REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into as of June 28, 1999, by and among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (each of whom may
be referred to herein as a "Holder" or collectively as the "Holders") and Dollar
Tree Stores, Inc., a Virginia corporation (the "Company").
This Agreement is made in connection with the acquisition by the
Company of 100% of the capital stock of ▇▇▇▇▇'▇ Merchandising, Inc., a New York
corporation ("TMI"), pursuant to a Merger Agreement, dated June 15, 1999 as
amended by Amendment dated June 22, 1999 (the "Merger Agreement"), under which a
wholly-owned subsidiary of the Company will merge with and into TMI ("Merger").
As a result of the Merger, the Holders will exchange of their interests in TMI
for an aggregate number of shares of common stock, $0.01 par value per share
("Common Stock"), of the Company as determined pursuant to section 2.1 of the
Merger Agreement. As used herein the term "Registrable Shares" shall mean the
shares of Common Stock received by Holders upon the original issuance thereof in
the Merger and any other shares of capital stock of the Company issued in
respect of any such shares of Common Stock as a result of stock splits, stock
dividends, reclassification, exchange offer, recapitalizations, mergers,
consolidations or similar events.
The parties hereby agree as follows:
1. Shelf Registration.
(a) The Company shall prepare or amend and file with the
Securities and Exchange Commission ("Commission"), a registration statement for
an offering to be made on a continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended ("Securities Act"), covering the Registrable
Shares ("Shelf Registration"). The Shelf Registration shall be on Form S-3 or
any similar form adopted by the Commission from and after the date hereof
permitting registration of the Registrable Shares for resale by the Holders in
the manner designated herein. The Company shall use commercially reasonable
efforts (subject in all cases to any procedures and limitations which may be
imposed by the staff of the Commission) to (i) file the Shelf Registration with
the Commission within 14 days following the Effective Time of
Registration Rights Agreement -- Page 1
the Merger as defined in the Merger Agreement ("Effective Time"), (ii) cause the
Shelf Registration to be declared effective under the Securities Act as soon as
practicable following the Effective Time, and (iii) keep the Shelf Registration
continuously effective under the Securities Act for a period ending on the
soonest of (A) two years from the Effective Time, (B) the date when, in the
opinion of counsel of the Company, all Registrable Shares are disposable without
restriction under any applicable rules and regulations of the Commission, and
(C) the date when all Registrable Shares covered by the Shelf Registration have
been disposed of by Holders; provided, however, that the Company may voluntarily
suspend dispositions of Registrable Shares pursuant to such Shelf Registration
for up to 90 days if the Company's Board of Directors makes a determination
(based upon advice of counsel) that the offering of the Registrable Shares
pursuant to the Shelf Registration would adversely affect or be affected by a
proposed financing, stock offering, reorganization, recapitalization, merger,
consolidation or similar transaction involving the Company, in which case the
Company shall be required to keep such Shelf Registration effective for an
additional period of time equal to the number of days the effectiveness thereof
is suspended pursuant to this clause; provided, that the Company shall not be
permitted to suspend sales pursuant to the Shelf Registration for more than 120
days in any 365-day period. The Company shall amend the registration statement
as necessary to comply with the rules, regulations or instructions applicable to
Form S-3 (or, if different, the form used for the registration statement) or by
the Securities Act or by any other rules and regulations thereunder for "shelf"
registration, and the Company shall furnish to the Holders copies of any such
amendment promptly after its being filed with the Commission. Anything in this
Agreement to the contrary notwithstanding, the Company shall have no obligation
to provide an underwritten registration for the benefit of Holders.
(b) The Registrable Shares proposed to be sold pursuant to the
Shelf Registration effected pursuant to this Section 1, which shall be block
trades if requested by the approved broker-dealer, shall be sold through
broker-dealers selected by the Holders subject to the reasonable approval of
Company.
(c) The Company may include in any such Shelf Registration
referred to in this Section 1 other shares of Common Stock of the Company held
by other security holders of the Company who have registration rights.
(d) Notwithstanding any other provision of this Agreement, the
Company shall not be required to effect a registration of any Common Stock under
this Section 1, or file any post-effective amendment to such a registration
unless the Company has received from Holders all information the Company has
reasonably requested pursuant to Section 3.
