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): June 16, 2009 (June 12, 2009)

Rite Aid Corporation
(Exact name of registrant as specified in its charter)

Delaware
1-5742
23-1614034
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
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))


 
 
 


 
Item 1.01  Entry into a Material Definitive Agreement.
 
On June 12, 2009, Rite Aid Corporation ("Rite Aid") completed its previously announced offering (the "Offering") of $410 million aggregate principal amount of its 9.750% senior secured notes due June 2016 (the "Notes") to qualified institutional buyers pursuant to Rule 144A, and outside of the United States pursuant to Regulation S, under the Securities Act of 1933, as amended (the "Securities Act").  The Notes are unsecured, unsubordinated obligations of Rite Aid and are guaranteed by the same subsidiaries (the "Subsidiary Guarantors") that guarantee Rite Aid's obligations under its senior secured credit facility and Rite Aid's outstanding 10.375% senior secured notes due 2016, 7.5% senior secured notes due 2017, 8.625% senior notes due 2015, 9.375% senior notes due 2015 and 9.5% senior notes due 2017 and that will guarantee Rite Aid's obligations under its anticipated $1.0 billion senior secured revolving credit facility due September 2012 (the "New Revolver").  The guarantees of the Notes are secured on a senior lien basis, pari passu with the secured guarantees of Rite Aid's senior secured credit facility.  Rite Aid used the net proceeds of the Offering to repay a portion of the amounts outstanding under Rite Aid's existing revolving credit facility, with a corresponding reduction in commitment.

Registration Rights Agreement

On June 12, 2009 (the "Closing Date"), the Company entered into a registration rights agreement relating to the Notes, among the Company, the Subsidiary Guarantors and Citigroup Global Markets Inc., Banc of America Securities LLC and Wachovia Capital Markets, LLC, as the initial purchasers (the "Initial Purchasers") of the Notes (the "Registration Rights Agreement").  The Registration Rights Agreement requires Rite Aid and the Subsidiary Guarantors, at their cost, to among other things: (i) file a registration statement with respect to the Notes within 150 days after the Closing Date to be used in connection with the exchange of the Notes and related guarantees for publicly registered notes and related guarantees with substantially identical terms in all material respects (except for the transfer restrictions relating to the Notes); (ii) use their commercially reasonable efforts to cause the applicable registration statement to become effective under the Securities Act within 210 days after the Closing Date; and (iii) use their commercially reasonable efforts to effect an exchange offer of the Notes and the related guarantees for registered notes and related guarantees within 270 days after the Closing Date.  In addition, under certain circumstances, Rite Aid and the Subsidiary Guarantors may be required to file a shelf registration statement to cover resales of the Notes.

If: (i) Rite Aid and the Subsidiary Guarantors fail to file any of the registration statements required by the Registration Rights Agreement on or before the date specified for such filing; (ii) any of such registration statements are not declared effective by the SEC on or prior to the date specified for such effectiveness; (iii) Rite Aid and the Subsidiary Guarantors fail to consummate the exchange offer within 270 days after the Closing Date; (iv) a shelf registration statement, if required, has not been filed on or prior to the 30th day after Rite Aid's obligation to file a shelf registration statement arises; (v) any required registration statement is filed and declared effective but thereafter ceases to be effective during the applicable period (subject to certain exceptions) (each such event referred to in clauses (i) through (v) above, a "Registration Default"), then Rite Aid will be obligated to pay additional interest to each holder of the Notes that are subject to transfer restrictions, with respect to the first 90-day period immediately

 
2
 

following the occurrence of a Registration Default, at a rate of 0.25% per annum on the principal amount of the Notes that are subject to transfer restrictions held by such holder. The amount of additional interest will increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of additional interest for all Registration Defaults of 0.50% per annum on the principal amount of the Notes that are subject to transfer restrictions.  Following the cure of the Registration Default, the accrual of additional interest will cease.  A Registration Default referred to in (v) above will be deemed not to have occurred and be continuing in relation to a shelf registration statement or the related prospectus if such Registration Default has occurred solely as a result of the filing of a post-effective amendment to such shelf registration statement and for such time as is reasonably necessary to incorporate Rite Aid's annual audited financial information, quarterly financial information or other required information where such post-effective amendment is not yet effective and needs to be declared effective to permit holders of the Notes to use the related prospectus and Rite Aid is using its commercially reasonable efforts to have such post-effective amendment declared effective.  A copy of the Registration Rights Agreement is filed hereto as Exhibit 10.1 and is incorporated herein by reference.

Senior Lien Intercreditor Agreement

In connection with the Offering, Rite Aid entered into a senior lien intercreditor agreement (the "Senior Intercreditor Agreement"), dated as of the Closing Date, among Rite Aid, the Subsidiary Guarantors, the senior collateral agent for holders of Rite Aid's senior lien indebtedness (the "Senior Collateral Agent"), the senior collateral agent under Rite Aid's senior secured credit facility, as authorized representative under the senior secured credit facility, and The Bank of New York Mellon Trust Company, N.A., as the authorized representative for the Notes.  Under the Senior Intercreditor Agreement, the authorized representative of the lenders under Rite Aid's senior secured credit facility has the right to instruct the Senior Collateral Agent to take actions with respect to the shared collateral until the termination of Rite Aid's senior loan obligations under its senior secured credit facility, even though all holders of senior obligations are pari passu and will share equally and ratably in any proceeds of the shared collateral.  After the termination of Rite Aid's senior secured credit facility, the authorized representative of whichever series of senior obligations constitutes the largest outstanding principal amount of any then outstanding series of senior obligations with respect to the shared collateral will have the right to instruct the Senior Collateral Agent to take actions with respect to the shared collateral.  Nothing contained in the Senior Intercreditor Agreement will affect the equal nature of the senior lien or the priority of Rite Aid's second priority indebtedness as set forth in its existing collateral trust and intercreditor agreement or any other rights of or obligations owed to a second priority debt party (in its capacity as such) contained in such existing collateral trust and intercreditor agreement or otherwise.  A copy of the Senior Lien Intercreditor Agreement is filed hereto as Exhibit 10.2 and is incorporated herein by reference.

The Initial Purchasers and their affiliates have performed investment banking, commercial banking and advisory services for Rite Aid from time to time for which they have received customary fees and expenses. Citigroup Global Markets Inc. acted and is acting as joint lead arranger and joint book-runner, and an affiliate of Citigroup Global Markets Inc. is the administrative agent and collateral agent, under Rite Aid's senior secured credit facility,

 
3
 

Tranche 4 Term Loan and the anticipated New Revolver.  Banc of America Securities LLC acted and is acting as joint lead arranger, and joint book-runner and an affiliate of Banc of America Securities LLC is the syndication agent, under Rite Aid's senior secured credit facility, Tranche 4 Term Loan and the anticipated New Revolver.  Wachovia Capital Markets, LLC is acting as joint lead arranger and joint book-runner and an affiliate of Wachovia Capital Markets, LLC is acting as co-documentation agent under Rite Aid's Tranche 4 Term Loan and the anticipated New Revolver. Affiliates of the Initial Purchasers are lenders under Rite Aid's senior secured credit facility, Tranche 4 Term Loan and the anticipated New Revolver. In connection with these roles, the Initial Purchasers and their respective affiliates each received, and will receive, customary fees.  Affiliates of one or more of the Initial Purchasers are lenders under Rite Aid's existing revolving credit facility being repaid in connection with the Offering and the anticipated New Revolver.
 
See the disclosure in Item 2.03 below for disclosure regarding the Indenture (as defined below).  Such disclosure is incorporated by reference into this Item 1.01.
 
Item 2.03  Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant
 
The information regarding the Notes set forth in Item 1.01 above is incorporated herein by reference.
 
The Notes were issued pursuant to an indenture, dated as of June 12, 2009, among the Company, The Bank of New York Mellon Trust Company, N.A., as trustee, and the Subsidiary Guarantors (the "Indenture").  At any time and from time to time, prior to June 12, 2012, Rite Aid may redeem up to a maximum of 35% of the original aggregate principal amount of the Notes with the proceeds of one or more equity offerings, at a redemption price equal to 109.750% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to, but not including, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided that: (i) at least 65% of the original aggregate principal amount of the Notes remains outstanding; and (ii) the redemption occurs within 75 days of the completion of such equity offering upon not less than 30 nor more than 60 prior days notice.  Prior to June 12, 2013, Rite Aid may redeem some or all of the Notes by paying a "make-whole" premium based on U.S. Treasury Rates.  On or after June 12, 2013, and on or after June 12 of the relevant year listed below, Rite Aid may redeem some or all of the Notes at the prices listed below, plus accrued and unpaid interest, if any, to, but not including, the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date): 2013 at a redemption price of 104.875%; 2014 at a redemption price of 102.438% and thereafter at a redemption price of 100%.
 
Each of the following constitutes an event of default under the Indenture: (1) failure to make the payment of any interest on the Notes when the same becomes due and payable, and such failure continues for a period of 30 days; (2) failure to make the payment of any principal of, or premium, if any, on, the Notes when the same becomes due and payable at its stated
 

 
4
 

 
maturity, upon acceleration, redemption, optional redemption, required repurchase or otherwise; (3) failure to comply with the covenant described under "—Merger, Consolidation and Sale of Property" in the Indenture; (4) failure to comply with any other covenant or agreement in the Notes or in the Indenture (other than a failure that is the subject of the foregoing clause (1), (2) or (3)) and such failure continues for 30 days after written notice is given to Rite Aid; (5) a default under any debt of Rite Aid or any restricted subsidiary that results in acceleration of the final maturity of such debt, or failure to pay any such debt at final maturity (giving effect to applicable grace periods), in an aggregate amount greater than $35.0 million or its foreign currency equivalent at the time; (6) any judgment or judgments for the payment of money in an aggregate amount in excess of $35.0 million (or its foreign currency equivalent at the time) that shall be rendered against Rite Aid or any restricted subsidiary and that shall not be waived, satisfied or discharged for any period of 30 consecutive days during which a stay of enforcement shall not be in effect;  (7) certain events involving bankruptcy, insolvency or reorganization of  Rite Aid or any significant subsidiary; (8) any subsidiary guarantee of a significant subsidiary ceases to be in full force and effect (subject to certain exceptions) and such default continues for 20 days after notice to Rite Aid, or any subsidiary guarantor that is a significant subsidiary denies or disaffirms its obligations under the Notes and (9) the material impairment of the security interests under certain of Rite Aid's agreements governing its senior lien indebtedness for any reason other than the satisfaction in full of all obligations under the Indenture and discharge of such agreements and the Indenture or any security interest created thereunder shall be declared invalid or unenforceable or Rite Aid or any of its subsidiaries asserting, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable.  A default under clauses (4), (8) or (9) is not an event of default until the trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding notify Rite Aid of the default and Rite Aid does not cure such default within the time specified after receipt of such notice. Such notice must specify the default, demand that it be remedied and state that such notice is a "Notice of Default."
 
Rite Aid is not required to make mandatory sinking fund payments with respect to the Notes.
 
Upon a change of control, as defined in the Indenture, Rite Aid is required to offer to purchase all of the Notes then outstanding at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the purchase date (subject to the rights of holders of record on the relevant record date to receive interest due on the relevant interest payment date).
 
The covenants in the Indenture limit the ability of Rite Aid and certain of its subsidiaries to, among other things: (1) incur additional debt; (2) pay dividends or make other restricted payments; (3) purchase, redeem or retire capital stock or subordinated debt; (4) make asset sales; (5) enter into transactions with affiliates; (6) incur liens; (7) enter into sale leaseback transactions; (8) provide subsidiary guarantees; (9) make investments; and (10) merge or consolidate with any other person.  A copy of the Indenture is filed hereto as Exhibit 4.1 and is incorporated by reference herein.
 
 
Item 9.01.  Financial Statements and Exhibits.
 

 
5
 

 
(c) Exhibits.
 

Number
 
Description
 4.1
 
Indenture, dated as of June 12, 2009, among Rite Aid Corporation, as issuer, the Subsidiary Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee.
 4.2
 
Form of 9.750% Notes due 2016 (included in Exhibit 4.1).
10.1
 
Registration Rights Agreement relating to the Notes, dated June 12, 2009, among Rite Aid Corporation, the Subsidiary Guarantors and Citigroup Global Markets Inc., Banc of America Securities LLC, and Wachovia Capital Markets, LLC as the Initial Purchasers of the Notes.
10.2
 
Senior Lien Intercreditor Agreement dated as of June 12, 2009, among Rite Aid Corporation, the Subsidiary Guarantors named therein, Citicorp North America, Inc., as senior collateral agent for the Senior Secured Parties (as defined therein), Citicorp North America, Inc., as senior representative for the Senior Loan Secured Parties ( as defined therein), The Bank of New York Mellon Trust Company, N.A., as Senior Representative (as defined therein) for the Initial Additional Senior Debt Parties (as defined therein), and each additional Senior Representative from time to time party thereto.

 
6
 

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:  June 16, 2009
By:
/s/ Marc A. Strassler
 
Name:
Marc A. Strassler
 
Title:
Executive Vice President,
   
General Counsel and Secretary


 
7
 

 
Exhibit Index
 
  Number
 
Description
 4.1
 
Indenture, dated as of June 12, 2009, among Rite Aid Corporation, as issuer, the Subsidiary Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee.
 4.2
 
Form of 9.750% Notes due 2016 (included in Exhibit 4.1).
10.1
 
Registration Rights Agreement relating to the Notes, dated June 12, 2009, among Rite Aid Corporation, the Subsidiary Guarantors and Citigroup Global Markets Inc., Banc of America Securities LLC, and Wachovia Capital Markets, LLC as the Initial Purchasers of the Notes.
10.2
 
Senior Lien Intercreditor Agreement dated as of June 12, 2009, among Rite Aid Corporation, the Subsidiary Guarantors named therein, Citicorp North America, Inc., as senior collateral agent for the Senior Secured Parties (as defined therein), Citicorp North America, Inc., as senior representative for the Senior Loan Secured Parties ( as defined therein), The Bank of New York Mellon Trust Company, N.A., as Senior Representative (as defined therein) for the Initial Additional Senior Debt Parties (as defined therein), and each additional Senior Representative from time to time party thereto.

 
 
 
 
 
8  


Exhibit 4.1
 
RITE AID CORPORATION
 
9.750% Senior Secured Notes due 2016
 
 
INDENTURE
 
Dated as of June 12, 2009
 
 
The Bank of New York Mellon Trust Company, N.A.,
 
as Trustee
 
 
 
 
 
TABLE OF CONTENTS
 
ARTICLE I

Definitions and Incorporation by Reference
 
SECTION 1.01.
Definitions.
  1
SECTION 1.02.
Other Definitions.
38
SECTION 1.03.
Incorporation by Reference of Trust Indenture Act
39
SECTION 1.04.
Rules of Construction
40
 
ARTICLE II

The Securities
 
SECTION 2.01.
Amount of Securities; Issuable in Series
41
SECTION 2.02.
Form and Dating
42
SECTION 2.03.
Execution and Authentication
42
SECTION 2.04.
Registrar and Paying Agent
43
SECTION 2.05.
Paying Agent To Hold Money in Trust
43
SECTION 2.06.
Holder Lists
43
SECTION 2.07.
Replacement Securities
43
SECTION 2.08.
Outstanding Securities
44
SECTION 2.09.
Temporary Securities
44
SECTION 2.10.
Cancellation
44
SECTION 2.11.
Defaulted Interest
45
SECTION 2.12.
CUSIP Numbers
45
 
ARTICLE III

Redemption
 
SECTION 3.01.
Notices to Trustee
45
SECTION 3.02.
Selection of Securities To Be Redeemed
45
SECTION 3.03.
Notice of Redemption
46
SECTION 3.04.
Effect of Notice of Redemption
46
SECTION 3.05.
Deposit of Redemption Price
46
SECTION 3.06.
Securities Redeemed in Part
47
 
ARTICLE IV

Covenants
 
SECTION 4.01.
Payment of Securities
47
SECTION 4.02.
SEC Reports
47
SECTION 4.03.
Limitation on Debt
48
SECTION 4.04.
Limitation on Restricted Payments
51
 
i
 
 
 
SECTION 4.05.
Limitation on Liens
54
SECTION 4.06.
Limitation on Asset Sales and Specified Collateral Dispositions
55
SECTION 4.07.
Limitation on Restrictions on Distributions from Restricted Subsidiaries
58
SECTION 4.08.
Limitation on Transactions with Affiliates
60
SECTION 4.09.
Guarantees by Subsidiaries
62
SECTION 4.10.
Limitation on Sale and Leaseback Transactions
63
SECTION 4.11.
Designation of Restricted and Unrestricted Subsidiaries
63
SECTION 4.12.
Additional Security Documents
64
SECTION 4.13.
Change of Control
65
SECTION 4.14.
Further Instruments and Acts
66
SECTION 4.15.
Covenant Suspension
66

ARTICLE V

Successor Company
 
SECTION 5.01.
When Company May Merge or Transfer Assets
67

ARTICLE VI

Defaults and Remedies

SECTION 6.01.
Events of Default
70
SECTION 6.02.
Acceleration
72
SECTION 6.03.
Other Remedies
72
SECTION 6.04.
Waiver of Past Defaults
72
SECTION 6.05.
Control by Majority
72
SECTION 6.06.
Limitation on Suits
73
SECTION 6.07.
Rights of Holders to Receive Payment
73
SECTION 6.08.
Collection Suit by Trustee
73
SECTION 6.09.
Trustee May File Proofs of Claim
73
SECTION 6.10.
Priorities
74
SECTION 6.11.
Undertaking for Costs
74
SECTION 6.12.
Waiver of Stay or Extension Laws
74
SECTION 6.13.
Enforcement of Remedies
75

ARTICLE VII

Trustee
 
SECTION 7.01.
Duties of Trustee
75
SECTION 7.02.
Rights of Trustee
76
SECTION 7.03.
Individual Rights of Trustee
77
SECTION 7.04.
Trustee’s Disclaimer
77
SECTION 7.05.
Notice of Defaults
77
SECTION 7.06.
Reports by Trustee to Holders
78
 
ii
 
 
SECTION 7.07.
Compensation and Indemnity
78
SECTION 7.08.
Replacement of Trustee
79
SECTION 7.09.
Successor Trustee by Merger
80
SECTION 7.10.
Eligibility; Disqualification
80
SECTION 7.11.
Preferential Collection of Claims Against Company
80

ARTICLE VIII

Discharge of Indenture; Defeasance
 
SECTION 8.01.
Discharge of Liability on Securities; Defeasance
80
SECTION 8.02.
Conditions to Defeasance
81
SECTION 8.03.
Application of Trust Money
83
SECTION 8.04.
Repayment to Company
83
SECTION 8.05.
Indemnity for Government Obligations
83
SECTION 8.06.
Reinstatement
83

ARTICLE IX

Amendments
 
SECTION 9.01.
Without Consent of Holders
83
SECTION 9.02.
With Consent of Holders
84
SECTION 9.03.
Compliance with Trust Indenture Act
86
SECTION 9.04.
Revocation and Effect of Consents and Waivers
86
SECTION 9.05.
Notation on or Exchange of Securities
87
SECTION 9.06.
Trustee To Sign Amendments
87
SECTION 9.07.
Payment for Consent
87

ARTICLE X

Collateral

SECTION 10.01.
Authorization of Actions to Be Taken
88

ARTICLE XI

Miscellaneous

SECTION 11.01.
Trust Indenture Act Controls
89
SECTION 11.02.
Notices
89
SECTION 11.03.
Communication by Holders with Other Holders
89
SECTION 11.04.
Certificate and Opinion as to Conditions Precedent
90
SECTION 11.05.
Statements Required in Certificate or Opinion
90
SECTION 11.06.
When Securities Disregarded
90
SECTION 11.07.
Rules by Trustee, Paying Agent and Registrar
91
SECTION 11.08.
Legal Holidays
91
SECTION 11.09.
Governing Law
91
 
 
iii

 
SECTION 11.10.
No Recourse Against Others
91
SECTION 11.11.
Successors
91
SECTION 11.12.
Multiple Originals
91
SECTION 11.13.
Table of Contents; Headings
91
SECTION 11.14.
Waiver of Jury Trial
91
SECTION 11.15.
Force Majeure
92

Schedule A – Subsidiary Guarantors
 
Appendix A - Provisions Relating to Initial Securities and Exchange Securities
 
Exhibit 1 to Appendix A - Form of Initial Security
 
Exhibit A - Form of Exchange Security
 
Exhibit B - Form of Transferee Letter of Representation
 
 
 
 
iv
 
 

CROSS-REFERENCE TABLE
 


TIA
Section
 
Indenture
Section
310
(a)(1)
7.10
 
(a)(2)
7.10
 
(a)(3)
N.A.
 
(a)(4)
N.A.
 
(b)
7.08;
   
7.10
 
(c)
N.A.
311
(a)
7.11
 
(b)
7.11
 
(c)
N.A.
312
(a)
2.06
 
(b)
11.03
 
(c)
11.03
313
(a)
7.06
 
(b)(1)
7.06;
   
11.02
 
(b)(2)
7.06
 
(c)
7.06;
   
11.02
 
(d)
7.06
314
(a)
4.02;
   
4.09;
   
7.06;
   
11.02
 
(b)
4.09;
   
7.02;
   
11.02
 
(c)(1)
7.02
 
(c)(2)
7.02
 
(c)(3)
N.A.
 
(d)
1.03;
   
7.02
 
(e)
11.05
 
(f)
4.14
315
(a)
7.01
 
(b)
7.05;
   
11.02
 
(c)
7.01
 
(d)
7.01
 
(e)
6.11
316
(a)
 
 
(last sentence)
11.06
 
 
v
 
 
TIA
Section
 
Indenture
Section
(a)(1)(A)
6.05
 
(a)(1)(B)
6.04
 
(a)(2)
N.A.
 
(b)
6.07
317
(a)(1)
6.08
 
(a)(2)
6.09
 
(b)
2.05
318
(a)
11.01

 
N.A. Means Not Applicable.
 
Note:  This Cross-Reference Table shall not, for any purposes, be deemed to be part of this Indenture.
 
 
vi

INDENTURE dated as of June 12, 2009, among RITE AID CORPORATION, a Delaware corporation (the “ Company ”), each of the SUBSIDIARY GUARANTORS named in Schedule A hereto and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association, as Trustee (the “ Trustee ”).
 
Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Company’s 9.750% Senior Secured Notes due 2016, to be issued from time to time, in one or more series as provided in this Indenture (the “ Initial Securities ”) and, if and when issued pursuant to a registered or private exchange for the Initial Securities, the Company’s 9.750% Senior Secured Notes due 2016 (the “ Exchange Securities ” and, together with the Initial Securities, the “ Securities ”):
 
ARTICLE I
 
Definitions and Incorporation by Reference
 
SECTION 1.01.   Definitions.
 
“ Additional Assets ” means:
 
(a) any Property (other than cash, cash equivalents and securities) to be owned by the Company or any Restricted Subsidiary and used in a Related Business; or
 
(b) Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary from any Person other than the Company or an Affiliate of the Company; provided , however , that, in the case of this clause (b), such Restricted Subsidiary is primarily engaged in a Related Business.
 
“ Additional Senior Debt ” means any Debt of the Company (other than Debt constituting Senior Loan Obligations) Guaranteed by the Subsidiary Guarantors pursuant to the Senior Subsidiary Guarantee Agreement (and not guaranteed by any other Subsidiary) with such Guarantees secured by the Senior Collateral on a pari passu basis with the Senior Loan Obligations (but without regard to control of remedies); provided , however , that such Debt is permitted to be incurred, secured and guaranteed on such basis by this Indenture and the Senior Debt Documents.
 
“ Additional Senior Debt Documents ” means, with respect to any series, issue or class of Additional Senior Debt, the promissory notes, indentures, Collateral Documents or other operative agreements evidencing or governing such Debt, including the Senior Collateral Documents, as the same may be amended, restated, supplemented or otherwise modified from time to time.
 
 
 
“ Additional Senior Debt Facility ” means each indenture or other governing agreement with respect to any Additional Senior Debt, as the same may be amended, restated, supplemented or otherwise modified from time to time.
 
“ Additional Senior Debt Obligations ” means, with respect to any series, issue or class of Additional Senior Debt, (a) all principal of and interest (including, without limitation, any interest which accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of the Company, whether or not allowed or allowable as a claim in any such proceeding) payable with respect to such Additional Senior Debt, (b) all other amounts payable to the related Additional Senior Debt Parties under the related Additional Senior Debt Documents and (c) any renewals, extensions or Refinancings of the foregoing.
 
“ Additional Senior Debt Parties ” means, with respect to any series, issue or class of Additional Senior Debt, the holders of such indebtedness from time to time, any trustee or agent therefor under any related Additional Senior Debt Documents and the beneficiaries of each indemnification obligation undertaken by the Company or any Obligor under any related Additional Senior Debt Documents, but shall not include the Obligors or any controlled Affiliates thereof (unless such Obligor or controlled Affiliate is a holder of such Debt, a trustee or agent therefor or a beneficiary of such an indemnification obligation named as such in an Additional Senior Debt Document).
 
“ Affiliate ” of any specified Person means:
 
(a) any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person; or
 
(b) any other Person who is a director or executive officer of:
 
(1) such specified Person;
 
(2) any Subsidiary of such specified Person; or
 
(3) any Person described in clause (a) above.
 
For the purposes of this definition, “control”, when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
 
For purposes of this definition, The Jean Coutu Group (PJC), Inc. and its Affiliates shall be “Affiliates” of the Company so long as The Jean Coutu Group (PJC), Inc. beneficially owns more than 10% of the Voting Stock of the Company.
 
“ Applicable Authorized Representative ” means, with respect to any Shared Collateral, (i) until the Senior Loan Obligation Payment Date, the representative
 
2
 
of the lenders under the Senior Credit Facility and (ii) from and after the Senior Loan Obligation Payment Date, the Major Additional Senior Representative.
 
“ Asset Sale ” means any sale, lease, transfer, issuance or other disposition (or series of related sales, leases, transfers, issuances or dispositions) by the Company or any Restricted Subsidiary, including any disposition by means of a merger, consolidation or similar transaction (each referred to for the purposes of this definition as a “disposition”), of:
 
(a) any shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares); or
 
(b) any other assets of the Company or any Restricted Subsidiary outside of the ordinary course of business of the Company or such Restricted Subsidiary,
 
in the case of either clause (a) or clause (b) above, whether in a single transaction or a series of related transactions, (i) that have a Fair Market Value in excess of $15.0 million or (ii) for aggregate consideration in excess of $15.0 million, other than, in the case of clause (a) or (b) above:
 
(1) any disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Wholly Owned Restricted Subsidiary;
 
(2) any disposition that constitutes a Permitted Investment or Restricted Payment permitted by Section 4.04;
 
(3) any disposition effected in compliance with Section 5.01(a);
 
(4) a sale of accounts receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” to a Receivables Entity;
 
(5) a transfer of accounts receivable and related assets of the type specified in the definition of “Qualified Receivables Transaction” (or a fractional undivided interest therein) by a Receivables Entity in connection with a Qualified Receivables Transaction; or
 
(6) a sale by the Company or a Restricted Subsidiary of Property by way of a Sale and Leaseback Transaction, but only if (A) such Property was owned by the Company or a Restricted Subsidiary on or after the Issue Date, (B) the requirements of clause (a) of Section 4.10 are satisfied with respect to such Sale and Leaseback Transaction, (C) the requirements of clauses (a), (b) and (c) of the first paragraph of Section 4.06 are satisfied as though such Sale and Leaseback Transaction constituted an Asset Sale and (D) the aggregate Fair Market Value of such Property, when added to the Fair Market Value of all other sales of Property
 
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pursuant to this clause (6) since the Issue Date, does not exceed $150.0 million.
 
“ Attributable Debt ” in respect of a Sale and Leaseback Transaction means, at any date of determination:
 
(a) if such Sale and Leaseback Transaction is a Capital Lease Obligation, the amount of Debt represented thereby according to the definition of “Capital Lease Obligation”; and
 
(b) in all other instances, the greater of:
 
(1) the Fair Market Value of the Property subject to such Sale and Leaseback Transaction; and
 
(2) the present value (discounted at the interest rate borne by the Securities, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction (in each case including any period for which such lease has been extended).
 
“ Authorized Representative ” means (a) in the case of any Senior Loan Obligations or the Senior Loan Parties, the representative of the lenders under the Senior Credit Facility, (b) in the case of the Securities, the Trustee, and (c) in the case of any Series of Additional Senior Debt Obligations or Additional Senior Debt Parties that become subject to the Senior Lien Intercreditor Agreement, the Senior Representative named for such Series in the applicable Joinder Agreement.
 
“ Average Life ” means, as of any date of determination, with respect to any Debt or Preferred Stock, the quotient obtained by dividing:
 
(a) the sum of the product of the numbers of years (rounded to the nearest one-twelfth of one year) from the date of determination to the dates of each successive scheduled principal payment of such Debt or redemption or similar payment with respect to such Preferred Stock multiplied by the amount of such payment by
 
(b) the sum of all such payments.
 
“ Bankruptcy Code ” means Title 11 of the United States Code, as amended.
 
“ Bankruptcy Law ” means the Bankruptcy Code and any similar Federal, state or foreign law for the relief of debtors.
 
“ Board of Directors ” means the board of directors of the Company or any duly authorized and constituted committee thereof.
 
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“ Board Resolution ” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.
 
“ Business Day ” means any day other than a Saturday, a Sunday or a day on which banking institutions in The City of New York, New York, are authorized or obligated by law, regulation, executive order or governmental decree to close.
 
“ Capital Lease Obligations ” means any obligation under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP; and the amount of Debt represented by such obligation shall be the capitalized amount of such obligations determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. For purposes of Section 4.05, a Capital Lease Obligation shall be deemed secured by a Lien on the Property being leased.
 
“ Capital Stock ” means, with respect to any Person, any shares or other equivalents (however designated) of any class of corporate stock or partnership interests or any other participations, rights, warrants, options or other interests in the nature of an equity interest in such Person, including Preferred Stock, but excluding any debt security convertible or exchangeable into such equity interest.
 
“ Capital Stock Sale Proceeds ” means the aggregate cash proceeds received by the Company from the issuance or sale (other than to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees) by the Company of its Capital Stock (other than Disqualified Stock) after the Issue Date, net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof.
 
“ Change of Control ” means the occurrence of any of the following events:
 
(a) if any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act or any successor provisions to either of the foregoing), including any group acting for the purpose of acquiring, holding, voting or disposing of securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act (other than one or more Permitted Holders), becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 40% or more of the total voting power of the Voting Stock of the Company (for purposes of this clause (a), such person or group shall be deemed to beneficially own any Voting Stock of a corporation held by any other corporation (the “ parent corporation ”) so long as such person or group beneficially owns, directly or indirectly, in the aggregate a majority of the total voting power of the Voting Stock of such parent corporation); or
 
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(b) the sale, transfer, assignment, lease, conveyance or other disposition, directly or indirectly, of all or substantially all the assets of the Company and the Restricted Subsidiaries, considered as a whole (other than a disposition of such assets as an entirety or virtually as an entirety to a Wholly Owned Restricted Subsidiary) shall have occurred, or the Company merges, consolidates or amalgamates with or into any other Person or any other Person merges, consolidates or amalgamates with or into the Company, in any such event pursuant to a transaction in which the outstanding Voting Stock of the Company is reclassified into or exchanged for cash, securities or other Property, other than any such transaction where:
 
(1) the outstanding Voting Stock of the Company is reclassified into or exchanged for other Voting Stock of the Company or for Voting Stock of the surviving corporation; and
 
(2) the holders of the Voting Stock of the Company immediately prior to such transaction own, directly or indirectly, not less than a majority of the Voting Stock of the Company or the surviving corporation immediately after such transaction and in substantially the same proportion as before the transaction; or
 
(c) during any period of two consecutive years commencing after the Issue Date, individuals who at the beginning of such period constituted the Board of Directors (together with any new directors whose election or appointment by such Board of Directors or whose nomination for election by the shareholders of the Company was approved by a vote of not less than three-fourths of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors then in office; or
 
(d) the shareholders of the Company shall have approved any plan of liquidation or dissolution of the Company.
 
“ Code ” means the Internal Revenue Code of 1986, as amended.
 
“ Collateral ” means the Senior Collateral and the Second Priority Collateral.
 
“ Collateral Disposition ” means (a) any sale, transfer or other disposition of Collateral (including any property or assets that would constitute Collateral but for the release of the Senior Lien and the Second Priority Lien with respect thereto in connection with such sale, transfer or other disposition), or (b) any casualty or other insured damage or Condemnation with respect to Collateral.
 
“ Collateral Documents ” means (a) the Senior Collateral Documents and (b) the Second Priority Collateral Documents.
 
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“ Collateral Subsidiary Guarantor ” means any Subsidiary of the Company that is a party to the Senior Subsidiary Guarantee Agreement or the Second Priority Subsidiary Guarantee Agreement.
 
“ Collateral Trust and Intercreditor Agreement ” means the Amended and Restated Collateral Trust and Intercreditor Agreement, dated as of June 5, 2009, among the Company, the Subsidiary Guarantors, the Second Priority Collateral Trustee, the Senior Collateral Agent and each Second Priority Representative, as the same may be amended, restated, supplemented or otherwise modified from time to time.
 
“ Commission ” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.
 
“ Commodity Price Protection Agreement ” means, in respect of a Person, any forward contract, commodity swap agreement, commodity option agreement or other similar agreement or arrangement designed to protect such Person against fluctuations in commodity prices.
 
“ Company ” means the Person named as the “Company” in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person and, for purposes of any provision contained herein and expressly required by the TIA, each other obligor on the indenture securities.
 
“ Condemnation ” means any action or proceeding for the taking of any assets of the Company or its Subsidiaries, or any part thereof or interest therein, for public or quasi-public use under the power of eminent domain, by reason of any similar public improvement or condemnation proceeding.
 
“ Consolidated Interest Coverage Ratio ” means, as of any date of determination, the ratio of:
 
(a) the aggregate amount of EBITDA for the most recent four consecutive fiscal quarters for which internal financial statements are available prior to such determination date to
 
(b) Consolidated Interest Expense for such four fiscal quarters;
 
provided , however , that:
 
(1) if
 
(A) since the beginning of such period the Company or any Restricted Subsidiary has Incurred any Debt that remains outstanding or Repaid any Debt; or
 
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(B) the transaction giving rise to the need to calculate the Consolidated Interest Coverage Ratio is an Incurrence or Repayment of Debt,
 
Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Incurrence or Repayment as if such Debt was Incurred or Repaid on the first day of such period; provided that, in the event of any such Repayment of Debt, EBITDA for such period shall be calculated as if the Company or such Restricted Subsidiary had not earned any interest income actually earned during such period in respect of the funds used to Repay such Debt, and
 
(2) if
 
(A) since the beginning of such period the Company or any Restricted Subsidiary shall have made any Asset Sale or an Investment (by merger or otherwise) in any Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary) or an acquisition of Property which constitutes all or substantially all of an operating unit of a business;
 
(B) the transaction giving rise to the need to calculate the Consolidated Interest Coverage Ratio is such an Asset Sale, Investment or acquisition; or
 
(C) since the beginning of such period any Person (that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period) shall have made such an Asset Sale, Investment or acquisition, EBITDA for such period shall be calculated after giving pro forma effect to such Asset Sale, Investment or acquisition as if such Asset Sale, Investment or acquisition occurred on the first day of such period.
 
If any Debt bears a floating rate of interest and is being given pro forma effect, the interest expense payable with respect to such Debt shall be calculated as if the base interest rate in effect for such floating rate of interest on the date of determination had been the applicable base interest rate for the entire period (taking into account any Interest Rate Agreement applicable to such Debt if such Interest Rate Agreement has a remaining term in excess of 12 months). In the event the Capital Stock of any Restricted Subsidiary is sold during the period, the Company shall be deemed, for purposes of clause (1) above, to have Repaid during such period the Debt of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Debt after such sale.
 
“ Consolidated Interest Expense ” means, for any period, the total interest expense of the Company and its consolidated Restricted Subsidiaries (excluding the non-
 
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cash interest expense related to (x) litigation reserves, (y) closed store liability reserves and (z) self-insurance reserves), plus, to the extent not included in such total interest expense, and to the extent Incurred by the Company or its Restricted Subsidiaries, and without duplication:
 
(a) interest expense attributable to Capital Lease Obligations;
 
(b) amortization of debt discount and debt issuance cost, including commitment fees;
 
(c) capitalized interest;
 
(d) non-cash interest expense other than expenses under clauses (x), (y) and (z) above;
 
(e) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers acceptance financing;
 
(f) net costs associated with Hedging Obligations (including amortization of fees but excluding costs associated with forward contracts for inventory in the ordinary course of business);
 
(g) Disqualified Stock Dividends;
 
(h) Preferred Stock Dividends;
 
(i) interest Incurred in connection with Investments in discontinued operations;
 
(j) interest accruing on any Debt of any other Person to the extent such Debt is Guaranteed by the Company or any Restricted Subsidiary; and
 
(k) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Company) in connection with Debt Incurred by such plan or trust.
 
Any program fees or liquidity fees on unused amounts related to any Qualified Receivables Transaction shall not be included in Consolidated Interest Expense unless otherwise required by GAAP.
 
“ Consolidated Net Income ” means, for any period, the net income (loss) of the Company and its consolidated Subsidiaries; provided , however , that there shall not be included in such Consolidated Net Income:
 
(a) any net income (loss) of any Person (other than the Company) if such Person is not a Restricted Subsidiary, except that:
 
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(1) subject to the exclusion contained in clause (d) below, the Company’s equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the limitations contained in clause (c) below); and
 
(2) the Company’s equity in a net loss of any such Person other than an Unrestricted Subsidiary for such period shall be included in determining such Consolidated Net Income;
 
(b) [intentionally omitted];
 
(c) any net income (loss) of any Restricted Subsidiary if such Restricted Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions, directly or indirectly, to the Company, except that:
 
(1) subject to the exclusion contained in clause (d) below, the Company’s equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash distributed by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to another Restricted Subsidiary, to the limitation contained in this clause); and
 
(2) the Company’s equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining such Consolidated Net Income;
 
(d) any gain or loss realized upon the sale or other disposition of any Property of the Company or any of its consolidated Subsidiaries (including pursuant to any Sale and Leaseback Transaction) that is not sold or otherwise disposed of in the ordinary course of business;
 
(e) any extraordinary gain or loss;
 
(f) the cumulative effect of a change in accounting principles;
 
(g) any non-cash compensation expense realized for grants of performance shares, stock options or other rights to officers, directors and employees of the Company or any Restricted Subsidiary; provided that such shares, options or other rights can be redeemed at the option of the holder only for Capital Stock of the Company (other than Disqualified Stock);
 
(h) store closing costs;
 
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(i) non-cash charges or credits that relate to use of the last-in-first-out method of accounting for inventory; and
 
(j) loss on debt modifications.
 
Notwithstanding the foregoing, for purposes of Section 4.04 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries to the Company or a Restricted Subsidiary to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted by Section 4.04 pursuant to clause (c)(4) thereof.
 
“ Corporate Trust Office ” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at 2 N. LaSalle Street, Suite 1020, Chicago, Illinois 60602, Attention: Corporate Trust Administration, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).
 
“ corporation ” means a corporation, association, company, limited liability company, joint-stock company, partnership or business trust.
 
“ Credit Facilities ” means, with respect to the Company or any Restricted Subsidiary, one or more debt or commercial paper facilities with banks or other institutional lenders (including the Senior Credit Facilities), providing for revolving credit loans, term loans, receivables or inventory financing (including through the sale of receivables or inventory to such lenders or to special purpose, bankruptcy remote entities formed to borrow from such lenders against such receivables or inventory), or trade letters of credit, in each case together with Refinancings thereof on any basis so long as such Refinancing constitutes Debt.
 
“ Currency Exchange Protection Agreement ” means, in respect of a Person, any foreign exchange contract, currency swap agreement, currency option or other similar agreement or arrangement designed to protect such Person against fluctuations in currency exchange rates.
 
“ Custodian ” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.
 
“ Debt ” means, with respect to any Person on any date of determination (without duplication):
 
(a) the principal of and premium (if any) in respect of:
 
(1) debt of such Person for money borrowed; and
 
(2) debt evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable;
 
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(b) all Capital Lease Obligations of such Person and all Attributable Debt in respect of Sale and Leaseback Transactions entered into by such Person;
 
(c) all obligations of such Person issued or assumed as the deferred purchase price of Property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business);
 
(d) all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in (a) through (c) above) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the third Business Day following receipt by such Person of a demand for reimbursement following payment on the letter of credit);
 
(e) the amount of all obligations of such Person with respect to the Repayment of any Disqualified Stock or, with respect to any Subsidiary of such Person, any Preferred Stock (but excluding, in each case, any accrued dividends);
 
(f) all obligations of the type referred to in clauses (a) through (e) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee;
 
(g) all obligations of the type referred to in clauses (a) through (f) of other Persons secured by any Lien on any Property of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the value of such Property or the amount of the obligation so secured; and
 
(h) to the extent not otherwise included in this definition, Hedging Obligations of such Person.
 
The amount of Debt of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date. The amount of Debt represented by a Hedging Obligation shall be equal to:
 
(1) zero if such Hedging Obligation has been Incurred pursuant to clause (g) or (h) of the second paragraph of Section 4.03; or
 
(2) the notional amount of such Hedging Obligation if not Incurred pursuant to such clauses.
 
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“ Debt Issuances ” means, with respect to the Company or any Restricted Subsidiary, one or more issuances of Debt evidenced by notes, debentures, bonds or other similar securities or instruments.
 
“ Default ” means any event which is, or after notice or passage of time or both would be, an Event of Default.
 
“ Depositary ” means, with respect to any Securities, a clearing agency that is registered as such under the Exchange Act and is designated by the Company to act as Depositary for such Securities (or any successor securities clearing agency so registered).
 
“ Disqualified Stock ” means, with respect to any Person, any Capital Stock that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable, in either case at the option of the holder thereof) or otherwise:
 
(a) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;
 
(b) is or may become redeemable or repurchaseable at the option of the holder thereof, in whole or in part; or
 
(c) is convertible or exchangeable at the option of the holder thereof for Debt or Disqualified Stock;
 
on or prior to, in the case of clause (a), (b) or (c), the first anniversary of the Stated Maturity of the Securities.
 
“ Disqualified Stock Dividends ” means all dividends with respect to Disqualified Stock of the Company held by Persons other than a Wholly Owned Restricted Subsidiary. The amount of any such dividend shall be equal to the quotient of such dividend divided by the difference between one and the maximum statutory federal income tax rate (expressed as a decimal number between 1 and 0) then applicable to the Company.
 
“ EBITDA ” means, for any period, an amount equal to, for the Company and its consolidated Restricted Subsidiaries:
 
(a) the sum of Consolidated Net Income for such period, plus the following to the extent reducing Consolidated Net Income for such period:
 
(1) the provision for taxes based on income or profits or utilized in computing net loss;
 
(2) Consolidated Interest Expense and non-cash interest expense related to litigation reserves, closed store liability reserves and self-insurance reserves, to the extent excluded from Consolidated Interest Expense;
 
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(3) depreciation;
 
(4) amortization of intangibles;
 
(5) non-cash impairment charges;
 
(6) any expenses or charges (other than depreciation or amortization expense) related to any Equity Offering, Permitted Investment, acquisition, disposition, recapitalization or the Incurrence of Debt permitted to be Incurred by the Indenture (including a refinancing thereof) (whether or not successful), including (i) such fees, expenses or charges related to the offering of Credit Facilities, Qualified Receivables Transactions or Debt Issuances and other Debt and (ii) any amendment or other modification of Credit Facilities, Qualified Receivables Transactions or Debt Issuances and, in each case, deducted (and not added back) in computing Consolidated Net Income;
 
(7) the amount of any restructuring charges, integration costs or other business optimization expenses or reserves deducted (and not added back) in such period in computing Consolidated Net Income, including any one-time costs (including costs related to the closure and/or consolidation of stores) incurred in connection with acquisitions on or after June 4, 2007;
 
(8) the amount of net cost savings projected by the Company in good faith to be realized as a result of specified actions taken or initiated during or prior to such period (calculated on a pro forma basis as though such cost savings had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that (x) such cost savings are reasonably identifiable and factually supportable, (y) such actions are taken no later than 36 months after June 4, 2007 and (z) the aggregate amount of cost savings added pursuant to this clause (8) shall not exceed $150.0 million for any four consecutive quarter period (which adjustments may be incremental to pro forma cost savings adjustments made pursuant to the definition of “Consolidated Interest Coverage Ratio”); and
 
(9) any other non-cash items (other than any such non-cash item to the extent that it represents an accrual of or reserve for cash expenditures in any future period), minus
 
(b) all non-cash items increasing Consolidated Net Income for such period (other than any such non-cash item to the extent that it will result in the receipt of cash payments in any future period).
 
Notwithstanding the foregoing clause (a), the provision for taxes and the depreciation, amortization and non-cash items of a Restricted Subsidiary shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same
 
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proportion) that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income and only if a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Restricted Subsidiary or its shareholders.
 
“ 8.125% Notes ” means the Company’s 8.125% Senior Secured Notes due 2010 issued under the indenture dated as of April 22, 2003, as supplemented, among the Company, the Subsidiary Guarantors and The Bank of New York Trust Company, N.A., as successor trustee, and outstanding on the Issue Date.
 
“ Equipment Financing Transaction ” means any arrangement (together with any Refinancing thereof) with any Person pursuant to which the Company or any Restricted Subsidiary Incurs Debt secured by a Lien on equipment or equipment related property of the Company or any Restricted Subsidiary.
 
“ Equity Offering ” means (a) an underwritten offering of common stock of the Company by the Company pursuant to an effective registration statement under the Securities Act or (b) so long as the Company’s common stock is, at the time, listed or quoted on a national securities exchange (as such term is defined in the Exchange Act), an offering of common stock by the Company in a transaction exempt from or not subject to the registration requirements of the Securities Act.
 
“ Event of Default ” has the meaning set forth under Section 6.01.
 
“ Exchange Act ” means the Securities Exchange Act of 1934.
 
“ Expansion Capital Expenditure ” means any capital expenditure incurred by the Company or any Restricted Subsidiary in developing, relocating, integrating, remodeling and refurbishing a warehouse, distribution center, store or other facility (other than ordinary course maintenance) for carrying on the business of the Company and its Restricted Subsidiaries that the Board of Directors determines in good faith will enhance the income generating ability of the warehouse, distribution center, store or other facility.
 
“ Fair Market Value ” means, with respect to any Property, the price that could be negotiated in an arm’s-length free market transaction, for cash, between a willing seller and a willing buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Pressure or compulsion shall not include sales of Property conducted in compliance with the requirements of a regulatory authority in connection with an acquisition or merger permitted by this Indenture. Fair Market Value shall be determined, except as otherwise provided:
 
(a) if such Property has a Fair Market Value equal to or less than $25.0 million, by any Officer of the Company; or
 
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(b) if such Property has a Fair Market Value in excess of $25.0 million, by a majority of the Board of Directors and evidenced by a Board Resolution, dated within 30 days of the relevant transaction, delivered to the Trustee.
 
“ First Lien Receivables Facility ” means the Receivables Financing Agreement dated as of September 21, 2004 (as such may be further amended, modified, supplemented or Refinanced from time to time), among Rite Aid Funding II, the Investors named therein, the Banks named therein, Citicorp North America Inc., as Program Agent, Rite Aid Headquarters Funding Inc., as Collection Agent, the Originators named therein and JPMorgan Chase Bank, as trustee. For the avoidance of doubt, the Receivables Facilities, as in effect on the Issue Date, constitutes a Qualified Receivables Transaction without any further action on behalf of the Company.
 
“ Foreign Subsidiary ” means any Subsidiary of the Company which (a) is organized under the laws of any jurisdiction outside of the United States, (b) is organized under the laws of Puerto Rico or the U.S. Virgin Islands, (c) has substantially all its operations outside of the United States, (d) has substantially all its operations in Puerto Rico or the U.S. Virgin Islands or (e) does not own any material assets other than Capital Stock of one or more Subsidiaries of the type described in (a) through (d) above.
 
