
  Name Rite, L.L.C.

  
	
  Northline & Dix—Toledo—Southgate,
  LLC

  
	
  Patton Drive and Navy Boulevard Property Corporation

  
	
  Paw Paw Lake Road & Paw Paw
  Avenue—Coloma,
  Michigan, LLC

  
	
  PDS-1 Michigan, Inc.

  
	
  Perry Distributors, Inc.

  
	
  Perry Drug Stores, Inc.

  
	
  Ram-Utica, Inc.

  
	
  RDS Detroit, Inc.

  
	
  Read’s Inc.

  
	
  Rite Aid Drug Palace, Inc.

  
	
  Rite Aid Hdqtrs. Corp.

  
	
  Rite Aid Hdqtrs. Funding, Inc.

  
	
  Rite Aid of Alabama, Inc.

  
	
  Rite Aid of Connecticut, Inc.

  
	
  Rite Aid of Delaware, Inc.

  
	
  Rite Aid of Florida, Inc.

  

 

	
  Rite Aid of Georgia, Inc,

  
	
  Rite Aid of Illinois, Inc.

  
	
  Rite Aid of Indiana Inc.

  
	
  Rite Aid of Kentucky, Inc.

  
	
  Rite Aid of Maine, Inc.

  
	
  Rite Aid of Maryland, Inc.

  
	
  Rite Aid of Massachusetts, Inc.

  
	
  Rite Aid of Michigan, Inc.

  
	
  Rite Aid of New Hampshire, Inc.

  
	
  Rite Aid of New Jersey, Inc.

  
	
  Rite Aid of New York, Inc.

  
	
  Rite Aid of North Carolina, Inc.

  
	
  Rite Aid of Ohio, Inc.

  
	
  Rite Aid of Pennsylvania, Inc.

  
	
  Rite Aid of South Carolina, Inc.

  
	
  Rite Aid of Tennessee, Inc.

  
	
  Rite Aid of Vermont, Inc.

  
	
  Rite Aid of Virginia, Inc.

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

  
	
  Rite Aid of West Virginia, Inc.

  
	
  Rite Aid Realty Corp.

  
	
  Rite Aid Rome Distribution Center, Inc.

  
	
  Rite Aid Services, L.L.C.

  
	
  Rite Aid Transport, Inc.

  
	
  Rite Fund, Inc.

  
	
  Rite Investments Corp.

  
	
  RX Choice, Inc.

  
	
  Seven Mile and Evergreen—Detroit, LLC

  
	
  Silver Springs Road—Baltimore, Maryland/One, LLC

  
	
  Silver Springs Road—Baltimore, Maryland/Two, LLC

  
	
  State & Fortification
  Streets—Jackson, Mississippi,
  LLC

  
	
  State Street and Hill Road—Gerard, Ohio, LLC

  
	
  The Lane Drug Company

  
	
  Thrifty Corporation

  
	
  Thrifty PayLess, Inc.

  
	
  Tyler and Sanders Roads, Birmingham—Alabama, LLC

  
	
  The Jean Coutu Group
  (PJC) USA, Inc.

  
	
  PJC Realty N.E. LLC

  
	
  Brooks Pharmacy, Inc.

  
	
  PJC of Massachusetts, Inc.

  
	
  PJC of Cranston, Inc.

  
	
  PJC of East Providence, Inc.

  
	
  PJC of Vermont Inc.

  
	
  PJC of Rhode Island, Inc.

  
	
  MC Woonsocket, Inc.

  
	
  P.J.C. Distribution, Inc.

  
	
  PJC Lease Holdings, Inc.

  
	
  P.J.C. Realty Co., Inc.

  
	
  PJC Realty MA, Inc.

  
	
  P.J.C. of West Warwick, Inc.

  
	
  JCG Holdings (USA), Inc.

  
	
  Eckerd Corporation

  

 

	
  Genovese Drug Stores, Inc.

  
	
  Thrift Drug, Inc.

  
	
  EDC Licensing, Inc.

  
	
  Eckerd Fleet, Inc.

  
	
  EDC Drug Stores, Inc.

  
	
  Thrift Drug Services, Inc.

  
	
  Maxi Drug, Inc.

  
	
  Maxi Green Inc.

  
	
  Maxi Drug North, Inc.

  
	
  Maxi Drug South, L.P.

  
	
  PJC Special Realty Holdings, Inc.

  
	
  PJC Manchester Realty LLC

  
	
  PJC Dorchester Realty LLC

  
	
  PJC Revere Realty LLC

  
	
  PJC Mansfield Realty LLC

  
	
  PJC Hyde Park Realty LLC

  
	
  PJC Haverhill Realty LLC

  
	
  PJC Peterborough Realty LLC

  
	
  PJC Providence Realty LLC

  
	
  PJC New London Realty LLC

  
	
  PJC East Lyme Realty LLC

  
	
  PJC Hermitage Realty LLC

  
	
  JCG (PJC) USA, LLC

  

 

Schedule
2.01: Commitments

	
  Lender

  	
   

  	
   

  	
   

  	
  Commitment

  	
   

  
	
  Citicorp North America, Inc.

  	
   

  	
  $

  	
  552,500,000

  	
   

  
	
  Bank of America,
  N.A.

  	
   

  	
  $

  	
  552,500,000

  	
   

  
	
  Total:

  	
   

  	
  $

  	
  1,105,000,000

  	
   

  

 

Schedule 3.04

Undisclosed
Liabilities

None.

Schedule 3.05(a)

Properties

None.

Schedule 3.05(c)

Leased
Warehouses and Distribution Centers

	
  Rite Aid Corporation

  	
   

  	
  Harco, Inc.

  	
   

  	
  Cottondale Industrial

  	
   

  	
  10390 Technology Drive

  Cottondale, AL 35453

  	
   

  	
  Tuscaloosa

  
	
  Rite Aid Rome

  Distribution Center, Inc.

  	
   

  	
  Rite Aid of New York,
  Inc.

  	
   

  	
  New York Distribution
  Center (Utica)

  	
   

  	
  2007
  Beechgrove Place

  Utica, NY 13501

  	
   

  	
  Oneida

  
	
  Thrifty Payless, Inc.

  	
   

  	
  Thrifty PayLess, Inc.

  	
   

  	
  Wilsonville Distribution
  Center

  	
   

  	
  29555
  S.W. Boones Ferry
  Road

  Wilsonville, OR 97070

  	
   

  	
  Clackamas

  
	
  Thrifty Payless, Inc.

  	
   

  	
  Thrifty PayLess, Inc.

  	
   

  	
  Woodland Distribution
  Center

  	
   

  	
  280
  N. Pioneer Avenue

  Woodland, CA 95776

  	
   

  	
  Yolo

  
	
  Rite Aid of West Virginia, Inc.

  	
   

  	
  Rite Aid of West Virginia, Inc.

  	
   

  	
  Dunbar, WV

  	
   

  	
  Charles Avenue and Jordan
  Street

  West Dunbar, WV

  	
   

  	
  Kanawa

  
	
  Rite Aid of Maryland,
  Inc.

  	
   

  	
  Rite Aid of Maryland,
  Inc.

  	
   

  	
  Riverside Business Park

  	
   

  	
  1351
  Brass Mill Road

  Belcamp, MD 21017

  	
   

  	
  Harford

  
	
  Eckerd Corporation

  	
   

  	
  Eckerd Corporation

  	
   

  	
  Mid-Atlantic

  	
   

  	
  355
  Walt Sanders
  Memorial Drive

  Shenandoah, GA 30265

  	
   

  	
  Coweta

  
	
  Eckerd Corporation

  	
   

  	
  Eckerd Corporation

  	
   

  	
  Mid-Atlantic

  	
   

  	
  4017
  Chesapeake Drive

  Charlotte, NC 28216

  	
   

  	
  Mecklenburg

  
	
  Eckerd Corporation

  	
   

  	
  Eckerd Corporation

  	
   

  	
  Northeast

  	
   

  	
  Geoffrey Road and Kresge
  Road

  Fairless Hills, PA 19030-4317

  	
   

  	
  Bucks

  

 

Schedule 3.06(a)

Litigation

We are subject from time to time to lawsuits and
governmental investigations arising in the ordinary course of business,
including employment related lawsuits arising form alleged violations of
certain State and Federal laws. Some of these suits purport to have been
determined to be class or collective actions and/or seek substantial damages.
In the opinion of our management, these matters are adequately covered by
insurance or, if not so covered, are without merit or are of such nature or
involve amounts that would not have a material adverse effect on our financial
condition, results of operations or cash flows if decided adversely.

Schedule 3.06(b)

Environmental
Matters

None.

Schedule 3.07

Compliance with
Laws

None.

Schedule 3.09

Taxes

None.

Schedule 3.12

Subsidiaries

	
   Entity Name

   	
    

   	
    

   	
    

   	
   Borrower Ownership Interest

   (direct or indirect)

   	
    

   	
   Subsidiary

   Loan Party?

   	
    

   
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  112 Burleigh
  Avenue Norfolk, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  1515 West State Street
  Boise, Idaho, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  1740 Associates, L.L.C.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  3581 Carter Hill Road—Montgomery Corp.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  4042 Warrensville Center
  Road—Warrensville Ohio, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  5277
  Associates, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  537 Elm Street Corp.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  5600 Superior Properties, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  657-659 Broad
  St. Corp.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  764 South
  Broadway—Geneva, Ohio, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  912 Elmwood
  Avenue—Buffalo, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Ann & Government
  Streets—Mobile, Alabama, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Apex Drug
  Stores, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Broadview and Wallings—Broadview
  Heights Ohio, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Central Avenue and Main
  Street—Petal, MS, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Drug Palace, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Eagle Managed Care Corp.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  East Stone Drive and
  Bloomingdale Pike—Kingsport, Tennessee, LLC        

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Eighth and Water
  Streets—Urichsville, Ohio, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  England Street—Asheland
  Corporation

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Euclid and Wilder
  Roads—Bay City, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Fairground, L.L.C.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Fiona One Corp.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  GDF, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Gettysburg and
  Germantown, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Gettysburg and Hoover—Dayton,
  Ohio, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Grand River & Fenkell, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Harco, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  K & B
  Alabama Corporation

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  K & B
  Louisiana Corporation

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  K & B
  Mississippi Corporation

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  K & B
  Services, Incorporated

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  K & B
  Tennessee Corporation

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  K & B, Incorporated

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  K&B Texas
  Corporation

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Keystone
  Centers, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Lakehurst and Broadway
  Corporation

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Louisville
  Avenue & North
  18th Street—Monroe, Louisiana LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Main and McPherson—Clyde,
  LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Mayfield & Chillicothe
  Roads—Chesterland, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Munson & Andrews,
  LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Name Rite, L.L.C.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  

 1
 

 

	
  Northline & Dix—Toledo—Southgate,
  LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Patton Drive and Navy
  Boulevard Property Corporation

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Paw Paw Lake
  Road & Paw Paw Avenue—Coloma, Michigan, LLC 

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PDS-1
  Michigan, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Perry
  Distributors, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Perry Drug
  Stores, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  RA 5—Points, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  RA Indian River/Kempsville, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Ram-Utica, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  RDS Detroit, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Read’s Inc.

  	
   

  	
   

  	
  99.9

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Richfield Road—Flint,
  Michigan, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Richmond Road and
  Monticello Boulevard—Richmond Heights, Ohio, LLC  

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Rite Aid Drug
  Palace, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid Funding I

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Rite Aid Funding II

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Rite Aid Hdqtrs. Corp.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid Hdqtrs.
  Funding, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid Lease
  Management Company

  	
   

  	
   

  	
  84

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Rite Aid of
  Alabama, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of
  Connecticut, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of
  Delaware, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of
  Florida, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of Georgia,
  Inc,

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid Health
  Solutions, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Rite Aid of
  Illinois, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of Indiana Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of
  Kentucky, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of
  Maine, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of
  Maryland, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of
  Massachusetts, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of
  Michigan, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of New
  Hampshire, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of New
  Jersey, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of New
  York, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of North
  Carolina, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of
  Ohio, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of
  Pennsylvania, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of South
  Carolina, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of
  Tennessee, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of
  Vermont, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of
  Virginia, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

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

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid of West
  Virginia, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid Realty Corp.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid Rome
  Distribution Center, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  

 2
 

 

	
  Rite Aid Services, L.L.C.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Aid
  Transport, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Fund, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Investments Corp.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Rite Investments Corp.,
  LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Route 1 & Hood Road—Fredericksburg, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Route 202 at Route 124
  Jaffrey—New Hampshire, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Rx Choice, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  RX USA, Inc.

  	
   

  	
   

  	
  80

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Seven Mile and
  Evergreen—Detroit, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Silver Springs Road—Baltimore,
  Maryland/One, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Silver Springs Road—Baltimore,
  Maryland/Two, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  State & Fortification
  Streets—Jackson, Mississippi, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  State Street and Hill
  Road—Gerard, Ohio, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  The Lane Drug Company

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  39/41
  Hightstown Road, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Thrifty Corporation

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Thrifty
  PayLess, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Tyler and Sanders Roads,
  Birmingham—Alabama, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Brooks
  Pharmacy, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Eckerd Corporation

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  EDC Licensing, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Genovese Drug
  Stores, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  JCG Holdings
  (USA), Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Maxi Drug
  North, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Maxi Drug, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  P.J.C. Distribution, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  P.J.C. Realty
  Co., Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC Lease
  Holdings, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC Special Realty
  Holdings, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  The Jean Coutu Group
  (PJC) USA, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Thrift Drug
  Services, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Thrift Drug, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Eckerd Fleet, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC of
  Massachusetts, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC Realty MA, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  EDC Drug
  Stores, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  MC Woonsocket, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC of
  Cranston, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC of East
  Providence, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC of Rhode
  Island, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  P.J.C. of West
  Warwick, Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  Maxi Green Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC of Vermont Inc.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  JCG (PJC) USA, LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC Dorchester Realty
  LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC East Lyme Realty LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC Haverhill Realty LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  

 3
 

 

	
  PJC Hermitage Realty LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC Hyde Park Realty LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC Manchester Realty LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC Mansfield Realty LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC New London Realty
  LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC Peterborough Realty
  LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC Providence Realty
  LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC Realty N.E., LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC Revere Realty LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  
	
  PJC Peterborough Realty
  I1 LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  PJC Essex Realty LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  PJC Norwich Realty LLC

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  N

  	
   

  	
   

  
	
  Maxi Drug South, L.P.

  	
   

  	
   

  	
  100

  	
  %

  	
   

  	
   

  	
  Y

  	
   

  	
   

  

 

 4

Schedule 3.13

SCHEDULE OF CASUALTY-PROPERTY INSURANCE

RITE AID CORPORATION

May 17, 2007—Policy periods ending on 6/1/07 will be renewed

	
   

   	
    

   	
   COVERAGE

   	
    

   	
   POLICY #

   	
    

   	
   CARRIER

   	
    

   	
   BROKER

   	
    

   	
   AMOUNT OF LIMIT

   	
    

   	
   POLICY PERIOD

   	
    

   	
   ANNUAL

   PREM AND/OR RATE

   
	
  1

  	
   

  	
  AIRCRAFT

  	
   

  	
  GM 3999738-03

  	
   

  	
  ILLINOIS

  	
   

  	
  EH&D

  	
   

  	
  $200.0 MILLION
  LIABILITY

  	
   

  	
  10/30/06-10/30/07

  	
   

  	
  $172,882

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  NATIONAL

  	
   

  	
   

  	
   

  	
  $50.0 MILLION WAR
  RISK

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  INSURANCE

  	
   

  	
   

  	
   

  	
  3rd PARTY—NON
  PASSENGER

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  COMPANY

  	
   

  	
   

  	
   

  	
  $25.0
  THOUSAND/PERSON—MED PAY

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $250.0 THOUSAND
  ADMITTED LIA.

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ALL RISK PHYSICAL
  DAMAGE

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  ALL RISK GROUND AND FLIGHT

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  NO DEDUCTIBLE

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  AUTOMOBILE

  	
   

  	
  TCZJCAP120D8153TIL07

  	
   

  	
  TRAVELERS

  	
   

  	
  AON

  	
   

  	
  $5.0
  MILLION CSL

  	
   

  	
  01/01/07-01/01/08

  	
   

  	
  $766,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  NO COLLISION OR
  COMP

  	
   

  	
   

  	
   

  	
  $250,000
  DEDUCTIBLE

  
	
  3

  	
   

  	
  OCEAN MARINE

  	
   

  	
  NO1208548
  002

  	
   

  	
  Indemnity

  	
   

  	
  AON

  	
   

  	
  $4.0
  MILLION/VESSEL

  	
   

  	
  06/01/07-06/01/08

  	
   

  	
  $50,400

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Insurance

  	
   

  	
   

  	
   

  	
  $400.0 THOUSAND ON
  DECK

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Company of

  	
   

  	
   

  	
   

  	
  $4.0 MILLION PER
  AIRCRAFT

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  North America

  	
   

  	
   

  	
   

  	
  $50.0 THOUSAND
  MAIL OR PARCEL POST

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  3D POLICY

  	
   

  	
  429CP0500

  	
   

  	
  St.
  Paul Fire

  	
   

  	
  MARSH

  	
   

  	
  LIMIT:
  $10.0 MILLION

  	
   

  	
  11/01/06-11/01/07

  	
   

  	
  $90,000

  
	
   

  	
   

  	
  (CRIME)

  	
   

  	
   

  	
   

  	
  & Marine

  	
   

  	
   

  	
   

  	
  DEDUCTIBLE: $500.0
  THOUSAND

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  D&O

  	
   

  	
  713-20-56

  	
   

  	
  AIG

  	
   

  	
  MARSH

  	
   

  	
  $15.0
  MILLION

  	
   

  	
  03/31/07-03/31/08

  	
   

  	
  $1,375,000

  
	
  

  	
   

  	
  INCLUDES

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $2.0 MILLION
  DEDUCTIBLE

  	
   

  	
   

  	
   

  	
  (Includes TRIA)

  
	
  

  	
   

  	
  BROOKS/ECKERD

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  D&O EXCESS

  	
   

  	
  EC09001183

  	
   

  	
  TRAVELERS

  	
   

  	
  MARSH

  	
   

  	
  $15.0 MILLION

  	
   

  	
  03/31/07-03/31/08

  	
   

  	
  ($440,000

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  EXCESS OF $15.0
  million

  	
   

  	
   

  	
   

  	
  Included above)

  
	
  

  	
   

  	
  D&O EXCESS

  	
   

  	
  DOC9035115-00

  	
   

  	
  ZURICH

  	
   

  	
  MARSH

  	
   

  	
  $10.0 MILLION

  	
   

  	
  03/31/07-03/31/08

  	
   

  	
  ($220,000

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  EXCESS OF $30.0
  MILLION

  	
   

  	
   

  	
   

  	
  Included above)

  
	
   

  	
   

  	
  D&O EXCESS

  	
   

  	
  COO7162/002

  	
   

  	
  AWAC

  	
   

  	
  MARSH

  	
   

  	
  $10.0 MILLION

  	
   

  	
  03/31/07-03/31/08

  	
   

  	
  ($165,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  EXCESS OF
  $40.0 MILLION

  	
   

  	
   

  	
   

  	
  Included above)

  
	
  

  	
   

  	
  D&O EXCESS

  	
   

  	
  ELU97350-07

  	
   

  	
  XL*

  	
   

  	
  MARSH

  	
   

  	
  $15.0 MILLION

  	
   

  	
  03/31/07-03/31/08

  	
   

  	
  ($180,000

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  EXCESS of $50.0
  MILLION

  	
   

  	
   

  	
   

  	
  Included above)

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (*SIDE A EXCESS
  COVERAGE)

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  D&O EXCESS

  	
   

  	
  713-44-92

  	
   

  	
  AIG*

  	
   

  	
  MARSH

  	
   

  	
  $10.0 MILLION

  	
   

  	
  03/31/07-03/31/08

  	
   

  	
  ($110,000

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  EXCESS of $65.0
  MILLION

  	
   

  	
   

  	
   

  	
  Included above)

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (*SIDE OF EXCESS
  COVERAGE)

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  Executive Risk

  	
   

  	
  A07SC2645000

  	
   

  	
  GREAT

  	
   

  	
  AON

  	
   

  	
  $5.0
  MILLION

  	
   

  	
  03/19/07-03/19/10

  	
   

  	
  $20,075.00

  
	
   

  	
   

  	
  (Kidnap/Ransom/

  	
   

  	
   

  	
   

  	
  AMERICAN

  	
   

  	
   

  	
   

  	
  (EACH LOSS)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Extortion)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  FIDUCIARY

  	
   

  	
  EC09001185

  	
   

  	
  TRAVELERS

  	
   

  	
  MARSH

  	
   

  	
  $5.0 MILLION

  	
   

  	
  03/31/07-03/31/08

  	
   

  	
  $52,500

  
	
  

  	
   

  	
  LIABILITY

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $250.0 THOUSAND
  DEDUCTIBLE

  	
   

  	
   

  	
   

  	
  (Includes TRIA)

  
	
  7A

  	
   

  	
  Excess

  	
   

  	
  U706-70004

  	
   

  	
  U.S.

