RITE AID CORP 8-K (Events or Changes Between Quarterly Reports) 2009-02-20

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported): February 20, 2009 (February 18, 2009)
Rite Aid Corporation

(Exact name of registrant as specified in its charter)
Delaware 1-5742 23-1614034

(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification Number)
30 Hunter Lane, Camp Hill, Pennsylvania 17011

(Address of principal executive offices, including zip code)
(717) 761-2633
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01. Entry into a Material Definitive Agreement.
On February 18, 2009, Rite Aid Corporation (the "Company") completed its previously announced $225 million second
priority accounts receivable securitization term loan (the "Second Lien Facility"), which was $25 million more than previously
announced. Net proceeds from the Second Lien Facility were used to repay approximately $210 million outstanding under the
Company's existing accounts receivable securitization facility (the "Existing Facility") and replace the borrowing availability that
was decreased under the recent extension of the Existing Facility. Based on the current concentration limits and provisions in
the Second Lien Facility, the Company continues to have access to up to $345 million under the Existing Facility, which the
Company anticipates will meet its maximum need from that source of liquidity.
Amounts outstanding under the Second Lien Facility are secured by second priority liens on the eligible third party
pharmaceutical receivables securing the Existing Facility. The terms of the credit agreement governing the Second Lien Facility
(the "Second Lien Credit Agreement"), by and among Rite Aid Funding II, as the Borrower, the lenders party thereto,
Citicorp North America, Inc. as the administrative agent, Rite Aid Hdqtrs. Funding, Inc. as collection agent, each of the
parties named on Schedule III thereto as originators and Citigroup Global Markets Inc. as the sole lead arranger and sole
bookrunning manager, including the covenants and default and acceleration provisions, are substantially similar to those
governing the Existing Facility, other than the second priority lien on the pharmaceutical receivables and certain borrowing
base requirements. The Second Lien Credit Agreement also allowed only a one-time draw at the time of closing and not
drawings on a revolving basis, as is the case under the Existing Facility. Under the Second Lien Facility, the Company will
continue to sell certain of its eligible third party pharmaceutical receivables to a special purpose entity ("SPE") and retains
servicing responsibility. The assets of the SPE are not available to satisfy the creditors of any other person, including any of the
Company’s affiliates.
The Second Lien Facility was sold at a discount of 3% and bears interest at a rate of either, at the Company's option, (a) a
base rate equal to the higher of (i) Citibank's base rate, (ii) the federal funds rate plus 0.50% per annum or (iii) an adjusted
LIBO rate plus 1.0% per annum, in each case plus 11% or (b) LIBOR plus 12% with a LIBOR floor of 3%. The Second
Lien Facility will mature on September 14, 2010. Should the Existing Facility not be renewed following its maturity on January
21, 2010, the Company has access to a backstop facility, which is backed by the banks under the Existing Facility, and which
continues until September 14, 2010, to provide receivables financing to the Company.
In connection with entering into the Second Lien Facility, on February 18, 2009 the Company also entered into an additional
amendment of the Existing Facility (the "Amendment"), by and among Rite Aid Funding II, CAFCO, LLC, CRC FUNDING,
LLC, Falcon Asset Securitization Company LLC, Variable Funding Capital Company LLC, as the investors, Citibank, N.A.
("Citibank"), JPMorgan Chase Bank, N.A. ("JPMorgan") and Wachovia Bank, National Association ("Wachovia"), as the
banks, Citicorp North America, Inc. ("CNAI"), as program agent, CNAI, JPMorgan and Wachovia, as investor agents, Rite
Aid Hdqtrs. Funding, Inc., as collection agent, and certain other parties thereto as originators, which provides availability
under the Existing Facility of up to $345 million and includes other conforming changes to provide for the addition of the
Second Lien Facility.
2
As previously disclosed, the Company has four primary sources of liquidity: (i) cash and cash equivalents, (ii) cash
provided by operating activities, (iii) the sale of accounts receivable under its receivable securitization agreements and (iv) the
revolving credit facility under its senior secured credit facility. Based upon its current levels of operations, planned
improvements in its operating performance, the approval by its stockholders of the proposed reverse stock split and the
opportunities that it believes the acquisition of Brooks Eckerd provides, the Company believes that cash flow from operations
together with available borrowings under the senior secured credit facility, sales of accounts receivable under the Existing
Facility and the new Second Lien Facility and other sources of liquidity will be adequate to meet its requirements for working
capital, debt service and capital expenditures for the foreseeable future.
The foregoing descriptions of the Second Lien Facility and Amendment do not purport to be complete and are
qualified in their entirety by reference to the Second Lien Credit Agreement and the Intercreditor Agreement and the
Amendment, respectively, which are filed as Exhibits 10.1, 10.2 and 10.3 hereto, respectively.
This report contains forward-looking statements, including guidance, which are subject to certain risks and
uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking
statements. Factors that could cause actual results to differ materially from those expressed or implied in such forward-looking
statements include the Company's high level of indebtedness; the Company's ability to make interest and principal payments
on its debt and satisfy the other covenants contained in the Company's senior secured credit facility and other debt
agreements; the Company's ability to improve the operating performance of its stores in accordance with its long term
strategy; the Company's ability to realize the benefits of the Brooks Eckerd acquisition, including positive same store sales
growth for Brooks Eckerd and cost savings; the Company's ability to hire and retain pharmacists and other store personnel;
the efforts of private and public third-party payors to reduce prescription drug reimbursements and encourage mail order;
competitive pricing pressures, including aggressive promotional activity from its competitors; the Company's ability to manage
expenses, including integration expenses; the Company's ability to realize the benefits from actions to further reduce costs and
investment in working capital; continued consolidation of the drugstore industry; changes in state or federal legislation or
regulations; the outcome of lawsuits and governmental investigations; general economic conditions and inflation and interest
rate movements and access to capital, including the Company's continuing ability to complete sale and leaseback transactions.
Consequently, all of the forward-looking statements made in this report are qualified by these and other factors, risks and
uncertainties. Readers are also directed to consider other risks and uncertainties discussed in documents filed by the Company
with the Securities and Exchange Commission. Forward-looking statements can be identified through the use of words such as
"may", "will", "intend", "plan", "project", "expect", "anticipate", "could", "should", "would", "believe", "estimate", "contemplate"
and "possible".
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-balance Sheet Arrangement of
a Registrant.
See description under Item 1.01.
Item 8.01. Other Events
On February 19, 2009, the Company issued a press release announcing the Second Lien Facility. A copy of the press release
is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits.
10.1 Credit Agreement, dated as of February 18, 2009, among Rite Aid Funding II as the Borrower and the Lenders
party thereto and Citicorp North America, Inc. as the Administrative Agent and Rite Aid Hdqtrs. Funding, Inc. as
Collection Agent and each of the parties named on Schedule III thereto as Originators and Citigroup Global
Markets Inc. as the Sole Lead Arranger and Sole Bookrunning Manager
10.2 Intercreditor Agreement, dated as of February 18, 2009, by and among Citicorp North America, Inc. and
Citicorp North America, Inc., and acknowledged and agreed to by Rite Aid Funding II
10.3 Amendment No. 11 to Receivables Financing Agreement, dated February 18, 2009
99.1 Press Release, dated February 19, 2009
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereto duly authorized.
Date: February 20, 2009 By: /s/ Robert B. Sari

Name: Robert B. Sari
Title: Executive Vice President,
General Counsel and Secretary
4
Exhibit Index
Exhibit No. Description
10.1 Credit Agreement, dated as of February 18, 2009, among Rite Aid Funding II as the Borrower and the
Lenders party thereto and Citicorp North America, Inc. as the Administrative Agent and Rite Aid Hdqtrs.
Funding, Inc. as Collection Agent and each of the parties named on Schedule III thereto as Originators and
Citigroup Global Markets Inc. as the Sole Lead Arranger and Sole Bookrunning Manager
10.2 Intercreditor Agreement, dated as of February 18, 2009, by and among Citicorp North America, Inc. and
Citicorp North America, Inc., and acknowledged and agreed to by Rite Aid Funding II
10.3 Amendment No. 11 to Receivables Financing Agreement, dated February 18, 2009
99.1 Press Release, dated February 19, 2009
In reviewing the agreements included as exhibits to this Current Report on Form 8-K please remember they are
included to provide you with information regarding their terms and are not intended to provide any other factual or
disclosure information about Rite Aid Corporation, its subsidiaries or the other parties to the agreements. The
agreements contain representations and warranties by each of the parties to the applicable agreement. These
representations and warranties have been made solely for the benefit of the other parties to the applicable agreement
and:
• should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk
to one of the parties if those statements prove to be inaccurate;
• have been qualified by disclosures that were made to the other party in connection with the negotiation of the
applicable agreement, which disclosures are not necessarily reflected in the agreement;
• may apply standards of materiality in a way that is different from what may be viewed as material to you or
other investors; and
• were made only as of the date of the applicable agreement or such other date or dates as may be specified in the
agreement and are subject to more recent developments.
Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were
made or at any other time. Additional information about Rite Aid Corporation may be found elsewhere in this report
and the Company's other public filings, which are available without charge through the SEC’s website at
http://www.sec.gov.
Exhibit 10.1
EXECUTION COPY
CREDIT AGREEMENT
Dated as of February 18, 2009
Among
RITE AID FUNDING II

as the Borrower
and
the Lenders party hereto
and
CITICORP NORTH AMERICA, INC.

as the Administrative Agent
and
RITE AID HDQTRS. FUNDING, INC.

as Collection Agent
and
Each of the Parties named on Schedule III

hereto as Originators
and
CITIGROUP GLOBAL MARKETS INC.

as the Sole Lead Arranger and Sole Bookrunning Manager
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
SECTION 1.01. Certain Defined Terms 1
SECTION 1.02. Other Terms 21
ARTICLE II AMOUNTS AND TERMS OF THE LOANS 21

SECTION 2.01. The Commitments 21
SECTION 2.02. Loans and Borrowings 22
SECTION 2.03. Requests for Borrowings 22
SECTION 2.04. Funding of Borrowings 23
SECTION 2.05. Interest Elections 23
SECTION 2.06. Repayment of Loans; Evidence of Indebtedness 25
SECTION 2.07. Repayment of Loans 25
SECTION 2.08. Prepayment of Loans 25
SECTION 2.09. Interest 27
SECTION 2.10. Alternate Rate of Interest 27
SECTION 2.11. Increased Costs 28
SECTION 2.12. Break Funding Payments 29
SECTION 2.13. Fees 29
SECTION 2.14. Taxes 30
SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Setoffs 31
SECTION 2.16. Mitigation Obligations; Replacement of Lenders 33
SECTION 2.17. Security Interest 33
SECTION 2.18. Right of Setoff 34
SECTION 2.19. Settlement Procedures 34
ARTICLE III CONDITIONS PRECEDENT 37

ARTICLE IV REPRESENTATIONS AND WARRANTIES 41
SECTION 4.01. Representations and Warranties of the Borrower 41
SECTION 4.02. Representations and Warranties of the Collection Agent 44
ARTICLE V COVENANTS 45
SECTION 5.01. Covenants of the Borrower 45
SECTION 5.02. Covenants of the Borrower, the Collection Agent and the Originators 55
ARTICLE VI ADMINISTRATION AND COLLECTION OF RECEIVABLES AND PARTICIPATED 56

RECEIVABLES
SECTION 6.01. Designation of Collection Agent 56
SECTION 6.02. Duties of Collection Agent 56
SECTION 6.03. Certain Rights of the Administrative Agent 58
SECTION 6.04. Rights and Remedies 59
SECTION 6.05. Further Actions Evidencing the Loans 59
SECTION 6.06. Covenants of the Collection Agent and each Originator 60
SECTION 6.07. Indemnities by the Collection Agent 61
SECTION 6.08. Representations of the Collection Agent 62
i
SECTION 6.09. Establishment of Deposit Accounts 63

SECTION 6.10. Establishment of Administrative Agent’s Account and Cure Account 63
ARTICLE VII EVENTS OF DEFAULT 65

SECTION 7.01. Events of Default 65
ARTICLE VIII THE ADMINISTRATIVE AGENT 69

SECTION 8.01. Authorization and Action 69
SECTION 8.02. Administrative Agent’s Reliance, Etc. 70
SECTION 8.03. Administrative Agent and Affiliates 70
SECTION 8.04. Indemnification of Administrative Agent 70
SECTION 8.05. Delegation of Duties 71
SECTION 8.06. Action or Inaction by Administrative Agent 71
SECTION 8.07. Notice of Events of Default 71
SECTION 8.08. Non-Reliance on Administrative Agent and Other Parties 71
SECTION 8.09. Successor Administrative Agent 72
SECTION 8.10. Reports and Notices 72
ARTICLE IX [INTENTIONALLY OMITTED] 73

ARTICLE X INDEMNIFICATION 73
SECTION 10.01. Indemnities by the Borrower 73
ARTICLE XI MISCELLANEOUS 75
SECTION 11.01. Amendments, Etc 75
SECTION 11.02. Notices, Etc 76
SECTION 11.03. Assignability 76
SECTION 11.04. Costs, Expenses and Taxes 79
SECTION 11.05. Waiver of Consequential Damages 80
SECTION 11.06. Confidentiality 80
SECTION 11.07. GOVERNING LAW 81
SECTION 11.08. Execution in Counterparts 81
SECTION 11.09. Survival of Termination 81
SECTION 11.10. Consent to Jurisdiction 81
SECTION 11.11. WAIVER OF JURY TRIAL 82
SECTION 11.12. Judgment 82
SECTION 11.13. USA Patriot Act 82
SECTION 11.14. RFA Intercreditor Agreement 83
ii
SCHEDULES
SCHEDULE I - Deposit Banks and Account Banks

SCHEDULE II - Credit and Collection Policy
SCHEDULE III - Addresses
SCHEDULE IV - Months
SCHEDULE V - Material Litigation
SCHEDULE VI - [Intentionally Omitted]
SCHEDULE VII - Administrative Agent’s Account and Cure Account
SCHEDULE VIII - Commitments
ANNEXES
ANNEX A - Form of Daily Report

ANNEX A-1 - Form of Borrower Report
ANNEX A-2 - Form of Interim Report
ANNEX B - Form of Deposit Account Agreement
ANNEX C - [Intentionally Omitted]
ANNEX D - Assignment and Acceptance
ANNEX E - Form of Funds Transfer Letter
ANNEX F - Form of Note
ANNEX G - Form of Parent Undertaking (Collection Agent)
ANNEX H - [Intentionally Omitted]
ANNEX I - Business Associate Addendum
ANNEX J - [Intentionally Omitted]
ANNEX K - Service Provider Addendum
iii
CREDIT AGREEMENT
Dated as of February 18, 2009
RITE AID FUNDING II, a Cayman Islands exempted company incorporated with limited liability (the
“Borrower”), the lenders from time to time party hereto (the “Lenders”), CITICORP NORTH AMERICA, INC., a
Delaware corporation (“CNAI”), as administrative agent and collateral processing agent (in such capacities, together with any
successor in such capacities, the “Administrative Agent”) for the Lenders, RITE AID HDQTRS. FUNDING, INC., a
Delaware corporation, as Collection Agent, and each of the parties named on Schedule III hereto as Originators, agree as
follows:
PRELIMINARY STATEMENT. The Borrower has acquired, and may continue to acquire, Receivables (as
hereinafter defined) and Participation Interests (as hereinafter defined) from Cayman SPE I (as hereinafter defined), either by
purchase or by contribution to the capital of the Borrower, as determined from time to time by the Borrower and Cayman
SPE I. The Borrower wishes to obtain loans from the Lenders which will be secured by, among other things, the Receivables
and Participation Interests. The Lenders are prepared to make such loans, in each case on the terms set forth
herein. Accordingly, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.
“Account Bank” has the meaning specified in the definition of “Governmental Entity Receivables Agreement.”
“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest
rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the greater of (a) (i) the Eurodollar Rate for
such Interest Period, multiplied by (ii) the Statutory Reserve Rate, and (b) 3% per annum.
“Administrative Agent” has the meaning specified in the introductory paragraph hereof.
“Administrative Agent’s Account” has the meaning specified in Section 6.10(a).
“Adverse Claim” means a lien, security interest or other charge or encumbrance, or any other type of
preferential arrangement.
“Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled
by or is under common control with such Person or is a director or officer of such Person.
“Alternate Base Rate” means a fluctuating interest rate per annum in effect from time to time that for any day
shall be equal to the highest of: (a) the Base Rate in effect on such day; (b) the Federal Funds Rate in effect on such day plus
0.50% per annum; and (c) the Adjusted LIBO Rate (without giving effect to clause (b) thereof) for an Interest Period of one
month beginning on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1.0% per
annum.
“Applicable Margin” means, at any time, (a) with respect to any ABR Loan, 11% per annum and (b) with
respect to any Eurodollar Loan, 12% per annum.
“Approved Fund” means (a) with respect to any Lender, a CLO managed by such Lender or by an Affiliate
of such Lender or (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any
other fund that invests in bank loans and similar extensions of credit and is managed or advised by the same investment advisor
as such Lender or by an Affiliate of such investment advisor.
“Assignment and Acceptance” means an assignment and acceptance agreement entered into by a Lender, an
Eligible Assignee and the Administrative Agent, pursuant to which such Eligible Assignee may become a party to this
Agreement, in substantially the form of Annex D hereto.
“Base Rate” means the rate of interest announced publicly by Citibank in New York, New York from time to
time as Citibank’s base rate.
“Beneficiary” means, as of any date, the Lenders and the Administrative Agent.
“Board” means the Board of Governors of the Federal Reserve System of the United States of America.
“Borrower Report” means a report in substantially the form of Annex A-1 hereto and containing such
additional information as the Administrative Agent may reasonably request from time to time, furnished by the Collection Agent
pursuant to Section 6.02(g).
“Borrower’s Account” means Account No. 304 264 903, Rite Aid Funding II at JPMorgan Chase Bank,
N.A., 1 Chase Manhattan Plaza, New York, NY ABA# 021 000 021.
“Borrowing” means Loans of the same Type, made, converted or continued on the same date and, in the case
of a Eurodollar Loan, as to which a single Interest Period is in effect.
“Borrowing Base” means, at any time, an amount equal to the sum, without duplication, of the following:
(a) 85% of the book value of Eligible Receivables; plus
2
(b) 85% of the book value of Eligible Participated Receivables; minus
(c) any reserves established by the Administrative Agent or the Required Lenders in its or their discretion
exercised in a commercially reasonable manner to reflect Borrowing Base Factors; minus
(d) the lesser of (i) the then RFA Borrowing Base and (ii) the then RFA Aggregate Bank Commitments (or,
if all the “Bank Commitments” of the “Banks” under and as defined in the Receivables Financing
Agreement have terminated, in lieu of clauses (i) and (ii) above, the then aggregate outstanding principal
amount of the advances made under the Receivables Financing Agreement).
The Administrative Agent, in its discretion exercised in a commercially reasonable manner to reflect
Borrowing Base Factors, may (i) reduce either or both of the advance rates set forth in clauses (a) and (b) above from time to
time and (ii) thereafter increase either or both of such advance rates to an advance rate not in excess of the applicable advance
rate set forth in clauses (a) and (b) above. The Administrative Agent will give prompt written notice to the Borrower and the
Lenders of any adjustments effected pursuant to the preceding sen
tence.
“Borrowing Base Factors” means factors affecting the saleability or collectability of any Eligible Receivables,
Eligible Participated Receivables or Participation Interests, factors affecting the market value of any Eligible Receivables,
Eligible Participated Receivables or Participation Interests, other impediments to the Administrative Agent’s ability to realize
upon any Eligible Receivables, Eligible Participated Receivables or Participation Interests and other factors affecting the credit
value to be afforded any Eligible Receivables, Eligible Participated Receivables or Participation Interests.
“Borrowing Request” means the request by the Borrower for a Borrowing in accordance with Section 2.03.
“Business Day” means any day on which (i) banks are not authorized or required to close in New York City,
Chicago, Illinois and Atlanta, Georgia and (ii) if this definition of “Business Day” is utilized in connection with the Eurodollar
Rate, dealings are carried out in the London interbank market.
“Capital Lease” means any lease of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which, in accordance with GAAP, should be capitalized on the lessee’s balance sheet.
“Capital Lease Obligation” of any Person means the obligations of such Person to pay rent or other amounts
under any Capital Lease, which obligations should be classified and accounted for as capital leases on a balance sheet of such
Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
3
“Cayman SPE I” means Rite Aid Funding I, a Cayman Islands exempted company incorporated with limited
liability, incorporated on August 11, 2004 under the name Cayman Resources (21) Ltd. (registration no. 138720).
“CHAMPUS” means the Civilian Health and Medical Program of the Uniformed Service, a program of
medical benefits covering former and active members of the uniformed services and certain of their dependents, financed and
administered by the United States Departments of Defense, Health and Human Services and Transportation and established
pursuant to 10 U.S.C. §§ 1071-1106, and all regulations promulgated thereunder including without limitation (a) all federal
statutes (whether set forth in 10 U.S.C. §§ 1071-1106 or elsewhere) affecting CHAMPUS and (b) all rules, regulations
(including 32 CFR 199), manuals, orders and administrative, reimbursement and other guidelines of all Governmental Entities
(including, without limitation, the Department of Health and Human Services, the Department of Defense, the Department of
Transportation, the Assistant Secretary of Defense (Health Affairs) and the Office of CHAMPUS, or any Person or entity
succeeding to the functions of any of the foregoing) promulgated pursuant to or in connection with any of the foregoing
(whether or not having the force of law) in each case, as amended, supplemented or otherwise modified from time to time.
“Change in Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities Exchange Act of 1934, as amended, and the rules of the SEC
thereunder as in effect on the effective date of this Agreement), other than Green Equity Investors III, L.P. and its Affiliates or
The Jean Coutu Group (PJC) Inc. and its Affiliates, of 30% or more of the outstanding shares of common stock of the Parent;
(b) at the end of any period of 12 consecutive calendar months, the occupation of a majority of the seats on the board of
directors of the Parent by Persons who were not members of the board of directors of the Parent on the first day of such
period; or (c) the occurrence of a “Change of Control”, as defined in any Indenture or other agreement that governs the terms
of any Material Debt.
“Change in Law” means (a) the adoption of any law, rule or regulation after the date hereof, (b) any change in
any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date hereof or
(c) compliance by any Lender (or, for purposes of Section 2.11(b), by any lending office of such Lender or by such Lender’s
holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date hereof.
“Citibank” means Citibank, N.A., a national banking association, its successors and assigns.
“CLO” means any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making,
purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business
and is administered or managed by a Lender or an Affiliate of a Lender.
“CMS” means Centers for Medicare & Medicaid Services of the Department of Health and Human Services,
and any successor agency.
4
“CNAI” has the meaning specified in the introductory paragraph hereof.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral” has the meaning specified in Section 2.17.
“Collection Agent” means at any time the Person then authorized pursuant to Section 6.01 to administer and
collect Receivables and Participated Receivables.
“Collection Agent Default” means (a) proceeding of the type described in Section 7.01(g) instituted by or
against the Collection Agent (without giving effect to any grace period provided therein), (b) the failure of the Collection Agent
to pay or deposit any amounts or perform any duties required of it under this Agreement (after giving effect to any grace
period provided in Section 7.01(a)), or (c) the occurrence of any other Event of Default with respect to the Collection Agent
under this Agreement or any other Transaction Document which specifically refers to the Collection Agent.
“Collection Agent Fee” has the meaning specified in Section 2.13(a).
“Collections” means, with respect to any Receivable or Participated Receivable, all cash collections and other
cash proceeds of such Receivable or Participated Receivable, including, without limitation, all cash proceeds of Related
Security with respect to such Receivable or Participated Receivable.
“Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make a Loan
hereunder on the Effective Date, expressed as an amount representing the principal amount of the Loan to be made (or
deemed to be made) by such Lender hereunder on the Effective Date, as such commitment may be (a) reduced or increased
from time to time on or prior to the Effective Date pursuant to assignments by or to such Lender pursuant to Section 11.03,
and (b) otherwise reduced, increased or terminated in accordance with the terms and conditions hereof. The initial amount of
each Lender’s Commitment is set forth on Schedule VIII, or in the Assignment and Acceptance pursuant to which such
Lender shall have assumed its Commitment, as applicable. The aggregate amount of the Lenders’ Commitments on the
Effective Date is set forth on Schedule VIII. Each Lender’s Commitment, if any, shall be zero once such Lender has made its
Loan on the Effective Date. In any event, no Lender shall have a Commitment after the Effective Date.
“Concentration Limit” for any Obligor means (i) so long as such Obligor’s long-term public senior unsecured
and unguaranteed debt securities shall be rated at least BBB- by S&P or Baa3 by Moody’s and such Obligor is not a
Governmental Entity, 20% of the sum of the Outstanding Balance of Eligible Receivables and the Outstanding Balance of
Eligible Participated Receivables, (ii) so long as such Obligor’s long-term public senior unsecured and unguaranteed debt
securities shall be rated by S&P or Moody’s, but shall not meet the criteria established in (i) above, 10% of the sum of the
Outstanding Balance of Eligible Receivables and the Outstanding Balance of Eligible Participated Receivables, and (iii) so long
as such Obligor does not have long-term public senior unsecured and unguaranteed debt securities that are rated by S&P or
Moody’s, 5% of the sum of the Outstanding Balance of Eligible Receivables and the Outstanding Balance of Eligible
Participated Receivables; provided, however, that, in each case,
5
the foregoing percentages shall be determined by the Administrative Agent based on all of the otherwise Eligible Receivables
and Eligible Participated Receivables prior to giving effect to any eliminations based upon the foregoing concentration limit.
“Contract” means an agreement between any Originator and a Person, or between a PBM and a Contract
Payor, pursuant to or under which such Person or Contract Payor shall be obligated to pay for pharmaceutical merchandise
sold by such Originator or its Affiliates from time to time.
“Contract Payor” means a Person who is required under its agreement with a PBM to make payments to
such PBM who, in turn, pays such amounts to an Originator on such Person’s behalf.
“Credit Agreement” means that certain Credit Agreement dated as of June 27, 2001, as amended and
restated as of July 9, 2008, among Rite Aid Corporation, a Delaware corporation, the Lenders party thereto, Citicorp North
America, Inc., as Administrative Agent and Collateral Processing Agent, Bank of America, N.A., as Syndication Agent, and
the other Persons party thereto, as the same may be amended, modified or restated from time to time.
“Credit and Collection Policy” means those receivables credit and collection policies and practices of the
Borrower and the Originators in effect on the date of this Agreement and described in Schedule II hereto, as modified in
compliance with this Agreement.
“Cure Account” has the meaning specified in Section 6.10(b).
“Cure Funds” means the amounts which, from time to time, are deposited into the Cure Account.
“Cure Period” means the period beginning on and including a Non-Compliance Date and ending on but
excluding the earlier of (a) the first Business Day thereafter on which the Borrowing Base equals or exceeds the aggregate
outstanding principal balance of the Loans and (b) the second consecutive Business Day following the occurrence of such
Non-Compliance Date.
“Daily Report” means an Officer’s Certificate of the Collection Agent substantially in the form of Annex A
hereto.
“Debt” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or
with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or
services (excluding current accounts payable incurred in the ordinary course of business), (e) all Debt of others secured by (or
for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Adverse Claim on
property owned or acquired by such Person, whether or not the Debt secured thereby has been assumed, (f) all Guarantees
by such Person of Debt of others, (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise,
of such Person as an account party in
6
respect of letters of credit and letters of guaranty and (i) all obligations, contingent or otherwise, of such Person in respect of
bankers’ acceptances. The Debt of any Person shall include the Debt of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in
or other relationship with such entity, except to the extent of the terms of such Debt provide that such Person is not liable
therefor.
“Default” means an event that but for notice or lapse of time or both would constitute an Event of Default.
“Deposit Account” means an account maintained at a Deposit Bank into which (i) Collections in the form of
checks and other items are deposited that have been sent to one or more related Lock-Boxes by Obligors that are not
Governmental Entities (other than the Contract Payors paying a PBM) and/or (ii) Collections in the form of electronic funds
transfers and other items are paid directly by Obligors that are not Governmental Entities (other than the Contract Payors
paying a PBM) and (iii) which is subject to a Deposit Account Agreement.
“Deposit Account Agreement” means an agreement, in substantially the form of Annex B, providing for
control by the Administrative Agent over one or more Deposit Accounts and associated Lock-Boxes.
“Deposit Bank” means any of the banks holding one or more Deposit Accounts.
“Distribution Date” means the ninth Business Day after the end of each Month.
“Effective Date” means the date on which the conditions set forth in Article III shall have first been satisfied.
“E-Mail Report” has the meaning specified in Section 6.02(g).
“Eligible Assignee” means (i) CNAI, any Lender or any of their respective Affiliates, (ii) any Person managed
by CNAI, any Lender or any of their respective Affiliates or any Approved Fund or (iii) any financial or other institution
approved by the Administrative Agent (which approval shall not be unreasonably withheld or delayed), it being understood
and agreed that in the case of clause (iii) above, the relevant financial or other institution must also be approved by the
Borrower (which approval by the Borrower shall not be unreasonably withheld or delayed and shall not be required (x) if an
Event of Default or a Default has occurred and is continuing or (y) with respect to any assignment by CNAI or any of its
Affiliates to any institution made prior to the date that is 30 days after the Effective Date).
“Eligible Institution” means a depository institution organized under the laws of the United States of America
or any state thereof or the District of Columbia (or any domestic branch of a foreign bank authorized under any such laws), (a)
whose senior long-term unsecured debt obligations are rated at least A- or better by Standard & Poor’s and A3 or better by
Moody’s, and (b) which is subject to regulation regarding fiduciary funds on deposit substantially similar to 12 C.F.R. Section
9.10(b), if applicable, and (c) which has a combined capital and surplus of at least $100,000,000.
7
“Eligible Investments” means book-entry securities entered on the books of the registrar of such securities and
held in the name or on behalf of the Administrative Agent, negotiable instruments or securities represented by instruments in
bearer or registered form (registered in the name of the Administrative Agent or its nominee) which evidence:
(a) readily marketable direct obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the United States;
(b) insured demand deposits, time deposits or certificates of deposit of any commercial bank that (i) is
a member of the Federal Reserve System, (ii) issues (or the parent of which issues) commercial paper rated, at the time of the
investment or contractual commitment to invest therein, as described in clause (d), (iii) is organized under the laws of the
United States or any state thereof and (iv) has combined capital and surplus of at least $500,000,000;
(c) repurchase obligations with a term of not more than ten days for underlying securities of the types
described in clauses (a) and (b) above entered into with any bank of the type described in clause (b) above;
(d) commercial paper (maturing no later than the Business Day prior to the end of any then applicable
Cure Period) having, at the time of the investment or contractual commitment to invest therein, the highest short-term rating
from each of S&P and Moody’s;
(e) investments in no-load money market funds having a rating from each rating agency rating such fund
in its highest investment category (including such funds for which the Administrative Agent or any of its Affiliates is investment
manager or advisor).
“Eligible Participated Receivable” means, at any date of determination, a Participated Receivable which is the
subject of a Participation Interest owned by the Borrower that satisfies at the time of creation and continues to meet the same
at the time of such determination the criteria established from time to time by the Administrative Agent in its discretion
exercised in a commercially reasonable manner (and, with respect to any criteria added or deleted after the Effective Date or
any modification after the Effective Date to any criteria, with the prior written consent of the Required Lenders) or by the
Required Lenders in their discretion exercised in a commercially reasonable manner, in each instance, to reflect Borrowing
Base Factors. On the date hereof, those criteria are the criteria in paragraphs (a) through (aa) of the definition of Eligible
Receivable subject to each reference therein (in the case of paragraphs (r) and (s), only the first reference therein) to
“Receivable” being deemed to be a reference to “Participated Receivable”.
“Eligible Participation Interest” means a Participation Interest with respect to which the related Participated
Receivable is an Eligible Participated Receivable.
“Eligible Receivable” means, at any date of determination, a Receivable of the Borrower that satisfies at the
time of creation and continues to meet the same at the time of such determination the criteria established from time to time by
the Administrative Agent in its discretion exercised in a commercially reasonable manner (and, with respect to any criteria
added or deleted after the Effective Date or any modification after the Effective Date to any
8
criteria, with the prior written consent of the Required Lenders) or by the Required Lenders in their discretion exercised in a
commercially reasonable manner, in each instance, to reflect Borrowing Base Factors. On the date hereof, those criteria are:
(a) such Receivable constitutes an “account” or a “payment intangible” within the meaning of Article 9
of the UCC of the applicable jurisdiction governing the perfection of the security interest created by this Agreement in such
Receivable;
(b) all payments on such Receivable are by the terms of such Receivable due not later than 90 days
after the date of sale or service, as applicable, (i.e., the transaction date) and are otherwise on terms that are normal and
customary in the business of the applicable Originator;
(c) such Receivable has been billed and has not remained unpaid for more than 120 days following the
date of sale or service, as applicable;
(d) such Receivable is denominated and payable only in United States dollars in the United States;
(e) such Receivable arose from a completed, outright and lawful sale of goods or the completed
performance of services by the applicable Originator and accepted by the applicable Obligor, and the amount of such
Receivable has been properly recognized as revenue on the books of the applicable Originator;
(f) the Obligor of such Receivable is not a Governmental Entity, except to the extent payment of such
Receivable is governed under the Social Security Act (42 U.S.C. § 1395, et seq.), including payments under Medicaid and
CHAMPUS or regulated by CMS, but, the foregoing notwithstanding, not if the Obligor is an Ohio Governmental Entity;
(g) the proceeds of such Receivable are payable solely in accordance with Section 5.01(h);
(h) such Receivable arose in the ordinary course of business of the applicable Originator;
(i) not more than 50% of the aggregate amount of Receivables from the same Obligor and any
Affiliates thereof remain unpaid for more than 120 days following the date of sale or service, as applicable;
(j) (1) to the knowledge of the Borrower and the Originators, no event of death, bankruptcy,
insolvency or inability to pay creditors generally of the Obligor of such Receivable has occurred, and no notice thereof has
been received, (2) such Receivable would not, consistent with the Credit and Collection Policy, be written off the applicable
Originator’s or Borrower’s books as uncollectible and (3) as to which neither the applicable Originator nor the Borrower has
(or consistent with the Credit and Collection Policy should have) established a specific reserve for non-payment;
9
(k) payment of such Receivable is not being disputed by the Obligor thereof and is not settled on a net
basis;
(l) such Receivable complies in all material respects with the requirements of all applicable laws and
regulations, whether Federal, state or local, including the Federal Consumer Credit Protection Act, the Federal Truth in
Lending Act and Regulation Z of the Federal Reserve Board;
(m) with respect to such Receivable, the Obligor (i) is organized in the United States (or, if such Obligor
is not organized in the United States, such Receivable is supported by a letter of credit approved by the Administrative Agent
in favor of the applicable Originator) and (ii) is not an Affiliate of the Parent, is not a Subsidiary and is not an Affiliate of any of
the Subsidiaries;
(n) such Receivable is subject to a perfected second priority security interest in favor of the
Administrative Agent for the benefit of the Lenders pursuant to this Agreement (subordinate only to the security interest
granted under the Receivables Financing Agreement subject to the terms of the RFA Intercreditor Agreement) and is not
subject to any other Adverse Claim (other than the aforesaid security interest granted under the Receivables Financing
Agreement);
(o) with respect to any such Receivable for an amount greater than $5,000,000, the Obligor has not
been disapproved by the Required Lenders (based, on the Required Lenders’ reasonable judgment, upon the creditworthiness
of such Obligor);
(p) the representations and warranties contained in this Agreement and the other Transaction
Documents with respect to such Receivable are true and correct in all material respects;
(q) such Receivable is in full force and effect and constitutes a legal, valid and binding obligation of the
Obligor, enforceable against such Obligor in accordance with its terms;
(r) if the Outstanding Balance of such Receivable, together with the Outstanding Balance of all other
Eligible Receivables and Eligible Participated Receivables owing by the Obligor thereof or by any of its Affiliates, exceeds the
Concentration Limit applicable to such Obligor, such excess portion shall be ineligible;
(s) if such Receivable is owed by an Obligor to which the Borrower, the Parent or any Originator is
indebted in any way, or which is subject to any right of setoff or recoupment by the Obligor, the portion of all Eligible
Receivables and Eligible Participated Receivables owing by such Obligor to the extent of such indebtedness, setoff or
recoupment shall be ineligible;
(t) such Receivable arises under a Contract (other than a Contract with respect to which the related
Obligor is a Governmental Entity) which (A) does not contain an enforceable provision requiring the Obligor thereunder to
consent to the transfer, sale or assignment of the Obligor’s payment obligation by the Originator pursuant to the Originator
Purchase Agreement, and (B) if such Contract is between a PBM and a Contract Payor, does not
10
contain any enforceable provision prohibiting the transfer, sale or assignment of such Contract Payor’s payment obligation to
the applicable Originator;
(u) such Receivable has not been extended, rewritten or otherwise modified from the original terms
thereof (except as permitted by Section 6.02(c));
(v) the transfer, sale or assignment of such Receivable in accordance with the Transaction Documents
does not contravene any applicable law, rule or regulation;
(w) such Receivable satisfies all applicable requirements of the Credit and Collection Policy;
(x) as to which Receivable the applicable Originator has, or has the right to use, valid provider
identification numbers and licenses to generate valid Receivables and all information set forth in the bill and supporting claim
documents with respect to such Receivable is true, complete and correct;
(y) as to which Receivable the applicable Originator has, or has the right to use, valid provider
identification numbers and licenses to generate reports with respect to such Receivable required by the applicable state agency
or other CMS-designated agents or agents of such state agency;
(z) such Receivable is not a Medicare Receivable;
(aa) such Receivable does not arise from a sale by the applicable Originator from a store located in
Hawaii, Illinois, Minnesota, Montana or New Mexico, unless the Borrower shall have furnished the Administrative Agent with
an opinion of local counsel, or other evidence satisfactory to it, to the effect that the transfer, sale and assignment of
Receivables and Participation Interests in accordance with the Transaction Documents from a store located in such state does
not violate any provision of law of such state; and
(bb) as to which Receivable, if it is a Part D Receivable, no Obligor thereunder is a Governmental

