EXHIBIT 4.3
RITE AID CORPORATION
$200,000,000
6% Dealer remarketable securities/SM1/
("DRS./SM/") due 2013
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
September 22, 1998
X.X. Xxxxxx Securities Inc.
Xxxxxxx, Sachs & Co.
Xxxxxx Xxxxxxx & Co. Incorporated
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Rite Aid Corporation., a Delaware corporation (the "COMPANY"), proposes to
issue and sell to X.X. Xxxxxx Securities Inc. ("JPMSI"), Xxxxxxx, Sachs & Co.
and Xxxxxx Xxxxxxx & Co. Incorporated (collectively, the "INITIAL PURCHASERS"),
upon the terms and subject to the conditions set forth in a purchase agreement
dated September 17, 1998 (the "PURCHASE AGREEMENT"), $200,000,000 aggregate
principal amount of its 6% Dealer remarketable securities/SM/ due 2013
("DRS./SM/"). Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Purchase Agreement.
As an inducement to the Initial Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the Initial
Purchasers thereunder, the Company agrees
/1//"Dealer remarketable securities/SM/" and "Drs./SM/" are service marks of
X.X. Xxxxxx Securities Inc.
with the Initial Purchasers, for the benefit of the holders (including the
Initial Purchasers) of the Drs. and the Exchange Drs. (as defined herein)
(collectively, the "HOLDERS"), as follows:
1. Registered Exchange Offer. The Company shall (i) prepare and, not
-------------------------
later than 90 days following the date of original issuance of the Drs. (the
"ISSUE DATE"), file with the Commission a registration statement (the "EXCHANGE
OFFER REGISTRATION STATEMENT") on an appropriate form under the Securities Act
with respect to a proposed offer to the Holders of the Drs. (the "REGISTERED
EXCHANGE OFFER") to issue and deliver to such Holders, in exchange for the Drs.,
a like aggregate principal amount of debt securities of the Company (the
"EXCHANGE DRS.") that are identical in all material respects to the Drs., except
for the transfer restrictions relating to the Drs., (ii) use its reasonable best
efforts to cause the Exchange Offer Registration Statement to become effective
under the Securities Act no later than 180 days after the Issue Date and the
Registered Exchange Offer to be consummated no later than 210 days after the
Issue Date and (iii) keep the Exchange Offer Registration Statement effective
for not less than 30 days (or longer, if required by applicable law) after the
date on which notice of the Registered Exchange Offer is mailed to the Holders
(such period being called the "EXCHANGE OFFER REGISTRATION PERIOD"). The
Exchange Drs. will be issued under the same indenture (the "INDENTURE") between
the Company and the Trustee or such other bank or trust company that is
reasonably satisfactory to the Initial Purchasers, as trustee (the "TRUSTEE"),
as the Drs.
Upon the effectiveness of the Exchange Offer Registration Statement, the
Company shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Drs. for Exchange Drs. (assuming that such Holder (a) is not an
affiliate of the Company or an Exchanging Dealer (as defined herein) not
complying with the requirements of the next sentence, (b) is not an Initial
Purchaser holding Drs. that have, or that are reasonably likely to have, the
status of an unsold allotment in an initial distribution, (c) acquires the
Exchange Drs. in the ordinary course of such Holder's business and (d) has no
arrangements or understandings with any person to participate, and is not
participating, in the distribution of the Exchange Drs.) and to trade such
Exchange Drs. from and after their receipt without any limitations or
restrictions under the Securities Act and without material restrictions under
the securities laws of the several states of the United States. The Company,
the Initial Purchasers and each Exchanging Dealer acknowledge that, pursuant to
current interpretations by the Commission's staff of Section 5 of the Securities
Act, each Holder that is a broker-dealer electing to exchange Drs., acquired for
its own account as a result of market-making activities or other trading
activities, for Exchange Drs. (an "EXCHANGING DEALER"), is required to deliver a
prospectus containing substantially the information set forth in Annex A hereto
on the cover, in Annex B hereto in the "Exchange Offer Procedures" section and
the "Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan
of Distribution" section of such prospectus in connection with a sale of any
such Exchange Drs. received by such Exchanging Dealer pursuant to the Registered
Exchange Offer.