  	
   

  	
  EH&D

  	
   

  	
  $5.0 MILLION

  	
   

  	
  03/03/06-03/31/07

  	
   

  	
  $42,735

  
	
   

  	
   

  	
  Fiduciary

  	
   

  	
   

  	
   

  	
  SPECIALTY

  	
   

  	
   

  	
   

  	
  EXCESS OF $5.0 MILLION

  	
   

  	
   

  	
   

  	
   

  

 1
 

 

	
  8

  	
   

  	
  ALL RISKS

  	
   

  	
  875 5096

  	
   

  	
  Lexington

  	
   

  	
  AON

  	
   

  	
  PRIMARY $5MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $2,800,000

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  Insurance Co

  	
   

  	
   

  	
   

  	
  100.0%

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $250,000 / $500,000
  DEDUCTIBLE

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  XPP5346960-01

  	
   

  	
  Steadfast

  	
   

  	
  AON

  	
   

  	
  $70MM x $30MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $361,111.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  Insurance Co

  	
   

  	
   

  	
   

  	
  10.0%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  875 5093

  	
   

  	
  Lexington

  	
   

  	
  AON

  	
   

  	
  $20MM x $30MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $1,031,250.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  Insurance Co

  	
   

  	
   

  	
   

  	
  37.5%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  DPB00524A

  	
   

  	
  Everest

  	
   

  	
  AON

  	
   

  	
  $20MM x $30MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $175,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  Reinsurance

  	
   

  	
   

  	
   

  	
  8.75%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (Bermuda) Ltd

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  CRXD 3610949a

  	
   

  	
  ACE American

  	
   

  	
  AON

  	
   

  	
  $20MM x $30MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $385,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  Insurance Co

  	
   

  	
   

  	
   

  	
  17.50%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  WB0600563

  	
   

  	
  Lloyd’s

  	
   

  	
  AON

  	
   

  	
  $20MM x $30MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $370,588.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  17.50%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  78-A3-XP-00000061-00

  	
   

  	
  Princeton

  	
   

  	
  AON

  	
   

  	
  $25MM x $50MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $75,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  E & S Co

  	
   

  	
   

  	
   

  	
  5.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  MAN2X70782

  	
   

  	
  Montpelier

  	
   

  	
  AON

  	
   

  	
  $25MM x $50MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $630,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  Reinsurance

  	
   

  	
   

  	
   

  	
  20.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Ltd

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  WB0600567

  	
   

  	
  Hannover Re

  	
   

  	
  AON

  	
   

  	
  $25MM x $50MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $75,294.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  4.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  PDII46450211

  	
   

  	
  Lancashire

  	
   

  	
  AON

  	
   

  	
  $25MM x $50MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $250,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  Insurance Co

  	
   

  	
   

  	
   

  	
  10.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Ltd

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  WB0600565

  	
   

  	
  Lloyd’s

  	
   

  	
  AON

  	
   

  	
  $25MM x $50MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $691,765.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  24.50%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  GEP1617

  	
   

  	
  Lloyd’s (GEP)

  	
   

  	
  AON

  	
   

  	
  $50MM x $50MM

  	
   

  	
  06/01/06-6/01/07

  	
   

  	
  $125,000.00

  
	
  

  	
   

  	
  PROPERY

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  5.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  78-A3-XP-00000062-00

  	
   

  	
  Princeton

  	
   

  	
  AON

  	
   

  	
  $25MM x $75MM

  	
   

  	
  06/01/06-6/01/07

  	
   

  	
  $60,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  E & S Co

  	
   

  	
   

  	
   

  	
  5.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  ESP001594900

  	
   

  	
  Arch

  	
   

  	
  AON

  	
   

  	
  $25MM x $75MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $70,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  Specialty

  	
   

  	
   

  	
   

  	
  4.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Insurance Co

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  12508-1302-PRMAN-

  	
   

  	
  Max Re Ltd

  	
   

  	
  AON

  	
   

  	
  $25MM x $75MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $250,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
  2006

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  20.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  LHD347355

  	
   

  	
  Landmark

  	
   

  	
  AON

  	
   

  	
  $25MM x $75MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $112,500.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  American

  	
   

  	
   

  	
   

  	
  6.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  RMP288602087

  	
   

  	
  Continental

  	
   

  	
  AON

  	
   

  	
  $25MM x $75MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $300,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  Casualty Co

  	
   

  	
   

  	
   

  	
  20.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  WB0600564

  	
   

  	
  Lloyd’s

  	
   

  	
  AON

  	
   

  	
  $25MM x $75MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $529,412.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  30.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  XPP5346960-01

  	
   

  	
  Steadfast

  	
   

  	
  AON

  	
   

  	
  $100MM x $100MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $66,667.90

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  Insurance Co

  	
   

  	
   

  	
   

  	
  20.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  78-A3-XP00000063-00

  	
   

  	
  Princeton

  	
   

  	
  AON

  	
   

  	
  $100MM x $100MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $60,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  E & S Co

  	
   

  	
   

  	
   

  	
  15.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  GEP1617

  	
   

  	
  Lloyd’s (GEP)

  	
   

  	
  AON

  	
   

  	
  $100MM x $100MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $12,500.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  2.50%

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ALL RISKS

  	
   

  	
  WB0600566

  	
   

  	
  Lloyd’s

  	
   

  	
  AON

  	
   

  	
  $400MM x $100MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $80,000.00

  
	
   

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  10.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  WB0600583

  	
   

  	
  Hannover Re

  	
   

  	
  AON

  	
   

  	
  $400MM x $100MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $40,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  5.00%

  	
   

  	
   

  	
   

  	
   

  

 2
 

 

	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  WB0600583

  	
   

  	
  Swiss Re

  	
   

  	
  AON

  	
   

  	
  $400MM x $100MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $100,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  12.50%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  RMP 288602087

  	
   

  	
  Continental

  	
   

  	
  AON

  	
   

  	
  $400MM x $100MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $90,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  Casualty Co

  	
   

  	
   

  	
   

  	
  11.25%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  OGP9253870

  	
   

  	
  Great

  	
   

  	
  AON

  	
   

  	
  $400MM x $100MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $10,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  American

  	
   

  	
   

  	
   

  	
  1.25%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Insurance Co

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  US6333

  	
   

  	
  Commonwealth

  	
   

  	
  AON

  	
   

  	
  $400MM x $100MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $40,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  Insurance Co

  	
   

  	
   

  	
   

  	
  5.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  PDII46450211

  	
   

  	
  Lancashire

  	
   

  	
  AON

  	
   

  	
  $400MM x $100MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $140,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  Insurance Co

  	
   

  	
   

  	
   

  	
  17.50%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Ltd

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  XPP5346960-D1

  	
   

  	
  Steadfast

  	
   

  	
  AON

  	
   

  	
  $300MM x $200MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $77,778.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  Insurance Co

  	
   

  	
   

  	
   

  	
  20.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  78-A3-XP-00000064-00

  	
   

  	
  Princeton

  	
   

  	
  AON

  	
   

  	
  $300MM x $200MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $140,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  E & S Co

  	
   

  	
   

  	
   

  	
  15.00%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  ALL RISKS

  	
   

  	
  ESP001594100

  	
   

  	
  Arch

  	
   

  	
  AON

  	
   

  	
  $300MM x $200MM

  	
   

  	
  06/01/06-06/01/07

  	
   

  	
  $15,000.00

  
	
  

  	
   

  	
  PROPERTY

  	
   

  	
   

  	
   

  	
  Specialty

  	
   

  	
   

  	
   

  	
  2.50%

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Insurance Co

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
  GENERAL

  LIABILITY INC.

  DRUGGIST

  LIABILITY

  	
   

  	
  XSLG21734822

  	
   

  	
  ACE AMERICAN

  INSURANCE CO.

  	
   

  	
  MARSH

  	
   

  	
  $4.0 MIL/$15.0
  MIL, INCLUDING A

  $1.0 MIL/$1.0 MIL CORRIDOR

  DEDUCTIBLE EXCESS $2.0 MIL SELF

  INSURED RETENTION

  	
   

  	
  01/01/07-01/01/08

  	
   

  	
  $3,278,283

  
	
  9A

  	
   

  	
  MICHIGAN LIQUOR

  	
   

  	
  HD0G21735000

  	
   

  	
  ACE AMERICAN

  	
   

  	
  MARSH

  	
   

  	
  $50,000/$50,000
  INCLUDING A

  	
   

  	
  01/01/07-01/01/08

  	
   

  	
  $5,000

  
	
  

  	
   

  	
  LIABILITY

  	
   

  	
   

  	
   

  	
  INSURANCE CO.

  	
   

  	
   

  	
   

  	
  $50,000 DEDUCTIBLE

  	
   

  	
   

  	
   

  	
   

  
	
  10

  	
   

  	
  UMBRELLA

  	
   

  	
  9834593

  	
   

  	
  NATIONAL

  	
   

  	
  MARSH

  	
   

  	
  $50.0 MIL/$50.0
  MIL EXCESS ACE’S

  	
   

  	
  01/01/07-01/01/08

  	
   

  	
  $2,850,000

  
	
   

  	
   

  	
  LIABILITY (LEAD

  	
   

  	
   

  	
   

  	
  UNION FIRE

  	
   

  	
   

  	
   

  	
  PRIMARY

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LAYER)

  	
   

  	
   

  	
   

  	
  INSURANCE

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UMBRELLA

  	
   

  	
  0800009494L107A

  	
   

  	
  XL INSURANCE

  	
   

  	
  MARSH

  	
   

  	
  $50.0 MIL/$50.0 MIL
  EXCESS AIG’S

  	
   

  	
  01/01/07-01/01/08

  	
   

  	
  $370,000

  
	
   

  	
   

  	
  LIABILITY

  	
   

  	
   

  	
   

  	
  AMERICA, INC.

  	
   

  	
   

  	
   

  	
  UMBRELLA

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2ND LAYER)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UMBRELLA

  	
   

  	
  XCPG23575085

  	
   

  	
  ACE AMERICAN

  	
   

  	
  MARSH

  	
   

  	
  $25.0 MIL/$25.0 MIL
  EXCESS XL’S

  	
   

  	
  01/01/07-01/01/08

  	
   

  	
  $145,637

  
	
   

  	
   

  	
  LIABILITY

  	
   

  	
   

  	
   

  	
  INSURANCE CO.

  	
   

  	
   

  	
   

  	
  UMBRELLA

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3RD LAYER)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UMBRELLA

  	
   

  	
  LQ1B7198643017

  	
   

  	
  LIBERTY

  	
   

  	
  MARSH

  	
   

  	
  $25.0 MIL/$25.0 MIL
  EXCESS ACE’S

  	
   

  	
  01/01/07-01/01/08

  	
   

  	
  $65,000

  
	
   

  	
   

  	
  LIABILITY

  	
   

  	
   

  	
   

  	
  INSURANCE

  	
   

  	
   

  	
   

  	
  UMBRELLA

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (4TH LAYER)

  	
   

  	
   

  	
   

  	
  UNDERWRITERS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  INC.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
  PUNITIVE 

  	
   

  	
  5247793

  	
   

  	
  STARR EXCESS

  	
   

  	
  MARSH/

  	
   

  	
  $50.0 MIL
  “WRAPPING AROUND” AIG’S

  	
   

  	
  01/01/07-01/01/08

  	
   

  	
  $300,000

  
	
  

  	
   

  	
  DAMAGES ONLY

  	
   

  	
   

  	
   

  	
  INTERNATIONAL

  	
   

  	
  BERMUDA

  	
   

  	
  LEAD UMBRELLA PROGRAM

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  WRAP-AROUND

  	
   

  	
   

  	
   

  	
  LIABILITY

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  POLICY

  	
   

  	
   

  	
   

  	
  INS. CO. LTD.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11A

  	
   

  	
  PUNITIVE

  	
   

  	
  IE00013373LI07A

  	
   

  	
  XL EUROPE

  	
   

  	
  MARSH /

  	
   

  	
  $50.0 MIL/$50.0 MIL
  “WRAPPING

  	
   

  	
  01/01/07-01/01/08

  	
   

  	
  $54,500

  
	
   

  	
   

  	
  DAMAGES WRAP -

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  BERMUDA

  	
   

  	
  AROUND” XL’S UMBRELLA
  PROGRAM

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AROUND POLICY

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 3
 

 

	
  12

  	
   

  	
  GENERAL

  	
   

  	
  PRIMARY:

  	
   

  	
  LIBERTY

  	
   

  	
  ALLIANT

  	
   

  	
  $5.0 MIL

  	
   

  	
  03/14/07-03/14/08

  	
   

  	
  $126,705

  
	
  

  	
   

  	
  LIABILITY

  	
   

  	
  EGL-BO-1$4126-016

  	
   

  	
  SURPLUS

  	
   

  	
  INSURANCE

  	
   

  	
  $15,000.00 SIR/OCCURRENCE

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  STRIP MALLS—

  	
   

  	
   

  	
   

  	
  INSURANCE

  	
   

  	
  SERVICES

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  “COMMON AREAS”

  	
   

  	
   

  	
   

  	
  CORP.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
  EXCESS:

  	
   

  	
  ST. PAUL

  	
   

  	
  ALLIANT

  	
   

  	
  $5.0 MIL

  	
   

  	
  03/14/07-03/14/08

  	
   

  	
  $22,786

  
	
  

  	
   

  	
   

  	
   

  	
  QI09100320

  	
   

  	
  TRAVELERS

  	
   

  	
  INSURANCE

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  SERVICES

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
   

  	
  N.Y. STATE DBL

  	
   

  	
  BINDER

  	
   

  	
  AM. GEN/AIG

  	
   

  	
  EH&D

  	
   

  	
  STATUTORY

  	
   

  	
  02/1/03 - OPEN

  	
   

  	
  .60/$100 PAYROLL

  
	
  14

  	
   

  	
  WORKMAN’S COMP

  	
   

  	
  TC2JUB-120D2216-07
  (ALL

  	
   

  	
  TRAVELERS

  	
   

  	
  A.J.

  	
   

  	
  STATUTORY W.C.

  	
   

  	
  01/01/07-01/01/08

  	
   

  	
  $38,575,000

  
	
  

  	
   

  	
  EXCLUDES WV

  	
   

  	
  OTHER STATES) TRJUB-

  	
   

  	
   

  	
   

  	
  GALLAGHER

  	
   

  	
  $2.0 MILLION E.L.

  	
   

  	
   

  	
   

  	
  INCLUDES $31.0

  
	
  

  	
   

  	
   

  	
   

  	
  121D0449-07 (AZ & MA)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $500,000 DEDUCTIBLE

  	
   

  	
   

  	
   

  	
  MILLION LOSS FUND

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  DEPOSIT

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  INCLUDED ABOVE

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14A

  	
   

  	
  EXCESS WORKERS

  	
   

  	
  TWXJ-UB-120D622-7-07

  	
   

  	
  TRAVELERS

  	
   

  	
  A.J.

  	
   

  	
  LIMIT-STATUTORY-EXCESS
  WC

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (OH, OR & WA)

  	
   

  	
  (OH, OR, WA)

  	
   

  	
   

  	
   

  	
  GALLAGHER

  	
   

  	
  RETAINED LIMIT $500,000

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  LIMIT-$2.0 MILLION
  EXCESS

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  EMPLOYERS LIABILITY

  	
   

  	
   

  	
   

  	
   

  
	
  14B

  	
   

  	
  EXCESS WORKERS

  	
   

  	
  WC10031180-03

  	
   

  	
  BREICKSTREET

  	
   

  	
  A.J.

  	
   

  	
  STATUTORY W.C.

  	
   

  	
  01/1/07-01/1/08

  	
   

  	
  $291,068.00

  
	
   

  	
   

  	
  (NV)

  	
   

  	
   

  	
   

  	
  MUTUAL

  	
   

  	
  GALLAGHER

  	
   

  	
  $250,000 DEDUCTIBLE

  	
   

  	
   

  	
   

  	
   

  
	
  15

  	
   

  	
  BONDS

  	
   

  	
  VARIOUS

  	
   

  	
  VARIOUS

  	
   

  	
  AON

  	
   

  	
  VARIOUS

  	
   

  	
  VARIOUS

  	
   

  	
  VARIOUS

  
	
  16

  	
   

  	
  STORAGE TANK

  	
   

  	
  7514294

  	
   

  	
  COMMERCE &

  	
   

  	
  MARSH

  	
   

  	
  $5.0 MILLION

  	
   

  	
  09/1/06-09/1/07

  	
   

  	
  $20,233.76

  
	
   

  	
   

  	
  THIRD-PARTY

  	
   

  	
   

  	
   

  	
  INDUSTRY

  	
   

  	
   

  	
   

  	
  $25,000 DEDUCTIBLE

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LIABILITY

  	
   

  	
   

  	
   

  	
  INSURANCE

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CORRECTIVE

  	
   

  	
   

  	
   

  	
  COMPANY

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ACTION &

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CLEANUP

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17

  	
   

  	
  PRIVACY

  	
   

  	
  HO TMT 2309903.7

  	
   

  	
  LLOYD’S/

  	
   

  	
  ALLIANT

  	
   

  	
  $10.0 MILLION

  	
   

  	
  02/15/07-02/15/08

  	
   

  	
  $225,000.00

  
	
  

  	
   

  	
  PROTECTION

  	
   

  	
   

  	
   

  	
  HISCOX

  	
   

  	
  INS.

  	
   

  	
  $1.0 MILLION DEDUCTIBLE

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  (CYBER

  	
   

  	
   

  	
   

  	
  SYNDICATES

  	
   

  	
  SERVICES

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  LIABILITY)

  	
   

  	
   

  	
   

  	
  LTD.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 4

Schedule 3.14

Labor

None.

Schedule 5.11

Excluded
Subsidiaries

912 Elmwood Avenue—Buffalo,
LLC

Drug Palace, Inc.

East
Stone Drive and Bloomingdale Pike—Kingsport, Tennessee, LLC

Euclid
and Wilder Roads—Bay City, LLC

Fiona
One Corp.

39/41 Hightstown Road, LLC

Gettysburg
and Germantown, LLC

Grand
River & Fenkell,
LLC

Louisville
Avenue & North
18th Street—Monroe,
Louisiana LLC

Main
and McPherson—Clyde, LLC

RA  5-Points,
LLC

RA  Indian
River/Kempsville, LLC

Richfield
Road—Flint, Michigan, LLC

Richmond
Road and Monticello Boulevard—Richmond Heights, Ohio, LLC

Rite
Aid Funding I*

Rite
Aid Funding II*

Rite
Aid Health Solutions, LLC**

Rite
Aid Lease Management Company

Rite
Investments Corp., LLC

Route
1 & Hood
Road—Fredericksburg,
LLC

Route
202 at Route 124 Jaffrey-New Hampshire, LLCR

Rx  USA, Inc.

PJC
Peterborough Realty II LLC

PJC
Essex Realty LLC

PJC Norwich Realty LLC

*                    Entities
that are part of the Securitization.

**             Entity
is Pharmacy Benefit Manager

Schedule 6.01(a)(xii)

Existing lndebtedness

	
   

  	
   

  	
  As of 6/1/07

  	
   

  
	
   

  	
   

  	
  (US Dollars)

  	
   

  
	
  IDB—Pontiac Whse

  	
   

  	
  478,000

  	
   

  
	
  Rome Note Payable

  	
   

  	
  44,012

  	
   

  
	
  M.H. Parsons and Sons Lumber Co.

  	
   

  	
  12,000

  	
   

  
	
  Emerson’s
  Pharmacy

  	
   

  	
  57,158

  	
   

  
	
  PL Properties
  (TPI related)

  	
   

  	
  54,441

  	
   

  
	
  Tandy Corporation

  	
   

  	
  581,782

  	
   

  
	
  Misc. TPI related
  debt

  	
   

  	
  23,540

  	
   

  
	
  Total Existing lndebtedness excluding Capital Lease
  Obligations

  	
   

  	
  1,250,933

  	
   

  
	
  Capital Lease Obligations—Rite Aid

  	
   

  	
  188,101,000

  	
   

  
	
  Capital Lease
  Obligations—Brooks
  Eckerd

  	
   

  	
  22,918,418

  	
   

  
	
  Total Capital Lease Obligations

  	
   

  	
  211,019,418

  	
   

  
	
  Total Existing
  lndebtedness including Capital Lease Obligations

  	
   

  	
  212,270,351

  	
   

  

 

Schedule 6.01(b)

Equity
Issuances

1.   Rite
Aid Lease Management Company, 213,000 shares of Class A, Cumulative
Preferred Stock.

Schedule 6.02(xi)

Liens

1.                 Liens in favor of
GNC with respect to certain inventory, goods, merchandise and other personal
property which may now or hereafter be placed in the possession of certain Subsidiaries
by GNC, or any of its successors, parents, or affiliates, which are held for sale,
nor or hereafter in the possession, custody or control of such Subsidiary,
wherever located, which are manufactured by GNC, or any of its successors,
parent, or affiliates, or carrying the trade name or trade style of GNC, or any
of its successors, parents or affiliates and all proceeds from the sale or
other disposition of the foregoing.

2.                 Mortgages as set
forth in chart following.

Mortgages

(Schedule 6.02(xi)
continued)

	
  #

  	
   

  	
  Store

  	
   

  	
  City, State

  (County)

  	
   

  	
  Title and

  Date of

  Document

  	
   

  	
  Mortgagor

  	
   

  	
  Mortgagee

  	
   

  	
  Mortgage

  Amount

  	
   

  	
  Payment Term 

  (Payment Amount)

  	
   

  	
  Comments

  
	
  1.

  	
   

  	
  507

  	
   

  	
  Pottsville, PS

  

  (Schuylkill)

  	
   

  	
  Mortgage dated 9/22/94

  	
   

  	
  Rite Aid of Pennsylvania, Inc.

  	
   

  	
  Bima Inc.

  	
   

  	
  $600,000

  	
   

  	
  Commencing October 22, 1994.

  

  Final payment date: September 22, 2004

  

  ($6,661.23 per year)

  	
   

  	
   

  
	
  2.

  	
   

  	
  1768

  	
   

  	
  Northampton, PA

  

  (Northampton)

  	
   

  	
  Motgage dated 5/6/60

  	
   

  	
  Robert Kosc

  	
   

  	
  Irving Goldberg and Helen Goldberg

  	
   

  	
  $2,000

  	
   

  	
   

  	
   

  	
  Payment amount and schedule is not stated in the mortgage.

  

 

Schedule 6.04

Investments

Certain cash and in-kind investments made to date by
Rite Aid Hdqtrs. Corp. in Verispan, L.L.C, a joint venture designed to gather
and sell pharmaceutical data. Rite Aid Hdqtrs. Corp. currently holds an approximate 5% equity interest in this venture, and has no obligation to make
any additional contributions of capital or assets.

Schedule 6.08(a)

Restricted Pavments

1.                 Rite
Aid Lease Management Company, 213,000 shares of Class A, Cumulative
Preferred Stock in the quarterly
dividend amount of $1.75 per
share,

2.                 Rite
Aid Risk Management Corp., 1,000 shares of Class C, Cumulative Participating
Voting Preferred Stock and 1,000 shares of Class D, Cumulative Participating Voting Preferred Stock each in the quarterly
dividend amount of $8.00 per share.*

*                    As
of the First Restatement Effective Date, these shares are retired.

Schedule 6.09

Affiliate
Transactions

1.                 Letter Agreement,
effective January 1, 2003, with Leonard Green & Partners L.P. relating to management services,
as the same may be amended, extended, renewed or restated from time to time,
subject to limitations set forth in Section 6.08.

2.                 Transition
Services Agreement, effective on closing of the transaction to acquire the
Brooks and Eckerd drugstore chains, with The Jean Coutu Group (PJC) Inc. to
provide transition services, as the same may be amended, extended, renewed or
restated fiom time to time, subject to the limitations set forth in section
6.09.

ANNEX 1

to Second Restated Credit Agreement

DEFINITIONS ANNEX

This is the Definitions Annex referred to in the
Senior Loan Documents and the Second Priority Debt Documents. Each capitalized
term used herein shall have the meaning assigned to it below or, if not defined
herein, the meaning assigned to it in the applicable Senior Loan Document or
Second Priority Debt Document. The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of such terms.

References to any agreement are to such agreement as
amended, modified or supplemented from time to time in accordance with the
terms thereof and of each Senior Loan Document and Second Priority Debt
Document containing restrictions or imposing conditions on the amendment,
modification or supplementing of such agreement.

“2017 7.5% Notes”
means the 7.5% Senior Secured Notes of the Borrower due 2017 issued pursuant to
the 2017 7.5% Note Indenture.

“2017 7.5% Note Indenture”
means the Indenture dated as of February 21, 2007, among Rite Aid, the
Subsidiary Guarantors and The Bank of New York Trust Company, N.A., as trustee,
relating to the 2017 7.5% Notes.

“4.75% Convertible Notes”
means the 4.75% Convertible Notes of the Borrower due 2006 issued pursuant to
the 4.75% Note Indenture and any Registered Equivalent Notes issued on exchange
thereof.

“4.75% Note Indenture”
means the Indenture dated as of November 19, 2001, between Rite Aid and
BNY Midwest Trust Company, as trustee, relating to the 4.75% Convertible Notes.

“7.5% Notes”
means the 7.5% Senior Secured Notes of the Borrower due 2015 issued pursuant to
the 7.5% Note Indenture and any Registered Equivalent Notes issued in exchange
therefor.

“7.5% Note Indenture”
means the Indenture dated as of January 11, 2005, among Rite Aid, the
Subsidiary Guarantors and BNY Midwest Trust Company, as trustee, relating to
the 7.5% Notes.

“8.125% Notes”
means the 8.125% Senior Secured Notes of the Borrower due 2010 issued pursuant
to the 8.125% Note Indenture and any Registered Equivalent Notes issued in
exchange therefor.

“8.125% Note Indenture”
means the Indenture dated as of April 22, 2003, among Rite Aid, the
Subsidiary Guarantors and BNY Midwest Trust Company, as trustee, relating to
the 8.125% Notes.

“8.625% Notes”
means the 8.625% Senior Notes of the Borrower due 2015 issued pursuant to the
8.625% Note Indenture.