“ GAAP ” means United States generally accepted accounting principles as in effect on the Issue Date, including those set forth:
 
(a) in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants;
 
(b) in the statements and pronouncements of the Financial Accounting Standards Board;
 
(c) in such other statements by such other entity as approved by a significant segment of the accounting profession; and
 
(d) the rules and regulations of the Commission governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the Commission.
 
“ Guarantee ” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Debt of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:
 
(a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise); or
 
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(b) entered into for the purpose of assuring in any other manner the obligee against loss in respect thereof (in whole or in part);
 
provided , however , that the term “Guarantee” shall not include:
 
(1) endorsements for collection or deposit in the ordinary course of business; or
 
(2) a contractual commitment by one Person to invest in another Person for so long as such Investment is reasonably expected to constitute a Permitted Investment under clause (b) of the definition of “Permitted Investment”.
 
The term “ Guarantee ” used as a verb has a corresponding meaning. The term “ Guarantor ” shall mean any Person Guaranteeing any obligation.
 
“ Hedging Obligation ” of any Person means any obligation of such Person pursuant to any Interest Rate Agreement, Currency Exchange Protection Agreement, Commodity Price Protection Agreement or any other similar agreement or arrangement.
 
“ Holder ” means a Person in whose name a Security is registered in the Security Register.
 
“ Incur ” means, with respect to any Debt or other obligation of any Person, to create, issue, incur (by merger, conversion, exchange or otherwise), extend, assume, Guarantee or become liable in respect of such Debt or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Debt or obligation on the balance sheet of such Person (and “ Incurrence ” and “ Incurred ” shall have meanings correlative to the foregoing); provided , however , that a change in GAAP that results in an obligation of such Person that exists at such time, and is not theretofore classified as Debt, becoming Debt shall not be deemed an Incurrence of such Debt; provided furthe r, however , that any Debt or other obligations of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Subsidiary at the time it becomes a Subsidiary; and provided further , however , that solely for purposes of determining compliance with Section 4.03, amortization of debt discount shall not be deemed to be the Incurrence of Debt; provided that in the case of Debt sold at a discount, the amount of such Debt Incurred shall at all times be the aggregate principal amount at Stated Maturity.
 
“ Indenture ” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively.
 
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“ Independent Financial Advisor ” means an investment banking firm of national standing or any third party appraiser of national standing; provided that such firm or appraiser is not an Affiliate of the Company.
 
“ Insolvency or Liquidation Proceeding” means:
 
(a) any case commenced by or against the Company or any Subsidiary Guarantor under any Bankruptcy Law for the relief of debtors, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of the Company or any Subsidiary Guarantor, any receivership or assignment for the benefit of creditors relating to the Company or any Subsidiary Guarantor or any similar case or proceeding relative to the Company or any Subsidiary Guarantor or its creditors, as such, in each case whether or not voluntary; or
 
(b) any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to the Company or any Subsidiary Guarantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency, except for any liquidation or dissolution permitted under the Senior Debt Documents.
 
“ Interest Payment Date ” means the scheduled date of an installment of interest on the Securities.
 
“ Interest Rate Agreement ” means, for any Person, any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement designed to protect against fluctuations in interest rates.
 
“ Investment ” by any Person means any direct or indirect loan (other than advances to customers in the ordinary course of business that are recorded as accounts receivable on the balance sheet of such Person), advance or other extension of credit or capital contribution (by means of transfers of cash or other Property to others or payments for Property or services for the account or use of others, or otherwise) to, or Incurrence of a Guarantee of any obligation of, or purchase or acquisition of Capital Stock, bonds, notes, debentures or other securities or evidence of Debt issued by, any other Person. For purposes of Sections 4.04 and 4.11, and the definition of “Restricted Payment”, “Investment” shall include the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of any Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided , however , that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary of an amount (if positive) equal to:
 
(a) the Company’s “Investment” in such Subsidiary at the time of such redesignation; less
 
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(b) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation.
 
In determining the amount of any Investment made by transfer of any Property other than cash, such Property shall be valued at its Fair Market Value at the time of such Investment.
 
“ Investment Grade Rating ” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, without regard to outlook.
 
“ Issue Date ” means the date on which the Original Securities are initially issued.
 
“ Joinder Agreement ” means the documents required to be delivered by a Senior Representative to the Senior Collateral Agent in order to establish an additional Series of Senior Obligations and Senior Secured Parties under the Senior Lien Intercreditor Agreement.
 
“ Lien ” means, with respect to any Property of any Person, any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, security interest, lien, charge, easement (other than any easement not materially impairing usefulness or marketability), encumbrance, preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever on or with respect to such Property (including any Capital Lease Obligation, conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing or any Sale and Leaseback Transaction).
 
“ Major Additional Senior Representative ” means the Senior Representative in respect of the Additional Senior Debt Facility under which the largest outstanding principal amount of Additional Senior Debt Obligations are then outstanding.
 
“ Moody’s ” means Moody’s Investors Service, Inc., or any successor to the rating agency business thereof.
 
“ Net Available Cash ” from any Asset Sale means cash payments received therefrom (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Debt or other obligations relating to the Property that is the subject of such Asset Sale or received in any other non-cash form), in each case net of:
 
(a) all legal, title and recording tax expenses, commissions and other fees and expenses incurred, and all Federal, state, provincial, foreign and local taxes required to be accrued as a liability under GAAP, as a consequence of such Asset Sale;
 
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(b) all payments made on (i) any Debt (other than any Additional Senior Debt Incurred after the Issue Date) that is secured by any Property subject to such Asset Sale, in accordance with the terms of any Lien upon or other security agreement of any kind with respect to such Property, or Debt which must by its terms, or in order to obtain a necessary consent to such Asset Sale, or by applicable law, be repaid out of the proceeds from such Asset Sale (including any payment required to be made on the revolving credit facility under the Senior Credit Facility) and (ii) any Debt under a Qualified Receivables Transaction required to be repaid or necessary to obtain a consent needed to consummate such Asset Sale;
 
(c) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Sale; and
 
(d) the deduction of appropriate amounts provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the Property disposed in such Asset Sale and retained by the Company or any Restricted Subsidiary after such Asset Sale.
 
“ Obligors ” means the Company, the Subsidiary Guarantors and any other Person who is liable for any of the Secured Obligations.
 
“ Offering Memorandum ” means the final offering memorandum dated June 8, 2009 relating to the offering and sale of the Securities.
 
“ Officer ” means the Chief Executive Officer, the President, the Chief Financial Officer, Chief Accounting Officer, Treasurer, Vice President of Financial Accounting or any Executive Vice President of the Company.
 
“ Officers’ Certificate ” means a certificate signed by two Officers of the Company, at least one of whom shall be the principal executive officer or principal financial officer of the Company, and delivered to the Trustee.
 
“ Opinion of Counsel ” means a written opinion from legal counsel. The counsel may be an employee of or counsel to the Company.
 
“ Original Securities ” has the meaning specified in Section 2.01.
 
“ Permitted Holder ” means (a) Leonard Green & Partners, L.P., or any of its Affiliates and (b) The Jean Coutu Group (PJC) Inc. or any of its Affiliates.
 
“ Permitted Investment ” means any Investment by the Company or a Restricted Subsidiary in:
 
(a) (i) the Company, (ii) any Restricted Subsidiary or (iii) any Person that will, upon the making of such Investment, become a Restricted Subsidiary;
 
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(b) any Person if as a result of such Investment such Person is merged or consolidated with or into, or transfers or conveys all or substantially all its Property to, the Company or a Restricted Subsidiary;
 
(c) cash and Temporary Cash Investments;
 
(d) receivables owing to the Company or a Restricted Subsidiary, if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided , however , that such trade terms may include such concessionary trade terms as the Company or such Restricted Subsidiary deems reasonable under the circumstances;
 
(e) payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;
 
(f) loans and advances to employees made in the ordinary course of business in accordance with applicable law consistent with past practices of the Company or such Restricted Subsidiary, as the case may be; provided that such loans and advances do not exceed $25.0 million at any one time outstanding;
 
(g) stock, obligations or other securities received in settlement of debts created in the ordinary course of business and owing to the Company or a Restricted Subsidiary or in satisfaction of judgments;
 
(h) any Person to the extent such Investment represents the non-cash portion of the consideration received in connection with an Asset Sale consummated in compliance with Section 4.06;
 
(i) Hedging Obligations permitted under clause (g), (h) or (i) of the second paragraph of Section 4.03;
 
(j) any Person if the Investments are outstanding on the Issue Date and not otherwise described in clauses (a) through (i) above;
 
(k) Investments in Unrestricted Subsidiaries or joint venture entities (including purchasing cooperatives) that do not exceed $15.0 million outstanding at any one time in the aggregate;
 
(l) other Investments that do not exceed $10.0 million outstanding at any one time in the aggregate;
 
(m) Investments in any entity, formed by the Company or a Restricted Subsidiary, organized under Section 501(c)(3) of the Code, that do not exceed an aggregate amount of $10.0 million in any fiscal year; and
 
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(n) any assets, Capital Stock or other securities to the extent acquired in exchange for shares of Capital Stock of the Company (other than Disqualified Stock).
 
“ Permitted Liens ” means:
 
(a) Liens to secure Debt permitted to be Incurred under clause (a), (b), (d), (l) or (s) (with respect to clause (d)) of the second paragraph of Section 4.03; provided , however , that:
 
(1) if such Debt is Incurred pursuant to such clause (b) (other than pursuant to a Sale and Leaseback Transaction, a Capital Lease Obligation or by a Receivables Entity in a Qualified Receivables Transaction) or clause (l), a Senior Lien (subject to Permitted Liens) upon the Property (if such Property does not otherwise constitute Senior Collateral at such time) subject to such Lien is concurrently granted as security for the Securities such that such Property also constitutes Senior Collateral subject to the Senior Collateral Documents, except to the extent such Property constitutes cash or cash equivalents securing only letter of credit obligations under Credit Facilities following a default under such Credit Facilities; and
 
(2) if such Debt is Incurred pursuant to such clause (d) or (s) (with respect to clause (d)), a Senior Lien (subject to Permitted Liens) upon the Property subject to such Lien is concurrently granted as security for the Securities such that such Property constitutes Senior Collateral subject to the Senior Lien and the Securities are secured by such Lien prior to such Debt pursuant to the Senior Collateral Documents;
 
(b) Liens to secure Debt permitted to be Incurred under clause (e), (q) or (r) of the second paragraph of Section 4.03; provided that any such Lien may not extend to any Property of the Company or any Restricted Subsidiary, other than the Property acquired, developed, constructed or leased with the proceeds of such Debt and any improvements or additions to such Property;
 
(c) Liens for taxes, assessments or governmental charges or levies on the Property of the Company or any Restricted Subsidiary if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision that shall be required in conformity with GAAP shall have been made therefor;
 
(d) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens and other similar Liens, on the Property of the Company or any Restricted Subsidiary arising in the ordinary course of business and securing payment of obligations that are not more than 60 days past due or are being contested in good faith and by appropriate proceedings;
 
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(e) Liens on the Property of the Company or any Restricted Subsidiary Incurred in the ordinary course of business to secure performance of obligations with respect to statutory or regulatory requirements, performance or return-of-money bonds, surety bonds or other obligations of a like nature and Incurred in a manner consistent with industry practice, in each case which are not Incurred in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of Property and which do not in the aggregate impair in any material respect the use of Property in the operation of the business of the Company and the Restricted Subsidiaries taken as a whole;
 
(f) Liens on Property at the time the Company or any Restricted Subsidiary acquired such Property, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary; provided , however , that any such Lien may not extend to any other Property of the Company or any Restricted Subsidiary; provide d f urther , however , that such Liens shall not have been Incurred in anticipation of or in connection with the transaction or series of transactions pursuant to which such Property was acquired by the Company or any Restricted Subsidiary;
 
(g) Liens on the Property of a Person at the time such Person becomes a Restricted Subsidiary; provided , however , that any such Lien may not extend to any other Property of the Company or any other Restricted Subsidiary that is not a direct Subsidiary of such Person; provided further , however , that any such Lien was not Incurred in anticipation of or in connection with the transaction or series of transactions pursuant to which such Person became a Restricted Subsidiary;
 
(h) pledges or deposits by the Company or any Restricted Subsidiary under workmen’s compensation laws, unemployment insurance laws or similar legislation, or good-faith deposits in connection with bids, tenders, contracts (other than for the payment of Debt) or leases to which the Company or any Restricted Subsidiary is party, or deposits to secure public or statutory obligations of the Company or any Restricted Subsidiary, or deposits for the payment of rent, in each case Incurred in the ordinary course of business;
 
(i) utility easements, building restrictions and such other encumbrances or charges against real Property as are of a nature generally existing with respect to properties of a similar character;
 
(j) Liens arising out of judgments or awards against the Company or a Restricted Subsidiary with respect to which the Company or the Restricted Subsidiary shall then be proceeding with an appeal or other proceeding for review and which do not give rise to an Event of Default;
 
(k) leases or subleases of real property granted by the Company or a Restricted Subsidiary to any other Person in the ordinary course of business and not materially impairing the use of the real property in the operation of the business of the Company or the Restricted Subsidiary;
 
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(l) licenses of intellectual property in the ordinary course of business;
 
(m) Liens existing on the Issue Date not otherwise described in clauses (a) through (l) above;
 
(n) Liens on the Property of the Company or any Restricted Subsidiary to secure any Refinancing, in whole or in part, of any Debt secured by Liens referred to in clause (a) (but only to the extent it relates to clause (a) or (d) referred to therein), (b) (other than Liens securing Debt Incurred pursuant to clause (r) referred to therein), (f), (g), or (m) above; provided , however , that (i) in the case of clause (a) or (b) above, the proviso to such clause remains satisfied and (ii) any such Lien shall be limited to all or part of the same Property that secured the original Lien (together with improvements and accessions to such Property) and the aggregate principal amount of Debt that is secured by such Lien shall not be increased to an amount greater than the sum of:
 
(A) the outstanding principal amount, or, if greater, the committed amount, of the Debt secured by Liens described under clause (b) (except as referred to above), (f), (g), or (m) above, as the case may be, at the time the original Lien became a Permitted Lien under this Indenture; and
 
(B) an amount necessary to pay any fees and expenses, including premiums and defeasance costs, incurred by the Company or such Restricted Subsidiary in connection with such Refinancing;
 
(o) any Lien granted pursuant to the Collateral Documents to secure a provider of debtor-in-possession financing, which such Lien may be senior in priority to the Lien securing the Securities or the applicable Subsidiary Guarantee so long as it is equally senior to all other Senior Obligations; and
 
(p) Liens not otherwise permitted by clauses (a) through (o) above encumbering assets that have an aggregate Fair Market Value not in excess of $5.0 million.
 
“ Permitted Refinancing Debt ” means any Debt that Refinances any other Debt, including any successive Refinancings, so long as:
 
(a) such Debt is in an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) not in excess of the sum of:
 
(1) the aggregate principal amount (or if Incurred with original issue discount, the aggregate accreted value) then outstanding of the Debt being Refinanced; and
 
(2) an amount necessary to pay any fees and expenses, including premiums and defeasance costs, related to such Refinancing;
 
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(b) the Average Life of such Debt is equal to or greater than the Average Life of the Debt being Refinanced;
 
(c) the Stated Maturity of such Debt is no earlier than the Stated Maturity of the Debt being Refinanced; and
 
(d) the new Debt shall not be senior in right of payment to the Debt that is being Refinanced;
 
provided , however , that Permitted Refinancing Debt shall not include:  (x) Debt of a Subsidiary that is not a Subsidiary Guarantor that Refinances Debt of the Company or a Subsidiary Guarantor, or (y) Debt of the Company or a Restricted Subsidiary that Refinances Debt of an Unrestricted Subsidiary.
 
“ Person ” means any individual, corporation, company (including any limited liability company), association, partnership, joint venture, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
 
“ Preferred Stock ” means any Capital Stock of a Person, however designated, which entitles the holder thereof to a preference with respect to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of any other class of Capital Stock issued by such Person.
 
“ Preferred Stock Dividends ” means all dividends with respect to Preferred Stock of Restricted Subsidiaries held by Persons other than the Company or a Wholly Owned Restricted Subsidiary. The amount of any such dividend shall be equal to the quotient of such dividend divided by the difference between one and the maximum statutory federal income rate (expressed as a decimal number between 1 and 0) then applicable to the issuer of such Preferred Stock.
 
“ pro forma ” means, unless the context otherwise requires, with respect to any calculation made or required to be made pursuant to the terms hereof, a calculation performed in accordance with Article 11 of Regulation S-X promulgated under the Securities Act, as interpreted in good faith by the Board of Directors after consultation with the independent certified public accountants of the Company, or otherwise a calculation made in good faith by the Board of Directors after consultation with the independent certified public accountants of the Company, as the case may be.
 
“ Property ” means, with respect to any Person, any interest of such Person in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including Capital Stock in, and other securities of, any other Person. For purposes of any calculation required pursuant to this Indenture, the value of any Property shall be its Fair Market Value.
 
“ Purchase Money Debt ” means Debt Incurred to finance the acquisition, development, construction or lease by the Company or a Restricted Subsidiary of
 
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Property, including additions and improvements thereto, where the maturity of such Debt does not exceed the anticipated useful life of the Property being financed; provided , however , that such Debt is Incurred within 24 months after the completion of the acquisition, development, construction or lease of such Property by the Company or such Restricted Subsidiary.
 
“ Qualified Consideration ” means, with respect to any Asset Sale (or any other transaction or series of related transactions required to comply with clause (b) of the first paragraph of Section 4.06), any one or more of (a) cash or cash equivalents, (b) notes or obligations that are converted into cash (to the extent of the cash received) within 180 days of such Asset Sale, (c) equity securities listed on a national securities exchange (as such term is defined in the Exchange Act) and converted into cash (to the extent of the cash received) within 180 days of such Asset Sale, (d) the assumption or discharge by the purchaser of liabilities of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Securities other than Second Priority Debt Obligations) as a result of which the Company and the Restricted Subsidiaries are no longer obligated with respect to such liabilities, (e) Additional Assets or (f) other Property; provided that the aggregate Fair Market Value of all Property received since the Issue Date by the Company and its Restricted Subsidiaries pursuant to Asset Sales (or such other transactions) that is used to determine Qualified Consideration pursuant to this clause (f) does not exceed the greater of $100.0 million and 5% of Total Assets.
 
“ Qualified Receivables Transaction ” means any transaction or series of transactions that may be entered into by the Company or any of its Subsidiaries pursuant to which the Company or any of its Subsidiaries may sell, convey or otherwise transfer to:
 
(a) a Receivables Entity (in the case of a transfer by the Company or any of its Subsidiaries); and
 
(b) any other Person (in the case of a transfer by a Receivables Entity),
 
or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of the Company or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing those accounts receivable, all contracts and all Guarantees or other obligations in respect of those accounts receivable, proceeds of those accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable; provided that:
 
(1) if the transaction involves a transfer of accounts receivable with Fair Market Value equal to or greater than $25.0 million, the Board of Directors shall have determined in good faith that the Qualified Receivables Transaction is economically fair and reasonable to the Company and the Receivables Entity;
 
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(2) all sales of accounts receivable and related assets to or by the Receivables Entity are made at Fair Market Value; and
 
(3) the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by the Board of Directors).
 
“ Rating Agencies ” means Moody’s and S&P.
 
“ Real Estate Financing Transaction ” means any arrangement with any Person pursuant to which the Company or any Restricted Subsidiary Incurs Debt secured by a Lien on real property of the Company or any Restricted Subsidiary and related personal property together with any Refinancings thereof.
 
“ Receivables Entity ” means a Wholly Owned Subsidiary of the Company (or another Person formed for the purposes of engaging in a Qualified Receivables Transaction with the Company in which the Company or any Subsidiary of the Company makes an Investment and to which the Company or any Subsidiary of the Company transfers accounts receivable and related assets) which engages in no activities other than in connection with the financing of accounts receivable of the Company and its Subsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to that business, and (with respect to any Receivables Entity formed after the Issue Date) which is designated by the Board of Directors (as provided below) as a Receivables Entity and:
 
(a) no portion of the Debt or any other obligations (contingent or otherwise) of which:
 
(1) is Guaranteed by the Company or any Subsidiary of the Company (excluding Guarantees of obligations (other than the principal of, and interest on, Debt) pursuant to Standard Securitization Undertakings);
 
(2) is recourse to or obligates the Company or any Subsidiary of the Company in any way other than pursuant to Standard Securitization Undertakings; or
 
(3) subjects any property or asset of the Company or any Subsidiary of the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;
 
(b) with which neither the Company nor any Subsidiary of the Company has any material contract, agreement, arrangement or understanding other than on terms which the Company reasonably believes to be no less favorable to the Company or the Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Company; and
 
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(c) to which neither the Company nor any Subsidiary of the Company has any obligation to maintain or preserve the entity’s financial condition or cause the entity to achieve certain levels of operating results other than pursuant to Standard Securitization Undertakings.
 
Any designation of this kind by the Board of Directors shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to the designation and an Officers’ Certificate certifying that the designation complied with the foregoing conditions.  For the avoidance of doubt, Rite Aid Funding I and Rite Aid Funding II are designated Receivables Entities without any further action on the part of the Company.
 
“ Receivables Facilities ” means the First Lien Receivables Facility and the Second Lien Receivables Facility.
 
“ Redemption Date ” means, when used with respect to any Security to be redeemed, the date fixed for such redemption by or pursuant to this Indenture.
 
“ Redemption Price ” means, when used with respect to any Security to be redeemed, the price at which it is to be redeemed pursuant to this Indenture.
 
“ Refinance ” means, in respect of any Debt, to refinance, extend, renew, refund, repay, prepay, repurchase, redeem, defease or retire, or to issue other Debt, in exchange or replacement for, such Debt. “ Refinanced ” and “ Refinancing ” shall have correlative meanings.
 
“ Related Business ” means any business that is related, ancillary or complementary to the businesses of the Company and the Restricted Subsidiaries on the Issue Date.
 
“ Repay ” means, in respect of any Debt, to repay, prepay, repurchase, redeem, legally defease or otherwise retire such Debt. “ Repayment ” and “ Repaid ” shall have correlative meanings. For purposes of Section 4.06 and the definition of “Consolidated Interest Coverage Ratio,” Debt shall be considered to have been Repaid only to the extent the related loan commitment, if any, shall have been permanently reduced in connection therewith.
 
“ Representatives ” means each of the Senior Representatives and the Second Priority Representatives.
 
“ Restricted Payment ” means:
 
(a) any dividend or distribution (whether made in cash, securities or other Property) declared or paid on or with respect to any shares of Capital Stock of the Company or any Restricted Subsidiary (including any payment in connection with any merger or consolidation with or into the Company or any Restricted Subsidiary), except for any dividend or distribution that is made solely to the Company or a Restricted Subsidiary (and, if such Restricted Subsidiary is not a
 
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Wholly Owned Restricted Subsidiary, to the other shareholders of such Restricted Subsidiary on a pro rata basis or on a basis that results in the receipt by the Company or a Restricted Subsidiary of dividends or distributions of greater value than it would receive on a pro rata basis) or any dividend or distribution payable solely in shares of Capital Stock (other than Disqualified Stock) of the Company;
 
(b) the purchase, repurchase, redemption, acquisition or retirement for value of any Capital Stock of the Company or any Restricted Subsidiary (other than from the Company or a Restricted Subsidiary);
 
(c) the purchase, repurchase, redemption, acquisition or retirement for value, prior to the date for any scheduled maturity, sinking fund or amortization or other installment payment, of any Subordinated Obligation (other than (i) the purchase, repurchase or other acquisition of any Subordinated Obligation purchased in anticipation of satisfying a scheduled maturity, sinking fund or amortization or other installment obligation, in each case due within one year of the date of acquisition or (ii) Second Priority Debt);
 
(d) any Investment (other than Permitted Investments) in any Person; or
 
(e) the issuance, sale or other disposition of Capital Stock of any Restricted Subsidiary to a Person other than the Company or another Restricted Subsidiary if the result thereof is that such Restricted Subsidiary shall cease to be a Restricted Subsidiary, in which event the amount of such “Restricted Payment” shall be the Fair Market Value of the remaining interest, if any, in such former Restricted Subsidiary held by the Company and the other Restricted Subsidiaries.
 
Notwithstanding the foregoing, no payment or other transaction permitted by clause (c) or (f) of the second paragraph of Section 4.08 will be considered a Restricted Payment.
 
“ Restricted Subsidiary ” means any Subsidiary of the Company other than an Unrestricted Subsidiary.
 
“ S&P ” means Standard & Poor’s Ratings Service or any successor to the rating agency business thereof.
 
“ Sale and Leaseback Transaction ” means any direct or indirect arrangement relating to Property now owned or hereafter acquired whereby the Company or a Restricted Subsidiary transfers such Property to another Person and the Company or a Restricted Subsidiary leases it from such Person.
 
“ SEC ” means the Securities and Exchange Commission.
 
“ Second Lien Receivables Facility ” means the Credit Agreement, dated as of February 18, 2009, among Rite Aid Funding II, the Lenders named therein, Citicorp North America, Inc. as the Administrative Agent, Rite Aid Hdqtrs. Funding, Inc. as Collection Agent, the Originators named therein, and Citigroup Global Markets Inc. as
 
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the Sole Lead Arranger and Sole Bookrunning Manager. For the avoidance of doubt, the Receivable Facilities, as in effect on the Issue Date, each constitutes a Qualified Receivables Transaction without any further action on behalf of the Company as the same may be amended, restated, supplemented or otherwise modified from time to time.
 
“ Second Priority Collateral ” means all the “Second Priority Collateral” as defined in any Second Priority Collateral Document.
 
“ Second Priority Collateral Documents ” means the Second Priority Subsidiary Security Agreement, the Second Priority Subsidiary Guarantee Agreement, the Second Priority Indemnity, Subrogation and Contribution Agreement, the Collateral Trust and Intercreditor Agreement and each of the security agreements and other instruments and documents executed and delivered by any Subsidiary Guarantor pursuant to any of the foregoing for purposes of providing collateral security or credit support for any Second Priority Debt Obligation or obligation under the Second Priority Subsidiary Guarantee Agreement (including, in each case, any schedules, exhibits or annexes thereto), in each case as the same may be amended, restated, supplemented or otherwise modified from time to time.
 
“ Second Priority Collateral Trustee ” means Wilmington Trust Company, in its capacity as collateral trustee under the Collateral Trust and Intercreditor Agreement and the Second Priority Collateral Documents, and its successors.
 
“ Second Priority Debt ” means the 10.375% Notes due 2016, the 7.5% Notes due 2017 and any other Debt of the Company Guaranteed by the Subsidiary Guarantors pursuant to the Second Priority Subsidiary Guarantee Agreement with such Guarantee secured on a pari passu basis by the Second Priority Collateral (but without regard as to control of remedies); provided , however , that such Debt is permitted to be incurred, secured and guaranteed on such basis by each Senior Debt Document and each Second Priority Debt Document.
 
“ Second Priority Debt Documents ” means, with respect to any series, issue or class of Second Priority Debt, the promissory notes, indentures, Collateral Documents or other operative agreements evidencing or governing such Debt, in each case as the same may be amended, restated, supplemented or otherwise modified from time to time.
 
“ Second Priority Debt Facility ” means the indenture or other governing agreement with respect to any Second Priority Debt.
 
“ Second Priority Debt Obligations ” means, with respect to any series, issue or class of Second Priority Debt, (a) all principal of and interest (including, without limitation, any interest which accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of the Company, whether or not allowed or allowable as a claim in any such proceeding) payable with respect to such Second Priority Debt, (b) all other amounts payable to the related Second Priority Debt Parties under the related Second
 
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Priority Debt Documents and (c) any renewals, extensions or Refinancings of the foregoing.
 
“ Second Priority Debt Parties ” means, with respect to any series, issue or class of Second Priority Debt, the holders of such indebtedness from time to time, any trustee or agent therefor under any related Second Priority Debt Documents and the beneficiaries of each indemnification obligation undertaken by the Company or any Obligor under any related Second Priority Debt Documents, but shall not include the Obligors or any controlled Affiliates thereof (unless any such Obligor or controlled Affiliate is a holder of such Second Priority Debt, a trustee or agent therefor or beneficiary of such an indemnification obligation named as such in a Second Priority Debt Document).
 
“ Second Priority Indemnity, Subrogation and Contribution Agreement ” means the Second Priority Indemnity, Subrogation and Contribution Agreement, dated as of June 27, 2001, as amended and restated as of May 28, 2003, among the Company, the Subsidiary Guarantors and the Second Priority Collateral Trustee, as the same may be amended, restated, supplemented or otherwise modified from time to time.
 
“ Second Priority Lien ” means the liens on the Second Priority Collateral in favor of the Second Priority Debt Parties under the Second Priority Collateral Documents.
 
“ Second Priority Representative ” means, in respect of a Second Priority Debt Facility, the trustee, administrative agent, security agent or similar agent under such Second Priority Debt Facility, as the case may be, and each of their successors in such capacities.
 
“ Second Priority Subsidiary Guarantee Agreement ” means the Second Priority Subsidiary Guarantee Agreement, dated as of June 27, 2001, as amended and restated as of May 28, 2003, made by the Subsidiary Guarantors (including any additional Subsidiary Guarantor becoming party thereto after May 28, 2003) in favor of the Second Priority Collateral Trustee for the benefit of the Second Priority Debt Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time.
 
“ Second Priority Subsidiary Security Agreement ” means the Second Priority Subsidiary Security Agreement, dated as of June 27, 2001, as amended and restated as of May 28, 2003, made by the Subsidiary Guarantors (including any additional Subsidiary Guarantor becoming party thereto after May 28, 2003) in favor of the Second Priority Collateral Trustee for the benefit of the Second Priority Debt Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time.
 
“ Secured Debt ” means indebtedness for money borrowed which is secured by a mortgage, pledge, lien, security interest or encumbrance on property of the Company or any Restricted Subsidiary, but shall not include guarantees arising in connection with
 
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the sale, discount, guarantee or pledge of notes, chattel mortgages, leases, accounts receivable, trade acceptances and other paper arising, in the ordinary course of business, out of installment or conditional sales to or by, or transactions involving title retention with, distributors, dealers or other customers, of merchandise, equipment or services.
 
“ Secured Obligations ” means the Senior Obligations and the Second Priority Debt Obligations.
 
“ Securities ” means the Securities, as designated in the first paragraph of this Indenture.
 
“ Securities Act ” means the Securities Act of 1933, as it may be amended and any successor act thereto.
 
“ Senior Collateral ” means all the “Senior Collateral” or “Collateral” as defined in any Senior Collateral Document.
 
“ Senior Collateral Agent ” means Citicorp North America, Inc., in its capacity as senior collateral agent for the Senior Secured Parties under the Senior Collateral Documents, and any successor thereof or replacement senior collateral agent appointed in accordance with the terms of the Senior Subsidiary Security Agreement, the Collateral Trust and Intercreditor Agreement and the Senior Lien Intercreditor Agreement.
 
“ Senior Collateral Documents ” means the Senior Subsidiary Security Agreement, the Senior Subsidiary Guarantee Agreement, the Senior Indemnity, Subrogation and Contribution Agreement, the Collateral Trust and Intercreditor Agreement, the Senior Lien Intercreditor Agreement and each of the security agreements and other instruments and documents executed and delivered by any Subsidiary Guarantor pursuant to any of the foregoing or pursuant to the Senior Credit Facility or any Additional Senior Debt Facility or for purposes of providing collateral security or credit support for any Senior Loan Obligation or Additional Senior Debt Obligation or obligation under the Senior Subsidiary Guarantee Agreement (including, in each case, any schedules, exhibits or annexes thereto), as the same may be amended, restated, supplemented or otherwise modified from time to time.
 
“ Senior Credit Facility ” means the Senior Credit Agreement dated as of June 5, 2009 (as may be further amended, modified, supplemented or Refinanced from time to time), among the Company, the Lenders (as defined therein) from time to time party thereto, Citicorp North America, Inc., as administrative agent and collateral agent, Bank of America, N.A., as syndication agent, and General Electric Capital Corporation, Wells Fargo Retail Finance, LLC and GMAC Commercial Finance LLC, as co-documentation agents.
 
“ Senior Debt Documents ” means (a) the Senior Loan Documents and (b) any Additional Senior Debt Documents.
 
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“ Senior Facilities ” means the Senior Credit Facility and any Additional Senior Debt Facilities.
 
“ Senior Hedging Agreement ” means any Hedging Agreement entered into with the Company or any Subsidiary, if the applicable counterparty was a Senior Lender or an Affiliate thereof (a) on September 30, 2005, in the case of any Hedging Agreement entered into prior to September 30, 2005 or (b) at the time the Hedging Agreement was entered into, in the case of any Hedging Agreement entered into on or after September 30, 2005.
 
“ Senior Indemnity, Subrogation and Contribution Agreement ” means the Senior Indemnity, Subrogation and Contribution Agreement, dated as of June 27, 2001, as amended and restated as of September 22, 2004 among the Company, the Subsidiary Guarantors (including Subsidiary Guarantors becoming party thereto after June 27, 2001) and the Senior Collateral Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.
 
“ Senior Lender ” means a “Lender” as defined in the Senior Credit Facility.
 
“ Senior Lien ” means the liens on the Senior Collateral in favor of the Senior Secured Parties under the Senior Collateral Documents.
 
“ Senior Lien Intercreditor Agreement ” means the Senior Lien Intercreditor Agreement, dated as of June 12, 2009, among the Company, the Subsidiary Guarantors, the Senior Collateral Agent, the Authorized Representative under the Senior Credit Facility and the Trustee, as the Authorized Representative under this Indenture, as the same may be amended, restated, supplemented or otherwise modified from time to time.
 
“ Senior Loan Documents ” means the Senior Credit Facility, any promissory notes issued to any Senior Lender pursuant to the Senior Credit Facility, each Senior Hedging Agreement, each refinancing amendment and each loan modification agreement entered into pursuant to the Senior Credit Facility and the Senior Collateral Documents.
 
“ Senior Loan Obligation Payment Date ” means the date on which (a) the Senior Loan Obligations have been paid in full, (b) all lending commitments under the Senior Credit Facility have been terminated and (c) there are no outstanding letters of credit issued under the Senior Credit Facility other than such as have been fully cash collateralized under documents and arrangements satisfactory to the issuer of such letters of credit.
 
“ Senior Loan Obligations ” means (a) the principal of each loan made under the Senior Credit Facility, (b) all reimbursement and cash collateralization obligations in respect of letters of credit issued under the Senior Credit Facility, (c) all monetary obligations of the Company or any Subsidiary under each Senior Hedging Agreement (as defined in the Senior Credit Facility) entered into (x) prior to September 30, 2005 with any counterparty that was a Senior Lender (or an Affiliate
 
33
thereof) on September 30, 2005 or (y) on or after September 30, 2005 with any counterparty that was a Senior Lender (or an Affiliate thereof) at the time such Senior Hedging Agreement was entered into, (d) all interest on the loans, letter of credit reimbursement, fees and other obligations under the Senior Credit Facility or such Senior Hedging Agreements (including, without limitation, any interest which accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of the Company or any Subsidiary Guarantor, whether or not allowed or allowable as a claim in such proceeding), (e) all other amounts payable by the Company or any Subsidiary under the Senior Debt Documents and (f) all increases, renewals, extensions and refinancings of the foregoing.
 
“ Senior Loan Parties ” means each party to the Senior Credit Facility from time to time other than any Obligor, each counterparty to a Senior Hedging Agreement, the beneficiaries of each indemnification obligation undertaken by the Company or any other Obligor under any Senior Debt Document, and the successors and permitted assigns of each of the foregoing.
 
“ Senior Obligations ” means the Senior Loan Obligations and any Additional Senior Debt Obligations.
 
“ Senior Representative ” means, in respect of a Senior Facility, the trustee, administrative agent, collateral agent, security agent or similar agent under such Senior Facility, as the case may be, and each of their successors in such capacities.
 
“ Senior Secured Parties ” means the Senior Loan Parties and any Additional Senior Debt Parties.
 
“ Senior Subsidiary Guarantee Agreement ” means the Amended and Restated Senior Subsidiary Guarantee Agreement, dated as of June 5, 2009, made by the Subsidiary Guarantors (including Subsidiary Guarantors that become parties thereto after June 27, 2001) in favor of the Senior Collateral Agent for the benefit of the Senior Secured Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time.
 
“ Senior Subsidiary Security Agreement ” means the Amended and Restated Senior Subsidiary Security Agreement, dated as of June 5, 2009, made by the Subsidiary Guarantors (including Subsidiary Guarantors that become parties thereto after June 27, 2001) in favor of the Senior Collateral Agent for the benefit of the Senior Secured Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time.
 
“ Series ” means (a) with respect to the Senior Secured Parties, each of (i) the Senior Loan Parties (in their capacities as such), and (ii) the Additional Senior Debt Parties that become subject to the Senior Lien Intercreditor Agreement after the date hereof that are represented by a common Authorized Representative (in its capacity as such for such Additional Senior Debt Parties) and (b) with respect to any Senior Obligations, each of (i) the Senior Loan Obligations and (ii) the Additional Senior Debt
 
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Obligations incurred pursuant to any Additional Senior Debt Facility, which, pursuant to any Joinder Agreement, are to be represented hereunder by a common Authorized Representative (in its capacity as such for such Additional Senior Debt Obligations).
 
“ Shared Collateral ” means, at any time, Senior Collateral in which the holders of two or more Series of Senior Obligations (or their respective Authorized Representatives) hold a valid and perfected security interest at such time. If more than two Series of Senior Obligations are outstanding at any time and the holders of fewer than all Series of Senior Obligations hold a valid and perfected security interest in any Senior Collateral at such time, then such Senior Collateral shall constitute Shared Collateral for those Series of Senior Obligations the holders of which hold a valid and perfected security interest in such Senior Collateral at such time, and shall not constitute Shared Collateral for any Series of Senior Obligations the holders of which do not have a valid and perfected security interest in such Senior Collateral at such time. Notwithstanding the foregoing, all cash and cash equivalents that secure the Senior Loan Obligations, or are otherwise held by the Senior Lenders, the administrative agent under the Senior Credit Facility or the Senior Collateral Agent to secure letters of credit obligations under the Senior Credit Facility following an event of default under the Senior Credit Facility, will not constitute Shared Collateral until after all such letter of credit obligations have been discharged and such cash and cash equivalents are applied to Senior Obligations pursuant to the terms of the Senior Credit Facility.
 
“ 7.5% Notes due 2017 ” means the Company’s 7.5% Senior Secured Notes due 2017 issued under the indenture dated as of February 21, 2007, among the Company, the Subsidiary Guarantors, The Bank of New York Trust Company, N.A., as trustee, and outstanding on the Issue Date.
 
“ Significant Subsidiary ” means any Subsidiary that would be a “Significant Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the Commission.
 
“ Specified Collateral Disposition ” means any Collateral Disposition (other than a Collateral Disposition occurring following the occurrence of a Triggering Event) in respect of which all or a portion of the resulting proceeds are required by the terms of any Senior Obligations to be used or allocated to Repay such Senior Obligations.
 
“ Standard Securitization Undertakings ” means representations, warranties, covenants and indemnities entered into by the Company or any Subsidiary of the Company which are customary in an accounts receivable securitization transaction involving a comparable company, including those in the Receivables Facilities as in effect on the Issue Date.
 
“ Stated Maturity ” means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder
 
35
thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).
 
“ Subordinated Obligation ” means any Debt of the Company or any Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that is subordinate or junior in right of payment to the Securities or the applicable Subsidiary Guarantee pursuant to a written agreement to that effect.
 
“ Subsidiary ” means, in respect of any Person, any corporation, company (including any limited liability company), association, partnership, joint venture or other business entity of which a majority of the total voting power of the Voting Stock is at the time owned or controlled, directly or indirectly, by:
 
(a) such Person;
 
(b) such Person and one or more Subsidiaries of such Person; or
 
(c) one or more Subsidiaries of such Person.
 
“ Subsidiary Guarantee ” means a Guarantee by a Subsidiary Guarantor of the Company’s obligations with respect to the Securities pursuant to the Senior Subsidiary Guarantee Agreement or otherwise on the terms set forth in this Indenture.
 
“ Subsidiary Guarantor ” means each Subsidiary that is a party to the Senior Subsidiary Guarantee Agreement as of the Issue Date and any other Person that Guarantees the Securities pursuant to Section 4.09.
 
“ Temporary Cash Investments ” means any of the following:
 
(a) Investments in U.S. Government Obligations maturing within 365 days of the date of acquisition thereof;
 
(b) Investments in time deposit accounts, certificates of deposit, money market deposits maturing within 90 days of the date of acquisition thereof issued by a bank or trust company organized under the laws of the United States of America or any state thereof having capital, surplus and undivided profits aggregating in excess of $500.0 million and whose long-term debt is rated “A-3” or “A-” or higher according to Moody’s or S&P (or such similar equivalent rating by at least one “nationally recognized statistical rating organization” (as defined in Section 3(a)(62) under the Act));
 
(c) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (a) entered into with:
 
(1) a bank meeting the qualifications described in clause (b) above; or
 
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(2) any primary government securities dealer reporting to the Market Reports Division of the Federal Reserve Bank of New York;
 
(d) Investments in commercial paper, maturing not more than 90 days after the date of acquisition, issued by a corporation (other than an Affiliate of the Company) organized and in existence under the laws of the United States of America with a rating at the time as of which any Investment therein is made of “P-1” (or higher) according to Moody’s or “A-1” (or higher) according to S&P (or such similar equivalent rating by at least one “nationally recognized statistical rating organization” (as defined in Rule 436 under the Securities Act));
 
(e) direct obligations (or certificates representing an ownership interest in such obligations) of any state of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of such state is pledged and which are not callable or redeemable at the issuer’s option; provided that:
 
(1) the long-term debt of such state is rated “A-3” or “A-” or higher according to Moody’s or S&P (or such similar equivalent rating by at least one “nationally recognized statistical rating organization” (as defined in Rule 436 under the Securities Act)); and
 
(2) such obligations mature within 180 days of the date of acquisition thereof; and
 
(f) money market funds at least 95% of the assets of which constitute Temporary Cash Equivalents of the kinds described in clauses (a) through (e) of this definition.
 
“ 10.375% Notes ” means the Company’s 10.375% Senior Secured Notes due 2016 issued under the indenture dated as of July 9, 2008, among the Company, the Subsidiary Guarantors and The Bank of New York Trust Company, N.A., as trustee, and outstanding on the Issue Date.
 
“ Total Assets ” means the total assets of the Company and the Restricted Subsidiaries on a consolidated basis determined in accordance with GAAP as shown on the most recent consolidated balance sheet of the Company.
 
“ Triggering Event ” at any time has the meaning set forth in the Collateral Trust and Intercreditor Agreement and the Senior Lien Intercreditor Agreement.
 
“ Trust Indenture Act ” or “ TIA ” means the Trust Indenture Act of 1939 as in force at the date as of which this Indenture was executed, except as provided in Section 9.03; provided , however , that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.
 
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“ Trustee ” means the Person named as the “Trustee” in the first paragraph of this Indenture until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean such successor Trustee.
 
“ Trust Officer ” means any officer within the Corporate Trust department of the Trustee (or any successor group of the Trustee) with direct responsibility for the administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.
 
“ Uniform Commercial Code ” means the New York Uniform Commercial Code as in effect from time to time.
 
“ Unrestricted Subsidiary ” means:
 
(a) any Subsidiary of the Company that is designated after the Issue Date as an Unrestricted Subsidiary as permitted or required pursuant to Section 4.11 and is not thereafter redesignated as a Restricted Subsidiary as permitted pursuant thereto; and
 
(b) any Subsidiary of an Unrestricted Subsidiary.
 
“ U.S. Government Obligations ” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer’s option.
 
“ Voting Stock ” of any Person means all classes of Capital Stock or other interests (including partnership interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.
 
“ Wholly Owned Restricted Subsidiary ” means, at any time, a Restricted Subsidiary all the Voting Stock of which (except directors’ qualifying shares) is at such time owned, directly or indirectly, by the Company and its other Wholly Owned Subsidiaries.
 
SECTION 1.02.   Other Definitions.
 

Term
Defined in
Section
“Additional Interest”                                                                                                         
Appendix A
“Affiliate Transaction”                                                                                                         
4.08
“Allocable Excess Proceeds”                                                                                                         
4.06
 
 
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Term
Defined in
Section
“Asset Sales Prepayment Offer”                                                                                                         
4.06
“Bankruptcy Law”                                                                                                         
6.01
“Change of Control Offer”                                                                                                         
4.13(a)
“Change of Control Payment Date”                                                                                                         
4.13(b)
“Change of Control Purchase Price”                                                                                                         
4.13(a)
“covenant defeasance option”                                                                                                         
8.01(b)
“Exchange Securities”                                                                                                         
Appendix A
“Global Security”                                                                                                         
Appendix A
“legal defeasance option”                                                                                                         
8.01(b)
“Legal Holiday”                                                                                                         
12.08
“Offer Amount”                                                                                                         
4.06
“Offer Period”                                                                                                         
4.06
“OID”                                                                                                         
2.01
“Original Securities”                                                                                                         
2.01
“Paying Agent”                                                                                                         
2.04
“Purchase Date”                                                                                                         
4.06
“Registered Exchange Offer”                                                                                                         
Appendix A
“Registrar”                                                                                                         
2.04
“Registration Rights Agreement”                                                                                                         
Appendix A
“Reversion Date”                                                                                                         
4.15(b)
“Securities Custodian”                                                                                                         
Appendix A
“Shelf Registration Statement                                                                                                         
Appendix A
“Surviving Person”                                                                                                         
5.01(a)(1)
“Suspended Covenants”                                                                                                         
4.15(a)
“Suspension Period”                                                                                                         
4.15(b)

 
SECTION 1.03.   Incorporation by Reference of Trust Indenture Act.   This Indenture is subject to the mandatory provisions of the TIA, which are incorporated by reference in and made a part of this Indenture.  The following TIA terms have the following meanings:
 
“Commission” means the SEC.
 
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“indenture securities” means the Securities.
 
“indenture security holder” means a Holder.
 
“indenture to be qualified” means this Indenture.
 
“indenture trustee” or “institutional trustee” means the Trustee.
 
“obligor” on the indenture securities means the Company and any other obligor on the indenture securities.
 
All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions.
 
SECTION 1.04.   Rules of Construction.   Unless the context otherwise requires:
 
(1) a term has the meaning assigned to it;
 
(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
 
(3) “or” is not exclusive;
 
(4) “including” means including without limitation;
 
(5) words in the singular include the plural and words in the plural include the singular;
 
(6) unsecured Debt shall not be deemed to be subordinate or junior to secured Debt merely by virtue of its nature as unsecured Debt;
 
(7) the principal amount of any noninterest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP;
 
(8) the principal amount of any Preferred Stock shall be the greater of (i) the maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock; and
 
(9) all references to any amount of interest or any other amount payable on or with respect to any of the Securities shall be deemed to include payment of any Additional Interest pursuant to the Registration Rights Agreement, if applicable.
 
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ARTICLE II
 
The Securities
 
SECTION 2.01.   Amount of Securities; Issuable in Series.   The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.  All Securities shall be identical in all respects other than issue prices and issuance dates.  The Securities may be issued in one or more series; provided , however , that any Securities issued with original issue discount (“ OID ”) for Federal income tax purposes shall not be issued as part of the same series as any Securities that are issued with a different amount of OID or are not issued with OID.  All Securities of any one series shall be substantially identical except as to denomination.
 