In connection with the Registered Exchange Offer, the Company shall:
-2-
(a) mail to each Holder a copy of the prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than 30 days (or
longer, if required by applicable law) after the date on which notice of the
Registered Exchange Offer is mailed to the Holders;
(c) utilize the services of a depositary for the Registered Exchange Offer
with an address in the Borough of Manhattan, The City of New York;
(d) permit Holders to withdraw tendered Drs. at any time prior to the
close of business, New York City time, on the last business day on which the
Registered Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all laws that are applicable to
the Registered Exchange Offer.
As soon as practicable after the close of the Registered Exchange Offer,
the Company shall:
(a) accept for exchange all Drs. tendered and not validly withdrawn
pursuant to the Registered Exchange Offer;
(b) deliver to the Trustee for cancellation all Drs. so accepted for
exchange; and
(c) cause the Trustee promptly to authenticate and deliver to each
Holder, Exchange Drs. equal in principal amount to the Drs. of such Holder
so accepted for exchange.
The Company shall use its reasonable best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein in order to permit such prospectus to be used by
all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Drs.; provided that (i) in the case where such
prospectus and any amendment or supplement thereto must be delivered by an
Exchanging Dealer, such period shall be the earlier of 180 days from the close
of the Registered Exchange Offer and the date on which all Exchanging Dealers
have sold all Exchange Drs. held by them and (ii) the Company shall make such
prospectus and any amendment or supplement thereto available to any broker-
dealer for use in connection with any resale of any Exchange Drs. for a period
of not less than 90 days after the consummation of the Registered Exchange
Offer.
The Indenture shall provide that the Drs. and the Exchange Drs. shall vote
and consent together on all matters as to which the Indenture provides for
voting and consent as one class and
-3-
that neither the Drs. nor the Exchange Drs. will have the right to vote or
consent as a separate class on any matter.
Interest on each Exchange Drs. issued pursuant to the Registered Exchange
Offer will accrue from the last interest payment date on which interest was paid
on the Drs. surrendered in exchange therefor or, if no interest has been paid on
the Drs., from the Issue Date.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Drs. received by such Holder will be
acquired in the ordinary course of business, (ii) such Holder will have no
arrangements or understanding with any person to participate and is not
participating in the distribution of the Drs. or the Exchange Drs. within the
meaning of the Securities Act and (iii) such Holder is not an affiliate of the
Company or, if it is such an affiliate, such Holder will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable.
Notwithstanding any other provisions hereof, the Company will ensure that
(i) any Exchange Offer Registration Statement and any amendment thereto and any
prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Exchange Offer Registration Statement and any
amendment thereto does not, when it becomes effective, 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 and
(iii) any prospectus forming part of any Exchange Offer Registration Statement,
and any supplement to such prospectus, does not, as of the consummation of the
Registered Exchange Offer, include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
2. Shelf Registration. If (i) because of any change in law or applicable
------------------
interpretations thereof by the Commission's staff the Company is not permitted
to effect the Registered Exchange Offer as contemplated by Section 1 hereof, or
(ii) any Drs. validly tendered and not withdrawn pursuant to the Registered
Exchange Offer are not exchanged for Exchange Drs. within 210 days after the
Issue Date, or (iii) in the opinion of counsel for the Initial Purchasers, a
registration statement must be filed or a prospectus must be delivered by the
Initial Purchasers in connection with any offering or sale of Drs. because such
Drs. represent an unsold allotment from the original offering thereof, or (iv)
any applicable law or interpretations do not permit any Holder to participate in
the Registered Exchange Offer, or (v) any Holder that participates in the
Registered Exchange Offer does not receive freely transferable Exchange Drs. in
exchange for tendered Drs., or (vi) the Company so elects, then the following
provisions shall apply:
(a) The Company shall use its reasonable best efforts to file as promptly
as practicable (but in no event more than 30 days after so required or requested
pursuant to this Section 2) with the Commission, and thereafter shall use its
reasonable best efforts to cause to be declared effective, a shelf registration
statement on an appropriate form under the Securities Act relating to
-4-
the offer and sale of the Transfer Restricted Drs. (as defined below) by the
Holders thereof from time to time in accordance with the methods of distribution
set forth in such registration statement (hereafter, a "SHELF REGISTRATION
STATEMENT" and, together with any Exchange Offer Registration Statement, a
"REGISTRATION STATEMENT").