Entity.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and
the regulations promulgated and rulings issued thereunder.
“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Parent, is
treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations
issued thereunder with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) the existence
with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to
11
any Plan; (d) the incurrence by the Parent or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect
to the termination of any Plan; (e) the receipt by the Parent or any ERISA Affiliate from the PBGC or a plan administrator of
any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the
incurrence by the Parent or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from
any Plan or Multiemployer Plan; (g) the receipt by the Parent or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Parent or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or
a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA; or (h) the existence of any event or condition that could reasonably be expected to constitute grounds under
ERISA for the termination of, or the appointment of a trustee to administer, any Plan.
“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
“Eurodollar” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
“Eurodollar Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate per
annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or another
commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to
time) at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period, for
U.S. dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. In the
event that such rate is not available at such time for any reason, then the “Eurodollar Rate” with respect to such Eurodollar
Borrowing for such Interest Period shall be the rate rounded upwards, if necessary, to the next 1/100 of 1% at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of
the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period.
“Event of Default” has the meaning specified in Section 7.01.
“Facility Principal” means, at any time, the aggregate outstanding principal of Loans under this Agreement.
“Federal Funds Rate” means, for any day, a fluctuating interest rate per annum equal to the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for
any day which is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day on such transactions received
12
by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
“Fee Agreement” has the meaning specified in Section 2.13(b).
“Fees” has the meaning specified in Section 2.13(b).
“Financial Officer” means the chief financial officer, principal accounting officer, treasurer, vice president of
financial accounting or controller of the relevant Person.
“First Lien Loan Documents” has the meaning specified in the RFA Intercreditor Agreement.
“Forecast” has the meaning specified in Section 5.01(k)(xiii).
“Funds Transfer Letter” means a letter in substantially the form of Annex E hereto executed and delivered by
the Borrower to the Administrative Agent, as the same may be amended or restated in accordance with the terms thereof.
“GAAP” means generally accepted accounting principles in the United States.
“Government Receivable” means any Originator Receivable with respect to which the Obligor is a
Governmental Entity.
“Governmental Authority” means the government of the United States of America, any other nation or any
political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central
bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
“Governmental Entity” means the United States of America, any state, any political subdivision of a state and
any agency or instrumentality of the United States of America or any state or political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. Payments from
Governmental Entities shall be deemed to include payments governed under the Social Security Act (42 U.S.C. § 1395, et
seq.), including payments under Medicare, Medicaid and CHAMPUS, and payments administered or regulated by CMS.
“Governmental Entity Receivables Account Notice” means a notice contained in a Governmental Entity
Receivables Agreement pursuant to which an Affiliate of the Parent gives revocable standing instructions to the Account Bank
to sweep funds on a daily basis from the Governmental Entity Receivables Account to (a) prior to the RFA Termination Date,
the RFA Trustee’s Account, and (b) thereafter, to an account under the sole dominion and control of the Administrative
Agent, for the benefit of the Beneficiaries.
“Governmental Entity Receivables Agreement” means an agreement between a bank (an “Account Bank”)
and one or more Originators or Affiliates of the Parent with respect to one or more accounts (each, a “Governmental Entity
Receivables Account”) or associated Lock-
13
Boxes into which Collections on account of Government Receivables are deposited or remitted and which is subject to a
Governmental Entity Receivables Account Notice.
“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the
guarantor guaranteeing or having the economic effect of guaranteeing any Debt or other obligation of any Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation or to purchase (or
to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof,
(c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Debt or other obligation or (d) as an account party in respect of any letter of credit
or letter of guaranty issued to support such Debt or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
“Hedging Agreement” means any rate swap transaction, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including any option with respect to any of the foregoing
transactions) or any combination of the foregoing transactions.
“HQ” means Rite Aid Hdqtrs. Funding, Inc., a Delaware corporation.
“Indemnified Party” has the meaning specified in Section 10.01.
“Indentures” means, collectively, (a) the Indenture dated as of December 21, 1998, between the Parent and
Harris Trust and Savings Bank, as trustee, (b) the Indenture dated as of August 1, 1993, between the Parent and Morgan
Guaranty Trust Company of New York, as trustee, (c) the Indenture dated as of September 10, 1997, between the Parent
and Harris Trust and Savings Bank, as trustee, (d) the Indenture dated as of September 22, 1998, between the Parent and
Harris Trust and Savings Bank, as trustee, (e) the Unsecured Note Indenture, (f) the 12.5% Note Indenture, (g) the 9.5%
Note Indenture, (h) the 8.125% Note Indenture, (i) the 9.25% Note Indenture and (j) the 4.75% Note Indenture, as each of
the terms set forth in clauses (e) through (j) are defined in the Credit Agreement.
“Interest Payment Date” means (a) with respect to any ABR Loan, the first day of each calendar month, and
(b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is
a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior
to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest
Period.
“Interest Election Request” means a request by the Borrower to convert or continue a Borrowing in
accordance with Section 2.05.
14
“Interest Period” means, with respect to any Eurodollar Borrowing, the period commencing on the date of
such Borrowing and ending (x) on the numerically corresponding day in the calendar month that is one, two, three or six
months thereafter, in each case as the Borrower may elect; provided that (i) if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next succeeding Business Day (unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding
Business Day), and (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
“Interim Report” means a report in substantially the form of Annex A-2 hereto and containing such additional
information as the Administrative Agent may reasonable request from time to time, furnished by the Collection Agent, pursuant
to Section 6.02(g).
“Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement on the Effective
Date.
“Lock-Box” means a post office box either (a) administered by a Deposit Bank for the purpose of receiving
Collections, which is the subject of a Deposit Account Agreement or (b) which receives Collections of Government
Receivables and is associated with a Governmental Entity Receivables Account that is subject to a Governmental Entity
Receivables Agreement.
“Material Adverse Effect” means a material adverse effect on (i) the collectibility of the Receivables and
Participated Receivables, (ii) the ability of the Borrower, the Collection Agent, the Parent, any Predecessor Purchaser, or any
Originator to perform any of its respective material obligations under the Transaction Documents to which it is a party, (iii) the
legality, validity or enforceability of the Transaction Documents (including, without limitation, the validity, enforceability or
priority of the security interests granted thereunder) or the rights of or benefits available to the Administrative Agent or the
Lenders under the Transaction Documents or (iv) the business, assets, operations, condition (financial or otherwise), or
prospects of the Parent and its Subsidiaries, taken as a whole.
“Material Debt” means Debt (other than the loans and letters of credit under the Credit Agreement), or
obligations in respect of one or more Hedging Agreements, of any one or more of the Parent and its Subsidiaries in an
aggregate principal amount exceeding $25,000,000. For purposes of this definition, the “principal amount” of the obligations
of the Parent or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Parent or such Subsidiary would be required to pay if such Hedging
Agreement were terminated at such time.
“Maturity Date” means September 14, 2010.
15
“Medicaid” means the medical assistance program established by Title XIX of the Social Security Act (42
U.S.C. Secs. 1396 et seq.) and any statutes succeeding thereto.
“Medicare” means the health insurance program for the aged and disabled established by Title XVIII of the
Social Security Act (42 U.S.C. Secs. 1395 et seq.) and any statutes succeeding thereto.
“Minimum Liquidity Position” means at any time an amount equal to the sum of (a) the Revolver Availability
(as defined in the Credit Agreement) plus (b) the Parent’s cash on hand.
“Month” means a fiscal month of the Parent as set forth on Schedule IV hereto, as such schedule shall be
updated from time to time in accordance with the terms hereof.
“Moody’s” means Moody’s Investors Service, Inc., and its successors.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“Non-Compliance Date” has the meaning set forth in Section 2.08(b).
“Note” means a promissory note of the Borrower, in substantially the form of Annex F hereto, evidencing a
Loan.
“Obligations” has the meaning specified in Section 2.17.
“Obligor” means a Person obligated to make payments pursuant to a Contract; provided, however, if a PBM
acts as agent for Contract Payors and is obligated, pursuant to a Contract, to turn over to an Originator payments made to it
by such Contract Payors, then the term “Obligor” shall include both such PBM and such Contract Payors.
“Originator” means each of the Persons designated as such on Schedule III.
“Originator Participation Interest” means, with respect to any Originator, a 100% undivided beneficial interest
in such Originator’s right, title and interest, whether now owned or hereafter arising and wherever located, in, to and under (i)
each Government Receivable owned by such Originator, (ii) all Related Security and Collections with respect to such
Government Receivable and (iii) all proceeds of such Government Receivable, Related Security and Collections.
“Originator Purchase Agreement” means the Purchase Agreement, dated as of September 21, 2004, among
the Originators, as sellers, and HQ, as purchaser, as the same may be amended, modified or restated from time to time.
“Originator Receivable” means the indebtedness of any Obligor resulting from the provision or sale of
pharmaceutical merchandise by any Originator under a Contract (whether constituting an account, instrument, chattel paper,
payment intangible or general intangible), and
16
includes the right to payment of any interest or finance charges and other obligations of such Obligor with respect thereto.
“Other Companies” means the Originators, the Predecessor Purchasers and all of their respective
Subsidiaries except the Borrower.
“Outstanding Balance” of any Originator Receivable at any time means the then outstanding principal balance
thereof.
“Parent” means Rite Aid Corporation, a Delaware corporation.
“Parent Undertaking (Collection Agent)” means the Undertaking Agreement, dated as of the date hereof, in
favor of the Lenders and the Administrative Agent and relating to obligations of the Collection Agent, substantially in the form
of Annex G hereto, as the same may be amended, modified or restated from time to time.
“Parent Undertaking (Originators)” means the Undertaking Agreement, dated as of September 21, 2004,
made by the Parent in favor of HQ and relating to obligations of the Originators, as the same may be amended, modified or
restated from time to time.
“Parent Undertakings” means the Parent Undertaking (Collection Agent) and the Parent Undertaking
(Originators).
“Part D Receivable” means a Receivable from a Part D Plan Sponsor, as that term is defined in 42 CFR
423.4, arising under and pursuant to the Part D program of Medicare. Unless the Administrative Agent notifies the Borrower
and the Collection Agent otherwise, in reliance on any order, judgment, ruling or interpretation of any court of competent
jurisdiction, CMS or other Governmental Entity having jurisdiction over the matter, Part D Receivables will be deemed for all
purposes of this Agreement not to be Medicare Receivables or Government Receivables, nor to be owing from a
Governmental Entity.
“Participant” has the meaning assigned to such term in Section 11.03(h).
“Participated Receivable” means any Originator Receivable which is the subject of a Participation Interest.
“Participation Interest” means any Originator Participation Interest which has been acquired by the Borrower
by purchase or capital contribution pursuant to the Tertiary Purchase Agreement.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any
successor entity performing similar functions.
“PBM” means a pharmaceutical benefits manager which has entered into an agreement with an Originator to
make payments as agent for various insurers and other Persons, on account of pharmaceutical goods sold by such Originator.
17
“Person” means an individual, partnership, corporation (including a business trust), limited liability company,
joint stock company, trust, unincorporated association, joint venture or other entity, or a Governmental Entity.
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions
of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Parent or any ERISA
Affiliate has any liability or is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an
“employer” as defined in Section 3(5) of ERISA.
“Predecessor Purchasers” means Cayman SPE I and HQ.
“Purchase Agreements” means, collectively, the Originator Purchase Agreement, the Secondary Purchase
Agreement and the Tertiary Purchase Agreement.
“Ratable Share” means, at any time in respect of any Lender, the percentage obtained by dividing (a) prior to
the making of the Loans on the Effective Date, the amount of such Lender’s Commitment at such time by the aggregate
amount of the Commitments of all the Lenders at such time, and (b) thereafter, the outstanding principal balance of the Loans
owing to such Lender at such time by the aggregate outstanding principal balance of the Loans owing to all the Lenders at such
time.
“Receivable” means any Originator Receivable (which is not a Government Receivable) that has been
acquired by the Borrower by purchase or by capital contribution pursuant to the Tertiary Purchase Agreement.
“Receivables Financing Agreement” means that certain Receivables Financing Agreement, dated as of
September 21, 2004, among the Borrower, the RFA Program Agent, and the “Investors,” “Banks,” “Investor Agents,”
“Collection Agent,” “Originators” and “Trustee” party thereto from time to time, as amended, supplemented, restated or
otherwise modified from time to time.
“Register” has the meaning specified in Section 11.03(c).
“Related Security” means (a) with respect to any Receivable:
(i) all of the Borrower’s interest in merchandise, if any, (including returned merchandise)
relating to any sale giving rise to such Receivable;
(ii) all security interests or liens and property subject thereto from time to time purporting to
secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all financing statements filed against an Obligor describing any collateral securing such
Receivable;
(iii) all guaranties, insurance and other agreements or arrangements of whatever character from
time to time supporting or securing payment of such
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Receivable whether pursuant to the Contract related to such Receivable or otherwise; and
(iv) the Contract and all other books, records and other information (including, without
limitation, computer programs, tapes, discs, punch cards, data processing software and related property and
rights, subject to the rights of any licensors and to applicable law) relating to such Receivable and the related
Obligor; and
(b) with respect to any Participation Interest, the Related Security with respect to the Government
Receivable that is the subject of such Participation Interest (subject to each reference to “Receivable” in the definition of
Related Security for such purposes being deemed to be a reference to a “Participated Receivable”).
“Required Lenders” means, at any time, Lenders whose aggregate Ratable Shares at such time exceed 50%.
“RFA Aggregate Bank Commitments” means, at any time, the aggregate of the then “Bank Commitments” (as
defined in, and determined in accordance with, the Receivables Financing Agreement) of all “Banks” (as defined in the
Receivables Financing Agreement) under the Receivables Financing Agreement.
“RFA Borrowing Base” means, at any time, the then “Borrowing Base” as defined in, and determined in
accordance with, the Receivables Financing Agreement.
“RFA Intercreditor Agreement” means that certain Intercreditor Agreement dated as of the date hereof by
and among the Administrative Agent and the RFA Program Agent and acknowledged and agreed to by the Borrower, as the
same may be amended, modified or restated from time to time.
“RFA Program Agent” means Citicorp North America, Inc., in its capacity as “Program Agent” under the
Receivables Financing Agreement, together with its successors in such capacity.
“RFA Termination Date” means the later of the “Facility Termination Date” (as defined in the Receivables
Financing Agreement) and the date on which all “Obligations” (as defined in the Receivables Financing Agreement) shall be
paid in full.
“RFA Trustee” means the “Trustee” as defined in the Receivables Financing Agreement.
“RFA Trustee’s Account” means the “Trustee’s Account” as defined in the Receivables Financing
Agreement.
“S&P” means Standard and Poor’s, a division of The McGraw-Hill Companies, Inc., and its successors.
“SEC” means the Securities and Exchange Commission.
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“Second Lien Loan Documents” has the meaning specified in the RFA Intercreditor Agreement.
“Secondary Purchase Agreement” means the purchase agreement, dated as of September 21, 2004, between
HQ, as seller and Cayman SPE I, as purchaser, as the same may be amended, modified or restated from time to time.
“Senior Collateral Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of
September 22, 2004, by and among the RFA Program Agent, Cayman SPE I, the Borrower, the Originators, HQ, Citicorp
North America, Inc. and JPMorgan Chase Bank, as Senior Collateral Agents, and the Administrative Agent (pursuant to the
Senior Collateral Intercreditor Agreement Amendment), as amended by the Senior Collateral Intercreditor Agreement
Amendment and as otherwise amended, modified or restated from time to time.
“Senior Collateral Intercreditor Agreement Amendment” means an amendment to the Senior Collateral
Intercreditor Agreement, in form and substance satisfactory to the Administrative Agent, pursuant to which, among other
things, the Administrative Agent becomes a party to the Senior Collateral Intercreditor Agreement and the Administrative
Agent is generally provided rights similar to (but subordinate to) those granted to the RFA Program Agent under the Senior
Collateral Intercreditor Agreement.
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number
one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages expressed as a
decimal (including any marginal, special, emergency or supplemental reserves) established by the Board to which the
Administrative Agent is subject with respect to eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar
Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.
“Subsidiary” means any corporation or other entity of which securities having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by
the Borrower or an Originator, as the case may be, or one or more Subsidiaries, or by the Borrower or an Originator, as the
case may be, and one or more Subsidiaries.
“Supermajority Lenders” means, at any time, Lenders whose aggregate Ratable Shares at such time exceed
66-2/3%.
“Term” means the period commencing on the date hereof and ending on the Maturity Date.
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“Tertiary Purchase Agreement” means the purchase agreement, dated as of September 21, 2004, between
Cayman SPE I, as seller, and the Borrower, as purchaser, as the same may be amended, modified or restated from time to
time.
“Transaction Document” means any of this Agreement, the Purchase Agreements, the Parent Undertakings,
the Notes, the RFA Intercreditor Agreement, the Senior Collateral Intercreditor Agreement, the Deposit Account
Agreements, the Governmental Entity Receivables Agreements, the Fee Agreement, each Borrower Report, each Daily
Report, each Interim Report, all amendments to any of the foregoing and all other agreements and documents delivered and/or
related hereto or thereto.
“Transferred Assets” means all Receivables and all Participation Interests.
“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such
Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
“UCC” means the Uniform Commercial Code as from time to time in effect in the relevant jurisdiction.
“USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001.
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal
from such Multiemployer Plan, as such terms are defined in Title IV of ERISA.
SECTION 1.02. Other Terms. All accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles. All terms used in Article 9 of the UCC in the State of New York,
and not specifically defined herein, are used herein as defined in such Article 9.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
SECTION 2.01. The Commitments. On the terms and conditions hereinafter set forth, each Lender
agrees to make a Loan to the Borrower on the Effective Date in an amount equal to the lesser of (a) such Lender’s Ratable
Share of the then Borrowing Base, and (b) such Lender’s Commitment. Notwithstanding anything to the contrary contained
herein (including the immediately preceding sentence) (and without affecting any other provisions hereof), the funded portion of
the Loan to be made by a Lender on the Effective Date (i.e., the amount advanced by a Lender to the Borrower on the
Effective Date) shall be equal to 97.00% of the principal amount of such Loan (it being agreed that the full principal amount of
each such Loan will be deemed outstanding on the Effective Date and the Borrower shall be obligated to repay 100% of the
principal amount of each such Loan (together with interest on such 100% of the principal amount of each such Loan) as
provided herein). Amounts repaid or prepaid in respect of Loans may not be reborrowed. Unless previously terminated in
accordance with the terms of
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this Agreement, the Commitments shall terminate at 5:00 p.m., New York City time, on February 20, 2009.
SECTION 2.02. Loans and Borrowings.
(a) Each Loan shall be made as part of a Borrowing consisting of Loans of the same Type made by the
Lenders ratably in accordance with the amounts of their Commitments. The failure of any Lender to make the Loan required
to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders
are several and no Lender shall be responsible for any other Lender’s failure to make a Loan as required.
(b) Subject to Section 2.10, each Borrowing shall be comprised entirely of ABR Loans or Eurodollar
Loans as the Borrower may request in accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall
be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than
$5,000,000. Borrowings of more than one Type may be outstanding at the same time; provided that there shall not at any
time be more than a total of 3 Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to
request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
SECTION 2.03. Requests for Borrowings. To request a Borrowing, the Borrower shall notify the
Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not
later than (1) 10:30 a.m., New York City time, on the Business Day of the proposed Borrowing, in the case of Borrowings to
be made on the same day as such notice is given or (2) 12:00 noon, New York City time, on the Business Day before the
proposed Borrowing, in the case of all other Borrowings. Each such telephonic Borrowing Request shall be irrevocable and
shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a
form approved by the Administrative Agent and signed by the Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.02:
(i) the aggregate amount of such Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day and shall be the Effective Date;
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(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and
(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be
a period contemplated by the definition of the term “Interest Period.”
If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR
Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be
deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of
such Lender’s Loan to be made as part of the requested Borrowing.
SECTION 2.04. Funding of Borrowings. (a) Each Lender shall make the Loan to be made by it
hereunder on the Effective Date by wire transfer of immediately available funds by 12:00 noon, New York City time, on the
Effective Date to the account of the Administrative Agent designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrower on the Effective Date by wire transfer, in like funds, to
the deposit account designated by the Borrower in the Funds Transfer Letter.
(b) Unless the Administrative Agent shall have received notice from a Lender prior to the Effective
Date that such Lender will not make available to the Administrative Agent such Lender’s share of the Loans to be made on the
Effective Date, the Administrative Agent may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share of the Loans available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including the date such amount is made available to
the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of
the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays
such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in the Loans made on
the Effective Date.
SECTION 2.05. Interest Elections. (a) Each Borrowing initially shall be of the Type specified in the
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section. The
Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders, and the Loans comprising each such portion shall be considered a
separate Borrowing.
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(b) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of
such election by telephone by the time that a Borrowing Request would be required to be made under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such
election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery
or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent
and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall specify the following information in
compliance with Section 2.02 and paragraph (f) of this Section:
(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected
with respect to different portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a
Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after
giving effect to such election, which shall be a period contemplated by the definition of the term “Interest
Period”.
If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the
Borrower shall be deemed to have selected an Interest Period of one month’s duration.
(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise
each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar
Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein,
at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the
Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing
may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable thereto.
(f) A Borrowing may not be converted to or continued as a Eurodollar Borrowing if after giving effect
thereto the Interest Period therefor would end after the Maturity Date.
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SECTION 2.06. Repayment of Loans; Evidence of Indebtedness. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount
of the Loan of such Lender as provided in Section 2.07.
(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing
the Debt of the Borrower to such Lender resulting from the Loan made by such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each
Loan made hereunder, the Type thereof and the Interest Period, if any, applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall
be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that the Loan made by it be evidenced by a Note. In such event, the
Borrower shall prepare, execute and deliver to such Lender a Note payable to the order of such Lender (or, if requested by
such Lender, to such Lender and its registered assigns) and in the form attached hereto as Annex F, or in such other form
approved by the Administrative Agent and the Borrower. Thereafter, the Loans evidenced by such Note and interest thereon
shall at all times (including after assignment pursuant to Section 11.03) be represented by one or more Notes in such form
payable to the order of the payee named therein (or, if such Note is a registered note, to such payee and its registered
assigns).
SECTION 2.07. Repayment of Loans. To the extent not previously paid, all Loans shall be due and
payable on the Maturity Date together with all accrued but unpaid interest owing hereunder and all other unpaid
Obligations. If, at any time, the “Commitment Termination Date” under, and as defined in, the Receivables Financing
Agreement shall occur or be declared or if the Receivables Financing Agreement shall be terminated for any reason (whether
by the Borrower, the RFA Program Agent or otherwise), then, in any such case, the Borrower shall, concurrently with such
occurrence, declaration or termination, prepay the outstanding principal amount of the Loans in full together with all accrued
but unpaid interest owing hereunder and all other unpaid Obligations.
SECTION 2.08. Prepayment of Loans. (a) The Borrower shall have the right, at any time and from time
to time on or after the date that is six months after the Effective Date, to prepay any Borrowing in whole or in part, subject to
the requirements of this Section; provided, however, that any partial prepayment made pursuant to this Section 2.08(a) shall
be in a principal amount that is a multiple of $1,000,000 and not less than $5,000,000. The Borrower
25
shall have no right to voluntarily prepay any Borrowing at any time prior to the date that is six months after the Effective Date.
(b) In the event that on any date (each, a “Non-Compliance Date”) the aggregate outstanding principal
balance of the Loans on such date shall exceed the then Borrowing Base, then, subject to Section 2.19, during the Cure
Period applicable to such Non-Compliance Date, each of the Borrower and the Collection Agent shall (and the Borrower
hereby authorizes the Collection Agent to) deposit any amount to be distributed to or otherwise received by the Borrower
hereunder or under the Receivables Financing Agreement out of “Collections” (as defined herein or therein), into the Cure
Account (up to an aggregate amount equaling such excess). At the end of the Cure Period corresponding to any Non-
Compliance Date, if the aggregate outstanding principal balance of the Loans on such date exceeds the then Borrowing Base
(the amount of such excess being the “Required Cure Payment Amount”), (y) the Administrative Agent shall apply all Cure
Funds then on deposit in the Cure Account, up to the applicable Required Cure Payment Amount, as a prepayment of the
Loans (and to the extent the Cure Funds on deposit in the Cure Account exceeds such Required Cure Payment Amount and
there exists no Default or Event of Default, the Administrative Agent, upon the Borrower’s written request together with an
officer’s certificate of the Borrower stating that, after taking into account the remittance of the excess funds in the Cure
Account to the Borrower, the Borrowing Base is equal to or greater than the aggregate outstanding principal balance of the
Loans, shall remit such excess to the Borrower), and (z) to the extent that the prepayment of the Loans pursuant to the
preceding clause (y) is less than the Required Cure Payment Amount, the Borrower shall prepay the Loans in an amount of the
deficiency. The Administrative Agent may, at any time during the continuance of an Event of Default, transfer any and all of
the Cure Funds then on deposit in the Cure Account to the Administrative Agent’s Account for payment of the Obligations
and Collection Agent Fees in the manner set forth in Section 2.19(c).
(c) Prior to any optional or mandatory prepayment hereunder of less than all of the Borrowings, the
Borrower shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such
prepayment pursuant to paragraph (d) of this Section. If the Borrower shall fail to so specify the Borrowing or Borrowings to
be prepaid prior to such prepayment, the Administrative Agent may apply any such prepayment to such Borrowing or
Borrowings as the Administrative Agent may elect.
(d) The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment, or (ii) in the case of prepayment of an ABR Borrowing, not later
than 11:00 a.m., New York City time, one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the Borrowings to be prepaid and the principal amount of each Borrowing
or portion thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount
of such prepayment. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount
of a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included
26
in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest on the principal amount being prepaid.
SECTION 2.09. Interest. (a) The Loans comprising each ABR Borrowing shall bear interest at the
Alternate Base Rate plus the Applicable Margin.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate
for the Interest Period in effect for such Borrowing plus the Applicable Margin.
(c) Notwithstanding the foregoing, upon the occurrence and during the continuation of an Event of
Default, at the option of the Administrative Agent or at the request of the Required Lenders, the Borrower shall pay interest on
all of the Obligations to but excluding the date of actual payment, after as well as before judgment, (i) in the case of principal,
at a rate per annum equal to 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of
this Section and (ii) in the case of any other amount, at a rate per annum equal to the highest rate then payable on any of the
Loans (or, if there are no Loans then outstanding, at a rate per annum equal to 2% plus the Alternate Base Rate plus the
Applicable Margin for ABR Loans).
(d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such
Loan and on the Maturity Date; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on
demand, (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion, together with any amounts due and payable pursuant to Section 2.12.
(e) All interest hereunder shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent
manifest error.
SECTION 2.10. Alternate Rate of Interest. If prior to the commencement of any Interest Period for a
Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be conclusive absent manifest error)
that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate for such
Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in
such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly
as practicable thereafter and, until the Administrative Agent
27
notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election
Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall
be ineffective and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.
SECTION 2.11. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar
Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by
such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional
amount or amounts as will compensate such Lender, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender determines that any Change in Law regarding capital requirements has or would have
the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender to a level below that which such Lender or such
Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies
and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will
pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for
any such reduction suffered. Each Lender will promptly notify the Borrower and the Administrative Agent of any event of
which it has knowledge that will entitle such Lender to compensation pursuant to this Section 2.11; provided that the failure to
provide such notification will not affect such Lender’s rights to compensation hereunder.
(c) A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender
or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall
not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required
to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to
the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of
such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such
increased costs
28
or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive
effect thereof.
SECTION 2.12. Break Funding Payments. In the event of (a) the payment of any principal of any
Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the
failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant
hereto, or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by the Borrower pursuant to Section 2.16, then, in any such event, the Borrower shall compensate each
Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense
to any Lender shall be deemed to consist of an amount determined by such Lender to be the excess, if any, of (i) the amount
of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted
LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have
been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such
period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting
forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower
and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.
SECTION 2.13. Fees. (a) The Borrower shall pay to the Collection Agent a fee (the “Collection Agent
Fee”) of 1% per annum on the average daily Outstanding Balance of the Receivables and Participated Receivables, from the
date of this Agreement until the date on which all outstanding Obligations shall have been paid in full, payable in arrears on
each Distribution Date. Upon three Business Days’ notice to the Borrower and the Administrative Agent, the Collection
Agent (if not an Originator, the Borrower or its designee or an Affiliate of the Borrower) may elect to be paid, as such fee,
another percentage per annum on the average daily Outstanding Balance of the Receivables and Participated Receivable, but
in no event in excess of 110% of the reasonable costs and expenses of the Collection Agent in administering and collecting the
Receivables and Participated Receivables. The Collection Agent Fee shall be payable only from Collections received by the
Borrower pursuant to, and subject to the priority of payment set forth in, Section 2.19. The amounts paid as the “Collection
Agent Fee” under, and as defined in, the Receivables Financing Agreement or any Purchase Agreement shall reduce (but not
below zero dollars), on a dollar-for-dollar basis, the obligation of the Borrower to pay the Collection Agent Fee pursuant to
this Section 2.13(a).
(b) The Borrower shall pay to the Administrative Agent for the account of the Persons entitled thereto
certain fees (collectively, the “Fees”) in the amounts and on the dates set forth in a separate fee agreement of even date
herewith among the Borrower, the Administrative
29
Agent and Citigroup Global Markets Inc., as the same may be amended or restated from time to time (the “Fee Agreement”).
(c) If any portion of the Loans are prepaid prior to the date that is six months before the Maturity Date,
whether pursuant to the second sentence of Section 2.07 or Section 2.08 or otherwise pursuant to this Agreement (including,
without limitation, any required prepayment following the occurrence of an Event of Default), and whether such prepayment is
mandatory or voluntary, the Borrower shall pay to the Administrative Agent, for the ratable benefit of the Lenders, a
prepayment fee equal to 1.0% of the principal amount of the Loans being so prepaid, which prepayment fee shall be due and
payable on the date of the applicable prepayment.
SECTION 2.14. Taxes. (a) Any and all payments and deposits required to be made hereunder or under
any other Transaction Document by the Collection Agent or the Borrower shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding net income taxes that are imposed by the United States and franchise taxes and net income taxes
that are imposed on the Administrative Agent, a Lender or any of its Affiliates (each of the foregoing, an “Affected Person”)
by the state or foreign jurisdiction under the laws of which such Affected Person is organized or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred
to as “Taxes”). If the Borrower or the Collection Agent shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder to any Affected Person, (i) the Borrower shall make an additional payment to such Affected
Person, in an amount sufficient so that, after making all required deductions (including deductions applicable to additional sums
payable under this Section 2.14), such Affected Person receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower or the Collection Agent, as the case may be, shall make such deductions and
(iii) the Borrower or the Collection Agent, as the case may be, shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future stamp or other documentary taxes or
any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or under any other
Transaction Document or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any
other Transaction Document (hereinafter referred to as “Other Taxes”).
(c) The Borrower will indemnify each Affected Person for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section
2.14) paid by such Affected Person and any liability (including penalties, interest and expenses) arising therefrom or with
respect thereto whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be
made within thirty days from the date the Affected Person makes written demand therefor (and a copy of such demand if
delivered by other than the Administrative Agent shall be delivered to the Administrative Agent). A certificate as to the
amount of such indemnification submitted to the Borrower and, with respect to any notification
30
by any Lender, to the Administrative Agent, setting forth, in reasonable detail, the basis for and the calculation thereof, shall be
conclusive and binding for all purposes absent manifest error.
(d) Each Affected Person which is organized outside the United States and which is entitled to an
exemption from, or reduction of, withholding tax under the laws of the United States as in effect on the date hereof (or, in the
case of any Person which becomes an Affected Person after the date hereof, on the date on which it so becomes an Affected
Person with respect to any payments under this Agreement) shall, on or prior to the date hereof (or, in the case of any Person
who becomes an Affected Person after the date hereof, on or prior to the date on which it so becomes an Affected Person),
deliver to the Borrower such certificates, documents or other evidence, as required by the Internal Revenue Code of 1986, as
amended or Treasury Regulations issued pursuant thereto, including Internal Revenue Service Form W-8BEN or Form W-
8ECI and any other certificate or statement of exemption required by Treasury Regulation Section 1.1441-1(a) or Section
1.1441-6(c) or any subsequent version thereof, properly completed and duly executed by such Affected Person as will permit
such payments to be made without withholding or at a reduced rate. Each such Affected Person shall from time to time
thereafter, upon written request from the Borrower, deliver to the Borrower any new certificates, documents or other evidence
as described in the preceding sentence as will permit payments under this Agreement to be made without withholding or at a
reduced rate (but only so long as such Affected Person is legally able to do so).
(e) The Borrower shall not be required to pay any amounts to any Affected Person in respect of Taxes
and Other Taxes pursuant to paragraphs (a), (b) and (c) above if the obligation to pay such amounts is attributable to the
failure by such Affected Person to comply with the provisions of paragraph (d) above; provided, however, that should an
Affected Person become subject to Taxes because of its failure to deliver a form required hereunder, the Borrower shall take
such steps as such Affected Person shall reasonably request to assist such Affected Person to recover such Taxes.
SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Setoffs. (a) Each of the Borrower
and the Collection Agent shall make each payment or deposit required to be made by it hereunder or under any other
Transaction Document (whether of principal, interest, fees, or otherwise) prior to the time expressly required hereunder or
under such other Transaction Document for such payment or deposit (or, if no such time is expressly required, prior to 12:00
noon, New York City time), on the date when due or when such deposit is required to be made, in immediately available
funds, without setoff or counterclaim. Any amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at its offices at 390 Greenwich Street, New
York, NY 10013, except that payments pursuant to Sections 2.11, 2.12, 2.14, 10.01 and 11.04 shall be made directly to the
Persons entitled thereto and payments pursuant to other Transaction Documents shall be made to the Persons specified
therein. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment or deposit under any Transaction Document shall be
due on a day that is not a Business Day, the date for payment or deposit shall be extended to the next succeeding Business
Day, and, in the case of any payment or deposit accruing interest, interest thereon shall be payable for the period
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of such extension. All payments under each Transaction Document shall be made in United States dollars.
(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay
fully all amounts of principal, interest, fees and other Obligations then due hereunder, such funds shall be applied in the order of
payment of Obligations set forth in Section 2.19.
(c) If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of
the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to
the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the
aggregate relative amounts of principal of and accrued interest on their Loans; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be
construed to apply to any payment made by or on behalf of the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation
in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which
the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on
which any payment is due to the Administrative Agent for the account of the Lenders that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower
has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith
on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(b),
2.15(d) or 8.04, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply
any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are fully paid.
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SECTION 2.16. Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests
compensation under Section 2.11, or if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.14, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i)
would eliminate or reduce amounts payable pursuant to Section 2.11 or 2.14, as the case may be, in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.
(b) If (i) any Lender requests compensation under Section 2.11, (ii) the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.14
or (iii) any Lender refuses to consent to any amendment or waiver of any Transaction Document requested by the Borrower
that requires the consent of all Lenders, and such amendment or waiver is consented to by the Supermajority Lenders, then
the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section
11.03), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.11 or payments required to be made pursuant to Section 2.14, such assignment will result in a
material reduction in such compensation or payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.
SECTION 2.17. Security Interest. To secure the performance by the Borrower of all the terms,
covenants and agreements on the part of the Borrower (whether as Borrower or otherwise) to be performed under this
Agreement or any document delivered in connection with this Agreement in accordance with the terms thereof, including,
without limitation, the punctual payment when due of all obligations of the Borrower hereunder or thereunder, whether for
principal, interest, fees, indemnification payments, expenses or otherwise (all of the foregoing, collectively, the “Obligations”),
the Borrower hereby assigns to the Administrative Agent for its benefit and the ratable benefit of the Lenders, and hereby
grants to the Administrative Agent for its benefit and the ratable benefit of the Lenders a security interest in, all of the
Borrower’s right, title and interest in and to the following (collectively, the “Collateral”): (A) the Purchase Agreements and the
Parent Undertakings, including, without limitation, (i) all rights of the Borrower to receive moneys due or to become due under
or pursuant to the Purchase Agreements or the Parent Undertakings, (ii) all security interests and property subject thereto from
time to
33
time purporting to secure payment of monies due or to become due under or pursuant to the Purchase Agreements or the
Parent Undertakings, (iii) all rights of the Borrower to receive proceeds of any insurance, indemnity, warranty or guaranty with
respect to the Purchase Agreements or the Parent Undertakings, (iv) claims of the Borrower for damages arising out of or for
breach of or default under the Purchase Agreements or the Parent Undertakings, and (v) the right of the Borrower to compel
performance and otherwise exercise all remedies thereunder, (B) all Transferred Assets, whether now owned and existing or
hereafter acquired or arising, the Related Security and Collections with respect thereto and all other assets of the Borrower,
including, without limitation, accounts, chattel paper, instruments, payment intangibles and general intangibles (as those terms
are defined in the UCC), including undivided interests in any of the foregoing, (C) the Lock-Boxes and Deposit Accounts and
(D) to the extent not included in the foregoing, all proceeds of any and all of the foregoing.
SECTION 2.18. Right of Setoff. Without in any way limiting the provisions of Section 2.15(c), the
Administrative Agent and each Lender is hereby authorized (in addition to any other rights it may have) at any time after the
occurrence and during the continuance of an Event of Default to set-off, appropriate and apply (without presentment, demand,
protest or other notice which are hereby expressly waived) any deposits and any other indebtedness held or owing by the
Administrative Agent or such Lender to, or for the account of, the Borrower, the Collection Agent or any Originator against
any amount owing by the Borrower, the Collection Agent or such Originator, respectively, to such Person or to the
Administrative Agent on behalf of such Person (even if contingent or unmatured).
SECTION 2.19. Settlement Procedures. (a) On each date that any Obligations remain outstanding
(commencing on the date the Administrative Agent’s Account and the Cure Account have been established, which accounts
shall be established no later than the second Business Day after the date of this Agreement) on which (x) any amount of
Collections are to be deposited into the Borrower’s Account (as defined in the Receivables Financing Agreement) (or
otherwise to be paid to or on behalf of the Borrower) pursuant to the Receivables Financing Agreement or are otherwise in
the Borrower’s Account (as defined in the Receivables Financing Agreement) or in the possession or control of the Borrower
or (y) after the RFA Termination Date, any amount of Collections are received by or on behalf of the Borrower or the
Collection Agent and not otherwise promptly applied to the payment of Obligations, each of the Borrower and the Collection
Agent shall (and the Borrower hereby authorizes and directs the Collection Agent to) cause such amount to be distributed as
follows:
(A) If on such date no Event of Default is continuing:
(i) First, if such date is not the Maturity Date, to be deposited into the Administrative Agent’s Account for
the benefit of the Beneficiaries and the Collection Agent, an amount equal to the sum of the accrued and
unpaid interest, Fees and Collection Agent Fees owing hereunder through such date and any unpaid
expenses of, or other amounts (other than Fees) owing to, the Administrative Agent incurred or owing
under any Transaction Document (such expenses and amounts owing to the Administrative Agent, the
“Administrative Agent Amounts”), in each case, to the extent the amount then on deposit in the
Administrative
34
Agent’s Account in respect thereof is less than the sum of the accrued and unpaid interest, Fees and
Collection Agent Fees owing hereunder as of such date and the Administrative Agent Amounts;
(ii) Second, if such date is not the Maturity Date and during any Cure Period, to be deposited into the
Cure Account, an amount equal to the amount then required to be deposited into the Cure Account
by the Borrower pursuant to Section 2.08(b), to be held by the Administrative Agent for the benefit of
the Beneficiaries and distributed in accordance with Section 2.08(b);
(iii) Third, if such date is the Maturity Date, to be deposited into the Administrative Agent’s Account for
the benefit of the Beneficiaries and the Collection Agent, an amount equal to all unpaid principal and
interest on the Loans and all other unpaid Obligations and unpaid Collection Agent Fees, to the extent
such amount is not then on deposit in the Administrative Agent’s Account; and
(iv) Thereafter, to be deposited into the Borrower’s Account.
(B) If on such date an Event of Default is continuing:
(i) First, to be deposited into the Administrative Agent’s Account for the benefit of the Beneficiaries and
the Collection Agent, the entire such amount to be applied to the payment in full of the Obligations and
Collection Agent Fees; and
(ii) Thereafter, once all Obligations and Collection Agent Fees have been paid in full, to be deposited into
the Borrower’s Account.
For purposes of determining the amount to be deposited into the Administrative Agent’s Account pursuant to the preceding
clause (A)(i) with respect to interest, Fees and Administrative Agent Amounts, the Administrative Agent shall, from time to
time, provide written notice to the Collection Agent and the Borrower of the estimated per diem accrual amount of interest and
Fees and of the Administrative Agent Amounts. The Borrower agrees that it shall not instruct the Collection Agent to direct
the RFA Trustee to hold in the RFA Trustee’s Account all or a portion of any Collections that otherwise would be deposited
into the Borrower’s Account (as defined in the Receivables Financing Agreement) pursuant to the terms of the Receivables
Financing Agreement if doing so would reduce the amounts that would otherwise be deposited into the Administrative Agent’s
Account or the Cure Account pursuant to any of clauses (A) (i), (ii) or (iii) above. The Borrower hereby authorizes the
Administrative Agent, at any time and from time to time upon the occurrence and during the continuance of a Default or an
Event of Default or if the aggregate outstanding principal balance of the Loans exceeds the Borrowing Base or if the Maturity
Date shall occur, to instruct the RFA Trustee to disburse to the Administrative Agent any and all amounts held by or otherwise
in the possession or control of the RFA Trustee (including, without limitation, in the RFA Trustee’s Account) that are to be
deposited into the Borrower’s Account (as defined in the Receivables Financing Agreement) or otherwise paid to or for the
benefit of the Borrower pursuant to the terms of the Receivables Financing Agreement.
35
Any such amounts received by the Administrative Agent under the preceding sentence shall be deposited into the
Administrative Agent’s Account and distributed in the manner provided in this Section 2.19.
(b) On each date on which any accrued interest, Fees or Collection Agent Fees are due and payable
hereunder or any Administrative Agent Amounts have not been reimbursed or are due and payable and, in each case, there
exists no Event of Default and such date is not the Maturity Date, the Administrative Agent shall distribute the amount then on
deposit in the Administrative Agent’s Account in respect thereof to, in the case of any such interest, Fees and Administrative
Agent Amounts, the Administrative Agent or Lender entitled to receive the same and, in the case of any such Collection Agent
Fees, to the Collection Agent; provided, that if on any such date there shall be insufficient amounts on deposit in the
Administrative Agent’s Account in respect thereof, such amounts shall be distributed (i) first, to the Administrative Agent for
Administrative Agent Amounts, (ii) second, to the Collection Agent (if the Collection Agent is other than an Originator or one
of its Affiliates) for due and payable Collection Agent Fees, (iii) third, ratably to the Administrative Agent and Lenders entitled
to receive same for due and payable accrued interest and Fees and (iv) fourth, to the Collection Agent (if the Collection Agent
is an Originator or one of its Affiliates) for due and payable Collection Agent Fees.
(c) During the continuance of an Event of Default or if the Maturity Date shall occur, the Administrative
Agent shall distribute the amount on deposit in the Administrative Agent’s Account to the payment of the Obligations and
Collection Agent Fees in the following order: (i) first, to the Administrative Agent for Administrative Agent Amounts,
(ii) second, to the Collection Agent (if the Collection Agent is other than an Originator or one of its Affiliates) for accrued and
unpaid Collection Agent Fees, (iii) third, ratably to the Administrative Agent and Lenders entitled to receive same for accrued
and unpaid interest and Fees, (iv) fourth, ratably to the Lenders in reduction of the aggregate outstanding principal on the
Loans until such principal is reduced to zero, (v) fifth, ratably to the Beneficiaries for other unpaid Obligations and (vi) sixth, to
the Collection Agent (if the Collection Agent is an Originator or one of its Affiliates) for accrued and unpaid Collection Agent
Fees.
(d) Nothing in this Section 2.19 shall relieve the Borrower of any obligation to pay any Obligation or
Collection Agent Fee hereunder as and when the same shall be due and payable or to deposit into the Cure Account the
amount then required to be deposited pursuant to Section 2.08(b). If, on the date any Obligations or Collection Agent Fees
are payable to the Administrative Agent, any Lender or the Collection Agent hereunder, the amount then on deposit in the
Administrative Agent’s Account in respect thereof is less than the amount thereof then due and payable, the Borrower shall
pay to the Administrative Agent for the benefit of the relevant Beneficiaries or the Collection Agent, as applicable, on such due
date, the amount of such deficiency.
(e) If at any time any payment of any Obligations is rescinded or must otherwise be returned by a
Beneficiary for any reason, effective upon such rescission or return such payment shall automatically be deemed, as between
the Beneficiaries and the Borrower, never to have occurred, and the Borrower shall be required, to the extent it received any
amounts
36
under this Section 2.19 or otherwise, to remit to the Administrative Agent for the account of the applicable Beneficiaries an
amount equal to the rescinded or returned payment.
ARTICLE III
CONDITIONS PRECEDENT
The effectiveness of this Agreement and the obligations of the Lenders to make the Loans under this
Agreement are subject to the fulfillment, to the satisfaction of the Administrative Agent, or waiver by the Administrative Agent
of the following conditions precedent on or before February 20, 2009:
(a) The Administrative Agent shall have received each of the following, duly executed by each of the
parties thereto, and each in form and substance satisfactory to the Administrative Agent:
(i) this Agreement;
(ii) the Notes payable to the order of each Lender;
(iii) the Funds Transfer Letter;
(iv) an amendment to the Parent Undertaking (Originators) and the assignment thereof, in such form as may
be required by the Administrative Agent in connection with the transactions contemplated hereby;
(v) the Parent Undertaking (Collection Agent);
(vi) an agreement of the Process Agent pursuant to which it agrees to act as such as called for by Section
11.10(a);
(vii) the RFA Intercreditor Agreement;
(viii) the Senior Collateral Intercreditor Agreement Amendment;
(ix) the Fee Agreement, together with payment of any Fees thereunder required to be paid on or before the
Effective Date;
(x) an amendment to the Receivables Financing Agreement in such form as may be required by the
Administrative Agent in connection with the transactions contemplated hereby;
(xi) an amendment to each of the Purchase Agreements in such form as may be required by the
Administrative Agent in connection with the transactions contemplated hereby;
(xii) (1) Deposit Account Agreements with each Deposit Bank, (2) Governmental Entity Receivables
Agreements with each Account
37
Bank, and (3) an amendment to the Deposit Account Agreements and Governmental Entity
Receivables Agreements (as such terms are defined in the Receivables Financing Agreement) in such
form as may be required by the Administrative Agent in connection with the transactions contemplated
hereby; and
(xiii) a personal covenant letter from each director and member of each of the Borrower and Cayman SPE I
agreeing not to introduce, present, vote on, adopt or pass any resolution which provides for the winding
up of (or has the effect of winding up) the Borrower or Cayman SPE I, as applicable, so long as any
Commitments or Obligations remain outstanding.
(b) The Administrative Agent shall have received the following, each (unless otherwise indicated),
dated the Effective Date:
(i) Certified copies of the resolutions (or similar authorization, if not a corporation) of the Board of
Directors (or similar governing body or Persons, if not a corporation) of the Borrower, the Parent, the
other Originators, the Collection Agent and the Predecessor Purchasers approving this Agreement, the
Purchase Agreements, the Parent Undertakings and any other Transaction Documents to which it is a
party and certified copies of all documents evidencing other necessary corporate or limited liability
company, as the case may be, action and governmental approvals, if any, with respect to this
Agreement, the Purchase Agreements, the Parent Undertakings and any such Transaction
Documents. One such certificate will be acceptable for any number of such Persons.
(ii) A certificate of the Secretary or Assistant Secretary of the Borrower, the Parent, the other Originators,
the Collection Agent and the Predecessor Purchasers certifying the names and true signatures of their
respective officers authorized to sign this Agreement, the Purchase Agreements, the Parent
Undertakings and the other documents to be delivered by it hereunder and thereunder. One such
certificate will be acceptable for any number of such Persons.
(iii) A copy of the by-laws of the Parent and of the Memorandum and Articles of Association of Cayman
SPE I and the Borrower, certified by the Secretary or Assistant Secretary (or, in the case of Cayman
SPE I and the Borrower, a director) of the Parent, Cayman SPE I or the Borrower, as the case may
be.
(iv) A copy of the certificates of incorporation of each of HQ, the Parent and the other Originators certified
as of a recent date by the Secretary of State or other appropriate official of the state of its organization
(or a certificate from the Secretary or Assistant Secretary of HQ, the Parent and the other Originators
certifying that their respective certificates of incorporation
38
have not been amended or modified from the copies thereof delivered for the closing of the Receivables
Financing Agreement or, if amended or modified since such closing, attaching those amendments and
modifications), and a certificate as to the good standing of each of the Borrower, Cayman SPE I, HQ,
the Parent and the other Originators from such Secretary of State or other official (or, in the case of the
Borrower and Cayman SPE I, the equivalent in the jurisdiction of their formation), dated as of a recent
date.
(v) Copies of proper financing statements (or similar filings to be made outside of the United States), duly
filed on or before the Effective Date, under the UCC and other laws of all jurisdictions that the
Administrative Agent may deem necessary or desirable in order to perfect the ownership and security
interests contemplated by this Agreement and the Purchase Agreements.
(vi) Copies of proper financing statements (or similar filings to be made outside of the United States), if any,
necessary to release all security interests and other rights of any Person in (i) the Receivables, the
Participated Receivables, Participation Interests, Contracts or Related Security previously granted by
the Borrower, any Predecessor Purchaser or any Originator and (ii) the Collateral previously granted
by the Borrower, in each case other than those security interests and financing statements or similar
filings which are subject and referred to in the Senior Collateral Intercreditor Agreement, the RFA
Intercreditor Agreement, the Receivables Financing Agreement or the other Transaction Documents.
(vii) Completed requests for information (or similar requests to be made outside of the United States), dated
on or before the Effective Date, listing all effective financing statements and other filings filed in the
jurisdictions referred to in subsection (v) above and in any other jurisdictions reasonably requested by
the Administrative Agent that name the Borrower, any Predecessor Purchaser or any Originator as
debtor (in the case of any Predecessor Purchaser or any Originator, only to the extent requested by the
Administrative Agent), together with copies of such financing statements and other filings (none of which
shall cover any Receivables, Participated Receivables, Participation Interests, Contracts, Related
Security or the Collateral except those relating to the Credit Agreement and the Indentures and those
filed in connection with the transactions contemplated by the Purchase Agreements and the Receivables
Financing Agreement).
(viii) Favorable opinions of Skadden, Arps, Slate, Meagher & Flom LLP, Chapman & Cutler relating to
various states’ local perfection issues, Parent general counsel, and Maples & Calder, as counsel for the
Borrower, the Predecessor Purchasers, the Parent and the other Originators, as to such matters as the
Administrative Agent may reasonably request.
39
(ix) A certified copy of the executed Originator Purchase Agreement, Secondary Purchase Agreement and
Tertiary Purchase Agreement, each, as amended through the Effective Date.
(x) A certified copy of the executed Parent Undertaking (Originators), as amended through the Effective
Date.
(c) as of the Effective Date, the following statements shall be true (and acceptance of the proceeds of
the Loans by the Borrower shall be deemed a representation and warranty by the Borrower, the Parent and the Collection
Agent (each as to itself) that such statements are then true):
(i) The representations and warranties contained in Sections 4.01 and 4.02 are correct on and
as of the Effective Date as though made on and as of such date,
(ii) No event has occurred and is continuing, or would result from the making of the Loans, that
constitutes an Event of Default or an Default,
(iii) There shall have been sold or contributed to the purchaser thereunder pursuant to each
Purchase Agreement, all Originator Receivables arising on or prior to such date other than
Government Receivables,
(iv) There shall have been sold or contributed to the purchaser under each Purchase
Agreement, all Participation Interests in all Originator Receivables which are Governmental
Receivables arising on or prior to such date; and
(v) No “Event of Termination” or “Incipient Event of Termination” under, and as each is