Subject to Section 2.03, the Trustee shall authenticate Securities for original issue on the Issue Date in the aggregate principal amount of $410,000,000 (the “ Original Securities ”).  With respect to any Securities issued after the Issue Date (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, Original Securities pursuant to Section 2.07, 2.08, 2.09 or 3.06 or Appendix A, including the Exchange Securities), there shall be established in or pursuant to a Board Resolution, and subject to Section 2.03, set forth, or determined in the manner provided in an Officers’ Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of such Securities:
 
(1) whether such Securities shall be issued as part of a new or existing series of Securities and, if issued as part of a new series, the title of such Securities (which shall distinguish the Securities of the series from Securities of any other series);
 
(2) the aggregate principal amount of such Securities to be authenticated and delivered under this Indenture, which may be issued for an unlimited aggregate principal amount (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the same series pursuant to Section 2.07, 2.08, 2.09 or 3.06 or Appendix A and except for Securities which, pursuant to Section 2.03, are deemed never to have been authenticated and delivered hereunder);
 
(3) the issue price and issuance date of such Securities, including the date from which interest payable with respect to such Securities shall accrue;
 
(4) if applicable, that such Securities shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective depositories for such Global Securities; the form of any legend or legends that shall be borne by any such Global Security in addition to or in lieu of that set forth in Exhibit 1 to Appendix A and any circumstances in addition to or in lieu of those set forth in Section 2.3 of Appendix A in
 
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which any such Global Security may be exchanged in whole or in part for Securities registered; and any transfer of such Global Security in whole or in part may be registered in the name or names of Persons other than the depository for such Global Security or a nominee thereof; and
 
(5) if applicable, that such Securities shall not be issued in the form of Initial Securities subject to Appendix A, but shall be issued in the form of Exchange Securities as set forth in Exhibit A.
 
SECTION 2.02.   Form and Dating.   Provisions relating to the Initial Securities and the Exchange Securities are set forth in Appendix A, which is hereby incorporated in and expressly made part of this Indenture.  The Initial Securities of each series and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit 1 to Appendix A, which is hereby incorporated in and expressly made a part of this Indenture.  The Exchange Securities and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A, which is hereby incorporated in and expressly made a part of this Indenture.  The Securities of each series may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject, if any, or usage; provided that any such notation, legend or endorsement is in a form reasonably acceptable to the Company.  Each Security shall be dated the date of its authentication.  The terms of the Securities of each series set forth in Exhibit 1 to Appendix A and Exhibit A are part of the terms of this Indenture.
 
SECTION 2.03.   Execution and Authentication.   An Officer (and for purposes of this Section 2.03, the term Officer shall include any Vice President of the Company authorized by the Board of Directors) shall sign the Securities for the Company by manual or facsimile signature.
 
If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless.
 
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a written order of the Company in the form of an Officers’ Certificate for the authentication and delivery of such Securities, and the Trustee in accordance with such written order of the Company shall authenticate and deliver such Securities.
 
A Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Security.  The signature shall be conclusive evidence that the Security has been authenticated under this Indenture.
 
The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Securities.  Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes
 
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authentication by such agent.  An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.
 
SECTION 2.04.   Registrar and Paying Agent.   The Company shall maintain an office or agency in the City of New York where Securities may be presented for registration of transfer or for exchange (the “ Registrar ”) and an office or agency in the City of New York where Securities may be presented for payment (the “ Paying Agent ”).  The Registrar shall keep a register of the Securities and of their transfer and exchange.  The Company may have one or more co-registrars and one or more additional paying agents.  The term “Paying Agent” includes any additional paying agent.
 
The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA.  The agreement shall implement the provisions of this Indenture that relate to such agent.  The Company shall notify the Trustee of the name and address of any such agent.  If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07.  The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer agent.
 
The Company initially appoints the Trustee as Registrar and Paying Agent in connection with the Securities.
 
SECTION 2.05.   Paying Agent To Hold Money in Trust.   Prior to each due date of the principal and interest on any Security, the Company shall deposit with the Paying Agent a sum sufficient to pay such principal and interest when so becoming due.  The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Securities and shall notify the Trustee of any default by the Company in making any such payment.  If the Company or a Wholly Owned Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund.  The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent.  Upon complying with this Section 2.05, the Paying Agent shall have no further liability for the money delivered to the Trustee.
 
SECTION 2.06.   Holder Lists.   The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders.  If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders.
 
SECTION 2.07.   Replacement Securities.   If a mutilated Security is surrendered to the Registrar or if the Holder of a Security claims that such Security has
 
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been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies any other reasonable requirements of the Trustee.  If required by the Trustee or the Company, such Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss which any of them may suffer if a Security is replaced.  The Company and the Trustee may charge the Holder for their expenses in replacing a Security.
 
Every replacement Security is an additional obligation of the Company.
 
SECTION 2.08.   Outstanding Securities.   Securities outstanding at any time are all Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.08 as not outstanding.  A Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security.
 
If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a bona fide purchaser.
 
If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal  and interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue.
 
SECTION 2.09.   Temporary Securities.   Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities.  Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities.  Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities and deliver them in exchange for temporary Securities.
 
SECTION 2.10.   Cancellation.   The Company at any time may deliver Securities to the Trustee for cancellation.  The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel and dispose of (subject to the record retention requirements of the Exchange Act) all Securities surrendered for registration of transfer, exchange, payment or cancellation and deliver a certificate of such disposal to the Company upon its request therefor unless the Company directs the Trustee to deliver canceled Securities to the Company.  The Company may not issue new Securities to replace Securities it has redeemed, paid or delivered to the Trustee for cancellation.
 
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SECTION 2.11.   Defaulted Interest.   If the Company defaults in a payment of interest on the Securities, the Company shall pay the defaulted interest (plus interest payable with respect to such defaulted interest to the extent lawful) in any lawful manner.  The Company may pay the defaulted interest to the persons who are Holders on a subsequent special record date.  The Company shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail to each Holder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.
 
SECTION 2.12.   CUSIP Numbers.   The Company in issuing the Securities may use “CUSIP” numbers (if then generally in use) and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders; provided , however , that neither the Company nor the Trustee shall have any responsibility for any defect in the “CUSIP” number that appears on any Security, check, advice of payment or redemption notice, and any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers.
 
ARTICLE III
 
Redemption
 
SECTION 3.01.   Notices to Trustee.   If the Company elects to redeem Securities pursuant to paragraph 5 of the Securities, it shall notify the Trustee in writing of the redemption date, the principal amount of Securities to be redeemed and that such redemption is being made pursuant to such paragraph 5 of the Securities.
 
The Company shall give each notice to the Trustee provided for in this Section 3.01 at least 45 days before the redemption date unless the Trustee consents to a shorter period.  Such notice shall be accompanied by an Officers’ Certificate from the Company to the effect that such redemption will comply with the conditions herein.
 
SECTION 3.02.   Selection of Securities To Be Redeemed.   If fewer than all the Securities are to be redeemed pursuant to paragraph 5 of the Securities, the Trustee shall select the Securities to be redeemed pro rata or by lot or by a method that complies with applicable legal and securities exchange requirements, if any, and that the Trustee considers fair and appropriate and in accordance with methods generally used at the time of selection by fiduciaries in similar circumstances.  The Trustee shall make the selection from outstanding Securities not previously called for redemption.  The Trustee may select for redemption portions of the principal of Securities that have denominations larger than $1,000.  Securities and portions of them the Trustee selects shall be in amounts of $1,000 or a whole multiple of $1,000.  Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption.  The Trustee shall notify the Company promptly of the Securities or portions of Securities to be redeemed.
 
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SECTION 3.03.   Notice of Redemption.   At least 30 days but not more than 60 days before a date for redemption of Securities, the Company shall mail a notice of redemption by first-class mail to each Holder of Securities to be redeemed at such Holder’s registered address.
 
The notice shall identify the Securities to be redeemed and shall state:
 
(1) the redemption date;
 
(2) the redemption price;
 
(3) the name and address of the Paying Agent;
 
(4) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price;
 
(5) if fewer than all the outstanding Securities are to be redeemed, the identification and principal amounts of the particular Securities to be redeemed;
 
(6) that, unless the Company defaults in making such redemption payment, interest on Securities (or portion thereof) called for redemption ceases to accrue on and after the redemption date, and the only remaining right of the Holders is to receive payment of the redemption price upon surrender to the Paying Agent; and
 
(7) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Securities.
 
At the Company’s request, the Trustee shall give the notice of redemption in the Company’s name and at the Company’s expense.  In such event, the Company shall provide the Trustee with the information required by this Section 3.03 at least 40 days before the redemption date and at least five days prior to the Trustee giving the notice of redemption.
 
SECTION 3.04.   Effect of Notice of Redemption.   Once notice of redemption is mailed, Securities called for redemption become due and payable on the redemption date and at the redemption price stated in the notice.  Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price stated in the notice, plus accrued interest, if any, to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date that is on or prior to the date of redemption).  Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.
 
SECTION 3.05.   Deposit of Redemption Price.   Prior to or on the redemption date, the Company shall deposit with the Paying Agent (or, if the Company or a Wholly Owned Subsidiary is the Paying Agent, shall segregate and hold in trust)
 
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money sufficient to pay the redemption price of and accrued interest, if any (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date that is on or prior to the date of redemption), on all Securities to be redeemed on that date other than Securities or portions of Securities called for redemption that have been delivered by the Company to the Trustee for cancellation.
 
SECTION 3.06.   Securities Redeemed in Part.   Upon surrender of a Security that is redeemed in part, the Company shall execute and the Trustee shall authenticate for the Holder (at the Company’s expense) a new Security equal in principal amount to the unredeemed portion of the Security surrendered.
 
ARTICLE IV
 
Covenants
 
SECTION 4.01.   Payment of Securities.   The Company shall promptly pay the principal of and interest on the Securities on the dates and in the manner provided in the Securities and in this Indenture.  Principal and interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and interest then due.
 
The Company shall pay interest on overdue principal at the rate per annum specified therefor in the Securities, and it shall pay interest on overdue installments of interest at the rate borne by the Securities, to the extent lawful.
 
SECTION 4.02.   SEC Reports.   Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall file with the Commission and provide the Trustee with such annual and quarterly reports and such information, documents and other reports as are specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation subject to such Sections, such information, documents and reports to be so filed and provided at the times specified for the filing of such information, documents and reports under such Sections; provided , however , that the Company shall not be so obligated to file such information, documents and reports with the Commission if the Commission does not permit such filings; provided further , however , that the Company shall be required also to provide to Holders any such information, documents or reports that are not so filed.  The Company shall also comply with the other provisions of TIA § 314(a).  Notwithstanding anything herein to the contrary, the Company will not be deemed to have failed to comply with any of its obligations hereunder for purposes of clause (d) of Section 6.01 until 120 days after the date any report hereunder is due.  Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).
 
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SECTION 4.03.   Limitation on Debt.   The Company shall not, and shall not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Debt unless, after giving effect to the application of the proceeds thereof, no Default or Event of Default would occur as a consequence of such Incurrence and no Default or Event of Default would be continuing following such Incurrence and application of proceeds and either:
 
(1) such Debt is Debt of the Company or a Subsidiary Guarantor and after giving effect to the Incurrence of such Debt and the application of the proceeds thereof, the Consolidated Interest Coverage Ratio would be greater than 2.00 to 1.00; or
 
(2) such Debt is Permitted Debt.
 
The term “ Permitted Debt ” is defined to include the following:
 
(a)  [Intentionally omitted];
 
(b)  Debt of the Company or a Subsidiary Guarantor (including Guarantees thereof) (1) under any Credit Facilities, (2) Incurred pursuant to a Real Estate Financing Transaction, a Sale and Leaseback Transaction or an Equipment Financing Transaction, (3) Incurred in respect of Capital Lease Obligations, (4) Incurred pursuant to Debt Issuances or (5) Incurred by a Receivables Entity, whether or not a Subsidiary Guarantor, in a Qualified Receivables Transaction that is not recourse to the Company or any other Restricted Subsidiary (except for Standard Securitization Undertakings); provided that the aggregate principal amount of all such Debt in clauses (1) through (5) hereof at any one time outstanding shall not exceed the greater of (A) $3,500.0 million, which amount shall be permanently reduced by the amount of Net Available Cash used to Repay Debt under the Credit Facilities, and not subsequently reinvested in Additional Assets or used to purchase Securities or Repay other Debt, pursuant to Section 4.06 and (B) the sum of the amount equal to (i) 60% of the book value of the inventory (determined using the first-in-first-out method of accounting) of the Company and the Restricted Subsidiaries and (ii) 85% of the book value of the accounts receivables of the Company and the Restricted Subsidiaries, including any Receivables Entity that is a Restricted Subsidiary;
 
(c)  [Intentionally omitted];
 
(d)  Debt of the Company outstanding on the Issue Date and evidenced by the 7.5% Notes due 2017 and of Subsidiary Guarantors, including any future Guarantor, evidenced by guarantees relating to the 7.5% Notes due 2017;
 
(e)  Debt Incurred after the Issue Date in respect of Purchase Money Debt; provided that the aggregate principal amount of such Debt does not exceed 80% of the Fair Market Value (on the date of the Incurrence thereof) of the Property acquired, constructed, developed or leased, including additions and improvements thereto;
 
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(f)  Debt of the Company owing to and held by any consolidated Restricted Subsidiary and Debt of a Restricted Subsidiary owing to and held by the Company or any consolidated Restricted Subsidiary; provided , however , that any subsequent issue or transfer of Capital Stock or other event that results in any such consolidated Restricted Subsidiary ceasing to be a consolidated Restricted Subsidiary or any subsequent transfer of any such Debt (except to the Company or a consolidated Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Debt by the issuer thereof;
 
(g)  Debt under Interest Rate Agreements entered into by the Company or a Restricted Subsidiary for the purpose of limiting interest rate risk of the financial management of the Company or such Restricted Subsidiary and not for speculative purposes; provided that the obligations under such agreements are directly related to payment obligations on Debt otherwise permitted by the terms of this Section 4.03;
 
(h)  Debt under Currency Exchange Protection Agreements entered into by the Company or a Restricted Subsidiary for the purpose of limiting currency exchange rate risks directly related to transactions entered into by the Company or such Restricted Subsidiary and not for speculative purposes;
 
(i)  Debt under Commodity Price Protection Agreements entered into by the Company or a Restricted Subsidiary in the financial management of the Company or that Restricted Subsidiary and not for speculative purposes;
 
(j)  Debt in connection with one or more standby letters of credit, banker’s acceptance, performance or surety bonds or completion guarantees issued by the Company or a Restricted Subsidiary or pursuant to self-insurance obligations and not in connection with the borrowing of money or the obtaining of advances or credit;
 
(k)  Debt outstanding on the Issue Date not otherwise described in clauses (a) through (j) above or clause (q) below;
 
(l)  other Debt of the Company or a Subsidiary Guarantor (including Guarantees thereof) in an aggregate principal amount outstanding at any one time not to exceed $600.0 million;
 
(m)  Debt of a Restricted Subsidiary outstanding on the date on which that Restricted Subsidiary was acquired by the Company or otherwise became a Restricted Subsidiary (other than Debt Incurred as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of transactions pursuant to which that Restricted Subsidiary became a Subsidiary of the Company or was otherwise acquired by the Company); provided that at the time that Restricted Subsidiary was acquired by the Company or otherwise became a Restricted Subsidiary and after giving effect to the Incurrence of that Debt, the Company would have been able to Incur $1.00 of additional Debt pursuant to clause (1) of the first paragraph of this Section 4.03;
 
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(n)  Debt arising from the honoring by a bank or other financial institution of a check or draft or other similar instrument inadvertently drawn against insufficient funds; provided that such Debt is extinguished within five Business Days of its Incurrence;
 
(o)  Endorsements of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;
 
(p)  [Intentionally omitted];
 
(q)  Debt in respect of Sale and Leaseback Transactions or Real Estate Financing Transactions involving only real property (and the related personal property) owned by the Company or a Subsidiary Guarantor on or after the Issue Date in an aggregate principal amount outstanding at any one time not to exceed $150.0 million; provided that such Sale and Leaseback Transactions or Real Estate Financing Transactions may involve Property other than real property (and the related personal property) owned on or after the Issue Date to the extent the portion of the Debt related to such Property is permitted by another provision of this Section 4.03 at the time of Incurrence;
 
(r)  Debt in respect of Sale and Leaseback Transactions that are not Capital Lease Obligations Incurred to finance the acquisition, construction and development of Property after the Issue Date, including additions and improvements thereto; provided that any reclassification of such Debt as a Capital Lease Obligation shall be deemed an Incurrence of such Debt;
 
(s)  Permitted Refinancing Debt Incurred in respect of Debt Incurred pursuant to clause (1) of the first paragraph of this Section 4.03 and clauses (a), (d), (e), (k), (m) and (q) above; and
 
(t)  Debt arising from agreements of the Company or any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than Guarantees of Debt incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that (i) such Debt is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (i)) and (ii) the maximum assumable liability in respect of such Debt will at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company or such Restricted Subsidiary in connection with such disposition.
 
Notwithstanding anything to the contrary contained in this Section 4.03, the Company shall not permit any Restricted Subsidiary that is not a Subsidiary
 
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Guarantor to Incur any Debt pursuant to this Section 4.03 if the proceeds thereof are used, directly or indirectly, to Refinance any Debt of the Company or any Subsidiary Guarantor.  In addition, except as set forth in the Collateral Documents, the Company shall not, and shall not permit any Subsidiary Guarantor to, Incur, directly or indirectly, any Senior Obligation that is subordinate or junior in right of payment (without regard to any security interest) to any other Debt of the Company or any Subsidiary Guarantor.
 
For purposes of determining compliance with this Section 4.03, (1) in the event that an item of Debt meets the criteria of more than one of the types of Debt described herein, the Company, in its sole discretion, will classify such item of Debt at the time of Incurrence and only be required to include the amount and type of such Debt in one of the above clauses, (2) the Company will be entitled at the time of such Incurrence to divide and classify an item of Debt in more than one of the types of Debt described herein and (3) with respect to Debt permitted under clause (k) of this Section 4.03 in respect of Sale and Leaseback Transactions that are not Capital Lease Obligations on the Issue Date, any reclassification of such Debt as a Capital Lease Obligation shall not be deemed an Incurrence of such Debt; provided , however , that (A) the Offered Securities will be deemed to have been Incurred pursuant to clause (b) of the second paragraph of this Section 4.03 (B) $250.0 million of the 10.375% Notes due 2016 will be deemed to have been Incurred pursuant to clause (b) of the second paragraph of this Section 4.03, (C) all outstanding Debt evidenced by the 8.125% Notes will be deemed to have been Incurred pursuant to clause (b) of the second paragraph of this Section 4.03, (D) all outstanding Debt evidenced by the Receivables Facilities will be deemed to have been Incurred pursuant to clause (b) of the second paragraph of this Section 4.03, (E) all outstanding Debt under the Senior Credit Facility immediately following the Issue Date will be deemed to have been Incurred pursuant to clause (b) of the second paragraph of this Section 4.03, (F) any Permitted Debt that is not Secured Debt may later be reclassified as having been Incurred pursuant to clause (1) of the first paragraph of this Section 4.03, to the extent such Debt could be Incurred pursuant to such clause at the time of such reclassification, and (G) any Permitted Debt may later be reclassified as having been Incurred pursuant to any other clause in the definition of Permitted Debt to the extent such Debt could be Incurred pursuant to such clause at the time of such reclassification.
 
SECTION 4.04.   Limitation on Restricted Payments .  The Company shall not make, and shall not permit any Restricted Subsidiary to make, directly or indirectly, any Restricted Payment if at the time of, and after giving effect to, such proposed Restricted Payment:
 
(a) a Default or Event of Default shall have occurred and be continuing;
 
(b) the Company could not Incur at least $1.00 of additional Debt pursuant to clause (1) of the first paragraph of Section 4.03; or
 
(c) the aggregate amount of such Restricted Payment and all other Restricted Payments declared or made since the Issue Date (the amount of any
 
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Restricted Payment, if made other than in cash, to be based upon Fair Market Value) would exceed an amount equal to the sum of:
 
(1) 50% of the aggregate amount of Consolidated Net Income accrued during the period (treated as one accounting period) from the beginning of the first fiscal quarter that commences after the Issue Date to the end of the most recent fiscal quarter for which financial statements have been filed with the Commission (or, if the aggregate amount of Consolidated Net Income for such period shall be a deficit, minus 100% of such deficit); plus
 
(2) 100% of Capital Stock Sale Proceeds; plus
 
(3) the sum of:
 
(A) the aggregate net cash proceeds received by the Company or any Restricted Subsidiary from the issuance or sale after the Issue Date of convertible or exchangeable Debt that has been converted into or exchanged for Capital Stock (other than Disqualified Stock) of the Company; and
 
(B) the aggregate amount by which Debt (other than Subordinated Obligations other than Second Priority Debt Obligations) of the Company or any Restricted Subsidiary is reduced on the Company’s consolidated balance sheet after the Issue Date upon the conversion or exchange of any Debt (other than convertible or exchangeable debt issued or sold after the Issue Date) for Capital Stock (other than Disqualified Stock) of the Company;
 
excluding, in the case of clause (A) or (B):
 
(x) any such Debt issued or sold to the Company or a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees; and
 
(y) the aggregate amount of any cash or other Property distributed by the Company or any Restricted Subsidiary upon any such conversion or exchange;
 
plus
 
(4) an amount equal to the sum of:
 
(A) the net reduction in Investments in any Person other than the Company or a Restricted Subsidiary resulting from dividends, repayments of loans or advances or other transfers of
 
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Property made after the Issue Date, in each case to the Company or any Restricted Subsidiary from such Person less the cost of the disposition of such Investments; and
 
(B) the portion (proportionate to the Company’s equity interest in such Unrestricted Subsidiary) of the Fair Market Value of the net assets of an Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary ( provided that such designation occurs after the Issue Date);
 
provided , however , that the foregoing sum shall not exceed, in the case of any Person, the amount of Investments previously made (and treated as a Restricted Payment) by the Company or any Restricted Subsidiary in such Person.
 
Notwithstanding the foregoing limitation, the Company may:
 
(a) pay dividends on its Capital Stock within 60 days of the declaration thereof if, on said declaration date, such dividends could have been paid in compliance with this Indenture; provided , however , that at the time of such payment of such dividend, no other Default or Event of Default shall have occurred and be continuing (or result therefrom); provided further , however , that, if declared on or after the Issue Date, such dividend shall be included in the calculation of the amount of Restricted Payments;
 
(b) purchase, repurchase, redeem, legally defease, acquire or retire for value Capital Stock of the Company or Subordinated Obligations on or after the Issue Date in exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company or an employee stock ownership plan or trust established by the Company or any such Subsidiary for the benefit of their employees); provided , however , that:
 
(1) such purchase, repurchase, redemption, legal defeasance, acquisition or retirement shall be excluded in the calculation of the amount of Restricted Payments; and
 
(2) the Capital Stock Sale Proceeds from such exchange or sale shall be excluded from the calculation pursuant to clause (c)(2) above;
 
(c) purchase, repurchase, redeem, legally defease, acquire or retire for value any Subordinated Obligations on or after the Issue Date in exchange for, or out of the proceeds of the substantially concurrent sale of, Permitted Refinancing Debt; provided , however , that such purchase, repurchase, redemption, legal defeasance, acquisition or retirement shall be excluded in the calculation of the amount of Restricted Payments;
 
(d) [intentionally omitted];
 
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(e) so long as no Default or Event of Default has occurred and is continuing the repurchase or other acquisition on or after the Issue Date of shares of, or options to purchase shares of, Capital Stock of the Company or any of its Subsidiaries from employees, former employees, directors or former directors of the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such Capital Stock; provided , however , that the aggregate amount of such repurchases and other acquisitions shall not exceed $15.0 million; provided further , however , that such repurchases and other acquisitions shall be included in the calculation of the amount of Restricted Payments;
 
(f) make payments not to exceed $2.5 million in the aggregate to enable the Company to make payments to holders of its Capital Stock in lieu of the issuance of fractional shares of its Capital Stock on or after the Issue Date; provided , however , that such payments shall be included in the calculation of the amount of Restricted Payments; and
 
(g) make any other Restricted Payments on or after the Issue Date not to exceed an aggregate amount of $40.0 million; provided , however , that such payments shall be included in the calculation of the amount of Restricted Payments.
 
SECTION 4.05.   Limitation on Liens .  The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, Incur or suffer to exist, any Lien (other than Permitted Liens) upon any of its Property (including Capital Stock of a Restricted Subsidiary), whether owned on the Issue Date or thereafter acquired, or any interest therein or any income or profits therefrom.  If the Company or any Subsidiary Guarantor creates any additional Lien upon any Property to secure any Secured Obligations, it must concurrently grant a Senior Lien (subject to Permitted Liens) upon such Property as security for the Securities or Subsidiary Guarantees of the Securities such that the Property subject to such Lien becomes Senior Collateral subject to the Senior Liens, except to the extent such Property constitutes cash or cash equivalents required to secure only letter of credit obligations under Credit Facilities following a default under such Credit Facilities.
 
Notwithstanding anything in the preceding paragraph, the aggregate principal amount of Senior Obligations constituting Debt and any other Debt secured by a Lien on the Collateral that shares in the distribution of proceeds of Collateral equally with the Securities at any one time outstanding shall not exceed the sum of the aggregate amount of Debt that at such time may be outstanding at any one time under clause (b) of the second paragraph of Section 4.03 and $200.0 million.
 
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SECTION 4.06.   Limitation on Asset Sales and Specified Collateral Dispositions .  The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Sale unless:
 
(a) the Company or such Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the Property subject to such Asset Sale;
 
(b) at least 75% of the consideration paid to the Company or such Restricted Subsidiary in connection with such Asset Sale is in the form of Qualified Consideration; and
 
(c) the Company delivers an Officers’ Certificate to the Trustee certifying that such Asset Sale complies with the foregoing clauses (a) and (b).
 
The Net Available Cash (or any portion thereof) from Asset Sales and Specified Collateral Dispositions may be applied by the Company or a Restricted Subsidiary, to the extent the Company or such Restricted Subsidiary elects (or is required by the terms of any Debt):
 
(a) to Repay any Senior Obligations secured by a Lien on Property of the Company or any Restricted Subsidiary of the Company (excluding, in any such case, any Debt owed to the Company or an Affiliate of the Company); provided , however , that to the extent the proceeds from any Asset Sale, including a Specified Collateral Disposition, will be allocated pursuant to the terms of any other Senior Debt Documents to Repay or provide for the Repayment of such Senior Obligations, a pro rata portion of such proceeds must, to the extent not inconsistent with the terms of such other Senior Obligations (other than Additional Senior Debt Incurred after the Issue Date), including but not limited to the prepayment provisions of the Senior Credit Facility, be allocated to Repay the Notes pursuant to an Asset Sales Prepayment Offer and the full amount of such allocated portion will be deemed Excess Proceeds; or
 
(b) to reinvest in Additional Assets or Expansion Capital Expenditures (including by means of an Investment in Additional Assets or Expansion Capital Expenditures by a Restricted Subsidiary with Net Available Cash received by the Company or another Restricted Subsidiary); provided , however , that (i) the Net Available Cash (or any portion thereof) from Asset Sales from the Company to any Subsidiary must be reinvested in Additional Assets or Expansion Capital Expenditures of the Company and (ii) if the assets that were the subject of such Asset Sale constituted Collateral, then such Net Available Cash must be reinvested in Additional Assets that are pledged at the time as Collateral to secure the Securities or the Subsidiary Guarantees of the Securities, subject to the Collateral Documents, or in Expansion Capital Expenditures to improve assets that constitute Collateral securing the Securities or the Subsidiary Guarantees of the Securities at the time.
 
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Pending application of Net Available Cash pursuant to this Section 4.06, which shall not be required in respect of an Asset Sale that is not a Specified Collateral Disposition if the Net Available Cash from such Asset Sale is less than $1.0 million, such Net Available Cash shall, to the extent not inconsistent with the terms of other Senior Obligations, be invested in Temporary Cash Investments or applied to temporarily reduce revolving credit indebtedness.  If the Net Available Cash from an Asset Sale that is not an Asset Sale referenced in paragraph (a) above (including a Specified Collateral Disposition) equals or exceeds $1.0 million, any Net Available Cash from such Asset Sale not applied in accordance with the preceding paragraph within 270 days from the date of the receipt of such Net Available Cash or that is not segregated from the general funds of the Company for investment in identified Additional Assets in respect of a project that shall have been commenced, and for which binding contractual commitments have been entered into, prior to the end of such 270-day period and that shall not have been completed or abandoned shall constitute “Excess Proceeds”; provided , however , that the amount of any Net Available Cash that ceases to be so segregated as contemplated above and any Net Available Cash that is segregated in respect of a project that is abandoned or completed shall also constitute “Excess Proceeds” at the time any such Net Available Cash ceases to be so segregated or at the time the relevant project is so abandoned or completed, as applicable; provided further , however , that the amount of any Net Available Cash that continues to be segregated for investment and that is not actually reinvested within 24 months from the date of the receipt of such Net Available Cash shall also constitute “Excess Proceeds”.
 
When the aggregate amount of Excess Proceeds exceeds $50.0 million (taking into account income earned on such Excess Proceeds, if any), the Company will be required to make an offer to purchase (the “ Asset Sales Prepayment Offer ”) the Securities which offer shall be in the amount of the Allocable Excess Proceeds, on a pro rata basis according to principal amount at maturity, at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the purchase date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), in accordance with the procedures (including prorating in the event of oversubscription) set forth herein.  To the extent that any portion of the amount of Net Available Cash remains after compliance with the preceding sentence and provided that all Holders have been given the opportunity to tender their Securities for purchase in accordance with this Indenture, the Company or such Restricted Subsidiary may use such remaining amount for any purpose permitted by this Indenture and the amount of Excess Proceeds will be reset to zero.
 
The term “ Allocable Excess Proceeds ” will mean the product of:
 
(a) the Excess Proceeds; and
 
(b) a fraction,
 
(1) the numerator of which is the aggregate principal amount of the Securities outstanding on the date of the Asset Sales Prepayment Offer; and
 
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(2) the denominator of which is the sum of the aggregate principal amount of the Securities outstanding on the date of the Asset Sales Prepayment Offer and the aggregate principal amount of other Additional Senior Debt Obligations of the Company outstanding on the date of the Asset Sales Prepayment Offer that is subject to terms and conditions in respect of Asset Sales similar in all material respects to this covenant and requiring the Company to make an offer to purchase such Debt or otherwise repay such Debt at substantially the same time as the Asset Sales Prepayment Offer; provided, however, that if any such Additional Senior Debt Obligations are entitled to participate directly in the proceeds of such Asset Sale, such Additional Senior Debt Obligations may be excluded from the determination of Allocable Excess Proceeds.
 
Within five Business Days after the Company is obligated to make an Asset Sales Prepayment Offer as described in the preceding paragraph, the Company shall send a written notice, by first-class mail, to the Holders, accompanied by such information regarding the Company and its Subsidiaries as the Company in good faith believes will enable such Holders to make an informed decision with respect to such Asset Sales Prepayment Offer.  Such notice shall state, among other things, the purchase price and the purchase date (the “ Purchase Date ”), which shall be, subject to any contrary requirements of applicable law, a Business Day no earlier than 30 days nor later than 60 days from the date such notice is mailed.  Nothing shall prevent the Company from conducting an Asset Sales Prepayment Offer earlier than as set forth in this paragraph.
 
Not later than the date upon which written notice of an Asset Sales Prepayment Offer is delivered to the Trustee as provided above, the Company shall deliver to the Trustee an Officers’ Certificate as to (a) the amount of the Asset Sales Prepayment Offer (the “ Offer Amount ”), (b) the allocation of the Net Available Cash from the Asset Sales pursuant to which such Prepayment Offer is being made and (c) the compliance of such allocation with the provisions of clause (b) of the second paragraph of this Section 4.06.  On or before the Purchase Date, the Company shall also irrevocably deposit with the Trustee or with the Paying Agent (or, if the Company or a Wholly Owned Subsidiary is the Paying Agent, shall segregate and hold in trust) in Temporary Cash Investments (other than in those enumerated in such clause (b) of the definition of Temporary Cash Investments), maturing on the last day prior to the Purchase Date or on the Purchase Date if funds are immediately available by open of business, an amount equal to the Offer Amount to be held for payment in accordance with the provisions of this Section 4.06.  Upon the expiration of the period for which the Prepayment Offer remains open (the “ Offer Period ”), the Company shall deliver to the Trustee for cancellation the Securities or portions thereof that have been properly tendered to and are to be accepted by the Company.  The Trustee or the Paying Agent shall, on the Purchase Date, mail or deliver payment to each tendering Holder in the amount of the purchase price.  In the event that the aggregate purchase price of the Securities delivered by the Company to the Trustee is less than the Offer Amount, the Trustee or the Paying Agent shall deliver the excess to the Company immediately after the expiration of the Offer Period for application in accordance with this Section 4.06.
 
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Holders electing to have a Security purchased shall be required to surrender the Security, with an appropriate form duly completed, to the Company or its agent at the address specified in the notice at least three Business Days prior to the Purchase Date.  Holders shall be entitled to withdraw their election if the Trustee or the Company receives not later than one Business Day prior to the Purchase Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security that was delivered for purchase by the Holder and a statement that such Holder is withdrawing its election to have such Security purchased.  If at the expiration of the Offer Period the aggregate principal amount of Securities surrendered by Holders exceeds the Offer Amount, the Company shall select the Securities to be purchased on a pro rata basis for all Securities (with such adjustments as may be deemed appropriate by the Company so that only Securities in denominations of $1,000, or integral multiples thereof, shall be purchased).  Holders whose Securities are purchased only in part shall be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered.
 
At the time the Company delivers Securities to the Trustee that are to be accepted for purchase, the Company shall also deliver an Officers’ Certificate stating that such Securities are to be accepted by the Company pursuant to and in accordance with the terms of this Section 4.06.  A Security shall be deemed to have been accepted for purchase at the time the Trustee or the Paying Agent mails or delivers payment therefor to the surrendering Holder.
 
The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Securities pursuant to this Section 4.06.  To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.06, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.06 by virtue thereof.
 
SECTION 4.07.   Limitation on Restrictions on Distributions from Restricted Subsidiaries .  The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or suffer to exist any consensual restriction on the right of any Restricted Subsidiary to:
 
(a) pay dividends, in cash or otherwise, or make any other distributions on or in respect of its Capital Stock, or pay any Debt or other obligation owed, to the Company or any other Restricted Subsidiary;
 
(b) make any loans or advances to the Company or any other Restricted Subsidiary; or
 
(c) transfer any of its Property to the Company or any other Restricted Subsidiary.
 
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The foregoing limitations will not apply:
 
(1) with respect to clauses (a), (b) and (c), to restrictions:
 
(A) in effect on the Issue Date;
 
(B) relating to Debt of a Restricted Subsidiary and existing at the time it became a Restricted Subsidiary if such restriction was not created in connection with or in anticipation of the transaction or series of transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the Company;
 
(C) that result from the Refinancing of Debt Incurred pursuant to an agreement referred to in clause (1)(A) or (B) above or in clause (2)(A) or (B) below; provided that such restriction is no less favorable to the Holders in any material respect, as reasonably determined by the Board of Directors (as evidenced by a Board Resolution), than those under the agreement evidencing the Debt so Refinanced;
 
(D) resulting from the Incurrence of any Debt permitted pursuant to Section 4.03; provided that (i) the restriction is no less favorable to the Holders in any material respect, as reasonably determined by the Board of Directors (as evidenced by a Board Resolution), than the restrictions of the same type contained in this Indenture and (ii) the Board of Directors determines (as evidenced by a Board Resolution) in good faith that such restrictions will not impair the ability of the Company to make payments of principal and interest on the Securities when due;
 
(E) existing by reason of applicable law; or
 
(F) any contractual requirements incurred with respect to Qualified Receivables Transactions relating exclusively to a Receivables Entity that, in the good faith determination of the Board of Directors, are customary for Qualified Receivables Transactions; and
 
(2) with respect to clause (c) only, to restrictions:
 
(A) relating to Debt that is permitted to be Incurred and secured pursuant to Sections 4.03 and 4.05 that limit the right of the debtor to dispose of the Property securing such Debt;
 
(B) encumbering Property at the time such Property was acquired by the Company or any Restricted Subsidiary, so long as such restriction relates solely to the Property so acquired and was
 
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not created in connection with or in anticipation of such acquisition;
 
(C) resulting from customary provisions restricting subletting or assignment of leases or customary provisions in other agreements that restrict assignment of such agreements or rights thereunder; or
 
(D) customary restrictions contained in agreements relating to the sale or other disposition of Property limiting the transfer of such Property pending the closing of such sale.
 
SECTION 4.08.   Limitation on Transactions with Affiliates .  The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, conduct any business or enter into or suffer to exist any transaction or series of transactions (including the purchase, sale, transfer, assignment, lease, conveyance or exchange of any Property or the rendering of any service) with, or for the benefit of, any Affiliate of the Company (an “ Affiliate Transaction ”), unless:
 
(a) the terms of such Affiliate Transaction are:
 
(1) set forth in writing;
 
(2) in the best interest of the Company or such Restricted Subsidiary, as the case may be; and
 
(3) no less favorable to the Company or such Restricted Subsidiary, as the case may be, than those that could be obtained in a comparable arm’s-length transaction with a Person that is not an Affiliate of the Company;
 
(b) if such Affiliate Transaction involves aggregate payments or value to the Affiliate in excess of $25.0 million in any 12-month period, the Board of Directors (including a majority of the disinterested members of the Board of Directors) approves such Affiliate Transaction and, in its good faith judgment, believes that such Affiliate Transaction complies with clauses (a)(2) and (3) of this Section 4.08 as evidenced by a Board Resolution promptly delivered to the Trustee; and
 
(c) if such Affiliate Transaction involves aggregate payments or value to the Affiliate in excess of $75.0 million in any 12-month period, the Company obtains a written opinion from an Independent Financial Advisor to the effect that the consideration to be paid or received in connection with such Affiliate Transaction is fair, from a financial point of view, to the Company and the Restricted Subsidiaries, taken as a whole.
 
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Notwithstanding the foregoing limitation, the Company or any Restricted Subsidiary may enter into or suffer to exist the following:
 
(a) any transaction or series of transactions between the Company and one or more Restricted Subsidiaries or between two or more Restricted Subsidiaries; provided that no more than 5% of the total voting power of the Voting Stock (on a fully diluted basis) of any such Restricted Subsidiary is owned by an Affiliate of the Company (other than a Restricted Subsidiary);
 
(b) any Restricted Payment permitted to be made pursuant to Section 4.04 or any Permitted Investment (other than pursuant to clauses (a)(3), (b), (g), (h), (i), (k) or (l) of the definition of “Permitted Investment”);
 
(c) the payment of compensation (including amounts paid pursuant to employee benefit plans) for the personal services of and related indemnities provided to officers, directors, consultants and employees of the Company or any of the Restricted Subsidiaries, so long as the Board of Directors in good faith shall have approved the terms thereof and deemed the services theretofore or thereafter to be performed for such compensation to be fair consideration therefor;
 
(d) loans and advances to employees made in the ordinary course of business in accordance with applicable law and consistent with the past practices of the Company or such Restricted Subsidiary, as the case may be; provided that such loans and advances do not exceed $25.0 million in the aggregate at any one time outstanding;
 
(e) any transaction effected as part of a Qualified Receivables Transaction or any transaction involving the transfer of accounts receivable of the type specified in the definition of “Credit Facilities” and permitted under clause (b) of Section 4.03;
 
(f) payments of customary fees by the Company or any of its Restricted Subsidiaries to Leonard Green & Partners L.P. or any of its Affiliates made for any corporate advisory services or financial advisory, financing, underwriting or placement services or in respect of other investment banking activities including, without limitation, in connection with acquisitions or divestitures, which are approved by a majority of the Board of Directors in good faith;
 
(g) any Affiliate Transaction, if such Affiliate Transaction is with any Person solely in its capacity as a holder of Debt or Capital Stock of the Company or any of its Restricted Subsidiaries, where such Person is treated no more favorably than any other holder of such Debt or Capital Stock of the Company or any of its Restricted Subsidiaries; and
 
(h) any agreement as in effect on the Issue Date or any amendment thereto (so long as such amendment is not disadvantageous to the Holders in any material respect) or any transaction contemplated thereby.
 
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SECTION 4.09.   Guarantees by Subsidiaries .  i)The Company shall cause each Subsidiary that becomes or is a Collateral Subsidiary Guarantor or an obligor with respect to any of the Secured Obligations (except a Foreign Subsidiary that becomes an obligor solely in respect of Debt or other obligations of itself or another Foreign Subsidiary), in each case, to become a Subsidiary Guarantor by becoming a party to the Senior Subsidiary Guarantee Agreement and the Senior Lien Intercreditor Agreement, if such Subsidiary is not already a Subsidiary Guarantor party thereto, and delivering evidence thereof to the Trustee at the time such Person becomes a Collateral Subsidiary Guarantor or such an obligor.
 
(b)  The Company shall not permit any Restricted Subsidiary that is not a Subsidiary Guarantor to Guarantee the payment of any Debt or Capital Stock of the Company (other than Guarantees permitted pursuant to clauses (j) or (o) of Section 4.03), except that a Restricted Subsidiary that is not a Subsidiary Guarantor may Guarantee Debt of the Company; provided that:
 
(1) such Debt and the Debt represented by such Guarantee is permitted by Section 4.03;
 
(2) such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture to this Indenture providing for a Guarantee of payment of the Securities by such Restricted Subsidiary, and such Guarantee of Debt of the Company:
 
(A) unless such Debt is a Subordinated Obligation, shall be pari   passu (or subordinate) in right of payment to and on substantially the same terms as (or less favorable to such Debt than) such Restricted Subsidiary’s Guarantee with respect to the Securities; and
 
(B) if such Debt is a Subordinated Obligation, shall be subordinated in right of payment to such Restricted Subsidiary’s Guarantee with respect to the Securities to at least the same extent as such Debt is subordinated to the Securities.
 
(c)  Upon any Subsidiary becoming a Subsidiary Guarantor as described above, such Subsidiary shall deliver to the Trustee an Opinion of Counsel to the effect that:
 
(1) such Guarantee of the Securities has been duly executed and authorized; and
 
(2) such Guarantee of the Securities constitutes a valid, binding and enforceable obligation of such Subsidiary, except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principles of equity.
 
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In addition, no Subsidiary Guarantor shall Guarantee, directly or indirectly, any Debt of the Company that is subordinate or junior in right of payment (without regard to any security interest) to any other Debt of the Company (other than as permitted by the Senior Lien Intercreditor Agreement) unless such Guarantee is expressly subordinate in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor.
 
SECTION 4.10.   Limitation on Sale and Leaseback Transactions .  The Company shall not, and shall not permit any Restricted Subsidiary to, enter into any Sale and Leaseback Transaction with respect to any Property unless:
 
(a) the Company or such Restricted Subsidiary would be entitled to:
 
(1) Incur Debt in an amount equal to the Attributable Debt with respect to such Sale and Leaseback Transaction pursuant to Section 4.03; and
 
(2) create a Lien on such Property securing such Attributable Debt without also securing the Securities or the applicable Subsidiary Guarantee pursuant to Section 4.05; and
 
(b) such Sale and Leaseback Transaction is effected in compliance with Section 4.06; provided that such Sale and Leaseback Transaction constitutes an Asset Sale.
 
SECTION 4.11.   Designation of Restricted and Unrestricted Subsidiaries .  The Board of Directors may designate any Subsidiary of the Company to be an Unrestricted Subsidiary if:
 
(a) the Subsidiary to be so designated does not own any Capital Stock or Debt of, or own or hold any Lien on any Property of, the Company or any other Restricted Subsidiary and is not required to be a Subsidiary Guarantor pursuant to this Indenture; and
 
(b) either:
 
(1) the Subsidiary to be so designated has total assets of $1,000 or less; or
 
(2) such designation is effective immediately upon such entity becoming a Subsidiary of the Company.
 
Unless so designated as an Unrestricted Subsidiary, any Person that becomes a Subsidiary of the Company will be classified as a Restricted Subsidiary; provided , however , that such Subsidiary shall not be designated a Restricted Subsidiary and shall be automatically classified as an Unrestricted Subsidiary if either of the requirements set forth in clauses (x) and (y) of the second immediately following paragraph will not be
 
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satisfied after giving pro forma effect to such classification as a Restricted Subsidiary or if such Person is a Subsidiary of an Unrestricted Subsidiary.
 
Except as provided in the first sentence of the preceding paragraph, no Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary.  In addition, neither the Company nor any Restricted Subsidiary shall at any time be directly or indirectly liable for any Debt that provides that the holder thereof may (with the passage of time or notice or both) declare a default thereon or cause the payment thereof to be accelerated or payable prior to its Stated Maturity upon the occurrence of a default with respect to any Debt, Lien or other obligation of any Unrestricted Subsidiary (including any right to take enforcement action against such Unrestricted Subsidiary).
 
The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary if, immediately after giving pro forma effect to such designation, (x) the Company could Incur at least $1.00 of additional Debt pursuant to clause (1) of the first paragraph of Section 4.03 and (y) no Default or Event of Default shall have occurred and be continuing or would result therefrom.
 
Any such designation or redesignation by the Board of Directors will be evidenced to the Trustee by filing with the Trustee a Board Resolution giving effect to such designation or redesignation and an Officers’ Certificate that:
 
(a) certifies that such designation or redesignation complies with the foregoing provisions; and
 
(b) gives the effective date of such designation or redesignation,
 
such filing with the Trustee to occur within 45 days after the end of the fiscal quarter of the Company in which such designation or redesignation is made (or, in the case of a designation or redesignation made during the last fiscal quarter of the Company’s fiscal year, within 90 days after the end of such fiscal year).
 
SECTION 4.12.   Additional Security Documents .  From and after the Issue Date, if the Company or any Subsidiary of the Company executes and delivers in respect of any Property of such Person any mortgages, deeds of trust, security agreements, pledge agreements or similar instruments to secure Debt or other obligations that at the time constitute Secured Obligations (except for a Foreign Subsidiary that does so solely in respect of Debt or other obligations of itself or another Foreign Subsidiary), then the Company shall, or shall cause such Subsidiary to, execute and deliver substantially identical mortgages, deeds of trust, security agreements, pledge agreements or similar instruments in order to vest in the Senior Collateral Agent a perfected first priority security interest, subject only to Permitted Liens, the Senior Lien Intercreditor Agreement and the Collateral Trust and Intercreditor Agreement, in such Property for the benefit of the Trustee on behalf of the holders of the Securities, among others, and thereupon all provisions of this Indenture relating to the Collateral will be deemed to relate to such Property to the same extent and with the same force and effect.
 
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SECTION 4.13.   Change of Control .  i)Upon the occurrence of a Change of Control, each Holder shall have the right to require the Company to repurchase all or any part of such Holder’s Securities pursuant to the offer described below (the “ Change of Control Offer ”) at a purchase price (the “ Change of Control Purchase Price ”) equal to 101.0% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the purchase date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).  If the purchase date is on or after a record date and on or before the relevant interest payment date, the accrued and unpaid interest, if any, will be paid to the person or entity in whose name the Security is registered at the close of business on that record date, and no additional interest will be payable to Holders whose Securities shall be subject to purchase.
 
(b)  Within 30 days following any Change of Control, the Company shall (1) cause a notice of the Change of Control Offer to be sent at least once to the Dow Jones News Service or similar business news service in the United States and (2) send, by first-class mail, with a copy to the Trustee, to each Holder, at such Holder’s address appearing in the Security Register, a notice stating:  (A) that a Change of Control Offer is being made pursuant to this Section 4.13 and that all Securities timely tendered will be accepted for payment; (B) the Change of Control Purchase Price and the purchase date, which shall be, subject to any contrary requirements of applicable law, a Business Day no earlier than 30 days nor later than 60 days from the date such notice is mailed (the “ Change of Control Payment Date ”); (C) the circumstances and relevant facts regarding the Change of Control (including, to the extent reasonably practicable, information with respect to pro forma historical income, cash flow and capitalization after giving effect to the Change of Control); and (D) the procedures that Holders must follow in order to tender their Securities (or portions thereof) for payment and the procedures that Holders must follow in order to withdraw an election to tender Securities (or portions thereof) for payment.
 