“8.625% Note Indenture”
means the Indenture dated February 21, 2007, among Rite Aid, the
Subsidiary Guarantors and The Bank of New York Trust Company, N.A., as trustee,
relating to the 8.625% Notes.

“9.25% Notes”
means the 9.25% Senior Notes of the Borrower due 2013 issued pursuant to the
9.25% Note Indenture and any Registered Equivalent Notes issued in exchange
therefor.

“9.25% Note Indenture”
means the Indenture dated as of May 20, 2003, between Rite Aid and BNY
Midwest Trust Company, as Trustee, relating to the 9.25% Notes.

“9.5% Note Indenture”
means the Indenture dated as of February 12, 2003, among Rite Aid, the
Subsidiary Guarantors named therein and BNY Midwest Trust Company, as trustee,
relating to the 9.5% Notes.

“9.5% Notes”
means the 9.5% Senior Secured Notes of Rite Aid due 2011 issued pursuant to the
9.5% Note Indenture and any Registered Equivalent Notes issued in exchange
therefor.

“12.5% Note Indenture”
means the Indenture dated as of June 27, 2001, among Rite Aid, the
Subsidiary Guarantors and U.S. Bank and Trust, as trustee, relating to the 12.5%
Notes.

“12.5% Notes”
means the 12.5% Senior Secured Notes due 2006 of Rite Aid issued on the
Effective Date pursuant to the 12.5% Note Indenture.

“Affiliate”
means, when used with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

“Asset Sale”
means any sale, lease, assignment, transfer or other disposition (including
pursuant to a Sale and Leaseback Transaction) of any property or asset (whether
now owned or hereafter acquired, whether in one transaction or a series of transactions
and whether by way of merger or otherwise) of the Borrower or any Subsidiary
(including of any Equity Interest in a Subsidiary).

“Attributable Debt”
means, as to any particular Capital Lease or Sale and Leaseback Transaction
under which the Borrower or any Subsidiary is at the time liable, as of any
date as of which the amount thereof is to be determined (a) in the case of
a transaction involving a Capital Lease, the amount as of such date of Capital
Lease Obligations with respect thereto and (b) in the case of a Sale and
Leaseback Transaction not involving a Capital Lease, the then present value of
the minimum rental obligations under such Sale and Leaseback Transaction during
the remaining term thereof (after giving effect to any extensions at the option
of the lessor) computed by discounting the rental payments at the actual
interest factor included in such payments or, if such interest factor cannot be
readily determined, at the rate per annum that would be applicable to a Capital
Lease of the Borrower having similar payment terms. The amount of any rental payment
required to be made under any such Sale and Leaseback Transaction not involving
a Capital Lease may exclude amounts required to be paid by the lessee on account
of maintenance and repairs, insurance, taxes, assessments, utilities, operating
and labor costs and similar charges, whether or not characterized as rent. Any
determination of any rate implicit in the terms of a Capital Lease or a lease
in a Sale and Leaseback Transaction not involving a Capital Lease made in
accordance with generally accepted financial practices by the Borrower shall be
binding and conclusive absent manifest error.

“Bankruptcy Proceeding”
means any proceeding under Title 11 of the U.S. Code or any other Federal, state
or foreign bankruptcy, insolvency, reorganization, receivership or similar law.

“Basket Asset Sale”
means any sale, transfer or disposition (including a Sale and Leaseback
Transaction not involving any Mortgaged Property) of office locations, Stores or
other personal or real property (including any improvements thereon), whether
or not constituting Mortgaged Property, or leasehold interest therein for fair
value in the ordinary course of business consistent with past practice and not
inconsistent with the business plan delivered to the Senior Lenders prior to
the Original Restatement Effective Date; provided, however, that (a) the aggregate consideration received
therefor (including the fair market value of any non-cash consideration) shall
not exceed $200,000,000 in any fiscal year of Rite Aid (calculated without
regard to Sale and Leaseback Transactions permitted by Section 6.01(ix),
(xiv) and (xv) of the Senior Credit Agreement) and (b) except with respect
to any net consideration received from any sale, transfer or disposition to a
third Person of Stores, leases and prescription files closed at substantially the
same time as, and entered into as part of a single related transaction with,
the purchase or other acquisition from such third Person of Stores, leases and
prescription files of a substantially equivalent value, at least 75% of such
consideration shall consist of cash.

“Borrower” means
Rite Aid.

 2
 

“Business Day”
means any day other than a Saturday, Sunday or day on which commercial banks in
New York City or Chicago, Illinois are authorized or required by law to close; provided, however, that
when used in connection with a Eurodollar Loan, the term “Business Day”
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.

“Capital Lease”
means any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which, in accordance with GAAP,
should be capitalized on the lessee’s balance sheet.

“Casualty/Condemnation”
means any event that gives rise to Casualty/ Condemnation Proceeds.

“Casualty/Condemnation
Proceeds” means

(a) any insurance proceeds under any insurance
policies or otherwise with respect to any casualty or other insured damage to any
properties or assets of the Borrower or the Subsidiaries; and

(b) any proceeds received by the Borrower or any
Subsidiary in connection with any action or proceeding for the taking of any
properties or assets of the Borrower or the Subsidiaries, or any part thereof
or interest therein, for public or quasi-public use under the power of eminent
domain, by reason of any similar public improvement or condemnation proceeding;

minus, in each case (i) any
fees, commissions and expenses (including the costs of adjustment and
condemnation proceedings) and other costs paid or incurred by the Borrower or
any Subsidiary in connection therewith, (ii) the amount of income taxes reasonably
estimated to be payable as a result of any gain recognized in connection with the
receipt of such payment or proceeds and (iii) the amount of any
Indebtedness (or Attributable Debt), other than the Senior Obligations,
together with premium or penalty, if any, and interest thereon (or comparable
obligations in respect of Attributable Debt), that is secured by a Lien on (or
if Attributable Debt, the lease of) the properties or assets in question and
that has priority over both the Senior Lien and the Second Priority Lien, that
is required to be repaid as a result of the receipt by the Borrower or a
Subsidiary of such payments or proceeds; provided, however, that no such proceeds shall constitute Casualty/Condemnation
Proceeds to the extent that such proceeds are (A) reinvested in other like
fixed or capital assets within 270 days of the Casualty/Condemnation that gave rise
to such proceeds or (B) committed to be reinvested in other like fixed or
capital assets within 270 days of such Casualty/Condemnation, with diligent
pursuit of such reinvestment, and reinvested in such assets within 365 days of
such Casualty/ Condemnation.

“Citibank” means
Citibank, N.A.

“Collateral”
means the Senior Collateral and the Second Priority Collateral.

“Collateral Documents”
means the Senior Collateral Documents and the Second Priority Collateral
Documents.

“Collateral Trust and
Intercreditor Agreement” means the Amended and Restated Collateral
Trust and Intercreditor Agreement, dated as of June 27, 2001, as amended
and restated as of May 28, 2003, among Rite Aid, the Subsidiary
Guarantors, the Second Priority Collateral Trustee, the Senior Collateral Agent
and each other Representative.

“Control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have meanings correlative thereto.

“Debt Facility”
means the Senior Credit Agreement and any Second Priority Debt Facility, or any
combination thereof (as the context requires).

 3
 

“Default Rate”
means a rate per annum (computed on the basis of the actual number of days
elapsed over a year of 365 or 366 days, as the case may be) equal to the sum of
(a) the rate of interest publicly announced by Citibank in New York, New
York, from time to time as its “base rate” plus (b) 2.00%.

“Domestic Subsidiary”
means any Subsidiary incorporated or organized under the laws of the United
States of America, any State thereof or the District of Columbia.

“Effective Date”
means June 27, 2001.

“Effective Date Indentures”
mean, collectively, (a) the Indenture dated as of December 21, 1998,
between Rite Aid and Harris Trust and Savings Bank, as trustee and (b) the
Indenture dated as of August 1, 1993, between Rite Aid and Morgan Guaranty
Trust Company of New York, as trustee.

“First Restatement
Effective Date” means November 8, 2006.

“Guarantee” of
or by any Person (the “guarantor”)
means any obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness or other obligation
of any other Person (the “primary obligor”)
in any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation or to purchase (or to advance or supply funds for the purchase of)
any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation or (d) as an account party in
respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that
the term Guarantee shall not include endorsements for collection or deposit in
the ordinary course of business.

“Indebtedness”
of any Person means, without duplication, (a) all obligations of such
Person for borrowed money or with respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar instruments,
(c) all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all
obligations of such Person in respect of the deferred purchase price of property
or services (excluding current accounts payable incurred in the ordinary course
of business), (e) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on property owned or acquired by such Person, whether
or not the Indebtedness secured thereby has been assumed, (f) all Guarantees
by such Person of Indebtedness of others, (g) all Capital Lease
Obligations of such Person, (h) all obligations, contingent or otherwise,
of such Person as an account party in respect of letters of credit and letters
of guaranty and (i) all obligations, contingent or otherwise, of such
Person in respect of bankers’ acceptances. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.

“Indentures”
mean, collectively, the Effective Date Indentures and the Restatement Date
Indentures.

“Instructing Group”
means, until the Senior Obligation Payment Date, the Required Lenders and,
thereafter, the Second Priority Instructing Group.

 4
 

“Intercompany Inventory
Purchase Agreement” means the Intercompany Inventory Purchase
Agreement dated as of June 12, 2000 (as amended), among the Borrower, Rite
Aid Hdqtrs. Corp., the Distribution Subsidiaries named therein and the Operating
Subsidiaries named therein.

“Interim Collateral”
means “Collateral”, as defined in any Interim Collateral Document.

“Interim Collateral and
Guarantee Agreement” means the Interim Collateral and Guarantee
Agreement dated as of June 4, 2007, among Holdings and its subsidiaries (including
subsidiaries that become parties thereto after the Second Restatement Effective
Date) and the Senior Collateral Agent.

“Interim Collateral
Documents” means the Interim Collateral and Guarantee Agreement, the
Interim Subsidiary Loan Party Guarantee Agreement and each of the security
agreements and other instruments and documents executed and delivered by the Subsidiary
Loan Parties, Holdings or any of their subsidiaries, as applicable, pursuant to
any of the foregoing or pursuant to the Senior Credit Agreement or for purposes
of providing collateral security or credit support for any Interim Obligation.

“Interim Obligations”
means (a) the aggregate principal amount of the Tranche 2 Term Loans
outstanding as a result of the borrowings made on the Second Restatement Effective
Date, (b) all interest on such outstanding Tranche 2 Term Loans
(including, without limitation any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower, any Subsidiary Loan
Party, Holdings or any of its subsidiaries, whether or not allowed or allowable
as a claim in such proceeding), (c) all other amounts payable by the Borrower
or any Subsidiary under the Senior Loan Documents in respect of such Tranche 2
Term Loans and (d) all increases, renewals, extensions and Refinancings of
the foregoing.

“Interim Secured Parties”
means the Tranche 2 Lenders and the beneficiaries of each indemnification
obligation undertaken by Rite Aid, any other Loan Party or Holdings or any of
its subsidiaries under any Senior Loan Document in respect of the Tranche 2
Term Loans, and the successors and permitted assigns of each of the foregoing.

“Interim Subsidiary Loan
Party Guarantee Agreement” means the Interim Subsidiary Loan Party
Guarantee Agreement dated as of June 4, 2007, among the Subsidiary Loan
Parties and the Senior Collateral Agent for the benefit of the Interim Secured
Parties.

“Lien” means,
with respect to any asset, (a) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, on or of such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, Capital Lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.

“Majority Senior Parties”
means the Required Lenders (as defined in the Senior Credit Agreement), or with
respect to any waiver, amendment or request, Senior Lenders having such amount
of unused Commitments, Revolving Exposures and outstanding Term Loans as may be
required under the Senior Credit Agreement to approve the same.

“Moody’s” means
Moody’s Investors Service, Inc., or any successor to its business of
rating debt securities.

 5
 

“Net Cash Proceeds” means:

(a) with
respect to any Asset Sale, an amount equal to the cash proceeds received by the
Borrower or any of the Subsidiaries from or in respect of such Asset Sale
(including, when received, any cash proceeds received in respect of any noncash
proceeds of any Asset Sale), less the sum of

(i) reasonable costs and expenses paid or
incurred in connection with such transaction, including, without limitation,
any underwriting brokerage or other customary selling commissions and
reasonable legal, advisory and other fees and expenses (including title and
recording expenses, associated therewith), payments of unassumed liabilities
relating to the assets sold and any severance and termination costs;

(ii) the amount of any Indebtedness (or
Attributable Debt), together with premium or penalty, if any, and accrued
interest thereon (or comparable obligations in respect of Attributable Debt)
secured by a Lien on (or if Attributable Debt, the lease of) any asset disposed
of in such Asset Sale and discharged from the proceeds thereof, but only to the
extent such Lien has priority over the Senior Lien and the Second Priority Lien;

(iii) any taxes actually paid or to be payable by
such Person (as estimated by a senior financial or accounting officer of the
Borrower, giving effect to the overall tax position of the Borrower) in respect
of such Asset Sale; and

(iv) the portion of such cash proceeds which the
Borrower determines in good faith and reasonably should be reserved for post-closing
adjustments, including, without limitation, indemnification payments and
purchase price adjustments, provided, that on the date that all such
post-closing adjustments have been determined, the amount (if any) by which the
reserved amount in respect of such Asset Sale exceeds the actual post-closing
adjustments payable by the Borrower or any of the Subsidiary Loan Parties shall
constitute Net Cash Proceeds on such date;

(b) with respect to the proceeds received by the
Borrower or a Subsidiary from or in respect of an issuance in the public or
private capital markets of long-term debt securities, of equity securities or
of equity-linked (e.g., trust preferred) securities,
an amount equal to the cash proceeds received by the Borrower or any of the
Subsidiaries from or in respect of such issuance, less any reasonable transaction
costs, including investment banking and underwriting fees, discounts and
commissions and any other expenses (including legal fees and expenses) reasonably
incurred by such Person in respect of such issuance;

(c) with respect to any Securitization, an amount
equal to the cash proceeds received by the Borrower or any of the Subsidiary
from or in respect of such Securitization, less any reasonable transaction
costs, including investment banking and underwriting fees, discounts and commissions
and any other expenses (including legal fees and expenses) reasonably incurred
by such Person in respect of such Securitization; and

(d) with respect to a Casualty/Condemnation, the
amount of Casualty/Condemnation Proceeds.

“Obligors” means
Rite Aid, the Subsidiary Guarantors, the Subsidiary Loan Parties and any other
Person who is liable for any of the Secured Obligations.

 6

“Original Restatement
Effective Date” means September 30, 2005.

“Permitted Disposition” means any of the following, other
than sales of Securitization Assets in a Securitization:

(a) dispositions of inventory at retail, cash, cash
equivalents and other cash management investments and obsolete, unused,
uneconomic or unnecessary equipment or inventory, in each case in the ordinary
course of business;

(b) a disposition to a Subsidiary Loan Party, provided that if the property subject to such disposition
constitutes Collateral immediately before giving effect to such disposition,
such property continues to constitute Collateral subject to the Senior Lien and
the Second Priority Lien;

(c) a sale or discount, in each case without recourse
and in the ordinary course of business, of overdue Accounts (as defined in the
Senior Credit Agreement) arising in the ordinary course of business, but only
to the extent such Accounts are no longer Eligible Accounts Receivable (as
defined in the Senior Credit Agreement) and such sale or discount is in
connection with the compromise or collection thereof consistent with customary
industry practice (and not as part of any bulk sale);

(d) Basket Asset Sales; and

(e) sales of Accounts Receivable (as defined in the
Senior Subsidiary Security Agreement) relating to worker’s compensation claims
to collection agencies pursuant to the Borrower’s customary cash management
procedures.

“Permitted Investments”
means any investment by any Person in (a) direct obligations of the United
States or any agency thereof, or obligations guaranteed by the United States or
any agency thereof, (b) commercial paper rated at least A-1 by
S&P and P-1 by Moody’s, (c) time deposits with, including
certificates of deposit issued by, any office located in the United States of
any bank or trust company which is organized or licensed under the laws of the
United States or any state thereof and has capital, surplus and undivided
profits aggregating at least $500,000,000, (d) repurchase agreements with respect
to securities described in clause (a) above entered into with an office of
a bank or trust company meeting the criteria specified in clause (c) above,
provided in each case that such investment matures within one year from the
date of acquisition thereof by such Person or (e) money market mutual
funds at least 80% the assets of which are held in investments referred to in
clauses (a) through (d) above (except that the maturities of certain
investments held by any such money market funds may exceed one year so long as
the dollar-weighted average life of the investments of such money market mutual
fund is less than one year).

“Reduction”
means, when applied to any Debt Facility, (a) the permanent repayment of
outstanding loans (or obligations in respect of Attributable Debt) under such
Debt Facility, (b) the permanent reduction of outstanding lending
commitments under such Debt Facility or (c) the permanent cash
collateralization of outstanding letters of credit under such facility
(together with the termination of any lending commitments utilized by such
letters of credit).

“Refinance”
means, with respect to any issuance of Indebtedness, to replace, renew, extend,
refinance, repay, refund, repurchase, redeem, defease or retire, or to issue Indebtedness
in exchange or as a replacement therefor. “Refinanced” and
“Refinancing” shall have correlative
meanings.

“Registered Equivalent
Notes” means, with respect to any notes originally issued in a Rule 144A
or other private placement transaction under the Securities Act of 1933, substantially
identical notes issued in a dollar for dollar exchange therefor pursuant to an exchange
offer registered with the SEC.

“Representatives”
means the Senior Collateral Agent and the Second Priority Representatives.

 7
 

“Restatement Date Indentures”
mean, collectively, (a) the 7.5% Note Indenture, (b) the 2017 7.5%
Note Indenture, (c) the 8.125% Note Indenture, (d) the 8.625% Note Indenture
and (e) the 9.25% Note Indenture.

“Rite Aid” means
Rite Aid Corporation, a Delaware corporation, and its successors.

“S&P” means
Standard & Poor’s Ratings Services, a division of The McGraw- Hill
Companies, Inc., or any successor to its business of rating debt
securities.

“Sale and Leaseback
Transaction” means any arrangement whereby the Borrower or a
Subsidiary shall sell or transfer any office building (including its
headquarters), distribution center, manufacturing plant, warehouse, Store,
equipment or other property, real or personal, now or hereafter owned by the
Borrower or a Subsidiary with the intention that the Borrower or any Subsidiary
rent or lease the property sold or transferred (or other property of the buyer
or transferee substantially similar thereto).

“SEC” means the
United States Securities and Exchange Commission and any successor agency
thereto.

“Second Priority Collateral”
means all the “Second Priority Collateral” as defined in any Second Priority
Collateral Document.

“Second Priority Collateral
Documents” means the Second Priority Subsidiary Security Agreement,
the Second Priority Subsidiary Guarantee Agreement, the Second Priority
Indemnity, Subrogation and Contribution Agreement, the Collateral Trust and Intercreditor
Agreement and each of the security agreements and other instruments and documents
executed and delivered by any Subsidiary Guarantor pursuant to any of the foregoing
for purposes of providing collateral security or credit support for any Second Priority
Debt Obligation or obligation under the Second Priority Subsidiary Guarantee Agreement.

“Second Priority Collateral
Trustee” means Wilmington Trust Company, in its capacity as
collateral trustee under the Collateral Trust and Intercreditor Agreement and the
Second Priority Collateral Documents, and its successors.

“Second Priority Debt”
means any Indebtedness (including the 8.125% Notes, the 7.5% Notes and the 2017
7.5% Notes) incurred by Rite Aid and Guaranteed by the Subsidiary Guarantors on
or after the Effective Date pursuant to the Second Priority Subsidiary
Guarantee Agreement (i) which is secured by the Second Priority Collateral
on a pari passu basis (other than as provided
by the terms of the applicable Second Priority Debt Documents) with the other
Second Priority Debt Obligations and (ii) if issued on or after the
Original Restatement Effective Date, matures the date that is three months
after the Tranche 2 Term Maturity Date; provided, however,
that (A) such Indebtedness is permitted to be incurred, secured and
Guaranteed on such basis by each Senior Loan Document and each Second Priority
Debt Document and (B) the Representative for the holders of such Second
Priority Debt shall have become party to the Collateral Trust and Intercreditor
Agreement pursuant to, and by satisfying the conditions set forth in, Section 10.12
thereof. Second Priority Debt shall include any Registered Equivalent Notes
issued in exchange thereof.

“Second Priority Debt
Documents” means, with respect to any series, issue or class of
Second Priority Debt, the promissory notes, indentures and other operative agreements
or instruments evidencing or governing such Debt, including the Second Priority
Collateral Documents.

“Second Priority Debt
Facility” means the indenture or other governing agreement or
instrument with respect to any Second Priority Debt.

“Second Priority Debt
Obligations” means with respect to any series, issue or class of
Second Priority Debt, (a) all principal of, and interest (including
without limitation, any interest which accrues after the 

 8
 

commencement of any
Bankruptcy Proceeding, whether or not allowed or allowable as a claim in any
such proceeding) payable with respect to such Second Priority Debt, (b) all
other amounts payable to the related Second Priority Debt Parties under the
related Second Priority Debt Documents and (c) any renewals or extensions
of the foregoing.

“Second Priority Debt
Parties” means with respect to any series, issue or class of Second
Priority Debt, the holders of such Debt, any trustee or agent therefor under
any related Second Priority Debt Documents and the beneficiaries of each
indemnification obligation undertaken by Rite Aid or any Obligor under any
related Second Priority Debt Documents, but shall not include the Loan Parties
or any Controlled Affiliates thereof (unless such Loan Party or Controlled
Affiliate is a holder of such Debt, a trustee or agent therefore or beneficiary
of such an indemnification obligation named as such in a Second Priority Debt
Document).

“Second Priority Indemnity,
Subrogation and Contribution Agreement” means the Amended and
Restated Second Priority Indemnity, Subrogation and Contribution Agreement,
dated as of June 27, 2001, as amended and restated as of May 28, 2003
among Rite Aid, the Subsidiary Guarantors and the Second Priority Collateral
Trustee.

“Second Priority
Instructing Group” means Second Priority Representatives with respect
to Second Priority Debt Facilities under which at least a majority of the then aggregate
amount of Second Priority Debt Obligations are outstanding.

“Second Priority Lien”
means the Liens on the Second Priority Collateral in favor of the Second
Priority Debt Parties under the Second Priority Collateral Documents.

“Second Priority
Representative” means, in respect of a Second Priority Debt Facility,
the trustee, administrative agent, security agent or similar agent under each Second
Priority Debt Facility, as the case may be, and each of their successors in
such capacities.

“Second Priority Subsidiary
Guarantee Agreement” means the Amended and Restated Second Priority
Subsidiary Guarantee Agreement, dated as of June 27, 2001, as amended and
restated as of May 28, 2003, made by the Subsidiary Guarantors (including any
additional Subsidiary Guarantor becoming party thereto after the Original Restatement
Effective Date) in favor of the Second Priority Collateral Trustee for the benefit
of the Second Priority Debt Parties.

“Second Priority Subsidiary
Security Agreement” means the Amended and Restated Second Priority
Subsidiary Security Agreement, dated as of June 27, 2001, as amended and
restated as of May 28, 2003, made by the Subsidiary Guarantors (including any
additional Subsidiary Guarantor becoming party thereto after the Original Restatement
Effective Date) in favor of the Second Priority Collateral Trustee for the benefit
of the Second Priority Debt Parties.

“Second Restatement
Effective Date” means the date on which the Senior Credit Agreement
becomes effective pursuant to its terms.

“Secured Obligations”
means the Senior Obligations and the Second Priority Debt Obligations.

