Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT
DATED AS OF OCTOBER 25, 1999
By and Among
RITE AID CORPORATION
and
GREEN EQUITY INVESTORS III, L.P.
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made
and entered into as of October 25, 1999, by and among RITE AID CORPORATION,
a Delaware corporation (the "COMPANY") and GREEN EQUITY INVESTORS III, L.P.
("GEI").
W I T N E S S E T H:
WHEREAS, pursuant to a letter agreement, dated as of October
18, 1999 (the "LETTER AGREEMENT"), GEI has agreed to purchase 3,000,000
shares of the Company's Series A 8% Convertible Pay-in-Kind Preferred Stock
(the "PREFERRED STOCK") at a purchase price of $100 per share;
WHEREAS, in consideration of the aforementioned purchase of
the Preferred Stock by GEI, the Company has agreed to provide to the
holders of the Preferred Stock and the Common Stock (as defined below) into
which it is convertible the registration rights set forth herein pursuant
to Section 3.4 of the Letter Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and subject to and on the terms and conditions herein set
forth, the parties hereto hereby agree as follows:
ARTICLE I.
Certain Definitions
As used in this Agreement, the following terms shall have the
meanings ascribed to them below:
1.1. "Common Stock" shall mean the common stock of the
Company, par value $1.00 per share, that may be issued from time to time
comprising common equity of the Company.
1.2. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any federal statute then in effect which has replaced
such statute.
1.3. "Group" shall mean two or more Persons that would be
deemed a "group" for purposes of Rule 13d-5 under the Exchange Act.
1.4. "Holder" means GEI for so long as it owns any
Registrable Securities and any other Person who is a holder or beneficial
owner of Registrable Securities for so long as such Person owns any
Registrable Securities.
1.5. "Person" shall mean an individual, corporation, limited
liability company, joint venture, partnership, trust, unincorporated
organization, government or any agency or political subdivision thereof or
any other entity that may be treated as a person under applicable law.
1.6. "Registrable Securities" shall mean the Preferred Stock,
the Company's Series B 8% Convertible Pay-in-Kind Preferred Stock (the
"Series B Preferred Stock) issued upon exchange of the Preferred Stock
and/or the Common Stock issued or issuable upon conversion of the Preferred
Stock or the Series B Preferred Stock.
As to any Registrable Securities, such securities shall cease
to be Registrable Securities when (i) a registration statement registering
such Registrable Securities under the Securities Act has been declared or
becomes effective and such Registrable Securities have been sold or
otherwise transferred by the Holder thereof pursuant to such effective
registration statement; (ii) such Registrable Securities are sold pursuant
to Rule 144 under circumstances in which any legend borne by such
Registrable Securities relating to restrictions on the transferability
thereof, under the Securities Act or otherwise, is removed by the Company
or such Registrable Securities are eligible to be sold pursuant to
paragraph (k) of Rule 144; or (iii) such Registrable Securities shall cease
to be outstanding.
1.7. "Rule 144" shall mean Rule 144 promulgated under the
Securities Act.
1.8. "Securities" shall mean the Preferred Stock, the Series
B Preferred Stock or the Common Stock.
1.9. "Securities Act" shall mean Securities Act of 1933, as
amended, or any federal statute then in effect which has replaced such
statute.
ARTICLE II.
Public Offering Pursuant to Registration Rights
2.1. Demand Registrations.
(a) Holders of Registrable Securities representing not
less than one-third of the then-outstanding Registrable Securities
(for purposes of this calculation, any Preferred Stock to be
measured as the number of shares of Common Stock issuable upon
conversion of such Preferred Stock at the then applicable conversion
rate) (the "INITIATING HOLDERS") may require that the Company effect
a registration under the Securities Act at any time or times (i)
with respect to at least 25% of the Common Stock issued or issuable
upon conversion of the Preferred Stock or Series B Preferred Stock
(or such lesser of all remaining Registrable Securities) (a "COMMON
STOCK REGISTRATION"), and (ii) with respect to Preferred Stock or
Series B Preferred Stock with an anticipated offering or sale price
of $75,000,000 to be registered on or after October 25, 2001 (a
"PREFERRED STOCK REGISTRATION") (each of such a Common Stock
Registration and a Preferred Stock Registration a "DEMAND
REGISTRATION"). Upon receipt of written notice of such demand, the
Company will promptly give written notice of the proposed
registration to all Holders other than Initiating Holders and will
include in such registration (x) all Registrable Securities
specified in such demand, together with Registrable Securities of
like kind of any other Holder joining in such demand as are
specified in a written request received by the Company within 20
days after delivery of the Company's notice and (y) all shares of
equity securities of the Company which the Company or other holders
of equity securities having registration rights may elect to
register. Notwithstanding anything in this Section 2.1(a) to the
contrary, the Holders will collectively be entitled to no more than
an aggregate of two (2) Demand Registrations.