defined in, the Receivables Financing Agreement shall have occurred and be continuing.
(d) the Administrative Agent shall have received a completed Borrower Report, a completed Interim
Report and a completed Daily Report containing information covering the most recently ended reporting period for which
information is required pursuant to Section 6.02(g) of the Receivables Financing Agreement and demonstrating that, after
giving effect to the making of the Loans hereunder, no Event of Default or Default will occur and the Borrowing Base will
equal or exceed the aggregate original principal amount of the Loans and the Administrative Agent shall be satisfied with the
calculation of the borrowing base under the Receivables Financing Agreement (including, without limitation, the concentration
limits utilized in such calculation).
(e) in the reasonable judgment of the Administrative Agent, (i) since March 1, 2008, there shall have
been no material adverse change in the business, assets, liabilities, condition (financial or otherwise), operations or prospects
of the Borrower, Parent, any Originator, HQ or Cayman SPE I, and (ii) since January 22, 2009, there shall have occurred no
circumstance, change or condition in the loan syndication, financial or capital markets generally that could reasonably be
expected to materially impair syndication of the Loans.
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(f) the Administrative Agent shall have not discovered or otherwise become aware of any information
not previously disclosed to it that is materially inconsistent with its understanding, based on the information previously provided
to it, of the business, assets, liabilities, condition (financial or otherwise), operations or prospects of the Borrower, Parent, any
Originator, HQ or Cayman SPE I.
(g) the Administrative Agent shall have had an opportunity to conduct a take-over audit of the
Collateral and the results of such audit shall have been satisfactory to the Administrative Agent.
(h) the Administrative Agent shall have received such other approvals, opinions or documents as the
Administrative Agent may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The Borrower hereby represents and
warrants as follows, which representations and warranties shall be deemed repeated on each day during the Term:
(a) The Borrower is an exempted company incorporated with limited liability validly existing and in
good standing under the laws of the Cayman Islands, and is duly qualified to do business, and is in good standing, in every
jurisdiction where the nature of its business requires it to be so qualified.
(b) The execution, delivery and performance by the Borrower of the Transaction Documents to which
it is a party and the other documents to be delivered by it hereunder, including the Borrower’s use of the proceeds of the
Loans, (i) are within the Borrower’s corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii)
do not contravene (1) the Borrower’s Memorandum and Articles of Association, (2) any law, rule or regulation applicable to
the Borrower, (3) any contractual restriction binding on or affecting the Borrower or its property or (4) any order, writ,
judgment, award, injunction or decree binding on or affecting the Borrower or its property, and (iv) do not result in or require
the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its properties (except
for the interest created pursuant to this Agreement). Each of the Transaction Documents to which the Borrower is a party has
been duly executed and delivered by the Borrower.
(c) No authorization or approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery and performance by the Borrower of the Transaction
Documents to which it is a party or any other document to be delivered thereunder, except for the filing of UCC financing
statements which are referred to herein and therein.
(d) Each of the Transaction Documents to which it is a party constitutes the legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other
41
similar laws affecting the rights of creditors generally and general equitable principles (whether considered in a proceeding at
law or in equity).
(e) Since its date of formation, August 11, 2004, there has been no material adverse change in the
business, operations, property, prospects or financial or other condition of the Borrower.
(f) Except as set forth in Schedule V or as otherwise disclosed by the Parent in its publicly available
SEC filings, there is no pending or threatened action, investigation or proceeding affecting the Borrower, the Parent or any of
their Subsidiaries before any court, governmental agency or arbitrator which if determined adversely to any of them, could
reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(g) No proceeds of any Loans will be used to acquire any equity security of a class which is registered
pursuant to Section 12 of the Securities Exchange Act of 1934.
(h) The Borrower is the legal and beneficial owner of the Transferred Assets and Related Security free
and clear of any Adverse Claim (other than the security interests therein granted under the Receivables Financing Agreement
subject to the RFA Intercreditor Agreement). The Administrative Agent for the benefit of the Lenders has a valid and
perfected security interest in each Transferred Asset now existing or hereafter arising and in the Related Security and
Collections with respect thereto, second only in priority to the security interests granted under the Receivables Financing
Agreement that are the subject of the RFA Intercreditor Agreement. No effective financing statement or other instrument
similar in effect covering any Collateral is on file in any recording office, except (i) those relating to the Credit Agreement and
the Indentures, all of which the Borrower represents relate to security interests that are subject to the Senior Collateral
Intercreditor Agreement, (ii) those relating to the Receivables Financing Agreement, all of which the Borrower represents
relate to security interests that are subject to the RFA Intercreditor Agreement, (iii) those filed in favor of the Administrative
Agent relating to this Agreement and (iv) those filed pursuant to the Purchase Agreements. Each Transferred Asset
characterized in any Borrower Report or other written statement made by or on behalf of the Borrower as an Eligible
Receivable or Eligible Participation Interest, or as included in the Borrowing Base is, as of the date of such Borrower Report
or other statement (or, if applicable, as of a date certain specified in such report), an Eligible Receivable or Eligible
Participation Interest, as properly included in the Borrowing Base.
(i) Each Borrower Report, Interim Report and Daily Report (if prepared by the Borrower or one of its
Affiliates, or to the extent that information contained therein is supplied by the Borrower or an Affiliate), information, exhibit,
financial statement, document, book, record or report furnished or to be furnished at any time by or on behalf of the Borrower
to the Administrative Agent or the Lenders in connection with and before or after the date of this Agreement is or will be
accurate in all material respects as of its date or (except as otherwise disclosed to the Administrative Agent or the Lenders, as
the case may be, at such time) as of the date so furnished (or, if applicable, as of a date certain specified in such report), and
no such document contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not
misleading.
42
(j) The principal place of business and chief executive office of the Borrower and the office where the
Borrower keeps its records concerning the Transferred Assets are located at the address or addresses referred to in Section
5.01(b).
(k) The names and addresses of all the Deposit Banks and Account Banks, together with the post
office boxes and account numbers of the Lock-Boxes, Deposit Accounts and Governmental Entity Receivables Accounts, as
the case may be, of the Borrower at such banks, are as specified in Schedule I hereto, as such Schedule I may be updated
from time to time pursuant to Section 5.01(g). The Lock-Boxes, Deposit Accounts and Governmental Entity Receivables
Accounts, as the case may be, are the only post office boxes and bank accounts into which Collections of Receivables and
Participated Receivables are deposited or remitted. The Borrower has delivered to the Administrative Agent a fully executed
Deposit Account Agreement or Governmental Entity Receivables Agreement with respect to each Deposit Account,
Governmental Entity Receivables Account and any associated Lock-Boxes.
(l) [Intentionally Omitted].
(m) The Borrower is not known by and does not use any tradename or doing-business-as name.
(n) The Borrower has no Subsidiaries.
(o) (i) The fair value of the property of the Borrower is greater than the total amount of liabilities,
including contingent liabilities, of the Borrower, (ii) the present fair salable value of the assets of the Borrower is not less than
the amount that will be required to pay all probable liabilities of the Borrower on its debts as they become absolute and
matured, (iii) the Borrower does not intend to, and does not believe that it will, incur debts or liabilities beyond the Borrower’s
abilities to pay such debts and liabilities as they mature and (iv) the Borrower is not engaged in a business or a transaction, and
is not about to engage in a business or a transaction, for which the Borrower’s property would constitute unreasonably small
capital.
(p) With respect to each Transferred Asset, the Borrower (i) shall have received such Transferred
Asset as a contribution to the capital of the Borrower by Cayman SPE I, (ii) shall have purchased such Transferred Asset
from Cayman SPE I in exchange for payment (made by the Borrower to Cayman SPE I in accordance with the provisions of
the Tertiary Purchase Agreement) of cash or (iii) shall have received such Transferred Asset partially as a capital contribution
and partially for payment in cash, in each case in an amount which constitutes fair consideration and reasonably equivalent
value. Each such sale referred to in the preceding sentence shall not have been made for or on account of an antecedent debt
owed by Cayman SPE I to the Borrower.
(q) Taxes. The Borrower has timely filed or caused to be filed all required income tax and sales tax
returns and reports and all other material tax returns and reports required to have been filed and has paid or caused to be paid
all material taxes due pursuant to such returns or pursuant to any assessment received by the Borrower, except where the
payment of any such taxes is being contested in good faith by appropriate proceedings and for which the Borrower has set
aside on its books adequate reserves. The charges, accruals and reserves on the
43
books of the Borrower in respect of such taxes or charges imposed by a Governmental Entity are, in the opinion of the
Borrower, adequate for the payment thereof.
SECTION 4.02. Representations and Warranties of the Collection Agent. The Collection Agent hereby
represents and warrants as follows, which representations and warranties shall be deemed repeated on each day during the
Term:
(a) The Collection Agent is a corporation duly incorporated, validly existing and in good standing under
the laws of Delaware, and is duly qualified to do business, and is in good standing, in every jurisdiction where the nature of its
business requires it to be so qualified, except where the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
(b) The execution, delivery and performance by the Collection Agent of this Agreement and any other
documents to be delivered by it hereunder (i) are within the Collection Agent’s corporate powers, (ii) have been duly
authorized by all necessary corporate action, (iii) do not contravene (1) the Collection Agent’s charter or by-laws, (2) any
law, rule or regulation applicable to the Collection Agent, (3) any contractual restriction binding on or affecting the Collection
Agent or its property or (4) any order, writ, judgment, award, injunction or decree binding on or affecting the Collection Agent
or its property, and (iv) do not result in or require the creation of any lien, security interest or other charge or encumbrance
upon or with respect to any of its properties. This Agreement has been duly executed and delivered by the Collection Agent.
(c) No authorization or approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery and performance by the Collection Agent of this
Agreement or any other document to be delivered by it hereunder.
(d) This Agreement constitutes the legal, valid and binding obligation of the Collection Agent
enforceable against the Collection Agent in accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the rights of creditors generally and general equitable principles (whether considered
in a proceeding at law or in equity).
(e) Since March 1, 2008 there has been no material adverse change in the business, operations,
property, prospects or financial or other condition of the Collection Agent.
(f) Except as set forth in Schedule V, there is no pending or threatened action, investigation or
proceeding affecting the Collection Agent or any of its Subsidiaries before any court, governmental agency or arbitrator which
if determined adversely, could reasonably be expected to result in a Material Adverse Effect.
(g) On each day during the Term, the outstanding principal balance of all Loans (less the amount of
Cure Funds then in the Cure Account) is not greater than the Borrowing Base. Each Transferred Asset characterized in any
Borrower Report as an Eligible Receivable or Eligible Participation Interest, or as included in the Borrowing Base is, as of the
date of such Borrower Report (or, if applicable, as of a date certain specified in such
44
information), an Eligible Receivable or Eligible Participation Interest, or properly included in the Borrowing Base, as
applicable.
ARTICLE V
COVENANTS
SECTION 5.01. Covenants of the Borrower. Until the Commitments have expired or been terminated
and the principal and interest of each Loan and all other Obligations have been paid in full, the Borrower covenants and agrees
with the Administrative Agent and the Lenders that:
(a) Compliance with Laws, Etc. The Borrower will comply in all material respects with all applicable
laws, rules, regulations and orders and preserve and maintain its corporate existence, rights, franchises, qualifications, and
privileges except to the extent that the failure so to comply with such laws, rules and regulations or the failure so to preserve
and maintain such rights, franchises, qualifications, and privileges could not reasonably be expected to result in a Material
Adverse Effect.
(b) Offices, Records, Name and Organization. The Borrower will keep its principal place of business
and chief executive office and the office where it keeps its records concerning the Transferred Assets at the address of the
Borrower set forth on Schedule III hereto or, upon 30 days’ prior written notice to the Administrative Agent, at any other
locations within the United States. The Borrower will not change its name or its jurisdiction of organization, unless (i) the
Borrower shall have provided the Administrative Agent with at least 30 days’ prior written notice thereof and (ii) no later than
the effective date of such change, all actions reasonably requested by the Administrative Agent to protect and perfect the
security interest in the Transferred Assets have been taken and completed. The Borrower also will maintain and implement (or
cause the Collection Agent to maintain or implement) administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Transferred Assets and related Contracts in the event of the destruction of the originals
thereof), and keep and maintain (or cause the Collection Agent to maintain or implement) all documents, books, records and
other information reasonably necessary or advisable for the collection of all Receivables and Participated Receivables
(including, without limitation, records adequate to permit the daily identification of each Receivable and Participated
Receivables and all Collections of and adjustments to each existing Participated Receivable).
(c) Performance and Compliance with Contracts and Credit and Collection Policy. The Borrower will,
at its expense, timely and fully perform and comply with all material provisions, covenants and other promises required to be
observed by it under the Contracts related to the Transferred Assets and timely and fully comply in all material respects with
the Credit and Collection Policy in regard to each of the Transferred Assets and the related Contract.
(d) Sales, Liens, Etc. Except for the security interest created hereunder in favor of the Administrative
Agent and the security interest created in favor of the RFA Program Agent under the Receivables Financing Agreement (and
which is subject to the RFA Intercreditor Agreement), the Borrower will not sell, assign (by operation of law or otherwise) or
45
otherwise dispose of, or create or suffer to exist any Adverse Claim upon or with respect to any Collateral, or upon or with
respect to any account to which any Collections of any Receivable or Participated Receivable are sent, or assign any right to
receive income in respect thereof.
(e) Extension or Amendment of Receivables and Participated Receivables. Except as provided in

Section 6.02(c), the Borrower will not (and will not permit the Collection Agent or any Originator to) extend, amend or
otherwise modify the terms of any Receivable or Participated Receivable, or amend, modify or waive any term or condition of
any Contract related thereto.
(f) Change in Business or Credit and Collection Policy. The Borrower will not make any change in the
character of its business or in the Credit and Collection Policy that could, in either case, reasonably be expected to result in a
Material Adverse Effect.
(g) Change in Payment Instructions to Obligors. The Borrower will not add or terminate any bank,
post office box or bank account as a Deposit Bank, Account Bank, Lock-Box, Deposit Account or Governmental Entity
Receivables Account from those listed in Schedule I to this Agreement, or make any change in its instructions to Obligors
regarding payments to be made to the Borrower or payments to be made to any such account or box, unless the
Administrative Agent shall have received notice of such addition, termination or change (including an updated Schedule I) and
a fully executed Deposit Account Agreement or Governmental Entity Receivables Agreement with each new Deposit Bank or
Account Bank, as the case may be, or with respect to each new Lock-Box, Deposit Account or Governmental Entity
Receivables Account.
(h) Deposits to Lock-Boxes, Deposit Accounts, Governmental Entity Receivables Accounts. The
Borrower will (or will cause the Collection Agent or the Originators to) instruct all Obligors that are Governmental Entities
other than Contract Payors to remit all their payments in respect of Participated Receivables to Governmental Entity
Receivables Accounts or Lock-Boxes associated therewith. The Borrower will (or will cause the Collection Agent or the
Originators to) instruct all Obligors that are not Governmental Entities other than Contract Payors to remit all their payments in
respect of Receivables to Deposit Accounts or Lock-Boxes associated therewith. If the Borrower shall receive any
Collections directly, it shall immediately (and in any event within one Business Day) deposit the same to a Deposit Account (in
the case of Collections of Receivables) or a Governmental Entity Receivables Account (in the case of Collections of
Participated Receivables). The Borrower will not deposit or otherwise credit, or cause or permit to be so deposited or
credited, to any Lock-Box, Deposit Account or Governmental Entity Receivables Account, cash or cash proceeds other than
Collections of Receivables or Participated Receivables.
(i) [Intentionally Omitted.]
(j) Further Assurances. (i) The Borrower agrees from time to time, at its expense, promptly to
execute and deliver all further instruments and documents, and to take all further actions, that may be necessary or desirable,
or that the Administrative Agent may reasonably request, to perfect or protect the security interest granted under this
Agreement, or to
46
enable the Lenders or the Administrative Agent to exercise and enforce their respective rights and remedies under this
Agreement.
(ii) The Borrower authorizes the Administrative Agent to file financing or continuation statements, and
amendments thereto and assignments thereof, relating to the Collateral.
(k) Reporting Requirements. The Borrower will provide to the Administrative Agent and the Lenders (in multiple
copies, if requested by the Administrative Agent) the following:
(i) as soon as available and in any event within 50 days (or such earlier date that is 5 days after the then-
current filing deadline for the Parent’s Quarterly Report on Form 10-Q) after the end of each of the first
three quarters of each fiscal year of the Parent, the Parent’s and its consolidated Subsidiaries’
consolidated balance sheet as of the end of such quarter and statements of income and cash flows for
the then elapsed portion of such fiscal year for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, certified by a Financial Officer of the Parent;
(ii) as soon as available and in any event within 105 days (or such earlier date that is 10 days after the then-
current filing deadline for the Parent’s Annual Report on Form 10-K) after the end of each fiscal year of
the Parent, the audited consolidated balance sheet of the Parent and its consolidated Subsidiaries and
related statements of income and cash flows as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all reported on by Deloitte & Touche
LLP or other independent public accountants of recognized national standing (without a “going
concern” or like qualification or exception and without any material qualification or exception as to the
scope of the audit) to the effect that such consolidated financial statements present fairly in all material
respects the financial position, results of operations and cash flows of the Parent and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP;
(iii) as soon as available and in any event within 50 days after the end of each of the first three fiscal
quarters (or such earlier date that is 5 days after the then-current filing deadline for the Parent’s
Quarterly Report on Form 10-Q) and within 105 days after the end of the fourth fiscal quarter of each
fiscal year (or such earlier date that is 10 days after the then-current filing deadline for the Parent’s
Annual Report on Form 10-K) of the Borrower, a balance sheet of the Borrower as of the end of such
quarter and a statement of income and cash flows of the Borrower for the period commencing at the
end of the previous fiscal year and ending with the end of such quarter, certified by a Financial Officer
of the Borrower;
47
(iv) as soon as possible and in any event within five days after the occurrence of each Event of Default or
Default, a statement of a Financial Officer of the Borrower setting forth details of such Event of Default
or Default and the action that the Borrower has taken and proposes to take with respect thereto;
(v) promptly after the sending or filing thereof, copies of all reports that the Parent sends to any of its
security holders, and copies of all reports and registration statements that the Parent or any of its
Subsidiaries files with the SEC or any national securities exchange;
(vi) promptly after the filing or receiving thereof, copies of all reports and notices that the Parent or any
ERISA Affiliate files under ERISA with the Internal Revenue Service or the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or that the Parent or any ERISA Affiliate receives from
any of the foregoing or from any multiemployer plan (within the meaning of Section 4001(a)(3) of
ERISA) to which the Parent or any ERISA Affiliate is or was, within the preceding five years, a
contributing employer, in each case in respect of the assessment of withdrawal liability or an event or
condition which could, in the aggregate, result in the imposition of liability on the Parent and/or any such
ERISA Affiliate in excess of $10,000,000;
(vii) at least 30 days prior to any change in the name or jurisdiction of organization of the Parent, any
Originator or the Borrower, a notice setting forth the new name or jurisdiction of organization and the
effective date thereof;
(viii) promptly after the Borrower obtains knowledge thereof, notice of any “Event of Termination”, “Facility
Termination Date” or “Commitment Termination Date” under any Purchase Agreement or under the
Receivables Financing Agreement;
(ix) so long as any Loans shall be outstanding, as soon as possible and in any event no later than the day of
occurrence thereof, notice that any Originator has stopped selling to HQ, pursuant to the Originator
Purchase Agreement, all newly arising or acquired Originator Receivables and Participation Interests in
Government Receivables; and notice that HQ or Cayman SPE I has stopped selling or contributing
Receivables and Participation Interests in Government Receivables pursuant to the Secondary Purchase
Agreement or the Tertiary Purchase Agreement, as the case may be;
(x) at the time of the delivery of the financial statements provided for in clauses (i) and (ii) of this paragraph,
a certificate of a Financial Officer of the Borrower to the effect that, to the best of such officer’s
knowledge, no
48
Event of Default has occurred and is continuing or, if any Event of Default has occurred and is
continuing, specifying the nature and extent thereof;
(xi) promptly after receipt thereof, copies of all notices received by the Borrower from any Person under or
with respect to any Purchase Agreement or the Receivables Financing Agreement;
(xii) at least 60 days prior to the end of the last fiscal year of the Parent referred to in Schedule IV, a new
Schedule IV, setting forth the Months for the upcoming fiscal year or years;
(xiii) no later than March 15, 2009, a 12-Month adjusted EBITDA and liquidity forecast for the Parent (the
“Forecast”) in form and substance reasonably satisfactory to the Administrative Agent, certified by a
Financial Officer of the Parent;
(xiv) (A) no later than 20 days after the Parent’s fiscal Month-end, a comparison of actual results for the
prior Month as compared to the Forecast then delivered by the Parent and (B) no later than 20 days
after the beginning of each fiscal quarter of the Parent, a new updated Forecast for such fiscal quarter,
in each case in form and substance reasonably satisfactory to the Administrative Agent, certified by a
Financial Officer of the Parent;
(xv) contemporaneously with sending same under or with respect to the Receivables Financing Agreement
(but without duplication of any such items delivered by the Borrower hereunder), copies of all reports,
notices and other communications sent by the Borrower to any Person under or with respect to the
Receivables Financing Agreement or any of the other “Transaction Documents” (as defined in the
Receivables Financing Agreement);
(xvi) promptly after the effectiveness thereof, copies of any amendments, modifications or waivers under or
with respect to the Receivables Financing Agreement or any of the other “Transaction Documents” (as
defined in the Receivables Financing Agreement);
(xvii) promptly after the request of the Administrative Agent, information as to the amount of funds in the
Borrower’s Account (as defined both herein and in the Receivables Financing Agreements); and
(xviii) such other information respecting the Receivables, Participated Receivables, or Participation Interests
or the condition or operations, financial or otherwise, of the Borrower, the Parent or any other
Originator as the Administrative Agent or any Lender may from time to time reasonably request, to the
extent such disclosure is permitted under applicable law, rule or regulation.
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Reports and financial statements required to be delivered pursuant to clauses (i), (ii) and (v) of this Section
5.01(k) shall be deemed to have been delivered on the date on which the Parent posts such reports, or reports containing such
financial statements, on the Parent’s website on the Internet at http://www.riteaid.com or when such reports, or reports
containing such financial statements, are posted on the SEC’s website at www.sec.gov; provided that the Parent shall deliver
paper copies of the reports and financial statements referred to in clauses (i), (ii) and (v) of this Section 5.01(k) to the
Administrative Agent or any Lender who requests the Parent to deliver such paper copies until written notice to cease
delivering paper copies is given by the Administrative Agent or such Lender, as applicable.
The Borrower and the Originators hereby acknowledge that (a) the Administrative Agent may make available
to the Lenders materials and/or information (collectively, “Borrower Party Materials”) provided by or on behalf of any of the
Borrower, the Originators, Parent, HQ and Cayman SPE I (collectively, the “Borrower Parties”) hereunder by posting the
Borrower Party Materials on Intralinks, the Internet or another similar electronic system (the “Platform”) and (b) certain of the
Lenders may be "public-side" Lenders (i.e., Lenders that do not wish to receive material non-public information with respect
to the Borrower Parties or any of their securities) (each, a “Public Lender”). The Borrower and each Originator agrees that
(w) all Borrower Party Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by
marking Borrower Party Materials “PUBLIC,” Borrower and each Originator, on its behalf and on behalf of each other
Borrower Party, shall be deemed to have authorized the Administrative Agent and the Lenders to treat such Borrower Party
Materials as not containing any material non-public information with respect to any Borrower Party or its securities for
purposes of United States federal and state securities laws; (y) all Borrower Party Materials marked “PUBLIC” are permitted
to be made available through a portion of the Platform designated for distribution of “PUBLIC” materials and/or information;
and (z) the Administrative Agent shall treat any Borrower Party Materials that are not marked “PUBLIC” as being suitable
only for posting on a portion of the Platform not designated for distribution of “PUBLIC” materials and/or information and
shall not make such Borrower Party Materials available through the portion of the Platform designated for distribution of
“PUBLIC” materials and/or information. At the request of the Administrative Agent, the Borrower shall promptly provide to
the Administrative Agent versions of any non-“PUBLIC” Borrower Party Materials that do not contain material non-public
information with respect to the Borrower Parties and their securities, which versions shall be suitable for posting through a
portion of the Platform designated for distribution of “PUBLIC” materials and/or information. None of the Administrative
Agent, any Lender or any other Indemnified Party shall be liable to any Borrower Party or any of their respective Affiliates or
any of their respective security holders or creditors for any damages arising from the use by unauthorized Persons of
information or other materials sent though the Platform that are intercepted by such Persons.
(l) Separateness.
(i) [Intentionally Omitted.]
(ii) The Borrower shall not direct or participate in the management of any of the Other
Companies’ operations or of any other Person’s operations.
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(iii) The Borrower shall conduct its business from an office separate from that of the Other
Companies and any other Person (but which may be located in the same facility as one or
more of the Other Companies). The Borrower shall have stationery and other business
forms and a mailing address and a telephone number separate from that of the Other
Companies and any other Person.
(iv) The Borrower shall at all times be adequately capitalized in light of its contemplated
business.
(v) The Borrower shall at all times provide for its own operating expenses and liabilities from its
own funds.
(vi) The Borrower shall maintain its assets and transactions separately from those of the Other
Companies and any other Person and reflect such assets and transactions in financial
statements separate and distinct from those of the Other Companies and any other Person
and evidence such assets and transactions by appropriate entries in books and records
separate and distinct from those of the Other Companies and any other Person. The
Borrower shall hold itself out to the public under the Borrower’s own name as a legal entity
separate and distinct from the Other Companies. The Borrower shall not hold itself out as
having agreed to pay, or as being liable, primarily or secondarily, for, any obligations of the
Other Companies or any other Person.
(vii) The Borrower shall not maintain any joint account with any Other Company or any other
Person or become liable as a guarantor or otherwise with respect to any Debt or
contractual obligation of any Other Company or any other Person.
(viii) The Borrower shall not make any payment or distribution of assets with respect to any
obligation of any Other Company or any other Person or grant an Adverse Claim on any of
its assets to secure any obligation of any Other Company or any other Person.
(ix) The Borrower shall not make loans, advances or otherwise extend credit to any of the
Other Companies.
(x) The Borrower shall comply in all material respects with its organizational documents and
resolutions.
(xi) The Borrower shall have recorded any security interests in its Register of Mortgages and
Charges, with respect to all assets purchased from any of the Other Companies.
(xii) The Borrower shall not engage in any transaction with any of the Other Companies, except
as permitted by this Agreement and the other Transaction Documents.
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(m) Tertiary Purchase Agreement. The Borrower will not amend, waive or modify any provision of the
Tertiary Purchase Agreement or waive the occurrence of any “Event of Termination” under the Tertiary Purchase Agreement,
without in each case the prior written consent of the Administrative Agent; provided, however, that the Borrower may amend
the percentage set forth in the definition of “Discount” in the Tertiary Purchase Agreement in accordance with the provisions of
the Tertiary Purchase Agreement without the consent of the Administrative Agent, provided, further, that the Borrower shall
promptly notify the Administrative Agent and each Lender of any such amendment. The Borrower will perform all of its
obligations under the Tertiary Purchase Agreement in all material respects and will enforce the Tertiary Purchase Agreement in
accordance with its terms in all material respects.
(n) Nature of Business. The Borrower will not engage in any business other than the purchase or
acquisition of Transferred Assets, Related Security and Collections from Cayman SPE I and the transactions contemplated by
this Agreement and the Receivables Financing Agreement. The Borrower will not create or form any Subsidiary.
(o) Mergers, Etc. The Borrower will not merge with or into or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions), all or substantially all of its
assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets or capital stock or other
ownership interest of, or enter into any joint venture or partnership agreement with, any Person, other than as specifically
contemplated by this Agreement and the other Transaction Documents.
(p) Distributions, Etc. The Borrower will not declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on account of any shares of any class of equity interests
of the Borrower, or return any capital to its shareholders as such, or purchase, retire, defease, redeem or otherwise acquire
for value or make any payment in respect of any shares of any class of equity of the Borrower or any warrants, rights or
options to acquire any such shares, now or hereafter outstanding; provided, however, that the Borrower may declare and pay
cash dividends on its share capital to its shareholders so long as (i) no Default or Event of Default shall then exist or would
occur as a result thereof, (ii) such dividends are in compliance with all applicable law including the laws of The Cayman
Islands, and (iii) such dividends have been approved by all necessary and appropriate corporate action of the Borrower.
(q) Debt. The Borrower will not incur any Debt, other than any Debt incurred pursuant to this
Agreement and any Debt incurred pursuant to the Receivables Financing Agreement; provided that the aggregate principal
amount of Debt outstanding under the Receivables Financing Agreement shall not at any time exceed $345,000,000 (or, if
less, the First Lien Cap (as defined in the RFA Intercreditor Agreement)).
(r) Memorandum and Articles of Association. The Borrower will not amend or delete or modify its
Memorandum and Articles of Association, without the prior written consent of the Administrative Agent.
(s) Additional Information. If additional information is requested by the Obligor as to a bill or