“Secured Parties”
means the Senior Secured Parties and the Second Priority Debt Parties.

“Senior Collateral”
means all the “Collateral” as defined in any Senior Collateral Document.

“Senior Collateral Agent”
means Citicorp North America, Inc., in its capacity as the senior
collateral processing agent under the Senior Collateral Documents and the Interim
Collateral Documents, as the case may be, and its successors.

“Senior Collateral
Disposition” means (a) any sale, transfer or other disposition
of Senior Collateral (including any property or assets that would constitute
Senior Collateral but for the release of the Senior 

 9
 

Lien with respect thereto
in connection with such sale, transfer or other disposition), other than a
Permitted Disposition or (b) a Casualty/Condemnation with respect to
Senior Collateral.

“Senior Collateral Documents”
means the Senior Subsidiary Security Agreement, the Senior Subsidiary Guarantee
Agreement, the Senior Indemnity, Subrogation and Contribution Agreement, the
Collateral Trust and Intercreditor Agreement and each of the security
agreements and other instruments and documents executed and delivered by any
Subsidiary Guarantor pursuant to any of the foregoing or pursuant to the Senior
Credit Agreement or for purposes of providing collateral security or credit
support for any Senior Obligation or obligation under the Senior Subsidiary
Guarantee Agreement.

“Senior Credit Agreement”
means the Amended and Restated Senior Credit Agreement, dated as of June 27,
2001, as amended and restated as of June 4, 2007 and as may be further
amended, restated or otherwise modified from time to time, among Rite Aid, the
Senior Lenders, the Tranche 2 Lenders, Citicorp North America, Inc., as administrative
agent and as Senior Collateral Agent and Bank of America, N.A., as syndication
agent for the Senior Lenders and the Tranche 2 Lenders.

“Senior Hedging Agreement”
means any Hedging Agreement entered into with Rite Aid or any Subsidiary, if
the applicable counterparty was a Senior Lender, a Tranche 2 Lender or an
Affiliate thereof (a) on the Original Restatement Effective Date, in the case
of any Hedging Agreement entered into prior to the Original Restatement
Effective Date or (b) at the time the Hedging Agreement was entered into,
in the case of any Hedging Agreement entered into on or after the Original
Restatement Effective Date.

“Senior Indemnity,
Subrogation and Contribution Agreement” means the Amended and
Restated Senior Indemnity, Subrogation and Contribution Agreement, dated as of June 27,
2001, as amended and restated as of May 28, 2003, among Rite Aid, the
Subsidiary Guarantors (including Subsidiary Guarantors becoming party thereto
after the Original Restatement Effective Date) and the Senior Collateral Agent.

“Senior Lender”
means a “Lender” as defined in the Senior Credit Agreement; provided that, prior to the Borrowing Base Date, the term
Senior Lender shall not include any such “Lender” in its capacity as a Tranche
2 Lender.

“Senior Lien”
means the Liens on the Senior Collateral in favor of the Senior Secured Parties
under the Senior Collateral Documents.

“Senior Loan Documents”
means the Senior Credit Agreement, the Notes referred to in the Senior Credit
Agreement, each Senior Hedging Agreement, the Senior Collateral Documents and,
prior to the Borrowing Base Date, the Interim Collateral Documents.

“Senior Obligation Payment
Date” means the date on which (a) the Senior Obligations have
been paid in full, (b) all lending commitments under the Senior Credit Agreement
have been terminated and (c) there are no outstanding letters of credit
issued under the Senior Credit Agreement other than such as have been fully
cash collateralized under documents and arrangements satisfactory to the issuer
of such letters of credit.

“Senior Obligations”
means (a) the principal of each loan made under the Senior Credit
Agreement, (b) all reimbursement and cash collateralization obligations in
respect of letters of credit issued under the Senior Credit Agreement, (c) all
monetary obligations of the Borrower or any Subsidiary under each Senior
Hedging Agreement entered into (i) prior to the Original Restatement Effective
Date with any counterparty that was a Senior Lender (or an Affiliate thereof)
on the Original Restatement Effective Date or (ii) on or after the
Original Restatement Effective Date with any counterparty that was a Senior Lender
(or an Affiliate thereof) at the time such Senior Hedging Agreement was entered
into, (d) all interest on the loans, letter of credit reimbursement, fees
and other obligations under the Senior Credit Agreement or such Senior Hedging
Agreements (including, without limitation any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or 

 10
 

reorganization of the Borrower,
any Subsidiary Loan Party, Holdings or any of its subsidiaries, whether or not allowed
or allowable as a claim in such proceeding), (e) all other amounts payable
by the Borrower or any Subsidiary under the Senior Loan Documents and (f) all
increases, renewals, extensions and Refinancings of the foregoing; provided that, prior to the Borrowing Base Date, the term
Senior Obligations shall not include any amount included in the definition of
the term Interim Obligations.

“Senior Secured Parties”
means each party to the Senior Credit Agreement other than any Loan Party, each
counterparty to a Senior Hedging Agreement, the beneficiaries of each
indemnification obligation undertaken by Rite Aid or any other Loan Party under
any Senior Loan Document, and the successors and permitted assigns of each of
the foregoing; provided that, prior to the
Borrowing Base Date, the term Senior Secured Parties shall not include any
Interim Secured Parties.

“Senior Subsidiary
Guarantee Agreement” means the Amended and Restated Senior
Subsidiary Guarantee Agreement, made by the Subsidiary Guarantors (including Subsidiary
Guarantors that become parties thereto after the Original Restatement Effective
Date) in favor of the Senior Collateral Agent for the benefit of the Senior Secured
Parties, as such agreement may be amended, supplemented or otherwise modified
from time to time.

“Senior Subsidiary Security
Agreement” means the Amended and Restated Senior Subsidiary Security
Agreement, made by the Subsidiary Guarantors (including Subsidiary Guarantors
that become parties thereto after the Original Restatement Effective Date) in
favor of the Senior Collateral Agent for the benefit of the Senior Secured
Parties, as such agreement may be amended, supplemented or otherwise modified
from time to time.

“Subsidiary”
means any subsidiary of the Borrower.

“Subsidiary Guarantor”
means each Subsidiary that is party to any Second Priority Collateral Document.

“Subsidiary Loan Party”
means each Subsidiary set forth on Schedule 1.01
to the Senior Credit Agreement and any wholly-owned Domestic Subsidiary,
including any Securitization Vehicle that is a Domestic Subsidiary, that owns
any assets consisting of inventory, accounts receivable, intellectual property,
or script lists; provided that (a) no Subsidiary
that engages solely in the Borrower’s pharmacy benefits management business
shall be deemed a Subsidiary Loan Party and (b) Holdings and its
subsidiaries shall not be Subsidiary Loan Parties prior to the Borrowing Base
Date.

“Triggering Event”
shall have the meaning assigned to such term in the Collateral Trust and
Intercreditor Agreement.

“Uniform Commercial Code”
or “UCC” means, unless otherwise specified,
the Uniform Commercial Code as from time to time in effect in the State of New
York.

 11EXHIBIT 4.8
 

HURCO COMPANIES,
INC.

and

WELLS FARGO BANK, NATIONAL ASSOCIATION

Trustee

Indenture

Dated as of *

Senior Debt Securities

   
 

Certain
Sections of this Indenture relating to Sections 310 through 318,

inclusive, of the Trust Indenture Act of 1939:

	
  Trust Indenture

  Act Section

  	
   

  	
   

  	
   

  	
  Indenture Section

  	
   

  
	
  '310

  	
  (a)(1)

  	
   

  	
   

  	
  609

  	
   

  
	
   

  	
  (a)(2)

  	
   

  	
   

  	
  609

  	
   

  
	
   

  	
  (a)(3)

  	
   

  	
   

  	
  Not Applicable

  	
   

  
	
   

  	
  (a)(4)

  	
   

  	
   

  	
  Not Applicable

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  608

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  610

  	
   

  
	
  '311

  	
  (a)

  	
   

  	
   

  	
  613

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  613

  	
   

  
	
  '312

  	
  (a)

  	
   

  	
   

  	
  701

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  701

  	
   

  
	
   

  	
  (c)

  	
   

  	
   

  	
  701

  	
   

  
	
  '313

  	
  (a)

  	
   

  	
   

  	
  702

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  702

  	
   

  
	
   

  	
  (c)

  	
   

  	
   

  	
  702

  	
   

  
	
   

  	
  (d)

  	
   

  	
   

  	
  702

  	
   

  
	
  '314

  	
  (a)

  	
   

  	
   

  	
  703

  	
   

  
	
   

  	
  (a)(4)

  	
   

  	
   

  	
  101

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  1004

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  Not Applicable

  	
   

  
	
   

  	
  (c)(1)

  	
   

  	
   

  	
  102

  	
   

  
	
   

  	
  (c)(2)

  	
   

  	
   

  	
  102

  	
   

  
	
   

  	
  (c)(3)

  	
   

  	
   

  	
  Not Applicable

  	
   

  
	
   

  	
  (d)

  	
   

  	
   

  	
  Not Applicable

  	
   

  
	
   

  	
  (e)

  	
   

  	
   

  	
  102

  	
   

  
	
  '315

  	
  (a)

  	
   

  	
   

  	
  601

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  602

  	
   

  
	
   

  	
  (c)

  	
   

  	
   

  	
  601

  	
   

  
	
   

  	
  (d)

  	
   

  	
   

  	
  601

  	
   

  
	
   

  	
  (e)

  	
   

  	
   

  	
  514

  	
   

  
	
  '316

  	
  (a)

  	
   

  	
   

  	
  101

  	
   

  
	
   

  	
  (a)(1)(A)

  	
   

  	
   

  	
  502

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  512

  	
   

  
	
   

  	
  (a)(1)(B)

  	
   

  	
   

  	
  513

  	
   

  
	
   

  	
  (a)(2)

  	
   

  	
   

  	
  Not Applicable

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  508

  	
   

  
	
   

  	
  (c)

  	
   

  	
   

  	
  104

  	
   

  
	
  '317

  	
  (a)(1)

  	
   

  	
   

  	
  503

  	
   

  
	
   

  	
  (a)(2)

  	
   

  	
   

  	
  504

  	
   

  
	
   

  	
  (b)

  	
   

  	
   

  	
  1003

  	
   

  
	
  '318

  	
  (a)

  	
   

  	
   

  	
  107

  	
   

  

 

NOTE: This reconciliation and tie shall not, for any
purpose, be deemed to be a part of the Indenture.

TABLE OF CONTENTS

	
  

  	
   

  	
  Page

  	
   

  
	
  PARTIES

  	
   

  	
  1

  	
   

  
	
  RECITALS OF THE COMPANY

  	
   

  	
  1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE ONE

  	
   

  	
   

  	
   

  
	
  DEFINITIONS AND
  OTHER PROVISIONS

  	
   

  	
   

  	
   

  
	
  of General Application

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 101. Definitions.

  	
   

  	
  1

  	
   

  
	
  “Act”

  	
   

  	
  1

  	
   

  
	
  “Affiliate”

  	
   

  	
  1

  	
   

  
	
  “Agent”

  	
   

  	
  2

  	
   

  
	
  “Authenticating Agent”

  	
   

  	
  2

  	
   

  
	
  “Board of Directors”

  	
   

  	
  2

  	
   

  
	
  “Board Resolution”

  	
   

  	
  2

  	
   

  
	
  “Business Day”

  	
   

  	
  2

  	
   

  
	
  “Commission”

  	
   

  	
  2

  	
   

  
	
  “Company”

  	
   

  	
  2

  	
   

  
	
  “Company Request” or
  “Company Order”

  	
   

  	
  2

  	
   

  
	
  “Corporate Trust
  Office”

  	
   

  	
  2

  	
   

  
	
  “corporation”

  	
   

  	
  2

  	
   

  
	
  “Covenant Defeasance”

  	
   

  	
  2

  	
   

  
	
  “Defaulted Interest”

  	
   

  	
  2

  	
   

  
	
  “Defeasance”

  	
   

  	
  2

  	
   

  
	
  “Definitive Security”

  	
   

  	
  2

  	
   

  
	
  “Depository”

  	
   

  	
  2

  	
   

  
	
  “Event of Default”

  	
   

  	
  3

  	
   

  
	
  “Exchange Act”

  	
   

  	
  3

  	
   

  
	
  “Expiration Date”

  	
   

  	
  3

  	
   

  
	
  “Global Securities”

  	
   

  	
  3

  	
   

  
	
  “Global Security
  Legend”

  	
   

  	
  3

  	
   

  
	
  “Holder”

  	
   

  	
  3

  	
   

  
	
  “Indenture”

  	
   

  	
  3

  	
   

  
	
  “interest”

  	
   

  	
  3

  	
   

  
	
  “Interest Payment Date”

  	
   

  	
  3

  	
   

  
	
  “Investment Company
  Act”

  	
   

  	
  3

  	
   

  
	
  “Maturity”

  	
   

  	
  3

  	
   

  
	
  “Notice of Default”

  	
   

  	
  3

  	
   

  
	
  “Officer”

  	
   

  	
  3

  	
   

  
	
  “Officers’ Certificate”

  	
   

  	
  3

  	
   

  
	
  “Opinion of Counsel”

  	
   

  	
  3

  	
   

  
	
  “Original Issue
  Discount Security”

  	
   

  	
  3

  	
   

  
	
  “Outstanding”

  	
   

  	
  4

  	
   

  
	
  “Participant”

  	
   

  	
  4

  	
   

  
	
  “Paying Agent”

  	
   

  	
  4

  	
   

  
	
  “Person”

  	
   

  	
  4

  	
   

  
	
  “Place of Payment”

  	
   

  	
  4

  	
   

  
	
  “Predecessor Security”

  	
   

  	
  4

  	
   

  
	
  “Redemption Date”

  	
   

  	
  5

  	
   

  
	
  “Redemption Price”

  	
   

  	
  5

  	
   

  

 

NOTE: This Table of Contents shall not, for any
purpose, be deemed to be a part of the Indenture.

 

	
  “Regular Record Date”

  	
   

  	
  5

  	
   

  
	
  “Responsible Officer”

  	
   

  	
  5

  	
   

  
	
  “Securities”

  	
   

  	
  5

  	
   

  
	
  “Securities Act”

  	
   

  	
  5

  	
   

  
	
  “Security Register” and
  “Security Registrar”

  	
   

  	
  5

  	
   

  
	
  “Special Record Date”

  	
   

  	
  5

  	
   

  
	
  “Stated Maturity”

  	
   

  	
  5

  	
   

  
	
  “Subsidiary”

  	
   

  	
  5

  	
   

  
	
  “Trust Indenture Act”

  	
   

  	
  5

  	
   

  
	
  “Trustee”

  	
   

  	
  5

  	
   

  
	
  “U.S. Government
  Obligation”

  	
   

  	
  5

  	
   

  
	
  “Vice President”

  	
   

  	
  6

  	
   

  
	
  SECTION 102. Compliance Certificates and Opinions.

  	
   

  	
  6

  	
   

  
	
  SECTION 103. Form of Documents Delivered to Trustee.

  	
   

  	
  6

  	
   

  
	
  SECTION 104. Acts of Holders; Record Dates.

  	
   

  	
  6

  	
   

  
	
  SECTION 105. Notices, Etc., to Trustee and Company.

  	
   

  	
  8

  	
   

  
	
  SECTION 106. Notice to Holders, Waiver.

  	
   

  	
  8

  	
   

  
	
  SECTION 107. Conflict with Trust Indenture Act.

  	
   

  	
  8

  	
   

  
	
  SECTION 108. Effect of Headings and Table of Contents.

  	
   

  	
  8

  	
   

  
	
  SECTION 109. Successors and Assigns.

  	
   

  	
  9

  	
   

  
	
  SECTION 110. Separability Clause.

  	
   

  	
  9

  	
   

  
	
  SECTION 111. Benefits of Indenture.

  	
   

  	
  9

  	
   

  
	
  SECTION 112. Governing Law.

  	
   

  	
  9

  	
   

  
	
  SECTION 113. Legal Holidays.

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE TWO

  	
   

  	
   

  	
   

  
	
  Security Forms

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 201. Form and Dating.

  	
   

  	
  9

  	
   

  
	
  SECTION 202. Execution and Authentication.

  	
   

  	
  10

  	
   

  
	
  SECTION 203. Transfer and Exchange.

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE THREE

  	
   

  	
   

  	
   

  
	
  The Securities

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 301. Amount Unlimited; Issuable in Series.

  	
   

  	
  14

  	
   

  
	
  SECTION 302. Intentionally Omitted.

  	
   

  	
  16

  	
   

  
	
  SECTION 303. Intentionally Omitted.

  	
   

  	
  16

  	
   

  
	
  SECTION 304. Temporary Securities.

  	
   

  	
  16

  	
   

  
	
  SECTION 305. Registration; Registration of Transfer and Exchange.

  	
   

  	
  16

  	
   

  
	
  SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.

  	
   

  	
  17

  	
   

  
	
  SECTION 307. Payment of Interest; Interest Rights Preserved.

  	
   

  	
  17

  	
   

  
	
  SECTION 308. Persons Deemed Owners.

  	
   

  	
  18

  	
   

  
	
  SECTION 309. Cancellation.

  	
   

  	
  18

  	
   

  
	
  SECTION 310. Computation of Interest.

  	
   

  	
  18

  	
   

  
	
  SECTION 311. CUSIP Numbers.

  	
   

  	
  19

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE FOUR

  	
   

  	
   

  	
   

  
	
  Satisfaction and Discharge

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 401. Satisfaction and Discharge of Indenture.

  	
   

  	
  19

  	
   

  
	
  SECTION 402. Application of Trust Money.

  	
   

  	
  20

  	
   

  

 

 ii
 

 

	
  ARTICLE FIVE

  	
   

  	
   

  	
   

  
	
  Remedies

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 501. Events of Default.

  	
   

  	
  20

  	
   

  
	
  SECTION 502. Acceleration of Maturity; Rescission and Annulment.

  	
   

  	
  21

  	
   

  
	
  SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

  	
   

  	
  22

  	
   

  
	
  SECTION 504. Trustee May File Proofs of Claim.

  	
   

  	
  22

  	
   

  
	
  SECTION 505. Trustee May Enforce Claims Without Possession of Securities.

  	
   

  	
  22

  	
   

  
	
  SECTION 506. Application of Money Collected.

  	
   

  	
  23

  	
   

  
	
  SECTION 507. Limitation on Suits.

  	
   

  	
  23

  	
   

  
	
  SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
  Interest.

  	
   

  	
  24

  	
   

  
	
  SECTION 509. Restoration of Rights and Remedies.

  	
   

  	
  24

  	
   

  
	
  SECTION 510. Rights and Remedies Cumulative.

  	
   

  	
  24

  	
   

  
	
  SECTION 511. Delay or Omission Not Waiver.

  	
   

  	
  24

  	
   

  
	
  SECTION 512. Control by Holders.

  	
   

  	
  24

  	
   

  
	
  SECTION 513. Waiver of Past Defaults.

  	
   

  	
  24

  	
   

  
	
  SECTION 514. Undertaking for Costs.

  	
   

  	
  25

  	
   

  
	
  SECTION 515. Waiver of Usury, Stay or Extension Laws.

  	
   

  	
  25

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE SIX

  	
   

  	
   

  	
   

  
	
  The Trustee

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 601. Certain Duties and Responsibilities.

  	
   

  	
  25

  	
   

  
	
  SECTION 602. Notice of Defaults.

  	
   

  	
  26

  	
   

  
	
  SECTION 603. Certain Rights of Trustee.

  	
   

  	
  26

  	
   

  
	
  SECTION 604. Not Responsible for Recitals or Issuance of Securities.

  	
   

  	
  28

  	
   

  
	
  SECTION 605. May Hold Securities.

  	
   

  	
  28

  	
   

  
	
  SECTION 606. Money Held in Trust.

  	
   

  	
  28

  	
   

  
	
  SECTION 607. Compensation and Reimbursement.

  	
   

  	
  28

  	
   

  
	
  SECTION 608. Conflicting Interests.

  	
   

  	
  29

  	
   

  
	
  SECTION 609. Corporate Trustee Required; Eligibility.

  	
   

  	
  29

  	
   

  
	
  SECTION 610. Resignation and Removal; Appointment of Successor.

  	
   

  	
  29

  	
   

  
	
  SECTION 611. Acceptance of Appointment by Successor.

  	
   

  	
  30

  	
   

  
	
  SECTION 612. Merger, Conversion, Consolidation or Succession to Business.

  	
   

  	
  31

  	
   

  
	
  SECTION 613. Preferential Collection of Claims Against Company.

  	
   

  	
  31

  	
   

  
	
  SECTION 614. Appointment of Authenticating Agent.

  	
   

  	
  31

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE SEVEN

  	
   

  	
   

  	
   

  
	
  Holders’ Lists and Reports by Trustee and Company

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 701. Preservation of Information; Communications to Holders.

  	
   

  	
  32

  	
   

  
	
  SECTION 702. Reports by Trustee.

  	
   

  	
  33

  	
   

  
	
  SECTION 703. Reports by Company.

  	
   

  	
  33

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT

  	
   

  	
   

  	
   

  
	
  Consolidation, Merger, Conveyance, Transfer or Lease

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.

  	
   

  	
  33

  	
   

  
	
  SECTION 802. Successor Substituted.

  	
   

  	
  34

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE NINE

  	
   

  	
   

  	
   

  
	
  Supplemental Indentures

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 901. Supplemental Indentures Without Consent of Holders.

  	
   

  	
  34

  	
   

  
	
  SECTION 902. Supplemental Indentures with Consent of Holders.

  	
   

  	
  35

  	
   

  

 

 iii
 

 

	
  SECTION 903. Execution of Supplemental Indentures.

  	
   

  	
  36

  	
   

  
	
  SECTION 904. Effect of Supplemental Indentures.

  	
   

  	
  36

  	
   

  
	
  SECTION 905. Conformity with Trust Indenture Act.

  	
   

  	
  36

  	
   

  
	
  SECTION 906. Notice of Supplemental Indenture; Reference in Securities to
  Supplemental Indentures.

  	
   

  	
  36

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE TEN

  	
   

  	
   

  	
   

  
	
  Covenants

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1001. Payment of Principal, Premium and Interest.

  	
   

  	
  36

  	
   

  
	
  SECTION 1002. Maintenance of Office or Agency.

  	
   

  	
  36

  	
   

  
	
  SECTION 1003. Money for Securities Payments to Be Held in Trust.

  	
   

  	
  37

  	
   

  
	
  SECTION 1004. Statement by Officers as to Default.

  	
   

  	
  37

  	
   

  
	
  SECTION 1005. Existence.

  	
   

  	
  38

  	
   

  
	
  SECTION 1006. Maintenance of Properties.

  	
   

  	
  38

  	
   

  
	
  SECTION 1007. Payment of Taxes and Other Claims.

  	
   

  	
  38

  	
   

  
	
  SECTION 1008. Waiver of Certain Covenants.

  	
   

  	
  38

  	
   

  
	
  SECTION 1009. Calculation of Original Issue Discount.

  	
   

  	
  38

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE ELEVEN

  	
   

  	
   

  	
   

  
	
  Redemption of Securities

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1101. Applicability of Article.

  	
   

  	
  39

  	
   

  
	
  SECTION 1102. Election to Redeem; Notice to Trustee.

  	
   

  	
  39

  	
   

  
	
  SECTION 1103. Selection by Trustee of Securities to Be Redeemed.

  	
   

  	
  39

  	
   

  
	
  SECTION 1104. Notice of Redemption.

  	
   

  	
  39

  	
   

  
	
  SECTION 1105. Deposit of Redemption Price.