(b) The Company shall file a registration statement with
respect to each Demand Registration requested pursuant to Section
2.1(a) as soon as practicable after receipt of the demand of the
Initiating Holders; provided, however, that if (x) in the good faith
judgment of the Board of Directors of the Company (the "BOARD"),
deferral of such Demand Registration or delivery of any prospectus
supplement to be delivered pursuant to Section 2.1(d) or Section 2.5
would be in the best interests of the Company in that such
registration or delivery would interfere with any other material
corporate transaction (as evidenced by an appropriate resolution of
the Board) of the Company or would require the disclosure of
material non-public information, then the Company shall have the
right to defer such filing or delivery, as the case may be, in order
to effect such other material corporate transaction; provided,
further, however, that (i) in any 12-month period in which the
Company has not made a Shelf Registration (as defined in Section
2.4(d)), the Company may not defer the filing or delivery, as the
case may be, for any period or periods aggregating more than 90 days
after receipt of the demand of the Initiating Holders, and (ii) in
any 12-month period in which the Company has made a Shelf
Registration, the Company may not defer the filing or delivery, as
the case may be, for any period or periods aggregating more than 120
days after receipt of the demand of the Initiating Holders, (y) the
Company shall not be required to file any registration statement or
deliver any prospectus supplement (i) if such filing or delivery is
prohibited by applicable law, (ii) if the Company cannot obtain,
after using its reasonable best efforts, financial information (or
information used to prepare such information) necessary for
inclusion of such registration statement or prospectus supplement or
(iii) if the Company has already filed a registration statement
which has not yet been declared effective or 30 days prior to the
anticipated consummation of a public offering by the Company of its
equity securities and 90 days subsequent to the consummation of such
public offering, and (z) if the Company undertakes a registration
within 90 days following an exercise of its deferral right, the
Holders shall have "piggyback" rights under Section 2.2 hereof such
that they shall be entitled to include therein a number of shares
equal to not less than one-third (1/3) of the number of shares of
Common Stock to be sold in such offering unless such inclusion would
be in conflict with the express registration rights of any other
party pursuant to any agreement by and between the Company and such
party as in existence on the date hereof, in which instance such
Holders shall be entitled to include in such offering the maximum
number of shares not resulting in such conflict.
(c) If the Initiating Holders intend to distribute the
Registrable Securities covered by a Demand Registration by means of
an underwriting, they shall so advise the Company as part of their
demand made pursuant to Section 2.1(a) and the Company shall include
such information in its written notice to Holders. The Initiating
Holders shall have the right to select the managing underwriter(s)
for any underwritten Demand Registration, subject to the approval of
the Board (which will not be unreasonably withheld or delayed). The
right of any Holder to participate in an underwritten Demand
Registration shall be conditioned upon such Holder's participation
in such underwriting in accordance with the terms and conditions
thereof, and the Company and all such Holders will enter into an
underwriting agreement in customary form.
(d) The Initiating Holders may require the Company to
make such Demand Registration in the form of a "shelf" registration
(to the extent the Company then qualifies for the filing of a
"shelf" registration statement), which they shall so advise the
Company as part of their demand made pursuant to Section 2.1(a),
providing for the registration of, and the sale on a continuous or
delayed basis by the Holders of, the Registrable Securities,
pursuant to Rule 415 under the Securities Act and/or any similar
rule that may be adopted by the Commission (the "SHELF
Registration"). The Company agrees to use its best efforts to file
the registration statement relating to the Shelf Registration to
become or be declared effective no later than 120 days after such
obligation arises, and to keep such Shelf Registration continuously
effective until the earlier of (i) two (2) years from the effective
date thereof or (ii) such time as there are no longer any
Registrable Securities outstanding subject to such demand, subject
to the Securities Act and the rules and regulations thereunder. The
Company further agrees, subject to Section 2.1(b), to supplement or
make amendments to the Shelf Registration, as and when required by
the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration or
by the Securities Act or rules and regulations thereunder for shelf
registration, and the Company agrees to furnish to the Holders of
the Registrable Securities copies of any such supplement or
amendment promptly following its being used and/or filed with the
Commission.
(e) The Holders will have absolute priority over any
other Securities sought to be included in a Demand Registration. If
such other Securities are included in any Demand Registration that
is not an underwritten offering, all Registrable Securities of the
Holders included in such offering shall be sold prior to or
concurrently with the sale of any of such other Securities. If other
Securities are included in any Demand Registration that is an
underwritten offering, and the managing underwriter for such
offering advises the Company that in its opinion the amount of
Securities to be included exceeds the amount of Securities which can
be sold in such offering without adversely affecting the
marketability thereof, the Company will include in such registration
all Registrable Securities requested to be included therein by the
Holders prior to the inclusion of any other Securities. If the
number of Registrable Securities requested by the Holders to be
included in such registration exceeds the amount of Securities which
in the opinion of such managing underwriter can be sold without
adversely affecting the marketability of such offering, such
Registrable Securities shall be included pro rata among the Holders
based on the percentage of the then-outstanding Registrable
Securities held by each such Holder.