(b) The Company shall use its reasonable best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the prospectus
forming part thereof to be used by Holders of Transfer Restricted Drs. for a
period ending on the earlier of (i) two years from the Issue Date or such
shorter period that will terminate when all the Transfer Restricted Drs. covered
by the Shelf Registration Statement have been sold pursuant thereto and (ii) the
date on which the Drs. become eligible for resale without volume restrictions
pursuant to Rule 144 under the Securities Act (in any such case, such period
being called the "SHELF REGISTRATION PERIOD"). The Company shall be deemed not
to have used its reasonable best efforts to keep the Shelf Registration
Statement effective during the requisite period if it voluntarily takes any
action that would result in Holders of Transfer Restricted Drs. covered thereby
not being able to offer and sell such Transfer Restricted Drs. during that
period, unless such action is required by applicable law.
(c) Notwithstanding any other provisions hereof, the Company will ensure
that (i) any Shelf Registration Statement and any amendment thereto and any
prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Shelf Registration Statement and any amendment
thereto (in either case, other than with respect to information included therein
in reliance upon or in conformity with written information furnished to the
Company by or on behalf of any Holder specifically for use therein (the
"HOLDERS' INFORMATION")) does 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 and (iii) any prospectus forming part
of any Shelf Registration Statement, and any supplement to such prospectus (in
either case, other than with respect to Holders' Information), does not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
3. Additional Interest. (a) If (i) the applicable Registration
-------------------
Statement is not filed with the Commission on or prior to 90 days after the
Issue Date (or in the case of a Shelf Registration Statement required to be
filed in response to a change in law or the applicable interpretations of
Commission's staff, if later, within 30 days after publication of the change in
law or interpretation), (ii) the Exchange Offer Registration Statement or the
Shelf Registration Statement, as the case may be, is not declared effective
within 180 days after the Issue Date (or in the case of a Shelf Registration, as
required by Section 2(a)), (iii) the Registered Exchange Offer is not
consummated on or prior to 210 days after the Issue Date, or (iv) the Shelf
Registration Statement is filed and declared effective as required by Section
2(a) but shall thereafter cease to be effective (at any time that the Company is
obligated to maintain the effectiveness thereof) without being again effective
within 30 days or being succeeded within 30 days by an additional Registration
Statement filed and declared effective (each such event referred to in clauses
(i) through (iv), a "REGISTRATION DEFAULT"), the Company will be obligated to
pay additional interest ("ADDITIONAL INTEREST") to each Holder of
-5-
Transfer Restricted Drs., during the period of one or more such Registration
Defaults, at a rate of 0.50% per annum on the principal amount of Transfer
Restricted Drs. held by such Holder until (i) the applicable Registration
Statement is filed, (ii) the Exchange Offer Registration Statement is declared
effective and the Registered Exchange Offer is consummated with respect to all
properly tendered Drs., (iii) the Shelf Registration Statement is declared
effective or (iv) the Shelf Registration Statement again becomes effective (or
is superseded by another effective Shelf Registration Statement), as the case
may be. Following the cure of all Registration Defaults, the accrual of
Additional Interest will cease. As used herein, the term "TRANSFER RESTRICTED
DRS." means (i) each Drs. until the date on which such Drs. has been exchanged
for a freely transferable Exchange Drs. in the Registered Exchange Offer, (ii)
each Drs. until the date on which it has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement or (iii) each Drs. until the date on which it is distributed to the
public pursuant to Rule 144 under the Securities Act or is saleable pursuant to
Rule 144(k) under the Securities Act. Notwithstanding anything to the contrary
in this Section 3(a), the Company shall not be required to pay Additional
Interest to a Holder of Transfer Restricted Drs. if such Holder failed to comply
with its obligations to make the representations set forth in the second to last
paragraph of Section 1 or failed to provide the information required to be
provided by it, if any, pursuant to Section 4(n).
(b) The Company shall notify the Trustee and the Paying Agent under the
Indenture immediately upon the happening of each and every Registration Default.
The Company shall pay the Additional Interest due on the Transfer Restricted
Drs. by depositing with the Paying Agent (which may not be the Company for these
purposes), in trust, for the benefit of the Holders thereof, prior to 10:00
a.m., New York City time, on the next interest payment date specified by the
Indenture and the Drs., sums sufficient to pay the Additional Interest then due.