(c)  Holders electing to have a Security purchased shall be required to surrender the Security, with an appropriate form duly completed, to the Company or its agent at the address specified in the notice at least three Business Days prior to the Change of Control Payment Date.  Holders shall be entitled to withdraw their election if the Trustee or the Company receives not later than one Business Day prior to the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security that was delivered for purchase by the Holder and a statement that such Holder is withdrawing its election to have such Security purchased.
 
(d)  On or prior to the Change of Control Payment Date, the Company shall irrevocably deposit with the Trustee or with the Paying Agent (or, if the Company or any of its Wholly Owned Subsidiaries is acting as the Paying Agent, segregate and hold in trust) in cash an amount equal to the Change of Control Purchase Price payable to the Holders entitled thereto, to be held for payment in accordance with the provisions of this Section 4.13.  On the Change of Control Payment Date, the Company shall deliver to the Trustee the Securities or portions thereof that have been properly tendered to and are
 
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to be accepted by the Company for payment.  The Trustee or the Paying Agent shall, on the Change of Control Payment Date, mail or deliver payment to each tendering Holder of the Change of Control Purchase Price.  In the event that the aggregate Change of Control Purchase Price is less than the amount delivered by the Company to the Trustee or the Paying Agent, the Trustee or the Paying Agent, as the case may be, shall deliver the excess to the Company immediately after the Change of Control Payment Date.
 
(e)  The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the purchase of Securities pursuant to this Section 4.13.  To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.13, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.13 by virtue thereof.
 
SECTION 4.14.   Further Instruments and Acts .  Upon request of the Trustee or as necessary, the Company shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
 
SECTION 4.15.   Covenant Suspension .  i)During any period of time that:
 
(1) the Securities have Investment Grade Ratings from both Rating Agencies and
 
(2) no Default or Event of Default has occurred and is continuing,
 
the Company and the Restricted Subsidiaries will not be subject to the following Sections of this Indenture: Section 4.03, Section 4.04, Section 4.06, Section 4.07, Section 4.08, clauses (a)(1) and (b) of Section 4.10, clause (x) of the fourth paragraph (and such clause (x) as referred to in the second paragraph) of Section 4.11, and clause (a)(5) of Section 5.01 (collectively, the “ Suspended Covenants ”).
 
(b)  Solely for the purpose of determining the amount of permitted Liens under Section 4.05 during any Suspension Period (as defined below) and without limiting the Company’s or any Restricted Subsidiary’s ability to Incur Indebtedness during any Suspension Period, to the extent that calculations in Section 4.05 refer to Section 4.03, such calculations shall be made as though Section 4.03 remains in effect during the Suspension Period.  In the event that the Company and the Restricted Subsidiaries are not subject to the Suspended Covenants for any period of time as a result of paragraph (a) of this Section 4.15 and, on any subsequent date (the “ Reversion Date ”), one or both of the Rating Agencies withdraws its ratings or downgrades the ratings assigned to the Securities below the required Investment Grade Ratings or a Default or Event of Default occurs and is continuing, then the Company and the Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants. The period of time between the Suspension Date and the Reversion Date is referred to as the “Suspension Period.”  
 
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Notwithstanding that the Suspended Covenants may be reinstated, no Default will be deemed to have occurred as a result of a failure to comply with the Suspended Covenants during the Suspension Period. On the Reversion Date, all Debt Incurred during the Suspension Period will be classified to have been Incurred pursuant to clause (1) of the first paragraph or one of the clauses set forth in the second paragraph of Section 4.03 (to the extent such Debt would be permitted to be Incurred thereunder as of the Reversion Date and after giving effect to Debt Incurred prior to the Suspension Period and outstanding on the Reversion Date).  To the extent such Debt would not be permitted to be Incurred pursuant to clause (1) of the first paragraph or one of the clauses set forth in the second paragraph of Section 4.03, such Debt will be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under clause (k) of the second paragraph of Section 4.03.  Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 4.04 will be made as though Section 4.04 had been in effect during the entire period of time from the Issue Date.  Accordingly, Restricted Payments made during the Suspension Period will reduce the amount available to be made as Restricted Payments under the first paragraph of Section 4.04 following any Reversion Date, and the items specified in clauses (c)(1) through (c)(4) of the first paragraph of Section 4.04 will increase the amount available to be made under the first paragraph thereof following any Reversion Date. For purposes of determining compliance with the first five paragraphs of Section 4.06, on the Reversion Date, the Net Available Cash from all Asset Sales not applied in accordance with the covenant will be deemed to be reset to zero.
 
ARTICLE V
 
Successor Company
 
SECTION 5.01.   When Company May Merge or Transfer Assets.   i)The Company shall not merge, consolidate or amalgamate with or into any other Person (other than a merger of a Wholly Owned Restricted Subsidiary into the Company) or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all its Property in any one transaction or series of transactions unless:
 
(1) the Company will be the surviving Person (the “ Surviving Person ”) or the Surviving Person (if other than the Company) formed by such merger, consolidation or amalgamation or to which such sale, transfer, assignment, lease, conveyance or disposition is made will be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia;
 
(2) the Surviving Person (if other than the Company) expressly assumes, by supplemental indenture in form reasonably satisfactory to the Trustee, executed and delivered to the Trustee by such Surviving Person, the due and punctual payment of the principal of, and premium, if any, and interest on, all the Securities, according to their tenor, and the due and punctual performance and observance of all the covenants and conditions of this Indenture to be performed by the Company;
 
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(3) in the case of a sale, transfer, assignment, lease, conveyance or other disposition of all or substantially all the Property of the Company, such Property shall have been transferred as an entirety or virtually as an entirety to one Person;
 
(4) immediately before and after giving effect to such transaction or series of transactions on a pro forma basis (and treating, for purposes of this clause (4) and clause (5) below, any Debt that becomes, or is anticipated to become, an obligation of the Surviving Person or any Restricted Subsidiary as a result of such transaction or series of transactions as having been Incurred by the Surviving Person or such Restricted Subsidiary at the time of such transaction or series of transactions), no Default or Event of Default shall have occurred and be continuing;
 
(5) immediately after giving effect to such transaction or series of transactions on a pro forma basis, either (A) the Company or the Surviving Person, as the case may be, would be able to Incur at least $1.00 of additional Debt under clause (1) of the first paragraph of Section 4.03 or (B) the Surviving Person would have a Consolidated Interest Coverage Ratio which is not less than the Consolidated Interest Coverage Ratio of the Company immediately prior to such transaction or series of transactions; and
 
(6) the Company shall deliver, or cause to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers’ Certificate and an Opinion of Counsel, each stating that such transaction and the supplemental indenture, if any, in respect thereto comply with this covenant and that all conditions precedent herein provided for relating to such transaction have been satisfied.
 
(b)  The Company shall not permit any Subsidiary Guarantor to merge, consolidate or amalgamate with or into any other Person (other than a merger of a Wholly Owned Restricted Subsidiary into such Subsidiary Guarantor, or a merger of a Subsidiary Guarantor into the Company or another Subsidiary Guarantor) or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all its Property in any one transaction or series of transactions unless:
 
(1) such Subsidiary Guarantor will be the Surviving Person or the Surviving Person (if other than such Subsidiary Guarantor) formed by such merger, consolidation or amalgamation or to which such sale, transfer, assignment, lease, conveyance or disposition is made will be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia;
 
(2) the Surviving Person (if other than such Subsidiary Guarantor) expressly assumes, by a Subsidiary Guarantee or a supplement to the
 
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Senior Subsidiary Guarantee Agreement or a supplemental indenture in form reasonably satisfactory to the Trustee, executed and delivered to the Trustee by such Surviving Person, the due and punctual performance and observance of all the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee;
 
(3) immediately before and after giving effect to such transaction or series of transactions on a pro forma basis (and treating, for purposes of this clause (3), any Debt that becomes, or is anticipated to become, an obligation of the Surviving Person, the Company or any Restricted Subsidiary as a result of such transaction or series of transactions as having been Incurred by the Surviving Person, the Company or such Restricted Subsidiary at the time of such transaction or series of transactions), no Default or Event of Default shall have occurred and be continuing; and
 
(4) the Company shall deliver, or cause to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers’ Certificate and an Opinion of Counsel, each stating that such transaction and such Subsidiary Guarantee, if any, in respect thereto comply with this covenant and that all conditions precedent herein provided for relating to such transaction have been satisfied.
 
The foregoing provisions (other than clause (3)) shall not apply to (A) any transactions which do not constitute an Asset Sale if the Subsidiary Guarantor is otherwise being released from its Subsidiary Guarantee at the time of such transaction in accordance with this Indenture and the Senior Collateral Documents or (B) any transactions which constitute an Asset Sale if the Company has complied with Section 4.06 and the Subsidiary Guarantor is released from its Subsidiary Guarantee at the time of such transaction in accordance with this Indenture and the Senior Collateral Documents.
 
The Surviving Person shall succeed to, and be substituted for, and may exercise every right and power of the Company under this Indenture (or of the Subsidiary Guarantor under the Subsidiary Guarantee, as the case may be), but the predecessor Company in the case of:
 
(a) a sale, transfer, assignment, conveyance or other disposition (unless such sale, transfer, assignment, conveyance or other disposition is of all or substantially all the assets of the Company as an entirety or virtually as an entirety); or
 
(b) a lease,
 
shall not be released from any obligation to pay the principal of, premium, if any, and interest on, the Securities.
 
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ARTICLE VI
 
Defaults and Remedies
 
SECTION 6.01.   Events of Default.   The following events shall be “Events of Default”:
 
(a) the Company fails to make the payment of any interest on any of the Securities when the same becomes due and payable, and such failure continues for a period of 30 days;
 
(b) the Company fails to make the payment of any principal of, or premium, if any, on any of the Securities when the same becomes due and payable at its Stated Maturity, upon acceleration, redemption, optional redemption, required repurchase or otherwise;
 
(c) the Company fails to comply with Article V;
 
(d) the Company fails to comply with any covenant or agreement in the Securities or in this Indenture (other than a failure that is the subject of the foregoing clause (a), (b) or (c)) and such failure continues for 30 days after written notice is given to the Company as provided below;
 
(e) a default under any Debt by the Company or any Restricted Subsidiary that results in acceleration of the final maturity of such Debt, or the failure to pay any such Debt at final maturity (giving effect to applicable grace periods), in an aggregate amount in excess of $35.0 million or its foreign currency equivalent at the time (the “ cross acceleration provisions ”);
 
(f) the Company or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
 
(1) commences a voluntary case;
 
(2) consents to the entry of an order for relief against it in an involuntary case;
 
(3) consents to the appointment of a Custodian of it or for any substantial part of its property; or
 
(4) makes a general assignment for the benefit of its creditors;
 
or takes any comparable action under any foreign laws relating to insolvency;
 
(g) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
 
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(1) is for relief against the Company or any Significant Subsidiary in an involuntary case;
 
(2) appoints a Custodian of the Company or any Significant Subsidiary or for any substantial part of its property; or
 
(3) orders the winding up or liquidation of the Company or any Significant Subsidiary;
 
and in each such case the order or decree remains unstayed and in effect for 45 days; or
 
(h) any judgment or judgments for the payment of money in an aggregate amount in excess of $35.0 million or its foreign currency equivalent at the time is rendered against the Company or any Restricted Subsidiary and shall not be waived, satisfied or discharged for any period of 30 consecutive days during which a stay of enforcement shall not be in effect;
 
(i) any Subsidiary Guarantee of a Significant Subsidiary ceases to be in full force and effect (other than in accordance with the terms of the Senior Collateral Documents and this Indenture as the same may be amended from time to time) and such default continues for 20 days after notice or any Subsidiary Guarantor that is a Significant Subsidiary denies or disaffirms its obligations under its Subsidiary Guarantee (the “ guarantee provisions ”); and
 
(j) the material impairment of the security interests under the Senior Collateral Documents (other than in accordance with the terms of the Senior Collateral Documents and this Indenture as each may be amended from time to time) for any reason other than the satisfaction in full of all obligations under this Indenture and discharge of the Senior Collateral Documents and this Indenture or any security interest created thereunder shall be declared invalid or unenforceable or the Company or any of its Subsidiaries asserting, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable (the “ security default provisions ”).
 
The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.
 
A Default under clause (d), (i) or (j) is not an Event of Default until the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities then outstanding notify the Company (and in the case of such notice by Holders, the Trustee) of the Default and the Company does not cure such Default within the time specified after receipt of such notice.  Such notice must specify the Default, demand that it be remedied and state that such notice is a “Notice of Default”.
 
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The Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice in the form of an Officers’ Certificate of any event that with the giving of notice or the lapse of time would become an Event of Default, its status and what action the Company is taking or proposes to take with respect thereto.
 
SECTION 6.02.   Acceleration .  If an Event of Default with respect to the Securities (other than an Event of Default specified in Section 6.01(f) or 6.01(g) with respect to the Company) shall have occurred and be continuing, the Trustee by notice to the Company, or the Holders of not less than 25% in aggregate principal amount of the Securities then outstanding by notice to the Company and the Trustee, may declare to be immediately due and payable the principal amount at maturity of all the Securities then outstanding, plus accrued but unpaid interest to the date of acceleration on all the Securities to be due and payable.  Upon such a declaration, such principal and interest shall be due and payable immediately.  If an Event of Default specified in Section 6.01(f) or 6.01(g) with respect to the Company occurs, the principal of and accrued and unpaid interest on all the Securities shall, automatically and without any action by the Trustee or any Holder, become and be immediately due and payable.  The Holders of a majority in aggregate principal amount of the outstanding Securities by notice to the Trustee and the Company may rescind and annul such declaration of acceleration if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal, premium or interest that has become due solely because of the acceleration.  No such rescission shall affect any subsequent Default or impair any right consequent thereto.
 
SECTION 6.03.   Other Remedies.   If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture.
 
The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default.  No remedy is exclusive of any other remedy.  All available remedies are cumulative.
 
SECTION 6.04.   Waiver of Past Defaults.   The Holders of a majority in aggregate principal amount of the Securities then outstanding by notice to the Trustee may waive an existing Default and its consequences except (i) a Default in the payment of the principal of, premium, if any, or interest on a Security or (ii) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Holder affected.  When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.
 
SECTION 6.05.   Control by Majority.   The Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee
 
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or of exercising any trust or power conferred on the Trustee with respect to the Securities.  However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of other Holders or would involve the Trustee in personal liability; provided , however , that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction.  Prior to taking any action or following any direction hereunder, the Trustee shall be entitled to indemnification reasonably satisfactory to it against all losses and expenses caused by taking or not taking such action.
 
SECTION 6.06.   Limitation on Suits.   A Holder may not pursue any remedy with respect to this Indenture or the Securities unless:
 
(1) such Holder shall have previously given to the Trustee written notice of a continuing Event of Default;
 
(2) the Holders of at least 25% in aggregate principal amount of the Securities then outstanding shall have made a written request, and such Holder or Holders shall have offered indemnity reasonably satisfactory to the Trustee to pursue a remedy; and
 
(3) the Trustee has failed to institute such proceeding and has not received from the Holders of at least a majority in aggregate principal amount of the Securities outstanding a direction inconsistent with such request, within 60 days after such notice, request and offer.
 
The foregoing limitations on the pursuit of remedies by a Holder shall not apply to a suit instituted by a Holder for the enforcement of payment of the principal of and premium, if any, or interest payable with respect to such Security on or after the applicable due date specified in such Security.  A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.
 
SECTION 6.07.   Rights of Holders to Receive Payment.   Notwithstanding any other provision of this Indenture, except as set forth in the Senior Collateral Documents, the right of any Holder to receive payment of principal of and interest on the Securities held by such Holder, on or after the respective due dates expressed in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
 
SECTION 6.08.   Collection Suit by Trustee.   If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.07.
 
SECTION 6.09.   Trustee May File Proofs of Claim.   The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial
 
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proceedings relative to the Company, its creditors or its property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders (it being understood it shall be under no obligation to do so), to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07.
 
SECTION 6.10.   Priorities.   If the Trustee collects any money or property pursuant to this Article VI, it shall pay out the money or property in the following order:
 
FIRST:  to the Trustee for amounts due under Section 7.07;
 
SECOND:  to Holders for amounts due and unpaid on the Securities for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and
 
THIRD:  to the Company.
 
The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10.  At least 15 days before such record date, the Company shall mail to each Holder and the Trustee a notice that states the record date, the payment date and amount to be paid.
 
SECTION 6.11.   Undertaking for Costs.   In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in aggregate principal amount of the Securities.
 
SECTION 6.12.   Waiver of Stay or Extension Laws.   The Company (to the extent it may lawfully do so) shall not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.
 
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SECTION 6.13.   Enforcement of Remedies .  Notwithstanding any of the foregoing, any enforcement of the Guarantees under the Senior Subsidiary Guarantee Agreement or any remedies with respect to the Senior Collateral under the Senior Collateral Documents is subject to the provisions of the Senior Lien Intercreditor Agreement and the Collateral Trust and Intercreditor Agreement.
 
ARTICLE VII
 
Trustee
 
SECTION 7.01.   Duties of Trustee.   i)If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.
 
(b)  Except during the continuance of an Event of Default:
 
(1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
 
(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture.  However, in the case of certificates or opinions specifically required by any provision hereof to be furnished to it, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations stated therein).
 
(c)  The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:
 
(1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;
 
(2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and
 
(3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05.
 
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(d)  Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
 
(e)  The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.
 
(f)  Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
 
(g)  No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.
 
(h)  Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section and to the provisions of the TIA, and the provisions of this Article VII shall apply to the Trustee in its role as Registrar, Paying Agent and Security Custodian.
 
(i)  The Trustee shall not be deemed to have notice of a Default or an Event of Default unless (i) the Trustee has received written notice thereof from the Company or any Holder and such notice references the Securities and this Indenture or (ii) a Trust Officer shall have actual knowledge thereof.
 
SECTION 7.02.   Rights of Trustee.   i)The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper person.  The Trustee need not investigate any fact or matter stated in the document.  The Trustee may, however, in its discretion make such further inquiry or investigation into such facts or matters as it may see fit and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney.
 
(b)  Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel.  The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers’ Certificate or Opinion of Counsel.
 
(c)  The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care and with the consent of the Company.
 
(d)  The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers; provided , however , that, subject to paragraph (b) of Section 7.01, the Trustee’s conduct does not constitute willful misconduct or negligence.
 
(e)  The Trustee may consult with counsel of its selection, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect
 
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to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
 
(f)  The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as a duty unless so specified herein.
 
(g)  The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.
 
(h)  The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture.
 
(i)  The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.
 
(j)  In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
 
(k)  The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.
 
SECTION 7.03.   Individual Rights of Trustee.   The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.  Any Paying Agent, Registrar or co-registrar may do the same with like rights.  However, the Trustee must comply with Sections 7.10 and 7.11.
 
SECTION 7.04.   Trustee’s Disclaimer.   The Trustee shall not be responsible for and makes no representation as to the validity, priority or adequacy of this Indenture or the Securities, it shall not be accountable for the Company’s use of the proceeds from the Securities, and it shall not be responsible for any statement of the Company in this Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee’s certificate of authentication.
 
SECTION 7.05.   Notice of Defaults.   If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each Holder notice of the Default or Event of Default within 30 days after it is known to a
 
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Trust Officer or written notice of it is received by the Trustee.  Except in the case of a Default or Event of Default in payment of principal of or interest on any Security, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Holders.
 
SECTION 7.06.   Reports by Trustee to Holders.   Within 60 days after February 1 each year beginning with February 1, 2010, the Trustee shall mail to each Holder a brief report dated as of such February 1 that complies with TIA § 313(a), if and to the extent required by such subsection.  The Trustee shall also comply with TIA § 313(b).
 
A copy of each report at the time of its mailing to Holders shall be filed with the Commission and each stock exchange (if any) on which the Securities are listed.
 
The Company agrees to notify promptly the Trustee whenever the Securities become listed on any stock exchange and of any delisting thereof.
 
SECTION 7.07.   Compensation and Indemnity.   The Company and the Guarantors, jointly and severally, shall pay to the Trustee from time to time reasonable compensation for its services.  The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Company and the Guarantors, jointly and severally, shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services.  Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts.  The Company and the Guarantors, jointly and severally, shall indemnify the Trustee against any and all loss, liability, claim, damage or expense (including reasonable attorneys’ fees and expenses) incurred by it in connection with the acceptance and administration of this trust and the performance of its duties hereunder.  The Trustee shall notify the Company promptly of any claim of which a Trust Officer has received notice for which it may seek indemnity.  Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder unless the Company has been prejudiced thereby.  The Company shall defend the claim, and the Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel.  The Company need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee’s own willful misconduct, negligence or bad faith.  The Company need not pay for any settlement made by the Trustee without the Company’s consent, such consent not to be unreasonably withheld.  All indemnifications and releases from liability granted hereunder to the Trustee shall extend to its officers, directors, employees, agents, successors and assigns.
 
To secure the Company’s payment obligations in this Section 7.07, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Securities.
 
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The Company’s payment obligations pursuant to this Section 7.07 shall survive the resignation or removal of the Trustee and the discharge or termination of this Indenture.  When the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(f) or (g) with respect to the Company, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.
 
The provisions of this section shall survive the termination of this Indenture.
 
SECTION 7.08.   Replacement of Trustee.   The Trustee may resign at any time by so notifying the Company.  The Holders of a majority in aggregate principal amount of the Securities the outstanding may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee; provided that so long as no Default or Event of Default has occurred and is continuing, the Company shall have the right to consent to the successor Trustee, such consent not to be unreasonably withheld.  The Company shall remove the Trustee if:
 
(1) the Trustee fails to comply with Section 7.10;
 
(2) the Trustee is adjudged bankrupt or insolvent;
 
(3) a receiver or other public officer takes charge of the Trustee or its property; or
 
(4) the Trustee otherwise becomes incapable of acting.
 
If the Trustee resigns or is removed by the Company or by the Holders of a majority in aggregate principal amount of the Securities then outstanding, and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee.
 
A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company.  Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee shall mail a notice of its succession to Holders.  The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07.
 
If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in aggregate principal amount of the Securities then outstanding may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee.
 
If the Trustee fails to comply with Section 7.10, any Holder who has been a bona fide Holder of a Security for at least six months may petition at the expense of the
 
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Company any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
 
Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Company’s obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.
 
SECTION 7.09.   Successor Trustee by Merger.   If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Trustee.
 
In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any such successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have.
 
SECTION 7.10.   Eligibility; Disqualification.   The Trustee shall at all times satisfy the requirements of TIA § 310(a).  The Trustee shall have (or, in the case of a corporation included in a bank holding company system, the related bank holding company shall have) a combined capital and surplus of at least $50,000,000 as set forth in its (or its related bank holding company’s) most recent published annual report of condition.  The Trustee shall comply with TIA § 310(b), subject to the penultimate paragraph thereof; provided , however , that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.
 
SECTION 7.11.   Preferential Collection of Claims Against Company.   The Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b).  A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.
 
ARTICLE VIII
 
Discharge of Indenture; Defeasance
 
SECTION 8.01.   Discharge of Liability on Securities; Defeasance .  (a) When (i) the Company delivers to the Trustee all outstanding Securities (other than Securities replaced pursuant to Section 2.07) for cancellation or (ii) all outstanding
 
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Securities have become due and payable, whether at maturity or as a result of the mailing of a notice of redemption pursuant to Article III and the Company irrevocably deposits with the Trustee funds sufficient to pay at maturity or upon redemption all outstanding Securities, including interest thereon to maturity or such redemption date (other than Securities replaced pursuant to Section 2.07), and if in either case the Company pays all other sums payable hereunder by the Company, then this Indenture shall, subject to Section 8.01(c), cease to be of further effect.  The Trustee shall acknowledge satisfaction and discharge of this Indenture on demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel and at the cost and expense of the Company.
 
(b)  Subject to Sections 8.01(c) and 8.02, the Company at any time may terminate (i) all of its obligations under the Securities and this Indenture (“ legal defeasance option ”) or (ii) its obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 and 4.14 and the operation of Sections 6.01(e), 6.01(f), 6.01(g), 6.01(h), 6.01(i) and 6.01(j) (but, in the case of Sections 6.01(f) and (g), with respect only to Significant Subsidiaries) and the limitations contained in Section 5.01(a)(5) (“ covenant defeasance option ”).  The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option.
 
If the Company exercises its legal defeasance option, payment of the Securities may not be accelerated because of an Event of Default.  If the Company exercises its covenant defeasance option, payment of the Securities may not be accelerated because of an Event of Default specified in Sections 6.01(d) (with respect to the covenants of Article IV identified in the immediately preceding paragraph), 6.01(e), 6.01(f), 6.01(g), 6.01(h), 6.01(i) or 6.01(j) (with respect only to Significant Subsidiaries in the case of Sections 6.01(f) and 6.01(g)) or because of the failure of the Company to comply with the limitations contained in Section 5.01(a)(5).  If the Company exercises its legal defeasance option or its covenant defeasance option, the Senior Lien, as it pertains to the Securities, will be released and each Subsidiary Guarantor will be released from all its obligations under its Subsidiary Guarantee, as it pertains to the Securities.
 
Upon satisfaction of the conditions set forth herein and upon request of the Company, the Trustee shall acknowledge in writing the discharge of those obligations that the Company terminates.
 
(c)  Notwithstanding clauses (a) and (b) above, the Company’s obligations in Sections 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.05 and 8.06 shall survive until the Securities have been paid in full.  Thereafter, the Company’s obligations in Sections 7.07 and 8.05 shall survive such satisfaction and discharge.
 
SECTION 8.02.   Conditions to Defeasance.   The Company may exercise its legal defeasance option or its covenant defeasance option only if:
 
(a) the Company irrevocably deposits in trust with the Trustee money or U.S. Government Obligations for the payment of principal of, and interest on, the Securities to maturity or redemption, as the case may be;
 
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(b) the Company delivers to the Trustee a certificate from a nationally recognized firm of independent certified public accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal and interest when due on all the Securities to maturity or redemption, as the case may be;
 
(c) 123 days pass after the deposit is made and during the 123-day period no Default specified in Section 6.01(f) or 6.01(g) occurs with respect to the Company or any other Person making such deposit which is continuing at the end of the period;
 
(d) no Default or Event of Default has occurred and is continuing on the date of such deposit and after giving effect thereto;
 
(e) such deposit does not constitute a default under any other agreement or instrument binding on the Company;
 
(f) the Company delivers to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940;
 
(g) in the case of the legal defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel stating that
 
(1) the Company has received from the Internal Revenue Service a ruling; or
 
(2) since the date of this Indenture there has been a change in the applicable Federal income tax law, to the effect, in either case, that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred;
 
(h) in the case of the covenant defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; and
 
(i) the Company delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Securities as contemplated by this Article VIII have been complied with.
 
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Before or after a deposit, the Company may make arrangements satisfactory to the Trustee for the redemption of Securities at a future date in accordance with Article III.
 
SECTION 8.03.   Application of Trust Money.   The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to this Article VIII.  It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Securities.
 
SECTION 8.04.   Repayment to Company.   The Trustee and the Paying Agent shall promptly turn over to the Company upon request any excess money or securities held by them at any time.
 
Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Company for payment as general creditors.
 
SECTION 8.05.   Indemnity for Government Obligations.   The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.
 
SECTION 8.06.   Reinstatement.   If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article VIII; provided , however , that, if the Company has made any payment of interest on or principal of any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.
 
ARTICLE IX
 
Amendments
 
SECTION 9.01.   Without Consent of Holders.   Without the consent of any Holders, the Company, when authorized by a Board Resolution, the Subsidiary Guarantors and the Trustee may amend this Indenture or the Securities and, subject to any other consent required under the terms of the applicable Collateral Documents, the Collateral Documents, in each case without notice to:
 
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(a) cure any ambiguity, omission, defect or inconsistency;
 
(b) provide for the assumption by a successor corporation of the obligations of the Company or any Subsidiary Guarantor under this Indenture, or any Collateral Documents;
 
(c) provide for uncertificated Securities in addition to or in place of certificated Securities; provided , however , that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Code;
 
(d) add additional Guarantees with respect to the Securities or release Subsidiary Guarantors from Subsidiary Guarantees as provided by the terms of this Indenture or the Subsidiary Guarantees;
 
(e) further secure the Securities (and if such security interest includes Liens on Property of the Company, provide for releases of such Property on terms comparable to the terms on which Collateral constituting Property of Subsidiary Guarantors may be released), release any Collateral used, sold, transferred or otherwise disposed of in accordance with the terms of the Senior Debt Documents and the Collateral Trust and Intercreditor Agreement, add to the covenants of the Company or the Subsidiary Guarantors for the benefit of the Holders or surrender any right or power herein conferred upon the Company;
 
(f) in the case of this Indenture, make any change that does not adversely affect the rights of any Holder;
 
(g) [reserved];
 
(h) make any change to comply with any requirements of the Commission in connection with the qualification of this Indenture under the Trust Indenture Act; or
 
(i) conform the text of this Indenture or the Securities to any provision of the “Description of Notes” contained in the Offering Memorandum.
 
After an amendment under this Section 9.01 becomes effective, the Company shall mail to Holders a notice briefly describing such amendment.  The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.01.
 
SECTION 9.02.   With Consent of Holders .  i)The Company, when authorized by a Board Resolution, the Subsidiary Guarantors and the Trustee may amend this Indenture or the Securities and, subject to any other consent required under the terms of the applicable Collateral Documents, the Collateral Documents, and (subject as aforesaid) waive any past default or compliance with any provisions (except, in the case of this Indenture, as provided in Section 6.04), with the consent of the Holders of at least
 
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a majority in aggregate principal amount of the Securities then outstanding (including consents obtained in connection with a tender offer or exchange offer for the Securities).  However, without the consent of each Holder affected thereby, an amendment may not:
 
(1) amend this Indenture to reduce the amount of Securities whose Holders are required to consent to an amendment or waiver;
 
(2) amend this Indenture to reduce the rate of or extend the time for payment of interest on any Security;
 
(3) amend this Indenture to reduce the principal of or extend the Stated Maturity of any Security;
 
(4) amend this Indenture to make any Security payable in money other than that stated in the Security;
 
(5) amend this Indenture or any Subsidiary Guarantee to impair the right of any Holder to receive payment of principal of and interest on such Holder’s Securities on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Securities or any Subsidiary Guarantee (except as set forth in the Senior Lien Intercreditor Agreement);
 
(6) amend this Indenture or any Subsidiary Guarantee to subordinate the Securities or any Subsidiary Guarantee to any other obligation of the Company or the applicable Subsidiary Guarantor (except as set forth in the Senior Lien Intercreditor Agreement);
 
(7) amend this Indenture to reduce the premium payable upon the redemption of any Security or change the time at which any Security may be redeemed in accordance with Article III;
 
(8) amend this Indenture to reduce the premium payable upon a Change of Control or, at any time after a Change of Control has occurred, amend the definition of “Change of Control” or change the time at which any Change of Control Offer relating thereto must be made or at which the Securities must be repurchased pursuant to such Change of Control Offer; or
 
(9) at any time after the Company is obligated to make a Prepayment Offer with the Excess Proceeds from Asset Sales, amend this Indenture to change the time at which such Prepayment Offer must be made or at which the Securities must be repurchased pursuant thereto.
 
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(b)  In addition, without the consent of at least 75% in aggregate principal amount of Securities then outstanding, an amendment, supplement or waiver may not:
 
(1) modify any Collateral Document or the provisions of this Indenture dealing with the Collateral Documents or application of trust moneys, or otherwise release any Collateral or any Subsidiary Guarantee other than in accordance with this Indenture, or the Collateral Documents; or
 
(2) modify the Senior Lien Intercreditor Agreement or the Collateral Trust and Intercreditor Agreement in any manner materially adverse to the Holders other than in accordance with this Indenture, or the Collateral Documents.
 
Each Holder of Securities, by its acceptance thereof, will be deemed to have consented and agreed to the terms of each Collateral Document, as originally in effect and as amended, supplemented or replaced from time to time in accordance with its terms or the terms of this Indenture, authorizes and directs the Trustee to enter into the Collateral Documents to which it is a party, and authorizes and empowers the Trustee and (through the Collateral Trust and Intercreditor Agreement and the Senior Lien Intercreditor Agreement) the Senior Collateral Agent to bind the Holders of Securities and other holders of Senior Obligations as set forth in the Collateral Documents to which they are a party and to perform its obligations and exercise its rights and powers thereunder, including entering into amendments permitted by the terms of this Indenture or the Senior Collateral Documents.
 
Notwithstanding the foregoing, no such consent or deemed consent shall be deemed or construed to represent an amendment or waiver, in whole or in part, of any provision of this Indenture or the Securities.
 
The foregoing shall not limit the right of the Company to amend, waive or otherwise modify the Collateral Documents in accordance with their terms.
 
The consent of the Holders of the Securities is not necessary to approve the particular form of any proposed amendment.  It shall be sufficient if such consent approves the substance of the proposed amendment.  After an amendment under this Section 9.02 becomes effective, the Company shall mail to each Holder at such Holder’s address appearing in the Security Register a notice briefly describing such amendment.  The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section.
 
SECTION 9.03.   Compliance with Trust Indenture Act.   Every amendment to this Indenture or the Securities shall comply with the TIA as then in effect.
 
SECTION 9.04.   Revocation and Effect of Consents and Waivers.   A consent to an amendment or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder’s Security, even if notation of the consent or waiver
 
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is not made on the Security.  However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective.  After an amendment or waiver becomes effective, it shall bind every Holder.  An amendment or waiver becomes effective upon the execution of such amendment or waiver by the Trustee.
 
The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture.  If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date.  No such consent shall be valid or effective for more than 120 days after such record date.
 
SECTION 9.05.   Notation on or Exchange of Securities.   If an amendment changes the terms of a Security, the Trustee may require the Holder of the Security to deliver such Security to the Trustee.  The Trustee may place an appropriate notation on the Security regarding the changed terms and return such Security to the Holder.  Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms.  Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment.
 
SECTION 9.06.   Trustee To Sign Amendments.   The Trustee shall sign any amendment or release authorized pursuant to this Article IX and Article XI if the amendment or release does not adversely affect the rights, duties, liabilities or immunities of the Trustee.   Subject to Section 2.04 of the Senior Lien Intercreditor Agreement, if such amendment or release does adversely affect the rights, duties, liabilities or immunities of the Trustee, the Trustee may but need not sign it.   In signing such amendment or release the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that such amendment or release is authorized or permitted by this Indenture.
 
SECTION 9.07.   Payment for Consent.   Neither the Company nor any Affiliate of the Company shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Securities unless such consideration is offered to be paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement.
 
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ARTICLE X
 
Collateral
 
SECTION 10.01.   Authorization of Actions to Be Taken.   (a)  Each Holder of Securities, by its acceptance thereof, consents and agrees to the terms of each Collateral Document, as originally in effect and as amended, supplemented or replaced from time to time in accordance with its terms or the terms of this Indenture, authorizes and directs the Trustee to enter into the Collateral Documents to which it is a party, authorizes and empowers the Trustee and (through the Senior Lien Intercreditor Agreement and the Collateral Trust and Intercreditor Agreement) the Senior Collateral Agent to bind the Holders of the Securities and other holders of Senior Obligations as set forth in the Collateral Documents to which they are a party and to perform its obligations and exercise its rights and powers thereunder, including entering into amendments permitted by the terms of this Indenture or the Senior Collateral Documents.
 
(b)  The Trustee is authorized and empowered to receive for the benefit of the Holders of Securities any funds collected or distributed to the Trustee under the Collateral Documents to which the Trustee is a party and, subject to the terms of the Collateral Documents, to make further distributions of such funds to the Holders of Securities according to the provisions of this Indenture.
 
(c)  Subject to the provisions of Section 7.01, Section 7.02 and the Collateral Documents, in the event it is the Applicable Authorized Representative at such time, the Trustee may, in its sole discretion, and without the consent of the Holders, direct, on behalf of the Holders, the Senior Collateral Agent to take all actions it deems necessary or appropriate in order to:
 
(1) foreclose upon or otherwise enforce any or all of the Senior Liens;
 
(2) enforce any of the terms of the Collateral Documents to which the Senior Collateral Agent or Trustee is a party; or
 
(3) collect and receive payment of any and all Senior Obligations.
 
Subject to the Senior Lien Intercreditor Agreement and at the Company’s sole cost and expense, the Trustee is authorized and empowered to institute and maintain, or direct the Senior Collateral Agent to institute and maintain, such suits and proceedings as it may deem reasonably expedient to protect or enforce the Senior Liens or the Senior Collateral Documents to which the Senior Collateral Agent or Trustee is a party or to prevent any impairment of Collateral by any acts that may be unlawful or in violation of the Senior Collateral Documents or this Indenture, and such suits and proceedings as the Trustee may deem reasonably expedient, at the Company’s sole cost and expense, to preserve or protect its interests and the interests of the Holders of Securities in the Collateral, including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule
 
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or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest hereunder or be prejudicial to the interests of Holders or the Trustee.
 
ARTICLE XI
 
Miscellaneous
 
SECTION 11.01.   Trust Indenture Act Controls.   If any provision of this Indenture limits, qualifies or conflicts with another provision that is required to be included in this Indenture by the TIA, the required provision shall control.
 
SECTION 11.02.   Notices.   Any notice or communication shall be in writing and delivered in person or mailed by first-class mail or sent by facsimile (with a hard copy delivered in person or by mail promptly thereafter) and addressed as follows:
 
if to the Company:
 
Rite Aid Corporation
30 Hunter Lane
Camp Hill, Pennsylvania 17011
facsimile: 717-760-7867
 
Attention of:  Marc A. Strassler, Esq.
 
if to the Trustee:
 
The Bank of New York Mellon Trust Company, N.A.
2 North LaSalle Street, Suite 1020
Chicago, IL 60602
facsimile: 312-827-8542
 
Attention of:  Corporate Trust Administration
 
The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.
 
Any notice or communication mailed to a Holder shall be mailed to the Holder at the Holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.
 
Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.  If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.
 
SECTION 11.03.   Communication by Holders with Other Holders.   Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to
 
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their rights under this Indenture or the Securities.  The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA § 312(c).
 
SECTION 11.04.   Certificate and Opinion as to Conditions Precedent.   Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee:
 
(1) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and
 
(2) except in the case of Section 3.01 under which an opinion will not be required, an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with; provided , however , that with respect to matters of fact an Opinion of Counsel may rely on an Officers’ Certificate or certificates of public officials.
 
SECTION 11.05.   Statements Required in Certificate or Opinion.   Each certificate with respect to compliance with a covenant or condition provided for in this Indenture shall include:
 
(1) a statement that the individual making such certificate has read such covenant or condition;
 
(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements contained in such certificate are based;
 
(3) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
 
(4) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with,
 
Each opinion with respect to compliance with a covenant or condition provided for in this Indenture shall be in form and substance reasonably satisfactory to the party requesting such opinion and the party giving such opinion.
 
SECTION 11.06.   When Securities Disregarded.   In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such
 
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direction, waiver or consent, only Securities that the Trustee knows are so owned shall be so disregarded.  Also, subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination.
 
SECTION 11.07.   Rules by Trustee, Paying Agent and Registrar.   The Trustee may make reasonable rules for action by or a meeting of Holders.  The Registrar and the Paying Agent or co-registrar may make reasonable rules for their functions.
 
SECTION 11.08.   Legal Holidays.   A “Legal Holiday” is a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York.  If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.  If a regular record date is a Legal Holiday, the record date shall not be affected.
 
SECTION 11.09.   Governing Law.   THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW.
 
SECTION 11.10.   No Recourse Against Others.   A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation.  By accepting a Security, each Holder shall waive and release all such liability.  The waiver and release shall be part of the consideration for the issue of the Securities.
 
SECTION 11.11.   Successors.   All agreements of the Company in this Indenture and the Securities shall bind its successors.  All agreements of the Trustee in this Indenture shall bind its successors.
 
SECTION 11.12.   Multiple Originals.   The parties may sign any number of copies of this Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  One signed copy is enough to prove this Indenture.
 
SECTION 11.13.   Table of Contents; Headings.   The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.
 
SECTION 11.14.   Waiver of Jury Trial.   EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.
 
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SECTION 11.15.   Force Majeure.   In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
 
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.
 
 
RITE AID CORPORATION
 
       
       
 
By:
     /s/ Marc A. Strassler
 
   
Name:
Marc A. Strassler
 
   
Title:
Executive Vice President,
Secretary and General Counsel
 
 
 
 
EACH OF THE SUBSIDIARY GUARANTORS
LISTED ON SCHEDULE A HERETO
 
     
     
 
By:
     /s/ Marc A. Strassler
 
   
Name:
Marc A. Strassler
 
   
Title:
Authorized Person
 
 
 
 
 
 
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. , as Trustee
 
     
     
 
By:
     /s/ D. G. Donovan
 
   
Name:
D. G. Donovan
 
   
Title:
Vice President
 
 
 
 
SCHEDULE A

Subsidiary Guarantors
 
Corporations

Thrifty PayLess, Inc.
Rite Aid of Vermont, Inc.
Rite Aid of Ohio, Inc.
Rite Aid of Maine, Inc.
Rite Aid of West Virginia, Inc.
The Lane Drug Company
3581 Carter Hill Road - Montgomery Corp.
4042 Warrensville Center Road - Warrensville Ohio, Inc.
5277 Associates, Inc.
537 Elm Street Corp.
5600 Superior Properties, Inc.
657-659 Broad St. Corp.
Apex Drug Stores, Inc.
Broadview and Wallings - Broadview Heights Ohio, Inc.
Eagle Managed Care Corp.
England Street-Asheland Corporation
GDF, Inc.
Harco, Inc.
K&B Alabama Corporation
K&B Louisiana Corporation
K&B Mississippi Corporation
K&B Services, Incorporated
K&B Tennessee Corporation
K&B Texas Corporation
K&B, Incorporated
Keystone Centers, Inc.
Lakehurst and Broadway Corporation
Patton Drive and Navy Boulevard Property Corporation
PDS-1 Michigan, Inc.
Perry Distributors, Inc.
Perry Drug Stores, Inc.
Ram-Utica, Inc.
RDS Detroit, Inc.
Read’s Inc.
Rite Aid Drug Palace, Inc.
Rite Aid Hdqtrs. Corp
Rite Aid Hdqtrs. Funding, Inc.
Rite Aid of Alabama, Inc.
Rite Aid of Connecticut, Inc.
Rite Aid of Delaware, Inc.
Rite Aid of Florida, Inc.
Rite Aid of Georgia, Inc.
Rite Aid of Illinois, Inc.
 
 
Rite Aid of Indiana, Inc.
Rite Aid of Kentucky, Inc.
Rite Aid of Maryland, Inc.
Rite Aid of Massachusetts, Inc.
Rite Aid of Michigan, Inc.
Rite Aid of New Hampshire, Inc.
Rite Aid of New Jersey, Inc.
Rite Aid of New York, Inc.
Rite Aid of North Carolina, Inc.
Rite Aid of Pennsylvania, Inc.
Rite Aid of South Carolina, Inc.
Rite Aid of Tennessee, Inc.
Rite Aid of Virginia, Inc.
Rite Aid of Washington, D.C., Inc.
Rite Aid Online Store, Inc.
Rite Aid Payroll Management, Inc.
Rite Aid Realty Corp.
Rite Aid Rome Distribution Center, Inc.
Rite Aid Transport, Inc.
Rite Fund, Inc.
Rite Investments Corp.
RX Choice, Inc.
Thrifty Corporation
Brooks Pharmacy, Inc.
Eckerd Corporation
EDC Licensing, Inc.
Genovese Drug Stores, Inc.
JCG Holdings (USA), Inc.
Maxi Drug North, Inc.
Maxi Drug, Inc.
P.J.C. Distribution, Inc.
P.J.C. Realty Co., Inc.
PJC Lease Holdings, Inc.
PJC Special Realty Holdings, Inc.
The Jean Coutu Group (PJC) USA, Inc.
Thrift Drug Services, Inc.
Thrift Drug, Inc.
Eckerd Fleet, Inc.
PJC of Massachusetts, Inc.
PJC Realty MA, Inc.
EDC Drug Stores, Inc.
MC Woonsocket, Inc.
PJC of Cranston, Inc.
PJC of East Providence, Inc.
PJC of Rhode Island, Inc.
P.J.C. of West Warwick, Inc.
 
Maxi Green Inc.
PJC of Vermont, Inc.

Limited Liability Companies

764 South Broadway - Geneva, Ohio, LLC
Eighth and Water Streets - Urichsville, Ohio, LLC
Gettysburg and Hoover-Dayton, Ohio, LLC
Mayfield & Chillicothe Roads - Chesterland, LLC
Munson & Andrews, LLC
Silver Springs Road - Baltimore, Maryland/One, LLC
Silver Springs Road - Baltimore, Maryland/Two, LLC
State Street and Hill Road-Gerard, Ohio, LLC
112 Burleigh Avenue Norfolk, LLC
1515 West State Street Boise, Idaho, LLC
1740 Associates, L.L.C.
Ann & Government Streets - Mobile, Alabama, LLC
Central Avenue and Main Street - Petal, MS, LLC
Fairground, L.L.C.
Name Rite, L.L.C.
Northline & Dix - Toledo - Southgate, LLC
Paw Paw Lake Road & Paw Paw Avenue - Coloma, Michigan, LLC
Seven Mile and Evergreen - Detroit, LLC
State & Fortification Streets - Jackson, Mississippi, LLC
Tyler and Sanders Roads, Birmingham - Alabama, LLC
Rite Aid Services, L.L.C.
JCG (PJC) USA, LLC
PJC Dorchester Realty LLC
PJC East Lyme Realty LLC
PJC Haverhill Realty LLC
PJC Hermitage Realty LLC
PJC Hyde Park Realty LLC
PJC Manchester Realty LLC
PJC Mansfield Realty LLC
PJC New London Realty LLC
PJC Peterborough Realty LLC
PJC Providence Realty LLC
PJC Realty N.E. LLC
PJC Revere Realty LLC

Limited Partnerships

Maxi Drug South, L.P.
 
APPENDIX A
 
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO RULE 144A, TO CERTAIN PERSONS IN OFFSHORE TRANSACTIONS IN RELIANCE ON REGULATION S AND, SUBJECT TO THE APPLICABLE PURCHASE AGREEMENT, TO INSTITUTIONAL ACCREDITED INVESTORS.
 
PROVISIONS RELATING TO INITIAL SECURITIES
 
AND EXCHANGE SECURITIES
 
1. Definitions
 
1.1  Definitions
 
For the purposes of this Appendix A the following terms shall have the meanings indicated below:
 
“Additional Interest” has the meaning specified in Section 3 of the Registration Rights Agreement.
 
“Definitive Security” means a certificated Initial Security or Exchange Security or Private Exchange Security bearing, if required, the restricted securities legend set forth in Section 2.3(c).
 
“Depository” means The Depository Trust Company, its nominees and their respective successors.
 
“Exchange Securities” means the 9.750% Senior Secured Notes due 2016 to be issued pursuant to this Indenture in connection with a Registered Exchange Offer pursuant to a Registration Rights Agreement.
 
“IAI” means an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
 
“Initial Purchasers” means Citigroup Global Markets Inc., Banc of America Securities LLC and Wachovia Capital Markets, LLC.
 
“Initial Securities” means the 9.750% Senior Secured Notes due 2016, to be issued from time to time, in one or more series as provided for in this Indenture.
 
“Original Securities” means Initial Securities in the aggregate principal amount of $410,000,000 issued on June 12, 2009.
 
“Private Exchange” means the offer by the Company, pursuant to Section 1 of the Registration Rights Agreement, or pursuant to any similar provision of any other Registration Rights Agreement, to issue and deliver to certain purchasers, in exchange for the Initial Securities held by such purchasers as part of their initial distribution, a like aggregate principal amount of Private Exchange Securities.
 
“Private Exchange Securities” means the 9.750% Senior Secured Notes due 2016 to be issued pursuant to this Indenture in connection with a Private Exchange pursuant to a Registration Rights Agreement.
 