2.2. Piggyback Registration.
(a) If the Company shall determine to register any
equity securities of the Company for its own account or for the
account of other holders of equity securities of the Company on any
registration form (other than Form S-4 or S-8 or other successor
forms) which permits the inclusion of Registrable Securities held by
any Holder (a "PIGGYBACK REGISTRATION"), the Company will promptly
give each Holder written notice thereof and, subject to Section
2.2(c), shall include in such registration all Registrable
Securities requested to be included therein pursuant to the written
requests of Holders received within 20 days after delivery of the
Company's notice.
(b) If the Piggyback Registration relates to an
underwritten public offering, the Company shall so advise the
Holders as part of the written notice given pursuant to Section
2.2(a). In such event, the right of any Holder to participate in
such registration shall be conditioned upon such Holder's
participation in such underwriting in accordance with the terms and
conditions thereof. The Board shall have the right to select the
managing underwriter(s) for any underwritten Piggyback Registration.
All Holders proposing to distribute their Securities through such
underwriting shall (together with the Company) enter into an
underwriting agreement in customary form.
(c) If such proposed Piggyback Registration is an
underwritten offering and the managing underwriter for such offering
advises the Company that the Securities requested to be included
therein exceeds the amount of Securities or other securities that
can be sold in such offering, except as provided in Section 2.1(b),
any Securities or other securities to be sold by the Company or
other holders of the Company's securities initiating such offering
in such offering shall have priority over any Registrable Securities
held by Holders, and the number of shares to be included by a Holder
and other holders of the Company's securities that did not initiate
the offering in such registration shall be reduced pro rata on the
basis of the percentage of the then outstanding Registrable
Securities held by each such Holder and all other holders exercising
similar registration rights.
2.3. Expenses of Registration. All expenses incurred in
connection with up to two Demand Registrations and all Piggyback
Registrations shall be borne by the Company, including without limitation
the reasonable cost of one counsel to all Holders reasonably acceptable to
the Company (the Company herein acknowledging that Irell & ▇▇▇▇▇▇▇ LLP is
acceptable counsel). All underwriting discounts, selling commissions and
other similar fees relating to Registrable Securities included in any
Demand or Piggyback Registration shall be borne by the holders of such
Registrable Securities pro rata on the basis of the amount of Registrable
Securities sold by them.
2.4. Registration Procedures. In the case of each
registration effected by the Company pursuant to this Article II, the
Company will keep each Holder advised in writing as to the initiation of
such registration and as to the completion thereof. At its expense, the
Company will use its best efforts to:
(a) cause such registration to be declared effective by
the Securities and Exchange Commission (the "COMMISSION") and, (i)
in the case of a Demand Registration other than a Shelf
Registration, keep such registration effective for a period of 180
days or until the Holders whose Registrable Securities are included
therein have completed the distribution described in the
registration statement relating thereto, whichever first occurs, and
(ii) in the case of a Shelf Registration, keep such registration
effective as set forth in Section 2.1(d);
(b) as soon as reasonably possible, prepare and file
with the Commission such amendments and supplements to such
registration statement and the prospectus included therein
(including post-effective amendments, prospectus supplements and
pricing supplements) as may be necessary to effect and maintain the
effectiveness of such registration statement for the period
specified in Section 2.4(a).