The liquidated damages due shall be payable on each interest payment date
specified by the Indenture and the Drs. to the record holder entitled to receive
the interest payment to be made on such date. Each obligation to pay Additional
Interest shall be deemed to accrue from and including the date of the applicable
Registration Default.
(c) The parties hereto agree that the Additional Interest provided for in
this Section 3 constitute a reasonable estimate of and are intended to
constitute the sole damages that will be suffered by Holders of Transfer
Restricted Drs. by reason of the failure of (i) the Shelf Registration Statement
or the Exchange Offer Registration Statement to be filed, (ii) the Shelf
Registration Statement to remain effective or (iii) the Exchange Offer
Registration Statement to be declared effective and the Registered Exchange
Offer to be consummated, in each case to the extent required by this Agreement.
4. Registration Procedures. In connection with any Registration
-----------------------
Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to each Initial Purchaser, prior to the
filing thereof with the Commission, a copy of the Registration Statement and
each amendment thereof and each supplement, if any, to the prospectus included
therein and shall use its reasonable best efforts
-6-
to reflect in each such document, when so filed with the Commission, such
comments as any Initial Purchaser may reasonably propose; (ii) include the
information set forth in Annex A hereto on the cover, in Annex B hereto in the
"Exchange Offer Procedures" section and the "Purpose of the Exchange Offer"
section and in Annex C hereto in the "Plan of Distribution" section of the
prospectus forming a part of the Exchange Offer Registration Statement, and
include the information set forth in Annex D hereto in the Letter of Transmittal
delivered pursuant to the Registered Exchange Offer; and (iii) if requested by
any Initial Purchaser, include the information required by Items 507 or 508 of
Regulation S-K, as applicable, in the prospectus forming a part of the Exchange
Offer Registration Statement.
(b) The Company shall advise each Initial Purchaser, each Exchanging
Dealer and the Holders (if applicable) and, if requested by any such person,
confirm such advice in writing (which advice pursuant to clauses (ii)-(v) hereof
shall be accompanied by an instruction to suspend the use of the prospectus
until the requisite changes have been made):
(i) when any Registration Statement and any amendment thereto has been
filed with the Commission and when such Registration Statement or any post-
effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or supplements to any
Registration Statement or the prospectus included therein or for additional
information;
(iii) if known by the Company, of the issuance by the Commission of any
stop order suspending the effectiveness of any Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Drs. or the Exchange Drs. for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and
(v) of the happening of any event that requires the making of any changes
in any Registration Statement or the prospectus included therein in order that
the statements therein are not misleading and do not omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
(c) The Company will make every reasonable effort to obtain the withdrawal
at the earliest possible time of any order suspending the effectiveness of any
Registration Statement.
(d) The Company will furnish to each Holder of Transfer Restricted Drs.
included within the coverage of any Shelf Registration Statement, without
charge, at least one conformed copy of such Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
and, if any such Holder so requests in writing, all exhibits thereto (including
those, if any, incorporated by reference).
-7-
(e) The Company will, during the Shelf Registration Period, promptly
deliver to each Holder of Transfer Restricted Drs. included within the coverage
of any Shelf Registration Statement, without charge, as many copies of the
prospectus (including each preliminary prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Company consents to the use of such prospectus
or any amendment or supplement thereto by each of the selling Holders of
Transfer Restricted Drs. in connection with the offer and sale of the Transfer
Restricted Drs. covered by such prospectus or any amendment or supplement
thereto.
(f) The Company will furnish to each Initial Purchaser and each Exchanging
Dealer, and to any other Holder who so requests, without charge, at least one
conformed copy of the Exchange Offer Registration Statement and any post-
effective amendment thereto, including financial statements and schedules and,
if any Initial Purchaser or Exchanging Dealer or any such Holder so requests in
writing, all exhibits thereto (including those, if any, incorporated by
reference).
(g) The Company will, during the Exchange Offer Registration Period or the
Shelf Registration Period, as applicable, promptly deliver to each Initial
Purchaser, each Exchanging Dealer and such other persons that are required to
deliver a prospectus following the Registered Exchange Offer, without charge, as
many copies of the final prospectus included in the Exchange Offer Registration
Statement or the Shelf Registration Statement and any amendment or supplement
thereto as such Initial Purchaser, Exchanging Dealer or other persons may
reasonably request; and the Company consents to the use of such prospectus or
any amendment or supplement thereto by any such Initial Purchaser, Exchanging
Dealer or other persons, as applicable, as aforesaid.