supporting claim documents, the Borrower will cause the applicable
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Originator to promptly provide the same and, if any error has been made with respect to such information, cause the
applicable Originator to promptly correct the same and, if necessary, to rebill such Originator Receivable.
(t) Use of Proceeds. The Borrower will use the proceeds of the Loans solely for the purchase of
Transferred Assets and Related Security with respect thereto from Cayman SPE I pursuant to the Tertiary Purchase
Agreement, to repay Debt owing under the Receivables Financing Agreement and to pay transaction costs, fees and expenses
in connection with this Agreement.
(u) RFA Intercreditor Agreement. The Borrower will not take any action in contravention of the terms
of the RFA Intercreditor Agreement and will comply with all of the terms and provisions thereof applicable to the Borrower.
(v) Amendments to First Lien Loan Documents. (i) If any amendment, supplement or other
modification of any provision of the First Lien Loan Documents has the effect of imposing on the Borrower any
representations, warranties, covenants, events of default or remedies that are more restrictive or burdensome to the Borrower
than the terms and provisions of such First Lien Loan Documents as in effect on the date of this Agreement, or altering any
definitions to effect any of the foregoing, (A) the Required Lenders shall be entitled to require that a substantially similar
amendment be made to the comparable Second Lien Loan Documents, and (B) the Borrower hereby irrevocably and
unconditionally agrees that at least three (3) Business Days prior to effecting any such amendment, supplement or other
modification of any provision of such First Lien Loan Documents, the Borrower shall, with respect to the applicable Second
Lien Loan Documents, provide to the Administrative Agent and the Lenders an amendment or amendments (the
“Corresponding Amendment”) that amends the applicable Second Lien Loan Documents to effect such modifications on
equivalent terms. The Required Lenders, at their sole discretion, may accept or decline any Corresponding Amendment. If
the Required Lenders accept any Corresponding Amendment, the Borrower hereby irrevocably and unconditionally agrees to
effect the Corresponding Amendment substantially concurrently with the related amendment, supplement or modification of the
First Lien Loan Documents.
(ii) The Borrower will not, directly or indirectly, enter into any amendment, supplement or modification of any of the
First Lien Loan Documents (or consent or agree thereto) if any such amendment, supplement or modification shall:
(1) increase the aggregate principal amount of, without duplication, loans or other extensions
of credit or commitments therefor so that the aggregate principal amount of such loans or other extensions of credit is
in excess of the First Lien Cap (as defined in the RFA Intercreditor Agreement);
(2) modify the method of computing interest or Yield (as defined in the Receivables Financing
Agreement) or increase the interest or Yield rate (including by any increase in the “applicable margin” or similar
component of the interest rate) or interest or yield provisions applicable to the First Lien Obligations (as defined in the
RFA Intercreditor Agreement) or any commitment fee, program fee, liquidity fee, or similar
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fee so that the combined interest rate and fees are increased by more than 2% per annum in the aggregate (excluding increases
resulting from (A) increases in the underlying reference rate not caused by any amendment, supplement or modification of the
Receivables Financing Agreement, or (B) accrual of interest or Yield at the rate applicable following an “Event of Termination”
under and as defined in the Receivables Financing Agreement as in effect on the date hereof);
(3) extend any scheduled amortization payments or the scheduled final maturity of the
Receivables Financing Agreement or make amendments or modifications to (A) clause (a) of the definition of “Facility
Termination Date” contained in the Receivables Financing Agreement as in effect on the date hereof to make the date
appearing therein later than September 14, 2010, or (B) clause (a) of the definition of “Commitment Termination
Date” contained in the Receivables Financing Agreement as in effect on the date hereof, other than the extension of
the date appearing therein to a date no later than September 14, 2010 or (C) clause (d) of such definition of
“Commitment Termination Date” to make the date appearing therein later than September 14, 2010;
(4) amend, modify or have the effect of a modification of the mandatory prepayment
provisions of the Receivables Financing Agreement in a manner that reduces amounts which would be otherwise
required to be used to prepay the First Lien Obligations (as defined in the RFA Intercreditor Agreement);
(5) amend Sections 2.04 or 2.04A of the Receivables Financing Agreement or alter any
instructions in effect on the date hereof directing collections of Collateral to be remitted to the RFA Trustee’s
Account or alter the way collections of Collateral are to be distributed pursuant to the Receivables Financing
Agreement as in effect on the date hereof;
(6) modify or add any covenant or event of default under the First Lien Loan Documents
which directly restricts the Borrower from making payments under the Second Lien Loan Documents which would
otherwise be permitted under the First Lien Loan Documents as in effect on the date hereof;
(7) increase the “Concentration Limit” (as defined in the Receivables Financing Agreement)
applicable to any account debtor (other than, in the event any such “Concentration Limit” is decreased after the date
hereof, increases in such “Concentration Limit” to a rate no higher than that existing on the date hereof) or make
amendments or modifications to the definitions of “Borrowing Base”, “Eligible Participated Receivable”, “Eligible
Receivable”, “Net Receivables Pool Balance” or any definitions used therein or applicable thereto contained in the
Receivables Financing Agreement as in effect on the date hereof that have the effect of increasing the amount of credit
available to the Borrower (other than, in the event a Reserve (as defined in the RFA Intercreditor Agreement) is
increased after the date hereof, decreases in such Reserve to a level no greater than that existing on the date hereof);
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(8) make amendments or modifications to Section 7.01(h) or Section 7.01(s) of the

Receivables Financing Agreement or to the definitions of “Default Ratio”, “Delinquency Ratio”, “Dilution Ratio”,
“Receivable Turnover Days” or any definitions used therein or applicable thereto contained in the Receivables
Financing Agreement as in effect on the date hereof, if the effect of any such amendment or modification would be to
make the provisions of Section 7.01(h) or 7.01(s) less restrictive with respect to the Borrower or the Collateral, or
waive compliance with Section 7.01(h) or 7.01(s) of the Receivables Financing Agreement; or
(9) amend or modify the definition of “Amortization Period” contained in the Receivables
Financing Agreement or have the effect of changing the start date of such period from the way such definition works
as of the date hereof.
SECTION 5.02. Covenants of the Borrower, the Collection Agent and the Originators. Until the
Commitments have expired or been terminated and the principal and interest of each Loan and all other Obligations have been
paid in full, each of the Borrower, the Collection Agent and each Originator will, at their respective expense, from time to time
during regular business hours as requested by the Administrative Agent permit the Administrative Agent or its agents or
representatives (including independent public accountants, which may be the Borrower’s or the Parent’s independent public
accountants), (i) to conduct audits of the Receivables, Participated Receivables, the Related Security and the related books
and records and collections systems of the Borrower, the Collection Agent or such Originator, as the case may be, (ii) to
examine and make copies of and abstracts from all books, records and documents (including, without limitation, computer
tapes and disks) in the possession or under the control of the Borrower, the Collection Agent or such Originator, as the case
may be, relating to Receivables, Participated Receivables and the Related Security, including, without limitation, the Contracts,
and (iii) to visit the offices and properties of the Borrower, the Collection Agent or such Originator, as the case may be, for the
purpose of examining such materials described in clause (ii) above, and to discuss matters relating to Receivables, Participated
Receivables and the Related Security or the Borrower’s, the Collection Agent’s or such Originator’s performance under the
Transaction Documents or under the Contracts with any of the officers or employees of the Borrower, the Collection Agent or
such Originator, as the case may be, having knowledge of such matters. In addition, upon the Administrative Agent’s request
no more than four times per year (but without such limitation if an audit deficiency is described during any such audit), the
Administrative Agent will, at the Borrower’s expense, appoint independent public accountants or other Persons acceptable to
the Administrative Agent (which shall not be the Parent’s or the Borrower’s independent public accountants who perform
regular financial statement audits for the Parent and its Subsidiaries), to prepare and deliver to the Administrative Agent and
each Lender a written report with respect to the Receivables, Participated Receivables and the Credit and Collection Policy
(including, in each case, the systems, procedures and records relating thereto) on a scope and in a form reasonably requested
by the Administrative Agent. The foregoing to the contrary notwithstanding, prior to the RFA Termination Date, each audit
performed by independent public accountants or other Persons acceptable to the RFA Program Agent pursuant to the
sentence of Section 5.02 of the Receivables Financing Agreement (as in effect on the date hereof) corresponding to the
preceding sentence shall constitute an audit under the preceding sentence, provided that the Administrative Agent receives a
copy of the reports and other information provided to the RFA Program Agent in connection with such audit and
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such reports and other information are posted on the Platform. In conjunction with the audits, examinations and visits referred
to in the first two sentences of this Section 5.02, the Administrative Agent and its agents, representatives, advisors or
consultants shall have full access during regular business hours to premises, books and records and members of management
as may be reasonably requested by the Administrative Agent or any such agent, representative, advisor or consultant in
connection with a review of the business and operations of the Borrower (including budgets, records, projections, financial
information, reports and turnaround plans) and the Borrower shall at all times cooperate with the reasonable requests of the
Administrative Agent and its agents, representatives, advisors or consultants. Until the Commitments have expired or been
terminated and the principal and interest of each Loan and all other Obligations have been paid in full, the Parent shall continue
to report in its filings with the SEC the borrowing base calculations under the Receivables Financing Agreement in a manner
and at such time as it has historically done and shall additionally include in such filings the borrowing base calculations under
this Agreement in a similar manner.
ARTICLE VI
ADMINISTRATION AND COLLECTION