  	
   

  	
  40

  	
   

  
	
  SECTION 1106. Securities Payable on Redemption Date.

  	
   

  	
  40

  	
   

  
	
  SECTION 1107. Securities Redeemed in Part.

  	
   

  	
  41

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE TWELVE

  	
   

  	
   

  	
   

  
	
  Sinking Funds

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1201. Applicability of Article.

  	
   

  	
  41

  	
   

  
	
  SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.

  	
   

  	
  41

  	
   

  
	
  SECTION 1203. Redemption of Securities for Sinking Fund.

  	
   

  	
  41

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE THIRTEEN

  	
   

  	
   

  	
   

  
	
  Defeasance and Covenant Defeasance

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1301. Company’s Option to Effect Defeasance or Covenant Defeasance.

  	
   

  	
  42

  	
   

  
	
  SECTION 1302. Defeasance and Discharge.

  	
   

  	
  42

  	
   

  
	
  SECTION 1303. Covenant Defeasance.

  	
   

  	
  42

  	
   

  
	
  SECTION 1304. Conditions to Defeasance or Covenant Defeasance.

  	
   

  	
  42

  	
   

  
	
  SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in Trust;
  Miscellaneous Provisions.

  	
   

  	
  44

  	
   

  
	
  SECTION 1306. Reinstatement.

  	
   

  	
  44

  	
   

  

 

SIGNATURES

EXHIBITS:

Exhibit
A: Form of Security

 iv

INDENTURE, dated as of *, between HURCO COMPANIES,
INC., a corporation duly organized and existing under the laws of the State of
Indiana (herein called the “Company”), having its principal office at One
Technology Way, Indianapolis, Indiana, and WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association, Trustee (herein called the “Trustee”).

RECITALS
OF THE COMPANY

The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of its
unsecured notes, debentures or other evidences of indebtedness (herein called
the “Securities”), to be issued in one or more series under this Indenture.

All things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually agreed, for
the equal and proportionate benefit of all Holders of the Securities or of
series thereof, as follows:

ARTICLE One

Definitions and Other Provisions

of General Application

SECTION 101. Definitions.

For all purposes
of this Indenture, except as otherwise expressly provided or unless the context
otherwise requires:

(1)           the
terms defined in this Article have the meanings assigned to them in this
Article and include the plural as well as the singular;

(2)           all
other terms used herein which are defined in the Trust Indenture Act, either
directly or by reference therein, have the meanings assigned to them therein;

(3)           all
accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles, and, except
as otherwise herein expressly provided, the term “generally accepted accounting
principles” with respect to any computation required or permitted hereunder
shall mean such accounting principles as are generally accepted at the date of
such computation;

(4)           unless
the context otherwise requires, any reference to an “Article,” a “Section” or a
Subsection refers to an Article, a Section or a Subsection, as the case may be,
of this Indenture; and

(5)           the
words “herein”, “hereof” and “hereunder” and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section,
Subsection or other subdivision.

“Act”, when used with respect to any Holder, has the
meaning specified in Section 104.

“Affiliate” of any specified Person means any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, 

directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

“Agent” means any Security Registrar, Paying Agent or
co-registrar.

“Authenticating Agent” means any Person authorized by
the Trustee pursuant to Section 614 to act on behalf of the Trustee to
authenticate Securities of one or more series.

“Board of Directors” means either the board of
directors of the Company or any duly authorized committee of that board.

“Board Resolution” means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors or such authorized persons or duly
appointed person thereof and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

“Business Day”, when used with respect to any Place of
Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment are authorized
or obligated by law or executive order to close.

“Commission” means the Securities and Exchange
Commission, from time to time constituted, created under the Exchange Act, or,
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.

“Company” means the Person named as the “Company” in
the first paragraph of this instrument until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter “Company” shall mean such successor Person.

“Company Request” or “Company Order” means a written
request or order signed in the name of the Company by its Chairman of the
Board, its President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.

“Corporate Trust Office” means the office of the
Trustee or the Security Registrar, as the case may be, at which at any
particular time its corporate trust business shall be principally administered,
which office as of the date of this instrument is located at 625 Marquette
Avenue, MAC N9311-110, Minneapolis, MN 55479, or which office is located at
such other address as the Trustee may designate from time to time by notice to
the Holders and the Company.

“corporation” means a corporation, association,
company, joint-stock company or business (including Delaware statutory) trust.

“Covenant Defeasance” has the meaning specified in
Section 1303.

“Defaulted Interest” has the meaning specified in
Section 307.

“Defeasance” has the meaning specified in Section
1302.

“Definitive Security” means a certificated Security
registered in the name of the Holder thereof and issued in accordance with
Section 203 hereof, substantially in the form of Exhibit A hereto, except that
such Security shall not bear the Global Security Legend and shall not have the “Schedule
of Exchanges of Interests in the Global Security” attached thereto.

“Depository” means, with respect to Securities of any
series issuable in whole or in part in the form of one or more Global
Securities, a clearing agency registered under the Exchange Act that is
designated to act as Depository for such Securities as contemplated by Section
203.

 2
 

“Event of Default” has the meaning specified in
Section 501.

“Exchange Act” means the Securities Exchange Act of
1934 and any statute successor thereto, in each case as amended from time to
time.

“Expiration Date” has the meaning specified in Section
104.

“Global Securities” means the Securities,
substantially in the form of Exhibit A hereto, as appropriate, that bear the
Global Security Legend and that have the “Schedule of Exchanges of Interests in
the Global Security” attached thereto, and that are deposited with or on behalf
of and registered in the name of the Depository, issued in accordance with
Section 201 or 203 of this Indenture.

“Global Security Legend” means the legend set forth in
Section 203(2), which is required to be placed on all Global Securities issued
under this Indenture.

“Holder” means a Person in whose name a Security is
registered in the Security Register.

“Indenture” means this instrument as originally
executed and as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively. The term “Indenture” shall also include the terms of
particular series of Securities established as contemplated by Section 301.

“interest”, when used with respect to an Original
Issue Discount Security which by its terms bears interest only after Maturity,
means interest payable after Maturity.

“Interest Payment Date”, when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.

“Investment Company Act” means the Investment Company
Act of 1940 and any statute successor thereto, in each case as amended from
time to time.

“Maturity”, when used with respect to any Security,
means the date on which the principal of such Security or an installment of
principal becomes due and payable as therein or herein provided, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.

“Notice of Default” means a written notice of the kind
specified in Section 501(4).

“Officer”
means the Chairman of the Board, the Chief Executive Officer, the Chief
Financial Officer, the Chief Legal and Administrative Officer, a President,
Vice President, Treasurer, Assistant Treasurer, Secretary or an Assistant
Secretary, of the Company.

“Officers’ Certificate” means a certificate signed on
behalf of the Company by the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the President or a Vice President, and by
the Chief Legal and Administrative Officer, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee. One of the officers signing an Officers’ Certificate
given pursuant to Section 1004 shall be the principal executive, financial or
accounting officer of the Company.

“Opinion of Counsel” means a written opinion of legal
counsel, who may be an employee of, or outside counsel for, the Company or the
Trustee, and who shall be acceptable to the Trustee.

“Original Issue Discount Security” means any Security
which provides for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 502.

 3
 

“Outstanding”,
when used with respect to Securities, means, as of the date of determination,
all Securities theretofore authenticated and delivered under this Indenture,
except:

(1)           Securities
theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation;

(2)           Securities
for whose payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of such Securities;
provided, however, that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;

(3)           Securities
as to which Defeasance has been effected pursuant to Section 1302; and

(4)           Securities
which have been paid pursuant to Section 306 or in exchange for or in lieu of
which other Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such Securities are
held by a bona fide purchaser in whose hands such Securities are valid
obligations of the Company;

provided, however, that in determining whether the
Holders of the requisite principal amount of the Outstanding Securities have
given, made or taken any request, demand, authorization, direction, notice,
consent, waiver or other action hereunder as of any date, (A) the principal
amount of an Original Issue Discount Security which shall be deemed to be
Outstanding shall be the amount of the principal thereof which would be due and
payable as of such date upon acceleration of the Maturity thereof to such date
pursuant to Section 502, (B) if, as of such date, the principal amount payable
at the Stated Maturity of a Security is not determinable, the principal amount
of such Security which shall be deemed to be Outstanding shall be the amount as
specified or determined as contemplated by Section 301, (C) the principal
amount of a Security denominated in one or more foreign currencies or currency
units which shall be deemed to be Outstanding shall be the U.S. dollar
equivalent, determined as of such date in the manner provided as contemplated
by Section 301, of the principal amount of such Security (or, in the case of a
Security described in Clause (A) or (B) above, of the amount determined as
provided in such Clause), and (D) Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other
action, only Securities of which a Responsible Officer of the Trustee has
actual knowledge are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee’s right so
to act with respect to such Securities and that the pledgee is not the Company
or any other obligor upon the Securities or any Affiliate of the Company or of
such other obligor.

“Participant” means, with respect to the Depository, a
Person who has an account with the Depository.

“Paying Agent” means any Person authorized by the Company
to pay the principal of or any premium or interest on any Securities on behalf
of the Company.

“Person” means any individual, corporation,
partnership, limited liability company, joint venture, trust, unincorporated
organization or government or any agency or political subdivision of a
government or governmental agency.

“Place of Payment”, when used with respect to the
Securities of any series, means the place or places where the principal of and
any premium and interest on the Securities of that series are payable as
specified, as contemplated by Section 301.

“Predecessor Security” of any particular Security
means every previous Security evidencing all or a portion of the same debt as
that evidenced by such particular Security, and, for the purposes of this
definition, any Security 

 4
 

authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.

“Redemption Date”, when used with respect to any
Security to be redeemed, means the date fixed for such redemption by or
pursuant to this Indenture.

“Redemption Price”, when used with respect to any
Security to be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture.

“Regular Record Date” for the interest payable on any
Interest Payment Date on the Securities of any series means the date specified
for that purpose as contemplated by Section 301.

“Responsible Officer”, when used with respect to the
Trustee, means any officer of the Trustee within the Corporate Trust Department
of the Trustee (or any successor unit or department of the Trustee) located at
the Corporate Trust Office of the Trustee who has direct responsibility for the
administration of this Indenture and, for the purposes of Section 601(3)(B) and
Section 602 (for the purposes of Section 315(b) of the Trust Indenture Act),
shall also include any officer of the Trustee to whom any corporate trust
matter is referred because of his knowledge of and familiarity with the
particular subject.

“Securities” means the Securities described in the
first recital hereto and issued on the date hereof. For all purposes of this
Indenture, the term “Securities” shall include the Securities initially issued
on the date hereof and any other Securities issued after the date hereof under
this Indenture.

“Securities Act” means the Securities Act of 1933 and
any statute successor thereto, in each case as amended from time to time.

“Security Register” and “Security Registrar” have the
respective meanings specified in Section 305.

“Special Record Date” for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.

“Stated Maturity”, when used with respect to any
Security or any installment of principal thereof or interest thereon, means the
date specified in such Security as the fixed date on which the principal of
such Security or such installment of principal or interest is due and payable.

“Subsidiary” means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, “voting stock” means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.

“Trust Indenture Act” means the Trust Indenture Act of
1939 as in force at the date as of which this instrument was executed;
provided, however, that in the event the Trust Indenture Act of 1939 is amended
after such date, “Trust Indenture Act” means, to the extent required by any
such amendment, the Trust Indenture Act of 1939 as so amended.

“Trustee” means the Person named as the “Trustee” in
the first paragraph of this instrument until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter “Trustee” shall mean or include each Person who is then a Trustee
hereunder, and if at any time there is more than one such Person, “Trustee” as
used with respect to the Securities of any series shall mean the Trustee with
respect to Securities of that series.

“U.S. Government Obligation” has the meaning specified
in Section 1304.

 5
 

“Vice President”, when used with respect to the
Company or the Trustee, means any vice president, whether or not designated by
a number or a word or words added before or after the title “vice president”.

SECTION 102. Compliance
Certificates and Opinions.

Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture, the Company
shall furnish to the Trustee such certificates and opinions as may be requested
by the Trustee. Each such certificate or opinion shall be given in the form of
an Officers’ Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the requirements
of the Trust Indenture Act and any other requirements set forth in this
Indenture.

Every certificate
(other than a certificate pursuant to Section 314(a)(4) of the Trust Indenture
Act) or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include,

(1)           a
statement that each individual signing such certificate or opinion has read
such covenant or condition and the definitions herein relating thereto;

(2)           a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;

(3)           a
statement that, in the opinion of each such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

(4)           a
statement as to whether, in the opinion of each such individual, such condition
or covenant has been complied with.

SECTION 103. Form of
Documents Delivered to Trustee.

In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.

Any certificate or opinion of an officer of the
Company may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or opinion
of counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.

Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.

SECTION 104. Acts of Holders;
Record Dates.

Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing, and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument 

 6
 

or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the “Act” of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Section 601) conclusive in favor
of the Trustee and the Company, if made in the manner provided in this Section.

The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit of a witness of
such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by a signer acting in a capacity other than
his individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.

The ownership of Securities shall be proved by the
Security Register.

Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.

The Company may set any day as a record date for the
purpose of determining the Holders of Outstanding Securities of any series
entitled to give, make or take any request, demand, authorization, direction,
notice, consent, waiver or other action provided or permitted by this Indenture
to be given, made or taken by Holders of Securities of such series; provided,
however, that the Company may not set a record date for, and the provisions of
this paragraph shall not apply with respect to, the giving or making of any
notice, declaration, request or direction referred to in the next paragraph. If
any record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; provided, however, that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and of no effect), and nothing in
this paragraph shall be construed to render ineffective any action taken by
Holders of the requisite principal amount of Outstanding Securities of the
relevant series on the date such action is taken. Promptly after any record
date is set pursuant to this paragraph, the Company, at its own expense, shall
cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Trustee in writing and to each
Holder of Securities of the relevant series in the manner set forth in Section
106.

The Trustee may set any day as a record date for the
purpose of determining the Holders of Outstanding Securities of any series
entitled to join in the giving or making of (1) any Notice of Default, (2) any
declaration of acceleration referred to in Section 502, (3) any request to
institute proceedings referred to in Section 507(2) or (4) any direction
referred to in Section 512, in each case with respect to Securities of such
series. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities of such series on such record date, and no other
Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date;
provided, however, that no such action shall be effective hereunder unless
taken on or prior to the applicable Expiration Date by Holders of the requisite
principal amount of Outstanding Securities of such series on such record date.
Nothing in this paragraph shall be construed to prevent the Trustee from
setting a new record date for any action for which a record date has previously
been set pursuant to this paragraph (whereupon the record date previously set
shall automatically and with no action by any Person be cancelled and of no
effect), and nothing in this paragraph shall be construed to render ineffective
any action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Trustee, at the
Company’s expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be given to the Company in
writing and to each Holder of Securities of the relevant series in the manner
set forth in Section 106.

 7
 

With respect to any record date set pursuant to this
Section, the party hereto which sets such record dates may designate any day as
the “Expiration Date” and from time to time may change the Expiration Date to
any earlier or later day; provided, however, that no such change shall be
effective unless notice of the proposed new Expiration Date is given to the
other party hereto in writing, and to each Holder of Securities of the relevant
series in the manner set forth in Section 106, on or prior to the existing
Expiration Date. If an Expiration Date is not designated with respect to any
record date set pursuant to this Section, the party hereto which set such
record date shall be deemed to have initially designated the 180th day after
such record date as the Expiration Date with respect thereto, subject to its
right to change the Expiration Date as provided in this paragraph. Notwithstanding
the foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.

Without limiting the foregoing, a Holder entitled
hereunder to take any action hereunder with regard to any particular Security
may do so with regard to all or any part of the principal amount of such
Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any part of such principal
amount.

SECTION 105. Notices, Etc.,
to Trustee and Company.

Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given
or furnished to, or filed with,

(1)           the
Trustee by any Holder or by the Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the Trustee
at its Corporate Trust Office, Attention: Hurco Companies, Inc. Account
Manager, or

(2)           the
Company by the Trustee or by any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to the Company addressed to it at the
address of its principal office specified in the first paragraph of this instrument
or at any other address previously furnished in writing to the Trustee by the
Company.

SECTION 106. Notice to
Holders, Waiver.

Where this Indenture provides for notice to Holders of
any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent via electronic transmission or
mailed, first-class postage prepaid, to each Holder affected by such event, at
his address as it appears in the Security Register, not later than the latest
date (if any), and not earlier than the earliest date (if any), prescribed for
the giving of such notice. In any case where notice to Holders is sent
electronically or given by mail, neither the failure to send or mail such
notice, nor any defect in any notice so sent, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.

SECTION 107. Conflict with
Trust Indenture Act.

If any provision hereof limits, qualifies or conflicts
with a provision of the Trust Indenture Act which is required under such Act or
deemed to be a part of and govern this Indenture, such required or deemed provision
shall control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
to be excluded, as the case may be.

SECTION 108. Effect of
Headings and Table of Contents.

The Article and Section headings herein and the Table
of Contents are for convenience only and shall not affect the construction
hereof.

 8

SECTION 109. Successors and
Assigns.

All covenants and agreements in this Indenture by the
Company shall bind its successors and assigns, whether so expressed or not.

SECTION 110. Separability
Clause.

In case any provision in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

SECTION 111. Benefits of
Indenture.

Nothing in this Indenture or in the Securities,
express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Indenture.

SECTION 112. Governing Law.

This Indenture and the Securities shall be governed by
and construed in accordance with the laws of the State of New York (including
without limitation Section 5-1401 of the New York General Obligations Law or
any successor to such statute). The Trustee and the Company agree to submit to
the non-exclusive jurisdiction of any United States federal or state court
located in the Borough of Manhattan, in The City of New York in any action or
proceeding arising out of or relating to this Indenture or the Securities.

The Trustee and the Company hereby knowingly,
voluntarily and intentionally waive any rights they may have to a trial by jury
in respect of any litigation based hereon, or arising out of, under or in
connection with this Indenture or any course of conduct, course of dealing,
statements (whether oral or written) or actions of the Trustee or the Company
relating thereto. The Company acknowledges and agrees that it has received full
and sufficient consideration for this provision and that this provision is a
material inducement for the Trustee and the Holders entering into this
Indenture.

SECTION
113. Legal Holidays.

In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security shall not be a Business Day
at any Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities (other than a provision of any Security which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity; and no interest
shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be, if payment is made on
the next succeeding Business Day.

ARTICLE Two

Security Forms

SECTION 201. Form and Dating.

The Securities of each series and the Trustee’s
certificate of authentication thereon shall be in substantially the form set
forth in Exhibit A hereto, the terms of which are incorporated in and made a
part of this Indenture, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depository therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by 

 9
 

their execution thereof. If the form of Securities of
any series is established by action taken by or pursuant to a Board Resolution,
a copy of an appropriate record of such action shall be certified by the
Secretary or an Assistant Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the Company Order contemplated by Section 202
for the authentication and delivery of such Securities. Unless otherwise
provided as contemplated by Section 301 with respect to any series of
Securities, each Security shall be dated the date of its authentication. Unless
otherwise provided as contemplated by Section 301 with respect to any series of
Securities, the Securities shall be issuable only in denominations of $1,000
and integral multiples thereof.

The Definitive Securities shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities. Securities issued in global
form shall be substantially in the form of Exhibit A attached hereto (including
the Global Security Legend thereon and the “Schedule of Exchanges of Interests
in the Global Security” attached thereto). Securities issued in definitive form
shall be substantially in the form of Exhibit A attached hereto (but without
the Global Security Legend thereon and without the “Schedule of Exchanges of
Interests in the Global Security” attached thereto). Each Global Security shall
represent such of the outstanding Securities as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount of
outstanding Securities from time to time endorsed thereon and that the aggregate
principal amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Security to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding
Securities represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 203 hereof.

SECTION 202. Execution and
Authentication.

Two Officers of the Company shall sign the Securities
for the Company, by manual or facsimile signature.

If an Officer of the Company whose signature is on a
Security no longer holds that office at the time such Security is
authenticated, such Security shall be valid nevertheless.

A Security shall not be valid or obligatory, or
entitled to any benefit under this Indenture, unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein manually executed by the Trustee or an Authentication Agent. The manual
signature of the Trustee shall be conclusive evidence, and the only evidence,
that such Security has been authenticated and delivered in accordance with the
terms of this Indenture and is entitled to the benefits of this Indenture.

The Trustee, upon a Company Order, shall authenticate
and deliver Securities for original issue in an aggregate principal amount
specified in such order. Such Company Order shall specify the principal amount
of the Securities to be authenticated and the date on which the original issue
of Securities is to be authenticated. The aggregate principal amount of
Securities which may be authenticated and delivered under this Indenture is
unlimited.

If the form or
terms of the Securities of the series have been established by or pursuant to
one or more Board Resolutions as permitted by Sections 201 and 301, in
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,

(1)           if
the form of such Securities has been established by or pursuant to a Board
Resolution as permitted by Section 201, that such form has been established in
conformity with the provisions of this Indenture;

(2)           if
the terms of such Securities have been established by or pursuant to a Board
Resolution as permitted by Section 301, that such terms have been established
in conformity with the provisions of this Indenture; and

(3)           that
such Securities, when authenticated and delivered by the Trustee and issued by
the Company in the manner and subject to any conditions specified in such
Opinion of Counsel, will constitute 

 10
 

valid and legally binding
obligations of the Company, enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors’
rights and to general equity principles.

If such form or terms have been so established, the
Trustee shall not be required to authenticate such Securities if the issue of
such Securities pursuant to this Indenture will affect the Trustee’s own rights,
duties or immunities under the Securities and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee.

Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by
the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.

SECTION
203. Transfer and Exchange.

(1)           Transfer
and Exchange of Global Securities. A Global Security may not be transferred as
a whole except by the Depository to a nominee of the Depository, by a nominee
of the Depository to the Depository or to another nominee of the Depository, or
by the Depository or any such nominee to a successor Depository or a nominee of
such successor Depository. The Company initially appoints The Depository Trust
Company (“DTC”) to act as Depository with respect to the Global Securities.
Global Securities shall be exchanged by the Company for Definitive Securities
if:

(A)          the
Company delivers to the Trustee notice from the Depository that it is unwilling
or unable to continue to act as Depository or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depository is not appointed by the Company within 120 days after the date of
such notice from the Depository; or

(B)           the
Company in its sole discretion determines that the Global Securities (in whole
but not in part) should be exchanged for Definitive Securities and delivers
written notice to such effect to the Trustee; or

(C)           there
shall have occurred and be continuing an Event of Default under this Indenture
and the Trustee has received a request from the Depository or any Holder to
issue Definitive Securities.

Upon the
occurrence of any of the preceding events in (A) or (B) above, the Company will
notify the Trustee in writing that, upon surrender by the Participants of their
interest in such Global Securities, Definitive Securities will be issued to
each Person that such Participants and the Depository identify as being the
beneficial owner of the related Securities. Global Securities also may be
exchanged or replaced, in whole or in part, as provided in Sections 304, 305
and 306 hereof. Except as otherwise provided above in this Section 203, every
Security authenticated and delivered in exchange for, or in lieu of, a Global
Security or any portion thereof, pursuant to this Section 203 or Sections 304,
305 or 306 hereof, shall be authenticated and delivered in the form of, and
shall be, a Global Security. A Global Security may not be exchanged for another
Security other than as provided in this Section 203(1).

(2)           Legends.
The following legend shall appear on the face of all Global Securities issued
under this Indenture unless specifically stated otherwise in the applicable provisions
of this Indenture:

 11
 

“THIS GLOBAL SECURITY IS HELD BY AND REGISTERED IN THE
NAME OF THE DEPOSITORY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY),
IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (A) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 203 OF THE INDENTURE, (B) THIS GLOBAL SECURITY
MAY BE EXCHANGED PURSUANT TO SECTION 203(1) OF THE INDENTURE, (C) THIS GLOBAL
SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
309 OF THE INDENTURE AND (D) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.”

