AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JANUARY 31, 2005
By and Among
RITE AID CORPORATION
and
GREEN EQUITY INVESTORS III, L.P.
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This Amended and Restated Registration Rights Agreement (this "Agreement")
is made and entered into as of January 31, 2005, 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, the Company and GEI have previously entered into a Registration
Rights Agreement dated as of October 27, 1999, as amended by Amendment No. 1
dated as of October 3, 2001 (as amended, the "Registration Rights Agreement");
and
WHEREAS, the Company and GEI have entered into a Redemption and Exchange
Agreement dated as of January 25, 2005 (the "Redemption and Exchange
Agreement"), pursuant to which the Company will redeem 1,040,000 shares of the
Company's 8% Series D Cumulative Convertible Pay-in-Kind Preferred Stock (the
"Series D Preferred Stock") held by GEI, and the remaining 3,482,437 shares of
Series D Preferred Stock will be exchanged for 1,160,812.2171 shares of the
Company's Series F Preferred Stock (as defined herein), 1,160,812.2171 shares of
the Company's Series G Preferred Stock (as defined herein) and 1,160,812.2171
shares of the Company's Series H Preferred Stock (as defined herein); and
WHEREAS, pursuant to Section 5.1 of the Registration Rights Agreement, the
Registration Rights Agreement is to be adjusted to account for certain changes
to the Company's capitalization; and
WHEREAS, the Company and GEI desire to amend and restate the Registration
Rights Agreement in order to account for the transactions contemplated by the
Redemption and Exchange 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 "Preferred Stock" shall collectively mean the Series F Preferred Stock,
Series G Preferred Stock and Series H Preferred Stock.
1.7 "Registrable Securities" shall mean each series of Preferred Stock
and/or the Common Stock issued or issuable upon conversion of the 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.
1.8 "Rule 144" shall mean Rule 144 promulgated under the Securities Act.
1.9 "Securities" shall mean the Preferred Stock or the Common Stock.
1.10 "Securities Act" shall mean Securities Act of 1933, as amended, or any
federal statute then in effect which has replaced such statute.
1.11 "Series F Preferred Stock" shall mean the Company's 8% Series F
Cumulative Convertible Pay-in-Kind Preferred Stock, par value $1.00 per share,
liquidation preference $100 per share.
1.12 "Series G Preferred Stock" shall mean the Company's 7% Series G
Cumulative Convertible Pay-in-Kind Preferred Stock, par value $1.00 per share,
liquidation preference $100 per share.
2
1.13 "Series H Preferred Stock" shall mean the Company's 6% Series H
Cumulative Convertible Pay-in-Kind Preferred Stock, par value $1.00 per share,
liquidation preference $100 per share.
ARTICLE II
Public Offering Pursuant to Registration Rights
2.1 Demand Registrations.
(a) Holders of Registrable Securities representing not less than (x)
30% of any series of Preferred Stock, or (y) if such request is made by Holders
of more than one series of Preferred Stock, 10% of the then-outstanding
Registrable Securities (for purposes of calculating (x) and (y), any Preferred
Stock is to be measured as the number of shares of Common Stock issuable upon
conversion of such Preferred Stock at the then applicable conversion rate on
such series of Preferred Stock) (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 any series of Preferred Stock or at least 10% of the Common Sock
issued or issuable upon conversion of all series of Preferred Stock, if the
request is made by Holders of more than one series of Preferred Stock (or such
lesser amount representing all remaining Registrable Securities) (a "Common
Stock Registration"), and (ii) with respect to a series of Preferred Stock with
an anticipated offering or sale price of $30,000,000 (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. For purposes of a
Preferred Stock Registration, only shares of the same series of Preferred Stock
will be considered "like kind." Notwithstanding anything in this Section 2.1(a)
to the contrary, the Holders will collectively be entitled to no more than an
aggregate of four (4) Demand Registrations under this Section 2.1(a) and Section
2.1(d). The Company shall not be obligated to effect more than three of such
Demand Registrations under this Section 2.1(a) by means of an underwriting
pursuant to Section 2.1(c).
(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
3
corporate transaction (as evidenced by an appropriate resolution of the Board)
of the Company or would require the disclosure of material non-public
information, the disclosure of which is not otherwise then required, in the
opinion of counsel to the Company, under applicable provisions of the Securities
Act, the Securities Exchange Act of 1934, as amended, or the rules of the New
York Stock Exchange (if the Common Stock is then listed on the New York Stock
Exchange) 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 requested pursuant to Section 2.1(a)
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. If the Initiating Holders expect
to enter into a "take down" underwriting agreement from time to time in
connection with a Shelf Registration (defined below), the Initiating Holders
shall similarly so advise the Company as part of their demand made pursuant to
Section 2.1(a) and (d). 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.