(h) Prior to the effective date of any Registration Statement, the Company
will use its reasonable best efforts to register or qualify, or cooperate with
the Holders of Drs., Exchange Drs. included therein and their respective
counsel in connection with the registration or qualification of, such Drs. or
Exchange Drs. for offer and sale under the securities or blue sky laws of such
jurisdictions as any such Holder reasonably requests in writing and do any and
all other acts or things necessary or advisable to enable the offer and sale in
such jurisdictions of the Drs. or Exchange Drs. covered by such Registration
Statement; provided that the Company will not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action which would subject it to general service of process or to taxation
in any such jurisdiction where it is not then so subject.
(i) The Company will cooperate with the Holders of Drs. or Exchange Drs.
to facilitate the timely preparation and delivery of certificates representing
Drs., Exchange Drs. to be sold pursuant to any Registration Statement free of
any restrictive legends and in such denominations and registered in such names
as the Holders thereof may request in writing prior to sales of Drs. or Exchange
Drs. pursuant to such Registration Statement.
(j) If any event contemplated by Section 4(b)(ii) through (v) occurs
during the period for which the Company is required to maintain an effective
Registration Statement, the Company will promptly prepare and file with the
Commission a post-effective amendment to the
-8-
Registration Statement or a supplement to the related prospectus or file any
other required document so that, as thereafter delivered to purchasers of the
Drs. or Exchange Drs. from a Holder, the prospectus will not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(k) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Drs. and the Exchange
Drs. as the case may be, and provide the applicable trustee with printed
certificates for the Drs. or the Exchange Drs. as the case may be, in a form
eligible for deposit with The Depository Trust Company.
(l) The Company will comply with all applicable rules and regulations of
the Commission and will make generally available to its security holders as soon
as practicable after the effective date of the applicable Registration Statement
an earning statement satisfying the provisions of Section 11(a) of the
Securities Act; provided that in no event shall such earning statement be
delivered later than 45 days after the end of a 12-month period (or 90 days, if
such period is a fiscal year) beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the applicable
Registration Statement, which statement shall cover such 12-month period.
(m) The Company will cause the Indenture, to be qualified under the Trust
Indenture Act as required by applicable law in a timely manner.
(n) The Company may require each Holder of Transfer Restricted Drs. to be
registered pursuant to any Shelf Registration Statement to furnish to the
Company such information concerning the Holder and the distribution of such
Transfer Restricted Drs. as the Company may from time to time reasonably require
for inclusion in such Shelf Registration Statement, and the Company may exclude
from such registration the Transfer Restricted Drs. of any Holder that fails to
furnish such information within a reasonable time after receiving such request.
(o) In the case of a Shelf Registration Statement, each Holder of Transfer
Restricted Drs. to be registered pursuant thereto agrees by acquisition of such
Transfer Restricted Drs. that, upon receipt of any notice from the Company
pursuant to Section 4(b)(ii) through (v), such Holder will discontinue
disposition of such Transfer Restricted Drs. until such Holder's receipt of
copies of the supplemental or amended prospectus contemplated by Section 4(j) or
until advised in writing (the "ADVICE") by the Company that the use of the
applicable prospectus may be resumed. If the Company shall give any notice under
Section 4(b)(ii) through (v) during the period that the Company is required to
maintain an effective Registration Statement (the "EFFECTIVENESS PERIOD"), such
Effectiveness Period shall be extended by the number of days during such period
from and including the date of the giving of such notice to and including the
date when each seller of Transfer Restricted Drs. covered by such Registration
Statement shall have received (x) the copies of the supplemental or amended
prospectus contemplated by Section 4(j) (if an amended or supplemental
prospectus is required) or (y) the Advice (if no amended or supplemental
prospectus is required).
-9-
(p) In the case of a Shelf Registration Statement, the Company shall enter
into such customary agreements (including, if requested, an underwriting
agreement in customary form) and take all such other action, if any, as Holders
of a majority in aggregate principal amount of the Drs. or Exchange Drs. being
sold or the managing underwriters (if any) shall reasonably request in order to
facilitate any disposition of Drs. or Exchange Drs. pursuant to such Shelf
Registration Statement.