OF RECEIVABLES AND PARTICIPATED RECEIVABLES
SECTION 6.01. Designation of Collection Agent. The servicing, administration and collection of the
Receivables and Participated Receivables shall be conducted by the Collection Agent so designated hereunder from time to
time. Until the Administrative Agent gives notice to the Borrower of the designation of a new Collection Agent in accordance
with the terms hereof, HQ is hereby designated as, and hereby agrees to perform the duties and obligations of, the Collection
Agent pursuant to the terms hereof. At any time after the occurrence and during the continuance of a Collection Agent Default
(and then, only after the RFA Termination Date or earlier if permitted under the RFA Intercreditor Agreement), the
Administrative Agent may and, at the request of the Required Lenders, the Administrative Agent shall designate as Collection
Agent any Person (including itself) to succeed the Parent or any successor Collection Agent, if such Person shall consent and
agree to the terms hereof. The Collection Agent may, with the prior consent of the Administrative Agent, subcontract with any
other Person (except that in the case of an Originator no such consent is required) for the servicing, administration or collection
of the Receivables and Participated Receivables. Any such subcontract shall not affect the Collection Agent’s liability for
performance of its duties and obligations pursuant to the terms hereof, and any such subcontract shall automatically terminate
upon designation of a successor Collection Agent. The foregoing to the contrary notwithstanding (but subject to the RFA
Intercreditor Agreement), until the RFA Termination Date, the “Collection Agent” under, and as defined in, the Receivables
Financing Agreement from time to time shall be the Collection Agent hereunder and the right of the Administrative Agent to
designate any successor Collection Agent shall be subject to the prior right of the RFA Program Agent to designate the
“Collection Agent” under the Receivables Financing Agreement.
SECTION 6.02. Duties of Collection Agent. (a) The Collection Agent shall take or cause to be taken all
such actions as may be necessary or advisable to collect each Receivable and Participated Receivable from time to time, all in
accordance in all material respects with applicable laws, rules and regulations, with reasonable care and diligence, and in
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accordance with the Credit and Collection Policy. The Borrower, the Administrative Agent and the Lenders hereby appoint
the Collection Agent, from time to time designated pursuant to Section 6.01 (including, without limitation, deemed designated
pursuant to the last sentence thereof), as agent for themselves to enforce their respective rights and interests in the Receivables,
the Participated Receivables, the Participation Interests, the Related Security and the Collections with respect thereto. In
performing its duties as Collection Agent, the Collection Agent shall exercise the same care and apply the same policies as it
would exercise and apply if it owned such Receivables or Participated Receivables and shall act in the best interests of the
Borrower, the Lenders and the Administrative Agent.
(b) The Collection Agent shall (i) prior to the RFA Termination Date, administer the Collections in
accordance with the terms and conditions of the Receivables Financing Agreement and, to the extent not inconsistent with the
Receivables Financing Agreement, this Agreement (including, without limitation, Sections 2.08(b) and 2.19), and (ii) thereafter,
administer the Collections in accordance with the terms and conditions of this Agreement (including, without limitation,
Sections 2.08(b) and 2.19).
(c) If no Event of Default or Default shall have occurred and be continuing, HQ, while it is the
Collection Agent, may, in accordance with the Credit and Collection Policy, extend the maturity or adjust the Outstanding
Balance of any Receivable or Participated Receivable as it deems appropriate to maximize Collections thereof, or otherwise
amend or modify other terms of any Receivable or Participated Receivable, provided that the classification of any such
Receivable or Participated Receivable as ineligible for inclusion in the Borrowing Base shall not be affected by any such
extension.
(d) The Collection Agent shall hold in trust for the Borrower, the Administrative Agent and each
Lender, in accordance with their respective interests, all documents, instruments and records (including, without limitation,
computer tapes or disks) which evidence or relate to Transferred Assets. The Collection Agent shall mark each Originator’s
master data processing records evidencing the Transferred Assets with a legend, acceptable to the Administrative Agent,
evidencing that such Transferred Assets have been sold to the Borrower and marking the Participated Receivables with a
legend, acceptable to the Administrative Agent, evidencing that such Purchased Receivables are the subject of a Participation
Interest sold to the Borrower.
(e) The Collection Agent shall, as soon as practicable following receipt, turn over to the Person entitled
thereto any cash collections or other cash proceeds received with respect to Receivables and Participated Receivables not
constituting Collateral.
(f) The Collection Agent shall, from time to time at the request of the Administrative Agent, furnish to
the Administrative Agent (promptly after any such request) (i) a calculation of the amounts set aside for or payable to the
Investors, the Banks, the Investor Agents and the Collection Agent (as such terms are defined in the Receivables Financing
Agreement) pursuant to Sections 2.04 and 2.04A of the Receivables Financing Agreement and (ii) information in reasonable
detail as to funds deposited into the Administrative Agent’s Account and the Cure Account.
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(g) The Collection Agent shall:
(i) No later than 3:00 p.m. (New York City time) on the seventh Business Day of each Month, prepare
and forward to the Administrative Agent a Borrower Report relating to the Receivables and
Participated Receivables outstanding on the last day of the immediately preceding Month.
(ii) On each Business Day, by no later than 12:00 noon (New York City time), provide to the
Administrative Agent, a Daily Report as of the prior Business Day.
(iii) [Intentionally Omitted].
(iv) No later than 12:00 noon (New York City time) on the fourth Business Day following the end of each
calendar week of each Month, prepare and deliver to the Administrative Agent an Interim Report
relating to Receivables and Participated Receivables outstanding on the last day of such calendar week.
The Collection Agent shall transmit the Borrower Reports and the Daily Reports to the Administrative Agent
and the Lenders, concurrently by facsimile and by electronic mail (each an “E-Mail Report”). Each E-Mail Report shall be
(A) formatted as the Administrative Agent may designate from time to time and shall be digitally signed and (B) sent to the
Administrative Agent and the Lenders, at an electronic mail address designated by each of them.
SECTION 6.03. Certain Rights of the Administrative Agent. (a) After the occurrence and during the
continuance of an Event of Default or a Default, the Administrative Agent may and, at the direction of the Required Lenders,
shall notify the Obligors of Receivables and Participated Receivables, at any time and at the Borrower’s expense, of the
security interest granted under this Agreement.
(b) At any time after the occurrence and during the continuance of an Event of Default or a Default:
(i) The Administrative Agent may, and, at the direction of the Required Lenders, the Administrative Agent
shall to the extent permitted under applicable law, direct the Obligors of Receivables and Participated
Receivables that all payments thereunder be made directly to the Administrative Agent or its designee.
(ii) At the Administrative Agent’s request and at the Borrower’s expense, the Borrower shall notify each
Obligor of Receivables and Participated Receivables of the security interest in the Receivables or
Participated Receivables granted under this Agreement and direct that payments be made directly to the
Administrative Agent or its designee.
(c) At any time:
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(i) At the Administrative Agent’s request and at the Borrower’s expense, the Borrower and the Collection
Agent shall (A) assemble all of the documents, instruments and other records (including, without
limitation, computer tapes and disks) that evidence or relate to the Receivables and Participated
Receivables and the related Contracts and Related Security, or that are otherwise necessary or
desirable to collect the Receivables and Participated Receivables, and shall make the same available to
the Administrative Agent at a place selected by the Administrative Agent or its designee, and (B)
segregate all cash, checks and other instruments received by it from time to time constituting Collections
of Receivables and Participated Receivables in a manner acceptable to the Administrative Agent and,
promptly upon receipt, remit all such cash, checks and instruments, duly indorsed or with duly executed
instruments of transfer, to the Administrative Agent or its designee.
(ii) The Borrower authorizes the Administrative Agent to take any and all steps in the Borrower’s name
and on behalf of the Borrower that are necessary or desirable, in the determination of the Administrative
Agent, to collect amounts due under the Receivables and Participated Receivables, including, without
limitation, endorsing the Borrower’s name on checks and other instruments representing Collections of
Receivables and Participated Receivables and enforcing the Receivables and Participated Receivables
and the Related Security and related Contracts.
SECTION 6.04. Rights and Remedies. (a) If the Collection Agent fails to perform any of its obligations
under this Agreement, the Administrative Agent may (but shall not be required to) (after notice to the Collection Agent and
such failure to perform, if capable of being cured, is not cured within five Business Days after such notice is sent) itself
perform, or cause performance of, such obligation; and the Administrative Agent’s costs and expenses incurred in connection
therewith shall be payable by the Collection Agent.
(b) The Borrower and the Originators shall perform their respective obligations under the Contracts
related to the Receivables, the Participated Receivables or the Participation Interests and the exercise by the Administrative
Agent on behalf of the Lenders of their rights under this Agreement shall not release the Originators, the Collection Agent or
the Borrower from any of their duties or obligations with respect to any Receivables, the Participated Receivables or the
Participation Interests or related Contracts. Neither the Administrative Agent nor the Lenders shall have any obligation or
liability with respect to any Receivables, the Participated Receivables or the Participation Interests or related Contracts, nor
shall any of them or the Borrower be obligated to perform the obligations of the Originators thereunder.
(c) In the event of any conflict between the provisions of Article VI of this Agreement and Article VI of
any Purchase Agreement, the provisions of Article VI of this Agreement shall control.
SECTION 6.05. Further Actions Evidencing the Loans. The Borrower and each Originator agrees from
time to time, at its expense, to promptly execute and deliver all further
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instruments and documents, and to take all further actions, that may be reasonably necessary or desirable, or that the
Administrative Agent or the Required Lenders may reasonably request, to perfect, protect or more fully evidence the security
interest granted hereunder, or to enable the Lenders or the Administrative Agent to exercise and enforce their respective rights
and remedies hereunder. Without limiting the foregoing, the Borrower and each Originator hereby authorizes the filing of any
financing statements or continuation statements, and amendments to financing statements, in any jurisdictions as the
Administrative Agent may reasonably determine are necessary to perfect the security interest granted to the Administrative
Agent pursuant to Section 2.17 hereof or the interests assigned pursuant to the Originator Purchase Agreement. Such
financing statements filed against the Borrower may describe the collateral in the same manner specified in Section 2.17 hereof
or in any other manner as the Administrative Agent may reasonably determine is necessary to ensure the perfection of such
security interest, including, without limitation, describing such property as all assets or all personal property of the Borrower
whether now owned or hereafter acquired.
SECTION 6.06. Covenants of the Collection Agent and each Originator. (a) [Intentionally Omitted.]
(b) Change in Credit and Collection Policy. Neither the Collection Agent nor any Originator will make
any change in the Credit and Collection Policy that would impair the collectibility of a significant amount of the Receivables or
Participated Receivables or the ability of HQ (if it is acting as Collection Agent) to perform its obligations under this
Agreement. In the event that the Collection Agent or any Originator makes any change to the Credit and Collection Policy, it
shall, contemporaneously with such change, provide the Administrative Agent with an updated Credit and Collection Policy
and a summary of all material changes.
(c) Change in Payment Instructions to Obligors. The Collection Agent will not add or terminate any
bank, post office box or bank account as a Deposit Bank, Account Bank, Lock-Box, Deposit Account or Governmental
Entity Receivables Account from those listed in Schedule I to this Agreement, or make any change in its instructions to
Obligors regarding payments to be made to the Borrower or payments to be made to any such box or account, unless the
Administrative Agent shall have received notice of such addition, termination or change (including an updated Schedule I) and
a fully executed Deposit Account Agreement, Governmental Entity Receivables Agreement with each new Deposit Bank or
Account Bank or with respect to each new such box or account.
(d) Deposits to Governmental Entity Receivables Accounts, Lock-Boxes and Deposit Accounts. The
Collection Agent will (or will cause the Borrower or the Originators to) instruct all Obligors that are Governmental Entities
(other than Contract Payors) to remit all their payments in respect of Participated Receivables to Governmental Entity
Receivables Accounts or Lock-Boxes associated therewith. The Collection Agent will (or will cause the Borrower or the
Originator to) instruct all Obligors that are not Governmental Entities (other than Contract Payors) to remit all their payments in
respect of Receivables to Deposit Accounts or Lock-Boxes associated therewith. If the Collection Agent shall receive any
Collections directly, it shall immediately (and in any event within one Business Day) deposit the same to a Deposit Account or
a Governmental Entity Receivables Account, as the case may be. The Collection Agent will not deposit or otherwise credit,
or cause or permit to be so deposited or credited, to any Lock-
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Box, Deposit Account or Governmental Entity Receivables Account cash proceeds other than Collections of Receivables or
Participated Receivables.
In furtherance of the foregoing, the Collection Agent (i) represents and warrants that, prior to the date hereof,
it has notified all Obligors that are not Governmental Entities (other than Contract Payors) to remit all their payments in respect
of Receivables to Deposit Accounts or Lock-Boxes associated therewith and (ii) agrees to use ongoing commercially
reasonable efforts to obtain compliance with such notice from those Obligors who have failed to so comply.
(e) Maintenance of Records. The Collection Agent also will maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate records evidencing Receivables and Participated
Receivable and related Contracts in the event of the destruction of the originals thereof), and keep and maintain all documents,
books, records and other information reasonably necessary or advisable for the collection of all Receivables (including,
without limitation, records adequate to permit the daily identification of each Receivable and Participated Receivable and all
Collections of and adjustments to each existing Receivable and Participated Receivable).
SECTION 6.07. Indemnities by the Collection Agent. Without limiting any other rights that the
Administrative Agent, any Lender or any of their respective Affiliates or members or any of their respective officers, directors,
employees or advisors (each, a “Special Indemnified Party”) may have hereunder or under applicable law, and in
consideration of its appointment as Collection Agent, the Collection Agent hereby agrees to indemnify each Special
Indemnified Party from and against any and all claims, losses and liabilities (including reasonable attorneys’ fees) (all of the
foregoing being collectively referred to as “Special Indemnified Amounts”) arising out of or resulting from any of the following
(excluding, however, (a) Special Indemnified Amounts to the extent found in a final non-appealable judgment of a court of
competent jurisdiction to have resulted from gross negligence or willful misconduct on the part of such Special Indemnified
Party, (b) recourse for Receivables and Participated Receivables which are not collected, not paid or uncollectible on account
of the insolvency, bankruptcy or financial inability to pay of the applicable Obligor or (c) any income taxes or franchise taxes
measured by income or any other tax or fee measured by income incurred by such Special Indemnified Party arising out of or
as a result of this Agreement or the security interest granted hereunder or in respect of any Receivable, Participated
Receivable or any Contract):
(i) any representation made or deemed made by the Collection Agent pursuant to Section 4.02(g) hereof
which shall have been incorrect in any respect when made or any other representation or warranty or
statement made or deemed made by the Collection Agent under or in connection with this Agreement
which shall have been incorrect in any material respect when made;
(ii) the failure by the Collection Agent to comply with any applicable law, rule or regulation with respect to
any Receivable, Participated Receivable, or Contract; or the failure of any Receivable, Participated
Receivable, or Contract to conform to any such applicable law, rule or regulation;
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(iii) the failure to have filed, or any delay in filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any
Receivables, Participated Receivables, the Contracts and the Related Security and Collections in
respect thereof, whether at the time of any purchase or reinvestment or at any subsequent time;
(iv) any failure of the Collection Agent to perform its duties or obligations in accordance with the provisions
of this Agreement;
(v) the commingling of Collections of Receivables or Participated Receivables at any time by the Collection
Agent with other funds;
(vi) any breach of an obligation of the Collection Agent reducing or impairing the rights of the Administrative
Agent or the Lenders with respect to any Receivable or Participated Receivable or the value of any
Receivable or Participated Receivable;
(vii) any Collection Agent Fees or other costs and expenses payable to any replacement Collection Agent,
to the extent in excess of the Collection Agent Fees payable to the Collection Agent hereunder; or
(viii) any claim brought by any Person other than a Special Indemnified Party arising from any activity by the
Collection Agent or its Affiliates in servicing, administering or collecting any Receivable or Participated
Receivable.
SECTION 6.08. Representations of the Collection Agent. The Collection Agent hereby represents and
warrants as follows:
(a) Lock Boxes, Deposit Accounts and Governmental Entity Receivables Accounts. Specified on
Schedule I hereto (as amended by the Collection Agent from time to time in accordance with Section 6.09(b)) are (i) the Lock
Box numbers, and (ii) the names, addresses and ABA numbers of all the Deposit Banks and Account Banks, together with the
account numbers of the Deposit Accounts or Governmental Entity Receivables Accounts, as the case may be, and the name of
a contact person at each Deposit Bank and Account Bank, as the case may be.
(b) Payment Instructions. It has notified (or has caused the Originators to notify) the Obligor on each
Receivable or Participated Receivable other than Contract Payors to make payments on such Receivable or Participated
Receivable to either one of the Lock Boxes or one of the Deposit Accounts or Governmental Entity Receivables Account, as
applicable.
(c) Daily Reports, Interim Reports and Borrower Reports. Each Daily Report, Interim Report and
Borrower Report delivered by the Collection Agent pursuant to this Agreement shall be true and correct in all material
respects on the date such report or certificate is delivered.
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SECTION 6.09. Establishment of Deposit Accounts. (a) [Intentionally Omitted].
(b) Deposit Accounts and Governmental Entity Receivables Accounts. On or prior to the date of this
Agreement, the Collection Agent for the benefit of the Beneficiaries, shall establish and maintain or cause to be established and
maintained (i) Lock Boxes to which Obligors will remit payments with respect to Receivables and (ii) Deposit Accounts or
Governmental Entity Receivables Accounts with an Eligible Institution. Obligors will be directed to remit payments with
respect to their Receivables or Participated Receivables to a Lock Box, a Deposit Account or a Governmental Entity
Receivables Account in accordance with the terms of Section 6.06(d). Except as contemplated by the Transaction
Documents (as defined in the Receivables Financing Agreement), the Lock Boxes (other than those to which only Collections
relating to Participated Receivables of Governmental Entities are directed) and Deposit Accounts shall be under the sole
control of the Administrative Agent for the benefit of the Beneficiaries, and neither the Borrower, the Collection Agent, the
Parent nor any Person claiming by, through or under the Borrower, the Collection Agent, or the Parent, shall have any right,
title or interest in, or any right to withdraw any amount from, any Lock Box (other than those to which only Collections relating
to Participated Receivables of Governmental Entities are directed). The Collection Agent shall transfer Collections to the Cure
Account or the Administrative Agent’s Account, as applicable, in the manner set forth in Sections 2.08(b) and 2.19. Each
Deposit Account and Governmental Entity Receivables Account shall be maintained with documentation and instructions in
form and substance satisfactory to the Administrative Agent. The Collection Agent will not (i) make any change in any Lock
Box numbers, the name, address or ABA number of any Deposit Bank or Account Bank, or the account number of any
Deposit Account from that set forth in Schedule I hereto or (ii) amend any instruction to any Obligor or any instruction to or
agreement with any Deposit Bank or Account Bank with respect to any Lock Box, Deposit Account or Governmental Entity
Receivables Account (other than to (A) redirect payments of Obligors to a different Lock Box or Deposit Account, (B) close
unused Lock Boxes, Deposit Accounts and Governmental Entity Receivables Accounts and (C) open new Lock Boxes,
Deposit Accounts and Governmental Entity Receivables Accounts if the Administrative Agent shall have received executed
copies of the Deposit Account Agreements or Governmental Entity Receivables Agreements with each new Deposit Bank or
Account Bank and an updated Schedule I) unless the Administrative Agent shall have given its prior consent to such change or
amendment.
SECTION 6.10. Establishment of Administrative Agent’s Account and Cure Account. (a) (1) The
Collection Agent, for the benefit of the Beneficiaries, shall, on or prior to the second Business Day after the date of this
Agreement, establish and maintain in the name of the Administrative Agent a non-interest bearing account accessible only by
and under the sole dominion and control of the Administrative Agent (the “Administrative Agent’s Account”), which shall be
identified as the “Administrative Agent’s Account for the Rite Aid Funding II Credit Agreement” and shall bear a designation
clearly indicating that the funds deposited therein are held for the benefit of the Beneficiaries. The Administrative Agent’s
Account shall initially be established with the Administrative Agent or an Affiliate thereof and thereafter may only be
established or maintained at an Eligible Institution. Except as specifically provided in this Agreement, the Administrative Agent
agrees that it shall have no right of set-off or banker’s lien against and no right to otherwise deduct from any funds held in the
Administrative Agent’s
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Account for any amount owed to it by any Beneficiary, the Borrower, any Predecessor Purchaser or any Originator. The tax
identification number associated with the Administrative Agent’s Account shall be that of the Borrower.
(ii) At the written direction of the Collection Agent (which may be a standing direction), funds on deposit in
the Administrative Agent’s Account shall be invested by the Administrative Agent in Eligible
Investments selected by the Collection Agent that will mature so that such funds will be available to be
distributed out of the Administrative Agent’s Account as and when required pursuant hereto. All such
Eligible Investments shall be held by the Administrative Agent for the benefit of the Beneficiaries. All
amounts on deposit in the Administrative Agent’s Account (including, all interest and other investment
earnings (net of losses and investment expenses) on funds on deposit therein) shall be applied in
accordance with Section 2.19 or as otherwise provided herein.
(b) (1) The Collection Agent, for the benefit of the Beneficiaries, shall, on or prior to the second
Business Day after the date of this Agreement, establish and maintain in the name of the Administrative Agent a non-interest
bearing account accessible only by and under the sole dominion and control of the Administrative Agent (the “Cure Account”),
which shall be identified as the “Cure Account for the Rite Aid Funding II Credit Agreement” and shall bear a designation
clearly indicating that the funds deposited therein are held for the benefit of the Beneficiaries. The Cure Account shall initially
be established with the Administrative Agent or an Affiliate thereof and thereafter may only be established or maintained at an
Eligible Institution. Except as specifically provided in this Agreement, the Administrative Agent agrees that it shall have no right
of set-off or banker’s lien against and no right to otherwise deduct from any funds held in the Cure Account for any amount
owed to it by any Beneficiary, the Borrower, any Predecessor Purchaser or any Originator. The tax identification number
associated with the Cure Account shall be that of the Borrower.
(ii) At the written direction of the Collection Agent (which may be a standing direction), funds on deposit in
the Cure Account shall be invested by the Administrative Agent in Eligible Investments selected by the
Collection Agent that will mature so that such funds will be available on or before the end of any then
applicable Cure Period. All such Eligible Investments shall be held by the Administrative Agent for the
benefit of the Beneficiaries.
(c) The Administrative Agent, on behalf of the Beneficiaries, shall possess all right, title and interest in
and to all funds on deposit from time to time in, and all Eligible Investments credited to, the Administrative Agent’s Account
and the Cure Account and in all proceeds thereof. Each of the Administrative Agent’s Account and the Cure Account shall be
under the sole dominion and control of the Administrative Agent for the benefit of the Beneficiaries. If, at any time, either of
the Administrative Agent’s Account or the Cure Account is held by an institution other than the Administrative Agent, an
Affiliate thereof or an Eligible Institution, the Administrative Agent (or the Collection Agent, at the direction of the
Administrative Agent and on its behalf) shall within 10 Business Days establish a new
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Administrative Agent’s Account or Cure Account, as applicable, meeting the conditions specified in paragraph (a)(i) or (b)(i)
above, as applicable, and shall transfer any cash and/or any investments in the applicable existing account to such new
Administrative Agent’s Account or Cure Account, as applicable. Neither the Borrower, the Collection Agent nor any Person
or entity claiming by, through or under the Borrower, the Collection Agent or any such Person or entity shall have any right,
title or interest in, or any right to withdraw any amount from, either of the Administrative Agent’s Account or Cure Account,
except as expressly provided herein. Once the Administrative Agent’s Account and the Cure Account have been established,
the Collection Agent shall deliver to the Administrative Agent a Schedule VII which identifies each of the Administrative
Agent’s Account and the Cure Account by setting forth the identification name of such account, the account number of each
such account, the account designation of each such account and the name and location of the institution with which such
account has been established. If a substitute Administrative Agent’s Account or Cure Account is established pursuant to this
Section 6.10, the party establishing such substitute Administrative Agent’s Account or Cure Account shall promptly provide to
the Collection Agent or the Administrative Agent, as applicable, an amended Schedule VII, setting forth the relevant
information for such substitute Administrative Agent’s Account or Cure Account.
(d) At no time may an amount greater than 10% of the funds on deposit in either of the Administrative
Agent’s Account or the Cure Account be invested in Eligible Investments (other than obligations of the United States
government or agencies the obligations of which are guaranteed by the United States government or investments described in
clause (e) of the definition of Eligible Investments) of any single entity or its Affiliates. Nothing herein shall be construed to
impose any obligation on the Administrative Agent to monitor compliance with this Section 6.10(d).
(e) Any request by the Collection Agent to invest funds on deposit in either of the Administrative
Agent’s Account or the Cure Account shall be in writing (which may be a standing instruction) and shall state that the
requested investment is an Eligible Investment.
(f) The Administrative Agent is hereby authorized, unless otherwise directed by the Collection Agent,
to effect transactions in Eligible Investments through a capital markets affiliate of the Administrative Agent.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default. If any of the following events (“Events of Default”) shall occur and be
continuing:
(a) The Collection Agent (i) shall fail to perform or observe any term, covenant or agreement under this
Agreement (other than as referred to in clause (ii) or (iii) of this subsection (a)) and such failure, if capable of being cured, shall
remain unremedied for ten days or (ii) shall fail to make when due any payment or deposit to be made by it under this
Agreement and such failure, in the case of payments on account of interest or Fees only, shall remain unremedied for one
Business Day or (iii) shall fail to deliver any Borrower Report,
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Interim Report or Daily Report when required and such failure shall remain unremedied for one Business Day (provided, that
the grace period in this clause (iii) may not be utilized more than three times in any Month); or
(b) The Borrower (i) shall fail to make any payment of principal of any Loan when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise, or (ii)
shall fail to pay any interest on any Loan or any fee or other amount (other than an amount referred to in the preceding clause
(i)) payable under this Agreement or any other Transaction Document when and as the same shall become due and payable,
and such failure shall continue unremedied for one Business Day; or
(c) Any representation or warranty (unless such representation or warranty relates solely to one or
more specific Receivables incorrectly characterized as Eligible Receivables or specific Participated Receivables incorrectly
characterized as Eligible Participated Receivables and immediately following the removal of such Receivables or Participated
Receivables from the Borrowing Base, the outstanding principal balance of the Loans (less the amount of Cure Funds then in
the Cure Account) is not greater than the Borrowing Base) made or deemed made by the Borrower, the Parent, any
Originator, any Predecessor Purchaser or the Collection Agent (or any of their respective officers) under or in connection with
this Agreement or any other Transaction Document or any information or report delivered by the Borrower, the Parent, any
Originator, any Predecessor Purchaser or the Collection Agent pursuant to this Agreement or any other Transaction
Document shall prove to have been incorrect or untrue in any material respect when made or deemed made or delivered; or
(d) The Borrower or any Originator shall fail to perform or observe any other term, covenant or
agreement contained in this Agreement on its part to be performed or observed and any such failure shall remain unremedied
for 10 days provided, that failure of the Borrower to perform or observe any covenant contained in Sections 5.01(b), 5.01(d),
5.01(g), 5.01(h), 5.01(n), 5.01(o), 5.01(p), 5.01(q), 5.01(u) or 5.01(v)(ii) shall not be entitled to the benefit of such 10-day
period; or
(e) The Borrower, the Parent, the Collection Agent, any Predecessor Purchaser or any Originator shall
fail to pay any principal of or premium or interest on any of its Debt which is outstanding in a principal amount of at least
$25,000,000 in the aggregate when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), redeemed, purchased or defeased, or an offer to repay, redeem, purchase or defease such
Debt shall be required to be made, in each case prior to the stated maturity thereof; or
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(f) The security interest created pursuant to Section 2.17 shall for any reason cease to be a valid and
perfected second priority security interest in the Collateral (subordinate only to the security interest granted under the
Receivables Financing Agreement subject to the terms of the RFA Intercreditor Agreement);
(g) The Borrower, the Parent, the Collection Agent, any Predecessor Purchaser or any Originator shall
generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall
make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower, the
Parent, the Collection Agent, any Predecessor Purchaser or any Originator seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property
and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain
undismissed or unstayed for a period of 60 days, or any of the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for
any substantial part of its property) shall occur; or any proceeding or petition shall be instituted or adopted for the winding up
of the Borrower or Cayman SPE I (whether or not in the context of a bankruptcy or insolvency proceeding); or the Borrower,
the Parent, the Collection Agent, any Predecessor Purchaser or any Originator shall take any corporate or other action to
authorize any of the actions set forth above in this subsection (g); or
(h) [Intentionally Omitted]; or
(i) The Facility Principal (less the amount of Cure Funds then in the Cure Account) shall be greater than
the Borrowing Base upon the termination of a Cure Period; or
(j) There shall have occurred any event which in the discretion of the Administrative Agent or the
Required Lenders may materially adversely affect the collectibility of the Receivables or Participated Receivables or the ability
of the Borrower, the Parent, any Originator or the Collection Agent to collect Receivables or Participated Receivables or
otherwise perform its obligations under this Agreement and the other Transaction Documents; or
(k) (i) An “Event of Termination” or “Facility Termination Date” shall occur under any Purchase
Agreement, or any Purchase Agreement shall cease to be in full force and effect, or (ii) an “Event of Termination” or
“Commitment Termination Date” shall occur under the Receivables Financing Agreement, or the Receivables Financing
Agreement shall cease to be in full force and effect; or
(l) All of the outstanding capital shares of the Borrower shall cease to be owned, directly or indirectly,
by the Parent or all of the outstanding capital stock or shares of any Originator (other than the Parent) or any Predecessor
Purchaser ceases to be owned, directly or indirectly, by the Parent; or a Change in Control of the Parent shall occur; or
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(m) One or more judgments for the payment of money in an aggregate amount in excess of
$25,000,000 (except to the extent covered by insurance as to which the insurer has acknowledged such coverage in writing)
shall be rendered against (i) the Parent, any Originator, any Predecessor Purchaser or any of their respective Subsidiaries or
any combination thereof or (ii) the Collection Agent or any of its Subsidiaries or a combination thereof, and the same shall
remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed, or any action
shall be taken by a judgment creditor to attach or levy upon any assets of the Parent, any Originator, any Predecessor
Purchaser or the Collection Agent or any of their respective Subsidiaries to enforce any such judgment; or
(n) The Parent shall fail to maintain a Minimum Liquidity Position at least equal to $100,000,000; or
(o) (1) the Parent or any ERISA Affiliate shall fail to pay when due an amount or amounts aggregating
in excess of $10,000,000 which it shall have become liable to pay under Section 302 or Title IV of ERISA; or notice of intent
to terminate a Plan shall be filed under Title IV of ERISA by the Parent or any ERISA Affiliate, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer, any
Plan; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Plan
must be terminated; or there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which could cause the Parent and/or one or more
ERISA Affiliates to incur a current payment obligation in excess of $50,000,000; or (ii) any other ERISA Event shall have
occurred that, in the opinion of the Administrative Agent or the Required Lenders, when taken together with all other ERISA
Events that have occurred, could reasonably be expected to result in liability of the Parent, the ERISA Affiliates and any
Subsidiaries in an aggregate amount exceeding $50,000,000; or
(p) (1) The Parent shall fail to make any payment required by a Parent Undertaking, or (ii) the Parent
shall fail to perform or observe any other term, covenant or agreement contained in a Parent Undertaking and any such failure
shall remain unremedied for 10 days after written notice thereof shall have been given to the Borrower by the Administrative
Agent, or (iii) a Parent Undertaking shall cease to be in full force and effect; or
(q) Any Governmental Entity Receivables Account Notice or “Governmental Entity Receivables
Account Notice” (as defined in the Receivables Financing Agreement) shall be revoked or revised; or
(r) A Collection Agent Default shall occur; or
(s) [Intentionally Omitted]; or
(t) The PBGC or the Internal Revenue Service shall, or shall indicate its intention to, file notice of a lien
pursuant to Section 4068 of ERISA or Section 6320 of the Code with regard to the assets of the Parent, the Borrower or any
Originator;
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then, and in any such event, any or all of the following actions may be taken by notice to the Borrower: (x) the Administrative
Agent may in its discretion, and shall, at the direction of the Required Lenders, declare the Loans then outstanding to be due
and payable, and thereupon the principal of the Loans, together with accrued interest thereon and all fees and other obligations
of the Borrower owing hereunder, shall become due and payable immediately, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower, (y) the Administrative Agent may in its discretion, and
shall, at the direction of the Required Lenders, terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (z) if such event is a Collection Agent Default, and without limiting any other right under this Agreement to
replace the Collection Agent (but subject to the terms of the RFA Intercreditor Agreement), the Administrative Agent may in
its discretion, and shall, at the direction of the Required Lenders, designate another Person to succeed HQ as the Collection
Agent; provided, that, automatically upon the occurrence of any event (without any requirement for the passage of time or the
giving of notice) described in paragraph (g) of this Section 7.01, the principal of the Loans (together with accrued interest
thereon and all fees and other obligations of the Borrower owing hereunder) shall become due and payable immediately, the
Commitments, if any, shall terminate immediately, and HQ (if it is then serving as the Collection Agent) shall cease to be the
Collection Agent, and the Administrative Agent or its designee shall become the Collection Agent. Upon any such declaration,
termination or designation or upon any such automatic acceleration, termination or cessation, the Lenders and the
Administrative Agent shall have, in addition to the rights and remedies which they may have under this Agreement, all other
rights and remedies provided after default under the UCC and under other applicable law, which rights and remedies shall be
cumulative.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01. Authorization and Action. Each Lender hereby appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the
other Transaction Documents as are delegated to the Administrative Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto. Without limiting the generality of the foregoing, each Lender hereby authorizes
the Administrative Agent to enter into the RFA Intercreditor Agreement and the Senior Collateral Intercreditor Agreement
Amendment and agrees that such Lender shall be bound by the terms and conditions of the RFA Intercreditor Agreement and
the Senior Collateral Intercreditor Agreement as amended by the Senior Collateral Intercreditor Agreement Amendment. The
Administrative Agent shall not have any duties other than those expressly set forth in the Transaction Documents, and no
implied obligations or liabilities shall be read into any Transaction Document, or otherwise exist, against the Administrative
Agent. The Administrative Agent does not assume, nor shall it be deemed to have assumed, any obligation to, or relationship
of trust or agency with, the Borrower, any Predecessor Purchaser, the Parent, the Collection Agent or any other
Originator. Notwithstanding any provision of this Agreement or any other Transaction Document, in no event shall the
Administrative Agent ever be required to take any action which exposes the Administrative Agent to personal liability or which
is contrary to any provision of any Transaction Document or applicable law.
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SECTION 8.02. Administrative Agent’s Reliance, Etc. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them as
Administrative Agent under or in connection with this Agreement (including, without limitation, the Administrative Agent’s
servicing, administering or collecting Receivables and Participated Receivables as Collection Agent) or any other Transaction
Document, except for its or their own gross negligence or willful misconduct. Without limiting the generality of the foregoing,
the Administrative Agent: (a) may consult with legal counsel (including counsel for any Lender, the Borrower, any
Predecessor Purchaser, the Parent, any other Originator and the Collection Agent), independent certified public accountants
and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (b) makes no warranty or representation to any Lender
(whether written or oral) and shall not be responsible to any Lender for any statements, warranties or representations (whether
written or oral) made in or in connection with this Agreement or any other Transaction Document; (c) shall not have any duty
to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement
or any other Transaction Document on the part of the Borrower, any Predecessor Purchaser, the Parent, any other Originator
or the Collection Agent or to inspect the property (including the books and records) of the Borrower, any Predecessor
Purchaser, the Parent, any other Originator or the Collection Agent; (d) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Transaction
Document or any other instrument or document furnished pursuant hereto or thereto; and (e) shall incur no liability under or in
respect of this Agreement or any other Transaction Document by acting upon any notice (including notice by telephone),
consent, certificate or other instrument or writing (which may be by telecopier or telex) believed by it to be genuine and signed
or sent by the proper party or parties.
SECTION 8.03. Administrative Agent and Affiliates. The Person serving as Administrative Agent
hereunder shall have the same rights and powers in its capacity as a “Lender” under this Agreement as any other Lender and
may exercise the same as though it were not the Administrative Agent. Such Person and any of its Affiliates may generally
engage in any kind of business with the Borrower, the Parent, any other Originator, any Predecessor Purchaser, the Collection
Agent or any Obligor, any of their respective Affiliates and any Person who may do business with or own securities of the
Borrower, the Parent, any other Originator, any Predecessor Purchaser, the Collection Agent or any Obligor or any of their
respective Affiliates, all as if such Person were not the Administrative Agent and without any duty to account therefor to the
Lenders. Without limiting the foregoing, (i) the Lenders hereby acknowledge that CNAI is the program agent under the
Receivables Financing Agreement and that, in such capacity, CNAI has or may have interests, or take actions, that may
conflict with the interests of the Lenders and (ii) the Lenders hereby waive any such conflict of interests and agree that CNAI,
as program agent under the Receivables Financing Agreement, shall have no duty to disclose to the Lenders or use on behalf
of the Lenders any information whatsoever about or derived from its role or activities in such capacity.
SECTION 8.04. Indemnification of Administrative Agent. Each Lender agrees to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower, the Parent or any other Originator), ratably according to
the respective Ratable Share of such Lender, from
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and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Administrative
Agent in any way relating to or arising out of this Agreement or any other Transaction Document or any action taken or
omitted by the Administrative Agent under this Agreement or any other Transaction Document, provided that no Lender shall
be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent’s gross negligence or willful misconduct.
SECTION 8.05. Delegation of Duties. The Administrative Agent may execute any of its duties through
agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it
with reasonable care.
SECTION 8.06. Action or Inaction by Administrative Agent. The Administrative Agent shall in all cases
be fully justified in failing or refusing to take action under any Transaction Document unless it shall first receive such advice or
concurrence of the Required Lenders and assurance of its indemnification by the Lenders, as it deems appropriate. The
Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any
other Transaction Document in accordance with a request or consent or at the direction of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 11.01) and
such request, consent or direction and any action taken or failure to act pursuant thereto shall be binding upon all Lenders and
the Administrative Agent. The Administrative Agent agrees that any consent permitted to be made by it under the RFA
Intercreditor Agreement shall only be made if the Administrative Agent receives the prior written approval of the Required
Lenders therefor.
SECTION 8.07. Notice of Events of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or of any Event of Default unless the Administrative Agent has received
notice from any Lender, the Collection Agent, any Originator, any Predecessor Purchaser or the Borrower stating that a
Default or Event of Default has occurred hereunder and describing such Default or Event of Default. If the Administrative
Agent receives such a notice, it shall promptly give notice thereof to each Lender. The Administrative Agent shall take such
action concerning a Default or an Event of Default as may be directed by the Required Lenders (or such other number of
percentage of the Lenders as shall be necessary under the circumstances as provided in Section 11.01) (subject to the other
provisions of this Article VIII), but until the Administrative Agent receives such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such action, as the Administrative Agent deems advisable and
in the best interests of the Lenders.
SECTION 8.08. Non-Reliance on Administrative Agent and Other Parties. Each Lender expressly
acknowledges that neither the Administrative Agent, any of its Affiliates nor any of their respective directors, officers, agents or
employees has made any representations or warranties to it and that no act by the Administrative Agent hereafter taken,
including any
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review of the affairs of the Borrower, the Collection Agent, any Predecessor Purchasers, the Parent or any other Originator,
shall be deemed to constitute any representation or warranty by the Administrative Agent. Each Lender represents and
warrants to the Administrative Agent that, independently and without reliance upon the Administrative Agent, any of its
Affiliates or any other Lender and based on such documents and information as it has deemed appropriate, it has made and
will continue to make its own appraisal of and investigation into the business, operations, property, prospects, financial and
other conditions and creditworthiness of the Borrower, the Parent and the other Originators, and the Loans and its own
decision to enter into this Agreement and to take, or omit, action under this Agreement or any other Transaction
Document. Except for items expressly required to be delivered under this Agreement or any other Transaction Document by
the Administrative Agent to any Lender, the Administrative Agent shall not have any duty or responsibility to provide any
Lender with any information concerning the Borrower, the Collection Agent, any Predecessor Purchaser, the Parent or any
other Originator or any of their Affiliates that comes into the possession of the Administrative Agent or any of its directors,
officers, agents, employees, attorneys-in-fact or Affiliates.
SECTION 8.09. Successor Administrative Agent. The Administrative Agent may, upon at least thirty
(30) days’ notice to the Borrower and each Lender, resign as Administrative Agent. Such resignation shall not become
effective until a successor agent is appointed by the Required Lenders (with the approval of the Borrower, which approval
shall not be unreasonably withheld and shall not be required if a Default or an Event of Default has occurred and is continuing)
and has accepted such appointment. If no successor agent shall have been so appointed by the Required Lenders and shall
have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent (which shall be
a financial institution with an office in New York, New York or an Affiliate of any such financial institution). Upon such
acceptance of its appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall succeed to and become vested with all the rights and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and obligations under the Transaction Documents. After
any retiring Administrative Agent’s resignation hereunder, the provisions of this Article VIII and Section 6.07 and Article X
shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent.
SECTION 8.10. Reports and Notices. The Administrative Agent hereby agrees to provide each Lender
with copies of all material notices, reports and other documents provided to the Administrative Agent by the Borrower or the
Collection Agent hereunder which are not otherwise required to be provided by the Borrower or the Collection Agent directly
to the Lenders in accordance with the terms hereof. Further, the Administrative Agent hereby agrees to provide each Lender
with copies of any “Enforcement Notice” delivered to the Administrative Agent pursuant to Section 2.05 of the Senior
Collateral Intercreditor Agreement and of any notice of an “Event of Default” or “Event of Termination” delivered to the
Administrative Agent under Section 2.07 of the Senior Collateral Intercreditor Agreement.
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ARTICLE IX
[INTENTIONALLY OMITTED]
ARTICLE X
INDEMNIFICATION
SECTION 10.01. Indemnities by the Borrower. Without limiting any other rights that the Administrative
Agent, the Lenders or any of their respective Affiliates or members or any of their respective officers, directors, employees or
advisors (each, an “Indemnified Party”) may have hereunder or under applicable law, the Borrower hereby agrees to
indemnify and hold harmless each Indemnified Party from and against any and all claims, losses and liabilities (including
reasonable attorneys’ fees) (all of the foregoing being collectively referred to as “Indemnified Amounts”) arising out of or
resulting from this Agreement or the other Transaction Documents or the use of proceeds of the Loans or the security interest
granted hereunder or in respect of any Transferred Asset or any Contract, excluding, however, (a) Indemnified Amounts to
the extent found in a final non-appealable judgment of a court of competent jurisdiction to have resulted from gross negligence
or willful misconduct on the part of such Indemnified Party, (b) recourse (except as otherwise specifically provided in this
Agreement) for Transferred Assets which are not collected, not paid or uncollectible on account of the insolvency, bankruptcy
or financial inability to pay of the applicable Obligor or (c) any income taxes or franchise taxes measured by income or any
other tax or fee measured by income incurred by such Indemnified Party arising out of or as a result of this Agreement or the
security interest granted hereunder or in respect of any Transferred Asset or any Contract. Without limiting or being limited by
the foregoing, the Borrower shall pay on demand to each Indemnified Party any and all amounts necessary to indemnify such
Indemnified Party from and against any and all Indemnified Amounts relating to or resulting from any of the following:
(i) the characterization in any Borrower Report or other written statement made by or on behalf of the
Borrower of any Transferred Asset as an Eligible Receivable or Eligible Participation Interest or as
included in the Borrowing Base which, as of the date on which such information was certified, is not an
Eligible Receivable or Eligible Participation Interest or should not be included in the Borrowing Base;
(ii) any representation or warranty or statement made or deemed made by the Borrower (or any of its
officers) under or in connection with this Agreement or any of the other Transaction Documents which
shall have been incorrect in any material respect when made;
(iii) the failure by the Borrower to comply with any applicable law, rule or regulation with respect to any
Receivable, Participated Receivable, Participated Interest, or the related Contract; or the failure of any
Receivable, Participated Receivable, Participation Interest, or the related Contract to conform to any
such applicable law, rule or regulation;
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(iv) the failure to vest in the Administrative Agent or the Lenders, as the case may be, a perfected security
interest in the Collateral free and clear of any Adverse Claim (other than the security interests therein
granted under the Receivables Financing Agreement subject to the RFA Intercreditor Agreement);
(v) the failure to have filed, or any delay in filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any
Transferred Assets and the Related Security and Collections in respect thereof, whether at the time of
any purchase or reinvestment or at any subsequent time;
(vi) any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of the Obligor
to the payment of any Receivable or any Participated Receivable (including, without limitation, a
defense based on such Receivable, Participated Receivable, or the related Contract not being a legal,
valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any
other claim resulting from the sale of the merchandise or services related to such Receivable or
Participated Receivable or the furnishing or failure to furnish such merchandise or services or relating to
collection activities with respect to such Receivable or Participated Receivable (if such collection
activities were performed by the Borrower acting as Collection Agent);
(vii) any failure of the Borrower to perform its duties or obligations in accordance with the provisions hereof
or to perform its duties or obligations under the Contracts;
(viii) any products liability or other claim arising out of or in connection with merchandise, insurance or
services which are the subject of any Contract;
(ix) the commingling of Collections of Receivables and Participated Receivables at any time with other
funds;
(x) any investigation, litigation or proceeding related to this Agreement or the use of proceeds of Loans or
in respect of any Receivable, Participated Receivable, Participated Interest, Related Security or
Contract;
(xi) any failure of the Borrower to comply with its covenants contained in this Agreement or any other
Transaction Document;
(xii) any claim brought by any Person other than an Indemnified Party arising from any activity by the
Borrower in servicing, administering or collecting any Receivable or Participated Receivable;
(xiii) in the case of a Contract between an Originator and a PBM, where such PBM acts as an agent for
Contract Payors rather than as a principal, the inability of the Administrative Agent, as collateral
assignee pursuant to
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this Agreement and the other Purchase Agreements of such Contract, to enforce any Receivable arising
under such contract directly (by contract or by operation of law) against such Contract Payor, except
to the extent such Contract Payor is a Governmental Entity and such enforcement rights are limited by
the 1972 Amendments to the Social Security Act; and
(xiv) the inability of the Administrative Agent or the Lenders to exercise their rights under this Agreement to
review any Contract which contains a confidentiality provision that purports to restrict its ability to do
so, or any litigation or proceeding relating to any such confidentiality provision.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc. No amendment or waiver of any provision of this Agreement or any
other Transaction Document or consent to any departure by the Borrower, the Parent, HQ (as Collection Agent or
otherwise), any Originator or any Predecessor Purchaser therefrom shall be effective unless in a writing signed by, with respect
to this Agreement, the Required Lenders or the Administrative Agent with the written consent of the Required Lenders (and, in
the case of any amendment, also signed by the Borrower, HQ and the Originators party hereto) and, with respect to any other
Transaction Document, the Administrative Agent (with the written consent of the Required Lenders) (and, in the case of any
amendment, also signed by the other parties thereto); provided, however, that the signatures of the Borrower, HQ and the
Originators party hereto shall not be required for the effectiveness of any amendment which modifies the representations,
warranties, covenants or responsibilities of the Collection Agent at any time when the Collection Agent is not an Originator, the
Parent or an Affiliate of such Originator or the Parent or a successor Collection Agent is designated by the Administrative
Agent pursuant to Section 6.01, and then such amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing
and additionally signed by (x) the Collection Agent, affect the rights or duties of the Collection Agent under this Agreement or
any other Transaction Document or (y) the Administrative Agent, affect the rights or duties of the Administrative Agent under
this Agreement or any other Transaction Document; provided further that no amendment, waiver or consent shall (i) increase
the Commitment of any Lender without the written consent of such Lender or increase the aggregate amount of the
Commitments of the Lenders without the written consent of each Lender, (ii) reduce or forgive the principal amount of any
Loan or reduce the rate of interest thereon (other than default interest under Section 2.09(c)), or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby, (iii) postpone the scheduled maturity of any Loan or
any date for the payment of any interest or fees payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) amend Section 2.15(b) or (c) in a manner that would alter the pro rata sharing of payments required
thereby, without the written consent of each Lender, (v) amend the advance rate under either clause (a) or (b) of the definition
of “Borrowing Base” to a percentage greater than the percentage set forth in such clause on the date hereof or amend either of
clauses (c) or (d) of such
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definition or amend the first sentence of the definitions of “Eligible Participated Receivable” or “Eligible Receivable”, in each
case, without the written consent of each Lender, (vi) except as contemplated by the RFA Intercreditor Agreement, the Senior
Collateral Intercreditor Agreement, any Deposit Account Agreement or any Governmental Entity Receivables Agreement,
subordinate the priority of the security interest granted to the Administrative Agent pursuant to this Agreement without the
written consent of each Lender, (vii) change any of the provisions of this Section or the percentage set forth in the definition of
“Required Lenders”, “Supermajority Lenders” or any other provision of any Transaction Document specifying the number or
percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any
consent thereunder, without the written consent of each Lender, (viii) release the Parent from its obligations under either
Parent Undertaking or limit its liability in respect of either Parent Undertaking, without the written consent of each Lender, (ix)
release all or substantially all of the Collateral from the security interests under the Transaction Documents, without the written
consent of each Lender, (x) change the order of the waterfall of payments under Sections 2.19 (a), (b), (c), (d) or (e), without
the written consent of each Lender or (xi) change the one-time funding of the Loans under Section 2.01, without the written
consent of each Lender. No failure on the part of the Lenders or the Administrative Agent to exercise, and no delay in
exercising, any right hereunder or under any other Transaction Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right hereunder or under any other Transaction Document preclude any other or further exercise
thereof or the exercise of any other right.
SECTION 11.02. Notices, Etc. All notices and other communications hereunder shall, unless otherwise
stated herein, be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, to each party hereto, at its address set forth on Schedule III hereto or at such other address or telecopy
number as shall be designated by such party in a written notice to the other parties hereto. All notices and other
communications given to any party hereto shall be deemed to have been given on the date of receipt.
SECTION 11.03. Assignability.
(a) This Agreement and the Lenders’ rights and obligations herein (including ownership of the Loan
made by it) shall be assignable in whole or in part by the Lenders and their successors and assigns, with the Borrower’s
consent, which shall not be unreasonably withheld or delayed, provided, that the Borrower’s consent shall not be required if
(i) the assignment shall be to an Eligible Assignee or by CNAI or any of its Affiliates to any institution made prior to the date
that is 30 days after the Effective Date or (ii) an Event of Default or a Default has occurred and is continuing. Each such
assignor shall notify the Administrative Agent and the Borrower of any such assignment. Each such assignor may, in
connection with any such assignment, disclose to the assignee or potential assignee any information relating to the Borrower,
the Collection Agent, any Predecessor Purchaser, the Parent or any other Originator, including the Transferred Assets
furnished to such assignor by or on behalf of the Borrower, the Parent, any other Originator or by the Administrative Agent;
provided that, prior to any such disclosure, the assignee or potential assignee agrees to preserve the confidentiality of any such
information which is confidential in accordance with the provisions of Section 11.06 hereof.
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(b) Each Lender may assign to any Eligible Assignee all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Commitment and any Loan made by it); provided, however,
that:
(i) each such assignment shall be of a constant, and not a varying, percentage of all rights and obligations
under this Agreement,
(ii) except in the case of an assignment to a Person described in clause (i) or (ii) of the definition of “Eligible
Assignee”, the amount being assigned pursuant to each such assignment (determined as of the date of
the Assignment and Acceptance Agreement with respect to such assignment) shall in no event be less
than the lesser of (x) $1,000,000 and (y) all of the assigning Lender’s Commitment or outstanding
Loans, and
(iii) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance Agreement, together with a
processing and recordation fee of $2,500; provided that, in the event of concurrent assignments to two
or more assignees that are Affiliates of one another, or by or to two or more Approved Funds managed
by the same investment advisor or by affiliated investment advisors, only one such fee shall be payable.
Upon such execution, delivery, acceptance and recording and any necessary consents required from the Administrative Agent
and the Borrower, from and after the effective date specified in such Assignment and Acceptance Agreement, (x) the assignee
thereunder shall be a party to this Agreement and, to the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance Agreement, have the rights and obligations of a Lender hereunder and (y) the
assigning Lender shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment
and Acceptance Agreement, relinquish such rights and be released from such obligations under this Agreement (and, in the
case of an Assignment and Acceptance Agreement covering all or the remaining portion of an assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto).
(c) The Administrative Agent shall maintain at its address referred to in Section 11.02 of this
Agreement a copy of each Assignment and Acceptance Agreement delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the Commitments of, and aggregate outstanding principal of Loans
owned by, each Lender from time to time (the “Register”). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Originators, the Administrative Agent and the Lenders may treat each
person whose name is recorded in the Register as a Lender under this Agreement for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice. Upon its receipt of an Assignment and Acceptance Agreement executed by an assigning Lender and
an Eligible Assignee, the Administrative Agent shall, if such Assignment and Acceptance Agreement has been completed,
(i) accept such
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Assignment and Acceptance Agreement, (ii) record the information contained therein in the Register and (iii) give prompt
notice thereof to the Borrower.
(d) Notwithstanding any other provision of this Section 11.03, any Lender may at any time pledge or
grant a security interest in all or any portion of its rights (including, without limitation, rights to payment of principal and interest)
under this Agreement to secure obligations of such Lender, including, without limitation, any pledge or grant to secure
obligations to a Federal Reserve Bank, without notice to or consent of the Borrower or the Administrative Agent; provided
that no such pledge or grant of a security interest shall release a Lender from any of its obligations hereunder or substitute any
such pledgee or grantee for such Lender as a party hereto.
(e) [Intentionally Omitted].
(f) This Agreement and the rights and obligations of the Administrative Agent herein shall be assignable
by the Administrative Agent and its successors and assigns.
(g) Neither the Borrower, the Parent, any Originator or the Collection Agent may assign its rights or
obligations hereunder or under any other Transaction Document or any interest herein or therein without the prior written
consent of the Administrative Agent and each Lender.
(h) Each Lender may, without the consent of the Administrative Agent or the Borrower, sell
participations to one or more banks or other entities (each, a “Participant”) in all or a portion of its rights and obligations
hereunder (including the outstanding Loans); provided that following the sale of a participation under this Agreement (i) the
obligations of such Lender shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which any Lender sells such a participation shall provide that the
Participant shall not have any right to direct the enforcement of this Agreement or the other Transaction Documents or to
approve any amendment, modification or waiver of any provision of this Agreement or the other Transaction Documents;
provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver that (i) reduces the amount of principal or interest (other than default interest)
that is payable on account of any Loan subject to such participation or delays any scheduled date for payment thereof or
(ii) reduces any fees payable by the Borrower to such Lender (to the extent relating to payments to the Participant) or delays
any scheduled date for payment of such fees. The Borrower acknowledges and agrees that each Lender’s source of funds
may derive in part from its Participants. Accordingly, references in Sections 2.11, 2.14, 6.07 and 11.04 and the other terms
and provisions of this Agreement and the other Transaction Documents to determinations, reserve and capital adequacy
requirements, expenses, increased costs, reduced receipts and the like as they pertain to any Lender shall be deemed also to
include those of its Participants; provided that the Borrower shall not be required to pay higher costs, expenses and
indemnification amounts pursuant to this sentence than would be required to be paid by the Borrower in the absence of the
sale of any participation by any Lender to a Participant as
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contemplated by this Section 11.03(h). Each Lender or the Administrative Agent may, in connection with any such
participation, disclose to Participants and potential Participants any information relating to the Borrower, the Collection Agent,
any Predecessor Purchaser, the Parent or the Originators, including the Transferred Assets, furnished to such Lender or the
Administrative Agent by or on behalf of the Borrower; provided that, prior to any such disclosure, such Participant or potential
Participant agrees to preserve the confidentiality of any such information which is confidential in accordance with the provisions
of Section 11.06 hereof.
(i) [Intentionally Omitted].
(j) Notwithstanding any other provision of this Section 11.03, none of the rights or obligations under
this Agreement may be assigned in whole or in part unless as of the effective date of such assignment, the assignee is either (A)
a “United States person” (within the meaning of Section 7701(a)(30) of the Code), or (B) entitled to a complete exemption
from all U.S. withholding taxes with respect to payments made to such assignee under any Transaction Document.
SECTION 11.04. Costs, Expenses and Taxes.
(a) In addition to the rights of indemnification granted under Section 10.01 hereof, the Borrower agrees
to pay on demand all costs and expenses of the Administrative Agent and its Affiliates and, to the extent described in
clause (z) below, of the Lenders in connection with the preparation, negotiation, execution, delivery, syndication,
administration (including periodic auditing and the other activities contemplated in Section 5.02) and enforcement of this
Agreement and the other documents and agreements to be delivered hereunder, including, without limitation, (x) the
reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent and its Affiliates with respect thereto and
with respect to advising the Administrative Agent and its Affiliates as to their rights and remedies under this Agreement and the
other Transaction Documents, (y) the costs and expenses of the Administrative Agent’s due diligence and monitoring of the
Collateral, including, without limitation, field examinations and audits and (z) all costs and expenses, if any (including
reasonable counsel fees and expenses), of the Administrative Agent, the Lenders and their respective Affiliates in connection
with the enforcement of this Agreement and the other documents and agreements to be delivered hereunder.
(b) [Intentionally Omitted].
(c) [Intentionally Omitted].
(d) Further, the Borrower agrees to pay any and all breakage and other expenses of the Administrative
Agent and the Lenders (including, without limitation, reasonable attorneys’ fees and disbursements and the cost including
accrued interest, of terminating or transferring any agreements such as interest rate swaps, over-the-counter forward
agreements and future contracts engaged by the Lenders or the Administrative Agent) in connection with any reduction of the
principal relating to the funding or maintenance of any Loan (or portion thereof).
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SECTION 11.05. No Proceedings; Waiver of Consequential Damages. (a) Each of the Collection Agent,
the Originators, the Administrative Agent, each Lender, each assignee of a Loan or any interest therein and each entity which
enters into a commitment to make a Loan or any interest therein or purchase interests therein hereby agrees that it will not
institute against, or join any other Person in instituting against, the Borrower any proceeding of the type referred to in Section
7.01(g) so long as there shall not have elapsed 91 days since the RFA Termination Date.
(b) Each of the Originators, the Collection Agent and the Borrower agree that no Indemnified Party
shall have any liability to them or any of their securityholders or creditors in connection with this Agreement, the other
Transaction Documents or the transactions contemplated thereby on any theory of liability for any special, indirect,
consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings).
SECTION 11.06. Confidentiality
. i) Each of the Borrower, each Originator, the Parent and the Collection Agent agrees to maintain the confidentiality of this
Agreement in communications with third parties and otherwise; provided that this Agreement may be disclosed (i) to third
parties to the extent such disclosure is made pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to the Administrative Agent, (ii) to the legal counsel and auditors of the Borrower, the Parent and the
Collection Agent if they agree to hold it confidential and (iii) to the extent required by applicable law or regulation or by any
court, regulatory body or agency having jurisdiction over such party; and provided, further, that such party shall have no
obligation of confidentiality in respect of any information which may be generally available to the public or becomes available
to the public through no fault of such party.
(b) Each Lender and the Administrative Agent agrees to maintain the confidentiality of all information
with respect to the Borrower, each Originator, the Parent or the Receivables (including the Borrower Reports) furnished or
delivered to it pursuant to this Agreement; provided, that such information may be disclosed (i) to such party’s legal counsel
and auditors and to such party’s assignees and participants and potential assignees and participants and their respective
counsel if they agree to hold it confidential, (ii) to the nationally recognized statistical rating agencies, (iii) to the extent required
by applicable law or regulation or by any court, regulatory body or agency having jurisdiction over such party, and (iv) to the
respective officers, directors, employees, accountants and advisors of each of the parties referred to in clauses (i) through (ii)
above; and provided, further, that such party shall have no obligation of confidentiality in respect of any information which may
be generally available to the public or becomes available to the public through no fault of such party.
(c) Notwithstanding any other provision herein or in any other Transaction Document, each Lender and
the Administrative Agent hereby confirms that the Borrower, the Originators and the Collection Agent (and each employee,
representative or other agent of each such party) may disclose to any and all Persons, without limitation of any kind, the U.S.
tax treatment and U.S. tax structure of the transaction contemplated by this Agreement and the other Transaction Documents.
80
(d) Each of the parties hereto and each successor Collection Agent hereunder agrees to comply with
the requirements of Annex I or (in the case of a successor Collection Agent) Annex K.
SECTION 11.07. GOVERNING LAW. THIS AGREEMENT SHALL, IN ACCORDANCE

WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD CALL
FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, EXCEPT TO THE EXTENT
THAT, PURSUANT TO THE UCC OF THE STATE OF NEW YORK, THE PERFECTION AND THE EFFECT
OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTERESTS OF THE ADMINISTRATIVE
AGENT OR THE LENDERS, AS APPLICABLE, IN THE COLLATERAL ARE GOVERNED BY THE LAWS
OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 11.08. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall
constitute one and the same agreement.
SECTION 11.09. Survival of Termination. The provisions of Sections 2.11, 2.12, 6.07, 10.01, 11.04,
11.05, 11.06 and 11.07 shall survive any termination of this Agreement.
SECTION 11.10. Consent to Jurisdiction.
(a) Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of any New York
State or Federal court sitting in New York City in any action or proceeding arising out of or relating to this Agreement or the
other Transaction Documents, and each party hereto hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State court or, to the extent permitted by law, in such Federal
court. The parties hereto hereby irrevocably waive, to the fullest extent they may effectively do so, the defense of an
inconvenient forum to the maintenance of such action or proceeding. The Borrower hereby irrevocably appoints CT
Corporation (the “Process Agent”), with an office on the date hereof at 111 Eighth Avenue, 13th Floor, New York, New
York 10011, United States, as its agent to receive on behalf of the Borrower and its property service of copies of the
summons and complaint and any other process which may be served in any such action or proceeding. Such service may be
made by mailing or delivering a copy of such process to the Borrower in care of the Process Agent at the Process Agent’s
above address, and the Borrower hereby irrevocably authorizes and directs the Process Agent to accept such service on its
behalf. The parties hereto agree that a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
(b) Each of the Borrower, the Parent, the Collection Agent and the Originators consents to the service
of any and all process in any such action or proceeding by the mailing of copies of such process to it at its address specified in
Section 11.02. Nothing in this Section
81
11.10 shall affect the right of any Lender or the Administrative Agent to serve legal process in any other manner permitted by
law.
(c) To the extent that the Borrower has or hereafter may acquire any immunity from jurisdiction of any
court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the Borrower hereby irrevocably waives such immunity
in respect of its obligations under this Agreement or any other Transaction Document.
SECTION 11.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED OR DELIVERED PURSUANT HERETO.
SECTION 11.12. Judgment.
(a) If for the purposes of obtaining judgment in any court it is necessary to convert a sum due
hereunder in U.S. Dollars into another currency, the parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal banking procedures the judgment creditor
could purchase U.S. Dollars with such other currency at New York, New York on the Business Day preceding that on which
final judgment is given.
(b) The obligation of the Borrower in respect of any sum due from it to the Lenders or the
Administrative Agent hereunder shall, notwithstanding any judgment in a currency other than U.S. Dollars, be discharged only
to the extent that on the Business Day following receipt by the Lenders or the Administrative Agent (as the case may be) of
any sum adjudged to be so due in such other currency, the Lenders or the Administrative Agent (as the case may be) may in
accordance with normal banking procedures purchase U.S. Dollars with such other currency; if the U.S. Dollars so purchased
are less than the sum originally due to the Lenders or the Administrative Agent (as the case may be) in U.S. Dollars, the
Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Lenders or the
Administrative Agent (as the case may be) against such loss, and if the U.S. Dollars so purchased exceed the sum originally
due to the Lenders or the Administrative Agent (as the case may be) in U.S. Dollars, the Lenders or the Administrative Agent
(as the case may be) shall remit to the Borrower such excess.
SECTION 11.13. USA Patriot Act. Each Lender hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information that will allow such Lender to identify the
Borrower in accordance with its requirements. The Borrower shall promptly, following a request by the Administrative Agent
or any Lenders provide all documentation and other information that the Administrative Agent or such Lender reasonably
requests in order to comply with its
82
ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the
USA Patriot Act.
SECTION 11.14. RFA Intercreditor Agreement. Notwithstanding anything herein to the contrary, the lien
and security interest granted to the Administrative Agent pursuant to this Agreement and the exercise of any right or remedy by
the Administrative Agent hereunder are subject to the provisions of the RFA Intercreditor Agreement. In the event of any
conflict between the terms of the RFA Intercreditor Agreement and this Agreement, the terms of the RFA Intercreditor
Agreement shall govern and control.
83
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
BORROWER: RITE AID FUNDING II
By: /s/ James J. Comitale

Name:James J. Comitale
Title: Vice President
Signature Page to Credit Agreement

ADMINISTRATIVE AGENT: CITICORP NORTH AMERICA, INC.,

as Administrative Agent
By: /s/ Thomas M. Halsch

Name:Thomas M. Halsch
LENDERS: CITICORP NORTH AMERICA, INC.

