REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
and entered into as of May 24, 2001, by and between RITE AID CORPORATION, a
Delaware corporation (the "Company"), and LIBERTYVIEW FUNDS L.P. ("LibertyView
Funds"), LIBERTYVIEW GLOBAL VOLATILITY FUND L.P. ("LibertyView Volatility") and
LIBERTYVIEW FUNDS LLC ("LibertyView" and together with LibertyView Funds and
LibertyView Volatility, "Liberty").
W I T N E S S E T H:
WHEREAS, the Company has agreed to issue to Liberty the Ex
change Shares (as defined below) in accordance with the terms of an Exchange
Term Sheet between the Company and Liberty dated as of April 11, 2001 as amended
by that certain Side Letter dated May 16, 2001 (as amended, the "Exchange
Agreement");
WHEREAS, in connection with the issuance of the Exchange
Shares to Liberty, the Company has agreed to provide Liberty with 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 "Common Stock" shall mean the common stock of the Company,
par value $1.00 per share.
1.3 "Deferral Period" shall have the meaning set forth in
Section 2.1(d).
1.4 "Effectiveness Date" shall mean the date the Shelf
Registration Statement must be declared effective pursuant to Section 2.1(b).
1.5 "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any federal statute then in effect which has replaced such
statute.
1.6 "Exchange Shares" shall mean the shares of Common Stock
issued to Liberty pursuant to the Exchange Agreement.
1.7 "Holder" shall mean Liberty 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.
1.8 "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.
1.9 "Registrable Securities" shall mean the Exchange Shares,
provided that 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.
1.10 "Rule 144" shall mean Rule 144 promulgated under the
Securities Act.
1.11 "Securities Act" shall mean Securities Act of 1933, as
amended, or any federal statute then in effect which has replaced such statute.
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1.12 "Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company pursuant to Section 2.1 hereof filed with
the Commission on Form S-1 or such other appropriate form (it being understood
by all parties that the Company will not be eligible to use Form S-3 prior to
October 11, 2001) under Rule 415 under the Act, or any similar rule that may be
adopted by the Commission, amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
prospectus contained therein, all exhibits thereto and all material incorporated
by reference thereto.
ARTICLE II
Registration Rights
2.1 Shelf Registration
(a) As soon as reasonably practicable following the date
the Company files its Annual Report on Form 10-K for the fiscal year ended March
3, 2001 with the Securities and Exchange Commission, the Company will file a
Shelf Registration Statement relating to the offer and sale of the Registrable
Securities by the Holders from time to time in accordance with the methods of
distribution elected by such Holders and set forth in such Shelf Registration
Statement, provided that the Company may also register for sale on its own
account or that of any other holder of equity securities of the Company pursuant
to the Shelf Registration Statement such additional shares of the Company's
stock as it shall desire.
(b) The Company will use its reasonable best efforts to
cause the registration statement filed pursuant to Section 2.1(a) to be declared
effective as soon as reasonably practicable, but not later than August 15, 2001,
and, subject to Section 2.1(d), to remain effective for a period ending on the
earlier of (i) the date two years after the effective date of the Registration
Statement, (ii) the date on which there cease to be any Registrable Securities
outstanding, and (iii) the date the Holders are eligible to sell the Registrable
Securities pursuant to paragraph (k) of Rule 144.