(c) provide (A) the Holders of the Registrable
Securities to be included in such registration statement, (B) the
underwriters (which term, for purposes of this Agreement, shall
include a person deemed to be an underwriter within the meaning of
Section 2(11) of the Securities Act) if any, thereof, (C) the sales
or placement agent therefor, if any, (D) counsel for such
underwriters or agent, and (E) not more than one counsel for all the
holders of such Registrable Securities the opportunity to
participate in the preparation of such registration statement, each
prospectus included therein or filed with the Commission, and each
amendment or supplement thereto;
(d) with respect to any Demand Registration that is a
Shelf Registration, for a reasonable period prior to the filing of
such registration statement, and throughout the period specified in
Section 4(a), make available at reasonable times at the Company's
principal place of business or such other reasonable place for
inspection by one representative of each of the parties referred to
in Section 2.4(d) who shall certify to the Company that they have a
current intention to sell the Registrable Securities pursuant to the
Shelf Registration such financial and other information and books
and records of the Company, and cause the officers, employees,
counsel and independent certified public accountants of the Company
to respond to such inquiries, as shall be reasonably necessary, in
the reasonable judgment of the respective counsel referred to in
such Section, to conduct a reasonable investigation within the
meaning of Section 11 of the Securities Act; provided, however, that
each such party shall be required to maintain in confidence and not
to disclose to any other person any information or records
reasonably designated by the Company in writing as being
confidential, until such time as (A) such information becomes a
matter of public record, other than by an impermissible disclosure
by such party (whether by virtue of its inclusion in such
registration statement or otherwise), or (B) such person shall be
required, or shall deem it advisable, to disclose such information
pursuant to the subpoena or order of any court or other governmental
agency or body having jurisdiction over the matter (subject to the
requirements of such order, and only after such person shall have
given the Company prompt prior written notice thereof), or (C) such
information is required to be set forth in such registration
statement or the prospectus included therein or in an amendment to
such registration statement or an amendment or supplement to such
prospectus in order that such registration statement, prospectus,
amendment or supplement, as the case may be, does not contain an
untrue statement of a material fact or omit to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing;
(e) (A) register or qualify the Registrable Securities
to be included in such registration statement under such securities
laws or blue sky laws of such jurisdictions as any Holder of such
Registrable Securities and each placement or sales agent, if any,
therefor and underwriter, if any, thereof shall reasonably request,
and (B) with respect to any Shelf Registration, keep such
registrations or qualifications in effect and comply with such laws
so as to permit the continuance of offers, sales and dealings
therein in such jurisdictions during the period the Shelf
Registration is required to remain effective under Section 2.4(a)
above and for so long as may be necessary to enable any such Holder,
agent or underwriter, if any, to complete its distribution of
Registrable Securities pursuant to such registration statement and
(C) take any and all other actions as may be reasonably necessary or
advisable to enable each such Holder, agent, if any, and
underwriter, if any, to consummate the disposition in such
jurisdictions of such Registrable Securities; provided, however,
that the Company shall not be required for any other purpose to (1)
qualify as a foreign corporation in any jurisdiction wherein it
would not otherwise be required to qualify but for the requirements
of this Section 2.4(f) or (2) consent to general service of process
or taxation in any such jurisdiction;
(f) furnish such number of prospectuses and other
documents incident thereto, including any amendment of or supplement
to the prospectus, as any Holder from time to time may reasonably
request;
(g) promptly notify the selling Holders of Registrable
Securities, the sales or placement agent, if any, therefor and the
managing underwriter or underwriters, if any, thereof and confirm
such advice in writing, (A) when such registration statement or the
prospectus included therein or any prospectus amendment or
supplement or post-effective amendment has been filed, and with
respect to such registration statement or any post-effective
amendment, when the same has become effective, (B) of any comments
by the Commission, the Blue Sky or securities commissioner or
regulator of any state with respect thereto or any request by the
Commission for amendments or supplements to such registration
statement or prospectus or for additional information, (C) of the
issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation or
threatening of any proceedings for that purpose, (D) if at any time
the representations and warranties of the Company contemplated by
Section 2.4(p) or Section 3 cease to be true and correct in all
material respects, (E) of the receipt by the Company of any
notification with respect to the suspension of the qualification of
the Registrable Securities for the sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, or (F)
at any time when a prospectus is required to be delivered under the
Securities Act, that such registration statement, prospectus,
prospectus amendment or supplement or post-effective amendment, or
any document incorporated by reference in any of the foregoing,
contains an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances
then existing;
(h) obtain the withdrawal of any order suspending the
effectiveness of such registration statement or any post-effective
amendment thereto at the earliest practicable date;
(i) if requested by any managing underwriter or
underwriters, any placement or sales agent or any Holder of
Registrable Securities, promptly incorporate in a prospectus
supplement or post-effective amendment such information as is
required by the applicable rules and regulations of the Commission
and as such managing underwriter or underwriters, such agent or such
holder specifies should be included therein relating to the terms of
the sale of such Registrable Securities, including, without
limitation, information with respect to the principal amount of
Registrable Securities being sold by such Holder or agent or to any
underwriters, the name and description of such Holder, agent or
underwriter, the offering price of such Registrable Securities and
any discount, commission or other compensation payable in respect
thereof, the purchase price being paid therefor by such underwriters
and with respect to any other terms of the offering of the