(3)           General
Provisions Relating to Transfers and Exchanges.

(A)          To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Global Securities and Definitive Securities upon
the Company’s order or at the Security Registrar’s request.

(B)           No
service charge shall be made to a Holder of a Definitive Security for any
registration of transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange or transfer pursuant to Section 305 hereof).

(C)           The
Security Registrar shall not be required to register the transfer of or
exchange any Security selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.

(D)          All
Global Securities and Definitive Securities issued upon any registration of
transfer or exchange of Global Securities or Definitive Securities shall be the
valid and legally binding obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global
Securities or Definitive Securities surrendered upon such registration of
transfer or exchange.

 12
 

(E)           The
Company shall not be required (i) to issue, to register the transfer of or to
exchange any Securities during a period beginning at the opening of business on
a Business Day 15 days before the day of any selection of Securities for
redemption under Section 1103 hereof and ending at the close of business on the
day of selection or (ii) to register the transfer of or to exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part or (iii) to register the
transfer of or to exchange a Security between a record date for the payment of
interest and the next succeeding Interest Payment Date.

(F)           Prior
to due presentment for the registration of a transfer of any Security, the
Trustee, any Agent and the Company may deem and treat the Person in whose name
any Security is registered as the absolute owner of such Security for the
purpose of receiving payment of principal of and interest on such Securities
and for all other purposes, and none of the Trustee, any Agent or the Company
shall be affected by notice to the contrary.

(G)           The
Trustee shall authenticate Global Securities and Definitive Securities upon
original issuance in accordance with the provisions of Section 202 hereof.

(H)          All
certifications, certificates and Opinions of Counsel required to be submitted
to the Security Registrar pursuant to this Section 203 to effect a registration
of transfer or exchange may be submitted by facsimile with the original to
follow by first class mail.

(4)           No
Obligation of the Trustee.

(A)          None
of the Trustee, any Paying Agent or the Security Registrar shall have any
responsibility or obligation to any beneficial owner in a Global Security, a
member of, or a participant in the Depository or other Person with respect to
the accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than the Depository) of any notice
(including any notice of redemption) or the payment of any amount, under or
with respect to such Securities. All notices and communications to be given to
the Holders and all payments to be made to Holders under the Securities shall
be given or made only to or upon the order of the registered Holders (which
shall be the Depository or its nominee in the case of the Global Security). The
rights of beneficial owners in the Global Security shall be exercised only
through the Depository subject to the applicable rules and procedures of the
Depository. The Trustee, any Paying Agent and the Security Registrar may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its members, participants and any beneficial owners.
The Trustee, each Paying Agent and the Security Registrar shall be entitled to
deal with any depositary (including the Depository), and any nominee thereof,
that is the Holder of any Global Security for all purposes of this Indenture
relating to such global Security (including the payment of principal, premium,
if any, and interest and additional amounts, if any, and the giving of
instructions or directions by or to the owner or holder of a beneficial ownership
interest in such Global Security) as the sole Holder of such Global Security
and shall have no obligations to the beneficial owners thereof. None of the
Trustee, any Paying Agent or the Security Registrar shall have any
responsibility or liability for any acts or omissions of any such depositary
with respect to such Global Security, for the records of any such depositary,
including records in respect of beneficial ownership interests in respect of
any such Global Security, for any transactions between such depositary and any
participant in such depositary or between or among any such depositary, any
such participant and/or any holder or owner of a beneficial interest in such
Global Security or for any transfers of beneficial interests in any such Global
Security.

(B)           The
Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any Security
(including any transfers between or among Depository participants, members or
beneficial owners in the Global Security) other than to 

 13
 

make any required
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the
terms of this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.

ARTICLE
THREE

The Securities

SECTION 301. Amount
Unlimited; Issuable in Series.

The aggregate principal amount of Securities which may
be authenticated and delivered under this Indenture is unlimited.

The Securities may
be issued in one or more series. There shall be established in or pursuant to a
Board Resolution and, subject to Section 202, set forth, or determined in the
manner provided, in an Officers’ Certificate, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
series,

(1)           the
title of the Securities of the series (which shall distinguish the Securities
of the series from Securities of any other series);

(2)           any
limit upon the aggregate principal amount of the Securities of the series which
may be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of the series pursuant to Section 304,
305, 306, 906 or 1107 and except for any Securities which, pursuant to Section
202, are deemed never to have been authenticated and delivered hereunder);

(3)           the
Person to whom any interest on a Security of the series shall be payable, if
other than the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest;

(4)           the
date or dates on which the principal of any Securities of the series is
payable;

(5)           the
rate or rates at which any Securities of the series shall bear interest, if
any, the date or dates from which any such interest shall accrue, the Interest
Payment Dates on which any such interest shall be payable and the Regular
Record Date for any such interest payable on any Interest Payment Date;

(6)           the
place or places where the principal of and any premium and interest on any
Securities of the series shall be payable;

(7)           the
period or periods within which, the price or prices at which and the terms and
conditions upon which any Securities of the series may be redeemed, in whole or
in part, at the option of the Company and, if other than by a Board Resolution,
the manner in which any election by the Company to redeem the Securities shall
be evidenced;

(8)           the
obligation, if any, of the Company to redeem or purchase any Securities of the
series pursuant to any sinking fund or analogous provisions or at the option of
the Holder thereof and the period or periods within which, the price or prices
at which and the terms and conditions upon which any Securities of the series
shall be redeemed or purchased, in whole or in part, pursuant to such
obligation;

(9)           if
other than denominations of $1,000 and any integral multiple thereof, the
denominations in which any Securities of the series shall be issuable;

 14
 

(10)         if
the amount of principal of or any premium or interest on any Securities of the
series may be determined with reference to an index or pursuant to a formula,
the manner in which such amounts shall be determined,

(11)         if
other than the currency of the United States of America, the currency,
currencies or currency units in which the principal of or any premium or
interest on any Securities of the series shall be payable and the manner of
determining the equivalent thereof in the currency of the United States of
America for any purpose, including for purposes of the definition of “Outstanding”
in Section 101;

(12)         if
the principal of or any premium or interest on any Securities of the series is
to be payable, at the election of the Company or the Holder thereof, in one or
more currencies or currency units other than that or those in which such
Securities are stated to be payable, the currency, currencies or currency units
in which the principal of or any premium or interest on such Securities as to
which such election is made shall be payable, the periods within which and the
terms and conditions upon which such election is to be made and the amount so
payable (or the manner in which such amount shall be determined);

(13)         if
other than the entire principal amount thereof, the portion of the principal
amount of any Securities of the series which shall be payable upon declaration
of acceleration of the Maturity thereof pursuant to Section 502;

(14)         if
the principal amount payable at the Stated Maturity of any Securities of the
series will not be determinable as of any one or more dates prior to the Stated
Maturity, the amount which shall be deemed to be the principal amount of such
Securities as of any such date for any purpose thereunder or hereunder,
including the principal amount thereof which shall be due and payable upon any
Maturity other than the Stated Maturity or which shall be deemed to be
Outstanding as of any date prior to the Stated Maturity (or, in any such case,
the manner in which such amount deemed to be the principal amount shall be
determined);

(15)         if
applicable, that the Securities of the series, in whole or any specified part,
shall be defeasible pursuant to Section 1302 or Section 1303 or both such
Sections and, if other than by a Board Resolution, the manner in which any
election by the Company to defease such Securities shall be evidenced;

(16)         if
applicable, that any Securities of the series shall be issuable in whole or in
part in the form of one or more Global Securities and, in such case, the
respective Depositories for such Global Securities, the form of any legend or
legends which shall be borne by any such Global Security in addition to or in
lieu of that set forth in Section 203 and any circumstances in addition to or
in lieu of those set forth in Clause (B) of the last paragraph of Section
203(1) in which any such Global Security may be exchanged in whole or in part
for Securities registered, and any transfer of such Global Security in whole or
in part may be registered, in the name or names of Persons other than the
Depository for such Global Security or a nominee thereof;

(17)         any
addition to or change in the Events of Default which applies to any Securities
of the series and any change in the right of the Trustee or the requisite
Holders of such Securities to declare the principal amount thereof due and
payable pursuant to Section 502;

(18)         any
addition to or change in the covenants set forth in Article Ten which applies
to Securities of the series; and

(19)         any
other terms of the series (which
terms shall not be inconsistent with the provisions of this Indenture, except
as permitted by Section 901(5)).

All Securities of any one series shall be
substantially identical except as to denomination and except as may otherwise
be provided in or pursuant to the Board Resolution referred to above and
(subject to Section 202) set forth, 

 15
 

or determined in the manner provided, in the Officers’
Certificate referred to above or in any such indenture supplemental hereto.

If any of the terms of the series are established by
action taken by or pursuant to a Board Resolution, a copy of an appropriate
record of such action shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers’ Certificate setting forth the terms of the series.

SECTION 302. Intentionally
Omitted.

SECTION 303. Intentionally
Omitted.

SECTION 304. Temporary
Securities.

Pending the preparation of definitive Securities of
any series, the Company may execute and, upon receipt of Company Order the Trustee
shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the Definitive
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of
such Securities.

If temporary Securities of any series are issued, the
Company will cause Definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of Definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
Definitive Securities of such series upon surrender of the temporary Securities
of such series at the office or agency of the Company in a Place of Payment for
that series, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor one or more
Definitive Securities of the same series, of any authorized denominations and
of like tenor and aggregate principal amount. Until so exchanged, the temporary
Securities of any series shall in all respects be entitled to the same rights,
benefits and privileges under this Indenture as Definitive Securities of such
series and tenor.

SECTION 305. Registration;
Registration of Transfer and Exchange.

The Company shall cause to be kept at the Corporate
Trust Office of the Trustee a register (the register maintained in such office
or agency and in any other office or agency of the Company in a Place of
Payment being herein sometimes collectively referred to as the “Security
Register”) in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities and of
transfers of Securities. The Trustee is hereby appointed “Security Registrar”
for the purpose of registering Securities and transfers of Securities as herein
provided.

Except as otherwise specified or contemplated by
Section 301 with respect to the Securities of any series, upon surrender for
registration of transfer of any Security of such series at the office or agency
of the Company in a Place of Payment, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of the same series, of
authorized denominations and of like tenor and aggregate principal amount.

Except as otherwise specified or contemplated by
Section 301 with respect to the Securities of any series, any Security of such
series may be exchanged at the option of the Holder, for one or more new
Securities of the same series, of authorized denominations and of like tenor
and aggregate principal amount, upon surrender of the Securities to be
exchanged at any such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities that the Holder making the exchange is
entitled to receive.

All Securities delivered upon any registration of
transfer or exchange of Securities shall be valid obligations of the Company,
evidencing the same debt, and entitled to the benefits under this Indenture, as
the Securities surrendered upon such registration of transfer or exchange.

 16
 

Every Security presented or surrendered for
registration of transfer or for exchange shall (if so required by the Company,
the Trustee or the Security Registrar) be duly endorsed or shall be accompanied
by a written instrument of transfer in form satisfactory to the Company, the
Trustee or the Security Registrar, as the case may be, duly executed by the
Holder thereof or his attorney duly authorized in writing.

Unless otherwise specified as contemplated by Section
301 with respect to Securities of any series, no service charge shall be made
for any registration of transfer or exchange of Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Securities.

SECTION 306. Mutilated,
Destroyed, Lost and Stolen Securities.

If any mutilated security is surrendered to the
Trustee, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same series and of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.

If there shall be delivered to the Company and the
Trustee (1) evidence to their satisfaction of the destruction, loss or theft of
any Security and (2) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) connected
therewith.

Every new Security of any series issued pursuant to
this Section in lieu of any destroyed, lost or stolen Security shall constitute
an original additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.

The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.

SECTION 307. Payment of
Interest; Interest Rights Preserved.

Except as otherwise provided as contemplated by
Section 301 with respect to any series of Securities, interest on any Security
which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest.

Any interest on
any Security of any series which is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called “Defaulted Interest”)
shall forthwith cease to be payable to the Holder on the relevant Regular
Record Date by virtue of having been such Holder, and such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in Clause
(1) or (2) below:

(1)           The
Company may elect to make payment of any Defaulted Interest to the Persons in
whose names the Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the amount
of Defaulted Interest proposed to be paid on each Security of such series and
the date of the proposed payment, and at the same 

 17
 

time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Clause
provided. Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be given to each Holder of Securities of such series in the manner
set forth in Section 106, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so sent, such Defaulted Interest shall be paid
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to the
following Clause (2).

(2)           The
Company may make payment of any Defaulted Interest on the Securities of any
series in any other lawful manner not inconsistent with the requirements of any
securities exchange on which such Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause, such
manner of payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section,
each Security delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.

SECTION 308. Persons Deemed
Owners.

Prior to due presentment of a Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Security is registered
as the absolute owner of such Security for the purpose of receiving payment of
principal of and premium, if any, and (subject to Sections 305 and 307)
interest, if any, on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.

SECTION 309. Cancellation.

All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in
any manner whatsoever, and may deliver to the Trustee (or to any other Person
for delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed in
accordance with the Trustee’s then customary procedures. If requested by the
Company, certification of the cancellation of all surrendered Securities shall
be delivered to the Company.

SECTION 310. Computation of
Interest.

Except as otherwise specified as contemplated by
Section 301 for Securities of any series, interest on the Securities of each
series shall be computed on the basis of a 360-day year of twelve 30-day
months.

 18

SECTION 311. CUSIP Numbers.

The Company in issuing the Securities may use “CUSIP”
and/or other similar numbers (if then generally in use), and, if so, the
Trustee shall use “CUSIP” and/or such other numbers in notices of redemption or
exchange as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption or
exchange and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the “CUSIP” and/or such other
numbers.

ARTICLE
FOUR

Satisfaction and Discharge

SECTION 401. Satisfaction and
Discharge of Indenture.

This Indenture
shall upon Company Request cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when

(1)           either

(A)          all
Securities theretofore authenticated and delivered (other than (i) Securities
which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306 and (ii) Securities for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee for cancellation;
or

(B)           all
such Securities not theretofore delivered to the Trustee for cancellation

(i)            have
become due and payable, or

(ii)           will
become due and payable at their Stated Maturity within one year, or

(iii)          are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the name,
and at the expense, of the Company,

and the Company,
in the case of (i), (ii) or (iii) above, has deposited or caused to be
deposited with the Trustee as trust funds, in trust for such purpose, money in
an amount sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and any premium and interest to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;

(2)           the
Company has paid or caused to be paid all other sums payable hereunder by the
Company; and

(3)           the
Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been complied
with.

Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 614 and,
if money shall have 

 19
 

been deposited with the Trustee pursuant to subclause
(B) of Clause (1) of this Section, the obligations of the Trustee under Section
402 and the last paragraph of Section 1003 shall survive.

SECTION 402. Application of
Trust Money.

Subject to the provisions of the last paragraph of
Section 1003, all money deposited with the Trustee pursuant to Section 401
shall be held in trust and applied by it, in accordance with the provisions of
the Securities and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and
any premium and interest for whose payment such money has been deposited with
the Trustee.

ARTICLE
FIVE

Remedies

SECTION 501. Events of
Default.

“Event of Default”,
wherever used herein with respect to Securities of any series, means any one of
the following events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

(1)           default
in the payment of any interest upon any Security of that series when it becomes
due and payable, and continuance of such default for a period of 30 days; or

(2)           default
in the payment of the principal of or any premium on any Security of that
series at its Maturity; or

(3)           default
in the deposit of any sinking fund payment, when and as due by the terms of a
Security of that series; or

(4)           default
in the performance, or breach, of any covenant or warranty of the Company in
this Indenture (other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically dealt
with or which has expressly been included in this Indenture solely for the
benefit of series of Securities other than that series), and continuance of
such default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a “Notice
of Default” hereunder; or

(5)           the
entry by a court having jurisdiction in the premises of (A) a decree or order
for relief in respect of the Company or in an involuntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company or under
any applicable Federal or State law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or of
any substantial part of the its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a period of
60 consecutive days; or

(6)           the
commencement by the Company of a voluntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree or order for relief in
respect of the Company in an involuntary case or proceeding under any
applicable Federal or State 

 20
 

bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any applicable Federal
or State law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or of
any substantial part of its property, or the making by the Company of an
assignment for the benefit of creditors, or the admission by the Company in
writing of its inability to pay its debts generally as they become due, or the
taking of corporate action by the Company in furtherance of any such action; or

(7)           any
other Event of Default provided as contemplated by Section 301 or 901 with
respect to Securities of that series.

SECTION 502. Acceleration of
Maturity; Rescission and Annulment.

If an Event of Default (other than an Event of Default
specified in Section 501(5) or 501(6)) with respect to Securities of any series
at the time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount of all
the Securities of that series (or, if any Securities of that series are
Original Issue Discount Securities, such portion of the principal amount of
such Securities as may be specified by the terms thereof) to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable. If an Event of Default
specified in Section 501(5) or 501(6) with respect to Securities of any series
at the time Outstanding occurs, the principal amount of all the Securities of
that series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) shall automatically, and without any
declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable.

At any time after
such a declaration of acceleration with respect to Securities of any series has
been made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the Holders of
a majority in principal amount of the Outstanding Securities of that series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if

(1)           the
Company has paid or deposited with the Trustee a sum sufficient to pay

(A)          all
overdue interest on all Securities of that series,

(B)           the
principal of (and premium, if any, on) any Securities of that series which have
become due otherwise than by such declaration of acceleration and any interest
thereon at the rate or rates prescribed therefor in such Securities,

(C)           to
the extent that payment of such interest is lawful, interest upon overdue
interest at the rate or rates prescribed therefor in such Securities, and

(D)          all
sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
all other amounts due the Trustee under Section 607; and

(2)           all
Events of Default with respect to Securities of that series, other than the
non-payment of the principal of Securities of that series which have become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 513.

No such rescission shall affect any subsequent default
or impair any right consequent thereon.

 21
 

SECTION 503. Collection of
Indebtedness and Suits for Enforcement by Trustee.

The Company
covenants that if

(1)           default
is made in the payment of any interest on any Security when such interest
becomes due and payable and such default continues for a period of 30 days, or

(2)           default
is made in the payment of the principal of (or premium, if any, on) any
Security at the Maturity thereof,

and such default is continuing, the Company will, upon
demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable on such Securities for
principal and any premium and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and
premium and on any overdue interest, at the rate or rates prescribed therefor
in such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and all other amounts due the Trustee under Section
607.

If an Event of Default with respect to Securities of
any series occurs and is continuing, the Trustee may in its discretion proceed
to protect and enforce its rights and the rights of the Holders of Securities
of such series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.

SECTION 504. Trustee May File
Proofs of Claim.

In case of any judicial proceeding relative to the
Company (or any other obligor upon the Securities), its property or its
creditors, the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions authorized under the Trust
Indenture Act in order to have claims of the Holders and the Trustee (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel, and all other amounts due the Trustee
under Section 607) allowed in any such proceeding. In particular, the Trustee
shall be authorized to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 607.

No provision of this Indenture shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however, that the Trustee may, on behalf of the Holders,
vote for the election of a trustee in bankruptcy or similar official and be a
member of a creditors’ or other similar committee.

SECTION 505. Trustee May
Enforce Claims Without Possession of Securities.

All rights of action and claims under this Indenture
or the Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.

 22
 

SECTION 506. Application of
Money Collected.

Any money collected by the Trustee pursuant to this
Article and, after an Event of Default, any money or other property
distributable in respect of the Company’s obligations under this Indenture,
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or any premium or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee
(including any predecessor Trustee) under Section 607;

SECOND: To the payment of the amounts then due and
unpaid for principal of and any premium and interest on the Securities in
respect of which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such Securities for principal and any premium and interest,
respectively; and

THIRD: To the Company or to such party as a court of
competent jurisdiction shall direct;

provided, however, in the event that default is made
in the payment of any interest on any Security when such interest becomes due
and payable and such default continues for a period of 30 days, or default is
made in the payment of the principal of or premium, if any, on any Security on
the Stated Maturity Date or Redemption Date thereof, the Trustee may reserve
from any money collected pursuant to this Article an amount sufficient, in the
reasonable determination of the Trustee, to cover the expenses, disbursements
and advances of the Trustee that may be incurred thereafter.

The Trustee may fix a record date for the payment of
any amounts to Holders pursuant to this Section.

SECTION 507. Limitation on
Suits.

No Holder of any
Security of any series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment
of a receiver or trustee, or for any other remedy hereunder, unless

(1)           such
Holder has previously given written notice to the Trustee of a continuing Event
of Default with respect to the Securities of that series;

(2)           the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;

(3)           such
Holder or Holders have offered to the Trustee indemnity or security reasonably
satisfactory to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request;

(4)           the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and

(5)           no
direction inconsistent with such written request has been given to the Trustee
during such 60-day period by the Holders of a majority in principal amount of
the Outstanding Securities of that series;

it being understood and intended that no one or more
of such Holders shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other of such Holders, or to obtain or to seek to obtain
priority or preference over any other of such Holders or to enforce any right
under this Indenture, except in the manner herein provided and for the equal
and ratable benefit of all of such Holders.

 23
 

SECTION 508. Unconditional
Right of Holders to Receive Principal, Premium and Interest.

Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 307) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.

SECTION 509. Restoration of
Rights and Remedies.

If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.

SECTION 510. Rights and
Remedies Cumulative.

Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities in
the last paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

SECTION 511. Delay or
Omission Not Waiver.

No delay or omission of the Trustee or of any Holder
of any Securities to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.

SECTION 512. Control by
Holders.

The Holders of a
majority in principal amount of the Outstanding Securities of any series shall
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Securities of such series,
provided, however, that

(1)           such
direction shall not be in conflict with any rule of law or with this Indenture;

(2)           such
direction shall not involve the Trustee in personal liability; and

(3)           the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.

SECTION 513. Waiver of Past
Defaults.

The Holders of not
less than a majority in principal amount of the Outstanding Securities of any
series may on behalf of the Holders of all the Securities of such series waive
any past default hereunder with respect to such series and its consequences,
except a default

 24
 

(1)           in
the payment of the principal of or any premium or interest on any Security of
such series, or

(2)           in
respect of a covenant or provision hereof which under Article Nine cannot be
modified or amended without the consent of the Holder of each Outstanding
Security of such series affected.

Upon any such waiver, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other default or impair any right consequent thereon.

SECTION 514. Undertaking for
Costs.

In any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act; provided, however, that neither this Section nor the
Trust Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the
Company.

SECTION 515. Waiver of Usury,
Stay or Extension Laws.

The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.

ARTICLE
SIX

The Trustee

SECTION
601. Certain Duties and Responsibilities.

(1)           Except
during the continuance of an Event of Default with respect to any series of
Securities,

(A)          the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture with respect to the Securities of such
series, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and

(B)           in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture, but in the case of any such certificates
or opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Indenture.

(2)           In
case an Event of Default with respect to any series of Securities has occurred
and is continuing, the Trustee shall exercise with respect to the Securities of
such series such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.

 25
 

(3)           No
provision of this Indenture shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act or its
own willful misconduct, except that

(A)          this
Subsection shall not be construed to limit the effect of Subsections (1) and
(4) of this Section;

(B)           the
Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and

(C)           the
Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Holders of a
majority in principal amount of the Outstanding Securities of any series
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture with respect to the Securities of such
series.