Name:Thomas M. Halsch
COLLECTION AGENT: RITE AID HDQTRS. FUNDING, INC.

Name: James J. Comitale

ORIGINATORS: RITE AID CORPORATION

RITE AID OF CONNECTICUT, INC.
RITE AID OF DELAWARE, INC.
RITE AID OF GEORGIA, INC.
RITE AID OF INDIANA, INC.
RITE AID OF KENTUCKY, INC.
RITE AID OF MAINE, INC.
RITE AID OF MARYLAND, INC.
RITE AID OF MICHIGAN, INC.
RITE AID OF NEW HAMPSHIRE, INC.
RITE AID OF NEW JERSEY, INC.
RITE AID OF NEW YORK, INC.
RITE AID OF OHIO, INC.
RITE AID OF PENNSYLVANIA, INC.
RITE AID OF TENNESSEE, INC.
RITE AID OF VERMONT, INC.
RITE AID OF VIRGINIA, INC.
RITE AID OF WASHINGTON, D.C., INC.
RITE AID OF WEST VIRGINIA, INC.
KEYSTONE CENTERS, INC.
THE LANE DRUG COMPANY
RITE AID DRUG PALACE, INC.
THRIFTY PAYLESS, INC.
HARCO, INC.
PERRY DRUG STORES, INC.
APEX DRUG STORES, INC.
PDS-1 MICHIGAN, INC.
RDS DETROIT, INC.
K & B ALABAMA CORPORATION
K & B LOUISIANA CORPORATION
K & B MISSISSIPPI CORPORATION
K & B TENNESSEE CORPORATION
ECKERD CORPORATION
GENOVESE DRUG STORES, INC.
EDC DRUG STORES, INC.
MAXI DRUG, INC.
MAXI DRUG SOUTH, L.P.
MAXI DRUG NORTH, INC.
MAXI GREEN, INC.
THRIFT DRUG, INC.
By: /s/ Robert B. Sari

Name:Robert B. Sari
Title: Exec. VP and Gen. Counsel of Rite Aid Corp.
VP as to all other originators

ANNEX D
FORM OF
ASSIGNMENT AND ACCEPTANCE AGREEMENT
Dated __________ __, 200___
Reference is made to the Credit Agreement, dated as of February 18, 2009, as amended to date (the
“Agreement”), among RITE AID FUNDING II, as the Borrower, the “Lenders” party thereto from time to time, CITICORP
NORTH AMERICA, INC., a Delaware corporation (“CNAI”), as Administrative Agent (the “Administrative Agent”) for the
Lenders, RITE AID HDQTRS. FUNDING, INC., a Delaware corporation, as Collection Agent, and each of the Originators
named therein. Terms defined in the Agreement are used herein with the same meaning.
_________________ (the “Assignor”) and ________________ (the “Assignee”) agree as follows:
1. Purchase and Sale. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchases and assumes from the Assignor, an interest in and to all of the Assignor’s rights and obligations under the
Agreement as of the date hereof equal to the percentage (the “Percentage”) interest specified on the signature page hereto of
all outstanding rights and obligations of all Lenders under the Agreement. After giving effect to such sale and assignment, [the
Assignee’s Commitment] [the amount of the Loans owned by the Assignee] will be as set forth in Section 2 of the signature
page hereto. [As consideration for the sale and assignment contemplated in this Section 1, the Assignee shall pay to the
Assignor on the Effective Date (as hereinafter defined) in immediately available funds an amount equal to $_________,
representing the purchase price payable by the Assignee for the Loans sold and assigned to the Assignee under this Section
1.]¹
2. Representations and Disclaimers of Assignor. The Assignor
i. represents and warrants that it is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse claim;
ii. makes no representation or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Agreement or any other instrument or document
furnished pursuant thereto or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the
Agreement or any other instrument or document furnished pursuant thereto; and
___________________________
¹ Include bracketed text if Assignor holds a portion of Loans on the Effective Date.
D-1
iii. makes no representation or warranty and assumes no responsibility with respect to the financial
condition of the Borrower, the Originators, the Collection Agent, the Parent or Cayman SPE I or the performance or
observance by the Borrower, the Originators, the Collection Agent, the Parent or Cayman SPE I of any of their
obligations under the Agreement or any other instrument or document furnished pursuant thereto.
3. Representations and Agreements of Assignee. The Assignee
i. confirms that it has received a copy of the Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01(k) of the Agreement and Section 6(c) of each of the Parent
Undertakings and such other documents and information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment and Acceptance Agreement;
ii. agrees that it will, independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Agreement;
iii. appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to
exercise such powers under the Agreement and the other Transaction Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto;
iv. agrees that it will perform in accordance with their terms all of the obligations which by the terms of
the Agreement and this Assignment and Acceptance Agreement are required to be performed by it as a Lender;
v. specifies as its address for notices the office set forth beneath its name on the signature pages
hereof;
vi. represents that this Assignment and Acceptance Agreement has been duly authorized, executed
and delivered by the Assignee pursuant to its corporate powers and constitutes the legal, valid and binding obligation
of the Assignee; and
vii. if the Assignee is organized under the laws of a jurisdiction outside the United States, (A) attaches
the forms prescribed by the Internal Revenue Service of the United States certifying as to the Assignee’s status for
purposes of determining exemption from United States withholding taxes with respect to all payments to be made to
the Assignee under the Agreement or such other documents as are necessary to indicate that all such payments are
subject to such taxes at a rate reduced by an applicable tax treaty, and (B) agrees to provide the Administrative
Agent (to the extent permitted by applicable law) with similar forms for each subsequent tax year of the Assignee in
which payments are to be made to the Assignee under the Agreement.
D-2
4. Effectiveness of Assignment.
a. Following the execution of this Assignment and Acceptance by the Assignor and the
Assignee, it will be delivered to the Administrative Agent for acceptance and recording by the Administrative Agent. The
effective date of this Assignment and Acceptance shall be the date of acceptance thereof by the Administrative Agent, unless
otherwise specified in Section 3 of the signature page hereto (the “Effective Date”).
b. Upon such acceptance and recording by the Administrative Agent, as of the Effective Date,
(i) the Assignee shall be a party to the Agreement and, to the extent provided in this Assignment and Acceptance Agreement,
have the rights and obligations of a Lender thereunder and hereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance Agreement, relinquish its rights and be released from its obligations under the Agreement.
c. Upon such acceptance and recording by the Administrative Agent, from and after the
Effective Date, the Administrative Agent, the Borrower or the Collection Agent, as the case may be, shall make all payments
under the Agreement in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest
and fees with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments
under the Agreement for periods prior to the Effective Date directly between themselves.
5. GOVERNING LAW. THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT

SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance Agreement to
be executed by their respective officers thereunto duly authorized, as of the date first above written, such execution being
made on the signature page hereto.
[Remainder of this page intentionally left blank]
D-3
Signature Page
to Rite Aid Funding II Assignment and Acceptance Agreement
Dated __________ ____, 20__
Section 1.
Percentage: ______%
Section 2.
[Assignee’s Commitment: $______]
[Aggregate Outstanding Principal of
Loans held by the Assignee: $______]
Section 3.
Effective Date:² ________ __, 200_
[NAME OF ASSIGNOR]
By:
Title:
[NAME OF ASSIGNEE]
By:
Title:
Address for Notices:
[Insert]
___________________________
² This date should be no earlier than the date of acceptance by the Administrative Agent.
D-4
Accepted this _____ day of

________ __, 200_
CITICORP NORTH AMERICA, INC., as

Administrative Agent
By:
Title:
D-5
ANNEX E
[Form of Funds Transfer Letter]
[Letterhead of the Borrower]
[Date]
Citicorp North America, Inc.,

390 Greenwich Street
New York, New York 10013
Re: Funds Transfers
Gentlemen:
This letter is the Funds Transfer Letter referred to in the Credit Agreement, dated as of February 18, 2009,
as modified, amended or restated from time to time (the “Credit Agreement”; terms used in the Credit Agreement, unless
otherwise defined herein, having the meaning set forth therein) among the undersigned, the Lenders, you, as Administrative
Agent for the Lenders, the Collection Agent and the Originators.
You are hereby directed to deposit all funds representing proceeds of the Loans to be made on the Effective
Date to [Account Number], at [Name, Address and ABA Number of Bank].
The provisions of this Letter may not be changed or amended orally, but only by a writing in substantially the
form of this letter signed by the undersigned and acknowledged by you.
Very truly yours,
Rite Aid Funding II
By:
Title:
Receipt acknowledged:
CITICORP NORTH AMERICA, INC.,
By: ___________________________
Title:
E-1
Annex F
NOTE
New York, New York
$______________ _________, 2009
FOR VALUE RECEIVED, THE UNDERSIGNED, Rite Aid Funding II, a Cayman Islands exempted company
incorporated with limited liability (the “Borrower”), promises to pay to the order of [Name of Lender] (“Payee”), the principal
sum of ______________ ($____________) or, if less, the aggregate unpaid principal amount of all Loans shown on the
schedule attached hereto (and any continuation thereof) and/or in the records of the Payee pursuant to that certain Credit
Agreement, dated as of February 18, 2009 (together with all amendments, restatements and other modifications, if any, from
time to time thereafter made thereto, the “Credit Agreement”), among Rite Aid Funding II, as borrower, the “Lenders” party
thereto from time to time, Citicorp North America, Inc., as Administrative Agent, Rite Aid Hdqtrs. Funding, Inc., as the
collection agent, and the parties thereto named as Originators.
The Borrower also promises to pay interest on the unpaid principal amount hereof from time to time outstanding from
the date hereof until paid in full, and any fees, expenses and other amounts due to Payee under the Credit Agreement, at the
rates per annum and on the dates specified in the Credit Agreement. In any event, all principal, interest and any fees, expenses
and other amounts due to Payee under the Credit Agreement shall be due and payable on the Maturity Date.
Payments of principal, interest and any fees, expenses and other amounts due to Payee under the Credit Agreement
are to be made in lawful money of the United States of America in same day or immediately available funds to the account
designated by the Administrative Agent from time to time in accordance with the Credit Agreement.
This Note is a Note referred to in, and evidences indebtedness incurred under, the Credit Agreement, and the holder
hereof is entitled to the benefits of the Credit Agreement, to which reference is also made for a description of the security for
this Note and for a statement of the terms and conditions on which the Borrower is permitted and required to make
prepayments and repayments of principal of the indebtedness evidenced by this Note. Unless otherwise defined, capitalized
terms used herein have the meanings provided in the Credit Agreement.
All parties hereto, whether as makers, endorsers, or otherwise, severally waive presentment for payment, demand,
protest and notice of dishonor.
The Borrower hereby irrevocably submits to the non-exclusive jurisdiction of any New York State or Federal court
sitting in New York City in any action or proceeding arising out of or relating to this Note, and the Borrower hereby
irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such New York
State court or, to the extent permitted by law, in such Federal court. The Borrower hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. The
Borrower agrees that a final judgment in any such action or
F-1
proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
The Borrower consents to the service of any and all process in any such action or proceeding by the mailing of copies
of such process to it at its address specified in Section 11.02 of the Credit Agreement. Nothing in this Note shall affect the
right of the Payee or its assignees to serve legal process in any other manner permitted by law.
To the extent that the Borrower has or hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, the Borrower hereby irrevocably waives such immunity in respect of its
obligations under this Note.
If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder in U.S. Dollars
into another currency, the Borrower agrees, to the fullest extent that it may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures the judgment creditor could purchase U.S. Dollars with
such other currency at New York, New York on the Business Day preceding that on which final judgment is given.
The obligation of the Borrower in respect of any sum due hereunder shall, notwithstanding any judgment in a currency
other than U.S. Dollars, be discharged only to the extent that on the Business Day following receipt by the Payee, the Payee
may in accordance with normal banking procedures purchase U.S. Dollars with such other currency; if the U.S. Dollars so
purchased are less than the sum originally due to the Payee in U.S. Dollars, the Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Payee against such loss.
THIS NOTE SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL

OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE
LAWS OF ANY OTHER JURISDICTION.
RITE AID FUNDING II
By:
Title:
F-2
Schedule attached to Note dated _________________, 2009 of Rite Aid Funding II payable to the order of
______________________________________
Date of Loan/Repayment Amount of Loan Amount of Repayment
F-3
Exhibit 10.2
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT (“Agreement”), is dated as of February 18, 2009, and entered
into by and among CITICORP NORTH AMERICA, INC., a Delaware corporation, in its capacity as program agent for
the First Lien Claimholders (as defined below), including its successors and assigns from time to time (the “First Lien
Agent”) and CITICORP NORTH AMERICA, INC., a Delaware corporation, in its capacity as administrative agent and
collateral processing agent for the Second Lien Claimholders (as defined below), including its successors and assigns from
time to time (the “Second Lien Agent”), and acknowledged and agreed to by RITE AID FUNDING II, a Cayman Islands
exempted company incorporated with limited liability (the “Borrower”). Capitalized terms used in this Agreement have the
meanings assigned to them in Section 1 below.
RECITALS
The Borrower, the investors, banks, agents, originators, collection agent and trustee party thereto, and First
Lien Agent in its capacity as program agent for the holders of the First Lien Obligations (as defined below), have entered into
that Receivables Financing Agreement dated as of September 21, 2004, providing for a revolving credit facility (as amended,
restated, supplemented or modified from time to time, the “First Lien Credit Agreement”);
The Borrower, the lenders party thereto, the collection agent party thereto, the originators and Second Lien
Agent in its capacity as administrative agent and collateral processing agent for the holders of the Second Lien Obligations (as
defined below), entered into that Credit Agreement dated as of the date hereof providing for a term loan (as amended,
restated, supplemented or modified from time to time, the “Second Lien Credit Agreement”);
The obligations of the Borrower under the First Lien Credit Agreement are secured on a first priority basis by
liens on substantially all the assets of the Borrower, pursuant to the terms of the First Lien Loan Documents;
The obligations of the Borrower under the Second Lien Credit Agreement are secured on a second priority
basis by liens on substantially all the assets of the Borrower pursuant to the terms of the Second Lien Loan Documents; and
The First Lien Collateral Agent and the Second Lien Collateral Agent have agreed to the intercreditor and
other provisions set forth in this Agreement.
AGREEMENT
In consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and
valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
SECTION 1. Definitions.
1.1 Defined Terms. As used in the Agreement, the following terms shall have the following meanings:
“Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled
by or is under common control with such Person or is a director or officer of such Person.
“Agreement” means this Intercreditor Agreement, as amended, restated, renewed, extended, supplemented
or otherwise modified from time to time.
“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter
in effect, or any successor statute.
“Bankruptcy Law” means the Bankruptcy Code and any state, foreign or other federal bankruptcy,
insolvency, receivership or similar law affecting creditors’ rights generally.
“Borrower” has the meaning assigned to that term in the Preamble to this Agreement.
“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in
New York City are authorized or required by law to close.
“Collateral” means all of the property of the Borrower, whether real, personal or mixed, constituting (or
required to constitute) both First Lien Collateral and Second Lien Collateral, including any Liens granted pursuant to Section 6
to secure both First Lien Obligations and Second Lien Obligations.
“Collateral Sale” means:
(1) any public or private sale or other similar disposition of Collateral pursuant to the UCC or other
applicable law, or
(2) any Enforcement Action of the type described in clause (3) of the definition of Enforcement Action.
“Creditors” means, collectively, the First Lien Agent, on behalf of itself and the First Lien Claimholders, and
the Second Lien Agent, on behalf of itself and the Second Lien Claimholders, and their respective successors and assigns.
“Discharge of First Lien Obligations” means:
(a) payment in full in cash of the principal of and interest (including interest accruing on or after the
commencement of any Insolvency Proceeding, whether or not such interest would be allowed in such Insolvency Proceeding),
on all First Lien Obligations;
2
(b) payment in full in cash of all other First Lien Obligations that are due and payable or otherwise accrued
and owing at or prior to the time such principal and interest are paid (other than any indemnification obligations for which no
claim or demand for payment, whether oral or written, has been made at such time); and
(c) termination or expiration of all commitments, if any, to extend credit that would constitute First Lien
Obligations.
“Enforcement Action” means any action under applicable law:
(1) to foreclose, execute or levy on, collect on, take possession of or control of, or sell or otherwise realize
upon (judicially or non-judicially) or to lease, license or otherwise dispose of (whether publicly or privately), any
Collateral or otherwise to exercise or enforce remedial rights with respect to Collateral under the First Lien Loan
Documents or the Second Lien Loan Documents, as applicable, or any other applicable agreement, document or
instrument pertaining thereto (including, without limitation, by way of setoff, noticing of any public or private sale or
other disposition pursuant to the UCC or other applicable law, notification of account debtors or notification of
depositary banks),
(2) to solicit bids from third parties to conduct the liquidation or disposition of any Collateral or to engage
or retain sales brokers, marketing agents, investment bankers, accountants, appraisers, auctioneers or other third
parties for the purposes of valuing, marketing, promoting and selling any Collateral,
(3) to receive a transfer of Collateral in satisfaction of any indebtedness or other obligation secured
thereby, or
(4) to otherwise enforce any security interest or exercise any other right or remedy, as a secured creditor
or otherwise, pertaining to the Collateral at law, in equity or pursuant to the First Lien Loan Documents or the Second
Lien Loan Documents, as applicable, or any other applicable agreement, document or instrument pertaining thereto
(including, without limitation, the commencement of any applicable legal proceedings or other actions against or with
respect to all or any portion of the Collateral to facilitate the actions described in the immediately preceding
clauses (1), (2) and (3), and exercising voting rights in respect of any equity interests comprising Collateral);
provided that “Enforcement Action” shall be deemed to include the commencement of, or joinder in filing of a
petition for commencement of, an Insolvency Proceeding against the owner of Collateral.
“Event of Default” means “Event of Termination” as defined in the First Lien Credit Agreement and/or
“Event of Default” as defined in the Second Lien Credit Agreement.
“First Lien Agent” has the meaning assigned to that term in the Recitals to this Agreement.
3
“First Lien Cap” means the aggregate principal amount of First Lien Obligations up to, but not in excess of,
the lesser of (i) $345,000,000 and (ii) the aggregate “Bank Commitments” (as such term is defined in the First Lien Credit
Agreement).
“First Lien Claimholders” means, at any relevant time, the holders of First Lien Obligations at that time,
including the First Lien Lenders and the agents under the First Lien Loan Documents.
“First Lien Collateral” means all of the assets and property of the Borrower, whether real, personal or
mixed, with respect to which a Lien is granted as security for any First Lien Obligations.
“First Lien Credit Agreement” has the meaning assigned to that term in the Recitals to this Agreement.
“First Lien Lenders” means the “Investors” and “Banks” under and as defined in the First Lien Credit
Agreement.
“First Lien Loan Documents” means the First Lien Credit Agreement, the “Transaction Documents” (as
defined in the First Lien Credit Agreement), and each of the other agreements, documents and instruments providing for or
evidencing any other First Lien Obligation, and any other document or instrument executed or delivered at any time in
connection with any First Lien Obligations, including any intercreditor, liquidity or joinder agreement among holders of First
Lien Obligations, to the extent such are effective at the relevant time, as each may be amended, restated, supplemented,
modified, renewed or extended from time to time in accordance with the provisions of this Agreement.
“First Lien Obligations” means all Obligations of Borrower outstanding under (i) the First Lien Credit
Agreement, and (ii) the other First Lien Loan Documents, in each case whether or not allowed or allowable in an Insolvency
Proceeding; provided that the aggregate principal amount, without duplication, of any revolving credit commitments or
revolving credit loans provided for under the First Lien Credit Agreement or any other First Lien Loan Document in excess of
the First Lien Cap shall not constitute First Lien Obligations for purposes of this Agreement, except for Inadvertent Excess
Advances not exceeding an aggregate amount of $7,000,000 outstanding at any time. “First Lien Obligations” shall include,
without limitation, all of the following (none of which shall be included within the First Lien Cap) (x) all interest accrued or
accruing (or which would, absent commencement of an Insolvency Proceeding, accrue) in accordance with the rate specified
in the relevant First Lien Loan Document (including any capitalized interest) and (y) all fees, costs, indemnities, expenses or
charges (including, without limitation, reasonable fees and expenses of legal counsel) arising under the First Lien Loan
Documents and provided for thereunder, in the case of each of clause (x) and clause (y) whether before or after
commencement of an Insolvency Proceeding, and irrespective of whether any claim for such interest, fees, costs, indemnities,
expenses or charges (including, without limitation, reasonable fees and expenses of legal counsel) is allowed as a claim in such
Insolvency Proceeding. To the extent any payment with respect to the First Lien Obligations (whether by or on behalf of
Borrower, as proceeds of security, enforcement of any right of set-off or otherwise) is declared to be fraudulent or preferential
in any respect, set aside or required
4
to be paid to a debtor in possession, trustee, receiver or similar Person, then the obligation or part thereof originally intended
to be satisfied shall be deemed to be reinstated and outstanding as if such payment had not occurred.
“Governmental Authority” means any federal, state, municipal, national or other government, governmental
department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer
exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court,
in each case whether associated with a state of the United States, the United States, or a foreign entity or government.
“Inadvertent Excess Advance” means an advance by a First Lien Claimholder: (i) in excess of the First
Lien Cap, (ii) made erroneously and not in accordance with the limitations contained in the First Lien Credit Agreement, and
(iii) as to which, the First Lien Claimholder that made such excess advance demands repayment, and exercises commercially
reasonable steps to obtain repayment, within three Business Days after making such advance.
“Insolvency Proceeding” means:
(a) any voluntary or involuntary case or proceeding under the Bankruptcy Code with respect to Borrower;
(b) any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding with respect to Borrower or with respect to a
material portion of its property;
(c) any liquidation, dissolution, reorganization or winding up of Borrower whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy; or
(d) any assignment for the benefit of creditors or any other marshaling of assets and liabilities of Borrower.
“Lien” means any lien (including, without limitation judgment liens and liens arising by operation of law),
mortgage or deed of trust, pledge, hypothecation, assignment, security interest, charge or encumbrance of any kind (including
any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature
thereof) and any option, call, trust, UCC financing statement or other preferential arrangement having the practical effect of any
of the foregoing, including any right of setoff or recoupment.
“Obligations” means all obligations of every nature of Borrower from time to time owed to the First Lien
Agent, the Second Lien Agent, the First Lien Claimholders, the Second Lien Claimholders or any of them or their respective
Affiliates under the First Lien Loan Documents or the Second Lien Loan Documents, whether for principal, interest, fees,
expenses, indemnification or otherwise (including, without limitation, reasonable fees and expenses of legal counsel) and all
guarantees of any of the foregoing, whether absolute or contingent, due or to become due, now existing or hereafter arising
and including interest and fees that accrue after the commencement by or against any Person or any Affiliate thereof of any
proceeding under
5
any Bankruptcy Law naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding.
“Person” means any natural person, corporation, limited liability company, trust, business trust, joint venture,
association, company, partnership, Governmental Authority or other entity.
“Pledged Collateral” has the meaning set forth in Section 5.4.
“Post-Petition Claims” means interest, fees, costs, expenses and other charges that pursuant to the First Lien
Credit Agreement or the Second Lien Credit Agreement, continue to accrue after the commencement of any Insolvency
Proceeding, whether or not such interest, fees, expenses and other charges are allowed or allowable under the Bankruptcy
Law or in any such Insolvency Proceeding.
“Proceeds” means (a) all “Proceeds” as defined in Article 9 of the UCC with respect to the Collateral, and
(b) whatever is recoverable or recovered when Collateral is sold, exchanged, collected, or disposed of, whether voluntarily or
involuntarily.
“Purchase Period” has the meaning set forth in Section 3.4.
“Recovery” has the meaning set forth in Section 6.6.
“Reserve” means any of the “Commingling Reserve,” “Dilution Reserve,” “Loss Reserve” or “Yield and Fee
Reserve” as such terms are defined in the First Lien Credit Agreement.
“Second Lien Agent” has the meaning assigned to that term in the Preamble of this Agreement.
“Second Lien Claimholders” means, at any relevant time, the holders of Second Lien Obligations at that
time, including the Second Lien Lenders and the agents under the Second Lien Loan Documents.
“Second Lien Collateral” means all of the assets and property of Borrower, whether real, personal or
mixed, with respect to which a Lien is granted as security for any Second Lien Obligations.
“Second Lien Credit Agreement” has the meaning assigned to that term in the Recitals to this Agreement.
“Second Lien Lenders” means the “Lenders” under and as defined in the Second Lien Credit Agreement.
“Second Lien Loan Documents” means the Second Lien Credit Agreement, the “Transaction Documents”
(as defined in the Second Lien Credit Agreement), and each of the other agreements, documents and instruments providing for
or evidencing any other Second Lien Obligation, and any other document or instrument executed or delivered at any time in
6
connection with any Second Lien Obligations, including any intercreditor or joinder agreement among holders of Second Lien
Obligations to the extent such are effective at the relevant time, as each may be amended, restated, supplemented, modified,
renewed or extended from time to time in accordance with the provisions of this Agreement.
“Second Lien Obligations” means all Obligations of Borrower outstanding under the Second Lien Credit
Agreement and the other Second Lien Loan Documents, in each case whether or not allowed or allowable in an Insolvency
Proceeding. “Second Lien Obligations” shall include, without limitation, all of the following (x) all interest accrued or accruing
(or which would, absent commencement of an Insolvency Proceeding, accrue) after commencement of an Insolvency
Proceeding in accordance with the rate specified in the relevant Second Lien Loan Document (including any capitalized
interest) and (y) all fees, costs, indemnities, expenses or charges (including, without limitation, reasonable fees and expenses of
legal counsel) arising under the Second Lien Loan Documents and provided for thereunder, in the case of each of clause (x)
and clause (y) whether before or after commencement of an Insolvency Proceeding, and irrespective of whether any claim for
such interest, fees, costs, indemnities, expenses or charges (including, without limitation, reasonable fees and expenses of legal
counsel) is allowed as a claim in such Insolvency Proceeding. To the extent any payment with respect to the Second Lien
Obligations (whether by or on behalf of Borrower, as proceeds of security, enforcement of any right of set-off or otherwise) is
declared to be fraudulent or preferential in any respect, set aside or required to be paid to a debtor in possession, trustee,
receiver or similar Person, then the obligation or part thereof originally intended to be satisfied shall be deemed to be reinstated
and outstanding as if such payment had not occurred.
“Standstill Period” has the meaning set forth in Section 3.1.
“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any
applicable jurisdiction.
“Yield” has the meaning set forth in the First Lien Credit Agreement.
1.2 Terms Generally. The definitions of terms in this Agreement 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 construed
as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented, modified,
renewed or extended;
(b) any reference herein to any Person shall be construed to include such Person’s permitted 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;
7
(d) all references herein to Sections shall be construed to refer to Sections of 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 general intangibles.
SECTION 2. Lien Priorities.
2.1 Relative Priorities. Notwithstanding the date, time, method, manner or order of grant, attachment or
perfection of any Liens securing the Second Lien Obligations granted on the Collateral or of any Liens securing the First Lien
Obligations granted on the Collateral and notwithstanding any provision of the UCC, or any other applicable law or the
Second Lien Loan Documents, the Second Lien Agent, on behalf of itself and the Second Lien Claimholders, hereby agrees
that:
(a) any Lien on the Collateral securing any First Lien Obligations now or hereafter held by or on behalf of
the First Lien Agent or any First Lien Claimholders or any agent or trustee therefor, regardless of how acquired, whether by
grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Lien on
the Collateral securing any Second Lien Obligations; and
(b) any Lien on the Collateral securing any Second Lien Obligations now or hereafter held by or on behalf
of the Second Lien Agent, any Second Lien Claimholders or any agent or trustee therefor regardless of how acquired,
whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all
respects to all Liens on the Collateral securing any First Lien Obligations.
(c) All Liens on the Collateral securing any First Lien Obligations shall be and remain senior in all respects
and prior to all Liens on the Collateral securing any Second Lien Obligations for all purposes, notwithstanding any defect or
deficiencies in, or failure to perfect or lapse in perfection of, the Liens securing the First Lien Obligations, the subordination of
any Lien on the Collateral securing any First Lien Obligations to any Lien securing any other obligation of the Borrower or any
other Person, the avoidance, invalidation or lapse of any Lien on the Collateral securing any First Lien Obligations or any
defect or deficiencies in the Liens securing the First Lien Obligations or any other circumstance whatsoever.
2.2 Prohibition on Contesting Liens. Second Lien Agent, for itself and on behalf of each Second Lien
Claimholder, and the First Lien Agent, for itself and on behalf of each First Lien Claimholder, agrees that it will not (and
hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency
Proceeding), the validity, enforceability, perfection or priority (as set forth in Section 2.1) of a Lien held by or on behalf of any
of the First Lien Claimholders in the First Lien Collateral or by or on behalf of any of the Second Lien Claimholders in the
Second Lien Collateral, as the case may be; provided that nothing in this Agreement shall be construed to prevent or impair
the rights of the First Lien Agent or any First Lien Claimholder or of the Second Lien Agent or any Second Lien Claimholder
to enforce this Agreement, including the provisions of this Agreement
8
relating to the priority of the Liens securing the First Lien Obligations and Second Lien Obligations as provided in Section 2.1
and the provisions related to enforcement in Section 3.1.
2.3 [Intentionally Omitted].
2.6 Nature of First Lien and Second Lien Obligations.
(a) Subject to any limitations on the aggregate principal amount of First Lien Obligations set forth in the
definition of “First Lien Obligations” and the limitations in Section 7.3, the Second Lien Agent acknowledges that, (i) the First
Lien Obligations are revolving in nature, (ii) the amount thereof that may be outstanding at any time or from time to time may
be increased or reduced and subsequently reborrowed, (iii) the terms of the First Lien Obligations may be modified, extended
or amended from time to time, and (iv) the aggregate amount of the First Lien Obligations may be increased without notice to
or consent by the Second Lien Claimholders and without affecting the provisions hereof.
(b) The First Lien Agent acknowledges that (i) the terms of the Second Lien Obligations may be modified,
extended or amended from time to time, and (ii) the aggregate amount of the Second Lien Obligations may be increased
without notice to or consent by the First Lien Claimholders and without affecting the provisions hereof.
(c) Subject to any limitations on the aggregate principal amount of First Lien Obligations set forth in the
definition of “First Lien Obligations” and the limitation in Section 7.3, the lien priorities provided in Sections 2.1 and 2.2 shall
not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing,
increase, replacement, renewal or restatement of either the First Lien Obligations or the Second Lien Obligations, or any
portion thereof.
2.7 Limitations on Duties and Obligations. Each of the Second Lien Agent, for itself and on behalf of each
Second Lien Claimholder, and the First Lien Agent, for itself and on behalf of each First Lien Claimholder, agrees that, except
in the case of (i) the obligations of the First Lien Agent under Section 5.4 as bailee and agent for perfection for the Second
Lien Agent and (ii) the obligations of the Second Lien Agent under Section 5.4 as bailee and agent for perfection for the First
Lien Agent, each of the First Lien Agent (on behalf of the First Lien Claimholders) and the Second Lien Agent (on behalf of
the Second Lien Claimholders) shall be solely responsible for perfecting and maintaining the perfection of its Lien in and to
each item constituting the Collateral in which the First Lien Agent (on behalf of the First Lien Claimholders) or the Second Lien
Agent (on behalf of the Second Lien Claimholders) has been granted a Lien. The foregoing provisions of this Agreement are
intended solely to govern the respective Lien priorities as between the Creditors and shall not impose on either the First Lien
Agent (on behalf of the First Lien Claimholders) or the Second Lien Agent (on behalf of the Second Lien Claimholders) any
obligations in respect of the disposition of proceeds of foreclosure on any Collateral that would conflict with prior perfected
claims therein in favor of
9
any other Person or any order or decree of any court or other Governmental Authority or any applicable law.
SECTION 3. Enforcement.
3.1 Exercise of Remedies.
(a) Until the Discharge of First Lien Obligations has occurred, whether or not any Insolvency Proceeding
has been commenced by or against the Borrower, the Second Lien Agent and the Second Lien Claimholders:
(1) will not take any Enforcement Action with respect to any Lien held by it under any Second Lien
Loan Document or otherwise; provided, however, that the Second Lien Agent may take Enforcement Action at any
time after a period of 30 days has elapsed since the date on which the First Lien Agent shall have received written
notice from the Second Lien Agent of the existence of any Event of Default under the Second Lien Credit Agreement
and the Second Lien Obligations are currently due and payable in full as a result of acceleration or otherwise (the
“Standstill Period”); provided, in no event shall the Second Lien Agent or any Second Lien Claimholder take any
Enforcement Action with respect to any Lien held by it under any Second Lien Loan Document or otherwise if,
notwithstanding the expiration of the Standstill Period, (i) the First Lien Agent or First Lien Claimholders shall have
commenced and are diligently pursuing an Enforcement Action with respect to all or any material portion of the
Collateral or shall be diligently attempting to vacate any stay or prohibition against such exercise (prompt written notice
of the initial commencement of such exercise to be given to the Second Lien Agent provided, that the First Lien Agent
shall incur no liability for, and the rights of the First Lien Agent hereunder or in respect of the Collateral shall be
unaffected by, the failure of the First Lien Agent to give any such notice); (ii) the “Amortization Period” (as defined in
the First Lien Credit Agreement) shall then exist and collections of the Collateral are being applied and distributed
pursuant to Sections 2.04(c) and 2.04A(b) of the First Lien Credit Agreement; or (iii) the acceleration of the Second
Lien Obligations (if any) is rescinded in accordance with the terms of the Second Lien Credit Agreement or by court
order;
(2) subject to their rights under Section 3.1(b), will not contest, protest or object to any
Enforcement Action brought by the First Lien Agent or any First Lien Claimholder or any other exercise by the First
Lien Agent or any First Lien Claimholder of any rights and remedies relating to the Collateral under the First Lien Loan
Documents or otherwise so long as the Liens granted to secure the Second Lien Obligations of the Second Lien
Claimholders attach to the Proceeds thereof subject to the relative priorities described in Section 2.1; and
(3) subject to their rights under clause (a)(1) above, will not contest, protest or object to (and
waive any and all claims with respect to) the forbearance by the First Lien Agent or the First Lien Claimholders from
bringing or pursuing any Enforcement Action so long as the Liens granted to secure the Second Lien Obligations
10
of the Second Lien Claimholders attach to the Proceeds thereof subject to the relative priorities described in
Section 2.1.
(b) Whether or not any Insolvency Proceeding has been commenced by or against the Borrower, the First
Lien Agent and the First Lien Claimholders agree that they will not effectuate any Collateral Sale during the first 45 days after
the occurrence of the “Amortization Period” (as defined in the First Lien Credit Agreement) unless either (1) such Collateral
Sale will result in the payment in full in cash of the First Lien Obligations and the Second Lien Obligations or (2) the Second
Lien Agent shall have consented thereto. If the First Lien Agent desires to arrange a Collateral Sale at any time after such 45-
day period, First Lien Agent will first offer the Second Lien Claimholders the option to purchase the First Lien Obligations in
accordance with the provisions of Section 3.4 by giving the Second Lien Agent notice thereof (the “Purchase Notice”),
which the Second Lien Agent will promptly forward to each Second Lien Claimholder.
(c) Until the Discharge of First Lien Obligations has occurred, whether or not any Insolvency Proceeding
has been commenced by or against the Borrower, but subject to the first proviso of Section 3.1(a)(1) and to Section 3.1(b),
the First Lien Agent and the First Lien Claimholders shall have the exclusive right to enforce rights and remedies with respect
to the Collateral, commence, and if applicable, maintain an Enforcement Action (including set-off) and, subject to Section 5.1,
make determinations regarding the release, disposition, or restrictions with respect to the Collateral without any consultation
with or the consent of the Second Lien Agent or any Second Lien Claimholder. In exercising rights and remedies with respect
to the Collateral and Enforcement Actions with respect to the Collateral, the First Lien Agent and the First Lien Claimholders
may, subject to Section 3.1(b), enforce the provisions of the First Lien Loan Documents and exercise remedies thereunder, all
in such order and in such manner as they may determine in the exercise of their sole discretion. Such exercise and
enforcement shall include, subject to Section 3.1(b), the right to exercise all the rights and remedies of a secured creditor
under the UCC and of a secured creditor under Bankruptcy Laws of any applicable jurisdiction.
(d) Notwithstanding the foregoing, the Second Lien Agent and any Second Lien Claimholder may:
(1) file a claim or statement of interest with respect to the Second Lien Obligations in any
Insolvency Proceeding commenced by or against the Borrower;
(2) take any action (not adverse to the priority status of Liens on the Collateral securing the First
Lien Obligations, or the rights of the First Lien Agent or the First Lien Claimholders to exercise remedies in respect
thereof) in order to create, perfect, preserve or protect its Lien on the Collateral;
(3) file any necessary responsive or defensive pleadings in opposition to any motion, claim,
adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the
claims of the Second Lien Claimholders, including any claims secured by the Collateral, if any, in each case in a
manner not inconsistent with any other provisions of this Agreement;
11
(4) vote on any plan of reorganization (including, without limitation, vote to accept or reject any
plan of partial or complete liquidation, reorganization, arrangement, composition or extension), file any proof of claim,
make other filings and make any arguments and motions that are, in each case, not inconsistent with any other
provisions of this Agreement, with respect to the Second Lien Obligations and the Collateral;
(5) exercise any of its rights or remedies with respect to the Collateral after the termination of the
Standstill Period to the extent permitted by Section 3.1(a)(1); and
(6) join (but not exercise any control with respect to) any judicial foreclosure proceeding or other
judicial lien enforcement proceeding with respect to the Collateral initiated by the First Lien Agent to the extent that
any such action could not reasonably be expected, in any material respect, to restrain, hinder, limit, delay for any
material period or otherwise interfere with the Enforcement Action by the First Lien Agent (it being understood that
any Liens attaching to the proceeds thereof shall be subject to the relative priorities described in Section 2.1).
The Second Lien Agent, on behalf of itself and the Second Lien Claimholders, agrees that it will not take or
receive any Collateral or any Proceeds of Collateral in connection with any Enforcement Action against any Collateral in its
capacity as a creditor, unless and until the Discharge of First Lien Obligations has occurred, except in connection with any
Enforcement Action expressly permitted by Section 3.1(a)(1) to the extent the Second Lien Agent and Second Lien
Claimholders are permitted to retain the Proceeds thereof in accordance with Section 4.2 of this Agreement.
(e) Subject to Sections 3.1(a), (b) and (d) and Section 6.4(b):
(1) except as otherwise permitted hereunder, the Second Lien Agent, for itself and on behalf of the
Second Lien Claimholders, agrees that the Second Lien Agent and the Second Lien Claimholders will not take any
action that would hinder any exercise of remedies under the First Lien Loan Documents;
(2) except as otherwise permitted hereunder, the Second Lien Agent, for itself and on behalf of the
Second Lien Claimholders, hereby waives any and all rights it or the Second Lien Claimholders may have as a junior
lien creditor or otherwise to object to the manner in which the First Lien Agent or the First Lien Claimholders seek to
enforce or collect the First Lien Obligations or the Liens securing the First Lien Obligations granted in any of the First
Lien Collateral undertaken in accordance with this Agreement, regardless of whether any action or failure to act by or
on behalf of the First Lien Agent or First Lien Claimholders is adverse to the interest of the Second Lien Claimholders;
and
(3) the Second Lien Agent hereby acknowledges and agrees that no covenant, agreement or
restriction contained in any Second Lien Loan Document (other than this Agreement) shall be deemed to restrict in any
way the rights and remedies of the
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First Lien Agent or the First Lien Claimholders with respect to the Collateral as set forth in this Agreement and the
First Lien Loan Documents.
(f) Except as specifically set forth in Sections 3.1(a) and (d), the Second Lien Agent and the Second Lien
Claimholders may exercise rights and remedies as unsecured creditors against the Borrower in accordance with the terms of
the Second Lien Loan Documents and applicable law; provided that in the event that any Second Lien Claimholder becomes a
judgment lien creditor in respect of Collateral as a result of its enforcement of its rights as an unsecured creditor with respect to
the Second Lien Obligations, such judgment lien shall be subject to the terms of this Agreement for all purposes (including in
relation to the First Lien Obligations) as the other Liens securing the Second Lien Obligations are subject to this Agreement.
(g) Except as specifically set forth in Sections 3.1(a) and (d), nothing in this Agreement shall prohibit the
receipt by the Second Lien Agent or any Second Lien Claimholders of the required payments of interest, principal and other
amounts owed in respect of the Second Lien Obligations so long as such receipt is not the direct or indirect result of any
Enforcement Action by the Second Lien Agent or any Second Lien Claimholders of rights or remedies as a secured creditor in
contravention of this Agreement or any Lien held by any of them.
3.2 Actions Upon Breach. If any Second Lien Claimholder, in contravention of the terms of this
Agreement, in any way takes, attempts to or threatens to take or participate in any Enforcement Action with respect to the
Collateral, or fails to take any action required by this Agreement, the First Lien Agent or the Borrower may obtain relief
against such Second Lien Claimholder by injunction, specific performance and/or other appropriate equitable relief, it being
understood and agreed by the Second Lien Agent on behalf of each Second Lien Claimholder that (i) the First Lien
Claimholders’ damages from its actions may at that time be difficult to ascertain and may be irreparable, and (ii) each Second
Lien Claimholder waives any defense that the Borrower and/or the First Lien Claimholders cannot demonstrate damage
and/or be made whole by the awarding of damages.
3.3 Commercially Reasonable Dispositions; Notice of Exercise. First Lien Agent agrees that any
Enforcement Action by First Lien Agent with respect to Collateral subject to Article 9 of the UCC shall be conducted by First
Lien Agent in a commercially reasonable manner. Second Lien Agent agrees that any Enforcement Action by Second Lien
Agent with respect to Collateral subject to Article 9 of the UCC shall be conducted by Second Lien Agent in a commercially
reasonable manner. First Lien Agent shall provide to Second Lien Agent prompt notice of any acceleration of the First Lien
Obligations and reasonable prior notice of its initial Enforcement Action. Second Lien Agent shall provide to First Lien Agent
prompt notice of any acceleration of the Second Lien Obligations and reasonable prior notice of its initial Enforcement
Action. Second Lien Agent and Second Lien Claimholders acknowledge that they have been advised by the First Lien Agent
that the delivery by the Second Lien Agent of the notice referred to in Section 3.1(a)(1) which triggers the start of the
Standstill Period will automatically cause the “Amortization Period” to commence under the First Lien Credit Agreement,
whereupon the taking of any Enforcement Action by the Second Lien Agent will be prohibited, subject to the provisions of
clauses (i), (ii) or (iii) of Section 3.1(a)(1).
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3.4 Purchase Option. The Second Lien Claimholders will have the option, exercisable (a) at any time
following the occurrence of the “Amortization Period” (as such term is defined in the First Lien Credit Agreement) and prior to
receipt of the Purchase Notice referred to in Section 3.1(b) or (b) within ten (10) Business Days following receipt of the
Purchase Notice, to purchase all, but not less than all, of the First Lien Obligations, without warranty, representation or
recourse of any kind (except for representations and warranties required to be made by assigning banks pursuant to the
“Assignment and Acceptance” (as such term is defined in the First Lien Credit Agreement)). The purchase price for any such
purchase shall be equal to the aggregate outstanding amount of First Lien Obligations due and payable on the closing date of
such purchase (including, without limitation, accrued interest, fees, costs, indemnities and expenses) and shall be payable all in
cash in immediately available funds. If one or more of the Second Lien Claimholders choose to exercise such right, each of
them must irrevocably notify the First Lien Agent thereof (and any such notice given following delivery of the Purchase Notice
must be given within ten (10) Business Days following the date of the Purchase Notice), and the parties shall endeavor to close
promptly thereafter, but in any event within ten (10) Business Days following notice of the exercise of the Second Lien
Claimholders’ purchase right (the “Purchase Period”). Each Second Lien Claimholder that gives notice of its intention to
exercise its purchase right shall concurrently provide a copy of such notice to the Second Lien Agent and the other Second
Lien Claimholders. If more than one Second Lien Claimholder elects to exercise its purchase option in accordance with this
Section 3.4, the First Lien Obligations shall be purchased by such Second Lien Claimholders on a pro rata basis according to
the amount of Second Lien Obligations owing to each Second Lien Claimholder that has exercised its purchase right relative to
the aggregate amount of Second Lien Obligations owing to all Second Lien Claimholders that have exercised their purchase
right. If any Second Lien Claimholders choose to exercise their purchase right, such purchase shall be effected pursuant to
documentation mutually acceptable to each of the First Lien Agent and the Second Lien Agent (and, in the event more than
one Second Lien Claimholder has exercised its purchase right, in a single closing). If the Second Lien Claimholders elect not
to exercise their purchase right under this Section 3.4 following receipt of the Purchase Notice (or do not irrevocably provide
notice of such exercise within the required timeframe or close the purchase within the Purchase Period, unless such failure is to
due solely to breach by the First Lien Claimholders of this Agreement), the First Lien Claimholders shall have no further
obligations pursuant to this Section 3.4. Each Second Lien Claimholder which exercises its purchase right hereunder agrees to
indemnify the First Lien Claimholders from and against any loss, liability, claim, damage or expense (including, without
limitation, reasonable fees and expenses of legal counsel) arising out of any claim asserted by a third party against the First
Lien Claimholders as a direct result of any acts by such Second Lien Claimholder occurring after the date of such purchase.
SECTION 4. Payments.
4.1 Application of Proceeds. Whether or not any Insolvency Proceeding has been commenced by or
against the Borrower, except as otherwise provided in Section 4.2, any Collateral or Proceeds thereof received upon the
exercise of remedies in connection with any Enforcement Action shall be applied: (a) first, so long as the Discharge of First
Lien Obligations has not occurred, to the payment in full in cash of the First Lien Obligations in such order as specified in the
relevant First Lien Loan Documents or as otherwise determined by the First Lien Claimholders, and (b) second, upon the
Discharge of First Lien Obligations, to the payment in
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full in cash of the Second Lien Obligations in such order as specified in the Second Lien Loan Documents or as otherwise
determined by the Second Lien Claimholders, or, in each case, as a court of competent jurisdiction may otherwise direct.
4.2 Payment Turnover. So long as the Discharge of First Lien Obligations has not occurred, whether or not
any Insolvency Proceeding has been commenced by or against the Borrower, any Collateral or Proceeds thereof received by
the Second Lien Agent or any Second Lien Claimholders in connection with any Enforcement Action relating to the Collateral
shall be segregated and held in trust and forthwith paid over to the Trustee (as defined in the First Lien Credit Agreement) for
deposit to the Trustee’s Account (as defined in the First Lien Credit Agreement) and for allocation pursuant to Section
2.04A(b) of the First Lien Credit Agreement for the benefit of the First Lien Claimholders in the same form as received, with
any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The First Lien Agent is hereby
authorized to make any such endorsements as agent for the Second Lien Agent or any such Second Lien Claimholders in
connection with any payment over described in the prior sentence. This authorization is coupled with an interest and is
irrevocable until the Discharge of First Lien Obligations. For the avoidance of doubt, the deposit of Proceeds of the Collateral
into the Trustee’s Account and the application of such Proceeds, in each case in accordance with Section 2.04A(b) of the
First Lien Credit Agreement, shall not constitute an Enforcement Action and the Second Lien Agent and the Second Lien
Claimholders shall have no obligation to pay over to the Trustee, the First Lien Agent or First Lien Claimholders any payment
received by the Second Lien Agent or the Second Lien Claimholders on account of the Second Lien Obligations that is paid
out of any amount that, in accordance with the First Lien Credit Agreement, is permitted to be deposited into the “Borrower’s
Account” (as defined therein) or is otherwise permitted under the First Lien Credit Agreement to be paid to or on behalf of the
Borrower, notwithstanding that such amount constitutes Proceeds of any Collateral.
SECTION 5. Other Agreements.
5.1 Releases.
If, in connection with an Enforcement Action by the First Lien Agent, the First Lien Agent, for itself or on behalf of any of the
First Lien Claimholders, releases any of its Liens on any part of the Collateral, then the Liens, if any, of the Second Lien
Agent, for itself or for the benefit of the Second Lien Claimholders, on such Collateral shall be automatically, unconditionally
and simultaneously released (the “Second Lien Release”) and the Second Lien Agent, for itself or on behalf of any such
Second Lien Claimholders, promptly shall execute and deliver to the First Lien Agent or the Borrower such termination
statements, releases and other documents as the First Lien Agent or the Borrower may request to effectively confirm such
release; provided, however, that the Second Lien Release shall not occur without the consent of the Second Lien Agent as to
any Collateral the net proceeds of the disposition of which will not be applied to repay (and, to the extent applicable, to
reduce permanently commitments with respect to) the First Lien Obligations.
5.3 Legend; Benefit of Agreement. (a) [Intentionally Omitted].
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(b) [Intentionally Omitted].
(c) The Second Lien Agent agrees that the Second Lien Credit Agreement shall include the following
language (or language to similar effect approved by the First Lien Agent):
“Notwithstanding anything herein to the contrary, the lien and security interest granted to the Second Lien
Agent pursuant to this Agreement and the exercise of any right or remedy by the Second Lien Agent
hereunder are subject to the provisions of the Intercreditor Agreement, dated as of February ___, 2009 (as
amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”),
among Citicorp North America, Inc., as First Lien Agent and Citicorp North America, Inc., as Second Lien
Agent and Rite Aid Funding II, as Borrower. In the event of any conflict between the terms of the
Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and
control.”
(d) [Intentionally Omitted].
(e) Except as otherwise expressly set forth in any First Lien Loan Document, no Person who obtains the
benefit of the provisions of this Agreement or any Collateral by virtue of the provisions hereof or any First Lien Loan
Document shall have any right to notice of any amendment of this Agreement or any action hereunder or to consent to, direct
or object to any action hereunder or under any First Lien Loan Document in respect of the Collateral (including the release or
impairment of any Collateral) other than in its capacity as a First Lien Lender and, in such case, only to the extent expressly
provided in the First Lien Loan Documents.
5.4 Gratuitous Bailee for Perfection. (a) The First Lien Agent agrees to hold that part of the Collateral that
is in its possession or control (or in the possession or control of its agents or bailees) to the extent that possession or control
thereof is taken to perfect a Lien thereon under the UCC (such Collateral being the “Pledged Collateral”) as collateral agent
for the First Lien Claimholders and as gratuitous bailee and agent for perfection for the Second Lien Agent (such bailment and
agency for perfection being intended, among other things, to satisfy the requirements of Sections 8-106(d)(3), 8-301(a)(2)
and 9-313(c) of the UCC) and any assignee solely for the purpose of perfecting the security interest granted under the First
Lien Loan Documents and the Second Lien Loan Documents, respectively, subject to the terms and conditions of this
Section 5.4. Solely with respect to any deposit accounts under the control (within the meaning of Section 9-104 of the UCC)
of the First Lien Agent, the First Lien Agent agrees to also hold control over such deposit accounts as gratuitous agent for the
Second Lien Agent, subject to the terms and conditions of this Section 5.4.
(b) The First Lien Agent shall have no obligation whatsoever to the First Lien Claimholders, the Second
Lien Agent or any Second Lien Claimholder to ensure that the Pledged Collateral is genuine or owned by the Borrower or to
preserve rights or benefits of any Person except as expressly set forth in this Section 5.4. The duties or responsibilities of the
First Lien Agent under this Section 5.4 shall be limited solely to holding the Pledged Collateral as bailee (and with respect to
deposit accounts, agent) in accordance with this Section 5.4 and delivering
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the Pledged Collateral upon a Discharge of First Lien Obligations as provided in paragraph (d) below.
(c) The First Lien Agent shall not have by reason of the First Lien Loan Documents, the Second Lien
Loan Documents, this Agreement or any other document a fiduciary relationship in respect of the First Lien Claimholders, the
Second Lien Agent or any Second Lien Claimholder and the Second Lien Agent and the Second Lien Claimholders hereby
waive and release the First Lien Agent from all claims and liabilities arising pursuant to the First Lien Agent’s role under this
Section 5.4 as gratuitous bailee and gratuitous agent with respect to the Pledged Collateral. It is understood and agreed that
the interests of the First Lien Agent and the Second Lien Agent may differ and the First Lien Agent shall be fully entitled to act
in its own interest without taking into account the interests of the Second Lien Agent or Second Lien Claimholders.
(d) Upon the Discharge of First Lien Obligations, the First Lien Agent shall deliver the remaining Pledged
Collateral in its possession (if any) together with any necessary endorsements (such endorsement shall be without recourse and
without any representation or warranty), first, to the Second Lien Agent to the extent Second Lien Obligations remain
outstanding, and second, to the Borrower to the extent no First Lien Obligations or Second Lien Obligations remain
outstanding (in each case, so as to allow such Person to obtain possession or control of such Pledged Collateral). The First
Lien Agent further agrees to take all other action reasonably requested by the Second Lien Agent at the expense of the
Second Lien Agent or the Borrower in connection with the Second Lien Agent obtaining a first-priority interest in the
Collateral (including, without limitation, cooperating with the Second Lien Agent in the transfer of control to the Second Lien
Agent of any deposit account under the control of the First Lien Agent) or as a court of competent jurisdiction may otherwise
direct.
(e) Pursuant to the First Lien Credit Agreement, First Lien Agent (either in its individual capacity or in its
capacity as “Program Agent”), as assignee of Borrower, is the secured party of record with respect to certain UCC-1
financing statements (the “Assigned Financing Statements”) filed against the “Originators” (as defined in the First Lien
Credit Agreement), Rite Aid Hdqtrs. Funding, Inc., a Delaware corporation, and Rite Aid Funding I, a Cayman Islands
exempted company incorporated with limited liability. First Lien Agent agrees that it is secured party of record with respect to
the Assigned Financing Statements for the benefit of the First Lien Claimholders and the Second Lien Claimholders. Except
as provided in Section 5.1, First Lien Agent shall not (and shall not authorize any other Person to) terminate any of the
Assigned Financing Statements, or release any collateral therefrom, in each case, without the prior consent of the Second Lien
Agent. Upon the Discharge of First Lien Obligations, if any Second Lien Obligations remain outstanding, First Lien Agent
shall (and Borrower hereby authorizes First Lien Agent to) assign to Second Lien Agent, First Lien Agent’s rights as secured
party of record with respect to the Assigned Financing Statements.
SECTION 6. Insolvency Proceedings.
6.1 Use of Cash Collateral and DIP Financing.
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(a) In its capacity as the holder of a Lien on the Collateral, the Second Lien Agent, for itself and on behalf
of the Second Lien Claimholders, shall not contest, protest or object to, and shall be deemed to have consented to, any use of
“cash collateral” (as defined in Section 363(a) of the Bankruptcy Code) in any Insolvency Proceeding if First Lien Agent has
consented in writing to such use, provided that (i) Second Lien Claimholders shall have the right to seek adequate protection
permitted by Section 6.4 and (ii) such cash collateral shall be used and applied to pay any customary “carve-out” or other
similar administrative priority expense or claim (at the same or higher level of priority as is applicable to trustee’s fees and
expenses in clause (i) of Section 2.04A(b) of the First Lien Credit Agreement) and otherwise in accordance with the order of
priority set forth in Section 2.04A(b) of the First Lien Credit Agreement applicable during the “Amortization Period” (as
defined therein).
(b) If Borrower shall be subject to any Insolvency Proceeding, nothing in this Agreement shall limit the
rights of any First Lien Claimholder or Second Lien Claimholder, as applicable, to object to or agree to post-petition financing
or the use of cash collateral, except as otherwise provided in Section 6.1(a), 6.1(c), 6.4 or 6.8.
(c) Second Lien Agent, on behalf of itself and the Second Lien Claimholders, agrees that it shall not,
directly or indirectly, provide, offer to provide or support any DIP financing secured by a Lien senior to or pari passu with the
Liens securing the First Lien Obligations.
6.4 Adequate Protection.
(a) In any Insolvency Proceeding, the Second Lien Agent, on behalf of itself and the Second Lien
Claimholders, agrees that none of them shall contest, protest or object to (or support any other Person contesting or objecting
to) (i) any request by the First Lien Agent or the First Lien Claimholders for “adequate protection” (within the meaning of the
Bankruptcy Code or any similar Bankruptcy Law) or any agreement between the Borrower and First Lien Claimholders
providing for adequate protection to First Lien Claimholders; or (ii) any objection by the First Lien Agent or the First Lien
Claimholders to any motion, relief, action or proceeding based on the First Lien Agent or the First Lien Claimholders claiming
a lack of adequate protection.
(b) Notwithstanding the foregoing provisions in this Section 6.4, in any Insolvency Proceeding:
(i) except as permitted in this Section 6.4, the Second Lien Claimholders may not seek or request
adequate protection and may not seek relief from the automatic stay imposed by Section 362 of the
Bankruptcy Code (or similar Bankruptcy Law) or other relief based upon a lack of adequate protection;
(ii) if the First Lien Claimholders (or any subset thereof) are granted adequate protection in the
form of additional Collateral, then the Second Lien
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Agent, on behalf of itself and the Second Lien Claimholders, may seek or request adequate protection in the
form of a Lien on such additional or replacement Collateral, which Lien will be subordinated to the Liens at
any time securing the First Lien Obligations on the same basis as the other Liens securing the Second Lien
Obligations are so subordinated to the First Lien Obligations under this Agreement (and the First Lien
Claimholders will not contest or object thereto); and
(iii) any claim of the Second Lien Claimholders under Section 507(b) of the Bankruptcy Code (or
similar Bankruptcy Law) shall be subordinate in right of payment to any claim of the First Lien Claimholders
under Section 507(b) of the Bankruptcy Code (or similar Bankruptcy Law).
6.5 No Waiver. Subject to Sections 3.1(a) and (d) and 6.8(b), nothing contained herein shall prohibit or in
any way limit the First Lien Agent or any First Lien Claimholder from objecting in any Insolvency Proceeding or otherwise to
any action taken by the Second Lien Agent or any of the Second Lien Claimholders, including the seeking by the Second Lien
Agent or any Second Lien Claimholders of adequate protection or the asserting by the Second Lien Agent or any Second
Lien Claimholders of any of its rights and remedies under the Second Lien Loan Documents or otherwise.
6.6 Avoidance Issues. To the extent any First Lien Claimholder receives payment or any property on
account of any First Lien Obligations and such transfer is subsequently invalidated, avoided, declared to be fraudulent or
preferential, set aside or otherwise required to be transferred to a trustee, receiver, or the estate of the Borrower (a
“Recovery”), then, to the extent of such Recovery, such First Lien Obligations intended to have been satisfied by such
transfer shall be reinstated as First Lien Obligations from and after the date of such Recovery and the Discharge of First Lien
Obligations shall be deemed not the have occurred for all purposes hereunder. If this Agreement shall have been terminated
prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish,
release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement.
6.7 Reorganization Securities. Nothing in this Agreement shall in any way prohibit or limit the right of any
Second Lien Claimholder to receive and retain any debt or equity securities that are issued by any reorganized debtor pursuant
to any plan of reorganization or similar dispositive restructuring plan in connection with any Insolvency Proceeding. If, in any
Insolvency Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized
debtor are distributed pursuant to a plan of reorganization or similar dispositive restructuring plan, both on account of First
Lien Obligations and on account of Second Lien Obligations, then, to the extent the debt obligations distributed on account of
the First Lien Obligations and on account of the Second Lien Obligations are secured by Liens upon the same property, the
provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like
effect to the Liens securing such debt obligations.
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6.8 Post-Petition Claims. (a) Neither the Second Lien Agent nor any Second Lien Claimholder shall
oppose or seek to challenge any claim by the First Lien Agent or any First Lien Claimholder for allowance or payment in any
Insolvency Proceeding of First Lien Obligations consisting of Post-Petition Claims to the extent of the value of any Collateral
securing the First Lien Obligations without regard to the existence of the Lien securing the Second Lien Obligations.
(b) Neither the First Lien Agent nor any other First Lien Claimholder shall oppose or seek to challenge any
claim by the Second Lien Agent or any Second Lien Claimholder for allowance in any Insolvency Proceeding of Second Lien
Obligations consisting of Post-Petition Claims to the extent of the value of any Collateral securing the Second Lien Obligations
after taking into account the amount of the First Lien Obligations.
6.9 Valuation of Collateral. In any Insolvency Proceeding, the First Lien Agent and First Lien Claimholders
agree not to contest the characterization of the Second Lien Obligations as secured claims under Section 506(b) of the
Bankruptcy Code or otherwise seek a valuation of the Collateral for the purpose of determining whether the Second Lien
Obligations constitute secured claims under the Bankruptcy Code in each case for a period of 60 days following the
commencement of the “Amortization Period” (as defined in the First Lien Credit Agreement).
6.10 Separate Grants of Security and Separate Classification. The Second Lien Agent, for itself and on
behalf of the Second Lien Claimholders, and the First Lien Agent for itself and on behalf of the First Lien Claimholders,
acknowledges and agrees that (i) the grants of Liens pursuant to the First Lien Loan Documents and the Second Lien Loan
Documents constitute two separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in
the Collateral, the Second Lien Obligations, to the extent deemed to be “secured claims” within the meaning of Section 506(b)
of the Bankruptcy Code (or any similar Bankruptcy Law), are fundamentally different from the First Lien Obligations and must
be separately classified in any plan of reorganization in an Insolvency Proceeding. The Second Lien Claimholders shall not
seek in any Insolvency Proceeding to be treated as part of the same class of creditors as the First Lien Claimholders and shall
not oppose or contest any pleading by the First Lien Claimholders seeking separate classification of their respective secured
claims.
6.11 Effectiveness in Insolvency Proceedings. This Agreement, which the parties hereto expressly
acknowledge is a “subordination agreement” under Section 510(a) of the Bankruptcy Code, shall be effective before, during
and after the commencement of an Insolvency Proceeding. All references in this Agreement to the Borrower shall include the
Borrower as a debtor-in-possession and any receiver or trustee for the Borrower in any Insolvency Proceeding.
SECTION 7. Reliance; Waivers; Etc.
7.1 Reliance. Other than any reliance on the terms of this Agreement, the First Lien Agent, on behalf of
itself and the First Lien Claimholders under its First Lien Loan Documents, acknowledges that it and such First Lien
Claimholders have, independently and without reliance on the Second Lien Agent or any Second Lien Claimholders, and
based on
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documents and information deemed by them appropriate, made their own credit analysis and decision to enter into such First
Lien Loan Documents and be bound by the terms of this Agreement and they will continue to make their own credit decision
in taking or not taking any action under the First Lien Loan Documents or this Agreement. The Second Lien Agent, on behalf
of itself and the Second Lien Claimholders, acknowledges that it and the Second Lien Claimholders have, independently and
without reliance on the First Lien Agent or any First Lien Claimholder, and based on documents and information deemed by
them appropriate, made their own credit analysis and decision to enter into each of the Second Lien Loan Documents and be
bound by the terms of this Agreement and they will continue to make their own credit decision in taking or not taking any
action under the Second Lien Loan Documents or this Agreement.
7.2 No Warranties or Liability. The First Lien Agent, on behalf of itself and the First Lien Claimholders
under the First Lien Loan Documents, acknowledges and agrees that each of the Second Lien Agent and the Second Lien
Claimholders have made no express or implied representation or warranty, including with respect to the execution, validity,
legality, completeness, collectibility or enforceability of any of the Second Lien Loan Documents, the ownership of any
Collateral or the perfection or priority of any Liens thereon. Except as otherwise provided herein, the Second Lien
Claimholders will be entitled to manage and supervise their respective loans and extensions of credit under the Second Lien
Loan Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate. Except as
otherwise provided herein, the Second Lien Agent, on behalf of itself and the Second Lien Claimholders, acknowledges and
agrees that the First Lien Agent and the First Lien Claimholders have made no express or implied representation or warranty,
including with respect to the execution, validity, legality, completeness, collectibility or enforceability of any of the First Lien
Loan Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon. Except as otherwise
provided herein, the First Lien Claimholders will be entitled to manage and supervise their respective loans and extensions of
credit under their respective First Lien Loan Documents in accordance with law and as they may otherwise, in their sole
discretion, deem appropriate. The Second Lien Agent and the Second Lien Claimholders shall have no duty to the First Lien
Agent or any of the First Lien Claimholders, and the First Lien Agent and the First Lien Claimholders shall have no duty to the
Second Lien Agent or any of the Second Lien Claimholders, to act or refrain from acting in a manner which allows, or results
in, the occurrence or continuance of an Event of Default or default under any agreements with the Borrower (including the First
Lien Loan Documents and the Second Lien Loan Documents), regardless of any knowledge thereof which they may have or
be charged with.
7.3 No Waiver of Lien Priorities.
(a) No right of the First Lien Claimholders, the First Lien Agent or any of them to enforce any provision of
this Agreement or any First Lien Loan Document shall at any time in any way be prejudiced or impaired by any act or failure
to act on the part of the Borrower or by any act or failure to act by any First Lien Claimholder or the First Lien Agent, or by
any noncompliance by any Person with the terms, provisions and covenants of this Agreement, any of the First Lien Loan
Documents or any of the Second Lien Loan Documents, regardless of any knowledge thereof which the First Lien Agent or
the First Lien Claimholders, or any of them, may have or be otherwise charged with.
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(b) Without in any way limiting the generality of the foregoing paragraph (but subject to the rights of the
Borrower under the First Lien Loan Documents and subject to the other provisions herein, including Section 3.1(b)), the First
Lien Claimholders, the First Lien Agent and any of them may, at any time and from time to time in accordance with the First
Lien Loan Documents and/or applicable law, without the consent of, or notice to, the Second Lien Agent or any Second Lien
Claimholders, without incurring any liabilities to the Second Lien Agent or any Second Lien Claimholders and without
impairing or releasing the Lien priorities and other benefits provided in this Agreement (even if any right of subrogation or other
right or remedy of the Second Lien Agent or any Second Lien Claimholders is affected, impaired or extinguished thereby) do
any one or more of the following:
(1) change the manner, place or terms of payment or change or extend the time of payment of, or
amend, renew, exchange, increase or alter, the terms of any of the First Lien Obligations or any Lien on any First Lien
Collateral or guaranty thereof or any liability of the Borrower or any liability incurred directly or indirectly in respect
thereof (including any increase in or extension of the First Lien Obligations, without any restriction as to the tenor or
terms of any such increase or extension) or otherwise amend, renew, exchange, extend, modify or supplement in any
manner any Liens held by the First Lien Agent or any of the First Lien Claimholders, the First Lien Obligations or any
of the First Lien Loan Documents; provided that (x) any such increase in the First Lien Obligations shall not increase
the amount of First Lien Obligations constituting principal under the First Lien Credit Agreement to an amount in
excess of the First Lien Cap, except for Inadvertent Excess Advances not exceeding an aggregate amount of
$7,000,000 outstanding at any time and (y) the scheduled termination date under the First Lien Credit Agreement
(i.e., the “Facility Termination Date” and the “Commitment Termination Date” referred to therein) shall not be
extended to a date later than September 14, 2010;
(2) sell, exchange, release, surrender, realize upon, enforce or otherwise deal with in any manner
and in any order any part of the First Lien Collateral or any liability of the Borrower to the First Lien Claimholders or
the First Lien Agent, or any liability incurred directly or indirectly in respect thereof;
(3) settle or compromise any First Lien Obligation or any other liability of the Borrower or any
security therefor or any liability incurred directly or indirectly in respect thereof and apply any sums by whomsoever
paid and however realized to any liability (including the First Lien Obligations) in any manner or order; and
(4) exercise or delay in or refrain from exercising any right or remedy against the Borrower or any
security or any other Person, elect any remedy and otherwise deal freely with the Borrower or any First Lien
Collateral and any security and any guarantor or any liability of the Borrower to the First Lien Claimholders or any
liability incurred directly or indirectly in respect thereof.
(c) Except with respect to actions taken by any of the First Lien Agent or First Lien Claimholders in
contravention of the provisions of this Agreement, the Second Lien Agent, on behalf of itself and the Second Lien
Claimholders, also agrees that the First Lien
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Claimholders and the First Lien Agent shall have no liability to the Second Lien Agent or any Second Lien Claimholders, and
the Second Lien Agent, on behalf of itself and the Second Lien Claimholders, hereby waives all claims against any First Lien
Claimholder or the First Lien Agent, arising out of any and all actions which the First Lien Claimholders or the First Lien Agent
may take or permit or omit to take with respect to:
(1) the First Lien Loan Documents;
(2) the collection of the First Lien Obligations; or
(3) the foreclosure upon, or sale, liquidation or other disposition of, any First Lien Collateral.
Except as otherwise provided herein, the Second Lien Agent, on behalf of itself and the Second Lien
Claimholders, agrees that the First Lien Claimholders and the First Lien Agent have no duty to them in respect of the
maintenance or preservation of the First Lien Collateral, the First Lien Obligations or otherwise.
(d) Unless otherwise specifically permitted herein, until the Discharge of First Lien Obligations, the Second
Lien Agent, on behalf of itself and the Second Lien Claimholders, agrees not to assert and hereby waives, to the fullest extent
permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling,
appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the Collateral or
any other similar rights a junior secured creditor may have under applicable law.
7.4 Obligations Unconditional. All rights, interests, agreements and obligations of the First Lien Agent and
the First Lien Claimholders and the Second Lien Agent and the Second Lien Claimholders, respectively, hereunder shall
remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any First Lien Loan Documents or any Second Lien Loan
Documents or any setting aside or avoidance of any Lien;
(b) except as otherwise expressly set forth in this Agreement, any change in the time, manner or place of
payment of, or in any other terms of, all or any of the First Lien Obligations or Second Lien Obligations, or any amendment or
waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the
terms of any First Lien Loan Document or any Second Lien Loan Document;
(c) except as otherwise expressly set forth in this Agreement, any exchange of any security interest in any
Collateral or any other collateral, or any amendment, waiver or other modification, whether in writing or by course of conduct
or otherwise, of all or any of the First Lien Obligations or Second Lien Obligations or any guaranty thereof;
(d) the commencement of any Insolvency Proceeding in respect of the Borrower; or
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(e) any other circumstances which otherwise might constitute a defense available to, or a discharge of, the
Borrower in respect of the First Lien Agent, the First Lien Obligations, any First Lien Claimholder, the Second Lien Agent, the
Second Lien Obligations or any Second Lien Claimholder in respect of this Agreement.
SECTION 8. Miscellaneous.
8.1 Conflicts. In the event of any conflict between the provisions of this Agreement and the provisions of
the First Lien Loan Documents or the Second Lien Loan Documents, the provisions of this Agreement shall govern and
control.
8.2 Effectiveness; Continuing Nature of this Agreement; Severability. This Agreement shall become
effective when executed and delivered by the parties hereto. This is a continuing agreement of lien subordination and the First
Lien Claimholders may continue, at any time and without notice to the Second Lien Agent or any Second Lien Claimholder
subject to the Second Lien Loan Documents, to extend credit and other financial accommodations and lend monies to or for
the benefit of the Borrower constituting First Lien Obligations in reliance hereof. The First Lien Agent, on behalf of itself and
the First Lien Claimholders, and the Second Lien Agent, on behalf of itself and the Second Lien Claimholders, each hereby
waives any right it may have under applicable law to revoke this Agreement or any of the provisions of this Agreement. The
terms of this Agreement shall survive, and shall continue in full force and effect, in any Insolvency Proceeding. Any provision
of this Agreement that is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. This Agreement shall terminate and be of no further force and effect:
(a) with respect to the First Lien Agent, the First Lien Claimholders and the First Lien Obligations, on the
date of Discharge of First Lien Obligations, subject to the rights of the First Lien Claimholders under Section 6.6; and
(b) with respect to the Second Lien Agent, the Second Lien Claimholders and the Second Lien
Obligations, upon the later of (1) the date upon which the obligations under the Second Lien Credit Agreement terminate if
there are no other Second Lien Obligations outstanding on such date and (2) if there are other Second Lien Obligations
outstanding on such date, the date upon which such Second Lien Obligations are paid in full in cash and terminate.
8.3 Amendments; Waivers. No amendment, modification or waiver of any of the provisions of this
Agreement by the Second Lien Agent or the First Lien Agent shall be deemed to be made unless the same shall be in writing
signed on behalf of each party hereto or its authorized agent and each waiver, if any, shall be a waiver only with respect to the
specific instance involved and shall in no way impair the rights of the parties making such waiver or the obligations of the other
parties to such party in any other respect or at any other time. Notwithstanding the foregoing, the Borrower shall not have any
right to consent to or approve any amendment, modification or waiver of any provision of this Agreement except to the extent
its rights are directly affected.
24
8.4 Information Concerning Financial Condition of the Borrower. The First Lien Agent and the First Lien
Claimholders, on the one hand, and the Second Lien Claimholders and the Second Lien Agent, on the other hand, shall each
be responsible for keeping themselves informed of (a) the financial condition of the Borrower and all endorsers and/or
guarantors of the First Lien Obligations or the Second Lien Obligations and (b) all other circumstances bearing upon the risk
of nonpayment of the First Lien Obligations or the Second Lien Obligations. The First Lien Agent and the First Lien
Claimholders shall have no duty to advise the Second Lien Agent or any Second Lien Claimholder of information known to it
or them regarding such condition or any such circumstances or otherwise, and the Second Lien Agent and the Second Lien
Claimholders shall have no duty to advise the First Lien Agent or any First Lien Claimholder of information known to it or
them regarding such condition or any such circumstance or otherwise. In the event the First Lien Agent or any of the First
Lien Claimholders, in its or their sole discretion, undertakes at any time or from time to time to provide any such information to
the Second Lien Agent or any Second Lien Claimholder, it or they shall be under no obligation:
(a) to make, and the First Lien Agent and the First Lien Claimholders shall not make, any express or
implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such
information so provided;
(b) to provide any additional information or to provide any such information on any subsequent occasion;
(c) to undertake any investigation; or
(d) to disclose any information, which pursuant to accepted or reasonable commercial finance practices,
such party wishes to maintain confidential or is otherwise required to maintain confidential.
In the event the Second Lien Agent or any of the Second Lien Claimholders, in its or their sole discretion, undertakes at any
time or from time to time to provide any such information to the First Lien Agent or any First Lien Claimholder, it or they shall
be under no obligation:
(a) to make, and the Second Lien Agent and the Second Lien Claimholders shall not make, any express or
implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such
information so provided;
(b) to provide any additional information or to provide any such information on any subsequent occasion;
(c) to undertake any investigation; or
(d) to disclose any information, which pursuant to accepted or reasonable commercial finance practices,
such party wishes to maintain confidential or is otherwise required to maintain confidential.
8.5 Subrogation. With respect to the value of any payments or distributions in cash, property or other
assets that any of the Second Lien Claimholders or the Second Lien
25
Agent pays over to the First Lien Agent or the First Lien Claimholders under the terms of this Agreement, the Second Lien
Claimholders and the Second Lien Agent shall be subrogated to the rights of the First Lien Agent and the First Lien
Claimholders; provided that, the Second Lien Agent, on behalf of itself and the Second Lien Claimholders, hereby waives all
such rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of First Lien Obligations has
occurred. The Borrower acknowledges and agrees that the value of any payments or distributions in cash, property or other
assets received by the Second Lien Agent or the Second Lien Claimholders that are paid over to the First Lien Agent or the
First Lien Claimholders pursuant to this Agreement shall not reduce any of the Second Lien Obligations.
8.6 Application of Payments. All payments received by the First Lien Agent or the First Lien Claimholders
may be applied, reversed and reapplied, in whole or in part, to such part of the First Lien Obligations provided for in the First
Lien Loan Documents.
8.7 SUBMISSION TO JURISDICTION; WAIVERS. (a) ALL JUDICIAL PROCEEDINGS

BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING HERETO MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW
YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY:
(1) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE

JURISDICTION AND VENUE OF SUCH COURTS;
(2) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(3) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN

ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO THE APPLICABLE PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE
WITH SECTION 8.8; AND
(4) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (3) ABOVE IS SUFFICIENT

TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE PARTY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT.
(b) EACH PARTY HERETO HEREBY WAIVES, TO THE MAXIMUM EXTENT

PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT OR ANY OTHER FIRST LIEN LOAN DOCUMENT OR SECOND LIEN LOAN DOCUMENT.
8.8 Notices. All notices to the Second Lien Claimholders and the First Lien Claimholders permitted or
required under this Agreement shall also be sent to the Second Lien
26
Agent and the First Lien Agent, respectively. Unless otherwise specifically provided herein, any notice hereunder shall be in
writing and may be personally served or sent by telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of
telefacsimile, or three Business Days after depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the addresses of the parties hereto shall be as set forth below each party’s name on the
signature pages hereto, or, as to each party, at such other address as may be designated by such party in a written notice to all
of the other parties.
8.9 Further Assurances. The First Lien Agent, on behalf of itself and the First Lien Claimholders under the
First Lien Loan Documents, and the Second Lien Agent, on behalf of itself and the Second Lien Claimholders under the
Second Lien Loan Documents, and the Borrower, agree that each of them shall take such further action and shall execute and
deliver such additional documents and instruments (in recordable form, if requested) as the First Lien Agent or the Second
Lien Agent may reasonably request to effectuate the terms of and the Lien priorities contemplated by this Agreement.
8.10 GOVERNING LAW. THIS AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5-

1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO
ANY CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE
LAWS OF ANY OTHER JURISDICTION.
8.11 Binding on Successors and Assigns. This Agreement shall be binding upon the First Lien Agent, the
First Lien Claimholders, the Second Lien Agent, the Second Lien Claimholders and their respective successors and assigns. If
either of the First Lien Agent or the Second Lien Agent resigns or is replaced pursuant to the First Lien Credit Agreement or
the Second Lien Credit Agreement, as applicable, its successor shall be deemed to be a party to this Agreement and shall
have all the rights of, and be subject to all the obligations of, this Agreement. Notwithstanding any other provision of this
Agreement, it is acknowledged and agreed that this provision shall not be assignable to any Person except as expressly
contemplated above, and that no party is a third party beneficiary hereof. Without limitation, no provision of this Agreement
shall inure to the benefit of a trustee, debtor-in-possession, creditor trust or any other representative of any estate or creditors
of the Borrower, including where such estate or creditor representative is the beneficiary of any Liens securing any Collateral
by virtue of any avoidance of such Liens in any Insolvency Proceeding.
8.12 Specific Performance. Each of the First Lien Agent and the Second Lien Agent may demand specific
performance of this Agreement. The First Lien Agent, on behalf of itself and the First Lien Claimholders under the First Lien
Loan Documents, and the Second Lien Agent, on behalf of itself and the Second Lien Claimholders, hereby irrevocably waive
any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of
specific performance in any action which may be brought by the First Lien Agent or the First Lien Claimholders or the Second
Lien Agent or the Second Lien Claimholders, as the case may be.
27
8.13 Headings. Section headings in this Agreement are included herein for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.
8.14 Counterparts. This Agreement may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single
contract. Delivery of an executed counterpart of a signature page of this Agreement or any document or instrument delivered
in connection herewith by telecopy or by electronic transmission in portable document format (.pdf) shall be effective as
delivery of a manually executed counterpart of this Agreement or such other document or instrument, as applicable.
8.15 Authorization. By its signature, each Person executing this Agreement on behalf of a party hereto
represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement.
8.16 No Third Party Beneficiaries. This Agreement and the rights and benefits hereof shall inure to the
benefit of each of the parties hereto and its respective successors and assigns and shall inure to the benefit of each of the First
Lien Claimholders and the Second Lien Claimholders. Nothing in this Agreement shall impair, as between the Borrower and
the First Lien Agent and the First Lien Claimholders, or as between the Borrower and the Second Lien Agent and the Second
Lien Claimholders, the obligations of the Borrower to pay principal, interest, fees and other amounts as provided in the First
Lien Loan Documents and the Second Lien Loan Documents, respectively.
8.17 Provisions Solely to Define Relative Rights. The provisions of this Agreement are and are intended
solely for the purpose of defining the relative rights of the First Lien Agent and the First Lien Claimholders on the one hand and
the Second Lien Agent and the Second Lien Claimholders on the other hand. None of the Borrower or any other creditor
thereof shall have any rights hereunder and the Borrower may not rely on the terms hereof, except, in the case of the
Borrower, for the provisions of Section 3.2. Nothing in this Agreement is intended to or shall impair the obligations of the
Borrower, which are absolute and unconditional, to pay the First Lien Obligations and the Second Lien Obligations as and
when the same shall become due and payable in accordance with their terms.
8.18 No Proceedings. (a) The Second Lien Agent and each Second Lien Claimholder agrees that it will not
institute, or join any other Person in instituting, any Insolvency Proceeding prior to the 91 st day following the Discharge of First
Lien Obligations.
(b) The Second Lien Agent and each Second Lien Claimholder agrees that it will not institute against, or
join any other Person in instituting against, any First Lien Lender that is an “Investor” (as defined in the First Lien Credit
Agreement), any bankruptcy, reorganization, insolvency or liquidation proceeding under the Bankruptcy Code so long as any
commercial paper or other senior indebtedness issued by such Investor shall be outstanding or there shall not have elapsed
one year plus one day since the last day on which any such commercial paper or other senior indebtedness shall have been
outstanding.
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(c) The First Lien Agent and the First Lien Claimholders shall not commence any Insolvency Proceeding
during the Purchase Period.
29
IN WITNESS WHEREOF, the parties hereto have executed this Intercreditor Agreement as of the date first
written above.
First Lien Agent:
CITICORP NORTH AMERICA, INC., as First Lien

Agent,
By: /s/ Tom Sullivan

Name: Tom Sullivan
Title: Director, VP
750 Washington Blvd.