Registrable Securities to be sold by such Holder or agent or to such
underwriters; and, with respect to a Demand Registration that is a
Shelf Registration, make all required filings of such prospectus
supplement or post-effective amendment promptly after notification
of the matters to be incorporated in such prospectus supplement or
post-effective amendment pursuant to this clause (i);
(j) furnish to each Holder of Registrable Securities
included in such registration statement, each placement or sales
agent, if any, therefor, each underwriter, if any, thereof and the
respective counsel referred to in Section 2.4(d) an executed copy of
such registration statement, each such amendment and supplement
thereto (in each case including all exhibits thereto and documents
incorporated by reference therein) and such number of copies of such
registration statement (excluding exhibits thereto and documents
incorporated by reference therein unless specifically and reasonably
so requested by such Holder, agent or underwriter, as the case may
be) and of the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus),
in conformity with the requirements of the Securities Act; and the
Company hereby consents to the use of such prospectus (including
such preliminary and summary prospectus) and any amendment or
supplement thereto by each such Holder and by any such agent and
underwriter, if any, in each case in the form most recently provided
to such party by the Company, in connection with the offering and
sale of the Registrable Securities covered by the prospectus
(including such preliminary and summary prospectus) or any
supplement or amendment thereto;
(k) cause all Registrable Securities covered by such
registration to be listed on each securities exchange or
inter-dealer quotation system on which similar securities issued by
the Company are then listed;
(l) provide a transfer agent and registrar for all
Registrable Securities covered by such registration and a CUSIP
number for all such Registrable Securities, in each case not later
than the effective date of such registration;
(m) obtain the consent or approval of each governmental
agency or authority, whether federal, state, provincial or local,
which may be required to effect any such Shelf Registration or the
offering or sale in connection therewith or to enable the selling
Holder or Holders to offer, or to consummate the disposition of,
their Registrable Securities; provided, however, that the Company
shall not be required for any such purpose to (1) qualify as a
foreign corporation in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this
Section 2.4(n) or (2) consent to general service of process or
taxation in any such jurisdiction;
(n) cooperate with the Holders of Registrable Securities
and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates shall not bear any
restrictive legends;
(o) with respect to an underwritten Demand, whether or
not an agreement of the type referred to in Section 2.4(s) hereof is
entered into and whether or not any portion of the offering
contemplated by such registration statement is an underwritten
offering or is made through a placement or sales agent or any other
entity, obtain an opinion or opinions of counsel to the Company in
customary form and covering such other matters of the type
customarily covered by such an opinion, as the managing
underwriters, if any, and as any Holders of at least 25% in
aggregate principal amount of the Registrable Securities to be
included in such Shelf Registration may reasonably request,
addressed to such Holder or Holders and the placement or sales
agent, if any, therefor and the underwriters, if any, thereof and
dated the closing date of such offering; obtain a "cold comfort"
letter or letters from the independent certified public accountants
of the Company addressed to the underwriters, thereof, dated (i) the
effective date of such registration statement, (ii) the effective
date of any prospectus supplement to the prospectus included in such
registration statement or post-effective amendment to such
registration statement which includes unaudited or audited financial
statements as of a date or for a period subsequent to that of the
latest such statements included in such prospectus (and, if such
registration statement contemplates an underwritten offering
pursuant to any prospectus supplement to the prospectus included in
such registration statement or post-effective amendment to such
registration statement which includes unaudited or audited financial
statements as of a date or for a period subsequent to that of the
latest such statements included in such prospectus, dated the date
of the closing under the underwriting agreement relating thereto),
such letter or letters to be in customary form and covering such
matters of the type customarily covered by letters of such type;
deliver such documents and certificates, including officers'
certificates, as may be reasonably requested by any Holders of at
least 25% in aggregate principal amount of the Registrable
Securities to be included in such Shelf Registration and the
placement or sales agent, if any, therefor and the managing
underwriters, if any, thereof to evidence the accuracy of the
representations and warranties contained in Section 3 hereof and the
compliance with or satisfaction of any agreements or conditions
contained in the underwriting agreement or other agreement entered
into by the Company; and undertake such obligations relating to
expense reimbursement, indemnification and contribution as are
provided in Section 2.7 hereof;
(p) in the event that any broker-dealer registered under
the Exchange Act shall underwrite any Registrable 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 Conduct (the "RULES OF CONDUCT") of the National
Association of Securities Dealers, Inc. ("NASD") thereof, whether as
a holder of such Registrable Securities or as an underwriter, a
placement or sales agent or a broker or dealer in respect thereof,
or otherwise use its reasonable best efforts to assist such
broker-dealer in complying with the requirements of such Rules of
Conduct, including, without limitation, by providing such
information to such broker-dealer as may be required in order for
such broker-dealer to comply with the requirements of the Rules of
Conduct;
(q) otherwise comply with all applicable rules and
regulations of the Commission and make available to its security
holders, as soon as reasonably practicable but in no event later
than eighteen months after the effective date of such registration
statement, an earnings statement covering the period of at least
twelve months, but not more than 18 months, beginning with the first
month after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act (including, at the option of the Company, Rule
158 thereunder); and
(r) in connection with any underwritten Demand
Registration, the Company will enter into an underwriting agreement
reasonably satisfactory to the Initiating Holders containing
customary underwriting provisions, including indemnification and
contribution provisions.