“Purchase Agreement” means the Purchase Agreement dated June 8, 2009, among the Company, the Subsidiary Guarantors named therein and the Initial Purchasers relating to the Original Securities, or any similar agreement relating to any future sale of Initial Securities by the Company.
 
“QIB” means a “qualified institutional buyer” as defined in Rule 144A.
 
“Registered Exchange Offer” means the offer by the Company, pursuant to a Registration Rights Agreement, to certain Holders of Initial Securities, to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate principal amount of Exchange Securities registered under the Securities Act.
 
“Registration Rights Agreement” means the Exchange and Registration Rights Agreement dated June 12, 2009, among the Company and the Initial Purchasers relating to the Original Securities, or any similar agreement relating to any additional Initial Securities.
 
“Rule 144A Securities” means all Initial Securities offered and sold to QIBs in reliance on Rule 144A.
 
“Securities” means the Initial Securities and the Exchange Securities, treated as a single class.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Securities Custodian” means the custodian with respect to a Global Security (as appointed by the Depository) or any successor person thereto, who shall initially be the Trustee.
 
“Shelf Registration Statement” means a registration statement issued by the Company in connection with the offer and sale of Initial Securities or Private Exchange Securities pursuant to the Registration Rights Agreement.
 
“Transfer Restricted Securities” means Definitive Securities and any other Securities that bear or are required to bear the legend set forth in Section 2.3(c) hereto.
 
1.2   Other Definitions
 
Term
Defined in
Section :
“Agent Members”
2.1(b)
“Global Security”
2.1(a)
“IAI Global Security”
2.1(a)
“Regulation S”
2.1
 
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Term
Defined in
Section :
“Regulation S Global Security”
2.1(a)
“Rule 144A”
2.1
“Rule 144A Global Security”
2.1(a)

2.    The Securities
 
2.1   Form and Dating
 
The Initial Securities will be offered and sold by the Company, from time to time, pursuant to one or more Purchase Agreements.  The Initial Securities will be resold initially only to QIBs in reliance on Rule 144A under the Securities Act (“Rule 144A”) and in reliance on Regulation S under the Securities Act (“Regulation S”).  Initial Securities may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and IAIs under Rule 501(a)(1), (2), (3) or (7) under the Securities Act, subject to the restrictions on transfer set forth herein.
 
(a)   Global Securities.   Initial Securities initially resold pursuant to Rule 144A shall be issued initially in the form of one or more permanent global Securities in definitive, fully registered form (collectively, the “Rule 144A Global Security”), Initial Securities initially resold pursuant to Regulation S shall be issued initially in the form of one or more global securities (collectively, the “Regulation S Global Security”) and, subject to Section 2.4 hereof, Initial Securities transferred subsequent to the initial resale thereof to IAIs shall be issued initially in the form of one or more permanent global securities in definitive, fully registered form (collectively, the “IAI Global Security”), in each case without interest coupons and with the global securities legend and restricted securities legend set forth in Exhibit 1 hereto, which shall be deposited on behalf of the purchasers of the Initial Securities represented thereby with the Securities Custodian, and registered in the name of the Depository or a nominee of the Depository, duly executed by the Company and authenticated by the Trustee as provided in this Indenture.  The Rule 144A Global Security, IAI Global Security, and Regulation S Global Security are collectively referred to herein as “Global Securities.”  The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as hereinafter provided.
 
(b)   Book-Entry Provisions.   This Section 2.1(b) shall apply only to a Global Security deposited with or on behalf of the Depository.
 
The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b) and pursuant to an order of the Company, authenticate and deliver initially one or more Global Securities that (a) shall be registered in the name of the Depository for such Global Security or Global Securities or the nominee of such Depository and (b) shall be delivered by the Trustee to such Depository or pursuant to such Depository’s instructions or held by the Trustee as Securities Custodian.
 
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Members of, or participants in, the Depository (“Agent Members”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depository or by the Trustee as Securities Custodian or under such Global Security, and the Depository may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Security for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices of such Depository governing the exercise of the rights of a holder of a beneficial interest in any Global Security.
 
(c)   Definitive Securities.   Except as provided in Section 2.3 or 2.4, owners of beneficial interests in Global Securities will not be entitled to receive physical delivery of Definitive Securities.
 
2.2   Authentication.   The Trustee shall authenticate and deliver:  (1) Original Securities for original issue in an aggregate principal amount of $410,000,000, (2) additional Initial Securities, if and when issued, in an unlimited aggregate principal amount, and (3) the Exchange Securities or Private Exchange Securities for issue only in a Registered Exchange Offer or a Private Exchange, respectively, pursuant to a Registration Rights Agreement, for a like principal amount of Initial Securities or Private Exchange Securities, as applicable, upon a written order of the Company signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company.  Such order shall specify the amount of the Securities to be authenticated and the date on which the original issue of Securities is to be authenticated and whether the Securities are to be Initial Securities or Exchange Securities.
 
2.3   Transfer and Exchange.    (a)   Transfer and Exchange of Definitive Securities.   When Definitive Securities are presented to the Registrar or a co-registrar with a request:
 
(x)  to register the transfer of such Definitive Securities; or
 
(y)  to exchange such Definitive Securities for an equal principal amount of Definitive Securities of other authorized denominations,
 
the Registrar or co-registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided , however , that the Definitive Securities surrendered for transfer or exchange:
 
(i)  shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Registrar or co-registrar, duly executed by the Holder thereof or his attorney duly authorized in writing; and
 
(ii)  if such Definitive Securities bear a restricted securities legend, they are being transferred or exchanged pursuant to an effective registration statement under the Securities Act or pursuant to clause (A), (B) or (C) below, and are accompanied by the following additional information and documents, as applicable:
 
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(A)  if such Definitive Securities are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect; or
 
(B)  if such Definitive Securities are being transferred to the Company, a certification to that effect; or
 
(C)  if such Definitive Securities are being transferred pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or in reliance upon another exemption from the registration requirements of the Securities Act, (i) a certification to that effect (in the form set forth on the reverse of the Initial Security) and (ii) if the Company so requests as provided in the form set forth on the reverse of the Initial Security, an opinion of counsel or other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(c)(i).
 
(b)   Transfer and Exchange of Global Securities.   (i)  The transfer and exchange of Global Securities or beneficial interests therein shall be effected through the Depository, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depository therefor.  A transferor of a beneficial interest in a Global Security shall deliver a written order given in accordance with the Depository’s procedures containing information regarding the participant account of the Depository to be credited with a beneficial interest in the Global Security, and such account shall be credited in accordance with such instructions with a beneficial interest in the Global Security, and the account of the Person making the transfer shall be debited by an amount equal to the beneficial interest in the Global Security being transferred.  In the case of a transfer of a beneficial interest in a Global Security to an IAI, the transferee must furnish a signed letter to the Trustee containing certain representations and agreements in the form of Exhibit B hereto.
 
(ii)  If the proposed transfer is a transfer of a beneficial interest in one Global Security to a beneficial interest in another Global Security, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Security to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of the Global Security from which such interest is being transferred.
 
(iii)  Notwithstanding any other provisions of this Appendix A (other than the provisions set forth in Section 2.4), a Global Security may not be transferred as a whole except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository.
 
(iv)  In the event that a Global Security is exchanged for Definitive Securities pursuant to Section 2.4 prior to the consummation of a Registered Exchange Offer or
 
5
the effectiveness of a Shelf Registration Statement with respect to such Securities, such Securities may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Securities intended to ensure that such transfers comply with Rule 144A, Regulation S or such other applicable exemption from registration under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Company.
 
(c)   Legend.
 
(i)  Except as permitted by the following paragraphs (ii), (iii) and (iv), each certificate evidencing the Global Securities and the Definitive Securities (and all Securities issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form:
 
“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO ONE YEAR AFTER THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN “AFFILIATE” (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH  TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE  COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION (AS DEFINED UNDER REGULATION S UNDER THE SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4) TO AN INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND TRUSTEE, (5) PURSUANT TO AN
 
6
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.  AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES THAT IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS.  THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) PURCHASING FROM A PERSON NOT PARTICIPATING IN THE INITIAL DISTRIBUTION OF THIS SECURITY (OR ANY PREDECESSOR SECURITY), THAT IT IS AN INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2)(i) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.”
 
Each Definitive Security will also bear the following additional legend:
 
“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”
 
(ii)  Upon any sale or transfer of a Transfer Restricted Security (including any Transfer Restricted Security represented by a Global Security) pursuant to Rule 144 under the Securities Act:
 
(A)  in the case of any Transfer Restricted Security that is a Definitive Security, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Security for a Security that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Security; and
 
(B)  in the case of any Transfer Restricted Security that is represented by a Global Security, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Security for a Security that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Security,
 
7
in either case, if the Holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Initial Security).
 
(iii)  After a transfer of any Initial Securities or Private Exchange Securities, as the case may be, during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Securities or Private Exchange Securities, all requirements pertaining to restricted securities legends on such Initial Security or such Private Exchange Security will cease to apply, and an Initial Security or Private Exchange Security, as the case may be, in global form without restricted security legends will be available to the transferee of the beneficial interests of such Initial Securities or Private Exchange Securities.  Upon the occurrence of any of the circumstances described in this paragraph, the Company will deliver an Officers’ Certificate to the Trustee instructing the Trustee to issue Securities without restricted security legends.
 
(iv)  Upon the consummation of a Registered Exchange Offer with respect to the Initial Securities pursuant to which certain Holders of such Initial Securities are offered Exchange Securities in exchange for their Initial Securities, Exchange Securities in global form without the restricted security legends will be available to Holders or beneficial owners that exchange such Initial Securities (or beneficial interests therein) in such Registered Exchange Offer.  Upon the occurrence of any of the circumstances described in this paragraph, the Company will deliver an Officers’ Certificate to the Trustee instructing the Trustee to issue Securities without restricted security legends.
 
(d)   Cancellation or Adjustment of Global Security.   At such time as all beneficial interests in a Global Security have either been exchanged for Definitive Securities, redeemed, repurchased or canceled, such Global Security shall be returned by the Depository to the Trustee for cancellation or retained and canceled by the Trustee.  At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for Definitive Securities, redeemed, repurchased or canceled, the principal amount of Securities represented by such Global Security shall be reduced, and an adjustment shall be made on the books and records of the Trustee (if it is then the Securities Custodian for such Global Security) with respect to such Global Security, by the Trustee or the Securities Custodian, to reflect such reduction.
 
(e)   Obligations with Respect to Transfers and Exchanges of Securities.
 
(i)  To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Definitive Securities and Global Securities at the Registrar’s or co-registrar’s request.
 
(ii) No service charge shall be made for any registration of transfer or exchange, but the Company or the Trustee may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar
 
8
governmental charge payable upon exchange or transfer pursuant to Sections 3.06, 4.06, 4.13 and 9.05 of this Indenture).
 
(iii)  The Registrar or co-registrar shall not be required to register the transfer of or exchange of any Security for a period beginning 15 days before the mailing of a notice of redemption or an offer to repurchase Securities or 15 days before an interest payment date.
 
(iv)  Prior to the due presentation for registration of transfer of any Security, the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar may deem and treat the person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected by notice to the contrary.
 
(v)  All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Securities surrendered upon such transfer or exchange.
 
(f)   No Obligation of the Trustee.
 
(i)  The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Security, a member of, or a participant in the Depository or any other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Securities or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Securities.  All notices and communications to be given to the Holders and all payments to be made to Holders under the Securities shall be given or made only to the registered Holders (which shall be the Depository or its nominee in the case of a Global Security).  The rights of beneficial owners in any Global Security shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository.  The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners.
 
(ii)  The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depository participants, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine
 
9
the same to determine substantial compliance as to form with the express requirements hereof.
 
2.4   Definitive Securities
 
(a)           A Global Security deposited with the Depository or with the Trustee as Securities Custodian pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of Definitive Securities in an aggregate principal amount equal to all or part of the principal amount of such Global Security, in exchange for such Global Security, only if such transfer complies with Section 2.3 and (i) the Depository notifies the Company that it is unwilling or unable to continue as a Depository for such Global Security or if at any time the Depository ceases to be a “clearing agency” registered under the Exchange Act, and a successor Depository is not appointed by the Company within 90 days of such notice, or (ii) a Default or an Event of Default has occurred and is continuing or (iii) the Company, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of Definitive Securities under this Indenture.
 
(b)  Any Global Security that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depository to the Trustee, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Security, an equal aggregate principal amount of Definitive Securities of authorized denominations.  Definitive Securities issued in exchange for any portion of a Global Security transferred pursuant to this Section shall be executed, authenticated and delivered only in denominations of $2,000 and any integral multiple of $1,000 in excess thereof and registered in such names as the Depository shall direct.  Any Definitive Security delivered in exchange for an interest in the Global Security shall, except as otherwise provided by Section 2.3(c), bear the restricted securities legend set forth in Exhibit 1 hereto.
 
(c)  The registered Holder of a Global Security may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action that a Holder is entitled to take under this Indenture or the Securities.
 
(d)  In the event of the occurrence of any of the events specified in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make available to the Trustee a reasonable supply of Definitive Securities in definitive, fully registered form without interest coupons.
 
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EXHIBIT 1 TO APPENDIX A
 
[FORM OF FACE OF INITIAL SECURITY]
 
[Global Securities Legend]
 
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
 
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
 
[Restricted Securities Legend]
 
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO ONE YEAR AFTER THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN “AFFILIATE” (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH  TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE  COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION (AS DEFINED UNDER REGULATION S UNDER THE SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4)
 
TO AN INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND TRUSTEE, (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.  AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES THAT IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS.  THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (2) PURCHASING FROM A PERSON NOT PARTICIPATING IN THE INITIAL DISTRIBUTION OF THIS SECURITY (OR ANY PREDECESSOR SECURITY), THAT IT IS AN INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2)(i) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.
 
[Definitive Securities Legend]
 
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
 
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[FORM OF FACE OF INITIAL SECURITY]
 
 
No.:  ___________
   
[up to]** $__________
     
 
9.750% Senior Secured Notes due 2016
 
     
 
CUSIP No.U76659 AP3 1
 
     
 
ISIN No. USU76659AP32 2
 
 

 
RITE AID CORPORATION, a Delaware corporation, promises to pay to [Cede & Co.]**, or registered assigns, the principal sum [of [    ] Dollars]* [as set forth on the Schedule of Increases or Decreases annexed hereto]** on June 12, 2016.
 
Interest Payment Dates: March 15 and September 15, commencing on September 15, 2009.
 
Record Dates:  March 1 and September 1.
 
________________________
*  Insert for Definitive Securities.
** Insert for Global Securities.  If the Security is to be issued in global form, add the Global Securities Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1 captioned “TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY”.

 
 
1 Insert for Reg. S Note  
2 Insert for Reg. S Note
 
3
 
Additional provisions of this Security are set forth on the other side of this Security.
 
IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.
 
 
RITE AID CORPORATION,
 
     
     
 
By:
  
 
   
Name:
 
 
   
Title:
 
 
 
TRUSTEE’S CERTIFICATE OF
AUTHENTICATION
 
Dated:
 
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
 
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
 
By:_________________________
Authorized Signatory
 
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[FORM OF REVERSE SIDE OF INITIAL SECURITY]
 
9.750% Senior Secured Notes due 2016
 
1.   Interest
 
(a) RITE AID CORPORATION, a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount of this Security at the rate per annum shown above.  The Company will pay interest semiannually on March 15 and September 15 of each year, commencing September 15, 2009.  Interest on the Securities will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from June 12, 2009.  Interest shall be computed on the basis of a 360-day year of twelve 30-day months.  The Company shall pay interest on overdue principal at the rate per annum borne by the Securities plus 1% per annum, and it shall pay interest on overdue installments of interest at the rate per annum borne by the Securities to the extent lawful.
 
(b)  Special Interest .  The holder of this Security is entitled to the benefits of a Exchange and Registration Rights Agreement, dated as of June 12, 2009, among the Company, the Subsidiary Guarantors named therein and the Initial Purchasers named therein (the “Registration Rights Agreement”).  Capitalized terms used in this paragraph (b) but not defined herein have the meanings assigned to them in the Registration Rights Agreement.  In the event that (i) neither the Exchange Offer Registration Statement nor the Shelf Registration Statement, as the case may be, is filed with the Commission on or prior to the date which is 150 days following the date of the original issuance of the Securities, (ii) the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, is not declared effective within 210 days after the original issuance of the Securities, (iii) if the Exchange Offer Registration Statement is declared effective, the Registered Exchange Offer is not consummated on or prior to 270 days after the date of the original issuance of Securities, (iv) if the Company and the Subsidiary Guarantors are required to file the Shelf Registration Statement, or designate an existing Automatic Shelf Registration Statement for the offer and sale of Restricted Securities in accordance with Section 2 of the Registration Rights Agreement, the Company or any Subsidiary Guarantor does not so file the Shelf Registration Statement on or prior to the 30th day after the Company’s obligation to file such Shelf Registration Statement arises, (v) the applicable Registration Statement is filed and declared effective but shall thereafter cease to be effective (at any time that the Company is obligated to maintain the effectiveness thereof) without being again effective within 30 days or being succeeded within 30 days by an additional Registration Statement filed and declared effective, provided that such 30-day period shall toll during a Suspension Period or during any Shelf Suspension Period, or (vi) any Suspension Periods exceed, in the aggregate, 75 days during any 365-day period (each such event referred to in clauses (i) through (vi), a “Registration Default”), the Company shall be obligated to pay Additional Interest from and including the date on which the first such Registration Default shall occur to but excluding the date on which all Registration Defaults have been cured, at a rate of 0.25% per annum on the applicable principal amount of Securities held by such Holder for the first 90-day period immediately following the occurrence of a Registration Default, and such rate will increase by an additional 0.25% with respect to each subsequent 90-day period
 
5
until all Registration Defaults have been cured, provided that the maximum additional rate may in no event exceed 0.50% per annum.
 
2.   Method of Payment
 
The Company will pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders at the close of business on the March 1 or September 1 next preceding the interest payment date even if Securities are canceled after the record date and on or before the interest payment date.  Holders must surrender Securities to a Paying Agent to collect principal payments.  The Company will pay principal and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts.  Payments in respect of the Securities represented by a Global Security (including principal and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Depository.  The Company will make all payments in respect of a Definitive Security (including principal and interest), by mailing a check to the registered address of each Holder thereof; provided , however , that payments on the Securities may also be made, in the case of a Holder of at least $1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).
 
3.   Paying Agent and Registrar
 
Initially, The Bank of New York Mellon Trust Company, N.A., a banking association organized and existing under the laws of the United States of America (the “Trustee”), will act as Paying Agent and Registrar.  The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice.  The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
 
4.   Indenture
 
The Company issued the Securities under an Indenture dated as of June 12, 2009 (the “Indenture”), among the Company, the Subsidiary Guarantors named therein and the Trustee.  The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and not defined in the Securities have the meanings ascribed thereto in the Indenture.  The Securities are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of those terms.
 
The Securities are unsecured, unsubordinated obligations of the Company.  The Company’s obligations under the Securities are Guaranteed, subject to certain limitations, by the Subsidiary Guarantors pursuant to Subsidiary Guarantees, subject to release of the Subsidiary Guarantees as provided in the Indenture or such Subsidiary
 
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Guarantee.  This Security is one of the Original Securities referred to in the Indenture issued in an aggregate principal amount of $410,000,000.  The Securities include the Original Securities, an unlimited aggregate principal amount of additional Initial Securities that may be issued under the Indenture, and any Exchange Securities issued in exchange for Initial Securities.  The Original Securities, such additional Initial Securities and the Exchange Securities are treated as a single class of securities under the Indenture.  The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, incur Debt, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, create or incur Liens and make Asset Sales.  The Indenture also imposes limitations on the ability of the Company and each Subsidiary Guarantor to consolidate or merge with or into any other Person or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all of the Property of the Company or such Subsidiary Guarantor.
 
5.   Optional Redemption
 
The Company may choose to redeem the Securities at any time.  If it does so, it may redeem all or any portion of the Securities, at once or over time, after giving the required notice under the Indenture.
 
To redeem the Securities prior to June 12, 2013, the Company must pay a redemption price equal to 100% of the principal amount of the Securities to be redeemed plus the Applicable Premium as of, and accrued and unpaid interest, if any, to but not including, the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date that is on or prior to the Redemption Date).  Any notice to Holders of such a redemption shall include the appropriate calculation of the Redemption Price, but need not include the Redemption Price itself.  The actual redemption price must be set forth in an Officers’ Certificate delivered to the Trustee no later than two Business Days prior to the Redemption Date.
 
“Applicable Premium” means, with respect to any Security on any Redemption Date, the greater of (i) 1.0% of the principal amount of such Security and (ii) the excess of (A) the present value at such Redemption Date of (1) the Redemption Price of such Security at June 12, 2013 (such Redemption Price being set forth in the table below) plus (2) all required interest payments due on such Security through June 12, 2013 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate on such Redemption Date plus 75 basis points over (B) the principal amount of such Security.
 
“Treasury Rate” means, as of any Redemption Date, the yield to maturity as of such Redemption Date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such statistical release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to June 12, 2013; provided , however , that if the period from the Redemption Date to June 12, 2013 is less than
 
7
one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.
 
Beginning on June 12, 2013, the Company may redeem the Securities in whole at any time or in part from time to time at the following Redemption Prices (expressed in percentages of principal amount), plus accrued and unpaid interest, if any, to but not including, the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date that is on or prior to the Redemption Date), if redeemed during the 12-month period beginning on June 12 of the years set forth below:
 
 
Redemption Period
Price
 
 
2013
104.875%
 
 
2014
102.438%
 
 
2015 and thereafter
100.000%
 

Notwithstanding the foregoing, at any time and from time to time prior to June 12, 2012, the Company may redeem up to 35% of the original aggregate principal amount of the Securities (including Securities issued after June 12, 2009, if any) with the proceeds from one or more Equity Offerings by the Company, at a Redemption Price equal to 109.750% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to but not including, the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date that is on or prior to the Redemption Date); provided , however , that after giving effect to any such redemption, at least 65% of the original aggregate principal amount of the Securities (including Securities issued after June 12, 2009, if any) remains outstanding.  Any such redemption shall be made within 75 days of such Equity Offering upon not less than 30 nor more than 60 days’ prior notice.
 
If the optional Redemption Date is on or after a record date and on or before the relevant Interest Payment Date, the accrued and unpaid interest, if any, will be paid to the person or entity in whose name the Security is registered at the close of business on that record date, and no additional interest will be payable to Holders whose Securities shall be subject to repurchase.
 
6.   Sinking Fund
 
The Securities are not subject to any sinking fund.
 
7.   Notice of Redemption
 
Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his or her registered address.  Securities in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000.  If money sufficient to pay the redemption price of and accrued interest on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the
 
8
redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Securities (or such portions thereof) called for redemption.
 
8.  Repurchase of Securities at the Option of Holders upon Change of Control
 
Upon a Change of Control, any Holder will have the right, subject to certain conditions specified in the Indenture, to cause the Company to repurchase all or any part of the Securities of such Holder at a purchase price equal to 101% of the principal amount of the Securities to be repurchased plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date that is on or prior to the date of purchase) as provided in, and subject to the terms of, the Indenture.
 
9.   Prepayment Offer Upon Asset Sale
 
When the aggregate amount of Excess Proceeds exceeds $50.0 million (taking into account income earned on such Excess Proceeds, if any), the Company will be required to make an offer to purchase (the “Asset Sales Prepayment Offer”) the Securities, which offer shall be in the amount of the Allocable Excess Proceeds, on a pro rata basis according to principal amount at maturity, at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the purchase date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date), in accordance with the procedures (including prorating in the event of oversubscription) set forth in the Indenture.  To the extent that any portion of the amount of Net Available Cash remains after compliance with the preceding sentence and provided that all Holders have been given the opportunity to tender their Securities for purchase in accordance with the Indenture, the Company or such Restricted Subsidiary may use such remaining amount for any purpose permitted by the Indenture and the amount of Excess Proceeds will be reset to zero.
 
10.   Guarantees; Security
 
The Indenture provides that, under certain circumstances, the Securities will be guaranteed pursuant to Subsidiary Guarantees.  Subsidiary Guarantees may be released in various circumstances, including in certain circumstances without the consent of Holders.
 
The Indenture provides that, under certain circumstances, the Securities or Subsidiary Guarantees must be secured by Liens on certain Property of the Company or Subsidiary Guarantors.  Liens securing the Securities or Subsidiary Guarantees may be released in various circumstances, including in certain circumstances without the consent of Holders.
 
11.   Denominations; Transfer; Exchange
 
The Securities are in registered form without coupons in denominations of $2,000 and whole multiples in excess thereof of $1,000.  A Holder may transfer or exchange Securities in accordance with the Indenture.  Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate
 
9
endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture.  The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or to transfer or exchange any Securities for a period of 15 days prior to a selection of Securities to be redeemed or 15 days before an interest payment date.
 
12.   Persons Deemed Owners
 
The registered Holder of this Security may be treated as the owner of it for all purposes.
 
13.   Unclaimed Money
 
If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person.  After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.
 
14.   Discharge and Defeasance
 
Subject to certain conditions, the Company at any time may terminate some of or all its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Securities to redemption or maturity, as the case may be.
 
15.   Amendment, Waiver, Deemed Consents, Releases
 
Subject to certain exceptions set forth in the Indenture, (i) the Indenture, or the Securities and, subject to any consent required by the terms of the applicable Collateral Documents, the Collateral Documents, may be amended without prior notice to any Holder but with the written consent of the Holders of at least a majority in aggregate principal amount of the outstanding Securities and (ii) any default or noncompliance with any provision may be waived with the written consent of the Holders of at least a majority in principal amount of the outstanding Securities.  Subject to certain exceptions set forth in the Indenture, without the consent of any Holders, the Company, when authorized by a Board Resolution, the Subsidiary Guarantors and the Trustee may amend the Indenture or the Securities and, subject to any consent required by the terms of the applicable Collateral Documents, the Collateral Documents, to: (i) cure any ambiguity, omission, defect or inconsistency; (ii) provide for the assumption by a successor corporation of the obligations of the Company or any Subsidiary Guarantor under the Indenture or any Collateral Document; (iii) provide for uncertificated Securities in addition to or in place of certificated Securities; provided , however , that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Code; (iv) add additional Guarantees with respect to the Securities or release Subsidiary Guarantors from Subsidiary Guarantees as provided by the terms of the Indenture or the Subsidiary Guarantees; (v) further secure the Securities (and if such security interest includes Liens on Property of the Company, provide
 
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for releases of such Property on terms comparable to the terms on which Collateral constituting Property of Subsidiary Guarantors may be released), release any Collateral used, sold, transferred or otherwise disposed of in accordance with the terms of the Senior Debt Documents and the Collateral Trust and Intercreditor Agreement, add to the covenants of the Company or the Subsidiary Guarantors for the benefit of the Holders of the Notes or surrender any right or power conferred upon the Company; (vi) in the case of the Indenture, make any change that does not adversely affect the rights of any Holder; (vii) make any change to comply with any requirements of the Commission in connection with the qualification of the Indenture under the Trust Indenture Act; or (viii)conform the Indenture or the Notes to the ‘‘Description of Notes’’ section in this Offering Memorandum.
 
Each Holder of Securities, by its acceptance hereof, will be deemed to have consented and agreed to the terms of each Collateral Document, as originally in effect and as amended, supplemented or replaced from time to time in accordance with its terms or the terms of this Indenture, authorizes and directs the Trustee to enter into the Collateral Documents to which it is a party, and authorizes and empowers the Trustee and (through the Collateral Trust and Intercreditor Agreement and the Senior Lien Intercreditor Agreement) the Senior Collateral Agent to bind the Holders of Securities and other holders of Senior Obligations as set forth in the Collateral Documents to which they are a party and to perform its obligations and exercise its rights and powers thereunder, including entering into amendments permitted by the terms of this Indenture or the Senior Collateral Documents.
 
Notwithstanding the foregoing, no such consent or deemed consent shall be deemed or construed to represent an amendment or waiver, in whole or in part, of any provision of this Indenture or the Securities.
 
The foregoing shall not limit the right of the Company to amend, waive or otherwise modify the Collateral Documents in accordance with their terms.
 
The consent of the Holders of the Securities is not necessary to approve the particular form of any proposed amendment.  It shall be sufficient if such consent approves the substance of the proposed amendment.
 
16.   Defaults and Remedies
 
If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding, subject to certain limitations, may declare all the Securities to be immediately due and payable.  Certain events of bankruptcy or insolvency are Events of Default and shall result in the Securities being immediately due and payable upon the occurrence of such Events of Default without any further act of the Trustee or any Holder.
 
Holders of Securities may not enforce the Indenture or the Securities except as provided in the Indenture.  The Trustee may refuse to enforce the Indenture or the Securities unless it receives reasonable indemnity or security.  Subject to certain limitations, Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the Trustee in its exercise of any trust or power under the Indenture.  The Holders of a majority
 
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in aggregate principal amount of the Securities then outstanding, by written notice to the Company and the Trustee, may rescind any declaration of acceleration and its consequences if the rescission would not conflict with any judgment or decree, and if all existing Events of Default have been cured or waived except nonpayment of principal, premium or interest that has become due solely because of the acceleration.
 
17.   Trustee Dealings with the Company
 
Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.
 
18.   No Recourse Against Others
 
A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation.  By accepting a Security, each Securityholder waives and releases all such liability.  The waiver and release are part of the consideration for the issue of the Securities.
 
19.   Successors
 
Subject to certain exceptions set forth in the Indenture, when a successor assumes all the obligations of its predecessor under the Securities and the Indenture in accordance with the terms of the Indenture, the predecessor will be released from those obligations.
 
20.   Authentication
 
This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security.
 
21.   Abbreviations
 
Customary abbreviations may be used in the name of a Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
 
22.   Governing Law
 
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW.
 
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23.   CUSIP Numbers
 
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders.  No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
 
The Company will furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Security.
 
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ASSIGNMENT FORM
 
To assign this Security, fill in the form below:
 
I or we assign and transfer this Security to
 
(Print or type assignee’s name, address and zip code)
 
(Insert assignee’s soc. sec. or tax I.D. No.)
 
and irrevocably appoint                          as agent to transfer this Security on the books of the Company.  The agent may substitute another to act for him.
 
   
   
Date:
 
Your Signature:
 
 
       
   
Sign exactly as your name appears on the other side of this Security.
 
In connection with any transfer of any of the Securities evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144 under the Securities Act after which the Securities may be transferred without limitation thereunder, the undersigned confirms that such Securities are being transferred in accordance with its terms.

 
CHECK ONE BOX BELOW
 
 
(1)
o
to the Company; or
 
(2)
o
pursuant to an effective registration statement under the Securities Act of 1933; or
 
(3)
o
inside the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or
 
(4)
o
outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or
 
(5)
o
to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and
 
14
 
 
 
 
 
agreements (the form of which letter can be obtained from the Trustee or the Company); or
 
(6)
o
pursuant to another available exemption from registration provided by Rule 144 under the Securities Act of 1933.
 
Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any person other than the registered holder thereof; provided , however , that if box (5) or (6) is checked, the Trustee may require, prior to registering any such transfer of the Securities, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.
 

   
 
Your Signature
 
     
Signature Guarantee:
 
   
 
Date:
 
 
   
Signature must be guaranteed by a
participant in a recognized signature
guaranty medallion program or other
signature guarantor acceptable to the Trustee
 
Signature  of Signature Guarantee

 
 
 
 
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
 
The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
 
Dated:
     
   
NOTICE:  To be executed by an executive officer
 

 
15
[TO BE ATTACHED TO GLOBAL SECURITIES]
 
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
 
The initial principal amount of this Global Security is $[        ].  The following increases or decreases in this Global Security have been made:
 

Date of
Exchange
Amount of decrease in Principal  Amount of this Global Security
Amount of increase in Principal Amount of this Global Security
Principal amount of this Global Security following such decrease or increase
Signature of authorized signatory of Trustee or Securities Custodian
         
 
 
16
OPTION OF HOLDER TO ELECT PURCHASE
 
If you want to elect to have this Security purchased by the Company pursuant to Section 4.06 (Asset Sale) or 4.13 (Change of Control) of the Indenture, check the box:
 
o
 
If you want to elect to have only part of this Security purchased by the Company pursuant to Section 4.06 or 4.13 of the Indenture, state the amount:
 
$
 
Date:
   
Your Signature:
 
         
(Sign exactly as your name appears on the other side of the Security)
 
Signature Guarantee:
 
     

Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee.
 
 
17
EXHIBIT A
 
[FORM OF FACE OF EXCHANGE SECURITY]
 
No.___________
   
[Up to]** $__________
     
 
9.750% Senior Secured Notes due 2016
 
     
 
CUSIP No.
 
     
 
ISIN No.
 

 
RITE AID CORPORATION, a Delaware corporation, promises to pay to [Cede & Co.]**, or registered assigns, the principal sum [of [     ] Dollars]* [as set forth on the Schedule of Increases or Decreases annexed hereto]** on June 12, 2016.
 
Interest Payment Dates: March 15 and September 15, commencing on September 15, 2009.
 
Record Dates:  March 1 and September 1.
 
*   Insert for Definitive Securities.
**  Insert for Global Securities.  If the Security is to be issued in global form, add the Global Securities Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1 captioned “TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY.”
 
Additional provisions of this Security are set forth on the other side of this Security.
 
IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed.
 
 
 
RITE AID CORPORATION,
 
     
     
 
By:
  
 
   
Name:
 
 
   
Title:
 
 
 
 
TRUSTEE’S CERTIFICATE OF
AUTHENTICATION
 
Dated:
 
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
 
 
as Trustee, certifies
 
 
that this is one of
 
 
the Securities referred
 
 
to in the Indenture.
 

By:
   
 
Authorized Signatory
 
 
2
 
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
 
9.750% Senior Secured Notes due 2016
 
1.   Interest
 
RITE AID CORPORATION, a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount of this Security at the rate per annum shown above.  The Company will pay interest semiannually on March 15 and September 15 of each year, commencing September 15, 2009.  Interest on the Securities will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from June 12, 2009.  Interest shall be computed on the basis of a 360-day year of twelve 30-day months.  The Company shall pay interest on overdue principal at the rate per annum borne by the Securities plus 1% per annum, and it shall pay interest on overdue installments of interest at the rate per annum borne by the Securities to the extent lawful.
 
2.   Method of Payment
 
The Company will pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders at the close of business on the March 1 or September 1 next preceding the interest payment date even if Securities are canceled after the record date and on or before the interest payment date.  Holders must surrender Securities to a Paying Agent to collect principal payments.  The Company will pay principal and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts.  Payments in respect of the Securities represented by a Global Security (including principal and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Depository.  The Company will make all payments in respect of a Definitive Security (including principal and interest), by mailing a check to the registered address of each Holder thereof; provided , however , that payments on the Securities may also be made, in the case of a Holder of at least $1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).
 
3.   Paying Agent and Registrar
 
Initially, The Bank of New York Mellon Trust Company, N.A., a banking association organized and existing under the laws of the United States of America (the “Trustee”), will act as Paying Agent and Registrar.  The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice.  The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
 
3
4.   Indenture
 
The Company issued the Securities under an Indenture dated as of June 12, 2009 (the “Indenture”), among the Company, the Subsidiary Guarantors named therein and the Trustee.  The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and not defined in the Securities have the meanings ascribed thereto in the Indenture.  The Securities are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of those terms.
 
The Securities are unsecured, unsubordinated obligations of the Company.  The Company’s obligations under the Securities are Guaranteed, subject to certain limitations, by the Subsidiary Guarantors pursuant to Subsidiary Guarantees, subject to release of the Subsidiary Guarantees as provided in the Indenture or such Subsidiary Guarantee.  This Security is one of the Original Securities referred to in the Indenture issued in an aggregate principal amount of $410,000,000.  The Securities include the Original Securities, an unlimited aggregate principal amount of additional Initial Securities that may be issued under the Indenture, and any Exchange Securities issued in exchange for Initial Securities.  The Original Securities, such additional Initial Securities and the Exchange Securities are treated as a single class of securities under the Indenture.  The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, incur Debt, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, create or incur Liens and make Asset Sales.  The Indenture also imposes limitations on the ability of the Company and each Subsidiary Guarantor to consolidate or merge with or into any other Person or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all of the Property of the Company or such Subsidiary Guarantor.
 
5.   Optional Redemption
 
The Company may choose to redeem the Securities at any time.  If it does so, it may redeem all or any portion of the Securities, at once or over time, after giving the required notice under the Indenture.
 
To redeem the Securities prior to June 12, 2013, the Company must pay a redemption price equal to 100% of the principal amount of the Securities to be redeemed plus the Applicable Premium as of, and accrued and unpaid interest, if any, to but not including, the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date that is on or prior to the Redemption Date).  Any notice to Holders of such redemption shall include the appropriate calculation of the Redemption Price, but need not include the Redemption Price itself.  The actual redemption price must be set forth in an Officers’ Certificate delivered to the Trustee no later than two Business Days prior to the Redemption Date.
 
4
“Applicable Premium” means, with respect to any Security on any Redemption Date, the greater of (i) 1.0% of the principal amount of such Security and (ii) the excess of (A) the present value at such Redemption Date of (1) the Redemption Price of such Security at June 12, 2013 (such Redemption Price being set forth in the table below) plus (2) all required interest payments due on such Security through June 12, 2013 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate on such Redemption Date plus 75 basis points over (B) the principal amount of such Security.
 
“Treasury Rate” means, as of any Redemption Date, the yield to maturity as of such Redemption Date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such statistical release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to June 12, 2013; provided , however , that if the period from the Redemption Date to June 12, 2013 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.
 
Beginning on June 12, 2013, the Company may redeem the Securities in whole at any time or in part from time to time at the following Redemption Prices (expressed in percentages of principal amount), plus accrued and unpaid interest, if any, to but not including, the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date that is on or prior to the Redemption Date), if redeemed during the 12-month period beginning on June 12 of the years set forth below:
 
Redemption Period
Price
2013
104.875%
2014
102.438%
2015 and thereafter
100.000%

Notwithstanding the foregoing, at any time and from time to time prior to June 12, 2012, the Company may redeem up to 35% of the original aggregate principal amount of the Securities (including Securities issued after June 12, 2009, if any) with the proceeds from one or more Equity Offerings by the Company, at a Redemption Price equal to 109.750% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to but not including, the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date that is on or prior to the Redemption Date); provided , however , that after giving effect to any such redemption, at least 65% of the original aggregate principal amount of the Securities (including Securities issued after June 12, 2009, if any) remains outstanding.  Any such redemption shall be made within 75 days of such Equity Offering upon not less than 30 nor more than 60 days’ prior notice.
 
If the optional Redemption Date is on or after a record date and on or before the relevant Interest Payment Date, the accrued and unpaid interest, if any, will be paid to the person or entity in whose name the Security is registered at the close of business on that
 
5
record date, and no additional interest will be payable to Holders whose Securities shall be subject to repurchase.
 
6.   Sinking Fund
 
The Securities are not subject to any sinking fund.
 
7.   Notice of Redemption
 
Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his or her registered address.  Securities in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000.  If money sufficient to pay the redemption price of and accrued interest on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Securities (or such portions thereof) called for redemption.
 
 
8. (a)   Repurchase of Securities at the Option of Holders upon Change of Control
 
Upon a Change of Control, any Holder of Securities will have the right, subject to certain conditions specified in the Indenture, to cause the Company to repurchase all or any part of the Securities of such Holder at a purchase price equal to 101% of the principal amount of the Securities to be repurchased plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date that is on or prior to the date of purchase) as provided in, and subject to the terms of, the Indenture.
 
9. (b)                       Prepayment Offer Upon Asset Sale
 
When the aggregate amount of Excess Proceeds exceeds $50.0 million (taking into account income earned on such Excess Proceeds, if any), the Company will be required to make an offer to purchase (the “Asset Sales Prepayment Offer”) the Securities, which offer shall be in the amount of the Allocable Excess Proceeds, on a pro rata basis according to principal amount at maturity, at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the purchase date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date), in accordance with the procedures (including prorating in the event of oversubscription) set forth in the Indenture.  To the extent that any portion of the amount of Net Available Cash remains after compliance with the preceding sentence and provided that all Holders have been given the opportunity to tender their Securities for purchase in accordance with the Indenture, the Company or such Restricted Subsidiary may use such remaining amount for any purpose permitted by the Indenture and the amount of Excess Proceeds will be reset to zero.
 
6
10.   Guarantees; Security
 
The Indenture provides that, under certain circumstances, the Securities will be guaranteed pursuant to Subsidiary Guarantees.  Subsidiary Guarantees may be released in various circumstances, including in certain circumstances without the consent of Holders.
 
The Indenture provides that, under certain circumstances, the Securities or Subsidiary Guarantees must be secured by Liens on certain Property of the Company or Subsidiary Guarantors.  Liens securing the Securities or Subsidiary Guarantees may be released in various circumstances, including in certain circumstances without the consent of Holders.
 
11.   Denominations; Transfer; Exchange
 
The Securities are in registered form without coupons in denominations of $2,000 and whole multiples in excess thereof of $1,000.  A Holder may transfer or exchange Securities in accordance with the Indenture.  Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture.  The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or to transfer or exchange any Securities for a period of 15 days prior to a selection of Securities to be redeemed or 15 days before an interest payment date.
 
12.   Persons Deemed Owners
 
The registered Holder of this Security may be treated as the owner of it for all purposes.
 
13.   Unclaimed Money
 
If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person.  After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.
 
14.   Discharge and Defeasance
 
Subject to certain conditions, the Company at any time may terminate some of or all its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Securities to redemption or maturity, as the case may be.
 
15.   Amendment, Waiver, Deemed Consents, Releases
 
Subject to certain exceptions set forth in the Indenture, (i) the Indenture, or the Securities and, subject to any consent required by the terms of the applicable Collateral
 
7
Documents, the Collateral Documents, may be amended without prior notice to any Holder but with the written consent of the Holders of at least a majority in aggregate principal amount of the outstanding Securities and (ii) any default or noncompliance with any provision may be waived with the written consent of the Holders of at least a majority in principal amount of the outstanding Securities.  Subject to certain exceptions set forth in the Indenture, without the consent of any Holders, the Company, when authorized by a Board Resolution, the Subsidiary Guarantors and the Trustee may amend the Indenture or the Securities and, subject to any consent required by the terms of the applicable Collateral Documents, the Collateral Documents, to: (i) cure any ambiguity, omission, defect or inconsistency; (ii) provide for the assumption by a successor corporation of the obligations of the Company or any Subsidiary Guarantor under the Indenture or any Collateral Document; (iii) provide for uncertificated Securities in addition to or in place of certificated Securities; provided , however , that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Code; (iv) add additional Guarantees with respect to the Securities or release Subsidiary Guarantors from Subsidiary Guarantees as provided by the terms of the Indenture or the Subsidiary Guarantees; (v) further secure the Securities (and if such security interest includes Liens on Property of the Company, provide for releases of such Property on terms comparable to the terms on which Collateral constituting Property of Subsidiary Guarantors may be released), release any Collateral used, sold, transferred or otherwise disposed of in accordance with the terms of the Senior Debt Documents and the Collateral Trust and Intercreditor Agreement, add to the covenants of the Company or the Subsidiary Guarantors for the benefit of the Holders of the Notes or surrender any right or power conferred upon the Company; (vi) in the case of the Indenture, make any change that does not adversely affect the rights of any Holder; (vii) make any change to comply with any requirements of the Commission in connection with the qualification of the Indenture under the Trust Indenture Act; or (viii)conform the Indenture or the Notes to the ‘‘Description of Notes’’ section in this Offering Memorandum.
 
Each Holder of Securities, by its acceptance hereof, will be deemed to have consented and agreed to the terms of each Collateral Document, as originally in effect and as amended, supplemented or replaced from time to time in accordance with its terms or the terms of this Indenture, authorizes and directs the Trustee to enter into the Collateral Documents to which it is a party, and authorizes and empowers the Trustee and (through the Collateral Trust and Intercreditor Agreement and the Senior Lien Intercreditor Agreement) the Senior Collateral Agent to bind the Holders of Securities and other holders of Senior Obligations as set forth in the Collateral Documents to which they are a party and to perform its obligations and exercise its rights and powers thereunder, including entering into amendments permitted by the terms of this Indenture or the Senior Collateral Documents.
 
Notwithstanding the foregoing, no such consent or deemed consent shall be deemed or construed to represent an amendment or waiver, in whole or in part, of any provision of this Indenture or the Securities.
 
The foregoing shall not limit the right of the Company to amend, waive or otherwise modify the Collateral Documents in accordance with their terms.
 
8
The consent of the Holders of the Securities is not necessary to approve the particular form of any proposed amendment.  It shall be sufficient if such consent approves the substance of the proposed amendment.
 
16.   Defaults and Remedies
 
If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the Securities then outstanding, subject to certain limitations, may declare all the Securities to be immediately due and payable.  Certain events of bankruptcy or insolvency are Events of Default and shall result in the Securities being immediately due and payable upon the occurrence of such Events of Default without any further act of the Trustee or any Holder.
 
Holders of Securities may not enforce the Indenture or the Securities except as provided in the Indenture.  The Trustee may refuse to enforce the Indenture or the Securities unless it receives reasonable indemnity or security.  Subject to certain limitations, Holders of a majority in aggregate principal amount of the Securities then outstanding may direct the Trustee in its exercise of any trust or power under the Indenture.  The Holders of a majority in aggregate principal amount of the Securities then outstanding, by written notice to the Company and the Trustee, may rescind any declaration of acceleration and its consequences if the rescission would not conflict with any judgment or decree, and if all existing Events of Default have been cured or waived except nonpayment of principal, premium or interest that has become due solely because of the acceleration.
 
17.   Trustee Dealings with the Company
 
Subject to certain limitations imposed by the TIA,  the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.
 
18.   No Recourse Against Others
 
A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation.  By accepting a Security, each Securityholder waives and releases all such liability.  The waiver and release are part of the consideration for the issue of the Securities.
 
19.   Successors
 
Subject to certain exceptions set forth in the Indenture, when a successor assumes all the obligations of its predecessor under the Securities and the Indenture in accordance with the terms of the Indenture, the predecessor will be released from those obligations.
 
9
20.   Authentication
 
This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security.
 
21.   Abbreviations
 
Customary abbreviations may be used in the name of a Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
 
22.   Governing Law
 
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW.
 
23.   CUSIP Numbers
 
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders.  No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
 
The Company will furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Security.
 
10
ASSIGNMENT FORM
 
To assign this Security, fill in the form below:
 
I or we assign and transfer this Security to
 
(Print or type assignee’s name, address and zip code)
 
(Insert assignee’s soc. sec. or tax I.D. No.)
 
and irrevocably appoint                          as agent to transfer this Security on the books of the Company.  The agent may substitute another to act for him.
 
   
     
 Date:  
Your Signature: 
   
 
 
 
Sign exactly as your name appears on the other side of this Security.      
       
 
Signature Guarantee:
 
 
 
Date:
         
Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee
 
Signature of Signature Guarantee
 

 
11
[TO BE ATTACHED TO GLOBAL SECURITIES]
 
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
 
The initial principal amount of this Global Security is $[        ].  The following increases or decreases in this Global Security have been made:
 

Date of
Exchange
Amount of decrease in Principal  Amount of this Global Security
Amount of increase in Principal Amount of this Global Security
Principal amount of this Global Security following such decrease or increase
Signature of authorized signatory of Trustee or Securities Custodian
         


12

EXHIBIT B
Form of
Transferee Letter of Representation
 
[Company]
In care of
[          ]
[          ]
[          ]
 
Ladies and Gentlemen:
 
This certificate is delivered to request a transfer of $[     ] principal amount of the 9.750% Senior Secured Notes due 2016 (the “Securities”) of Rite Aid Corporation (the “Company”).
 