(q) In the case of a Shelf Registration Statement, the Company shall (i)
make reasonably available for inspection by a representative of, and Special
Counsel (as defined below) acting for, Holders of a majority in aggregate
principal amount of the Drs. and Exchange Drs. being sold and any underwriter
participating in any disposition of Drs. or Exchange Drs. pursuant to such Shelf
Registration Statement, all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries and (ii)
use its reasonable best efforts to have its officers, directors, employees,
accountants and counsel supply all relevant information reasonably requested by
such representative, Special Counsel or any such underwriter (an "INSPECTOR") in
connection with such Shelf Registration Statement.
(r) In the case of a Shelf Registration Statement, the Company shall, if
requested by Holders of a majority in aggregate principal amount of the Drs. and
Exchange Drs. being sold, their Special Counsel or the managing underwriters (if
any) in connection with such Shelf Registration Statement, use its reasonable
best efforts to cause (i) its counsel (which may be the Company's general
counsel) to deliver an opinion relating to the Shelf Registration Statement and
the Drs. or Exchange Drs., as applicable, in customary form, (ii) its officers
to execute and deliver all customary documents and certificates requested by
Holders of a majority in aggregate principal amount of the Drs. and Exchange
Drs. being sold, their Special Counsel or the managing underwriters (if any) and
(iii) its independent public accountants to provide a comfort letter or letters
in customary form, subject to receipt of appropriate documentation as
contemplated, and only if permitted, by Statement of Auditing Standards No. 72.
5. Registration Expenses. The Company will bear all expenses incurred in
---------------------
connection with the performance of its obligations under Sections 1, 2, 3 and 4
and, in the case of a Shelf Registration Statement, the Company will
reimburse the Initial Purchasers and the Holders for the reasonable fees and
disbursements of one firm of attorneys (in addition to any local counsel) chosen
by the Holders of a majority in aggregate principal amount of the Drs. and the
Exchange Drs. to be sold pursuant to each Registration Statement (the "SPECIAL
COUNSEL") acting for the Initial Purchasers or Holders in connection therewith.
6. Indemnification. (a) In the event of a Shelf Registration Statement
---------------
or in connection with any prospectus delivery pursuant to an Exchange Offer
Registration Statement by an Initial Purchaser or Exchanging Dealer, as
applicable, the Company shall indemnify and hold harmless each Holder
(including, without limitation, any such Initial Purchaser or Exchanging
Dealer), its affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls such Holder
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 6 and Section 7 as a Holder) from and
against
-10-
any loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, without limitation, any loss, claim, damage, liability or
action relating to purchases and sales of Drs. or Exchange Drs.), to which that
Holder may become subject, whether commenced or threatened, under the Securities
Act, the Exchange Act, any other federal or state statutory law or regulation,
at common law or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any such Registration Statement
or any prospectus forming part thereof or in any amendment or supplement thereto
or (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and shall reimburse each Holder promptly upon demand for any legal
or other expenses reasonably incurred by that Holder in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; 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 arises out of, or is based upon, an untrue statement
or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with any Holders' Information; and
provided, further, that with respect to any such untrue statement in or omission
from any related preliminary prospectus, the indemnity agreement contained in
this Section 6(a) shall not inure to the benefit of any Holder from whom the
person asserting any such loss, claim, damage, liability or action received Drs.
or Exchange Drs. to the extent that such loss, claim, damage, liability or
action of or with respect to such Holder results from the fact that both (A) a
copy of the final prospectus was not sent or given to such person at or prior to
the written confirmation of the sale of such Drs. or Exchange Drs. to such
person and (B) the untrue statement in or omission from the related preliminary
prospectus was corrected in the final prospectus unless, in either case, such
failure to deliver the final prospectus was a result of non-compliance by the
Company with Section 4(d), 4(e), 4(f) or 4(g).
(b) In the event of a Shelf Registration Statement, each Holder shall
indemnify and hold harmless the Company, its affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 6(b) and
Section 7 as the Company), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such Registration
Statement or any prospectus forming part thereof or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with any Holders' Information furnished to
the Company by such Holder, and shall reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending or preparing to
-11-
defend against or appearing as a third party witness in connection with any such
loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that no such Holder shall be liable for any indemnity claims
hereunder in excess of the amount of net proceeds received by such Holder from
the sale of Drs. or Exchange Drs. pursuant to such Shelf Registration Statement.