2.5. Delivery of Prospectus Supplement. Subject to Section
2.1(b), in the event that the Company would be required, pursuant to
Section 2.4(h) above, to notify the selling Holders of Registrable
Securities, the placement or sales agent, if any, therefor and the managing
underwriters, if any, thereof, the Company shall as soon as reasonably
practicable prepare and furnish to each such Holder, to each placement or
sales agent, if any, and to each underwriter, if any, a reasonable number
of copies of a prospectus supplemented or amended so that, as thereafter
delivered to initial purchasers of Registrable Securities, such prospectus
shall not 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 in light of the circumstances then
existing. Each Holder of Registrable Securities agrees that upon receipt of
any notice from the Company pursuant to Section 2.4(h) hereof, such Holder
shall forthwith discontinue the disposition of Registrable Securities
pursuant to the registration statement applicable to such Registrable
Securities until such Holder shall have received copies of such amended or
supplemented prospectus, and if so directed by the Company, such Holder
shall deliver to the Company (at the Company's expense) all copies, other
than permanent file copies, then in such Holder's possession of the
prospectus covering such Registrable Securities at the time of receipt of
such notice.
2.6. Furnishing Information by the Holders. The Company may
require each Holder of Registrable Securities as to which any registration
is being effected to furnish to the Company such information regarding such
Holder and such Holder's intended method of distribution of such
Registrable Securities as the Company may from time to time reasonably
request in writing, but only to the extent that such information is
required in order to comply with the Securities Act. Each such Holder
agrees to notify the Company as promptly as practicable of any inaccuracy
or change in information previously furnished by such Holder to the Company
or of the occurrence of any event in either case as a result of which any
prospectus relating to such registration contains or would contain an
untrue statement of a material fact regarding such Holder or such Holder's
intended method of distribution of such Registrable Securities or omits to
state any material fact regarding such Holder or such Holder's intended
method of distribution of such Registrable Securities required to be stated
therein or necessary to make the statements therein not misleading in light
of the circumstances then existing, and promptly to furnish information so
required so that such prospectus shall not contain, with respect to such
Holder or the distribution of such Registrable Securities, 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 in light of the circumstances then existing.
2.7. Indemnification.
(a) The Company will indemnify each Holder whose
Registrable Securities are to be included in a registration pursuant
to this Article II, each of such Holder's officers, directors,
partners, agents, employees and representatives and each person
controlling such Holder within the meaning of Section 15 of the
Securities Act, with respect to each registration, qualification or
compliance effected pursuant to this Article II, against all
expenses, claims, losses, damages and liabilities (or actions,
proceedings or settlements in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement, prospectus,
or other document incorporated by reference therein, or compliance,
or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each such
indemnified person for any legal and any other expenses reasonably
incurred in connection with investigating and defending or settling
any such claim, loss, damage, liability or action; provided,
however, that the Company will not be liable in any such case to a
Holder to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company by
such Holder and provided for use in such registration statement,
prospectus, offering circular or other document or the Holder
delivered a registration or prospectus in violation of Section 2.5
hereof after notice was provided by the Company as provided in
Section 2.5. It is agreed that the indemnity agreement contained in
this Section 2.7(a) shall not apply to amounts paid in settlement of
any such loss, claim, damage, liability or action if such settlement
is effected without the consent of the Company (which consent shall
not be unreasonably withheld or delayed).
(b) Each Holder whose Registrable Securities are
included in any registration effected pursuant to this Article II
shall indemnify the Company, each of its directors, officers,
agents, employees and representatives, and each Person who controls
the Company within the meaning of Section 15 of the Securities Act,
each other such Holder and each of their officers, directors,
partners, agents, employees and representatives and each person
controlling such Holder, and each underwriter, if any, of such
Registrable Securities and each Person who controls any such
underwriter, against all expenses, claims, losses, damages and
liabilities (or actions, proceedings or settlements in respect
thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document incident
to such registration, qualification or compliance, or any omission
(or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and will reimburse such indemnified persons for any
legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability
or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and
in strict conformity with written information furnished to the
Company by such Holder and provided specifically for use therein;
provided, however, that (x) no Holder shall be liable hereunder for
any amounts in excess of the gross proceeds received by such Holder
pursuant to such registration, and (y) the obligations of such
Holder hereunder shall not apply to amounts paid in settlement of
any such claims, losses, damages or liabilities (or actions in
respect thereof) if such settlement is effected without the consent
of such Holder (which consent shall not be unreasonably withheld).