4
(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 included in such Shelf Registration
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 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
5
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. Notwithstanding anything
to the contrary continued in this Section 2.2, Piggyback Registration rights do
not extend to any underwritten take-down off of a shelf registration statement,
whether such registration statement is filed pursuant to Section 2.1(d) or
otherwise, nor shall other holders of the Company's securities included in a
Shelf Registration filed pursuant to Section 2.1(d) have piggyback registration
rights on an underwritten take-down by the Initiating Holders of such Shelf
Registration.
(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 (i)
up to four Demand Registrations in the aggregate under Section 2.1(a) and (d)
(except as to certain underwritten take-down transactions in respect of a Shelf
Registration filed pursuant to Section 2.1(d) described below, and (ii) 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 ▇▇▇▇▇▇, ▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP is acceptable counsel). All underwriting discounts, selling
commissions and other similar fees relating to Registrable Securities included
in any Demand or Piggyback Registration or underwritten take-down off of a Shelf
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.
Notwithstanding anything to the contrary contained in this Agreement, the
Company shall not be obligated to bear the expense of performing its obligations
under more than one underwritten take-down agreement in respect of a Shelf
Registration under Section 2.1(d) in any 180-day period. If requested by the
Initiating Holders of a Shelf Registration, the Company shall reasonably
cooperate in respect to additional such underwritten take-down agreements as
described herein, including by entering into such an agreement upon customary
terms as described in Section 2.4(r), provided that the Initiating Holders
undertake to reimburse the Company for all of its out-of-pocket expenses
incurred in connection therewith, including the reasonable fees and expenses of
the Company's outside counsel and accountants, whether or not the take-down
transaction is consummated. The Holders participating in such additional
underwritten take-downs shall pay all of such Company
6
expenses. The Company's agreement to reasonably cooperate with respect to such
additional underwritten take-downs shall not be interpreted as the Company or
its officers or directors agreeing to be bound by a hold-back or lock-up
agreement.
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
included in such registration statement 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 reasonably 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, but not including any
documents incorporated by reference into such registration statement;
(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
7
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 2.1(d) 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(e)
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
8
purpose, (D) 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 (E) 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;
9
(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(m) 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 Registration and subject to
the limitations contained in Section 2.1(c), whether or not an agreement of the
type referred to in Section 2.4(r) 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
10
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 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(g) 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(g) 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
11
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
12
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
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ 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
13
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
14
(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
[Intentionally left blank]
15
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.
16
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 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 or any series of
Preferred Stock differently from any of the other Holders or series of Preferred
Stock, by such Holder or the holders of more than 66% in interest of the
Securities held by such group of Holders or series of Preferred Stock.
(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:
17
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Partners, L.P.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
GEI may, by written notice given to the Company in accordance with this Section
5.6, 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
18
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.
19
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date set forth above.
RITE AID CORPORATION
By:
------------------------------------
Name: ▇▇▇▇▇▇ ▇. Sari, Esq.
Title: Senior Vice President,
General Counsel and Secretary
GREEN EQUITY INVESTORS III, L.P.
By: GEI Capital III, its General Partner
By:
--------------------------------
Manager
20
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
Certain Definitions
1.1 "Common Stock"..........................................................1
1.2 "Exchange Act"..........................................................2
1.3 "Group".................................................................2
1.4 "Holder"................................................................2
1.5 "Person"................................................................2
1.6 "Preferred Stock".......................................................2
1.7 "Registrable Securities"................................................2
1.8 "Rule 144"..............................................................2
1.9 "Securities"............................................................2
1.10 "Securities Act"........................................................2
1.11 "Series F Preferred Stock"..............................................2
1.12 "Series G Preferred Stock"..............................................2
1.13 "Series H Preferred Stock"..............................................3
ARTICLE II
Public Offering Pursuant to Registration Rights
2.1 Demand Registrations....................................................3
2.2 Piggyback Registration..................................................5
2.3 Expenses of Registration................................................6
2.4 Registration Procedures.................................................7
2.5 Delivery of Prospectus Supplement......................................11
2.6 Furnishing Information by the Holders..................................12
2.7 Indemnification........................................................12
2.8 Other Obligations......................................................14
2.9 Hold-Back Agreements...................................................15
ARTICLE III
[Intentionally left blank]
ARTICLE IV
Termination
ARTICLE V
Miscellaneous
5.1 Recapitalization, Exchanges, etc. Affecting the Common Stock...........16
5.2 Injunctive Relief......................................................16
5.3 Parties in Interest....................................................16
5.4 Survival...............................................................17
5.5 Amendment; Waiver......................................................17
5.6 Notices................................................................17
5.7 Inspection.............................................................18
5.8 APPLICABLE LAW.........................................................18
5.9 Headings...............................................................18
5.10 Integration............................................................18
5.11 Illegality.............................................................18
5.12 Counterparts...........................................................19
ii