(c) Promptly after receipt by an indemnified party under this Section 6 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party pursuant to Section 6(a) or 6(b), notify the indemnifying party in writing
of the claim or the commencement of that action; provided, however, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have under this Section 6 except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 6. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than the reasonable costs of investigation; provided, however,
that an indemnified party shall have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 6(a) and 6(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against
-12-
any loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability or claims that were raised or could
have been raised by such plaintiff in such proceeding.
7. Contribution. If the indemnification provided for in Section 6 is
------------
unavailable or insufficient to hold harmless an indemnified party under Section
6(a) or 6(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified 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, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company from the offering and sale of the Drs., on the
one hand, and a Holder with respect to the sale by such Holder of Drs. or
Exchange Drs., on the other, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and such Holder on the
other with respect to the statements or omissions that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and a Holder on the other with respect to such offering
and such sale shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Drs. (before deducting expenses) received by
or on behalf of the Company as set forth in the table on the cover of the
Offering Memorandum, on the one hand, bear to the total proceeds received by
such Holder with respect to its sale of Drs. or Exchange Drs., on the other.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to the Company or
information supplied by the Company on the one hand or to any Holders'
Information supplied by such Holder on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The parties hereto agree that it
would not be just and equitable if contributions pursuant to this Section 7 were
to be determined by pro rata allocation or by any other method of allocation
that 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 above in
this Section 7 shall be deemed to include, for purposes of this Section 7, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim. Notwithstanding the provisions of this Section 7, an
indemnifying party that is a Holder of Drs. or Exchange Drs. shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Drs. or Exchange Drs. sold by such indemnifying party to any
purchaser exceeds the amount of any damages which such indemnifying party has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged 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.
-13-
8. Rules 144 and 144A. So long as Transfer Restricted Drs. remain
------------------
outstanding, the Company shall use its reasonable best efforts to file the
reports required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and, if at any time the Company is not required to file such
reports, it will, upon the written request of any Holder of Transfer Restricted
Drs., make publicly available other information so long as necessary to permit
sales of such Holder's securities pursuant to Rules 144 and 144A. So long as
Transfer Restricted Drs. remain outstanding, the Company covenants that it will
take such further action as any Holder of Transfer Restricted Drs. may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Transfer Restricted Drs. without registration under the
Securities Act within the limitation of the exemptions provided by Rules 144 and
144A (including, without limitation, the requirements of Rule 144A(d)(4)). So
long as Transfer Restricted Drs. remain outstanding, upon the written request of
any Holder of Transfer Restricted Drs., the Company shall deliver to such Holder
a written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 8 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.
9. Underwritten Registrations. If any of the Transfer Restricted Drs.
--------------------------
covered by any Shelf Registration Statement are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will administer the offering will be selected by the Holders of a majority
in aggregate principal amount of such Transfer Restricted Drs. included in such
offering, subject to the consent of the Company (which shall not be unreasonably
withheld or delayed), and such Holders shall be responsible for all underwriting
commissions and discounts in connection therewith.
No person may participate in any underwritten registration hereunder unless
such person (i) agrees to sell such person's Transfer Restricted Drs. on the
basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
10. Miscellaneous. (a) Amendments and Waivers. The provisions of this
------------- ----------------------
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of Holders of a majority in aggregate principal
amount of the Drs. and the Exchange Drs., taken as a single class.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders whose Drs. are being sold pursuant to a Registration Statement and that
does not directly or indirectly affect the rights of other Holders may be given
by Holders of a majority in aggregate principal amount of the Drs. and the
Exchange Drs. being sold by such Holders pursuant to such Registration
Statement.
-14-
(b) Notices. All notices and other communications provided for or
--------
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier or air courier guaranteeing next-day delivery:
(1) if to a Holder, at the most current address given by such Holder to the
Company in accordance with the provisions of this Section 10(b), which address
initially is, with respect to each Holder, the address of such Holder
maintained by the Registrar under the Indenture, with a copy in like manner to
the Initial Purchasers;
(2) if to an Initial Purchaser, initially at its address set forth in the
Purchase Agreement; and
(3) if to the Company, initially at the address of the Company set forth in
the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.