(c) Each party entitled to indemnification under this
Section 2.7 (the "INDEMNIFIED PARTY") shall give notice to the party
required to provide indemnification (the "INDEMNIFYING PARTY")
promptly after such Indemnified Party has actual knowledge of any
claim as to which indemnity may be sought and shall permit the
Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or
any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld
or delayed, the Company herein and hereby approving Irell & ▇▇▇▇▇▇▇
LLP as counsel to GEI for the purposes of this Section 2.7(c)), and
the Indemnified Party may participate in such defense with counsel
reasonably acceptable to and paid for by the Indemnifying Party but
otherwise at the Indemnified Party's expense, and provided, further,
that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations
under this Section 2.7 to the extent such failure is not materially
prejudicial. No Indemnifying Party in the defense of any such claim
or litigation shall except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement
which does not include an unconditional release of such Indemnified
Party from all liability in respect of such claim or litigation.
Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting
therefrom.
(d) If the indemnification provided for in this Section
2.7 is held by a court of competent jurisdiction to be unavailable
to an Indemnified Party with respect to any loss, liability, claim,
damage or expense referred to therein, then the Indemnifying Party,
in lieu of indemnifying such Indemnified Party hereunder, shall
contribute to the amount paid or payable by such Indemnified Party
as a result of such loss, liability, claim, damage or expense in
such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party
on the other in connection with the statements or omissions which
resulted in such loss, liability, claim, damage or expense as well
as any other relevant equitable considerations. The relative fault
of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or 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.
(e) Notwithstanding the foregoing, to the extent that
the provisions on indemnification and contribution contained in an
underwriting agreement entered into in connection with an
underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall
control.
2.8. Other Obligations. With a view to making available the
benefits of certain rules and regulations of the Commission which may
effectuate the registration of Registrable Securities or permit the sale of
Registrable Securities to the public without registration, the Company
agrees to:
(a) exercise best efforts to cause the Company to be
eligible to utilize Form S-3 (or any similar form) for the
registration of Securities;
(b) at such time as any Registrable Securities are
eligible for transfer under Rule 144(k), upon the request of the
holder of such Registrable Securities, remove any restrictive legend
from the certificates evidencing such Registrable Securities at no
cost to such holder;
(c) make and keep available public information as
defined in Rule 144 under the Securities Act at all times;
(d) file with the Commission in a timely manner all
reports and other documents required of the Company under the
Securities Act and the Exchange Act at any time after it has become
subject to such reporting requirements; and
(e) furnish any Holder upon request a written statement
by the Company as to its compliance with the reporting requirements
of Rule 144 (at any time from and after 90 days following the
effective date of the first registration statement filed by the
Company for an offering of its securities to the general public),
and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), a copy of the
most recent annual or quarterly report of the Company, and such
other reports and documents as a Holder may reasonably request in
availing itself of any rule or regulation of the Commission
(including Rule 144A) allowing a holder of Registrable Securities to
sell any such Registrable Securities without registration.
2.9. Hold-Back Agreements. If requested by the Company or any
underwriter of securities of the Company, Holders shall not sell or
otherwise transfer or dispose of any Securities (other than pursuant to
such registration) during the period 15 days prior to and 90 days following
the effective date of registration statement relating to the offering of
the Company's Securities for its own account or such longer period that the
underwriters may reasonably request. The obligations described in this
Section 2.9 shall not apply to a registration on Form S-4 or Form S-8 or
similar forms which may be promulgated in the future and shall not apply to
a Holder holding less than 1% of the then-outstanding Securities.
ARTICLE III.
Representations and Warranties
The Company represents and warrants to, and agrees with, GEI
and each of the Holders from time to time of Registrable Securities that:
(a) The compliance by the Company with all of the
provisions of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or result in
a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or
any subsidiary of the Company is a party or by which the Company or
any subsidiary of the Company is bound or to which any of the
property or assets of the Company or any subsidiary of the Company
is subject nor will such action result in any violation of the
provisions of the certificate of incorporation or by-laws of the
Company or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company
or any subsidiary of the Company or any of their properties; and no
consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or
body is required for the consummation by the Company of the
transactions contemplated by this Agreement, except the registration
under the Securities Act of the Registrable Securities, and such
consents, approvals, authorizations, registrations or qualifications
as may be required under State securities or blue sky laws in
connection with the offering and distribution of the Registrable
Securities.
(b) This Agreement has been duly authorized, executed
and delivered by the Company.
ARTICLE IV.
Termination
This Agreement shall terminate immediately following the
moment at which there exist no Securities that constitute Registrable
Securities; provided, however, that Section 2.7 hereof shall survive
indefinitely.
ARTICLE V.
Miscellaneous
5.1. Recapitalization, Exchanges, etc. Affecting the Common
Stock. The provisions of this Agreement shall apply to the full extent set
forth herein with respect to (a) the Registrable Securities and (b) any and
all shares of capital stock of the Company or any successor or assign of
the Company (whether by merger, consolidation, sale of assets or otherwise)
which may be issued in respect of, in exchange for, or in substitution for
the Registrable Securities, by reason of any stock dividend (including,
without limitation, a payment-in-kind dividend paid on the Preferred
Stock), split, reverse split, combination, recapitalization,
reclassification, merger, consolidation or otherwise. In the event of any
change in the capitalization of the Company as a result of any stock split,
stock dividend or stock combination, the provisions of this Agreement shall
be appropriately adjusted.