(4)           Notwithstanding
the foregoing, no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

(5)           Whether
or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection
to the Trustee shall be subject to the provisions of this Section.

SECTION 602. Notice of
Defaults.

If a default occurs hereunder with respect to
Securities of any series, the Trustee shall give the Holders of Securities of
such series notice of such default as and to the extent provided by the Trust
Indenture Act; provided, however, that in the case of any default of the
character specified in Section 501(4) with respect to Securities of such
series, no such notice to Holders shall be given until at least 30 days after
the occurrence thereof. Except in the case of a default or Event of Default in
payment of principal of, premium, if any, or interest on any Security, or in
the payment of any sinking fund installment, the Trustee may withhold such
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interest of the Holders of the
Securities. For the purpose of this Section, the term “default” means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.

SECTION 603. Certain Rights
of Trustee.

Subject to the
provisions of Section 601:

(1)           the
Trustee may conclusively rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document (whether in its
original or facsimile form) believed by it to be genuine and to have been
signed or presented by the proper party or parties;

(2)           before
the Trustee acts or refrains from acting in administering this Indenture, it
may require an Officers’ Certificate or an Opinion of Counsel, or both, and the
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such certificate or opinion;

 26
 

(3)           any
request or direction of the Company mentioned herein shall be sufficiently
evidenced by a Company Request or Company Order, and any resolution of the
Board of Directors shall be sufficiently evidenced by a Board Resolution;

(4)           the
Trustee may consult with counsel of its selection and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;

(5)           the
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the
Holders pursuant to this Indenture, unless such Holders shall have offered to
the Trustee security or indemnity reasonably satisfactory to the Trustee against
the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;

(6)           the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney;

(7)           the
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee
shall not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;

(8)           the
Trustee shall not be liable for any action taken, suffered, or omitted to be
taken by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture;

(9)           the
Trustee shall not be deemed to have notice or be charged with knowledge of any
default (within the meaning of Section 602) or Event of Default with respect to
the Securities of any series for which it is acting as Trustee unless written
notice of such default or Event of Default, as the case may be, is received by
the Trustee at the Corporate Trust Office of the Trustee from the Company, any
other obligor upon such Securities or by any Holder of such Securities, and
such notice references the Securities and this Indenture;

(10)         the
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder,
and each agent, custodian and other Person employed to act hereunder;

(11)         the
Trustee may request that the Company deliver an Officers’ Certificate setting
forth the names of individuals and/or titles of officers authorized at such
time to take specified actions pursuant to this Indenture, which Officers’
Certificate may be signed by any persons authorized to sign an Officers’
Certificate, including any person specified as so authorized in any such
certificate previously delivered and not superseded;

(12)         the
permissive right of the Trustee hereunder to take or omit to take any action
shall not be construed as a duty; and

(13)         anything
in this Indenture notwithstanding, in no event shall the Trustee be liable for
special, indirect, punitive or consequential loss or damage of any kind
whatsoever (including but not limited to loss of profit), even if the Company
has been advised as to the likelihood of such loss or damage and regardless of
the form of action.

 27
 

SECTION 604. Not Responsible
for Recitals or Issuance of Securities.

The recitals contained herein and in the Securities,
except the Trustee’s certificates of authentication, shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of Securities or the
proceeds thereof.

SECTION 605. May Hold
Securities.

The Trustee, any Authenticating Agent, any Paying
Agent, any Security Registrar or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Securities
and, subject to Sections 608 and 613, may otherwise deal with the Company with
the same rights it would have if it were not Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent.

SECTION 606. Money Held in
Trust.

Money held by the Trustee in trust hereunder need not
be segregated from other funds except to the extent required by law. The
Trustee shall be under no liability for interest on, or for the investment of,
any money received by it hereunder except as otherwise agreed in writing with
the Company.

SECTION 607. Compensation and
Reimbursement.

The Company agrees

(1)           to
pay to the Trustee from time to time such compensation as shall be agreed in
writing between the Company and the Trustee for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);

(2)           except
as otherwise expressly provided herein, to reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its agents and counsel), except any such expense, disbursement or advance as
may be attributable to its gross negligence or willful misconduct; and

(3)           to
the fullest extent permitted by law, to indemnify each of the Trustee, or any
predecessor Trustee, and their respective officers, employees, directors, shareholders
and agents, for, and to hold them harmless against, any and all loss, damage,
claim, liability or expense, including taxes (other than taxes based upon,
measured by or determined by the income of the Trustee or any predecessor
Trustee), incurred without gross negligence or willful misconduct on its part,
arising out of or in connection with the acceptance or administration of the
trusts and its duties under this Indenture, including the enforcement of this
provision, including the reasonable costs and expenses of defending (including
the reasonable compensation and the expense and disbursements of its agents and
counsel) themselves against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.

As security for the performance of the obligations of
the Company under this Section, the Trustee shall have a lien prior to the
Securities upon all property and funds held or collected by the Trustee as
such, other than funds held in trust under Section 402.

In addition and without prejudice to the rights
provided to the Trustee under any of the provisions of this Indenture, when the
Trustee incurs expenses or renders services in connection with an Event of
Default specified in Section 501(5) or Section 501(6), the expenses (including
the reasonable charges and expenses of its counsel) and the compensation for
the services are intended to constitute expenses of administration under any
applicable Federal and State bankruptcy, insolvency or other similar law.

 28

The Company’s obligations under this Section 607 and
the lien referred to in this Section 607 shall survive the resignation or
removal of the Trustee, the discharge of the Company’s obligations under
Articles Four and Thirteen of this Indenture and/or the termination of this
Indenture.

“Trustee” for purposes of this Section 607 shall
include any predecessor Trustee; provided, however, that the negligence, bad
faith or willful misconduct of any Trustee hereunder shall not affect the
rights of any other Trustee hereunder.

SECTION 608. Conflicting
Interests.

If the Trustee has or shall acquire a conflicting
interest within the meaning of Section 310(b) of the Trust Indenture Act, the
Trustee shall eliminate such interest, apply to the Commission for permission to
continue as trustee (if any of the Securities are registered pursuant to the
Securities Act) or resign, to the extent and in the manner provided by, and
subject to the provisions of, the Trust Indenture Act and this Indenture. To
the extent permitted by such Act, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under this Indenture, in its
capacity as trustee in respect of the Securities of any series, in its capacity
as trustee in respect of the Securities of any other series or any other
indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are outstanding.
Nothing herein shall prevent the Trustee from filing with the Commission the
application referred to in the second to last paragraph of Section 310(b) of
the Trust Indenture Act.

SECTION 609. Corporate
Trustee Required; Eligibility.

There shall at all times be one (and only one) Trustee
hereunder with respect to the Securities of each series, which may be Trustee
hereunder for Securities of one or more other series. Each Trustee shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and has its
Corporate Trust Office in the United States of America. If any such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of its supervising or examining authority, then for the purposes
of this Section and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee with respect to the Securities of any
series shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

SECTION
610. Resignation and Removal; Appointment of
Successor.

No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 611.

The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may, at the
expense of the Company, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.

The Trustee may be removed at any time with respect to
the Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company. If the instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the Trustee within 30
days after the Trustee’s receipt of such notice of removal, the departing
Trustee may, at the expense of the Company, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.

If at any time:

 29
 

(1)           the
Trustee shall fail to comply with Section 608 after written request therefor by
the Company or by any Holder who has been a bona fide Holder of a Security for
at least six months, or

(2)           the
Trustee shall cease to be eligible under Section 609 and shall fail to resign
after written request therefor by the Company or by any such Holder, or

(3)           the
Trustee shall become incapable of acting or shall be adjudged a bankrupt or
insolvent or a receiver of the Trustee or of its property shall be appointed or
any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, (A) the Company by a Board Resolution may
remove the Trustee with respect to all Securities, or (B) subject to Section
514, any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with respect
to all Securities and the appointment of a successor Trustee or Trustees.

If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Securities of one or more series, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee or Trustees
with respect to the Securities of that or those series (it being understood
that any such successor Trustee may be appointed with respect to the Securities
of one or more or all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any particular series) and shall
comply with the applicable requirements of Section 611. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements
of Section 611, become the successor Trustee with respect to the Securities of
such series and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Securities of any series
shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 611, any Holder who has been a
bona fide Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.

The Company shall give notice of each resignation and
each removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities of any
series to all Holders of Securities of such series in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with
respect to the Securities of such series and the address of its Corporate Trust
Office.

SECTION 611. Acceptance of
Appointment by Successor.

In case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder; subject,
nevertheless, to its lien provided for in Section 607.

In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor Trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring 

 30
 

Trustee is not retiring
with respect to all Securities, shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or
those series as to which the retiring Trustee is not retiring shall continue to
be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary, to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee,
it being understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates; subject,
nevertheless, to its lien provided for in Section 607.

Upon request of any such successor Trustee, the
Company shall execute any and all instruments to more fully and certainly vest
in and confirm to such successor Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.

No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee shall be qualified
and eligible under this Article.

SECTION 612. Merger,
Conversion, Consolidation or Succession to Business.

Any Person into which the Trustee may be merged or
converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any Person succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such Person shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.

SECTION 613. Preferential
Collection of Claims Against Company.

If and when the Trustee shall be or become a creditor
of the Company (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection
of claims against the Company (or any such other obligor).

SECTION 614. Appointment of
Authenticating Agent.

The Trustee may appoint an Authenticating Agent or
Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon original issue and upon exchange, registration of transfer
or partial redemption thereof or pursuant to Section 306, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee’s certificate of
authentication, such reference shall be deemed to include authentication and delivery
on behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital 

 31
 

and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.

Any corporation into which an Authenticating Agent may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to all or
substantially all of the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided
such corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee or
the Authenticating Agent.

An Authenticating Agent may resign at any time by
giving written notice thereof to the Trustee and to the Company. The Trustee
may at any time terminate the agency of an Authenticating Agent by giving
written notice thereof to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case
at any time such Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment in the manner provided in Section 106 to all Holders
of Securities of the series with respect to which such Authenticating Agent will
serve. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.

The Trustee agrees to pay to each Authenticating Agent
from time to time reasonable compensation for its services under this Section,
and the Trustee shall be entitled to be reimbursed for such payments, subject
to the provisions of Section 607.

If an appointment with respect to one or more series
is made pursuant to this Section, the Securities of such series may have
endorsed thereon, in addition to the Trustee’s certificate of authentication,
an alternative certificate of authentication in the following form:

This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.

	
  

  	
  [

  	
   

  	
  ]

  
	
  Dated:

  	
   

  	
   

  	
  as
  Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  As
  Authenticating Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Officer

  
							

 

ARTICLE
SEVEN

Holders’ Lists and Reports by
Trustee and Company

SECTION 701. Preservation of
Information; Communications to Holders.

The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the
Trustee in its capacity as Security Registrar.

The rights of Holders to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities, and the corresponding rights and privileges of the Trustee, shall
be as provided by the Trust Indenture Act.

 32
 

Every Holder of Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.

SECTION 702. Reports by
Trustee.

So long as any Securities remain outstanding, the
Trustee shall transmit to Holders such reports concerning the Trustee and its
actions under this Indenture as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto. If required by Section
313(a) of the Trust Indenture Act, the Trustee shall, within sixty days after
each September 1 following the date of this Indenture deliver to Holders a
brief report, dated as of such September 1, which complies with the provisions
of such Section 313(a) (but if no event described in Section 313(a) has
occurred within the 12 months preceding the reporting date, no such report need
be transmitted). The Trustee also shall comply with Section 313(b)(2) of the
Trust Indenture Act and shall also transmit by mail all reports as required by
Section 313(c) of the Trust Indenture Act.

A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when any Securities are listed on any stock
exchange or delisted therefrom.

SECTION 703. Reports by
Company.

The Company shall file with the Trustee and the
Commission, and transmit to Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant to such Act;
provided, however, that any such information, documents or reports required to
be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission. Delivery of such reports, information
and documents to the Trustee is for informational purposes only and the Trustee’s
receipt of same shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on an Officers’ Certificate).

ARTICLE
EIGHT

Consolidation, Merger,
Conveyance, Transfer or Lease

SECTION
801. Company May Consolidate, Etc., Only on
Certain Terms.

The Company shall
not consolidate with or merge into any other Person or convey, transfer or
lease its properties and assets substantially as an entirety to any Person, and
the Company shall not permit any Person to consolidate with or merge into the
Company or convey, transfer or lease its properties and assets substantially as
an entirety to the Company, unless:

(1)           in
case the Company shall consolidate with or merge into another Person or convey,
transfer or lease substantially all of its properties and assets as an entirety
to any Person, the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer, or
which leases substantially all of the properties and assets of the Company as
an entirety shall be a corporation, partnership, limited liability company or
trust, shall be organized and validly existing under the laws of the United
States of America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and delivered
to the Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of and any premium and interest on all the Securities
and the performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed;

(2)           immediately
after giving effect to such transaction and treating any indebtedness which
becomes an obligation of the Company or any Subsidiary as a result of such
transaction as having been 

 33
 

incurred by the Company
or such Subsidiary at the time of such transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing; and

(3)           the
Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance, transfer or
lease and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with.

SECTION 802. Successor
Substituted.

Upon any consolidation of the Company with, or merger
of the Company into, any other Person or any conveyance, transfer or lease of
the properties and assets of the Company substantially as an entirety in
accordance with Section 801, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein, and thereafter,
except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.

ARTICLE
NINE

Supplemental Indentures

SECTION 901. Supplemental
Indentures Without Consent of Holders.

Without the
consent of any Holders, the Company, when authorized by a Board Resolution, and
the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:

(1)           to
evidence the succession of another Person to the Company and the assumption by
any such successor of the covenants of the Company herein and in the Securities
contained, all as provided in Article Eight; or

(2)           to
add to the covenants of the Company for the benefit of the Holders of all or
any series of Securities (and if such covenants are to be for the benefit of
less than all series of Securities, stating that such covenants are expressly
being included solely for the benefit of such series) or to surrender any right
or power herein conferred upon the Company; or

(3)           to
add any additional Events of Default for the benefit of the Holders of all or
any series of Securities (and if such additional Events of Default are to be
for the benefit of less than all series of Securities, stating that such
additional Events of Default are expressly being included solely for the
benefit of such series); or

(4)           to
add to or change any of the provisions of this Indenture to such extent as
shall be necessary to permit or facilitate the issuance of Securities in
uncertificated form; or

(5)           to
add to, change or eliminate any of the provisions of this Indenture in respect
of one or more series of Securities, provided, however, that any such addition,
change or elimination (A) shall neither (i) apply to any Security of any series
created prior to the execution of such supplemental indenture and entitled to
the benefit of such provision nor (ii) modify the rights of the Holder of any
such Security with respect to such provision or (B) shall become effective only
when there is no such Security Outstanding; or

(6)           to
secure the Securities; or

 34
 

(7)           to
establish the form or terms of Securities of any series as permitted by
Sections 201 and 301; or

(8)           to
evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Securities of one or more series and to add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 611;

(9)           to
cure any ambiguity, to correct or supplement any provision herein which may be
defective or inconsistent with any other provision herein, or to make any other
provisions with respect to matters or questions arising under this Indenture,
provided that such action pursuant to this Clause (9) shall not adversely
affect the interests of the Holders of Securities of any series; or

(10)         to
comply with the requirements of the Commission either to effect or maintain the
qualifications of this Indenture under the Trust Indenture Act.

SECTION 902. Supplemental
Indentures with Consent of Holders.

With the consent
of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series affected by such supplemental indenture,
by Act of said Holders delivered to the Company and the Trustee, the Company,
when authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security,

(1)           change
the Stated Maturity of the principal of, or any installment of principal of or
interest on, any Security, or reduce the principal amount thereof or the rate
of interest thereon or any premium payable upon the redemption thereof, or
reduce the amount of the principal of an Original Issue Discount Security or
any other Security which would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502, or change any
Place of Payment where, or the coin or currency in which, any Security or any
premium or interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or

(2)           reduce
the percentage in principal amount of the Outstanding Securities of any series,
the consent of whose Holders is required for any such supplemental indenture,
or the consent of whose Holders is required for any waiver (of compliance with
certain provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or

(3)           modify
any of the provisions of this Section, Section 513, or Section 1008, except to
increase any such percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the Holder
of each Outstanding Security affected thereby; provided, however, that this
clause shall not be deemed to require the consent of any Holder with respect to
changes in the references to “the Trustee” and concomitant changes in this
Section and Section 1008, or the deletion of this proviso, in accordance with
the requirements of Sections 611 and 901(8).

A supplemental indenture which changes or eliminates
any covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of Securities,
or which modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the
rights under this Indenture of the Holders of Securities of any other series.

It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.

 35
 

SECTION 903. Execution of
Supplemental Indentures.

In executing, or accepting the additional trusts
created by, any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee
shall be entitled to receive, and (subject to Section 601) shall be fully
protected in relying upon, an Officers’ Certificate and an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee’s own
rights, duties or immunities under this Indenture or otherwise.

SECTION 904. Effect of
Supplemental Indentures.

Upon the execution of any supplemental indenture under
this Article, this Indenture shall be modified in accordance therewith, and
such supplemental indenture shall form a part of this Indenture for all
purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.

SECTION 905. Conformity with
Trust Indenture Act.

Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture Act.

SECTION 906. Notice of
Supplemental Indenture; Reference in Securities to Supplemental Indentures.

After any supplemental indenture entered into pursuant
to this Article becomes effective, the Company shall send to Holders a notice
briefly describing such supplemental indenture. The failure to give such notice
to all Holders, or any defect therein, shall not impair or affect the validity
of any such supplemental indenture under this Article.

Securities of any series authenticated and delivered
after the execution of any supplemental indenture pursuant to this Article may,
and shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of any series so modified as to conform,
in the opinion of the Trustee and the Company, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Securities of such series.

ARTICLE
TEN

Covenants

SECTION 1001. Payment of
Principal, Premium and Interest.

The Company covenants and agrees for the benefit of
each series of Securities that it will duly and punctually pay the principal of
and any premium and interest on the Securities of that series in accordance
with the terms of the Securities and this Indenture.

SECTION 1002. Maintenance of
Office or Agency.

The Company will maintain in each Place of Payment for
any series of Securities an office or agency (which may be an office of the
Trustee or an affiliate of the Trustee, Security Registrar or Co-Security
Registrar) where Securities of that series may be presented or surrendered for
payment, where Securities of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive
all such presentations, surrenders, notices and demands.

 36
 

The Company may also from time to time designate one
or more other offices or agencies where the Securities of one or more series
may be presented or surrendered for any or all such purposes and may from time
to time rescind such designations; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.

SECTION 1003. Money for
Securities Payments to Be Held in Trust.

If the Company shall at any time act as its own Paying
Agent with respect to any series of Securities, it will, on or before each due
date of the principal of or any premium or interest on any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal and any premium and
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.

Whenever the Company shall have one or more Paying
Agents for any series of Securities, it will, prior to each due date of the
principal of or any premium or interest on any Securities of that series,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided by the Trust Indenture Act, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.

The Company will cause each Paying Agent for any
series of Securities other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent will (1)
comply with the provisions of the Trust Indenture Act applicable to it as a
Paying Agent and (2) during the continuance of any default by the Company (or
any other obligor upon the Securities of that series) in the making of any
payment in respect of the Securities of that series, upon the written request
of the Trustee, forthwith pay to the Trustee all sums held in trust by such
Paying Agent for payment in respect of the Securities of that series.

The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Company Order direct any Paying Agent to pay, to the
Trustee all sums held in trust by the Company or such Paying Agent, such sums
to be held by the Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.

Subject to applicable abandoned property laws, any
money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee thereof,
shall thereupon cease; provided, however, that the Trustee or such Paying
Agent, before being required to make any such repayment, may at the expense of
the Company cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in New York, New York, notice that such money remains unclaimed and that, after
a date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.

SECTION 1004. Statement by
Officers as to Default.

The Company will deliver to the Trustee, within 120
days after the end of each fiscal year of the Company ending after the date
hereof, an Officers’ Certificate, stating whether or not to the best knowledge
of the signers thereof the Company is in default in the performance and
observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and, if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
The Company shall, so long as any of the Securities are Outstanding, deliver to
the Trustee, forthwith and in any event within five business days upon any
executive officer of the Company becoming aware of any default or Event of 

 37
 

Default in respect of the performance or observance of
any covenant, agreement or condition contained in this Indenture or the
Securities, but in any event not later than 20 Business Days after the
occurrence thereof, an Officers’ Certificate specifying such default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.

SECTION 1005. Existence.

Subject to Article Eight, the Company will do or cause
to be done all things necessary to preserve and keep in full force and effect
its existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the
loss thereof is not disadvantageous in any material respect to the Holders.

SECTION 1006. Maintenance of
Properties.

The Company will cause all material properties used or
useful in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order (reasonable
wear and tear excepted) and supplied with all necessary equipment and will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Company, desirable in the
conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.

SECTION 1007. Payment of
Taxes and Other Claims.

The Company will pay or discharge or cause to be paid
or discharged, before the same shall become delinquent, (1) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
Subsidiary or upon the income, profits or property of the Company or any
Subsidiary, and (2) all lawful claims for labor, materials and supplies which,
if unpaid, might by law become a lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings.

SECTION 1008. Waiver of
Certain Covenants.

Except as otherwise specified as contemplated by
Section 301 for Securities of such series, the Company may, with respect to the
Securities of any series, omit in any particular instance to comply with any
term, provision or condition set forth in any covenant provided pursuant to
Section 301(18), 901(2) or 901(7) for the benefit of the Holders of such
series, if before the time for such compliance the Holders of at least a
majority in principal amount of the Outstanding Securities of such series
shall, by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision or condition except to
the extent so expressly waived, and, until such waiver shall become effective,
the obligations of the Company and the duties of the Trustee in respect of any
such term, provision
or condition shall remain in full force and effect.

SECTION 1009. Calculation of
Original Issue Discount.

The Company shall provide to the Trustee on a timely
basis such information as the Trustee requires to enable the Trustee to prepare
and file any form required to be submitted by the Company with the Internal
Revenue Service and the Holders of the Notes relating to original issue
discount, including, without limitation, Form 1099-OID or any successor form.

 38

ARTICLE
ELEVEN

Redemption of Securities

SECTION
1101. Applicability of Article.

Securities of any series which are redeemable before
their Stated Maturity shall be redeemable in accordance with their terms and
(except as otherwise specified as contemplated by Section 301 for such
Securities) in accordance with this Article.

SECTION
1102. Election to Redeem; Notice to Trustee.

The election of the Company to redeem any Securities
shall be evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities. In case of any redemption at the election
of the Company of less than all the Securities of any series (including any
such redemption affecting only a single Security), the Company shall, not less
than 45 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date, of the principal amount of Securities of such series to
be redeemed and, if applicable, of the tenor of the Securities to be redeemed.
In the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers’ Certificate evidencing compliance with such restriction.

SECTION
1103. Selection by Trustee of Securities to
Be Redeemed.

If less than all the Securities of any series are to
be redeemed (unless all the Securities of such series and of a specified tenor
are to be redeemed or unless such redemption affects only a single Security),
the particular Securities to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, with the
requirements of the principal national securities exchange, if any, on which
the Securities are listed or, if the Securities are not so listed, by such
method as the Trustee shall deem fair and appropriate and which may provide for
the selection for redemption of a portion of the principal amount of any
Security of such series; provided, however, that the unredeemed portion of the
principal amount of any Security shall be in an authorized denomination (which
shall not be less than the minimum authorized denomination) for such Security.
If less than all the Securities of such series and of a specified tenor are to
be redeemed (unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series and specified tenor not previously called for redemption in
accordance with the preceding sentence.