8th Floor
Stamford, CT 06901
Facsimile No. (914) 274-9038
Attn: Global Securitization
Second Lien Agent:

as Second Lien Agent

Name: Thomas M. Halsch
390 Greenwich Street

1st Floor
New York, NY 10013
Facsimile No. (646) 291-3363
Attn: Brendan Mackay
S-1
Acknowledged and Agreed to by:
RITE AID FUNDING II

30 Hunter Lane
Camp Hill, Pennsylvania 17011
Attention: Robert Sari
Facsimile No. (717) 760-7867
S-2
Exhibit 10.3
Amendment No. 11 to Receivables Financing Agreement
This AMENDMENT NO. 11 TO RECEIVABLES FINANCING AGREEMENT, dated as of February 18,

2009 (this “Amendment Agreement”), is made by and among Rite Aid Funding II (the “Borrower”), CAFCO, LLC
(“CAFCO”), CRC FUNDING, LLC (“CRC”), Falcon Asset Securitization Company LLC (“Falcon”), Variable Funding
Capital Company LLC (“Variable”; together with CAFCO, CRC and Falcon, the “Investors”), Citibank, N.A. (“Citibank”),
JPMorgan Chase Bank, N.A. (“JPMorgan”) and Wachovia Bank, National Association (“Wachovia”; together with Citibank
and JPMorgan, the “Banks”), Citicorp North America, Inc., as program agent (the “Program Agent”), Citicorp North
America, Inc. (“CNAI”), JPMorgan and Wachovia, as investor agents (CNAI, JPMorgan and Wachovia, in such capacity,
the “Investor Agents”), Rite Aid Hdqtrs. Funding, Inc. (the “Collection Agent”), each of the parties named in Schedule III to
the Agreement (as defined below) as originators (the “Originators”) and The Bank of New York Mellon, as Trustee.
Preliminary Statements. (1) The Borrower, the Investors (other than CRC), the Program Agent, the Banks,
the Investor Agents, the Collection Agent, the Originators and The Bank of New York Mellon, as Trustee are parties to a
Receivables Financing Agreement, dated as of September 21, 2004, as amended as of September 20, 2005, December 30,
2005, September 19, 2006, November 9, 2006, February 20, 2007, August 31, 2007, September 18, 2007, September 16,
2008, January 15, 2009 and January 22, 2009 (the “Agreement”; capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the Agreement).
(2) The Borrower, the Investors, the Program Agent, the Banks, the Investor Agents, the Collection Agent
and the Originators wish to amend the Agreement.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. Amendments to Agreement. As of the Effective Date (as defined below in Section 2), the
Agreement is amended as follows:
1.1 Section 1.01 of the Agreement is amended as follows:
(a) The definition of “Alternate Base Rate” is amended by (i) deleting the word “and” at the end of each
sub-clause (i) in each of clauses (a), (b) and (c) therein, (ii) deleting the period at the end of each sub-clause (ii) in
each of clauses (a), (b) and (c) therein and in lieu thereof inserting the word “; and”, and (iii) inserting a new sub-clause
(iii) in each of clauses (a), (b) and (c) therein as follows:
“(iii) the Eurodollar Rate (without giving effect to clause (b) thereof) for a Fixed Period of
one month beginning on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1.00% per annum.”
(b) The definition of “Bank Commitment” is amended by (i) deleting the amount “$325,000,000” in
clause (a) thereof and replacing it with the amount “$173,000,000”, (ii) deleting the amount “$125,000,000” in
clause (b) thereof and replacing it with the amount “$66,000,000”, and (iii) deleting the amount “$200,000,000” in
clause (c) thereof and replacing it with the amount “$106,000,000”.
(c) The definition of “Change in Control” is amended by adding the clause “or the Jean Coutu Group (PJC)
Inc. and its Affiliates” after the term “Affiliates,” in the fourth line thereof.
(d) The definition of “Concentration Limit” is amended by deleting the phrase “higher amount” in the second
line thereof and replacing it with the phrase “higher percentage”.
(e) Clause (ix) of the definition of “Eligible Receivable” is amended by adding the phrase “(except those
created by the Second Lien Credit Agreement)” after the words “Adverse Claim” appearing therein.
(f) The definition of “Eurodollar Rate” is amended by (i) inserting the words “the higher of (a)” after the
words “an interest rate per annum equal to” in the first sentence thereof, (ii) inserting the words “and (b) 3.00% per
annum” before the period at the end of the first sentence thereof, (iii) deleting the words “In the event such rate” and
inserting in lieu thereof the words “In the event the rate determined in accordance with clause (a) above”, and (iv)
deleting the words “then the Eurodollar Rate” and inserting in lieu thereof the words “then the rate determined in
accordance with clause (a) above”.
(g) The definition of “Facility Amount” is amended by deleting the amount “$650,000,000” in the first line
thereof and replacing it with the amount “$345,000,000”.
(h) The definition of “Intercreditor Agreement” is amended by replacing the reference to “September 21,
2004” with a reference to “September 22, 2004”.
(i) The definition of “Investor Facility Amount” is amended by (i) deleting the amount “$325,000,000” in
clause (a) thereof and replacing it with the amount “$173,000,000”, (ii) deleting the amount “$125,000,000” in
clause (b) thereof and replacing it with the amount “$66,000,000”, and (iii) deleting the amount “$200,000,000” in
clause (c) thereof and replacing it with the amount “$106,000,000”.
(j) The definition of “Net Receivables Pool Balance” is amended by deleting the text in lines 7 to 9
beginning with the words “(A) in the case of” and ending with the words “all other Obligors”.
(k) The definition of “Percentage” is restated in its entirety to read as follows:
“‘Percentage’ of any Bank means, (a) with respect to Citibank, 50.1449275%, or such
amount as reduced or increased by any Assignment and Acceptance entered into with an
Eligible Assignee, (b) with respect to JPMorgan, 19.1304348%, or such
2
amount as reduced or increased by any Assignment and Acceptance entered into with an
Eligible Assignee, (c) with respect to Wachovia, 30.7246377%, or such amount as reduced
or increased by any Assignment and Acceptance entered into with an Eligible Assignee, or (d)
with respect to a Bank that has entered into an Assignment and Acceptance, the amount set
forth therein as such Bank’s Percentage, or such amount as reduced or increased by an
Assignment and Acceptance entered into between such Bank and an Eligible Assignee.”
(l) A new definition of “Second Lien Agent” is added which reads in its entirety as follows:
“‘Second Lien Agent’ means CNAI in its capacity as administrative agent and collateral
processing agent under the Second Lien Credit Agreement, and any successor to CNAI
thereunder.”
(m) A new definition of “Second Lien Borrowing Base Deficiency” is added which reads in its entirety as
follows:
“‘Second Lien Borrowing Base Deficiency” means, on any date, the excess, if any, of (x) the
“Facility Principal” (as defined in the Second Lien Credit Agreement), over (y) the “Borrowing
Base” (as defined in the Second Lien Credit Agreement).”
(n) A new definition of “Second Lien Credit Agreement” is added which reads in its entirety as follows:
“‘Second Lien Credit Agreement’ means that certain Credit Agreement dated as of
February 18, 2009 among the Borrower, the Originators, certain lenders party thereto, HQ,
as collection agent, and the Second Lien Agent, as the same may be amended, modified or
restated from time to time.”
(o) A new definition of “Second Lien Intercreditor Agreement” is added which reads in its entirety as
follows:
“‘Second Lien Intercreditor Agreement’ means that certain Intercreditor Agreement dated as
of February 18, 2009 by and among the Program Agent, the Borrower and the Second Lien
Agent, as the same may be amended, modified or restated from time to time.”
(p) The definition of “Transaction Document” is amended by adding the term “the Second Lien Intercreditor
Agreement,” after the term “the Intercreditor Agreement,” in the second line thereof.
3
1.2 Section 1.02 of the Agreement is amended by deleting the term “generally accepted accounting principals” in the
second line thereof and replacing it with the term “GAAP”.
1.3 Section 2.04(a) of the Agreement is amended by deleting clause (i) thereof, renumbering clause (ii) thereof as a new
clause (i) thereof, deleting the word “and” at the end of the newly renumbered clause (i) thereof, and inserting a new clause (ii)
as follows:
“(ii) at any time that there exists a Second Lien Borrowing Base Deficiency, deposit to and
hold in the Trustee’s Account, in trust for the Beneficiaries and the Collection Agent, all
Collections (which Collections shall thereafter be applied pursuant to Section 2.04(i)); and”
1.4 Section 2.04(a)(iii) of the Agreement is amended by inserting the following clause prior to the semicolon at the end
thereof:
“unless otherwise instructed by the Borrower pursuant to Section 2.04(d) (and if no such
instructions shall have been given by the Borrower, unless otherwise instructed in writing by
the Second Lien Agent, which instructions shall state that such remaining Collections will be
applied to amounts due and owing under the Second Lien Credit Agreement and otherwise in
accordance with the terms of the Second Lien Credit Agreement)”
1.5 Section 2.04(a) of the Agreement is amended by inserting the following sentence at the end of the proviso thereto:
“The Daily Report delivered by the Collection Agent to the Trustee on each Deposit Date
shall set forth (x) the amount of the Second Lien Borrowing Base Deficiency and (y) the
amount of funds then held in the Trustee’s Account pursuant to any previous application of
clause (ii) of Section 2.04(a) or clause (iii) of Section 2.04(b).”
1.6 Section 2.04(b) of the Agreement is amended by inserting the words “during the Revolving Period” after the first
appearance of the words “Fixed Period” in the first sentence thereof, deleting clause (i) thereof, renumbering clause (ii) thereof
as a new clause (i) thereof, renumbering clause (iii) thereof as a new clause (ii) thereof, deleting the word “and” at the end of
the newly renumbered clause (ii) thereof, and inserting a new clause (iii) as follows:
“(iii) at any time that there exists a Second Lien Borrowing Base Deficiency, deposit to and
hold in the Trustee’s Account, in trust for the Beneficiaries and the Collection Agent, all
Collections (which Collections shall thereafter be applied pursuant to Section 2.04(i)); and”
1.7 Section 2.04(b) of the Agreement is amended by inserting the following sentence at the end of the proviso thereto:
4
“The Daily Report delivered by the Collection Agent to the Trustee on each Deposit Date
shall set forth (x) the amount of the Second Lien Borrowing Base Deficiency and (y) the
amount of funds then held in the Trustee’s Account pursuant to any previous application of
clause (ii) of Section 2.04(a) or clause (iii) of Section 2.04(b).”
1.8 Sections 2.04(b)(iv) and 2.04(c)(iii) of the Agreement are each hereby amended by inserting the following parenthetical
expression prior to the semicolon or period (as applicable) at the end thereof:
“(unless otherwise instructed in writing by the Second Lien Agent, which instructions shall state
that such remaining Collections will be applied to amounts due and owing under the Second
Lien Credit Agreement and otherwise in accordance with the terms of the Second Lien Credit
Agreement)”.
1.9 Section 2.04(d) of the Agreement is amended by adding the following phrase prior to the period at the end thereof:
“for distribution on account of Facility Principal pursuant to Section 2.04A”.
1.10 The first paragraph of Section 2.04(e) of the Agreement is amended by inserting the following proviso prior to the
period at the end thereof:
“; provided, further, that if the Second Lien Agent shall have otherwise instructed the Trustee
in writing as to the deposit of funds that are to be transferred to the Borrower’s Account or
distributed to the Borrower, the Trustee shall follow such instructions of the Second Lien
Agent, which instructions shall state that such remaining Cure Funds will be applied to amounts
due and owing under the Second Lien Credit Agreement and otherwise in accordance with
the terms of the Second Lien Credit Agreement.”
1.11 A new Section 2.04(i) is inserted after Section 2.04(h) as follows:
“(i) To the extent that any amounts have been deposited to the Trustee’s Account pursuant
to Section 2.04(a)(ii) or Section 2.04(b)(iii), such amounts shall be held in the Trustee’s
Account until the earlier of (x) the date on which the Collection Agent certifies in writing to the
Trustee, annexing a Daily Report evidencing such certification, that there is no Second Lien
Borrowing Base Deficiency, in which case, the Trustee shall promptly deposit into the
Borrower’s Account any amounts then in the Trustee’s Account which were previously
deposited pursuant to Section 2.04(a)(ii) or Section 2.04(b)(iii), and (y) the date on which the
“Cure Period” (as such term is defined in the Second
5
Lien Credit Agreement) ends, in which case any amounts then in the Trustee’s Account which
were previously deposited pursuant to Section 2.04(a)(ii) or Section 2.04(b)(iii) shall be
available for distribution on the next Distribution Date pursuant to Section 2.04A and shall be
distributed to the Investor Agent’s Accounts for the ratable distribution to the applicable
Investors and Banks, in reduction of the Facility Principal (regardless of whether such
Distribution Date occurs during the Revolving Period or the Amortization Period).
1.12 Sections 2.04A(a)(ix) and 2.04A(b)(viii) of the Agreement are each hereby amended by inserting the following
parenthetical expression prior to the period at the end thereof:
“(unless otherwise instructed in writing by the Second Lien Agent, which instructions shall state
that such remaining funds will be applied to amounts due and owing under the Second Lien
Credit Agreement and otherwise in accordance with the terms of the Second Lien Credit
Agreement)”.
1.13 The last paragraph of Section 2.04A(b) of the Agreement is amended by deleting the words “provided, however” and
inserting in lieu thereof the following:
“; provided, however, that if the Second Lien Agent shall have otherwise instructed the
Trustee in writing as to the deposit of funds that are to be transferred to the Borrower’s
Account or distributed to the Borrower, the Trustee shall follow such instructions of the
Second Lien Agent, which instructions shall state that such remaining funds will be applied to
amounts due and owing under the Second Lien Credit Agreement and otherwise in
accordance with the terms of the Second Lien Credit Agreement; provided, further,”
1.14 Section 4.01(h) the Agreement is amended in its entirety to read as follows:
“(h) The Borrower is the legal and beneficial owner of the Transferred Assets and Related
Security free and clear of any Adverse Claim except those created by the Second Lien Credit
Agreement. The Program Agent for the benefit of the Investors and the Banks has a valid and
perfected first priority security interest in each Transferred Asset now existing or hereafter
arising and in the Related Security and Collections with respect thereto. No effective financing
statement or other instrument similar in effect covering any Collateral is on file in any recording
office, except those relating to the Credit Agreement, the Second Lien Credit Agreement and
the Indentures, all of which the Borrower represents relate to security interests that are subject
to the Intercreditor Agreement and the Second Lien Intercreditor
6
Agreement, those filed by the Second Lien Agent pursuant to the Second Lien Credit
Agreement, those filed in favor of the Program Agent relating to this Agreement and those filed
pursuant to the Purchase Agreements. Each Transferred Asset characterized in any Borrower
Report or other written statement made by or on behalf of the Borrower as an Eligible
Receivable or Eligible Participation Interest, or as included in the Net Receivables Pool
Balance is, as of the date of such Borrower Report or other statement (or, if applicable, as of
a date certain specified in such report), an Eligible Receivable or Eligible Participation Interest,
or properly included in the Net Receivables Pool Balance.”
1.15 Section 5.01(d) of the Agreement is amended in its entirety to read as follows:
“(d) Sales, Liens, Etc. Except for the security interest created hereunder and the security
interest created under the Second Lien Credit Agreement in favor of the Second Lien Agent,
the Borrower will not sell, assign (by operation of law or otherwise) or otherwise dispose of,
or create or suffer to exist any Adverse Claim upon or with respect to any Collateral, or upon
or with respect to any account to which any Collections of any Pool Receivable or
Participated Receivable are sent, or assign any right to receive income in respect thereof.”
1.16 Clauses (xiii) and (xiv) of Section 5.01(k) of the Agreement are each hereby amended by deleting the term “Funding
Agents” where it appears therein and replacing it with the term “Investor Agents”.
1.17 Section 5.01(n) of the Agreement is amended in its entirety to read as follows:
“(n) Nature of Business. The Borrower will not engage in any business other than the
purchase or acquisition of Transferred Assets, Related Security and Collections from Cayman
SPE I and the transactions contemplated by this Agreement and by the Second Lien Credit
Agreement. The Borrower will not create or form any Subsidiary.”
1.18 Section 5.01(q) of the Agreement is amended in its entirety to read as follows:
“(q) Debt. The Borrower will not incur any Debt, other than any Debt incurred pursuant to
this Agreement or the Second Lien Credit Agreement.”
1.19 New Sections 5.01(u), 5.01(v), 5.01(w) and 5.01(x) are inserted in the appropriate location as follows:
“(u) Amendments to the Second Lien Credit Agreement. The Borrower may agree or
consent to any amendment, supplement or
7
modification to the Second Lien Loan Documents (as defined in the Second Lien Intercreditor
Agreement) in accordance with their terms, in each case, without the consent of, or prior
notice to the Program Agent or the First Lien Claimholders (as defined in the Second Lien
Intercreditor Agreement); provided, however, that any such amendment, supplement or
modification shall not, without the consent of the Program Agent and each Investor Agent:
(i) increase the aggregate principal amount of loans or other extensions of credit
under the Second Lien Loan Documents (as defined in the Second Lien Intercreditor
Agreement) or commitments therefor so that the aggregate principal amount of such loans or
other extensions of credit and commitments is in excess of $225,000,000;
(ii) modify the method of computing interest or increase the interest rate (including
by any increase in the “applicable margin” or similar component of the interest rate) or yield
provisions applicable to the Second Lien Obligations (as defined in the Second Lien
Intercreditor Agreement) or any commitment fee, facility fee, utilization fee, or similar fee so
that the combined interest rate and fees are increased by more than 2% per annum in the
aggregate (excluding increases resulting from (A) increases in the underlying reference rate not
caused by any amendment, supplement or modification of the Second Lien Credit Agreement,
or (B) accrual of interest at the rate applicable following an “Event of Default” under the
Second Lien Credit Agreement as in effect on the date hereof);
(iii) change any representations, warranties, covenants, defaults, events of default or

other provisions (including the addition of defaults or events of default not contained in the
Second Lien Loan Documents (as defined in the Second Lien Intercreditor Agreement) as of
the date hereof) in any manner that makes them more restrictive as to the Borrower, except to
make conforming changes to match changes made to the First Lien Loan Documents (as
defined in the Second Lien Intercreditor Agreement), on substantially similar economic terms;
(iv) change to earlier dates any dates upon which payments of principal or interest
are due thereon or otherwise alter any provisions that decrease the weighted average life to
maturity;
(v) change the prepayment, redemption, or defeasance provisions thereof if the

effect of such change is to require any new
8
payment or accelerate the payment date of any existing payment obligation; or
(vi) change or amend any other term of the Second Lien Loan Documents (as
defined in the Second Lien Intercreditor Agreement) if such change or amendment would
result in a default under this Agreement, increase the obligations of the Borrower or confer
additional rights on any Second Lien Claimholder (as defined in the Second Lien Intercreditor
Agreement) in a manner adverse in any respect to any of the First Lien Claimholders (as
defined in the Second Lien Intercreditor Agreement).
(v) Notice of Amendments. In the event the Second Lien Loan Documents (as defined in
the Second Lien Intercreditor Agreement) are amended, supplemented or otherwise modified,
the Borrower shall provide a copy of each such amendment, supplement or modification to the
Program Agent at least five (5) Business Days prior to the effective date thereof.”
(w) Refinancing of Second Lien Obligations. The Borrower will not refinance the Debt
under the Second Lien Credit Agreement unless (i) the Program Agent and each Investor
Agent have consented thereto or the terms of such refinanced Debt, if contained in an
amendment to the Second Lien Credit Agreement, would not require the consent of the
Program Agent and the Investor Agents pursuant to Section 5.01(u) and (ii) the holders of
such refinanced Debt (or an agent for such holders) agree in writing, at or prior to the time of
such refinancing, to be bound by the terms of the Second Lien Intercreditor Agreement.
(x) Prepayment of the Second Lien Obligations. The Borrower will not make any optional
prepayment, in whole or in part, of the principal amount of the Debt outstanding under the
Second Lien Credit Agreement unless (i) the Program Agent and each Investor Agent have
consented thereto or (ii) such prepayment is a prepayment in full in connection with a
refinancing permitted by Section 5.01(w) and the principal amount of the refinanced Debt
outstanding immediately following the refinancing is equal to the principal amount of the Debt
prepaid.
1.20 Section 6.06(d) of the Agreement is amended by (i) deleting the words “, except as provided in the second to last
sentence of this Section 6.06(d)” at the end of the first paragraph thereof. and (ii) deleting in their entirety the second and third
sentences of the second paragraph thereof.
9
1.21 Section 7.01(d) of the Agreement is amended by deleting the reference to “5.01(p) or 5.01(q)” therein and inserting in
lieu thereof a reference to “5.01(p), 5.01(q), 5.01(u), 5.01(w) or 5.01(x)”.
1.22 Section 7.01(k) of the Agreement is amended in its entirety to read as follows:
(k) (i) An “Event of Termination” or “Facility Termination Date” shall occur under any
Purchase Agreement or any Purchase Agreement shall cease to be in full force or effect, or
(ii) an “Event of Default” shall occur under the Second Lien Credit Agreement, or (iii) the
Second Lien Agent shall deliver to the Program Agent a notice of the type described in
Section 3.1(a)(1) of the Second Lien Intercreditor Agreement (which triggers the start of the
“Standstill Period” thereunder).”
1.23 Section 7.01(q) of the Agreement is amended in its entirety to read as follows:
“(q) Any Governmental Entity Receivables Account Notice or “Governmental Entity

Receivables Account Notice” (as defined in the Second Lien Credit Agreement) shall be
revoked or revised.”
1.24 The proviso in the final paragraph of Section 7.01 of the Agreement is amended by (i) deleting the reference to
“paragraph (g) of this Section 7.01” and replacing it with a reference to “paragraph (g) of this Section 7.01 or clause (iii) of
paragraph (k) of this Section 7.01”, and (ii) after the words “the Commitment Termination Date shall occur”, inserting the
words “and, in the case of an event described in paragraph (g),”.
1.25 Section 11.05 of the Agreement is amended by inserting a new clause (c) in the appropriate location as follows:
“(c) The Collection Agent and each Originator hereby agrees that it will not institute against,
or join any other Person in instituting against, the Borrower any proceeding of the type
referred to in Section 7.01(g) so long as there shall not have elapsed one year plus one day
since the later of the Facility Termination Date and the date on which all Obligations shall have
been paid in full.”
1.26 A new Section 11.14 of the Agreement is inserted in the appropriate location as follows:
Section 11.14 Second Lien Intercreditor Agreement. Notwithstanding anything herein to

the contrary, the exercise of certain rights and remedies by the Program Agent hereunder is
subject to the provisions of the Second Lien Intercreditor Agreement. In the event of any
conflict between the terms of the Second Lien Intercreditor Agreement and this Agreement,
the terms of the Second Lien Intercreditor Agreement shall govern and control.
10
1.27 Schedule I (Deposit Banks and Account Banks) to the Agreement is amended by deleting the contents thereof and
inserting in lieu thereof the following:
Mellon Bank, N.A.

500 Ross Street, Room 154-1380
Pittsburgh, PA 15262-0001
Attn: Document Control Group Manager
Account Number: 0693636

Account Number: 103-7294
1.28 Schedule II (Credit and Collection Policy), and Schedule V (Material Litigation) to the Agreement are each amended
in their entirety to read as set forth in Schedule II and Schedule V, respectively, to this Amendment Agreement.
SECTION 2. Conditions to Effectiveness This Amendment Agreement shall become effective when the
following documents have been delivered to the Program Agent, each in form and substance satisfactory to the Program Agent
and the Investor Agents (the “Effective Date”):
(a) fully executed counterparts of this Amendment Agreement;
(b) fully executed counterparts of the Second Lien Intercreditor Agreement;
(c) fully executed copies of an amendment and/or restatement of the Intercreditor Agreement;
(d) fully executed counterparts of an omnibus amendment to each of the Parent Undertakings;
(e) fully executed counterparts of amendments to each of the Deposit Account Agreement and the
Governmental Entity Receivables Agreement;
(f) fully executed counterparts of an omnibus amendment to each of the Purchase Agreements;
(g) copies of executed copies of the Second Lien Credit Agreement and all related documents; and
(h) favorable opinions of Skadden, Arps, Slate, Meagher & Flom LLP, as counsel for the Borrower, the
Predecessor Purchasers, the Parent and the other Originators, as to such matters as the Program Agent or any
Investor Agent may reasonably request.
SECTION 3. Representations and Warranties. Each of the Borrower and the Collection Agent represents
and warrants that each of the representations and warranties contained in Section 4.01 and Section 4.02, respectively, of the
Agreement (after giving effect to this Amendment Agreement) are correct in all material respects on and as of the date of this
Amendment Agreement as though made on and as of such date.
11
SECTION 4. Confirmation of Agreement. Each reference in the Agreement to “this Agreement” or “the
Agreement” shall mean the Agreement as amended by this Amendment Agreement, and as hereafter amended or
restated. Except as herein expressly amended, the Agreement is ratified and confirmed in all respects and shall remain in full
force and effect in accordance with its terms.
SECTION 5. Confirmation of Parent Undertakings. The Parent, by its signature below, hereby confirms
and agrees that notwithstanding the effectiveness of this Amendment Agreement, after giving effect to the amendments thereto
on the date of the Amendment Agreement (a) the Parent Undertakings shall continue to be in full force and effect and shall
apply to the Agreement as amended as contemplated by this Amendment Agreement, and (b) the Parent Undertakings are
hereby ratified and confirmed.
SECTION 6. Consent to Amendments of Purchase Agreements. Pursuant to the provisions of

Section 5.01(m) of each of the Agreement, the Tertiary Purchase Agreement and the Secondary Purchase Agreement , each
of the Program Agent and each Investor Agent hereby consents to the amendments to the Purchase Agreements referred to in
clause (f) of Section 2.
SECTION 7. Authorization of Second Lien Intercreditor Agreement. Each Investor, each Bank and each
Investor Agent authorizes the Program Agent to enter into the Second Lien Intercreditor Agreement as agent on its behalf.
SECTION 8. Costs and Expenses. The Borrower agrees to pay on demand all reasonable costs and
expenses in connection with the preparation, execution and delivery of this Amendment Agreement and any other documents
to be delivered hereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Program Agent, the Investor Agents, the Investors, the Banks and the Trustee with respect thereto.
SECTION 9. GOVERNING LAW. THIS AMENDMENT AGREEMENT SHALL, IN

ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD
CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
SECTION 10. Execution in Counterparts. This Amendment Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Amendment Agreement by facsimile or by electronic transmission in portable document
format (.pdf) shall be effective as delivery of a manually executed counterpart of this Amendment Agreement.
[Remainder of this page intentionally left blank]
12
IN WITNESS WHEREOF, the parties have caused this Amendment Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first above written.
RITE AID FUNDING II

CAFCO, LLC
By: Citicorp North America,

Inc., as Attorney-in-Fact

Name: Tom Sullivan
Title: Director, VP
CRC FUNDING, LLC
By: Citicorp North America,

Inc., as Attorney-in-Fact

Name: Tom Sullivan
Title: Director, VP
FALCON ASSET SECURITIZATION

COMPANY LLC
By: JPMorgan Chase Bank, N.A., its

attorney-in-fact
By: /s/ John M. Kuhns

Name: John M. Kuhns
Title: Exec Director
VARIABLE FUNDING CAPITAL

COMPANY LLC
By: Wachovia Capital Markets, LLC, as Attorney-in-

Fact
By: /s/ Douglas R. Wilson, Sr.

Name: Douglas R. Wilson, Sr.
Title: Director

as Program Agent and as an Investor Agent

Name: Tom Sullivan
Title: Director, VP
CITIBANK, N.A.

Name: Tom Sullivan
Title: Director, VP
JPMORGAN CHASE BANK, N.A.

as a Bank and as an Investor Agent
By: /s/ John M. Kuhns

Name: John M. Kuhns
Title: Exec Director
WACHOVIA BANK, NATIONAL ASSOCIATION

as a Bank and as an Investor Agent
By: /s/ Michael J. Landry

Name: Michael J. Landry
RITE AID HDQTRS. FUNDING INC.

THE BANK OF NEW YORK MELLON

as Trustee
By: /s/ Jared Fischer

Name: Jared Fischer
Title: Assistant Treasurer
RITE AID CORPORATION

RITE AID OF CONNECTICUT, INC.
RITE AID OF DELAWARE, INC.
RITE AID OF GEORGIA, INC.
RITE AID OF INDIANA, INC.
RITE AID OF KENTUCKY, INC.
RITE AID OF MAINE, INC.
RITE AID OF MARYLAND, INC.
RITE AID OF MICHIGAN, INC.
RITE AID OF NEW HAMPSHIRE, INC.
RITE AID OF NEW JERSEY, INC.
RITE AID OF NEW YORK, INC.
RITE AID OF OHIO, INC.
RITE AID OF PENNSYLVANIA, INC.
RITE AID OF TENNESSEE, INC.
RITE AID OF VERMONT, INC.
RITE AID OF VIRGINIA, INC.
RITE AID OF WASHINGTON, D.C., INC.
RITE AID OF WEST VIRGINIA, INC.
KEYSTONE CENTERS, INC.
THE LANE DRUG COMPANY
RITE AID DRUG PALACE, INC.
THRIFTY PAYLESS, INC.
HARCO, INC.
PERRY DRUG STORES, INC.
APEX DRUG STORES, INC.
PDS-1 MICHIGAN, INC.
RDS DETROIT, INC.
K & B ALABAMA CORPORATION
K & B LOUISIANA CORPORATION
K & B MISSISSIPPI CORPORATION
K & B TENNESSEE CORPORATION
ECKERD CORPORATION
GENOVESE DRUG STORES, INC.
EDC DRUG STORES, INC.
MAXI DRUG, INC.
MAXI DRUG SOUTH, L.P.
MAXI DRUG NORTH, INC.
MAXI GREEN, INC.
THRIFT DRUG, INC.
By: /s/ Robert B. Sari

Name: Robert B. Sari
Title: Exec. VP and Gen. Counsel of
Rite Aid
Corporation
VP as to all other originators
Exhibit 99.1
Press Release
For Further Information Contact:
INVESTORS: MEDIA:
Frank Vitrano Karen Rugen
(717) 972-3948 (717) 730-7766
or investor@riteaid.com
RITE AID COMPLETES $225 MILLION

SECOND LIEN SECURITIZATION FACILITY
Camp Hill, PA (February 19, 2009) — Rite Aid Corporation (NYSE: RAD) announced today that it has completed its
previously announced second priority accounts receivable securitization term loan (the “Second Lien” facility) for $225 million,
which is $25 million more than previously announced. The second priority accounts receivable securitization loan will be used
to replace the previously announced $200 million step down of availability on the company’s existing accounts receivable
securitization facility (the “First Lien” facility), which was renewed on January 22, 2009 and extended through January 21,
2010.
Amounts outstanding under the Second Lien facility are secured by second priority liens on the eligible third party
pharmaceutical receivables securing Rite Aid's existing accounts receivable securitization facility. The Second Lien facility
contains terms substantially similar to those governing Rite Aid's existing accounts receivable securitization facility, other than it
has a second priority lien on the pharmaceutical receivables and that it allows only a one-time draw at the time of closing and
not drawings on a revolving basis. The Second Lien facility was sold at a discount of 3%, bears interest at a rate of LIBOR
plus 12%, with a LIBOR floor of 3%, and will mature on September 14, 2010.
Rite Aid will have access to $345 million of availability under the First Lien facility, which is what the company anticipates its
borrowing level to be under that facility. Should the First Lien facility not be renewed following its maturity on January 21,
2010 the company has access to a backstop facility to provide receivable financing to the company until September
2010. The backstop facility is backed by the banks in the existing facility.
Citigroup Global Markets Inc. acted as sole lead arranger and sole bookrunner for the loan.
Rite Aid Corporation is one of the nation’s leading drugstore chains with more than 4,900 stores in 31 states and the District
of Columbia with fiscal 2008 annual sales of more than $24.3 billion. Information about Rite Aid, including corporate
background and press releases, is available through the company’s website at http://www.riteaid.com.
###

RITE AID CORP 8-K (Events or Changes Between Quarterly Reports) 2009-02-20

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RITE AID CORP 8-K (Events or Changes Between Quarterly Reports) 2009-02-20

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Rite Aid Corporation

Delaware 1-5742 23-1614034

30 Hunter Lane, Camp Hill, Pennsylvania 17011

Item 1.01. Entry into a Material Definitive Agreement.

See description under Item 1.01.

Item 8.01. Other Events

Item 9.01. Financial Statements and Exhibits

Date: February 20, 2009 By: /s/ Robert B. Sari

Exhibit No. Description

Dated as of February 18, 2009

RITE AID FUNDING II

the Lenders party hereto

CITICORP NORTH AMERICA, INC.

RITE AID HDQTRS. FUNDING, INC.

Each of the Parties named on Schedule III

CITIGROUP GLOBAL MARKETS INC.

ARTICLE II AMOUNTS AND TERMS OF THE LOANS 21

ARTICLE III CONDITIONS PRECEDENT 37

ARTICLE VI ADMINISTRATION AND COLLECTION OF RECEIVABLES AND PARTICIPATED 56

SECTION 6.09. Establishment of Deposit Accounts 63

ARTICLE VII EVENTS OF DEFAULT 65

ARTICLE VIII THE ADMINISTRATIVE AGENT 69

ARTICLE IX [INTENTIONALLY OMITTED] 73

SCHEDULE I - Deposit Banks and Account Banks

ANNEX A - Form of Daily Report

Dated as of February 18, 2009

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

(a) 85% of the book value of Eligible Receivables; plus

(b) 85% of the book value of Eligible Participated Receivables; minus

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

“Collateral” has the meaning specified in Section 2.17.

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

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

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

(z) such Receivable is not a Medicare Receivable;

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

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

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

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

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

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

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

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

“Maturity Date” means September 14, 2010.

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

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

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

“Obligations” has the meaning specified in Section 2.17.

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

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

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

“Predecessor Purchasers” means Cayman SPE I and HQ.

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

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

“SEC” means the Securities and Exchange Commission.

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

AMOUNTS AND TERMS OF THE LOANS

SECTION 2.02. Loans and Borrowings.

(i) the aggregate amount of such Borrowing;

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

SECTION 2.11. Increased Costs. (a) If any Change in Law shall:

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

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

Dated ______ , 200_

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

$______ _, 2009