2. Company's Obligations. In connection with the Company's obligation
to effect a Shelf Registration pursuant to Section 1, it shall:
Registration Rights Agreement -- Page 2
(a) Notify the Holders as to the filing thereof and of all
amendments or supplements thereto filed prior to the effective date of such
Shelf Registration;
(b) Notify the Holders, when the Company receives notice
thereof, of the time when such Shelf Registration became effective or any
amendment or supplement to any prospectus forming a part of such Shelf
Registration has been filed;
(c) Notify the Holders of any request by the Commission for
the amending or supplementing of such Shelf Registration or prospectus or for
additional information;
(d) Prepare and file with the Commission any amendments or
supplements to such Shelf Registration and the prospectus which may reasonably
be necessary in the opinion of counsel to the Company to keep such Shelf
Registration effective and to comply with the provisions of the Securities Act
with respect to the offer of the Registrable Shares covered by such Shelf
Registration during the period required for the distribution of such securities;
(e) Prepare and file with the Commission (and promptly notify
the Holders of such filing) any amendment or supplement to such Shelf
Registration and the prospectus as may be necessary in the opinion of counsel to
the Company to correct any statements therein or omission therefrom if, at any
time when a prospectus relating to such Registrable Shares is required to be
delivered under the Securities Act, any event with respect to the Company shall
have occurred as a result of which any prospectus would include an untrue
statement of material fact or omit to state any material fact necessary to make
the statements therein not misleading;
(f) In case the Holders are required to deliver a prospectus,
prepare upon request such amendment or amendments to such Shelf Registration and
such prospectus or prospectuses as may reasonably be necessary in the opinion of
counsel to the Company to permit compliance with the requirements of Section
9(a)(3) of the Securities Act;
(g) Advise the Holders if the Company shall receive notice or
obtain knowledge of the issuance of any stop order by the Commission suspending
the effectiveness of any such Shelf Registration or amendment thereto or of the
initiation or threatening of any proceedings for that purpose;
(h) Use its reasonable efforts to qualify such Registrable
Shares for sale under the securities or blue sky laws of such states within the
United States as the Holders may reasonably designate, except that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business in any such state or to take any action which would
subject it to general service of process in any such jurisdiction where it is
not then so qualified or subject;
Registration Rights Agreement -- Page 3
(i) Furnish to the Holders copies of any such Shelf
Registration and each preliminary or final prospectus, or supplement or
amendment required to be prepared thereto, all in such quantities required as
they may from time to time reasonably request (in which case each Holder shall
keep a written record of the distribution of the preliminary or final
prospectuses and shall refrain from delivery of the preliminary or final
prospectuses in any manner or under any circumstances which would violate the
Securities Act or the securities laws of any other jurisdiction, including the
various states of the United States); and
(j) Cause such Registrable Shares to be listed on the
principal securities exchange or quotation system, if any, on which shares of
the Company's Common Stock shall then be listed.
Each Holder of Registrable Shares agrees by acquisition of
such Registrable Shares that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 2(e) hereof, such Holder
will forthwith discontinue disposition of Registrable Shares until such Holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 2(e) hereof, or until it is advised in writing by the Company that the
use of the prospectus may be resumed, and has received copies of any additional
or supplemental filings that are incorporated by reference in the prospectus,
and, if so directed by the Company, such Holder will deliver to the Company all
copies then in such Holder's possession of the prospectus covering such
Registrable Shares current at the time of receipt of such notice.
3. Holders' Obligation to Furnish Information. In connection with the
Company's obligation to effect a Shelf Registration pursuant to Section 1, each
Holder shall furnish information to the Company concerning such Holder's
holdings of securities of the Company and the proposed method of sale or other
disposition of the Registrable Shares and such other information and
undertakings as the Company may reasonably request in connection with the
preparation and filing of the Shelf Registration or any post-effective amendment
covering all or part of the Registrable Shares. Each Holder further agrees to
enter into such undertakings and take such other action relating to the conduct
of the proposed offering which the Company may reasonably request as being
necessary, in the opinion of counsel to the Company, to ensure compliance with
the federal and state securities laws and the rules or other requirements of the
National Association of Securities Dealers, Inc. ("NASD") or otherwise to
effectuate the offering.
4. Expenses. The Company shall pay all expenses (the "Registration
Expenses") incident to each registration of the Registrable Shares under Section
1, including, without limitation, all registration, filing and NASD fees, all
fees and expenses of complying with state securities or blue sky laws, all fees
and expenses incurred by the Company in connection with the listing, if any, of
the Registrable Securities on any securities exchange or quotation system, all
word processing, duplicating and printing expenses, all fees and expenses
incurred by the
Registration Rights Agreement -- Page 4
Company in connection with any registration statement, any prospectus, any
amendments or supplements thereto, and other documents relating to the
performance of and compliance with this Agreement by the Company, messenger and
delivery expenses, the fees and disbursements of counsel for the Company and of
its independent public accountants, including, without limitation, the expenses
of any special audits or "cold comfort" letters required by or incident to such
performance and compliance, premiums and other costs of policies of insurance
purchased by the Company at its option against liabilities arising out of the
public offering of such Registrable Shares, but excluding discounts and
commissions and fees and expenses of selling brokers, dealer managers or similar
securities industry professionals relating to the distribution of the
Registrable Shares, transfer taxes, fees and disbursements of counsel for any
selling shareholder(s) and other selling expenses of the Holders, if any.