Upon transfer, the Securities would be registered in the name of the new beneficial owner as follows:
 
Name:
   
     
Address:
   
 
   
Taxpayer ID Number:
   

 
The undersigned represents and warrants to you that:
 
1. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “Securities Act”)), purchasing for our own account or for the account of such an institutional “accredited investor” at least $250,000 principal amount of the Securities, and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act.  We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Securities, and we invest in or purchase securities similar to the Securities in the normal course of our business.  We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment.
 
2.  We understand that the Securities have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence.  We agree on our own behalf and on behalf of any investor account for which we are purchasing Securities to offer, sell or otherwise transfer such Securities prior to the date that is two years after the later of the date of original issue and the last date on which the Company or any affiliate of the Company was the owner of such Securities (or any predecessor thereto) (the “Resale Restriction Termination Date”) only (a) to the Company, (b) pursuant to a registration statement that has been declared effective under the Securities Act, (c) in a transaction complying with the requirements of Rule 144A
 
under the Securities Act (“Rule 144A”), to a person we reasonably believe is a qualified institutional buyer under Rule 144A (a “QIB”) that is purchasing for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act, (e) to an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing for its own account or for the account of such an institutional “accredited investor,” in each case in a minimum principal amount of Securities of $100,000, or (f) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws.  The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date.  If any resale or other transfer of the Securities is proposed to be made pursuant to clause (e) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Company and the Trustee, which shall provide, among other things, that the transferee is an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Securities for investment purposes and not for distribution in violation of the Securities Act.  Each purchaser acknowledges that the Company and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Securities pursuant to clause (e) or (f) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Company and the Trustee.
 
 
TRANSFEREE:
 
,
       
 
by:
   
 

 
2
 
Exhibit 10.1
 
EXECTUTION COPY
 
 
RITE AID CORPORATION.
$410,000,000 9.750% Senior Secured Notes due 2016
 
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
 
June 12, 2009
Citigroup Global Markets Inc.
Banc of America Securities LLC
Wachovia Capital Markets, LLC
As Initial Purchasers
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
 
Ladies and Gentlemen:
 
Rite Aid Corporation, a Delaware corporation (the “Company”), proposes to issue and sell, upon the terms set forth in a purchase agreement dated June 8, 2009 (the “Purchase Agreement”), to the initial purchasers set forth in the Purchase Agreement (the “Initial Purchasers”), $410,000,000 aggregate principal amount of its 9.750% Senior Secured Notes due 2016 (the “Securities”) to be guaranteed by the subsidiary guarantors listed on Schedule I hereto (the “Subsidiary Guarantors”) relating to the initial placement of the Securities (the “Initial Placement”).  Capitalized terms used but not defined herein shall have the meanings given to such terms in the Purchase Agreement.
 
As an inducement to the Initial Purchasers to enter into the Purchase Agreement, and as satisfaction of the conditions thereunder, the Company and the Subsidiary Guarantors agree with you for your benefit and the benefit of the holders from time to time of the Securities (including the Initial Purchasers) and the Exchange Securities (as defined herein) (each a “Holder” and collectively, the “Holders”), as follows:
 
1.   Registered Exchange Offer .  Unless the Registered Exchange Offer (as defined herein) shall not be permitted by applicable law or applicable interpretation of the staff of the Securities and Exchange Commission (the “SEC” or “Commission”), the Company shall (i) prepare and, not later than 150 days following the date of the original issuance of the Securities (the date of such filing being referred to herein as the “Filing Date”), file with the Commission a registration statement (the “Exchange Offer Registration Statement”) on an appropriate form under the Securities Act with respect to a proposed offer to the Holders of the Securities (the “Registered Exchange Offer”) to issue and deliver to such Holders, in exchange for the Securities a like aggregate principal amount of debt securities of the Company (the “Exchange Securities”) that are substantially identical in all material respects to the Securities, except for the transfer
 
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restrictions relating to the Securities, (ii) use its commercially reasonable efforts to cause the Exchange Offer Registration Statement to become effective under the Securities Act no later than 210 days after the Filing Date and (iii) as soon as practicable after the effectiveness of the Exchange Offer Registration Statement, initiate the Registered Exchange Offer as set forth in the following paragraph.  The Exchange Securities will be issued under the same indenture as the Securities (the “Indenture”) to be dated as of June 12, 2009, between the Company and the Trustee or such other bank or trust company that is reasonably satisfactory to the Initial Purchasers, as trustee (the “Trustee”), with such modifications as may be appropriate to account for the registration of the Exchange Securities under the Securities Act.
 
Upon the effectiveness of the Exchange Offer Registration Statement, the Company shall commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder electing to exchange Securities for Exchange Securities (assuming that such Holder (a) is not an affiliate of the Company or an Exchanging Dealer (as defined herein) not complying with the requirements of the next sentence, (b) is not holding Securities that have, or that are reasonably likely to have, the status of an unsold allotment in the Initial Placement, (c) acquires the Exchange Securities in the ordinary course of such Holder’s business and (d) has no arrangements or understandings with any person to participate, and is not participating, in the distribution of the Exchange Securities) and to trade such Exchange Securities from and after their receipt without any limitations or restrictions under the Securities Act and without material restrictions under the securities laws of the several states of the United States.  The Company, the Holders and each Exchanging Dealer acknowledge that, pursuant to current interpretations by the Commission’s staff of Section 5 of the Securities Act, each Holder that is a Broker-Dealer electing to exchange Securities, acquired for its own account as a result of market-making activities or other trading activities, for Exchange Securities (an “Exchanging Dealer”), is required, in connection with a sale of any such Exchange Securities received by such Exchanging Dealer pursuant to the Registered Exchange Offer, to deliver a prospectus containing substantially the information set forth (i) in Annex A hereto on the cover of such prospectus, (ii) in Annex B hereto in the “Exchange Offer Procedures” section and the “Purpose of the Exchange Offer” section of such prospectus and (iii) in Annex C hereto in the “Plan of Distribution” section of such prospectus, in each case subject to any changes, additions, deletions or moving of such disclosure required by the SEC.
 
In connection with the Registered Exchange Offer, the Company shall:
 
(a)  mail to each Holder of Securities a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;
 
(b)  keep the Registered Exchange Offer open for not less than 30 days and not more than 60 business days (or, in each case, longer, if required by applicable law) after the date on which notice of the Registered Exchange Offer is mailed to the Holders of Securities and the Initial Purchasers;
 
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(c)  utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan, The City of New York;
 
(d)  permit Holders to withdraw tendered Securities at any time prior to the end of the Registered Exchange Offer, as set forth in the materials originally mailed to Holders of Securities or otherwise extended by the Company;
 
(e)  comply with all requests of the Securities and Exchange Commission in order to consummate the Registered Exchange Offer; and
 
(f)  comply in all respects with all laws that are applicable to the Registered Exchange Offer.
 
As soon as practicable after the close of the Registered Exchange Offer, the Company shall:
 
(a)  accept for exchange all Securities tendered and not validly withdrawn pursuant to the Registered Exchange Offer;
 
(b)  deliver to the Trustee for due cancelation all Securities so accepted for exchange; and
 
(c)  cause the Trustee for the Exchange Securities promptly to authenticate and deliver to each Holder, Exchange Securities equal in principal amount to the Securities of such Holder so accepted for exchange.
 
The Company shall use its best efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the prospectus contained therein in order to permit such prospectus to be used by all persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply with such requirements in order to resell the Exchange Securities; provided that (i) in the case where such prospectus and any amendment or supplement thereto must be delivered by an Exchanging Dealer, such period shall be the earlier of 210 days from the close of the Registered Exchange Offer and the date on which all Exchanging Dealers have sold all Exchange Securities held by them and (ii) the Company shall make such prospectus and any amendment or supplement thereto available to any Broker-Dealer for use in connection with any resale of any Exchange Securities for a period of not less than 90 days after the consummation of the Registered Exchange Offer.
 
Notwithstanding the foregoing, during any 365-day period, the Company may suspend the effectiveness of the Exchange Offer Registration Statement or the Shelf Registration Statement (i) in relation to a Shelf Registration Statement, solely for the purpose of filing of a post-effective amendment to such Shelf Registration Statement for such time as is reasonably necessary to incorporate annual audited financial information, quarterly financial information or other information required by the Commission with respect to the Company (a “Shelf Suspension Period”) where such post-effective amendment is not yet effective and needs to be declared effective to permit Holders of
 
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the Securities to use the related prospectus and the Company is using its commercially reasonable best efforts to have such post-effective amendment declared effective or (ii) for up to 2 periods (each such period pursuant to this clause (ii) a “Suspension Period”) of up to 45 consecutive days (except for the consecutive 45-day period immediately prior to maturity of the Securities), but no more than an aggregate of 75 days during any 365-day period, if there is a possible acquisition or business combination or other transaction, business development or event involving the Company that may require disclosure in the Exchange Offer Registration Statement or the Shelf Registration Statement and the Company determines in the exercise of its reasonable judgment that such disclosure is not in the best interests of the Company and its stockholders or obtaining any financial statements relating to an acquisition or business combination required to be included in the Exchange Offer Registration Statement or the Shelf Registration Statement would be impracticable.  In such a case, the Company shall promptly notify any such Broker-Dealers of the suspension of the effectiveness of the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, provided that such notice shall not require the Company to disclose the possible acquisition or business combination or other transaction, business development or event if the Company determines in good faith that such acquisition or business combination or other transaction, business development or event should remain confidential.  Upon the abandonment, consummation or termination of the possible acquisition or business combination or other transaction, business development or event or the availability of the required financial statements with respect to a possible acquisition or business combination, the suspension of the use of the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, pursuant to this paragraph shall cease and the Company shall promptly notify such Broker-Dealers that the use of the prospectus contained in the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, as amended or supplemented, as applicable, may resume.  The Company shall provide sufficient copies of the latest version of such prospectus to such Broker-Dealers, promptly upon written request, and in no event later than one Business Day after such request, at any time during such period.
 
The Indenture shall provide that the Securities and the Exchange Securities shall vote and consent together on all matters as to which the Indenture provides for voting and consent as one class and that neither the Securities nor the Exchange Securities will have the right to vote or consent as a separate class on any matter.
 
Interest on each Exchange Security issued pursuant to the Registered Exchange Offer will accrue from the last interest payment date on which interest was paid on the Securities surrendered in exchange therefor or, if no interest has been paid on the Securities, from the date of the closing of the Exchange Offer.
 
Each Holder hereby acknowledges and agrees that any such Holder using the Registered Exchange Offer to participate in a distribution of the Exchange Securities (x) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission in Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991) and Exxon Capital Holdings Corporation (pub. avail. May 13, 1988), as interpreted
 
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in the Commission’s letter to Shearman & Sterling dated July 2, 1993 and similar no-action letters, and (y) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale transaction which must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K under the Securities Act if the resales are of Exchange Securities obtained by such Holder in exchange for Securities acquired by such Holder directly from the Company or one of its affiliates.  Accordingly, each Holder participating in the Registered Exchange Offer shall be required to represent to the Company that at the time of the consummation of the Registered Exchange Offer (i) any Exchange Securities received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understanding with any person to participate, and is not participating, in the distribution of the Securities or the Exchange Securities within the meaning of the Securities Act, (iii) such Holder is not an affiliate of the Company or, if it is such an affiliate (as defined in Section 10(e)), such Holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) it is not acting on behalf of any person who, to its knowledge, could not truthfully make the foregoing representations and (v) it shall have made such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to render the use of Form S-4 or another appropriate form under the Securities Act available or for the Exchange Offer Registration Statement to be declared effective.  To the extent permitted by law, upon the written request of the Initial Purchasers, the Company shall inform the Initial Purchasers of the names and addresses of the Holders to whom the Exchange Offer is made, and the Initial Purchasers shall have the right to contact such Holders and otherwise facilitate the tender of Securities in the Exchange Offer.
 
Notwithstanding any other provisions hereof, the Company will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto shall comply in all material respects with the Securities Act and the rules and regulations of the Commission thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto shall not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any supplement to such prospectus, shall not, as of the consummation of the Registered Exchange Offer, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
 
If any Initial Purchaser determines that it is not eligible to participate in the Registered Exchange Offer with respect to the exchange of Securities constituting any portion of an unsold allotment, at the written request of such Initial Purchaser, the Company shall issue and deliver to such Initial Purchaser or the person purchasing Exchange Securities registered under a Shelf Registration Statement (as contemplated by Section 2 hereof) from such Initial Purchaser, in exchange for such Securities, a like principal amount of Exchange Securities.  The Company shall use its best efforts to cause
 
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the CUSIP Service Bureau to issue the same CUSIP number for such Exchange Securities as for Exchange Securities issued pursuant to the Registered Exchange Offer.
 
2.   Shelf Registration .  If (i) because of any change in law or applicable interpretations thereof by the Commission’s staff the Company is not permitted to effect the Registered Exchange Offer as contemplated by Section 1 hereof, (ii) the Exchange Offer Registration Statement is not declared effective within 210 days after the original issuance of the Securities or the Registered Exchange Offer is not consummated within 270 days after the original issuance of the Securities, (iii) a Holder (including an Initial Purchaser) of Securities notifies the Company following the completion of the Registered Exchange Offer that the Securities held by such Holder are not eligible to be exchanged for Exchange Securities in the Registered Exchange Offer, (iv) certain Holders (other than the Initial Purchasers) of the Securities are prohibited by law or the policy of the Commission from participating in the Registered Exchange Offer or the Exchange Securities may not be freely transferable by such Holders other than by reason of such Holder being an affiliate of the Company (it being understood that the requirement that a participating Broker-Dealer deliver the prospectus contained in the Exchange Offer Registration Statement in connection with sales of Exchange Securities shall not result in such Exchange Securities being not “freely transferable”), or (v) in the case of any Initial Purchaser that participates in the Registered Exchange Offer or acquires Exchange Securities pursuant to Section 1(d) hereof, such Initial Purchaser does not receive freely tradeable Exchange Securities in exchange for Securities constituting any portion of an unsold allotment (it being understood that (x) the requirement that an Initial Purchaser deliver a prospectus containing the information required by Item 507 or 508 of Regulation S-K under the Securities Act in connection with sales of Exchange Securities acquired in exchange for such Securities shall not result in such Exchange Securities not being “freely transferable” and (y) the requirement that an Exchanging Dealer deliver a prospectus in connection with sales of Exchange Securities acquired in the Registered Exchange Offer in exchange for Securities acquired as a result of market-making activities or other trading activities shall not result in such Exchange Securities being not “freely transferable”), then the following provisions shall apply:
 
(a)  The Company shall promptly (i) file (but in no event more than 30 days after so required or requested pursuant to this Section 2) with the Commission, and, if such registration statement is not a registration statement that shall become effective upon filing thereof pursuant to General Instruction I.D. of Form S-3 (an “Automatic Shelf Registration Statement”), thereafter shall use their reasonable best efforts to cause to be declared effective, a shelf registration statement on an appropriate form under the Securities Act relating to the offer and sale of the Transfer Restricted Securities (as defined herein) by the Holders thereof from time to time in accordance with the methods of distribution set forth in such registration statement (hereafter, a “Shelf Registration Statement” and, together with any Exchange Offer Registration Statement, a “Registration Statement”) or (ii) solely at its option, in lieu of filing a shelf registration statement and causing such registration statement to be declared effective as described in clause (i) above, designate, by means of an Officers’ Certificate (as defined in the Indenture), an existing Automatic Shelf Registration Statement as a Shelf Registration Statement able to be used for the offer and sale of the Transfer Restricted Securities.
 
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(b)  Subject to any Suspension Periods provided for in Section 1, the Company shall keep the Shelf Registration Statement continuously effective, supplemented and amended, or shall file additional registration statements, as required by the Securities Act, in order to permit the prospectus forming part thereof to be used by Holders of Transfer Restricted Securities for a period ending on the earlier of (i) one year from the effective date of the Shelf Registration Statement or such shorter period that will terminate when all the Transfer Restricted Securities covered by the Shelf Registration Statement have been sold pursuant thereto and (ii) the date the Transfer Restricted Securities cease to be outstanding (in any such case, such period being called the “Shelf Registration Period”).  The Company shall be deemed not to have complied with this paragraph (b) if it voluntarily takes any action that would result in Holders of Transfer Restricted Securities covered thereby not being able to offer and sell such Transfer Restricted Securities during that period, unless such action is required by applicable law.
 
(c)  Notwithstanding any other provisions hereof, the Company shall ensure that (i) any Shelf Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and regulations of the Commission thereunder, (ii) any Shelf Registration Statement and any amendment thereto (in either case, other than with respect to information included therein in reliance upon or in conformity with written information furnished to the Company by or on behalf of any Holder specifically for use therein (the “Holders’ Information”)) does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Shelf Registration Statement, and any supplement to such prospectus (in either case, other than with respect to Holders’ Information), does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
 
3.   Additional Interest .  1)If (i) neither the Exchange Offer Registration Statement nor the Shelf Registration Statement, as the case may be, is filed with the Commission on or prior to the date which is 150 days following the date of the original issuance of the Securities, (ii) the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, is not declared effective or an Automatic Shelf Registration Statement is not designated as a Shelf Registration Statement able to be used for the offer and sale of the Transfer Restricted Securities within 210 days after the original issuance of the Securities, (iii) the Exchange Offer Registration Statement is declared effective, the Registered Exchange Offer is not consummated on or prior to 270 days after the date of the original issuance of Securities, (iv) the Company is required to file the Shelf Registration Statement in accordance with Section 2, the Company does not so file the Shelf Registration Statement or designate an Automatic Shelf Registration Statement to be used for the offer and sale of the Transfer Restricted Securities and a prospectus supplement covering the offer and sale of the Transfer Restricted Securities is not filed with respect to an Automatic Shelf Registration Statement so designated on or prior to the 30th day after the Company’s obligation to file such Shelf Registration Statement arises, (v) the applicable Registration Statement is filed and declared effective
 
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or so designated but shall thereafter cease to be effective (at any time that the Company is obligated to maintain the effectiveness thereof) without being again effective within 30 days or being succeeded within 30 days by an additional Registration Statement filed and declared effective or immediately effective, provided that such 30-day period shall toll during a Suspension Period or during any Shelf Suspension Period, or (vi) any Suspension Periods exceed, in the aggregate, 75 days during any 365-day period (each such event referred to in clauses (i) through (vi), a “Registration Default”), the Company shall be obligated to pay additional interest (“Additional Interest”) to each Holder of Transfer Restricted Securities, during the period of one or more such Registration Defaults, at a rate of 0.25% per annum on the applicable principal amount of Transfer Restricted Securities held by such Holder for the first 90-day period immediately following the occurrence of a Registration Default, and such rate will increase by an additional 0.25% with respect to each subsequent 90-day period until all Registration Defaults have been cured, provided that the maximum additional rate may in no event exceed 0.50% per annum.  Such obligation to pay Additional Interest shall survive until (i) the applicable Registration Statement is filed, (ii) the Exchange Offer Registration Statement is declared effective and the Registered Exchange Offer is consummated with respect to all properly tendered Securities, (iii) the Shelf Registration Statement is declared effective or (iv) the Shelf Registration Statement again becomes effective (or is superseded by another effective Shelf Registration Statement), as the case may be. Following the cure of all Registration Defaults, the accrual of Additional Interest will cease.
 
As used herein, the term “Transfer Restricted Securities” means (i) each Security until the date on which such Security has been exchanged for a freely transferable Exchange Security in the Registered Exchange Offer, (ii) each Security until the date on which it has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement or (iii) each Security until the date on which it is distributed to the public pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule 144 without limitations.  Notwithstanding anything to the contrary in this Section 3(a), the Company shall not be required to pay Additional Interest to a Holder of Transfer Restricted Securities if such Holder failed to comply with its obligations to make the representations set forth in the third to last paragraph of Section 1 or failed to provide the information required to be provided by it, if any, pursuant to Section 4(n).
 
(b)  The Company shall notify the Trustee and the paying agent under the Indenture immediately upon the happening of each and every Registration Default.  The Company shall pay the Additional Interest due on the Transfer Restricted Securities by depositing with the paying agent (which may not be the Company for these purposes), in trust, for the benefit of the Holders thereof, prior to 11:00 a.m., New York City time, on the next applicable interest payment date specified by the Indenture and the Securities, sums sufficient to pay the Additional Interest then due.  The Additional Interest due shall be payable on each applicable interest payment date specified by the Indenture and the Securities to the record holder entitled to receive the interest payment to be made on such date.  Each obligation to pay Additional Interest shall be deemed to accrue from and include the date of the applicable Registration Default.
 
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(c)  The parties hereto agree that the Additional Interest provided for in this Section 3 constitute a reasonable estimate of and are intended to constitute the sole damages that will be suffered by Holders of Transfer Restricted Securities by reason of the failure of (i) the Shelf Registration Statement or the Exchange Offer Registration Statement to be filed, (ii) the Shelf Registration Statement to remain effective or (iii) the Exchange Offer Registration Statement to be declared effective and the Registered Exchange Offer to be consummated, in each case to the extent required by this Agreement.
 
4.   Registration Procedures .  In connection with any Registration Statement, the following provisions shall apply:
 
(a)  The Company shall (i) furnish to each of the Initial Purchasers a copy of the Registration Statement and each amendment thereof and each supplement (other than reports required to be filed by it under the Exchange Act), if any, to the prospectus included therein and shall use its reasonable best efforts to reflect in each such document, when so filed with the Commission, such comments as any Initial Purchaser or any Holder may reasonably propose; (ii) include the information set forth (A) in Annex A hereto on the cover of such prospectus, (B) in Annex B hereto in the “Exchange Offer Procedures” section and the “Purpose of the Exchange Offer” section of such prospectus, (C) in Annex C hereto in the “Plan of Distribution” section of the prospectus forming a part of the Exchange Offer Registration Statement and (D) in Annex D hereto in any Letter of Transmittal delivered pursuant to the Registered Exchange Offer, in each case subject to any changes, additions, deletions or moving of such disclosure required by the SEC; and (iii) if requested by an Initial Purchaser, include the information required by Items 507 or 508 of Regulation S-K, as applicable, in the prospectus forming part of the Exchange Offer Registration Statement.
 
(b)  The Company shall advise each of the Initial Purchasers, each Exchanging Dealer and the Holders (if applicable) and, if requested by any such person, confirm such advice in writing (which advice pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made):
 
i) when any Registration Statement and any amendment thereto has been filed with the Commission and when such Registration Statement or any post-effective amendment thereto has become effective;
 
ii) of any request by the Commission for amendments or supplements to any Registration Statement or the prospectus included therein or for additional information;
 
iii) if known by the Company, of the issuance by the Commission of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for that purpose;
 
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iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities or the Exchange Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and
 
v) of the happening of any event that requires the making of any changes in any Registration Statement or the prospectus included therein in order that the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
 
(c)  The Company shall make every reasonable effort to obtain the withdrawal at the earliest possible time of any order suspending the effectiveness of any Registration Statement or qualifying the Securities therein for sale in any jurisdiction.
 
(d)  The Company shall furnish to each Holder of Transfer Restricted Securities included within the coverage of any Shelf Registration Statement, without charge, upon the written request of such Holder, at least one conformed copy of such Shelf Registration Statement and any post-effective amendment thereto, including all material incorporated therein by reference, including financial statements and schedules and, if any such Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference).
 
(e)  The Company shall, during the Shelf Registration Period, promptly deliver to each Holder of Transfer Restricted Securities included within the coverage of any Shelf Registration Statement, without charge, as many copies of the prospectus (including each preliminary prospectus) included in such Shelf Registration Statement and any amendment or supplement thereto as such Holder may reasonably request; and the Company consents to the use of such prospectus or any amendment or supplement thereto by each of the selling Holders of Transfer Restricted Securities in connection with the offer and sale of the Transfer Restricted Securities covered by such prospectus or any amendment or supplement thereto.
 
(f)  The Company shall furnish to each Exchanging Dealer who so requests in writing, without charge, at least one conformed copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including financial statements and schedules and, if any Exchanging Dealer so requests in writing, all exhibits thereto (including those, if any, incorporated by reference).
 
(g)  The Company shall, during the Exchange Offer Registration Period or the Shelf Registration Period, as applicable, promptly deliver to each Initial Purchaser, each Exchanging Dealer and such other persons that are required to deliver a prospectus following the Registered Exchange Offer, without charge, as many copies of the final prospectus included in the Exchange Offer Registration Statement or the Shelf Registration Statement and any amendment or supplement thereto as such Initial Purchaser, Exchanging Dealer or other persons may reasonably request; and the Company consents to the use of such prospectus or any amendment or supplement thereto by any such Initial Purchaser, Exchanging Dealer or other persons, as applicable, as aforesaid.
 
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(h)  Prior to the effective date of any Registration Statement, the Company shall use its reasonable best efforts to register or qualify, or cooperate with the Holders of Securities or Exchange Securities included therein and their respective counsel in connection with the registration or qualification of, such Securities or Exchange Securities for offer and sale under the securities or blue sky laws of such jurisdictions as any such Holder reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Securities or Exchange Securities covered by such Registration Statement, provided that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process or to taxation in any such jurisdiction where it is not then so subject.
 
(i)  The Company shall cooperate with the Holders of Securities or Exchange Securities to facilitate the timely preparation and delivery of certificates representing Securities or Exchange Securities to be sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders thereof may request in writing at least one business day prior to sales of Securities or Exchange Securities pursuant to such Registration Statement.
 
(j)  If any event contemplated by Section 4(b)(ii) through (v) occurs during the period for which the Company is required to maintain an effective Registration Statement, the Company shall promptly prepare and file with the Commission a post-effective amendment to the Registration Statement or an amendment or a supplement to the related prospectus or file any other required document so that, as thereafter delivered to purchasers of the Securities or Exchange Securities from a Holder, the prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  In such circumstances, other than with respect to any Shelf Suspension Period, the period of effectiveness of the Exchange Offer Registration Statement provided for in Section 1 and the Shelf Registration Statement provided for in Section 2(b) shall each be extended by the number of days from and including the date of the giving of a notice of suspension pursuant to Section 4(b) to and including the date when the Initial Purchasers, the Holders of the Securities and any known Exchanging Dealer shall have received such amended or supplemented Prospectus pursuant to this Section.
 
(k)  Not later than the effective date of the applicable Registration Statement, the Company shall obtain a CUSIP number for the Securities and the Exchange Securities and provide the applicable trustee with printed certificates for the Securities or the Exchange Securities, as the case may be, in a form eligible for deposit with The Depository Trust Company.
 
(l)  The Company shall comply with all applicable rules and regulations of the Commission and make generally available to the Company’s security holders as soon as reasonably practicable after the effective date of the applicable Registration Statement an earning statement satisfying the provisions of Section 11(a) of the Securities Act, provided that in no event shall such earning statement be delivered later than 45 days
 
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after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the applicable Registration Statement, which statement shall cover such 12-month period.
 
(m)  The Company shall cause the Indenture to be qualified under the Trust Indenture Act as required by applicable law in a timely manner.
 
(n)  The Company may require each Holder of Transfer Restricted Securities to be registered pursuant to any Shelf Registration Statement to furnish to the Company such information concerning the Holder and the distribution of such Transfer Restricted Securities as the Company may from time to time reasonably require for inclusion in such Shelf Registration Statement, and the Company may exclude from such registration the Transfer Restricted Securities of any Holder that fails to furnish such information within a reasonable time after receiving such request.
 
(o)  In the case of a Shelf Registration Statement, each Holder of Transfer Restricted Securities to be registered pursuant thereto agrees by acquisition of such Transfer Restricted Securities that, upon receipt of any notice from the Company pursuant to Section 4(b)(ii) through (v), such Holder will discontinue disposition of such Transfer Restricted Securities until such Holder’s receipt of copies of the supplemental or amended prospectus contemplated by Section 4(j) or until advised in writing (the “Advice”) by the Company that the use of the applicable prospectus may be resumed.  If the Company shall give any notice under Section 4(b)(ii) through (v) during the period that the Company is required to maintain an effective Registration Statement (the “Effectiveness Period”), other than with respect to any Shelf Suspension Period, such Effectiveness Period shall be extended by the number of days during such period from and including the date of the giving of such notice to and including the date when each seller of Transfer Restricted Securities covered by such Registration Statement shall have received (x) the copies of the supplemental or amended prospectus contemplated by Section 4(j) (if an amended or supplemental prospectus is required) or (y) the Advice (if no amended or supplemental prospectus is required).
 
(p)  In the case of a Shelf Registration Statement, the Company shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as Holders of a majority in aggregate principal amount of the Securities or Exchange Securities being sold or the managing underwriters, if any, shall reasonably request in order to facilitate any disposition of Securities or Exchange Securities pursuant to such Shelf Registration Statement.
 
(q)  In the case of any Shelf Registration Statement, the Company shall:
 
(i) make reasonably available for inspection by the Holders of, representatives and counsel to, a majority in aggregate principal amount of the Securities to be registered thereunder, any underwriter participating in any disposition pursuant to such Registration Statement and any attorney, accountant
 
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or other agent retained by such Holders or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company;
 
(ii) cause the Company’s officers, directors and employees to supply all relevant information reasonably requested by the Holders or any such underwriter, attorney, accountant or agent in connection with any such Shelf Registration Statement as is customary for similar due diligence examinations; provided , however , that the foregoing inspection and information gathering shall be coordinated on behalf of the Initial Purchasers by Citigroup Global Markets Inc. in connection with any underwritten Shelf Registration Statement to which it is a party, and on behalf of the Holders by one counsel designated by the Holders of a majority of the Securities; provided , further , that any information provided pursuant to Section 4(q)(i) and (ii) that is designated in writing by the Company, in good faith, as confidential at the time of delivery of such information shall be kept confidential by the Holders or any such underwriter, attorney, accountant or agent, and shall be used only in connection with such Shelf Registration and the transactions contemplated thereby unless such disclosure is made in connection with a court proceeding or required by law, or such information becomes available to the public generally or through a third party without an accompanying obligation of confidentiality;
 
(iii) make such representations and warranties to the underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in primary underwritten offerings and covering matters including, but not limited to, those set forth in the Purchase Agreement;
 
(iv) obtain opinions of its counsel and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the underwriters, if any) addressed to each selling Holder and the underwriters, if any, covering such matters as are customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such Holders and underwriters;
 
(v) if requested in writing by Holders of a majority in aggregate principal amount of the Securities to be registered thereunder or by any underwriter participating in any disposition pursuant to such Shelf Registration Statement, to use its reasonable best efforts to obtain “cold comfort” letters and updates thereof from the independent certified public accountants of the Company, addressed to each selling Holder of Securities registered thereunder and the underwriters, if any, in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with primary underwritten offerings; and
 
(vi) deliver such documents and certificates as may be reasonably requested by the Holders of a majority in aggregate principal amount of the Securities and the Exchange Securities being sold and the underwriters, if any,
 
14
 
and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company.
 
The actions set forth in clauses (iii), (iv) and (v) of this subsection shall be performed at (A) the effectiveness of such Shelf Registration Statement and, if applicable, each post-effective amendment thereto or, in the case of the designation of an existing Automatic Shelf Registration Statement for the offer and sale of Transfer Restricted Securities, upon the filing of a prospectus supplement relating to such offer and sale of Transfer Restricted Securities or any post-effective amendment thereto; and (B) each closing under any underwriting or similar agreement as and to the extent required thereunder.
 
(r)  If a Registered Exchange Offer is to be consummated, upon delivery of the Securities by Holders to the Company (or to such other person as directed by the Company) in exchange for the Exchange Securities, the Company shall mark, or cause to be marked, on the Securities so exchanged that such Securities are being canceled in exchange for the Exchange Securities.  In no event shall the Securities be marked as paid or otherwise satisfied.
 
(s)  The Company will use its reasonable best efforts to cause the Securities covered by a Registration Statement to be rated with at least one nationally recognized statistical rating agency, if so requested by Holders of a majority in aggregate principal amount of the Securities and the Exchange Securities being sold with respect to the related Registration Statement or by any underwriters.
 
(t)  In the event that any Broker-Dealer shall underwrite any Securities or participate as a member of an underwriting syndicate or selling group or “assist in the distribution” (within the meaning of the Rules of Fair Practice and the By-Laws of the Financial Industry Regulatory Authority, Inc.) thereof, whether as a Holder of such Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company shall assist such Broker-Dealer in complying with the requirements of such Rules and By-Laws, including, without limitation, by:
 
(i) if such Rules or By-Laws shall so require, engaging a “qualified independent underwriter” (as defined in such Rules) to participate in the preparation of the Registration Statement, to exercise usual standards of due diligence with respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Securities;
 
(ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 6 hereof; and
 
(iii) providing such information to such Broker-Dealer as may be required in order for such Broker-Dealer to comply with the requirements of such Rules.
 
15
5.   Registration Expenses .  The Company shall bear all expenses incurred in connection with the performance of their obligations under Sections 1, 2, 3 and 4 and, in the case of a Shelf Registration Statement, the Company shall reimburse the Holders for the reasonable fees and disbursements of one firm of attorneys (in addition to any local counsel) chosen by the Holders of a majority in aggregate principal amount of the Securities and the Exchange Securities to be sold pursuant to each Registration Statement acting for the Holders and the Initial Purchasers in connection therewith and, in the case of any Exchange Offer Registration Statement, will reimburse the Initial Purchasers for the reasonable fees and disbursements of counsel acting in connection therewith.
 
6.   Indemnification .  vi)In the event of a Shelf Registration Statement or in connection with any prospectus delivery pursuant to an Exchange Offer Registration Statement by an Exchanging Dealer, the Company shall indemnify and hold harmless each Holder (including, without limitation, each Initial Purchaser and any such Exchanging Dealer), their affiliates, their respective officers, directors, employees, representatives and agents, and each person, if any, who controls such Holder within the meaning of the Securities Act or the Exchange Act (collectively referred to for purposes of this Section 6 and Section 7 as a Holder), from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof (including, without limitation, any loss, claim, damage, liability or action relating to purchases and sales of Securities or Exchange Securities), to which that Holder may become subject, whether commenced or threatened, under the Securities Act, the Exchange Act, any other federal or state statutory law or regulation, at common law or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any such Registration Statement or any prospectus forming part thereof or in any amendment or supplement thereto or any “issuer free writing prospectus” within the meaning of the Securities Act approved by the Company or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and shall reimburse each indemnified party promptly upon demand for any legal or other expenses reasonably incurred by that indemnified party in connection with investigating or defending or preparing to defend against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action as such expenses are incurred; provided , however , that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with any Holders’ Information.
 
(b)  In the event of a Shelf Registration Statement, each Holder severally and not jointly shall indemnify and hold harmless the Company, its affiliates, its respective officers, directors, employees, representatives and agents, and each person, if any, who controls the Company, within the meaning of the Securities Act or the Exchange Act (collectively referred to for purposes of this Section 6(b) and Section 7 as the Company), from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof, to which the Company may become subject, whether commenced or threatened, under the Securities Act, the Exchange Act, any other federal
 
16
 
or state statutory law or regulation, at common law or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any such Registration Statement or any prospectus forming a part thereof or in any amendment or supplement thereto or any “issuer free writing prospectus” within the meaning of the Securities Act or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with any Holders’ Information furnished to the Company by such Holder, and shall reimburse the Company for any legal or other expenses reasonably incurred by the Company, in connection with investigating or defending or preparing to defend against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action as such expenses are incurred; provided , however , that no such Holder shall be liable for any indemnity claims hereunder in excess of the amount of net proceeds received by such Holder from the sale of Securities or Exchange Securities pursuant to such Shelf Registration Statement.
 
(c)  Promptly after receipt by an indemnified party under this Section 6 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party pursuant to Section 6(a) or 6(b), notify the indemnifying party in writing of the claim or the commencement of that action; provided , however , that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 6 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further , however , that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 6.  If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party.  After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 6 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than the reasonable costs of investigation; provided , however , that an indemnified party shall have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel for the indemnified party will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based upon advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf
 
17
of the indemnified party) or (4) the indemnifying party has not in fact employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm of attorneys (in addition to any local counsel) at any one time for all such indemnified party or parties. Each indemnified party, as a condition of the indemnity agreements contained in Sections 6(a) and 6(b), shall use all reasonable efforts to cooperate with the indemnifying party in the defense of any such action or claim. No indemnifying party shall be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with its written consent or if there be a final judgment for the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability or claims that were raised or could have been raised by such plaintiff in such proceeding.
 
7.   Contribution .  If the indemnification provided for in Section 6 is unavailable or insufficient to hold harmless an indemnified party under Section 6(a) or 6(b), then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the indemnified party, on the one hand, and the indemnifying party, on the other hand, from the Initial Placement and the Registration Statement which resulted in such loss, claim, damage or liability, or action in respect thereof, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and such Holder, on the other, with respect to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations.  Benefits received by the Company shall be deemed to be equal to the total net proceeds from the Initial Placement (before deducting expenses) received by the Company, and benefits received by the Initial Purchasers shall be deemed to be equal to the total purchase discounts and commissions in each case set forth on the cover of the Final Memorandum.  Benefits received by any other Holders shall be deemed to be equal to the value of receiving Securities or Exchange Securities, as applicable, registered under the Securities Act.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to the Company or information supplied by the Company on the
 
18
one hand or to any Holder or information supplied by such Holder on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 7 were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 7 shall be deemed to include, for purposes of this Section 7, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending or preparing to defend any such action or claim.  Notwithstanding the provisions of this Section 7, an indemnifying party that is a Holder of Securities or Exchange Securities shall not be required to contribute any amount in excess of the amount by which (A) with respect to any Holder, the total price at which the Securities or Exchange Securities sold by such indemnifying party to any purchaser, (B) with respect to a Purchaser, the total consideration received by such Purchaser pursuant to the Purchase Agreement, as the case may be, exceeds the amount of any damages which such indemnifying party has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
 
8.   Rules 144 and 144A .   So long as Transfer Restricted Securities remain outstanding, the Company shall use its reasonable best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the written request of any Holder of Transfer Restricted Securities, make publicly available other information so long as necessary to permit sales of such Holder’s securities pursuant to Rules 144 and 144A.  So long as Transfer Restricted Securities remain outstanding, upon the written request of any Holder of Transfer Restricted Securities, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 8 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act.
 
9.   Underwritten Registrations .  If any of the Transfer Restricted Securities covered by any Shelf Registration Statement are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by the Holders of a majority in aggregate principal amount of such Transfer Restricted Securities included in such offering, subject to the consent of the Company (which shall not be unreasonably withheld or delayed), and such Holders shall be responsible for all underwriting commissions and discounts in connection therewith.
 
No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person’s Transfer Restricted Securities on the basis reasonably provided in any underwriting arrangements approved by the persons
 
19
 
entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.
 
10.   Miscellaneous .  vii) Amendments and Waivers .  The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of Holders of a majority in aggregate principal amount of the Securities and the Exchange Securities; provided that, with respect to any matter that directly or indirectly affects the rights of any Initial Purchaser hereunder, the Company shall obtain the written consent of each such Initial Purchaser against which such amendment, qualification, supplement, waiver or consent is to be effective.  Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Securities or Exchange Securities, as the case may be, are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by Holders of a majority in aggregate principal amount of the Securities and the Exchange Securities being sold by such Holders pursuant to such Registration Statement.
 
(b)   Notices .  All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail, telecopier or any courier guaranteeing next-day delivery:
 
(1) if to a Holder, at the most current address given by such Holder to the Company in accordance with the provisions of this Section 10(b), which address initially is, with respect to each Holder, the address of such Holder maintained by the Registrar under the Indenture;
 
(2) if to you, initially at the respective addresses set forth in the Purchase Agreement; and
 
(3) if to the Company, initially at the address of the Company set forth in the Purchase Agreement.
 
All such notices and communications shall be deemed to have been duly given:  when delivered by hand, if personally delivered; when delivered by e mail, if receipt is acknowledged in a reply e-mail by the recipient; one business day after being delivered to a next-day air courier; five business days after being deposited in the mail; and when receipt is acknowledged by the recipient’s telecopier machine, if sent by telecopier.
 
(c)   Successors And Assigns .  This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without the need for an express assignment or any consent by the Company thereto, subsequent Holders of Securities and the Exchange Securities.  The Company hereby agrees to extend the benefits of this Agreement to any Holder of Securities and the Exchange
 
20
 
Securities, and any such Holder may specifically enforce the provisions of this Agreement as if an original party hereto.
 
(d)   Counterparts .  This Agreement may be executed in any number of counterparts (which may be delivered in original form or by telecopier) and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
 
(e)   Definition of Terms .  For purposes of this Agreement, (a) the term “business day” means any day on which the New York Stock Exchange, Inc. is open for trading, (b) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act, (c) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act, (d) the term “Broker-Dealer” shall mean any broker or dealer registered as such under the Exchange Act, (e) the term “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, (f) the term “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder, (g) the term “Exchange Offer Registration Period” shall mean the 210 day period following the consummation of the Registered Exchange Offer, exclusive of any period during which any stop order shall be in effect suspending the effectiveness of the Exchange Offer Registration Statement, and (h) the term “Shelf Registration” shall mean a registration effected pursuant to Section 2 hereof.
 
(f)   Headings .  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
 
(g)   Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.
 
(h)   No Inconsistent Agreements .  The Company has not entered into, or shall not, on or after the date of this Agreement, enter into any agreement that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.
 
(i)   Severability .  The remedies provided herein are cumulative and not exclusive of any remedies provided by law.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
 
21
(j)   Securities Held by the Company, etc.   Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities or Exchange Securities is required hereunder, Securities or Exchange Securities, as applicable, held by the Company or its Affiliates shall be disregarded and deemed not to be outstanding in determining whether such consent or approval was given by the Holders of such required percentage.
 
22
 
Please confirm that the foregoing correctly sets forth the agreement among the Company, the Subsidiary Guarantors and the several Initial Purchasers.
 
 
Very truly yours,
   
 
RITE AID CORPORATION,
       
       
 
By
 
/s/ Marc A. Strassler
   
Name:
Marc A. Strassler
   
Title:
Executive Vice
     
President, General
      Counsel and Secretary
 
23
 
 
 
   
 
Each of the Subsidiary
Guarantors listed on
Schedule I hereto,
       
       
 
By
 
/s/ Marc A. Strassler
   
Name:
Marc A. Strassler
   
Title:
Authorized Person
     
 
       
 
 
24
 
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

Citigroup Global Markets Inc.
Banc of America Securities LLC
Wachovia Capital Markets, LLC

By:  Citigroup Global Markets Inc.
 
by
   
/s/ David Leland
   
 
Name:
David Leland
   
 
Title:
Vice President
   



By:  Banc of America Securities LLC
 
by
   
/s/ Aaron Peyton
   
 
Name:
Aaron Peyton
   
 
Title:
Principal
   



By:  Wachovia Capital Markets, LLC
 
by
   
/s/ Scott Yarbrough
   
 
Name:
Scott Yarbrough
   
 
Title:
Director
   

For themselves and the other several
Initial Purchasers named in Schedule I
to the Purchase Agreement.

ANNEX A
 
Each broker-dealer that receives Exchange Securities for its own account pursuant to the Registered Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities.  The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.  This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Securities where such Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities.  The Company has agreed that, starting on the Expiration Date (as defined herein) and ending on the close of business 210 days after the Expiration Date, it will make this prospectus available to any broker-dealer for use in connection with any such resale.  See “Plan of Distribution.”
 
 
ANNEX B
 
Each broker-dealer that receives Exchange Securities for its own account in exchange for Securities, where such Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities.  See “Plan of Distribution.”
 
 
ANNEX C
 
PLAN OF DISTRIBUTION
 
Each broker-dealer that receives Exchange Securities for its own account pursuant to the Registered Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities.  This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Securities received in exchange for Securities where such Securities were acquired as a result of market-making activities or other trading activities.  The Company has agreed that, starting on the Expiration Date (as defined herein) and ending on the close of business 210 days after the Expiration Date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale.  In addition, until _______________, 200__, all dealers effecting transactions in the Exchange Securities may be required to deliver a prospectus.
 
The Company will not receive any proceeds from any sale of Exchange Securities by broker-dealers.  Exchange Securities received by broker-dealers for their own account pursuant to the Registered Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices.  Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such Exchange Securities.  Any broker-dealer that resells Exchange Securities that were received by it for its own account pursuant to the Registered Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Securities may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of Exchange Securities and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.
 
For a period of 210 days after the Expiration Date the Company will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the Letter of Transmittal.  The Company has agreed to pay all expenses incident to the Registered Exchange Offer (including the expenses of one counsel for the Holders of the Securities) other than commissions or concessions of any broker-dealers and will indemnify the Holders of the Securities (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.
 
 
ANNEX D
 
o
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
   
   
 
Name:
Address:


If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities.  If the undersigned is a broker-dealer that will receive Exchange Securities for its own account in exchange for Securities that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.
 
 
SCHEDULE 1
 
Subsidiary Guarantors
 
Corporations

Thrifty PayLess, Inc.
Rite Aid of Vermont, Inc.
Rite Aid of Ohio, Inc.
Rite Aid of Maine, Inc.
Rite Aid of West Virginia, Inc.
The Lane Drug Company
3581 Carter Hill Road - Montgomery Corp.
4042 Warrensville Center Road - Warrensville Ohio, Inc.
5277 Associates, Inc.
537 Elm Street Corp.
5600 Superior Properties, Inc.
657-659 Broad St. Corp.
Apex Drug Stores, Inc.
Broadview and Wallings - Broadview Heights Ohio, Inc.
Eagle Managed Care Corp.
England Street-Asheland Corporation
GDF, Inc.
Harco, Inc.
K&B Alabama Corporation
K&B Louisiana Corporation
K&B Mississippi Corporation
K&B Services, Incorporated
K&B Tennessee Corporation
K&B Texas Corporation
K&B, Incorporated
Keystone Centers, Inc.
Lakehurst and Broadway Corporation
Patton Drive and Navy Boulevard Property Corporation
PDS-1 Michigan, Inc.
Perry Distributors, Inc.
Perry Drug Stores, Inc.
Ram-Utica, Inc.
RDS Detroit, Inc.
READ’s Inc.
Rite Aid Drug Palace, Inc.
Rite Aid Hdqtrs. Corp
Rite Aid Hdqtrs. Funding, Inc.
Rite Aid of Alabama, Inc.
Rite Aid of Connecticut, Inc.
Rite Aid of Delaware, Inc.
Rite Aid of Florida, Inc.
Rite Aid of Georgia, Inc.
Rite Aid of Illinois, Inc.
 
2
 
Rite Aid of Indiana, Inc.
Rite Aid of Kentucky, Inc.
Rite Aid of Maryland, Inc.
Rite Aid of Massachusetts, Inc.
Rite Aid of Michigan, Inc.
Rite Aid of New Hampshire, Inc.
Rite Aid of New Jersey, Inc.
Rite Aid of New York, Inc.
Rite Aid of North Carolina, Inc.
Rite Aid of Pennsylvania, Inc.
Rite Aid of South Carolina, Inc.
Rite Aid of Tennessee, Inc.
Rite Aid of Virginia, Inc.
Rite Aid of Washington, D.C., Inc.
Rite Aid Realty Corp.
Rite Aid Rome Distribution Center, Inc.
Rite Aid Transport, Inc.
Rite Fund, Inc.
Rite Investments Corp.
Rx Choice, Inc.
Thrifty Corporation
Brooks Pharmacy, Inc.
Eckerd Corporation
EDC Licensing, Inc.
Genovese Drug Stores, Inc.
JCG Holdings (USA), Inc.
Maxi Drug North, Inc.
Maxi Drug, Inc.
P.J.C. Distribution, Inc.
P.J.C. Realty Co., Inc.
PJC Lease Holdings, Inc.
PJC Special Realty Holdings, Inc.
The Jean Coutu Group (PJC) USA, Inc.
Thrift Drug Services, Inc.
Thrift Drug, Inc.
Eckerd Fleet, Inc.
PJC of Massachusetts, Inc.
PJC Realty MA, Inc.
EDC Drug Stores, Inc.
MC Woonsocket, Inc.
PJC of Cranston, Inc.
PJC of East Providence, Inc.
PJC of Rhode Island, Inc.
P.J.C. of West Warwick, Inc.
Maxi Green Inc.
 