The Trustee shall promptly notify the Company in
writing of the Securities selected for redemption as aforesaid and, in case of
any Securities selected for partial redemption as aforesaid, the principal
amount thereof to be redeemed.

The provisions of the two preceding paragraphs shall
not apply with respect to any redemption affecting only a single Security,
whether such Security is to be redeemed in whole or in part. In the case of any
such redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.

For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.

SECTION
1104. Notice of Redemption.

Notice of redemption shall be given by electronic
transmission or first-class mail, postage prepaid, sent not less than 30 nor
more than 60 days prior to the Redemption Date, to each Holder of Securities to
be redeemed, at his address appearing in the Security Register.

 39
 

All notices of
redemption shall state:

(1)           the
Redemption Date,

(2)           the
Redemption Price,

(3)           if
less than all the Outstanding Securities of any series consisting of more than
a single Security are to be redeemed, the identification (and, in the case of
partial redemption of any such Securities, the principal amounts) of the
particular Securities to be redeemed and, if less than all the Outstanding
Securities of any series consisting of a single Security are to be redeemed,
the principal amount of the particular Security to be redeemed,

(4)           that
on the Redemption Date the Redemption Price, and accrued interest, if any, will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after said date,

(5)           the
place or places where each such Security is to be surrendered for payment of
the Redemption Price,

(6)           that
the redemption is for a sinking fund, if such is the case, and

(7)           the
CUSIP and/or other similar number as contemplated by Section 311.

Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company’s request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.

SECTION
1105. Deposit of Redemption Price.

On or prior to 10:00 a.m., New York City time, on any
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities which are to be redeemed
on that date.

SECTION
1106. Securities Payable on Redemption Date.

Notice of redemption having been given as aforesaid,
the Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 301, installments of interest
whose Stated Maturity is on or prior to the Redemption Date will be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.

If any Security called for redemption shall not be so
paid upon surrender thereof for redemption, the principal and any premium
shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.

 40
 

SECTION
1107. Securities Redeemed in Part.

Any Definitive Security which is to be redeemed only
in part shall be surrendered at a Place of Payment therefor (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities of
the same series and of like tenor, of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.

ARTICLE
TWELVE

Sinking Funds

SECTION
1201. Applicability of Article.

The provisions of this Article shall be applicable to
any sinking fund for the retirement of Securities of any series except as
otherwise specified as contemplated by Section 301 for such Securities.

The minimum amount of any sinking fund payment
provided for by the terms of any Securities is herein referred to as a “mandatory
sinking fund payment”, and any payment in excess of such minimum amount
provided for by the terms of such Securities is herein referred to as an “optional
sinking fund payment”. If provided for by the terms of any Securities, the cash
amount of any sinking fund payment may be subject to reduction as provided in
Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities as provided for by the terms of such Securities.

SECTION
1202. Satisfaction of Sinking Fund Payments
with Securities.

The Company (1) may deliver Outstanding Securities of
a series (other than any previously called for redemption) and (2) may apply as
a credit Securities of a series which have been redeemed either at the election
of the Company pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the terms
of such Securities, in each case in satisfaction of all or any part of any
sinking fund payment with respect to any Securities of such series required to
be made pursuant to the terms of such Securities as and to the extent provided
for by the terms of such Securities; provided, however, that the Securities to be
so credited have not been previously so credited. The Securities to be so
credited shall be received and credited for such purpose by the Trustee at the
Redemption Price, as specified in the Securities so to be redeemed, for
redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly.

SECTION
1203. Redemption of Securities for Sinking
Fund.

Not less than 90 days prior to each sinking fund
payment date for any Securities, the Company will deliver to the Trustee an
Officers’ Certificate specifying the amount of the next ensuing sinking fund
payment for such Securities pursuant to the terms of such Securities, the
portion thereof, if any, which is to be satisfied by payment of cash and the
portion thereof, if any, which is to be satisfied by delivering and crediting
Securities pursuant to Section 1202 and will also deliver to the Trustee any
Securities to be so delivered. Not less than 45 days prior to each such sinking
fund payment date, the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and
cause notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 1104. Such notice
having been duly given, the redemption of such Securities shall be made upon
the terms and in the manner stated in Sections 1106 and 1107.

ARTICLE
THIRTEEN

Defeasance and Covenant
Defeasance

 41
 

SECTION
1301. Company’s Option to Effect Defeasance
or Covenant Defeasance.

The Company may elect, at its option at any time, to
have Section 1302 or Section 1303 applied to any Securities or any series of
Securities, as the case may be, designated pursuant to Section 301 as being
defeasible pursuant to such Section 1302 or 1303, in accordance with any
applicable requirements provided pursuant to Section 301 and upon compliance
with the conditions set forth below in this Article. Any such election shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities.

SECTION
1302. Defeasance and Discharge.

Upon the Company’s exercise of its option (if any) to
have this Section applied to any Securities or any series of Securities, as the
case may be, the Company shall be deemed to have been discharged from its
obligations with respect to such Securities as provided in this Section on and
after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called “Defeasance”). For this purpose, such Defeasance means that
the Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Securities and to have satisfied all its other obligations
under such Securities and this Indenture insofar as such Securities are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder: (1) the rights of
Holders of such Securities to receive, solely from the trust fund described in
Section 1304 and as more fully set forth in such Section, payments in respect
of the principal of and any premium and interest on such Securities when
payments are due, (2) the Company’s obligations with respect to such Securities
under Sections 304, 305, 306, 1002 and 1003 and with respect to the Trustee,
including but not limited to those under Section 607, (3) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and (4) this Article.
Subject to compliance with this Article, the Company may exercise its option
(if any) to have this Section applied to any Securities notwithstanding the
prior exercise of its option (if any) to have Section 1303 applied to such
Securities.

SECTION
1303. Covenant Defeasance.

Upon the Company’s exercise of its option (if any) to
have this Section applied to any Securities or any series of Securities, as the
case may be, (1) the Company shall be released from its obligations under
Sections 1006 through 1007, inclusive, and any covenants provided pursuant to
Sections 301(18), 901(2) or 901(7) for the benefit of the Holders of such
Securities and (2) the occurrence of any event specified in Sections 501(4)
(with respect to any of Sections 1006 through 1007, inclusive, and any such
covenants provided pursuant to Section 301(18), 901(2) or 901(7)) and 501(7)
shall be deemed not to be or result in an Event of Default, in each case with
respect to such Securities as provided in this Section on and after the date
the conditions set forth in Section 1304 are satisfied (hereinafter called “Covenant
Defeasance”). For this purpose, such Covenant Defeasance means that, with
respect to such Securities, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such specified Section (to the extent so specified in the case of Section
501(4)), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.

SECTION
1304. Conditions to Defeasance or Covenant
Defeasance.

The following
shall be the conditions to the application of Section 1302 or Section 1303 to
any Securities or any series of Securities, as the case may be:

(1)           The
Company shall irrevocably have deposited or caused to be deposited with the
Trustee (or another trustee which satisfies the requirements contemplated by
Section 609 and agrees to comply with the provisions of this Article applicable
to it) as trust funds in trust for the purpose of making the following
payments, specifically pledged as security for, and dedicated solely to, the
benefits of the Holders of such Securities, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount, or
(C) a combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the 

 42
 

Trustee (or any such
other qualifying trustee) to pay and discharge, the principal of and any
premium and interest on such Securities on the respective Stated Maturities or
on the applicable redemption date, as the case may be, in accordance with the
terms of this Indenture and such Securities. As used herein, “U.S. Government
Obligation” means (i) any security which is (x) a direct obligation of the
United States of America for the payment of which the full faith and credit of
the United States of America is pledged or (y) an obligation of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America the payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States of America, which, in
either case (x) or (y), is not callable or redeemable at the option of the
issuer thereof, and (ii) any depositary receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S.
Government Obligation which is specified in Clause (i) above and held by such
bank for the account of the holder of such depositary receipt, or with respect
to any specific payment of principal of or interest on any U.S. Government
Obligation which is so specified and held; provided, however, that (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or the
specific payment of principal or interest evidenced by such depositary receipt.

(2)           In
the event of an election to have Section 1302 apply to any Securities or any
series of Securities, as the case may be, the Company shall have delivered to
the Trustee an Opinion of Counsel stating that (A) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling or (B)
since the date of this instrument, there has been a change in the applicable
Federal income tax law, in either case (A) or (B) to the effect that, and based
thereon such opinion shall confirm that, the Holders of such Securities will
not recognize gain or loss for Federal income tax purposes as a result of the
deposit, Defeasance and discharge to be effected with respect to such
Securities and will be subject to Federal income tax on the same amount, in the
same manner and at the same times as would be the case if such deposit,
Defeasance and discharge were not to occur.

(3)           In
the event of an election to have Section 1303 apply to any Securities or any
series of Securities, as the case may be, the Company shall have delivered to
the Trustee an Opinion of Counsel to the effect that the Holders of such
Securities will not recognize gain or loss for Federal income tax purposes as a
result of the deposit and Covenant Defeasance to be effected with respect to
such Securities and will be subject to Federal income tax on the same amount,
in the same manner and at the same times as would be the case if such deposit
and Covenant Defeasance were not to occur.

(4)           The
Company shall have delivered to the Trustee an Officers’ Certificate to the
effect that neither such Securities nor any other Securities of the same
series, if then listed on any securities exchange, will be delisted as a result
of such deposit.

(5)           No
event which is, or after notice or lapse of time or both would become, an Event
of Default with respect to such Securities or any other Securities shall have
occurred and be continuing at the time of such deposit or, with regard to any
such event specified in Sections 501(6) and (7), at any time on or prior to the
90th day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 90th day).

(6)           Such
Defeasance or Covenant Defeasance shall not cause the Trustee to have a
conflicting interest within the meaning of the Trust Indenture Act (assuming all
Securities are in default within the meaning of such Act).

(7)           Such
Defeasance or Covenant Defeasance shall not result in a breach or violation of,
or constitute a default under, any other agreement or instrument to which the
Company is a party or by which it is bound.

 43
 

(8)           Such
Defeasance or Covenant Defeasance shall not result in the trust arising from
such deposit constituting an investment company within the meaning of the
Investment Company Act unless such trust shall be registered under such Act or
exempt from registration thereunder.

(9)           The
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent with respect to
such Defeasance or Covenant Defeasance have been complied with.

SECTION
1305. Deposited Money and U.S. Government
Obligations to Be Held in Trust; Miscellaneous Provisions.

Subject to the provisions of the last paragraph of
Section 1003, all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or other qualifying trustee (solely for
purposes of this Section and Section 1306, the Trustee and any such other
trustee are referred to collectively as the “Trustee”) pursuant to Section 1304
in respect of any Securities shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any such Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Holders of such Securities, of all sums due and to become due thereon in
respect of principal and any premium and interest, but money so held in trust
need not be segregated from other funds except to the extent required by law.

The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 1304 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of Outstanding
Securities.

Anything in this Article to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or U.S. Government Obligations held by it
as provided in Section 1304 with respect to any Securities which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect the Defeasance or Covenant Defeasance, as the case may be, with respect
to such Securities.

SECTION
1306. Reinstatement.

If the Trustee or the Paying Agent is unable to apply
any money in accordance with this Article with respect to any Securities by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
obligations under this Indenture and such Securities from which the Company has
been discharged or released pursuant to Section 1302 or 1303 shall be revived
and reinstated as though no deposit had occurred pursuant to this Article with
respect to such Securities, until such time as the Trustee or Paying Agent is
permitted to apply all money held in trust pursuant to Section 1305 with
respect to such Securities in accordance with this Article; provided, however,
that if the Company makes any payment of principal of or any premium or
interest on any such Security following such reinstatement of its obligations,
the Company shall be subrogated to the rights (if any) of the Holders of such
Securities to receive such payment from the money so held in trust.

This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same
instrument.

 44
 

IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of the day and year first above written.

	
  

  	
  HURCO COMPANIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Attest:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, NATIONAL ASSOCIATION,

  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 45

EXHIBIT A

[FORM OF FACE
OF SECURITY]

HURCO
COMPANIES, INC.

[Global Securities
Legend]

THIS GLOBAL SECURITY IS HELD BY AND REGISTERED IN THE
NAME OF THE DEPOSITORY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) IS
NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (A) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 203 OF THE INDENTURE, (B) THIS GLOBAL SECURITY MAY BE
EXCHANGED PURSUANT TO SECTION 203(a) OF THE INDENTURE, (C) THIS GLOBAL SECURITY
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 309 OF THE
INDENTURE AND (D) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 A-1
 

[Form of Face of
Security]

HURCO COMPANIES,
INC.

[Designation of
Series]

CUSIP No.                          

[Other No.                          ]

No.                      
$                   

Hurco Companies, Inc., a corporation duly organized
and existing under the laws of the State of Indiana (herein called the “Company”,
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to                                       ,
or registered assigns, the principal sum of                                       Dollars
on                                       
[if the Security is to bear interest prior to
Maturity, insert  o,
and to pay interest thereon from or from the most recent Interest Payment Date
to which interest has been paid or duly provided for, semi-annually on                                       
and in                                       
each year, commencing                                       ,
at the rate of             %
per annum, until the principal hereof is paid or made available for payment [if applicable, insert o, provided, however that any principal and premium, and any
such installment of interest, which is overdue shall bear interest at the rate
of             %
per annum (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand). The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest, which
shall be the                                       
or                                       
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holder of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.][if the Security is not to
bear interest prior to Maturity, insert o.
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of             %
per annum (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment. Interest on any overdue principal or premium shall be
payable on demand. [Any such interest on overdue principal or premium which is
not paid on demand shall bear interest at the rate of             %
per annum (to the extent that the payment of such interest on interest shall be
legally enforceable), from the date of such demand until the amount so demanded
is paid or made available for payment. Interest on any overdue interest shall
be payable on demand.]]

Payment of the principal of (and premium, if any) and [if applicable, insert o
any such] interest on this Security will be made at the office or agency of the
Company maintained for that purpose in The City of New York, New York, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts [if
applicable, insert o; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register].

Reference is hereby made to the further provisions of
this Security set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has
been executed by the Trustee referred to on the reverse hereof by manual
signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

 A-2
 

IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed.

	
  

  	
  HURCO COMPANIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

	
  Attest:

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  

 

 A-3
 

CERTIFICATE
OF AUTHENTICATION

This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  [

  	
   

  	
  ],

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
					

 

 A-4
 

[Form of Reverse
of Security]

This Security is one of a duly authorized issue of
securities of the Company (herein called the “Securities”), issued and to be
issued in one or more series under an Indenture, dated as of                                  ,
                                 
(herein called the “Indenture”, which term shall have the meaning assigned to
it in such instrument), between the Company and [                                                                ],
as Trustee (herein called the ‘“Trustee”, which term includes any successor
trustee under the Indenture), and reference is hereby made to the Indenture for
a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof [if applicable, insert o, limited in aggregate principal amount to $               ].

[If applicable, insert o The Securities of this series are subject to
redemption at any time, upon not less than 30 days’ and not more than 60 days’
notice by mail, as a whole or from time to time in part, at the election of the
Company [if applicable, insert o (provided, however,
that, if the Company shall have elected pursuant to the Indenture to defease
[the entire indebtedness of this Security] [or] [certain restrictive covenants
and Events of Defaults with respect to this Security], prior to making such
election to redeem the Securities it shall have deposited in trust amounts
sufficient to pay the Redemption Price)], on any date prior to their Stated
Maturity at a Redemption Price equal to the greater of (i) 100% of the
principal amount of such Securities to be redeemed, plus accrued interest thereon
to the Redemption Date and (ii) the sum of the present values of the Remaining
Scheduled Payments (as defined below) of the notes to be redeemed, discounted
to the Redemption Date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate (as defined below),
plus [             ]
basis points, plus accrued and unpaid interest thereon to the Redemption Date.

“Treasury Rate” means, for any
Redemption Date, the rate per annum equal to the semiannual equivalent yield to
maturity, computed as the second Business Day immediately preceding that
Redemption Date, of the Comparable Treasury Issue referred to below, assuming a
price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price referred to below for
that Redemption Date. “Comparable Treasury Issue”
means the United States Treasury security selected by an Independent Investment
Banker as having a maturity comparable to the remaining term of the notes to be
redeemed that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of the notes to be
redeemed. “Comparable Treasury Price” means, with
respect to any Redemption Date, (1) the average of the bid and asked prices for
the Comparable Treasury Issue, expressed in each case as a percentage of its
principal amount, on the third Business Day preceding the Redemption Date, as
contained in the daily statistical release, or any successor release, published
by the Federal Reserve Bank of New York and designated “Composite 3:30 p.m.
Quotations for U.S. Government Securities,” or (2) if the release, or any
successor release, is not published or does not contain these prices on that
business day, (a) the average of the Reference Treasury Dealer Quotations for
such Redemption Date, after excluding the highest and lowest of the Reference
Treasury Quotations, or (b) if the Trustee obtains fewer than four Reference
Treasury Dealer Quotations, the average of all these quotations. “Independent Investment Banker” means the Reference Treasury
Dealer appointed by the Company. “Reference Treasury Dealer”
means [ ] and [their] successors and one other nationally recognized investment
banking firm that is a primary U.S. Government securities dealer. “Reference Treasury Dealer Quotations” means, with respect
to each Reference Treasury Dealer and any Redemption Date, the average, as
determined by the trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the trustee by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third Business Day preceding such redemption
date. “Remaining Scheduled Payments” means,
with respect to each note to be redeemed, the remaining scheduled payments of
the principal thereof and interest thereon that would be due after the related
Redemption Date for such redemption; provided, however, that, if such
Redemption Date is not an Interest Payment Date with respect to such note, the
amount of the next succeeding scheduled interest payment thereon will be
reduced by the amount of interest accrued thereon to such Redemption Date.]

[If applicable, insert o The Securities of this series are subject to
redemption upon not less than 30 days’ notice by mail, [if
applicable, insert o
(1) on                                  
in any year commencing with the year                
and ending with the year                
through operation of the sinking fund for this series at a Redemption Price
equal to 100% of the principal amount, and (2)] at any time [if applicable, insert o
on or after                                  ],
as a whole or in part, at the election of the 

 A-5
 

Company, at the following Redemption Prices (expressed
as percentages of the principal amount): If redeemed [if
applicable, insert o
on or before                                  
and if redeemed] during the 12-month period beginning of the years indicated,

	
  Year

  	
   

  	
  Redemption Price

  	
   

  	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

and thereafter at a Redemption Price equal to           %
of the principal amount, together in the case of any such redemption [if applicable, insert o
(whether through operation of the sinking fund or otherwise)] with accrued
interest to the Redemption Date, but interest installments whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holders
of such Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant Record Dates referred to on the face hereof,
all as provided in the Indenture.]

[If applicable, insert o The Securities of this series are subject to
redemption upon not less than 30 days’ notice by mail, (1) on                                  
in any year commencing with the year and ending with the year                
through operation of the sinking fund for this series at the Redemption Prices
for redemption through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below, and (2) at any time [if applicable, insert o
on or after                                  ],
as a whole or in part, at the election of the Company, at the Redemption Prices
for redemption otherwise than through operation of the sinking fund (expressed
as percentages of the principal amount) set forth in the table below: If
redeemed during the 12-month period beginning on                                  
of the years indicated,

	
  Year

  	
   

  	
  Redemption Price for

  Redemption through

  Operation of the

  Sinking Fund

  	
   

  	
  Redemption Price for

  Redemption Otherwise

  than through Operation of

  the Sinking Fund

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

and thereafter at a Redemption Price equal to           %
of the principal amount, together in the case of any such redemption (whether
through operation of the sinking fund or otherwise) with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]

[If applicable, insert o Notwithstanding the foregoing, the Company
may not, prior to                                  ,
redeem any Securities of this series as contemplated by [if
applicable, insert o
Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than           %
per annum.]

[If applicable, insert o The sinking fund for this series provides for
the redemption on                                  
in each year beginning with the year                
and ending with the year of                
[if applicable, insert o not less than $               
(“mandatory sinking fund”) and not more than] $               
aggregate principal amount of Securities of this series. Securities of this
series acquired or redeemed by the Company otherwise than through [if applicable, insert o
mandatory] sinking fund payments may be credited against subsequent [if applicable, insert o
mandatory] sinking fund payments otherwise required to be made [if applicable, insert o,
in the inverse order in which they become due].]

[If the Security is subject
to redemption of any kind, insert o In the event of redemption of this Security
in part only, a new Security or Securities of this series and of like tenor for
the unredeemed portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof.]

[If applicable, insert o The Indenture contains provisions for
defeasance at any time of [the entire indebtedness of this Security] [or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth in
the Indenture.]

 A-6
 

[If the Security is not an
Original Issue Discount Security, insert o. If an Event
of Default with respect to Securities of this series shall occur and be continuing,
the principal of the Securities of this series may be declared due and payable
in the manner and with the effect provided in the Indenture.]

[If the Security is an
Original Issue Discount Security, insert o If an Event of Default with respect to Securities
of this series shall occur and be continuing, an amount of principal of the
Securities of this series may be declared due and payable in the manner and
with the effect provided in the Indenture. Such amount shall be equal to o  insert formula for determining
the amount. Upon payment (i) of the amount of principal so declared
due and payable and (ii) of interest on any overdue principal, premium and
interest (in each case to the extent that the payment of such interest shall be
legally enforceable), all of the Company’s obligations in respect of the
payment of the principal of and premium and interest, if any, on the Securities
of this series shall terminate.]

The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount
of the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.

As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right to institute
any proceeding with respect to the Indenture or for the appointment of a
receiver or trustee or for any other remedy thereunder, unless such Holder
shall have previously given the Trustee written notice of a continuing Event of
Default with respect to the Securities of this series, the Holders of not less
than 25% in principal amount of the Securities of this series at the time
Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee indemnity or security reasonably satisfactory to it, and the Trustee shall
not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or any premium or
interest hereon on or after the respective due dates expressed herein.

No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of and
any premium and interest on this Security at the times, place and rate, and in
the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security may be registered
and this Security may be exchanged as provided in the Indenture.

The Securities of this series are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof.

No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security is registered
as the owner hereof for all purposes, whether or not this Security be overdue,
and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.

All terms used in this Security which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.

 A-7
 

ASSIGNMENT
FORM

To assign this Security,
fill in the form below:

I or we assign and
transfer this Security to:

(Insert assignee’s
social security or tax I.D. no.)

(Print or type
assignee’s name, address and zip code)

and irrevocably appoint                                                   
as agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.

	
  Your Signature:

  	
   

  
	
   

  	
  (Sign exactly as your name appears on the other side
  of this Security)

  
	
   

  
	
  Your Name:

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
	
   

  
	
  Signature Guarantee:

  	
   

  	
  *

  
						

 

*NOTICE: The Signature must be guaranteed by an
Institution which is a member of one of the following recognized signature
Guarantee Programs: (i) The Securities Transfer Agent Medallion Program
(STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The
Stock Exchange Medallion Program (SEMP); or (iv) such other guarantee program
acceptable to the Trustee.

 A-8
 

[TO BE
ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF
EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY

The following exchanges
of an interest in this Global Security for an interest in another Global
Security or for a Definitive Security, or exchanges of an interest in another
Global Security or a Definitive Security for an interest in this Global
Security have been made:

	
  Date of Exchange

  	
   

  	
  Amount of decrease

  in Principal Amount of

  this Global Security

  	
   

  	
  Amount of increase

  in Principal Amount of

  this Global Security

  	
   

  	
  Principal Amount of this

  Global Security following

  such decrease or increase

  	
   

  	
  Signature of authorized

  signatory of Trustee or

  Securities Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 A-9

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