5. Indemnification.
(a) By the Company. In the event of any registration of the
Registrable Shares of the Company under the Securities Act, the Company will,
and hereby does, indemnify and hold harmless the Holders with respect to the
Registrable Shares included in such registration, against any losses, claims,
damages or liabilities which Holders may suffer under the Securities Act,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement of any material fact contained in any
Registration Statement under which such securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances in which
they were made not misleading; PROVIDED HOWEVER that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Holder for use therein; and PROVIDED FURTHER that
the Company shall not be liable to any person in any such case to the extent
that any such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of such person's failure to send or give a copy
of the final prospectus, as the same may be then supplemented or amended, to the
person asserting an untrue statement or omission at or prior to written
confirmation of the sale of the Registrable Shares to such person if such
statement or omission was corrected in such final prospectus as amended or
supplemented, and such final prospectus as amended or supplemented was furnished
by the Company to such person.
(b) By the Holders. Each Holder agrees that, as a condition to
including any Registrable Shares in any Shelf Registration filed pursuant to
Section 1, that each such Holder
Registration Rights Agreement -- Page 5
hereby does, jointly and severally, indemnify and hold harmless against any
losses, claims, damages or liabilities which the Company, each director of the
Company, each officer of the Company, each other person (other than the Holders)
who participates in the offering or sale of such securities and each other
person, if any, who controls the foregoing parties within the meaning of the
Securities Act may suffer under the Securities Act, insofar as such losses,
claims, damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any statement or
alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, only if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Holder for use therein; provided that the
obligations of such Holder to indemnify the Company shall be limited to the
proceeds received by the Seller from the sale of such Registrable Securities
pursuant to such Registration Statement. Such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling person and shall survive
the transfer of such securities by such Holder.
The Company shall be entitled to receive indemnities from
selling brokers, dealer managers and similar securities industry professionals
participating in the distribution or sale, to the same extent as provided above
with respect to information so furnished in writing by such persons.
(c) Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding subdivisions of this Section 5,
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the commencement of
such action; provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding paragraphs of this Section 5, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
consent of the indemnified party, consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term thereof, the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation.
Registration Rights Agreement -- Page 6
(d) Other Indemnification. Indemnification similar to that
specified in paragraphs (a) through (c) of this Section 5 (with appropriate
modifications) shall be given by the Company and the Holders with respect to any
required registration or other qualification of the Registrable Shares under any
Federal or state law or regulation or any governmental authority other than the
Securities Act.
(e) Indemnification Payment. The indemnification required by
this Section 5 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
(f) Contribution. If the indemnification provided for in this
Agreement shall for any reason be unavailable or insufficient (other than by
reason of exceptions provided in those sections) to an indemnified party under
paragraphs (a), (b) and (d) of this Section 5 in respect to any loss, claim,
damage or liability, or any action in respect thereof, or referred to therein,
then each indemnifying party shall, in lieu of indemnifying such party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, in such
proportion as shall be appropriate to reflect the relative fault of the Company
on the one hand and any Holder on the other, with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or such Holder, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 5 were to be determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to in this Section 5 shall be deemed to
include, for purposes of this Section 5, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim. 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.
6. Amendments and Waivers. This Agreement may be amended and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of Holders of a
majority of the Registrable Shares.
7. Notices. Any notice from one party to the other shall be in writing
and either delivered personally or by certified or registered mail, postage
prepaid, or by telegram, telecopier, or by overnight mail delivery by a
nationally recognized courier, and shall be deemed
Registration Rights Agreement -- Page 7
given when so delivered personally or, if mailed or given by telegram or
telecopier or overnight mail, upon receipt thereof by the addressees, as
follows:
If to the Company:
Dollar Tree Stores, Inc.
Attention: Mr. H. ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. Old, Jr., Esq.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Holder, in care of:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Steates ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
8. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns as hereinafter set forth in this Section 8.
Provided an express written assumption of the Holder's obligations hereunder and
certain representations in a form reasonably acceptable to Company is
Registration Rights Agreement -- Page 8
made, the provisions of this Agreement which are for the benefit of the Holders
shall also be for the benefit of and enforceable by any subsequent holder
receiving Registrable Shares by gift or bequest by a Holder ("Subsequent
Holders").
9. Descriptive Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
10. Governing Law. The validity of this Agreement and all matters
relating to its interpretation and performance shall be interpreted in
accordance with the laws of the Commonwealth of Virginia applicable to contracts
made and fully performed therein, but without regard to principles of conflicts
of law. The courts in Norfolk, Virginia shall have exclusive jurisdiction over
any controversy arising under this Agreement and venue in Norfolk, Virginia is
appropriate.
11. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
12. Entire Agreement; Amendment. This Agreement contains all of the
terms agreed upon by the parties with respect to the subject matter herein and
there are no representations or understandings between the parties except as
provided in this Agreement. This Agreement may not be amended or modified in any
way except by a written amendment duly executed by each of the parties.
IN WITNESS WHEREOF, the parties have caused this Registration
Rights Agreement to be executed and delivered as of the date first above
written.
DOLLAR TREE STORES, INC.
By: /s/ H. ▇▇▇ ▇▇▇▇▇▇▇
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Name: H. ▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President
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HOLDERS
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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