3
 
PJC of Vermont, Inc.
Rite Aid Payroll Management Inc.
Rite Aid Online Store Inc.

Limited Liability Companies

764 South Broadway - Geneva, Ohio, LLC
Eighth and Water Streets - Urichsville, Ohio, LLC
Gettysburg and Hoover-Dayton, Ohio, LLC
Mayfield & Chillicothe Roads - Chesterland, LLC
Munson & Andrews, LLC
Silver Springs Road - Baltimore, Maryland/One, LLC
Silver Springs Road - Baltimore, Maryland/Two, LLC
State Street and Hill Road-Gerard, Ohio, LLC
112 Burleigh Avenue Norfolk, LLC
1515 West State Street Boise, Idaho, LLC
1740 Associates, L.L.C.
Ann & Government Streets - Mobile, Alabama, LLC
Central Avenue and Main Street - Petal, MS, LLC
Fairground, L.L.C.
Name Rite, L.L.C.
Northline & Dix - Toledo - Southgate, LLC
Paw Paw Lake Road & Paw Paw Avenue - Coloma, Michigan, LLC
Seven Mile and Evergreen - Detroit, LLC
State & Fortification Streets - Jackson, Mississippi, LLC
Tyler and Sanders Roads, Birmingham - Alabama, LLC
Rite Aid Services, L.L.C.
JCG (PJC) USA, LLC
PJC Dorchester Realty LLC
PJC East Lyme Realty LLC
PJC Haverhill Realty LLC
PJC Hermitage Realty LLC
PJC Hyde Park Realty LLC
PJC Manchester Realty LLC
PJC Mansfield Realty LLC
PJC New London Realty LLC
PJC Peterborough Realty LLC
PJC Providence Realty LLC
PJC Realty N.E. LLC
PJC Revere Realty LLC

Limited Partnerships

Maxi Drug South, L.P.

Exhibit 10.2
 
EXECUTION COPY

 
SENIOR LIEN INTERCREDITOR AGREEMENT
 
Dated as of
 
June 12, 2009
 
Among
 
RITE AID CORPORATION,
 
THE SUBSIDIARY GUARANTORS,
 
CITICORP NORTH AMERICA, INC.,
as Senior Collateral Agent,
 
CITICORP NORTH AMERICA, INC.,
as Authorized Representative under the Senior Credit Agreement,
 
THE BANK OF NEW YORK MELLON TRUST COMPANY
as Authorized Representative under the Initial Additional Senior Debt Facility,
 
and
 
each additional Authorized Representative from time to time party hereto
 

 
 
 

SENIOR LIEN INTERCREDITOR AGREEMENT (as amended or supplemented from time to time, this “ Agreement ”) dated as of June 12, 2009, among RITE AID CORPORATION, a Delaware corporation (“ Rite Aid ”), each Subsidiary of Rite Aid listed on the signature pages hereto or which becomes a party hereto pursuant to Section 24 of the Senior Subsidiary Security Agreement (each such Subsidiary, individually a “Subsidiary Guarantor”, and collectively, the “Subsidiary Guarantors”), CITICORP NORTH AMERICA, INC., as senior collateral agent for the Senior Secured Parties (as defined below) (in such capacity, as further defined herein, the “ Senior Collateral Agent ”), CITICORP NORTH AMERICA, INC., as Senior Representative for the Senior Loan Secured Parties (in such capacity and together with its successors in such capacity, the “ Administrative Agent ”), The Bank of New York Mellon Trust Company, N.A., as Senior Representative for the Initial Additional Senior Debt Parties (in such capacity and together with its successors in such capacity, the “ Initial Additional Senior Representative ”), and each additional Senior Representative from time to time party hereto for the Additional Senior Debt Parties of the Series with respect to which it is acting in such capacity.
 
In consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Senior Collateral Agent, the Administrative Agent (for itself and on behalf of the Senior Loan Secured Parties), the Initial Additional Senior Representative (for itself and on behalf of the Initial Additional Senior Debt Parties) and each additional Senior Representative (for itself and on behalf of the Additional Senior Debt Parties of the applicable Series) agree as follows:
 
ARTICLE I
 
Definitions
 
SECTION 1.01  Construction; Certain Defined Terms.
 
(a)   The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument, other document, statute or regulation herein shall be construed as referring to such agreement, instrument, other document, statute or regulation as from time to time amended, supplemented or otherwise modified, (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, but shall not be deemed to include the subsidiaries of such Person unless express reference is made to such subsidiaries, (iii) 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, (iv) all references herein to Articles, Sections and Annexes shall be construed to refer to Articles, Sections and Annexes of this Agreement and (v) unless otherwise expressly qualified herein, the words “asset” and
 

 
 
 

“property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
 
(b)   It is the intention of the Senior Secured Parties of each Series that the holders of Senior Obligations of such Series (and not the Senior Secured Parties of any other Series) bear the risk of (i) any determination by a court of competent jurisdiction that (x) any of the Senior Obligations of such Series are unenforceable under applicable law or are subordinated to any other obligations (other than another Series of Senior Obligations), (y) any of the Senior Obligations of such Series do not have an enforceable security interest in any of the Senior Collateral securing any other Series of Senior Obligations and/or (z) any intervening security interest exists securing any other obligations (other than another Series of Senior Obligations) on a basis ranking prior to the security interest of such Series of Senior Obligations but junior to the security interest of any other Series of Senior Obligations or (ii) the existence of any Senior Collateral for any other Series of Senior Obligations that is not Shared Collateral (any such condition referred to in the foregoing clauses (i) or (ii) with respect to any Series of Senior Obligations, an “ Impairment ” of such Series).  In the event of any Impairment with respect to any Series of Senior Obligations, the results of such Impairment shall be borne solely by the holders of such Series of Senior Obligations, and the rights of the holders of such Series of Senior Obligations (including, without limitation, the right to receive distributions in respect of such Series of Senior Obligations pursuant to Section 2.01) set forth herein shall be modified to the extent necessary so that the effects of such Impairment are borne solely by the holders of the Series of such Senior Obligations subject to such Impairment.  Additionally, in the event the Senior Obligations of any Series are modified pursuant to applicable law (including, without limitation, pursuant to Section 1129 of the Bankruptcy Code), any reference to such Senior Obligations or the Senior Debt Documents governing such Senior Obligations shall refer to such obligations or such documents as so modified.
 
(c)   Capitalized terms used but not otherwised defined herein shall have the meanings set forth in the Senior Credit Agreement, including the Definitions Annex thereto. As used in this Agreement, the following terms have the meanings specified below:
 
“ 2009 Restatement Effective Date ” means the date on which the amendment and restatement of the Original Credit Agreement pursuant to the 2009 Amendment and Restatement Agreement becomes effective pursuant to its terms.
 
“ Additional Senior Debt ” means any Indebtedness of Rite Aid (other than Indebtedness constituting Senior Loan Obligations) Guaranteed by the Subsidiary Guarantors pursuant to the Senior Subsidiary Guarantee Agreement (and not Guaranteed by any other Subsidiary) with such Guarantees secured by the Senior Collateral on a pari passu basis (but without regard to control of remedies) with the Senior Loan Obligations (and not secured by Liens on any other assets of Rite Aid or any Subsidiary); provided , however , that (i) such Indebtedness is permitted to be incurred, secured and Guaranteed on such basis by each Senior Debt Document and Second Priority Debt Document and
 

 
 
 

(ii) the Representative for the holders of such Indebtedness shall have become party to (A) the Collateral Trust and Intercreditor Agreement pursuant to, and by satisfying the conditions set forth in, Section 8.12 thereof and (B) this Agreement as the Initial Additional Senior Representative or pursuant to, and by satisfying the conditions set forth in, Section 5.02(c) hereof.  Additional Senior Debt shall include any Registered Equivalent Notes and Guarantees thereof by the Subsidiary Guarantors pursuant to the Senior Subsidiary Guarantee Agreement issued in exchange thereof.
 
“ Additional Senior Debt Documents ” means, with respect to any series, issue or class of Additional Senior Debt, the promissory notes, indentures (which shall include the Initial Additional Senior Debt Facility if such series of Additional Senior Debt is the first series of Additional Senior Debt), Collateral Documents or other operative agreements evidencing or governing such Indebtedness, including the Senior Collateral Documents.
 
“ Additional Senior Debt Facility ” means each indenture or other governing agreement with respect to any Additional Senior Debt.
 
“ Additional Senior Debt Obligations ” means, with respect to any series, issue or class of Additional Senior Debt, (a) all principal of, and interest (including, without limitation, any interest which accrues after the commencement of any Bankruptcy Proceeding, whether or not allowed or allowable as a claim in any such proceeding) payable with respect to, such Additional Senior Debt, (b) all other amounts payable to the related Additional Senior Debt Parties under the related Additional Senior Debt Documents and (c) any renewals or extensions of the foregoing.
 
“ Additional Senior Debt Parties ” means, with respect to any series, issue or class of Additional Senior Debt, the holders of such Indebtedness, any trustee or agent therefor under any related Additional Senior Debt Documents and the beneficiaries of each indemnification obligation undertaken by Rite Aid or any Obligor under any related Additional Senior Debt Documents, but shall not include the Obligors or any Controlled Affiliates thereof (unless such Obligor or Controlled Affiliate is a holder of such Indebtedness, a trustee or agent therefor or beneficiary of such an indemnification obligation named as such in an Additional Senior Debt Document).
 
“ Administrative Agent ” shall have the meaning assigned to such term in the introductory paragraph of this Agreement.
 
“ Affiliate ” means, when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
 
“ Agreement ” shall have the meaning assigned to such term in the introductory paragraph of this Agreement.
 
“ Applicable Authorized Representative ” means, with respect to any Shared Collateral, (i) until the Senior Loan Obligation Payment Date, the Administrative
 

 
 
 

Agent and (ii) from and after the Senior Loan Obligation Payment Date, the Major Additional Senior Representative.
 
“ Asset Sale ” means any sale, lease, assignment, transfer or other disposition (including pursuant to a Sale and Leaseback Transaction) of any property or asset (whether now owned or hereafter acquired, whether in one transaction or a series of transactions and whether by way of merger or otherwise) of the Borrower or any Subsidiary (including of any Equity Interest in a Subsidiary).
 
“ Attributable Debt ” means, as to any particular Capital Lease or Sale and Leaseback Transaction under which the Borrower or any Subsidiary is at the time liable, as of any date as of which the amount thereof is to be determined (a) in the case of a transaction involving a Capital Lease, the amount as of such date of Capital Lease Obligations with respect thereto and (b) in the case of a Sale and Leaseback Transaction not involving a Capital Lease, the then present value of the minimum rental obligations under such Sale and Leaseback Transaction during the remaining term thereof (after giving effect to any extensions at the option of the lessor) computed by discounting the rental payments at the actual interest factor included in such payments or, if such interest factor cannot be readily determined, at the rate per annum that would be applicable to a Capital Lease of the Borrower having similar payment terms.  The amount of any rental payment required to be made under any such Sale and Leaseback Transaction not involving a Capital Lease may exclude amounts required to be paid by the lessee on account of maintenance and repairs, insurance, taxes, assessments, utilities, operating and labor costs and similar charges, whether or not characterized as rent.  Any determination of any rate implicit in the terms of a Capital Lease or a lease in a Sale and Leaseback Transaction not involving a Capital Lease made in accordance with generally accepted financial practices by the Borrower shall be binding and conclusive absent manifest error.
 
“ Authorized Representative ” means (i) in the case of any Senior Loan Obligations or the Senior Loan Secured Parties, the Administrative Agent, (ii) in the case of the Initial Additional Senior Debt Obligations or the Initial Additional Senior Debt Parties, the Initial Additional Senior Representative and (iii) in the case of any Series of Additional Senior Debt Obligations or Additional Senior Debt Parties that become subject to this Agreement after the date hereof, the Senior Representative named for such Series in the applicable Joinder Agreement.
 
“ Bankruptcy Code ” shall mean Title 11 of the United States Code, as amended.
 
“ Bankruptcy Law ” shall mean the Bankruptcy Code and any similar Federal, state or foreign law for the relief of debtors.
 
“ Bankruptcy Proceeding ” means any proceeding under Title 11 of the U.S. Code or any other Federal, state or foreign bankruptcy, insolvency, reorganization, receivership or similar law.
 
“ Borrower ” means Rite Aid.
 
 
 
 

“ Business Day ” means any day other than a Saturday, Sunday or day on which commercial banks in New York City or Chicago, Illinois are authorized or required by law to close.
 
“ Capital Lease ” means any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which, in accordance with GAAP, should be capitalized on the lessee’s balance sheet.
 
“ Casualty/Condemnation ” means any event that gives rise to Casualty/ Condemnation Proceeds.
 
“ Casualty/Condemnation Proceeds ” means
 
(a)   any insurance proceeds under any insurance policies or otherwise with respect to any casualty or other insured damage to any properties or assets of the Borrower or the Subsidiaries; and
 
(b)   any proceeds received by the Borrower or any Subsidiary in connection with any action or proceeding for the taking of any properties or assets of the Borrower or the Subsidiaries, or any part thereof or interest therein, for public or quasi-public use under the power of eminent domain, by reason of any similar public improvement or condemnation proceeding;
 
minus , in each case (i) any fees, commissions and expenses (including the costs of adjustment and condemnation proceedings) and other costs paid or incurred by the Borrower or any Subsidiary in connection therewith, (ii) the amount of income taxes reasonably estimated to be payable as a result of any gain recognized in connection with the receipt of such payment or proceeds and (iii) the amount of any Indebtedness (or Attributable Debt), other than the Senior Obligations, together with premium or penalty, if any, and interest thereon (or comparable obligations in respect of Attributable Debt), that is secured by a Lien on (or if Attributable Debt, the lease of) the properties or assets in question and that has priority over both the Senior Lien and the Second Priority Lien, that is required to be repaid as a result of the receipt by the Borrower or a Subsidiary of such payments or proceeds; provided , however , that no such proceeds shall constitute Casualty/Condemnation Proceeds to the extent that such proceeds are (A) reinvested in other like fixed or capital assets within 270 days of the Casualty/Condemnation that gave rise to such proceeds or (B) committed to be reinvested in other like fixed or capital assets within 270 days of such Casualty/Condemnation, with diligent pursuit of such reinvestment, and reinvested in such assets within 365 days of such Casualty/ Condemnation.
 
“ Cash Sweep Period ” shall have the meaning assigned to such term in the Senior Subsidiary Security Agreement.
 
“ Citibank ” means Citibank, N.A.
 
“ Citibank Concentration Account ” shall have the meaning assigned to such term in the Senior Subsidiary Security Agreement.
 

 
 
 

“ CNAI ” means Citicorp North America, Inc.
 
“ Collateral ” means the Senior Collateral and the Second Priority Collateral.
 
“ Collateral Documents ” means the Senior Collateral Documents and the Second Priority Collateral Documents.
 
“ Collateral Trust and Intercreditor Agreement ” means the Amended and Restated Collateral Trust and Intercreditor Agreement, dated as of June 27, 2001, as amended and restated as of May 28, 2003, as further amended and restated as of June 5, 2009 (as amended, supplemented or otherwise modified from time to time), among Rite Aid, the Subsidiary Guarantors, the Second Priority Collateral Trustee, the Senior Collateral Agent and each other Representative.
 
“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “ Controlling ” and “ Controlled ” have meanings correlative thereto.
 
“ Controlling Secured Parties ” means, with respect to any Shared Collateral, the Series of Senior Secured Parties whose Senior Representative is the Applicable Authorized Representative for such Shared Collateral.
 
“ Debt Facility ” means any Senior Facility and any Second Priority Debt Facility, or any combination thereof (as the context requires).
 
“ DIP Financing ” shall have the meaning assigned to such term in Section 2.05(b).
 
“ DIP Financing Liens ” shall have the meaning assigned to such term in Section 2.05(b).
 
“ DIP Lenders ” shall have the meaning assigned to such term in Section 2.05(b).
 
“ Effective Date ” means June 27, 2001.
 
“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person.
 
“ Event of Default ” means an “Event of Default” as defined in the Senior Credit Agreement or any Additional Senior Debt Facility and, at any time when the Collateral Trust and Intercreditor Agreement remains in effect, shall also include any “Event of Default” as defined in any Second Priority Debt Facility.
 
 
 
 

“ GAAP ” means generally accepted accounting principles in the United States of America.
 
“ 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.
 
“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided , that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.
 
“ 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.
 
“ Impairment ” shall have the meaning assigned to such term in Section 1.01(b).
 
“ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account
 

 
 
 

party in respect of letters of credit and letters of guaranty and (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
 
“ Initial Additional Senior Debt Facility ” means that certain Indenture dated as of June 12, 2009, among Rite Aid, the Subsidiary Guarantors identified therein and The Bank of New York Mellon Trust Company, N.A., as trustee.
 
“ Initial Additional Senior Debt Obligations ” means the Additional Senior Debt Obligations pursuant to the Initial Additional Senior Debt Facility.
 
“ Initial Additional Senior Debt Parties ” means the holders of any Initial Additional Senior Debt Obligations and the Initial Additional Senior Representative.
 
“ Initial Additional Senior Representative ” shall have the meaning assigned to such term in the introductory paragraph to this Agreement.
 
“ Insolvency or Liquidation Proceeding ” means:
 
(a)   any case commenced by or against Rite Aid or any Subsidiary Guarantor under any Bankruptcy Law, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of Rite Aid or any Subsidiary Guarantor, any receivership or assignment for the benefit of creditors relating to Rite Aid or any Subsidiary Guarantor or any similar case or proceeding relative to Rite Aid or any Subsidiary Guarantor or its creditors, as such, in each case whether or not voluntary; or
 
(b)   any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to Rite Aid or any Subsidiary Guarantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency, except for any liquidation or dissolution permitted under the Senior Debt Documents.
 
“ Intervening Creditor ” shall have the meaning assigned to such term in Section 2.01(a).
 
“ Joinder Agreement ” means the documents required to be delivered by a Senior Representative to the Senior Collateral Agent pursuant to Section 5.13 in order to establish an additional Series of Senior Obligations and Senior Secured Parties hereunder.
 
“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, Capital Lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of
 

 
 
 

securities, any purchase option, call or similar right of a third party with respect to such securities.
 
“ Loan Parties ” means the Borrower and the Subsidiary Loan Parties.
 
“ Loans ” means the loans made by the Lenders to the Borrower pursuant to the Senior Credit Agreement (including, unless the context otherwise requires, Other Revolving Loans and Other Term Loans).
 
“ Net Cash Proceeds ” means:
 
(a)   with respect to any Asset Sale, an amount equal to the cash proceeds received by the Borrower or any of the Subsidiaries from or in respect of such Asset Sale (including, when received, any cash proceeds received in respect of any noncash proceeds of any Asset Sale), less the sum of
 
(i) reasonable costs and expenses paid or incurred in connection with such transaction, including, without limitation, any underwriting brokerage or other customary selling commissions and reasonable legal, advisory and other fees and expenses (including title and recording expenses, associated therewith), payments of unassumed liabilities relating to the assets sold and any severance and termination costs;
 
(ii) the amount of any Indebtedness (or Attributable Debt), together with premium or penalty, if any, and accrued interest thereon (or comparable obligations in respect of Attributable Debt) secured by a Lien on (or if Attributable Debt, the lease of) any asset disposed of in such Asset Sale and discharged from the proceeds thereof, but only to the extent such Lien has priority over the Senior Lien and the Second Priority Lien;
 
(iii) any taxes actually paid or to be payable by such Person (as estimated by a senior financial or accounting officer of the Borrower, giving effect to the overall tax position of the Borrower) in respect of such Asset Sale; and
 
(iv) the portion of such cash proceeds which the Borrower determines in good faith and reasonably should be reserved for post-closing adjustments, including, without limitation, indemnification payments and purchase price adjustments, provided, that on the date that all such post-closing adjustments have been determined, the amount (if any) by which the reserved amount in respect of such Asset Sale exceeds the actual post-closing adjustments payable by the Borrower or any of the Subsidiary Loan Parties shall constitute Net Cash Proceeds on such date; and
 
(b)   with respect to a Casualty/Condemnation, the amount of Casualty/Condemnation Proceeds.
 

 
 
 

“ Non-Controlling Authorized Representative ” means, at any time with respect to any Shared Collateral, any Authorized Representative that is not the Applicable Authorized Representative at such time with respect to such Shared Collateral.
 
“ Non-Controlling Secured Parties ” means, with respect to any Shared Collateral, the Senior Secured Parties that are not Controlling Secured Parties with respect to such Shared Collateral.
 
“ Obligors ” means Rite Aid, the Subsidiary Guarantors, the Subsidiary Loan Parties and any other Person who is liable for any of the Secured Obligations.
 
“ Original Restatement Effective Date ” means September 30, 2005.
 
“ Permitted First Priority Debt ” means any Indebtedness incurred by the Borrower and Guaranteed by the Subsidiary Guarantors pursuant to the Senior Subsidiary Guarantee Agreement and not Guaranteed by any other Subsidiary which is secured by the Senior Collateral pursuant to the Senior Collateral Documents on a pari passu basis (but without regard to control of remedies) with the Senior Loan Obligations and is not secured by any other assets of the Borrower or any Subsidiary; provided , however , that (a) such Indebtedness is permitted to be incurred, secured and Guaranteed on such basis by each Senior Debt Document and each Second Priority Debt Document, (b) such Indebtedness constitutes Refinancing Indebtedness in respect of Term Loans or other Loans, Revolving Commitments or Other Revolving Commitments, Permitted First Priority Debt incurred pursuant to Section 6.01(a)(i) of the  Senior Credit Agreement or any combination of the foregoing, (c) such Indebtedness has a later maturity and a longer weighted average life than the Refinanced Debt (as defined in “ Refinancing Indebtedness ”) in respect of which such Indebtedness is Refinancing Indebtedness, (d) such Indebtedness bears an interest rate not in excess of the market interest rate with respect to such type of Indebtedness as of the time of its issuance or incurrence, (e) at the option of the Borrower, such Indebtedness may contain market call and make-whole provisions as of the time of its issuance or incurrence, (f) the senior management of the Borrower determines in good faith that such Indebtedness contains covenants (including with respect to amortization and convertibility) and events of default on market terms and (g) the Representative for the holders of such Indebtedness shall have become party to (i) the Collateral Trust and Intercreditor Agreement pursuant to, and by satisfying the conditions set forth in, Section 8.12 thereof and (ii) this Agreement as the Initial Additional Senior Representative or pursuant to, and by satisfying the conditions set forth in, Section 5.02(c) hereof.  Permitted First Priority Debt shall include any Registered Equivalent Notes and Guarantees thereof by the Subsidiary Guarantors pursuant to the Senior Subsidiary Guarantee Agreement issued in exchange thereof.
 
“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
 
“ Possessory Collateral ” means any Shared Collateral in the possession of the Senior Collateral Agent (or its agents or bailees), to the extent that possession thereof
 

 
 
 

perfects a Lien thereon under the Uniform Commercial Code of any jurisdiction. Possessory Collateral includes any Certificated Securities, Promissory Notes, Instruments, and Chattel Paper, in each case, delivered to or in the possession of the Senior Collateral Agent under the terms of the Senior Collateral Documents. All capitalized terms used in this definition and not defined elsewhere in this Agreement have the meanings assigned to them in the UCC.
 
“ Proceeds ” shall have the meaning assigned to such term in Section 2.01.
 
“ Reduction ” means, when applied to any Debt Facility, (a) the permanent repayment of outstanding loans (or obligations in respect of Attributable Debt) under such Debt Facility, (b) the permanent reduction of outstanding lending commitments under such Debt Facility or (c) the permanent cash collateralization of outstanding letters of credit under such facility (together with the termination of any lending commitments utilized by such letters of credit).
 
“ Reduction Event ” means any Asset Sale or Casualty/Condemnation.
 
“ Refinance ” means, with respect to any issuance of indebtedness, to replace, renew, extend, refinance, repay, refund, repurchase, redeem, defease or retire, or to issue Indebtedness in exchange or as a replacement therefor, including any successive Refinancing.  “ Refinanced ” and “ Refinancing ” shall have correlative meanings.
 
“ Registered Equivalent Notes ” means, with respect to any notes originally issued in a Rule 144A or other private placement transaction under the Securities Act of 1933, substantially identical notes (having the same Guarantees) issued in a dollar for dollar exchange therefor pursuant to an exchange offer registered with the SEC.
 
“ Related Parties ” means, with respect to any specified Person, such Person’s Affiliates and the directors, officers, employees, agents, trustees and advisors of such Person and such Person’s Affiliates.
 
“ Representatives ” means the Senior Representatives and the Second Priority Representatives.
 
“ Rite Aid ” shall have the meaning assigned to such term in the introductory paragraph of this Agreement.
 
“ Sale and Leaseback Transaction ” means any arrangement whereby the Borrower or a Subsidiary shall sell or transfer any office building (including its headquarters), distribution center, manufacturing plant, warehouse, Store, equipment or other property, real or personal, now or hereafter owned by the Borrower or a Subsidiary with the intention that the Borrower or any Subsidiary rent or lease the property sold or transferred (or other property of the buyer or transferee substantially similar thereto).
 
“ SEC ” means the United States Securities and Exchange Commission and any successor agency thereto.
 

 
 
 

“ Second Priority Collateral ” means all the “Second Priority Collateral” as defined in any Second Priority Collateral Document.
 
“ Second Priority Collateral Documents ” means the Second Priority Subsidiary Security Agreement, the Second Priority Subsidiary Guarantee Agreement, the Second Priority Indemnity, Subrogation and Contribution Agreement, the Collateral Trust and Intercreditor Agreement and each of the security agreements and other instruments and documents executed and delivered by any Subsidiary Guarantor pursuant to any of the foregoing for purposes of providing collateral security or credit support for any Second Priority Debt Obligation or obligation under the Second Priority Subsidiary Guarantee Agreement.
 
“ Second Priority Collateral Trustee ” means Wilmington Trust Company, in its capacity as collateral trustee under the Collateral Trust and Intercreditor Agreement and the Second Priority Collateral Documents, and its successors.
 
“ Second Priority Debt ” means any Indebtedness (including the 2017 7.5% Notes and the 2016 10.375% Notes) incurred by Rite Aid and Guaranteed by the Subsidiary Guarantors on or after the Effective Date pursuant to the Second Priority Subsidiary Guarantee Agreement (i) which is secured by the Second Priority Collateral on a pari passu basis (but without regard to control of remedies) (other than as provided by the terms of the applicable Second Priority Debt Documents) with the other Second Priority Debt Obligations and (ii) if issued on or after the 2009 Restatement Effective Date, matures after the date that is 90 days after the Latest Maturity Date in effect on the date of issuance of such Indebtedness; provided , however , that (A) such Indebtedness is permitted to be incurred, secured and Guaranteed on such basis by each Senior Debt Document and each Second Priority Debt Document and (B) the Representative for the holders of such Second Priority Debt shall have become party to the Collateral Trust and Intercreditor Agreement pursuant to, and by satisfying the conditions set forth in, Section 8.12 thereof.  Second Priority Debt shall include any Registered Equivalent Notes issued in exchange thereof.
 
“ Second Priority Debt Documents ” means, with respect to any series, issue or class of Second Priority Debt, the promissory notes, indentures and other operative agreements or instruments evidencing or governing such Indebtedness, including the Second Priority Collateral Documents.
 
“ Second Priority Debt Facility ” means the indenture or other governing agreement or instrument with respect to any class or series of Second Priority Debt.
 
“ Second Priority Debt Obligations ” means, with respect to any series, issue or class of Second Priority Debt, (a) all principal of, and interest (including, without limitation, any interest which accrues after the commencement of any Bankruptcy Proceeding, whether or not allowed or allowable as a claim in any such proceeding) payable with respect to, such Second Priority Debt, (b) all other amounts payable to the related Second Priority Debt Parties under the related Second Priority Debt Documents and (c) any renewals or extensions of the foregoing.
 

 
 
 

“ Second Priority Debt Parties ” means, with respect to any series, issue or class of Second Priority Debt, the holders of such Indebtedness, any trustee or agent therefor under any related Second Priority Debt Documents and the beneficiaries of each indemnification obligation undertaken by Rite Aid or any Obligor under any related Second Priority Debt Documents, but shall not include the Loan Parties or any Controlled Affiliates thereof (unless such Loan Party or Controlled Affiliate is a holder of such Indebtedness, a trustee or agent therefor or beneficiary of such an indemnification obligation named as such in a Second Priority Debt Document).
 
“ Second Priority Indemnity, Subrogation and Contribution Agreement ” means the Amended and Restated Second Priority Indemnity, Subrogation and Contribution Agreement, dated as of June 27, 2001, as amended and restated as of May 28, 2003, among Rite Aid, the Subsidiary Guarantors and the Second Priority Collateral Trustee.
 
“ Second Priority Lien ” means the Liens on the Second Priority Collateral in favor of the Second Priority Debt Parties under the Second Priority Collateral Documents.
 
“ Second Priority Representative ” means, in respect of a Second Priority Debt Facility, the trustee, administrative agent, security agent or similar agent under such Second Priority Debt Facility, as the case may be, and each of their successors in such capacities.
 
“ Second Priority Subsidiary Guarantee Agreement ” means the Amended and Restated Second Priority Subsidiary Guarantee Agreement, dated as of June 27, 2001, as amended and restated as of May 28, 2003, made by the Subsidiary Guarantors (including any additional Subsidiary Guarantor becoming party thereto after the Original Restatement Effective Date) in favor of the Second Priority Collateral Trustee for the benefit of the Second Priority Debt Parties.
 
“ Second Priority Subsidiary Security Agreement ” means the Amended and Restated Second Priority Subsidiary Security Agreement, dated as of June 27, 2001, as amended and restated as of May 28, 2003, made by the Subsidiary Guarantors (including any additional Subsidiary Guarantor becoming party thereto after the Original Restatement Effective Date) in favor of the Second Priority Collateral Trustee for the benefit of the Second Priority Debt Parties.
 
“ Secured Obligations ” means the Senior Obligations and the Second Priority Debt Obligations.
 
“ Secured Parties ” means the Senior Secured Parties and the Second Priority Debt Parties.
 
“ Senior Class Debt ” shall have the meaning assigned to such term in Section 5.13.
 

 
 
 

“ Senior Class Debt Parties ” shall have the meaning assigned to such term in Section 5.13.
 
“ Senior Class Debt Representative ” shall have the meaning assigned to such term in Section 5.13.
 
“ Senior Collateral ” means all the “Senior Collateral” or “Collateral” as defined in any Senior Collateral Document.
 
“ Senior Collateral Agent ” means Citicorp North America, Inc., in its capacity as senior collateral agent for the Senior Secured Parties under the Senior Collateral Documents, and any successor thereof or replacement senior collateral agent appointed in accordance with the terms of the Senior Subsidiary Security Agreement, the Collateral Trust and Intercreditor Agreement and this Agreement.
 
“ Senior Collateral Documents ” means the Senior Subsidiary Security Agreement, the Senior Subsidiary Guarantee Agreement, the Senior Indemnity, Subrogation and Contribution Agreement, the Collateral Trust and Intercreditor Agreement, this Agreement (upon and after the initial execution and delivery hereof by the initial parties hereto) and each of the security agreements and other instruments and documents executed and delivered by any Subsidiary Guarantor pursuant to any of the foregoing or pursuant to the Senior Credit Agreement or any Additional Senior Debt Facility for purposes of providing collateral security or credit support for any Senior Obligation or obligation under the Senior Subsidiary Guarantee Agreement.
 
“ Senior Credit Agreement ” means the Amended and Restated Senior Credit Agreement, dated as of June 27, 2001, as amended and restated as of July 9, 2008, as further amended and restated as of June 5, 2009, and as may be further amended, restated or otherwise modified from time to time, among Rite Aid, the Senior Lenders, the Tranche 2 Lenders, Citicorp North America, Inc., as administrative agent and as Senior Collateral Agent and Bank of America, N.A., as syndication agent for the Senior Lenders and the Tranche 2 Lenders, and the other parties thereto.
 
“ Senior Debt Documents ” means (a) the Senior Loan Documents and (b) any Additional Senior Debt Documents.
 
“ Senior Facilities ” means the Senior Credit Agreement and any Additional Senior Debt Facilities.
 
“ Senior Hedging Agreement ” means any Hedging Agreement entered into with Rite Aid or any Subsidiary, if the applicable counterparty was a Senior Lender or an Affiliate thereof (a) on the Original Restatement Effective Date, in the case of any Hedging Agreement entered into prior to the Original Restatement Effective Date or (b) at the time the Hedging Agreement was entered into, in the case of any Hedging Agreement entered into on or after the Original Restatement Effective Date.
 
“ Senior Indemnity, Subrogation and Contribution Agreement ” means the Amended and Restated Senior Indemnity, Subrogation and Contribution Agreement,
 

 
 
 

dated as of June 27, 2001, as amended and restated as of May 28, 2003, among Rite Aid, the Subsidiary Guarantors (including Subsidiary Guarantors becoming party thereto after the Original Restatement Effective Date) and the Senior Collateral Agent.
 
“ Senior Lender ” means a “Lender” as defined in the Senior Credit Agreement.
 
“ Senior Lien ” means the Liens on the Senior Collateral in favor of the Senior Secured Parties under the Senior Collateral Documents.
 
“ Senior Loan Documents ” means the Senior Credit Agreement, any promissory notes issued to any Senior Lender pursuant to the Senior Credit Agreement, each Senior Hedging Agreement, each Refinancing Amendment, each Loan Modification Agreement and the Senior Collateral Documents.
 
“ Senior Loan Obligation Payment Date ” means the date on which (a) the Senior Loan Obligations have been paid in full, (b) all lending commitments under the Senior Credit Agreement have been terminated and (c) there are no outstanding letters of credit issued under the Senior Credit Agreement other than such as have been fully cash collateralized under documents and arrangements satisfactory to the issuer of such letters of credit.
 
“ Senior Loan Obligations ” means (a) the principal of each loan made under the Senior Credit Agreement, (b) all reimbursement and cash collateralization obligations in respect of letters of credit issued under the Senior Credit Agreement, (c) all monetary obligations of the Borrower or any Subsidiary under each Senior Hedging Agreement entered into (i) prior to the Original Restatement Effective Date with any counterparty that was a Senior Lender (or an Affiliate thereof) on the Original Restatement Effective Date or (ii) on or after the Original Restatement Effective Date with any counterparty that was a Senior Lender (or an Affiliate thereof) at the time such Senior Hedging Agreement was entered into, (d) all interest on the loans, letter of credit reimbursement, fees and other obligations under the Senior Credit Agreement or such Senior Hedging Agreements (including, without limitation any interest which accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of the Borrower, any Subsidiary Loan Party, Holdings or any of its subsidiaries, whether or not allowed or allowable as a claim in such proceeding), (e) all other amounts payable by the Borrower or any Subsidiary under the Senior Loan Documents and (f) all increases, renewals, extensions and Refinancings of the foregoing.
 
“ Senior Loan Secured Parties ” means each party to the Senior Credit Agreement other than any Loan Party, each counterparty to a Senior Hedging Agreement, the beneficiaries of each indemnification obligation undertaken by Rite Aid or any other Loan Party under any Senior Loan Document, and the successors and permitted assigns of each of the foregoing.
 

 
 
 

“ Senior Obligation Payment Date ” means the date on which (a) the Senior Obligations have been paid in full, (b) all lending commitments under the Senior Debt Documents have been terminated and (c) there are no outstanding letters of credit issued under the Senior Debt Documents other than such as have been fully cash collateralized under documents and arrangements satisfactory to the issuer of such letters of credit.
 
“ Senior Obligations ” means the Senior Loan Obligations and any Additional Senior Debt Obligations.
 
“ Senior Representative ” means, in respect of a Senior Facility, the trustee, administrative agent, collateral agent, security agent or similar agent under such Senior Facility, as the case may be, and each of their successors in such capacities.
 
“ Senior Secured Parties ” means the Senior Loan Secured Parties and any Additional Senior Debt Parties.
 
“ Senior Subsidiary Guarantee Agreement ” means the Amended and Restated Senior Subsidiary Guarantee Agreement dated as of June 5, 2009, made by the Subsidiary Guarantors (including Subsidiary Guarantors that become parties thereto after the Original Restatement Effective Date) in favor of the Senior Collateral Agent for the benefit of the Senior Secured Parties, as such agreement may be amended, supplemented or otherwise modified from time to time.
 
“ Senior Subsidiary Security Agreement ” means the Amended and Restated Senior Subsidiary Security Agreement dated as of June 5, 2009, made by the Subsidiary Guarantors (including Subsidiary Guarantors that become parties thereto after the Original Restatement Effective Date) in favor of the Senior Collateral Agent for the benefit of the Senior Secured Parties, as such agreement may be amended, supplemented or otherwise modified from time to time.
 
“ Series ” means (a) with respect to the Senior Secured Parties, each of (i) the Senior Loan Secured Parties (in their capacities as such), (ii) the Initial Additional Senior Debt Parties (in their capacities as such) and (iii) the Additional Senior Debt Parties that become subject to this Agreement after the date hereof that are represented by a common Authorized Representative (in its capacity as such for such Additional Senior Debt Parties) and (b) with respect to any Senior Obligations, each of (i) the Senior Loan Obligations, (ii) the Initial Additional Senior Debt Obligations and (iii) the Additional Senior Debt Obligations incurred pursuant to any Additional Senior Debt Facility, which pursuant to any Joinder Agreement, are to be represented hereunder by a common Authorized Representative (in its capacity as such for such Additional Senior Debt Obligations).
 
“ Shared Collateral ” means, at any time, Senior Collateral in which the holders of two or more Series of Senior Obligations (or their respective Authorized Representatives) hold a valid and perfected security interest at such time.  If more than two Series of Senior Obligations are outstanding at any time and the holders of fewer
 

 
 
 

than all Series of Senior Obligations hold a valid and perfected security interest in any Senior Collateral at such time, then such Senior Collateral shall constitute Shared Collateral for those Series of Senior Obligations the holders of which hold a valid and perfected security interest in such Senior Collateral at such time and shall not constitute Shared Collateral for any Series of Senior Obligations the holders of which do not have a valid and perfected security interest in such Senior Collateral at such time.  Notwithstanding the foregoing, all cash and cash equivalents that secure the Senior Loan Obligations, or are otherwise held by the Senior Lenders, the Administrative Agent or the Senior Collateral Agent, pursuant to Section 2.05(j) of the Senior Credit Agreement shall be deemed not to constitute Shared Collateral until applied pursuant to Section 2.05(j) of the Senior Credit Agreement to satisfy any Senior Obligations other than Senior Obligations in respect of LC Disbursements or other LC Exposure.
 
“ Store ” means any retail store (which may include any real property, fixtures, equipment, inventory and script files related thereto) operated, or to be operated, by any Subsidiary Loan Party.
 
“ Subsidiary ” means any subsidiary of the Borrower.
 
“ Subsidiary Guarantor ” means each Subsidiary that is party to any Second Priority Collateral Document or Senior Collateral Document.
 
“ Subsidiary Loan Party ” means each Subsidiary set forth on Schedule 1.01 to the Senior Credit Agreement and any wholly-owned Domestic Subsidiary, including any Securitization Vehicle that is a Domestic Subsidiary, that owns any assets consisting of inventory, accounts receivable, intellectual property, or script lists, subject to the terms of Section 5.11 of the Senior Credit Agreement; provided that no Subsidiary that engages solely in the Borrower’s pharmacy benefits management business shall be deemed a Subsidiary Loan Party.
 
“ Triggering Event ” means (x) the occurrence of any Event of Default and, as a result thereof, (A) the acceleration (including any automatic acceleration in connection with any Bankruptcy Proceeding) of the principal amount of any Senior Obligations or Second Priority Debt Obligations under the terms of any Senior Debt Document or any Second Priority Debt Document or (B) the commencement of the exercise of remedies in respect of Collateral (it being understood that the exercise by the Senior Collateral Agent of their cash sweep rights pursuant to Section 9.15 of the Senior Credit Agreement shall not be deemed an exercise of remedies in respect of Collateral) and (y) in either case, (i) receipt by the Senior Collateral Agent and the Second Priority Collateral Trustee of written notice thereof from any Senior Representative (in the case of any such Event of Default arising under any Senior Debt Document), or (ii) receipt by the Senior Collateral Agent and the Second Priority Collateral Trustee of written notice thereof from any Second Priority Representative (in the case of any such Event of Default arising under any Second Priority Debt Document).
 

 
 
 

“ Uniform Commercial Code ” or “ UCC ” means, unless otherwise specified, the Uniform Commercial Code as from time to time in effect in the State of New York.
 
ARTICLE II
 
Priorities and Agreements with Respect to Shared Collateral
 
SECTION 2.01   Priority of Claims.
 
(a)   Anything contained herein or in any of the Senior Debt Documents to the contrary notwithstanding (but subject to Sections 1.01(b) and 2.01(d) and (e)), if an Event of Default has occurred and is continuing, and the Senior Collateral Agent or any Senior Secured Party is taking action to enforce rights in respect of any Shared Collateral, or any distribution is made in respect of any Shared Collateral in any Bankruptcy Proceeding of any Subsidiary Guarantor or any Senior Secured Party receives any payment pursuant to any intercreditor agreement (other than this Agreement) with respect to any Shared Collateral, the proceeds of any sale, collection or other liquidation of any such Senior Collateral by any Senior Secured Party or received by the Senior Collateral Agent or any Senior Secured Party pursuant to any such intercreditor agreement with respect to such Shared Collateral and proceeds of any such distribution (subject, in the case of any such distribution, to the sentence immediately following) to which the Senior Obligations are entitled under any intercreditor agreement (other than this Agreement) (all proceeds of any sale, collection or other liquidation of any Senior Collateral and all proceeds of any such distribution being collectively referred to as “ Proceeds ”), shall be applied (i) at any time when the Collateral Trust and Intercreditor Agreement remains in effect, as provided in Section 4.01 of the Collateral Trust and Intercreditor Agreement, and (ii) at any other time, (A) FIRST, to the fees and expenses of, and reimbursements and indemnification owed to, the Senior Collateral Agent pursuant to the Senior Subsidiary Security Agreement and the Senior Credit Agreement that are unpaid as of the applicable date of receipt of such proceeds, and to any Senior Secured Party which has theretofore advanced or paid any such fees and expenses of, and reimbursements and indemnification owed to, the Senior Collateral Agent in an amount equal to the amount thereof so advanced or paid by such Senior Secured Party pro rata based on the amount of such fees, expenses, reimbursements and indemnifications (or such advances or payment), (B) SECOND, to reimburse any amounts owing to the Senior Collateral Agent pursuant to Section 8.03 of the Senior Subsidiary Security Agreement, (C) THIRD, subject to Sections 1.01(b) and 2.01(d) and (e), to the payment of the Senior Obligations then due and owing, pro rata based on the amount of Senior Obligations then due and owing (after giving effect to any payments previously made under this Section), until the Senior Obligation Payment Date, and (D) FOURTH, to Rite Aid and the Subsidiary Guarantors or their successors or assigns, as their interests may appear, or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct. Notwithstanding the foregoing, with respect to any Shared Collateral for which a third party (other than a Senior Secured Party) has a lien or security interest that is junior in priority to the security interest of any Series of Senior Obligations but senior (as determined by appropriate legal proceedings in the case of any dispute) to the security
 

 
 
 

interest of any other Series of Senior Obligations (such third party an “ Intervening Creditor ”), the value of any Shared Collateral or Proceeds which are allocated to such Intervening Creditor shall be deducted on a ratable basis solely from the Shared Collateral or Proceeds to be distributed in respect of the Series of Senior Obligations with respect to which such third party lien or security interest exists.
 
(b)   It is acknowledged that the Senior Obligations of any Series may, subject to the limitations set forth in the then extant Senior Debt Documents and the Second Priority Debt Documents, be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded, Refinanced or otherwise amended or modified from time to time, all without affecting the priorities set forth in Section 2.01(a) or the provisions of this Agreement defining the relative rights of the Senior Secured Parties of any Series.
 
(c)   Notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Liens securing any Series of Senior Obligations granted on the Shared Collateral and notwithstanding any provision of the Uniform Commercial Code of any jurisdiction, or any other applicable law or the Senior Debt Documents or any defect or deficiencies in the Liens securing the Senior Obligations of any Series or any other circumstance whatsoever (but, in each case, subject to Sections 1.01(b) and 2.01(d) and (e)), each Senior Secured Party hereby agrees that the Liens securing each Series of Senior Obligations on any Shared Collateral shall be pari passu and of equal priority and nothing contained in this Agreement shall affect the priority of the Second Priority Liens set forth in the Collateral Trust and Intercreditor Agreement or any other rights of or obligations owed to a Second Priority Debt Party (in its capacity as such) contained in the Collateral Trust and Intercreditor Agreement or otherwise.
 
(d)   Notwithstanding anything in this Agreement or the other Senior Collateral Documents to the contrary, (i) any Shared Collateral consisting of cash or cash equivalents that secure the Senior Loan Obligations or are otherwise held by the Senior Lenders, the Administrative Agent or the Senior Collateral Agent pursuant to Section 2.05(j) of the Senior Credit Agreement shall be applied as specified in such Section of the Senior Credit Agreement and (ii) at all times during a Cash Sweep Period prior to the occurrence of a Triggering Event, the funds on deposit in the Citibank Concentration Account may be applied in accordance with the provisions of the Senior Credit Agreement, as in effect on the 2009 Restatement Effective Date.  After the occurrence of a Triggering Event, funds on deposit in the Citibank Concentration Account consisting of proceeds of Senior Collateral shall be applied in accordance with the provisions of Section 2.01(a).
 
(e)   In the event that Rite Aid or any of its Subsidiaries shall at any time, or from time to time (but in the case of any sale or disposition of Senior Collateral, only prior to the occurrence of a Triggering Event), receive any Net Cash Proceeds of any Reduction Event (other than Net Cash Proceeds required by the Senior Credit Agreement to be applied to prepay Revolving Borrowings, Other Revolving Borrowings or Swingline Loans (without permanent reductions of related lending commitments) at any time when the Revolver Availability is less than the amount specified in Section 2.11(c)
 

 
 
 

of the Senior Credit Agreement or during a Cash Sweep Period), an amount equal to such Net Cash Proceeds shall, in accordance with and to the extent required by the provisions of the Senior Credit Agreement and, to the extent not inconsistent with the provisions of the Senior Credit Agreement, the other Senior Debt Documents, be applied to Reductions to the Senior Facilities established under the Senior Credit Agreement and the other Senior Debt Documents.  So long as no Triggering Event has occurred and is continuing, Net Cash Proceeds of a Reduction Event in excess of those applied in accordance with the foregoing provision of this paragraph shall be applied in accordance with any applicable provisions of the Senior Debt Documents and Second Priority Debt Documents.  In the event Rite Aid or any of its Subsidiaries shall, at any time after the occurrence of a Triggering Event, receive any Net Cash Proceeds of any Reduction Event which are attributable to Senior Collateral, such Net Cash Proceeds shall be subject to and applied in accordance with the provisions of Section 2.01(a).
 
SECTION 2.02   Actions With Respect to Shared Collateral; Prohibition on Contesting Liens.
 