(c) Successors And Assigns. This Agreement shall be binding upon the
----------------------
Company and its successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
------------
counterparts (which may be delivered in original form or by telecopier) and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(e) Definition of Terms. For purposes of this Agreement, (a) the term
-------------------
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities Act.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(h) Remedies. In the event of a breach by the Company or by any Holder of
--------
any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law, including recovery of damages (other than the recovery of damages for a
breach by the Company of its obligations under Sections 1 or 2
-15-
hereof for which Additional Interest has been paid pursuant to Section 3
hereof), will be entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agree that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(i) No Inconsistent Agreements. The Company represents, warrants and
--------------------------
agrees that (i) it has not entered into, shall not, on or after the date of this
Agreement, enter into any agreement that is inconsistent with the rights granted
to the Holders in this Agreement or otherwise conflicts with the provisions
hereof, (ii) it has not previously entered into any agreement granting any
registration rights with respect to any of its debt securities to any person,
except for such agreements where the Company has complied and is in compliance
with its registration obligations to date, and (iii) without limiting the
generality of the foregoing, so long as Transfer Restricted Drs. remain
outstanding, without the written consent of the Holders of a majority in
aggregate principal amount of the then outstanding Transfer Restricted Drs., it
shall not grant to any person the right to request the Company to register any
debt securities of the Company under the Securities Act unless the rights so
granted are not in conflict or inconsistent with the provisions of this
Agreement.
(j) No Piggyback on Registrations. Neither the Company nor any of its
-----------------------------
security holders (other than the Holders of Transfer Restricted Drs. in such
capacity) shall have the right to include any securities of the Company in any
Shelf Registration or Registered Exchange Offer other than Transfer Restricted
Drs..
(k) Severability. The remedies provided herein are cumulative and not
------------
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
Please confirm that the foregoing correctly sets forth the agreement among
the Company and the Initial Purchasers.
-16-
Very truly yours,
RITE AID CORPORATION
By /s/ Xxxxx Xxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxx
Title: Executive V.P. & CFO
Accepted:
X.X. XXXXXX SECURITIES INC.
XXXXXXX, SACHS & CO.
XXXXXX XXXXXXX & CO. INCORPORATED
By: X.X. Xxxxxx Securities Inc.
By /s/ Xxxx X. Xxxxxxx
-----------------------
Name: Xxxx X. Xxxxxxx
Title: V.P.
-17-
ANNEX A
Each broker-dealer that receives Exchange Drs. for its own account pursuant
to the Registered Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Drs.. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Drs. received in exchange for Drs. where such Drs. were
acquired by such broker-dealer as a result of market-making activities or other
trading activities. The Company has agreed that, for a period of 180 days after
the Expiration Date (as defined herein), it will make this Prospectus available
to any broker-dealer for use in connection with any such resale. See "Plan of
Distribution".
-18-
ANNEX B
Each broker-dealer that receives Exchange Drs. for its own account in
exchange for Drs., where such Drs. were acquired by such broker-dealer as a
result of market-making activities or other trading activities, must acknowledge
that it will deliver a prospectus in connection with any resale of such Exchange
Drs. See "Plan of Distribution".
-19-
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Drs. for its own account pursuant
to the Registered Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Drs. This Prospectus,
as it may be amended or supplemented from time to time, may be used by a broker-
dealer in connection with resales of Exchange Drs. received in exchange for Drs.
where such Drs. were acquired as a result of market-making activities or other
trading activities. The Company has agreed that, for a period of 180 days after
the Expiration Date, it will make this prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale. In
addition, until _______________, 199_, all dealers effecting transactions in the
Exchange Drs. may be required to deliver a prospectus.
The Company will not receive any proceeds from any sale of Exchange Drs. by
broker-dealers. Exchange Drs. received by broker-dealers for their own account
pursuant to the Registered Exchange Offer may be sold from time to time in one
or more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the Exchange Drs. or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or at negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from any
such broker-dealer or the purchasers of any such Exchange Drs. Any broker-
dealer that resells Exchange Drs. that were received by it for its own account
pursuant to the Registered Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Drs. may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of Exchange Drs. and any commission or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that, by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the Holders of the Drs.) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Drs. (including any broker-
dealers) against certain liabilities, including liabilities under the Securities
Act.
-20-
ANNEX D
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:
Address:
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Drs. If the undersigned is a broker-dealer that will receive Exchange Drs. for
its own account in exchange for Drs. that were acquired as a result of market-
making activities or other trading activities, it acknowledges that it will
deliver a prospectus in connection with any resale of such Exchange Drs.;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
-21-
