Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
DATED AS OF OCTOBER 27, 1999
By and Between
RITE AID CORPORATION
and
▇.▇. ▇▇▇▇▇▇ VENTURES CORPORATION
REGISTRATION RIGHTS AGREEMENT
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This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into as of October 27, 1999, by and between RITE AID CORPORATION, a
Delaware corporation (the "COMPANY"), and ▇.▇. ▇▇▇▇▇▇ VENTURES CORPORATION
("▇.▇. ▇▇▇▇▇▇").
W I T N E S S E T H:
WHEREAS, the Company has agreed to issue to ▇. ▇. ▇▇▇▇▇▇ a warrant,
dated October 27, 1999 (the "WARRANT"), to purchase 2,500,000 shares (the
"WARRANT SHARES") of the Company's Common Stock, par value $1.00 per share
(the "COMMON STOCK"), in accordance with the terms thereof;
WHEREAS, in connection with the issuance of the Warrant to ▇.▇.
▇▇▇▇▇▇, the Company has agreed to provide to the holders of the Warrant and
the Warrant Shares the registration rights set forth herein;
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 "Commission" shall mean the Securities and Exchange Commission or
any federal agency at the time administering the Securities Act.
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 ▇.▇. ▇▇▇▇▇▇ 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 Common Stock issued or
issuable upon exercise of the Warrant.
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 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
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2.1 Demand Registrations.
(a) Holders of Registrable Securities representing not less than
one-third of the then-outstanding Registrable Securities (the "INITIATING
HOLDERS") may require that the Company effect a registration under the
Securities Act at any time or times with respect to at least 25% of the
Common Stock issued or issuable upon exercise of the Warrant (or, if less,
all remaining Registrable Securities) (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 (x) if 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 2.5 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 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, (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 Holders will have absolute priority over any other securities
of the Company 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 of the Company 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 of the Company. 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 Registrable 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 that can be sold in such offering, except as provided in Section
2.1(b), any 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 ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ 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 Commission
and, in the case of a Demand 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;
(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) (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) 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(d) or (2)
consent to general service of process or taxation in any such jurisdiction;
(e) 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;
(f) 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(n) 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;
(g) obtain the withdrawal of any order suspending the effectiveness of
such registration statement or any post-effective amendment thereto at the
earliest practicable date;
(h) 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;
(i) 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(c) 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;
(j) 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;
(k) 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;
(l) 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;
(m) with respect to an underwritten Demand Registration, whether or
not an agreement of the type referred to in Section 2.4(p) hereof is
entered into, 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 may reasonably
request, addressed to the underwriters 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 the managing
underwriters 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;
(n) 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;
(o) 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
(p) 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(f)
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(f) 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 or Section 20 of the Exchange
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 or Section 20 of the Exchange
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 ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ as counsel to ▇.▇. ▇▇▇▇▇▇
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 the Warrant or any Common Stock (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
Common Stock (assuming exercise of the Warrant for this purpose).
ARTICLE III
Representations and Warranties
------------------------------
The Company represents and warrants to, and agrees with, ▇.▇. ▇▇▇▇▇▇
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 of the Company 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, 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 Warrant 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 of the Company 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
waiver 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 ▇.▇. ▇▇▇▇▇▇:
▇.▇. ▇▇▇▇▇▇ Ventures Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇.▇. ▇▇▇▇▇▇ 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
▇.▇. ▇▇▇▇▇▇ VENTURES CORPORATION
By: /s/ ▇▇▇▇ ▇. Major, Jr.
____________________________________
Title: Managing Director