(a)   With respect to any Shared Collateral, (i) only the Senior Collateral Agent (and the Administrative Agent, as set forth in Section 2.01(d)) shall act or refrain from acting with respect to the Shared Collateral (including with respect to any intercreditor agreement with respect to any Shared Collateral), and then (in the case of the Senior Collateral Agent) only on the instructions of the Applicable Authorized Representative, (ii) the Senior Collateral Agent shall not follow any instructions with respect to such Shared Collateral (including with respect to any intercreditor agreement with respect to any Shared Collateral) from any Non-Controlling Authorized Representative (or any other Senior Secured Party other than the Applicable Authorized Representative and the Controlling Secured Parties) and (iii) no Non-Controlling Authorized Representative or other Senior Secured Party (other than the Applicable Authorized Representative and the Controlling Secured Parties) shall or shall instruct the Senior Collateral Agent to, commence any judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its security interest in or realize upon, or take any other action available to it in respect of, any Shared Collateral (including with respect to any intercreditor agreement with respect to any Shared Collateral), whether under any Senior Collateral Document, applicable law or otherwise, it being agreed that only the Senior Collateral Agent, acting on the instructions of the Applicable Authorized Representative and in accordance with the applicable Senior Collateral Documents, shall be entitled to take any such actions or exercise any such remedies with respect to Shared Collateral. Notwithstanding the equal priority of the Liens, the Senior Collateral Agent (acting on the instructions of the Applicable Authorized Representative) may deal with the Shared Collateral without regard to the equal priority Lien of the Non-Controlling Secured Parties on such Senior Collateral. No Non-Controlling Authorized Representative or Non-Controlling Secured Party will contest, protest or object to any foreclosure proceeding or action brought by the Senior Collateral Agent, Applicable Authorized Representative or Controlling Secured Party or any other exercise by the Senior Collateral Agent, Applicable Authorized Representative
 

 
 
 

or Controlling Secured Party of any rights and remedies relating to the Shared Collateral, or to cause the Senior Collateral Agent to do so. The foregoing shall not be construed to limit the rights and priorities of any Senior Secured Party, Senior Collateral Agent or Authorized Representative with respect to any collateral not constituting Shared Collateral.
 
(b)   Each of the Authorized Representatives agrees that it will not accept any Lien on any collateral for the benefit of any Series of Senior Obligations (other than funds deposited for the discharge or defeasance of any Additional Senior Debt Facility) other than pursuant to the Senior Collateral Documents and pursuant to Section 2.05(j) of the Senior Credit Agreement or, after the Senior Loan Obligation Payment Date, any equivalent provision of any other Senior Facility, and by executing this Agreement (or a Joinder Agreement), each Authorized Representative and the Series of Senior Secured Parties for which it is acting hereunder agree to be bound by the provisions of this Agreement and the other Senior Collateral Documents applicable to it.
 
(c)   Each of the Senior Secured Parties agrees that it will not (and hereby waives any right to) question or contest or support any other Person in questioning or contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the perfection, priority, validity, attachment, or enforceability of a Lien held by or on behalf of any of the Senior Secured Parties in all or any part of the Senior Collateral, or the provisions of this Agreement; provided that nothing in this Agreement shall be construed to prevent or impair the rights of any of the Senior Collateral Agent or any Authorized Representative to enforce this Agreement.
 
SECTION 2.03   No Interference; Payment Over.
 
(a)   Each Senior Secured Party agrees that (i) it will not challenge or question in any proceeding the validity or enforceability of any Senior Obligations of any Series or any Senior Collateral Document or the validity or enforceability of the priorities, rights or duties established by or other provisions of this Agreement; (ii) it will not take or cause to be taken any action the purpose or intent of which is, or could be, to interfere, hinder or delay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other disposition of the Shared Collateral by the Senior Collateral Agent, (iii) except as provided in Section 2.02, it shall have no right to (A) direct the Senior Collateral Agent or any other Senior Secured Party to exercise any right, remedy or power with respect to any Shared Collateral (including pursuant to any intercreditor agreement) or (B) consent to the exercise by the Senior Collateral Agent or any other Senior Secured Party of any right, remedy or power with respect to any Shared Collateral, (iv) it will not institute any suit or assert in any suit, bankruptcy, insolvency or other proceeding any claim against the Senior Collateral Agent or any other Senior Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to any Shared Collateral, and none of the Senior Collateral Agent, any Applicable Authorized Representative or any other Senior Secured Party shall be liable for any action taken or omitted to be taken by the Senior Collateral Agent, such Applicable Authorized Representative or other Senior Secured Party with respect to any Shared Collateral in accordance with the provisions of this Agreement, (v) it will not
 

 
 
 

seek, and hereby waives any right, to have any Shared Collateral or any part thereof marshaled upon any foreclosure or other disposition of such Senior Collateral and (vi) it will not attempt, directly or indirectly, whether by judicial proceedings or otherwise, to challenge the enforceability of any provision of this Agreement; provided that nothing in this Agreement shall be construed to prevent or impair the rights of any of the Senior Collateral Agent or any other Senior Secured Party to enforce this Agreement.
 
(b)   Each Senior Secured Party whose Senior Obligations arise under any Senior Facility hereby agrees that if it shall obtain possession of any Shared Collateral or shall realize any proceeds or payment in respect of any such Shared Collateral pursuant to any Senior Collateral Document or by the exercise of any rights available to it under applicable law or in any Insolvency or Liquidation Proceeding or through any other exercise of remedies (including pursuant to any intercreditor agreement) at any time prior to the Senior Obligation Payment Date (determined, solely for this purpose, as if such Senior Facility did not exist), then it shall hold such Shared Collateral, proceeds or payment in trust for the other Senior Secured Parties and promptly transfer such Shared Collateral, proceeds or payment, as the case may be, to the Senior Collateral Agent, to be distributed in accordance with the provisions of Section 2.01.
 
SECTION 2.04  Automatic Release of Liens; Amendments to Senior Collateral Documents.
 
(a)   If, at any time the Senior Collateral Agent forecloses upon or otherwise exercises remedies against any Shared Collateral resulting in a sale or disposition thereof, then (whether or not any Insolvency or Liquidation Proceeding is pending at the time) the Liens in favor of the Senior Collateral Agent for the benefit of each Series of Senior Secured Parties upon such Shared Collateral will automatically be released and discharged; provided that any proceeds of any Shared Collateral realized therefrom shall be applied pursuant to Section 2.01 and the Senior Subsidiary Security Agreement.
 
(b)   Each Senior Secured Party agrees that the Senior Collateral Agent may enter into any amendment (and, upon request by the Senior Collateral Agent, each Authorized Representative shall sign a consent to such amendment) to any Senior Collateral Document, so long as the Senior Collateral Agent receives a certificate of Rite Aid stating that such amendment is permitted by the terms of each then extant Senior Debt Document.  Additionally, each Senior Secured Party agrees that the Senior Collateral Agent may enter into any amendment (and, upon request by the Senior Collateral Agent, each Authorized Representative shall sign a consent to such amendment) to any Senior Collateral Document solely as such Senior Collateral Document relates to a particular Series of Senior Obligations so long as (x) such amendment is in accordance with the Senior Debt Document pursuant to which such Series of Senior Obligations was incurred and (y) such amendment does not adversely affect the Senior Secured Parties of any other Series.  Notwithstanding the foregoing, no amendment to any Senior Collateral Document entered into by the Senior Collateral Agent pursuant to this Section 2.04(b) will (i) release all or substantially all of the Senior Collateral from the Liens under the Senior Collateral Documents without the written
 

 
 
 

consent of each Authorized Representative or (ii) change the pro rata application of the proceeds of the Senior Collateral required by Section 7.03 of the Senior Subsidiary Security Agreement.
 
(c)   Each Authorized Representative agrees to execute and deliver (at the sole cost and expense of the Subsidiary Guarantors) all such authorizations and other instruments as shall reasonably be requested by the Senior Collateral Agent to evidence and confirm any release of Shared Collateral or amendment to any Senior Collateral Document provided for in this Section.
 
SECTION 2.05  Certain Agreements With Respect to Bankruptcy or Insolvency Proceedings.
 
(a)   This Agreement shall continue in full force and effect notwithstanding the commencement of any Bankruptcy Proceeding by or against Rite Aid or any of its subsidiaries.
 
(b)   If Rite Aid or any Subsidiary Guarantor shall become subject to a Bankruptcy   Proceeding and shall, as debtor(s)-in-possession, move for approval of financing (“ DIP Financing ”) to be provided by one or more lenders (the “ DIP Lenders ”) under Section 364 of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law or the use of cash Senior Collateral under Section 363 of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law, each Senior Secured Party agrees that it will raise no objection to any such financing or to the Liens on the Shared Collateral securing the same (“ DIP Financing Liens ”) or to any use of cash Senior Collateral that constitutes Shared Collateral, unless any Controlling Secured Party, or an Authorized Representative of any Controlling Secured Party, shall then oppose or object to such DIP Financing or such DIP Financing Liens or use of cash Senior Collateral (and (i) to the extent that such DIP Financing Liens are senior to the Liens on any such Shared Collateral for the benefit of the Controlling Secured Parties, each Non-Controlling Secured Party will subordinate its Liens with respect to such Shared Collateral on the same terms as the Liens of the Controlling Secured Parties (other than any Liens of any Senior Secured Parties constituting DIP Financing Liens) are subordinated thereto, and (ii) to the extent that such DIP Financing Liens rank pari passu with the Liens on any such Shared Collateral granted to secure the Senior Obligations of the Controlling Secured Parties, each Non-Controlling Secured Party will confirm the priorities with respect to such Shared Collateral as set forth herein), in each case so long as (A) the Senior Secured Parties of each Series retain the benefit of their Liens on all such Shared Collateral pledged to the DIP Lenders, including proceeds thereof arising after the commencement of such proceeding, with the same priority vis-a-vis all the other Senior Secured Parties (other than any Liens of the Senior Secured Parties constituting DIP Financing Liens) as existed prior to the commencement of the Bankruptcy Proceeding, (B) the Senior Secured Parties of each Series are granted Liens on any additional Senior Collateral pledged to any Senior Secured Parties as adequate protection or otherwise in connection with such DIP Financing or use of cash Senior Collateral, with the same priority vis-a-vis the Senior Secured Parties as set forth in this Agreement, (C) if any amount of such DIP Financing or cash collateral is applied to repay any of the Senior
 

 
 
 

Obligations, such amount is applied pursuant to Section 2.01, and (D) if any Senior Secured Parties are granted adequate protection, including in the form of periodic payments, in connection with such DIP Financing or use of cash collateral, the proceeds of such adequate protection is applied pursuant to Section 2.01; provided that the Senior Secured Parties of each Series shall have a right to object to the grant of a Lien to secure the DIP Financing over any collateral subject to Liens in favor of the Senior Secured Parties of such Series or its Authorized Representative that shall not constitute Shared Collateral; and provided , further , that the Senior Secured Parties receiving adequate protection shall not object to any other Senior Secured Party receiving adequate protection comparable to any adequate protection granted to such Senior Secured Parties in connection with a DIP Financing or use of cash collateral.  This Section shall not affect the priority of the Second Priority Liens set forth in the Collateral Trust and Intercreditor Agreement or any other rights of a Second Priority Debt Party (in its capacity as such) contained in the Collateral Trust and Intercreditor Agreement or otherwise.
 
SECTION 2.06  Reinstatement. In the event that any of the Senior Obligations shall be paid in full and such payment or any part thereof shall subsequently, for whatever reason (including an order or judgment for disgorgement of a preference under Title 11 of the United States Code, or any similar law, or the settlement of any claim in respect thereof), be required to be returned or repaid, the terms and conditions of this Article II shall, subject to the provisions of Section 1.01(b), be fully applicable thereto until all such Senior Obligations shall again have been paid in full in cash.
 
SECTION 2.07  Insurance. As between the Senior Secured Parties, the Senior Collateral Agent, acting at the direction of the Applicable Authorized Representative, shall have the right, to the extent authorized by the Senior Subsidiary Security Agreement, to adjust or settle any insurance policy or claim covering or constituting Shared Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding affecting the Shared Collateral.
 
SECTION 2.08  Refinancings. The Senior Obligations of any Series may be Refinanced, in whole or in part, with other Senior Obligations, in each case, without notice to, or the consent (except to the extent a consent is otherwise required to permit the refinancing transaction under any Senior Debt Document) of any Senior Secured Party of any other Series, all without affecting the priorities provided for herein or the other provisions hereof; provided that the Authorized Representative of the holders of any such Refinancing indebtedness shall have executed a Joinder Agreement on behalf of the holders of such Refinancing indebtedness.
 
SECTION 2.09  Possessory Collateral Agent as Gratuitous Bailee for Perfection.
 
(a)   The Senior Collateral Agent agrees to hold any Shared Collateral constituting Possessory Collateral that is part of the Senior Collateral in its possession or control (or in the possession or control of its agents or bailees) as gratuitous bailee for the benefit of each other Senior Secured Party solely for the purpose of perfecting the security interest granted in such Possessory Collateral, if any, pursuant to the applicable
 

 
 
 

Senior Collateral Documents, in each case, subject to the terms and conditions of this Section 2.09. Pending delivery to the Senior Collateral Agent, each other Authorized Representative agrees to hold any Shared Collateral constituting Possessory Collateral, from time to time in its possession, as gratuitous bailee for the benefit of each other Senior Secured Party, solely for the purpose of perfecting the security interest granted in such Possessory Collateral, if any, pursuant to the applicable Senior Collateral Documents, in each case, subject to the terms and conditions of this Section 2.09.
 
(b)   The duties or responsibilities of the Senior Collateral Agent and each other Authorized Representative under this Section 2.09 shall be limited solely to holding any Shared Collateral constituting Possessory Collateral as gratuitous bailee for the benefit of each other Senior Secured Party for purposes of perfecting the Lien held by such Senior Secured Parties therein.
 
ARTICLE III
 
Existence and Amounts of Liens and Obligations
 
Whenever the Senior Collateral Agent or any Authorized Representative shall be required, in connection with the exercise of its rights or the performance of its obligations hereunder, to determine the existence or amount of any Senior Obligations of any Series, or the Shared Collateral subject to any Lien securing the Senior Obligations of any Series, it may request that such information be furnished to it in writing by each other Authorized Representative and shall be entitled to make such determination on the basis of the information so furnished; provided , however , that if an Authorized Representative shall fail or refuse reasonably promptly to provide the requested information, the requesting Senior Collateral Agent or Authorized Representative shall be entitled to make any such determination by such method as it may, in the exercise of its good faith judgment, determine, including by reliance upon a certificate of Rite Aid.  The Senior Collateral Agent and each Authorized Representative may rely conclusively, and shall be fully protected in so relying, on any determination made by it in accordance with the provisions of the preceding sentence (or as otherwise directed by a court of competent jurisdiction) and shall have no liability to any Subsidiary Guarantor, any Senior Secured Party or any other person as a result of such determination.
 
ARTICLE IV
 
The Senior Collateral Agent
 
SECTION 4.01  Appointment and Authority.
 
(a)   Each Senior Representative, on behalf of the Senior Secured Parties represented by it, hereby irrevocably appoints Citicorp North America, Inc. (and any successor thereto as Senior Collateral Agent pursuant to the definition of the term “Senior Collateral Agent”) to act on its behalf as the Senior Collateral Agent hereunder and under each of the other Senior Collateral Documents and authorizes the Senior Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the
 

 
 
 

Senior Collateral Agent by the terms hereof or thereof, including for purposes of acquiring, holding and enforcing any and all Liens on Senior Collateral granted by any Subsidiary Guarantor to secure any of the Senior Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Senior Collateral Agent and any co-agents, sub-agents and attorneys-in-fact appointed by the Senior Collateral Agent pursuant to Section 4.05 for purposes of holding or enforcing any Lien on the Senior Collateral (or any portion thereof) granted under any of the Senior Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Applicable Authorized Representative), shall be entitled to the benefits of all provisions of this Article IV and Article VIII of the Senior Credit Agreement and the equivalent provision of any Additional Senior Debt Facility (as though such co-agents, sub-agents and attorneys-in-fact were the “Senior Collateral Agent” under the Senior Collateral Documents) as if set forth in full herein with respect thereto.
 
(b)   Upon execution and delivery of an instrument substantially in the form of Annex 2 by an additional Senior Class Debt Representative in accordance with Section 5.13, each then-existing Senior Class Debt Representative (the “Existing Debt Representatives”) hereby authorizes and directs the Senior Collateral Agent to execute and deliver such instrument substantially in the form of Annex 2 and any other Senior Collateral Documents (and acknowledges that any Senior Collateral Documents previously executed and delivered will be deemed to have been executed and delivered) on behalf of all Existing Debt Representatives and acknowledges and agrees that upon execution and delivery of such instrument substantially in the form of Annex 1 and such other Senior Collateral Documents, if any, the Senior Collateral Agent will act in its capacity as Senior Collateral Agent for all Existing Debt Representatives and such additional Senior Class Debt Representative.
 
(c)   Each Non-Controlling Secured Party acknowledges and agrees that the Senior Collateral Agent shall be entitled, for the benefit of the Senior Secured Parties, to sell, transfer or otherwise dispose of or deal with any Shared Collateral as provided herein and in the Senior Collateral Documents, without regard to any rights to which the Non-Controlling Secured Parties would otherwise be entitled as a result of the Senior Obligations held by such Non-Controlling Secured Parties. Without limiting the foregoing, each Non-Controlling Secured Party agrees that none of the Senior Collateral Agent, the Applicable Authorized Representative or any other Senior Secured Party shall have any duty or obligation first to marshal or realize upon any type of Shared Collateral (or any other Senior Collateral securing any of the Senior Obligations), or to sell, dispose of or otherwise liquidate all or any portion of such Shared Collateral (or any other Senior Collateral securing any Senior Obligations), in any manner that would maximize the return to the Non-Controlling Secured Parties, notwithstanding that the order and timing of any such realization, sale, disposition or liquidation may affect the amount of proceeds actually received by the Non-Controlling Secured Parties from such realization, sale, disposition or liquidation. Each of the Senior Secured Parties waives any claim it may now or hereafter have against the Senior Collateral Agent or the Authorized Representative of any other Series of Senior Obligations or any other Senior Secured Party of any other Series arising out of (i) any actions which the Senior Collateral Agent, any Authorized Representative or any Senior Secured Party takes or omits to take
 

 
 
 

(including actions with respect to the creation, perfection or continuation of Liens on any Senior Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to realize upon, any of the Senior Collateral and actions with respect to the collection of any claim for all or any part of the Senior Obligations from any account debtor, guarantor or any other party) in accordance with the Senior Collateral Documents or any other agreement related thereto or to the collection of the Senior Obligations or the valuation, use, protection or release of any security for the Senior Obligations, (ii) any election by any Applicable Authorized Representative or any holders of Senior Obligations, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b) of the Bankruptcy Code or (iii) subject to Section 2.05, any borrowing by, or grant of a security interest or administrative expense priority under Section 364 of the Bankruptcy Code by, Rite Aid or any of its subsidiaries, as debtor-in-possession. Notwithstanding any other provision of this Agreement, the Senior Collateral Agent shall not accept any Shared Collateral in full or partial satisfaction of any Senior Obligations pursuant to Section 9-620 of the Uniform Commercial Code of any jurisdiction, without the consent of each Authorized Representative representing holders of Senior Obligations for whom such Senior Collateral constitutes Shared Collateral.
 
SECTION 4.02  Rights as a Senior Secured Party.
 
The Person serving as the Senior Collateral Agent hereunder shall have the same rights and powers in its capacity as a Senior Secured Party under any Series of Senior Obligations that it holds as any other Senior Secured Party of such Series and may exercise the same as though it were not the Senior Collateral Agent and the term “Senior Secured Party” or “Senior Secured Parties” or (as applicable) “Senior Loan Secured Party”, “Senior Loan Secured Parties”, “Additional Senior Debt Party” or “Additional Senior Debt Parties” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Senior Collateral Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with Rite Aid or any Subsidiary or other Affiliate thereof as if such Person were not the Senior Collateral Agent hereunder and without any duty to account therefor to any other Senior Secured Party.
 
SECTION 4.03  Exculpatory Provisions.
 
(a)   The Senior Collateral Agent shall not have any duties or obligations except those expressly set forth herein and in the other Senior Collateral Documents. Without limiting the generality of the foregoing, the Senior Collateral Agent:
 
 
(i)
shall not be subject to any fiduciary or other implied duties, regardless of whether an Event of Default has occurred and is continuing;
 
 
(ii)
shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Senior Collateral Documents that the Senior Collateral Agent is required to exercise as
 

 
 
 

 
    directed in writing by the Applicable Authorized Representative; provided that the Senior Collateral Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Senior Collateral Agent to liability or that is contrary to any Senior Collateral Document or applicable law;
     
 
(iii)
shall not, except as expressly set forth herein and in the other Senior Collateral Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to Rite Aid or any of its Affiliates that is communicated to or obtained by the Person serving as the Senior Collateral Agent or any of its Affiliates in any capacity;
 
 
(iv)
shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Applicable Authorized Representative or (ii) in the absence of its own gross negligence or willful misconduct or (iii) in reliance on a certificate of an authorized officer of Rite Aid stating that such action is permitted by the terms of this Agreement. The Senior Collateral Agent shall be deemed not to have knowledge of any Event of Default under any Series of Senior Obligations unless and until notice describing such Event Default is given to the Senior Collateral Agent by the Authorized Representative of such Senior Obligations or Rite Aid; and
 
 
(v)
shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Senior Collateral Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any default or event of default under any Senior Debt Document, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Senior Collateral Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Senior Collateral Documents, (v) the value or the sufficiency of any Senior Collateral for any Series of Senior Obligations, or (i) the satisfaction of any condition set forth in any Senior Debt Document, other than to confirm receipt of items expressly required to be delivered to the Senior Collateral Agent.
 
SECTION 4.04  Reliance by Senior Collateral Agent.
 
The Senior Collateral Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or
 

 
 
 

intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  The Senior Collateral Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. The Senior Collateral Agent may consult with legal counsel (who may be counsel for Rite Aid), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
 
SECTION 4.05  Delegation of Duties.
 
The Senior Collateral Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Senior Collateral Document by or through any one or more sub-agents appointed by the Senior Collateral Agent. The Senior Collateral Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Affiliates. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Affiliates of the Senior Collateral Agent and any such sub-agent.
 
SECTION 4.06  Resignation of Senior Collateral Agent.
 
The Senior Collateral Agent may at any time give notice of its resignation as Senior Collateral Agent under this Agreement and the other Senior Collateral Documents to each Authorized Representative and Rite Aid.  Upon receipt of any such notice of resignation, the Applicable Authorized Representative shall have the right, in consultation with Rite Aid, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Applicable Authorized Representative and shall have accepted such appointment within 30 days after the retiring Senior Collateral Agent gives notice of its resignation, then the retiring Senior Collateral Agent may, on behalf of the Senior Secured Parties, appoint a successor Senior Collateral Agent meeting the qualifications set forth above; provided that if the Senior Collateral Agent shall notify Rite Aid and each Authorized Representative that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Senior Collateral Agent shall be discharged from its duties and obligations hereunder and under the other Senior Collateral Documents (except that in the case of any Senior Collateral security held by the Senior Collateral Agent on behalf of the Senior Secured Parties under any of the Senior Collateral Documents, the retiring Senior Collateral Agent shall continue to hold such Senior Collateral security solely for purposes of maintaining the perfection of the security interests of the Senior Secured Parties therein until such time as a successor Senior Collateral Agent is appointed but with no obligation to take any further action at the request of the Applicable Authorized Representative or any other Senior Secured Parties) and (b) all payments, communications and determinations provided to be made by, to or through the Senior Collateral Agent shall instead be made by or to each Authorized Representative directly, until such time as the Applicable Authorized Representative appoints a successor Senior Collateral Agent as provided for above in this
 

 
 
 

Section. Upon the acceptance of a successor’s appointment as Senior Collateral Agent hereunder and under the Senior Collateral Documents, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Senior Collateral Agent, and the retiring Senior Collateral Agent shall be discharged from all of its duties and obligations hereunder or under the other Senior Collateral Documents (if not already discharged therefrom as provided above in this Section).  After the retiring Senior Collateral Agent’s resignation hereunder and under the other Senior Collateral Documents, the provisions of this Article and Article VIII of the Senior Credit Agreement and the equivalent provision of any Additional Senior Debt Facility shall continue in effect for the benefit of such retiring Senior Collateral Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Senior Collateral Agent was acting as Senior Collateral Agent.  Upon any notice of resignation of the Senior Collateral Agent hereunder and under the other Senior Collateral Documents, Rite Aid agrees to use commercially reasonable efforts to transfer (and maintain the validity and priority of) the Liens in favor of the retiring Senior Collateral Agent under the Senior Collateral Documents to the successor Senior Collateral Agent.
 
SECTION 4.07  Non-Reliance on Senior Collateral Agent and other Senior Secured Parties.
 
Each Senior Secured Party acknowledges that it has, independently and without reliance upon the Senior Collateral Agent, any Authorized Representative or any other Senior Secured Party or any of their Affiliates and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Senior Debt Documents.  Each Senior Secured Party also acknowledges that it will, independently and without reliance upon the Senior Collateral Agent, any Authorized Representative or any other Senior Secured Party or any of their Affiliates and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Senior Debt Document or any related agreement or any document furnished hereunder or thereunder.
 
SECTION 4.08  Senior Collateral and Guaranty Matters.
 
Each of the Senior Secured Parties irrevocably authorizes the Senior Collateral Agent, at its option and in its discretion,
 
(a)   to release any Lien on any property granted to or held by the Senior Collateral Agent under any Senior Collateral Document in accordance with Section 2.04 or upon receipt of a written request from Rite Aid stating that the release of such Lien is permitted by the terms of each then extant Senior Debt Document;
 
(b)   to release any Subsidiary Guarantor from its obligations under the Senior Collateral Documents upon receipt of a written request from Rite Aid stating that such release is permitted by the terms of each then extant Senior Debt Document.
 

 
 
 

ARTICLE V
 
Miscellaneous
 
SECTION 5.01  Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:
 
(a)   if to the Senior Collateral Agent or the Administrative Agent, to it at 388 Greenwich Street, New York, NY 10013, Attention of Thomas Halsch, Telecopy No. (646) 328-3784;
 
(b)   if to the Initial Additional Senior Representative, to it at 2 North LaSalle Street, Suite 1020, Chicago, IL 60602, Attention: Corporate Trust Administration (Telecopy No. (312) 827-8542);
 
(c)   if to any other Senior Representative, to it at the address set forth in the applicable Joinder Agreement.
 
Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt (if a Business Day) and on the next Business Day thereafter (in all other cases) if delivered by hand or overnight courier service or sent by telecopy or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 5.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 5.01. As agreed to in writing among the Senior Collateral Agent and each Authorized Representative from time to time, notices and other communications may also be delivered by e-mail to the e-mail address of a representative of the applicable person provided from time to time by such person.
 
SECTION 5.02  Waivers; Amendment; Joinder Agreements.
 
(a)   No failure or delay on the part of any party hereto in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the parties hereto are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  No notice or demand on any party hereto in any case shall entitle such party to any other or further notice or demand in similar or other circumstances.
 

 
 
 

(b)   Neither this Agreement nor any provision hereof may be terminated, waived, amended or modified (other than pursuant to any Joinder Agreement) except pursuant to an agreement or agreements in writing entered into by each Authorized Representative and the Senior Collateral Agent (and with respect to any such termination, waiver, amendment or modification which by the terms of this Agreement requires Rite Aid’s consent or which increases the obligations or reduces the rights of Rite Aid or any Subsidiary Guarantor, with the consent of Rite Aid).
 
(c)   Notwithstanding the foregoing, without the consent of any Senior Secured Party, any Authorized Representative may become a party hereto by execution and delivery of a Joinder Agreement in accordance with Section 5.13 and upon such execution and delivery, such Authorized Representative and the Additional Senior Debt Parties and Additional Senior Debt Obligations of the Series for which such Authorized Representative is acting shall be subject to the terms hereof and the terms of the other Senior Collateral Documents applicable thereto.
 
(d)   Notwithstanding the foregoing, without the consent of any other Authorized Representative or Senior Secured Party, the Senior Collateral Agent may effect amendments and modifications to this Agreement to the extent necessary to reflect any incurrence of any Additional Senior Debt in compliance with the Senior Debt Documents and the Second Priority Debt Documents.
 
SECTION 5.03  Parties in Interest. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, as well as the other Senior Secured Parties, all of whom are intended to be bound by, and to be third party beneficiaries of, this Agreement.
 
SECTION 5.04  Survival of Agreement. All covenants, agreements, representations and warranties made by any party in this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement.
 
SECTION 5.05  Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this Agreement by facsimile or electronic transmission shall be effective as delivery of a manually signed counterpart of this Agreement.
 
SECTION 5.06  Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.  The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
 

 
 
 

SECTION 5.07  Governing Law; Jurisdiction.
 
(a)   This Agreement shall be construed in accordance with and governed by the law of the State of New York.
 
SECTION 5.08  Submission To Jurisdiction Waivers; Consent to Service of Process. The Senior Collateral Agent and each Authorized Representative, on behalf of itself and the Senior Secured Parties of the Series for whom it is acting, irrevocably and unconditionally :
 
(a)   submits for itself and its property in any legal action or proceeding relating to this Agreement and the Senior Collateral Documents, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America in the Southern District of New York, and appellate courts from any thereof;
 
(b)   consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;
 
(c)   agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Person (or its Authorized Representative) at the address referred to in 5.01;
 
(d)   agrees that nothing herein shall affect the right of any other party hereto (or any Senior Secured Party) to effect service of process in any other manner permitted by law or shall limit the right of any party hereto (or any Senior Secured Party) to sue in any other jurisdiction; and
 
(e)   waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 5.08 any special, exemplary, punitive or consequential damages.
 
SECTION 5.09  WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
 
SECTION 5.10  Headings. Article, Section and Annex headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.
 
SECTION 5.11  Conflicts. In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of any of the other Senior
 

 
 
 

Debt Documents or Senior Collateral Documents, the provisions of this Agreement shall control.
 
SECTION 5.12  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 Senior Secured Parties in relation to one another.  None of Rite Aid, any Subsidiary Guarantor or any other creditor thereof shall have any rights or obligations hereunder, except as expressly provided in this Agreement ( provided that nothing in this Agreement (other than Section 2.04, 2.05, 2.08, 2.09 or Article V) is intended to or will amend, waive or otherwise modify the provisions of the Senior Credit Agreement or any Additional Senior Debt Facilities), and none of Rite Aid or any Subsidiary Guarantor may rely on the terms hereof (other than Sections 2.04, 2.05, 2.08, 2.09 and Article V).  Nothing in this Agreement is intended to or shall impair the obligations of any Subsidiary Guarantor, which are absolute and unconditional, to pay the Senior Obligations as and when the same shall become due and payable in accordance with their terms.
 
SECTION 5.13  Additional Senior Debt .   To the extent, but only to the extent  permitted by the provisions of the Senior Debt Documents and the Second Priority Debt Documents, Rite Aid may incur or issue and sell one or more series or classes of Senior Facilities.  Any such additional class or series of Additional Senior Debt (the “ Senior Class Debt ”) may be secured by the Senior Lien and may be Guaranteed by the Subsidiary Guarantors on a senior basis, in each case under and pursuant to the Senior Collateral Documents, if and subject to the condition that the Representative of any such Senior Class Debt (each, a “ Senior Class Debt Representative ”), acting on behalf of the holders of such Senior Class Debt (such Representative and holders in respect of any Senior Class Debt being referred to as the “ Senior Class Debt Parties ”), becomes a party to this Agreement by satisfying the conditions set forth in clauses (i) through (v) of the immediately succeeding paragraph.
 
In order for a Senior Class Debt Representative to become a party to this Agreement,
 
 
(i)
such Senior Class Debt Representative, the Senior Collateral Agent and each Subsidiary Guarantor shall have executed and delivered an instrument substantially in the form of Annex 2 (with such changes as may be approved by the Senior Collateral Agent and such Senior Class Representative) pursuant to which such Senior Class Debt Representative becomes an Authorized Representative hereunder, and the Senior Class Debt in respect of which such Senior Class Debt Representative is the Representative and the related Senior Class Debt Parties become subject hereto and bound hereby;
 
 
(ii)
Rite Aid shall have delivered to the Senior Collateral Agent and the Second Priority Collateral Trustee true and complete copies of each of the Senior Debt Documents relating to such Senior Class Debt, certified as being true and correct by a Financial Officer of Rite Aid;
 

 
 
 

 
(iii)
all filings, recordations and/or amendments or supplements to the Senior Collateral Documents necessary or desirable in the reasonable judgment of the Senior Collateral Agent to confirm and perfect the Senior Liens securing the relevant Senior Obligations relating to such Senior Class Debt shall have been made, executed and/or delivered (or, with respect to any such filings or recordations, acceptable provisions to perform such filings or recordings have been taken in the reasonable judgment of the Senior Collateral Agent), and all fees and taxes in connection therewith shall have been paid;
 
 
(iv)
the Senior Debt Documents, as applicable, relating to such Senior Class Debt shall provide, in a manner reasonably satisfactory to the Senior Collateral Agent, that each Senior Class Debt Party with respect to such Senior Class Debt will be subject to and bound by the provisions of this Agreement in its capacity as a holder of such Senior Class Debt; and
 
 
(v)
the Senior Collateral Agent and the Second Priority Collateral Trustee shall have received such opinions of outside counsel to Rite Aid and such Senior Class Debt Representative as any of them may request and such other documents relating to the matters referred to in clauses (i), (ii) and (iii) as any of them may reasonably request, and such opinions and other documents shall be reasonably satisfactory in form and substance to the Senior Collateral Agent and the Second Priority Collateral Trustee.
 
SECTION 5.14 Integration. This Agreement together with the other Senior Debt Documents, including the Senior Collateral Documents, represents the agreement of each of the Subsidiary Guarantors and the Senior Secured Parties with respect to the subject matter hereof and there are no promises, undertakings, representations or warranties by any Subsidiary Guarantor, the Senior Collateral Agent, any Authorized Representative or any other Senior Secured Party relative to the subject matter hereof not expressly set forth or referred to herein or in the other Senior Debt Documents or the Senior Collateral Documents.
 
SECTION 5.15 Rights of Authorized Representatives.  Any trustee or other Authorized Representative under any Additional Senior Debt Facility that becomes a party hereto shall have all the rights, privileges, protections, immunities, benefits and indemnities granted to it under the applicable indenture or other agreement that constitutes such Additional Senior Debt Facility as if such rights, privileges, protections, immunities, benefits and indemnities were set forth herein in full.
 
[Remainder of this page intentionally left blank]
 

 
 
 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
 
 
RITE AID CORPORATION,
       
       
 
By
 
/s/ Marc A. Strassler
   
Name:
Marc A. Strassler
   
Title:
Executive Vice President, General
     
Counsel and Secretary
       

   
 
THE SUBSIDIARY GUARANTORS LISTED ON ANNEX 1 HERETO,
       
       
 
By
 
/s/ Marc A. Strassler
   
Name:
Marc A. Strassler
   
Title:
Authorized Person
       
       


[Signature Page to Senior Lien Intercreditor Agreement]
 
 
 


 
CITICORP NORTH AMERICA, INC.,
as Administrative Agent and Senior Collateral Agent
       
       
 
By
 
/s/ David Leland
   
Name:
David Leland
   
Title:
Vice President
       
       



 
 
 


 
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Initial Additional
Senior Representative
       
       
 
By
 
/s/ D. G. Donovan
   
Name:
D. G. Donovan
   
Title:
Vice President
       
       



 
 
 
Annex 2 to the
Senior Lien Intercreditor Agreement

SUBSIDIARY GUARANTORS
 

 
1.
112 Burleigh Avenue Norfolk, LLC
 
2.
1515 West State Street Boise, Idaho, LLC
 
3.
1740 Associates, L.L.C.
 
4.
3581 Carter Hill Road–Montgomery Corp.
 
5.
4042 Warrensville Center Road – Warrensville Ohio, Inc.
 
6.
5277 Associates, Inc.
 
7.
537 Elm Street Corp.
 
8.
5600 Superior Properties, Inc.
 
9.
657-659 Broad St. Corp.
 
10.
764 South Broadway-Geneva, Ohio, LLC
 
11.
Ann & Government Streets - Mobile, Alabama, LLC
 
12.
Apex Drug Stores, Inc.
 
13.
Broadview and Wallings-Broadview Heights Ohio, Inc.
 
14.
Brooks Pharmacy, Inc.
 
15.
Central Avenue and Main Street - Petal, MS, LLC
 
16.
Eagle Managed Care Corp.
 
17.
Eckerd Corporation
 
18.
Eckerd Fleet, Inc.
 
19.
EDC Drug Stores, Inc.
 
20.
Eighth and Water Streets – Urichsville, Ohio, LLC
 
21.
England Street-Asheland Corporation
 
22.
Fairground, L.L.C.
 
23.
GDF, Inc.
 

 
 
 
 

24.
Genovese Drug Stores, Inc.
 
25.
Gettysburg and Hoover-Dayton, Ohio, LLC
 
26.
Harco, Inc.
 
27.
K & B Alabama Corporation
 
28.
K & B Louisiana Corporation
 
29.
K & B Mississippi Corporation
 
30.
K & B Services, Incorporated
 
31.
K & B Tennessee Corporation
 
32.
K&B Texas Corporation
 
33.
K & B, Incorporated
 
34.
Keystone Centers, Inc.
 
35.
Lakehurst and Broadway Corporation
 
36.
Maxi Drug North, Inc.
 
37.
Maxi Drug South, L.P.
 
38.
Maxi Drug, Inc.
 
39.
Maxi Green Inc.
 
40.
Mayfield & Chillicothe Roads – Chesterland, LLC
 
41.
MC Woonsocket, Inc.
 
42.
Munson & Andrews, LLC
 
43.
Name Rite, L.L.C.
 
44.
Northline & Dix – Toledo – Southgate, LLC
 
45.
P.J.C. Distribution, Inc.
 
46.
P.J.C. Realty Co., Inc.
 
47.
Patton Drive and Navy Boulevard Property Corporation
 
48.
Paw Paw Lake Road & Paw Paw Avenue–Coloma, Michigan, LLC
 

 
 
 

49.
PDS-1 Michigan, Inc.
 
50.
Perry Distributors, Inc.
 
51.
Perry Drug Stores, Inc.
 
52.
PJC Dorchester Realty LLC
 
53.
PJC East Lyme Realty LLC
 
54.
PJC Haverhill Realty LLC
 
55.
PJC Hermitage Realty LLC
 
56.
PJC Hyde Park Realty LLC
 
57.
PJC Lease Holdings, Inc.
 
58.
PJC Manchester Realty LLC
 
59.
PJC Mansfield Realty LLC
 
60.
PJC New London Realty LLC
 
61.
PJC of Cranston, Inc.
 
62.
PJC of East Providence, Inc.
 
63.
PJC of Massachusetts, Inc.
 
64.
PJC of Rhode Island, Inc.
 
65.
PJC of Vermont Inc.
 
66.
P.J.C. of West Warwick, Inc.
 
67.
PJC Peterborough Realty LLC
 
68.
PJC Providence Realty LLC
 
69.
PJC Realty MA, Inc.
 
70.
PJC Realty N.E. LLC
 
71.
PJC Revere Realty LLC
 
72.
PJC Special Realty Holdings, Inc.
 
73.
Ram-Utica, Inc.
 

 
 
 

74.
RDS Detroit, Inc.
 
75.
Read's Inc.
 
76.
Rite Aid Drug Palace, Inc.
 
77.
Rite Aid Hdqtrs. Corp.
 
78.
Rite Aid of Alabama, Inc.
 
79.
Rite Aid of Connecticut, Inc.
 
80.
Rite Aid of Delaware, Inc.
 
81.
Rite Aid of Florida, Inc.
 
82.
Rite Aid of Georgia, Inc.
 
83.
Rite Aid of Illinois, Inc.
 
84.
Rite Aid of Indiana, Inc.
 
85.
Rite Aid of Kentucky, Inc.
 
86.
Rite Aid of Maine, Inc.
 
87.
Rite Aid of Maryland, Inc.
 
88.
Rite Aid of Massachusetts, Inc.
 
89.
Rite Aid of Michigan, Inc.
 
90.
Rite Aid of New Hampshire, Inc.
 
91.
Rite Aid of New Jersey, Inc.
 
92.
Rite Aid of New York, Inc.
 
93.
Rite Aid of North Carolina, Inc.
 
94.
Rite Aid of Ohio, Inc.
 
95.
Rite Aid of Pennsylvania, Inc.
 
96.
Rite Aid of South Carolina, Inc.
 
97.
Rite Aid of Tennessee, Inc.
 
98.
Rite Aid of Vermont, Inc.
 

 
 
 

99.
Rite Aid of Virginia, Inc.
 
100.
Rite Aid of Washington, D.C., Inc.
 
101.
Rite Aid of West Virginia, Inc.
 
102.
Rite Aid Realty Corp.
 
103.
Rite Aid Rome Distribution Center, Inc.
 
104.
Rite Aid Services, L.L.C.
 
105.
Rite Aid Transport, Inc.
 
106.
RX Choice, Inc.
 
107.
Seven Mile and Evergreen – Detroit, LLC
 
108.
Silver Springs Road – Baltimore, Maryland/One, LLC
 
109.
Silver Springs Road – Baltimore, Maryland/Two, LLC
 
110.
State & Fortification Streets – Jackson, Mississippi, LLC
 
111.
State Street and Hill Road – Gerard, Ohio, LLC
 
112.
The Lane Drug Company
 
113.
Thrift Drug Services, Inc.
 
114.
Thrift Drug, Inc.
 
115.
Thrifty Corporation
 
116.
Thrifty PayLess, Inc.
 
117.
Tyler and Sanders Roads, Birmingham - Alabama, LLC
 
118.
Rite Aid Payroll Management, Inc.
 
119.
Rite Aid Online Store, Inc.
 
120.
Rite Fund, Inc.
 
121.
Rite Investments Corp.
 
122.
Rite Aid Hdqtrs. Funding, Inc.
 
123.
EDC Licensing, Inc.
 

 
 
 

124.
JCG Holdings (USA), Inc.
 
125.
JCG (PJC) USA, LLC
 
126.
The Jean Coutu Group (PJC) USA, Inc.
 


 
 
 
Annex 2 to the
Senior Lien Intercreditor Agreement


REPRESENTATIVE SUPPLEMENT NO.    dated as of     , to the SENIOR LIEN INTERCREDITOR AGREEMENT dated as of June 12, 2009 (the “ Senior Lien Intercreditor Agreement ”), among Citicorp North America, Inc., a Delaware corporation ( “CNAI” ),  as Senior Collateral Agent for the Senior Secured Parties under the Senior Collateral Documents, CNAI, as Authorized Representative under the Senior Credit Agreement, The Bank of New York Mellon Trust Company, N.A., as Initial Additional Authorized Representative, and the additional Authorized Representatives from time to time a party thereto.
 
A.  Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Senior Lien Intercreditor Agreement, including the Definitions Annex referred to therein.
 
B.  As a condition to the ability of Rite Aid to issue Additional Senior Debt and to secure such Senior Class Debt with the Senior Lien and to have such Senior Class Debt guaranteed by the Subsidiary Guarantors on a senior basis, in each case under and pursuant to the Senior Collateral Documents, the Senior Class Debt Representative in respect of such Senior Class Debt is required to become an Authorized Representative under, and such Senior Class Debt and the Senior Class Debt Parties in respect thereof are required to become subject to and bound by, the Senior Lien Intercreditor Agreement.  Section 5.13 of the Senior Lien Intercreditor Agreement provides that such Senior Class Debt Representative may become an Authorized Representative under, and such Senior Class Debt and such Senior Class Debt Parties may become subject to and bound by, the Senior Lien Intercreditor Agreement, pursuant to the execution and delivery by the Senior Class Representative of an instrument in the form of this Representative Supplement and the satisfaction of the other conditions set forth in Section 5.13 of the Senior Lien Intercreditor Agreement.  The undersigned Senior Class Debt Representative (the “ New Representative ”) is executing this Representative Supplement in accordance with the requirements of the Senior Debt Documents.
 
Accordingly, the Senior Collateral Agent and the New Representative agree as follows:
 
SECTION 1.  In accordance with Section 5.13 of the Senior Lien Intercreditor Agreement, the New Representative by its signature below becomes an Authorized Representative under, and the related Senior Class Debt and Senior Class Debt Parties become subject to and bound by, the Senior Lien Intercreditor Agreement with the same force and effect as if the New Representative had originally been named therein as an Authorized Representative, and the New Representative, on behalf of itself and such Senior Class Debt Parties, hereby agrees to all the terms and provisions of the Senior Lien Intercreditor Agreement applicable to it as a Senior Representative and Authorized Representative and to the Senior Class Debt Parties that it represents as Additional Senior Debt Parties.  Each reference to a “Representative”, “Senior Representative” or “Authorized Representative” in the Senior Lien Intercreditor
 

 
 
 

Agreement shall be deemed to include the New Representative.  The Senior Lien Intercreditor Agreement is hereby incorporated herein by reference.
 
The New Representative and [Citicorp North America, Inc.], on behalf of the Senior Secured Parties, hereby irrevocably (i) appoint [Citicorp North America, Inc.] as Senior Collateral Agent for purposes of the Senior Lien Intercreditor Agreement and the other Senior Collateral Documents, (ii) authorize the Senior Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Senior Collateral Agent in the Senior Collateral Documents, together with such actions and powers as are reasonably incidental thereto, and (iii) authorize the Senior Collateral Agent to execute any Senior Collateral Documents on behalf of all Senior Secured Parties and to take such other actions to maintain and preserve the security interests granted pursuant to any Senior Collateral Documents.  The New Representative hereby acknowledges and agrees that the Senior Collateral Agent in its capacity as such shall be acting on its behalf and on behalf of all other Senior Secured Parties.

SECTION 2.  The New Representative represents and warrants to the Senior Collateral Agent and the other Senior Secured Parties that (i) it has full power and authority to enter into this Representative Supplement, in its capacity as [agent] [trustee], (ii) this Representative Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of such Agreement and (iii) the Additional Senior Debt Documents relating to such Senior Class Debt provide that, upon the New Representative’s entry into this Agreement, the Senior Class Debt Parties in respect of such Senior Class Debt will be subject to and bound by the provisions of the Senior Lien Intercreditor Agreement as Additional Senior Debt Parties.
 
SECTION 3.  This Representative Supplement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Representative Supplement shall become effective when the Senior Collateral Agent shall have received a counterpart of this Representative Supplement that bears the signature of the New Representative.  Delivery of an executed signature page to this Representative Supplement by facsimile transmission shall be effective as delivery of a manually signed counterpart of this Representative Supplement.
 
SECTION 4.  Except as expressly supplemented hereby, the Senior Lien Intercreditor Agreement shall remain in full force and effect.
 
SECTION 5.  THIS REPRESENTATIVE SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
SECTION 6.  In case any one or more of the provisions contained in this Representative Supplement should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and
 

 
 
 

enforceability of the remaining provisions contained herein and in the Senior Lien Intercreditor Agreement shall not in any way be affected or impaired.  The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
 
SECTION 7.  All communications and notices hereunder shall be in writing and given as provided in Section 5.01 of the Senior Lien Intercreditor Agreement.  All communications and notices hereunder to the New Representative shall be given to it at the address set forth below its signature hereto.
 
By acknowledging and agreeing to this Representative Supplement, each of the Subsidiary Guarantors party hereto hereby (i) reaffirms the security interests granted pursuant to the Senior Subsidiary Security Agreement and grants a security interest in all of its right, title and interest in the Senior Collateral (as defined in the Senior Subsidiary Security Agreement), whether now owned or hereafter acquired, to secure the Senior Obligations and (ii) authorizes the filing of any financing statements describing the Senior Collateral in any manner the Senior Collateral Agent chooses, including, without limitation, describing such Senior Collateral as “all assets of debtor, whether now owned or hereafter acquired,” “all personal property of debtor, whether now owned or hereafter acquired” or using words of similar import.
 

 
 
 

IN WITNESS WHEREOF, the New Representative and the Senior Collateral Agent have duly executed this Representative Supplement to the Senior Lien Intercreditor Agreement as of the day and year first above written.
 
 
[NAME OF NEW REPRESENTATIVE], as
[                 ] for the holders of
[                                  ],
       
       
 
By
   
   
Name:
 
   
Title:
Authorized Signatory
       
       
       

 
Address for notices:
       
       
       
       
       
   
attention of:
 
       
   
Telecopy:
 





Acknowledged by:

CITICORP NORTH AMERICA, INC.,
as Senior Collateral Agent,

By
   
 
Name:
   
 
Title:
   

THE SUBSIDIARY GUARANTORS
LISTED ON SCHEDULE 1 HERETO,

By
   
 
Name:
   
 
Title:
   


 
 
 
Schedule 1 to Annex 2  to the
Senior Lien Intercreditor Agreement

Subsidiary Guarantors