5.2. Injunctive Relief. It is hereby agreed and acknowledged
that it will be impossible to measure in money the damages that would be
suffered if the parties fail to comply with any of the obligations herein
imposed on them and that in the event of any such failure, an aggrieved
Person will be irreparably damaged and will not have an adequate remedy at
law. Any such Person shall, therefore, in addition to any other remedies
available under applicable law, be entitled to injunctive relief, including
specific performance, to enforce such obligations, without the posting of
any bond, and if any action should be brought in equity to enforce any of
the provisions of this Agreement, none of the parties hereto shall raise
the defense that there is an adequate remedy at law.
5.3. Parties in Interest. All the terms and provisions of
this Agreement shall be binding upon, shall inure to the benefit of and
shall be enforceable by the respective successors and assigns of the
parties hereto. In the event that any transferee of any Holder of
Registrable Securities shall acquire Registrable Securities, in any manner,
whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing of any kind, be deemed a
party hereto for all purposes and such Registrable Securities shall be held
subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such transferee shall be entitled to receive
the benefits of and be conclusively deemed to have agreed to be bound by
and to perform all of the terms and provisions of this Agreement.
5.4. Survival. The respective indemnities, agreements,
representations, warranties and each other Provision set forth in this
Agreement or made pursuant hereto shall remain in full force and effect
regardless of any investigation (or statements as to the results thereto)
made by or on behalf of any Holder of Registrable Securities, any director,
officer or partner of such Holder, any agent or underwriter or any
director, officer or partner thereof, or any controlling person of any of
the foregoing, and shall survive delivery of and payment for the
Registrable Securities pursuant to the Letter Agreement and the transfer of
Registrable Securities by such Holder.
5.5. Amendment; Waiver.
(a) This Agreement may be amended only by a written
instrument signed by the Company and by Holders holding more than
66% of the then outstanding Registrable Securities and, in the case
of any amendment that adversely affects any Holder or all of the
members of any group of Holders differently from any of the other
Holders, by such Holder or the holders of more than 66% in interest
of the Securities held by such group of Holders.
(b) No provision of this Agreement may be waived orally,
but only by a written instrument signed by the party against whom
enforcement of such wavier is sought. Holders shall be bound from
and after the date of the receipt of a written notice from the
Company setting forth such amendment or waiver, whether or not the
Registrable Securities shall have been marked to indicate such
amendment or waiver.
5.6. Notices. Except as otherwise provided in this Agreement,
notices and other communications under this Agreement shall be in writing
(including a writing delivered by facsimile transmission) and shall be
deemed to have been duly given if delivered personally, or sent by either
certified or registered mail, return receipt requested, postage prepaid, or
by overnight courier guaranteeing next day delivery, or by telex or
telecopier, at the following addresses:
if to the Company:
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
if to GEI:
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Partners, L.P.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Irell & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
GEI may, by written notice given to the Company in accordance with this
Section 4.5, change the address to which such notice or other
communications are to be sent to it. All such notices and communications
shall be deemed to have been given on the date of delivery thereof, if
delivered by hand, on the fifth day after the mailing thereof, if mailed,
on the next day after the sending thereof, if by overnight courier and when
receipt is acknowledged, if telecopied.
5.7. Inspection. So long as this Agreement shall be in
effect, this Agreement and any amendments hereto shall be made available
for inspection by any Holder at the principal offices of the Company.
5.8. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
5.9. Headings. Article, section and paragraph headings are
inserted for convenience only and do not constitute a part of this
Agreement.
5.10. Integration. This Agreement and the documents referred
to herein or delivered pursuant hereto which form a part hereof contain the
entire understanding of the parties with respect to the subject matter
hereof. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter
hereof other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to this subject matter.
5.11. Illegality. In case any provision in this Agreement
shall be declared or held invalid, illegal or unenforceable, in whole or in
part, whether generally or in any particular jurisdiction, such provision
shall be deemed amended to the extent, but only to the extent, necessary to
cure such invalidity, illegality or unenforceability, and the validity,
legality and enforceability of the remaining provisions, both generally and
in every other jurisdiction, shall not in any way be affected or impaired
thereby.
5.12. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument, and it shall not be
necessary in making proof of this Agreement to produce or account for more
than one such counterpart.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth above.
RITE AID CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Senior Executive Vice President,
General Counsel and Secretary
GREEN EQUITY INVESTORS III, L.P.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Partners, L.P.
By: LGP Management, Inc.
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
_________________________
