Exhibit 10.27
MANAGEMENT SERVICES
AGREEMENT
This MANAGEMENT SERVICES AGREEMENT (this
“Management Agreement”), dated as of January 1, 2003 is
made by and between Rite Aid Corporation, a Delaware corporation
(the “Company”), and Leonard Green & Partners, L.P.
(“LGP”).
WHEREAS, the Company desires to obtain from
LGP, and LGP desires to provide, certain investment banking,
management, consulting and financial planning services on an
ongoing basis and certain financial advisory and investment banking
services in connection with major financial transactions that may
be undertaken from time to time in the future;
NOW, THEREFORE, in consideration of the
foregoing and the mutual agreements contained herein, the parties
hereto hereby agree as follows:
1.
Retention of Services.
1.1 General
Services . Subject to the terms and conditions hereof, the
Company hereby retains LGP, and LGP hereby agrees to be retained by
the Company, to provide management, consulting and financial
planning services to the Company on an ongoing basis in connection
with the operation and growth of the Company and its subsidiaries
and affiliates during the term set forth in section 3.1 of this
agreement (the “General Services”).
1.2 Major
Transaction Services. Subject to the terms and conditions
hereof, the Company may retain LGP, and if requested LGP hereby
agrees to be retained by the Company, to provide financial advisory
and investment banking services to the Company, its subsidiaries
and affiliates in connection with major financial transactions that
may be undertaken from time to time in the future (“Major
Transaction Services” and, together with the General
Services, the “Services”).
2.
Compensation.
2.1 General
Services Fee. In consideration of the General Services, the
Company shall pay LGP an annual fee payable in cash equal to One
Million Dollars ($1,000,000.00) payable monthly in advance in equal
monthly installments.
2.2 Major
Transaction Services Fee. In consideration of any Major
Transaction Services provided by LGP from time to time, and subject
to the provisions of the immediately following sentence, the
Company shall pay LGP normal and customary fees for services of
like kind, taking into consideration all relevant factors,
including but not limited to the complexity of the subject
transaction, the time devoted to providing such services and the
value of LGP’s investment banking expertise and relationships
within the business and financial community. The amount of such
fees shall be approved in accordance with any applicable procedures
set forth in the charter documents or
financing
agreements of the Company and shall be subject to the prior
approval of the Board of Directors of the Company.
2.3
Expenses. In addition to the fees to be paid to LGP under
sections 2.1 and 2.2 hereof, the Company shall pay to, or on behalf
of, LGP, promptly as billed, all reasonable and documented
out-of-pocket expenses incurred by LGP in connection with the
Services rendered hereunder. Such expenses shall include, among
other things, reasonable fees and disbursements of counsel, travel
(including aircraft) expenses, word processing charges, messenger
and duplicating services, facsimile expenses and other customary
expenditures.
3.
Term.
3.1
Termination. This Management Agreement shall terminate
immediately following the payment of the Company’s obligation
under Section 2.1 hereof on the second (2 nd )
anniversary of the date hereof (the “Termination
Date”); unless otherwise mutually agreed in writing by the
Company and LGP.
3.2
Survival of Certain Obligations. Notwithstanding any other
provision hereof, the obligations of the Company to pay amounts due
with respect to periods prior to the termination hereof pursuant to
Section 2 hereof and the provisions of Section 5 hereof shall
survive any termination of this Management Agreement.
4.
Decisions/Authority of Advisor.
4.1
Limitation on LGP Liability. The Company reserves the right
to make all decisions with regard to any matter upon which LGP has
rendered its advice and consultation, and there shall be no
liability to LGP for any such advice accepted by the Company
pursuant to the provisions of this Management Agreement.
4.2
Independent Contractor. LGP shall act solely as an
independent contractor and shall have complete charge of its
personnel engaged in