(c) Each Holder of Registrable Securities that wishes to
sell Registrable Securities pursuant to a Shelf Registration Statement and
related prospectus agrees to deliver a notice and questionnaire in the form
attached hereto as Exhibit A (a "Notice and Questionnaire") at least five (5)
business days prior to the intended distribution of Registrable Securities under
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the Shelf Registration Statement. Provided that the Shelf Registration Statement
has been declared effective, the Company shall, as promptly as is practicable
after a Holder has delivered a Notice and Questionnaire and such other
information as the Company may reasonably require, (i) if required by applicable
law, file with the Commission a post-effective amendment to the Shelf
Registration Statement or prepare and, if required by applicable law, file a
supplement to the related Prospectus or amendment to any document incorporated
therein by reference or file any other required document so that such Holder is
named as a selling security holder in the Shelf Registration Statement and the
related prospectus in such a manner as to permit such Holder to deliver such
prospectus to purchasers of the Registrable Securities in accordance with
applicable law and, if the Company shall file a post-effective amendment to the
Shelf Registration Statement, use its best efforts to cause such post-effective
amendments to be declared effective under the Act as promptly as is practicable
and maintain effectiveness as set forth in Section 2.1(b), (ii) provide such
Holder copies of any documents filed pursuant to the foregoing and (iii) notify
such Holder as promptly as practicable after the effectiveness of any
post-effective amendment filed hereunder, provided, however, that if the Notice
and Questionnaire is delivered during a Deferral Period, the Company shall so
inform the Holder delivering such Notice and Questionnaire and shall take the
actions set forth in clauses (i), (ii) and (iii) above upon expiration of the
Deferral Period in accordance with Section 2.1(d) hereof.
(d) Notwithstanding anything in Section 2.1(b), 2.1(c) or
2.5 hereof, the Company may take action that would result in the Holders of
Registrable Securities being unable to offer and sell Registrable Securities
under a Shelf Registration Statement that has been filed pursuant to this
Section 2.1 if in the good faith determination of the Board of Directors of the
Company, as evidenced by an appropriate resolution of the Board, (i) such action
is required by applicable law, (ii) upon the occurrence of any event that
requires any change to be made to the Shelf Registration Statement so that, as
of such date, the Shelf Registration Statement 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, or
(iii) the continued effectiveness of the Shelf Registration Statement would
require the Company to disclose a material financing, acquisition or other
corporate development. The period during which the Company is required to
maintain the effectiveness of the Shelf Registration Statement pursuant to
Section 2.1(b)(i) shall be extended by the duration of all periods during which
the availability of the Shelf Registration Statement and prospectus is suspended
in accordance with the foregoing (each such period of suspension being referred
to herein as a "Deferral Period"). Nothing contained in this Section 2.1(d)
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shall prevent the Holder from selling Registrable Securities pursuant to Rule
144, should the Holder be eligible to use Rule 144.
(e) The Holders may elect to sell Registrable Securities
in an underwritten offering in accordance with the conditions set forth in this
Section 2.1(e). In any such underwritten offering, the investment banker or
bankers and manager or managers that will administer the offering will be
selected by, and the underwriting arrangements with respect thereto will be
approved by a majority in interest of the Holders, subject, in each case, to the
consent of the Company, which consent will not be unreasonably withheld, and the
Holders will be responsible for all underwriting commissions and discounts in
connection therewith. The Company shall not be obligated to arrange for more
than one underwritten offering pursuant to the Shelf Registration Statement. No
Holder may participate in any underwritten offering hereunder unless the Holder
(i) agrees to sell the Holder's Registrable Securities on the basis provided in
any underwriting arrangements approved pursuant hereto and (ii) completes and
executes all other questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
2.2 Piggyback Registration.
(a) If the Company has not filed the Shelf Registration
Statement, and 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"), prior to the date the Company
files the Shelf Registration Statement or at such time as the Shelf Registration
Statement is not effective, 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 Company shall have the right to select the managing
underwriter(s) for any underwritten Piggyback Registration. All Holders
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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 under
written 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, 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.
(d) Notwithstanding the provisions of this Section 2.2,
the Company shall have the right at any time after it shall have given written
notice to the Holders pursuant to Section 2.2 (irrespective of whether a written
request for inclusion of any such securities shall have been made) to elect not
to file any such proposed registration statement, or to withdraw the same after
the filing but prior to the date thereof.
2.3 Expenses of Registration. All expenses incurred in
connection with the registrations described herein shall be borne by the
Company, provided that the expenses borne by the Company shall not include the
fees or disbursements of any counsel or other adviser of any Holder. All
underwriting discounts, selling commissions and other similar fees relating to
Registrable Securities included in registration statement of the Company 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;
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(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, including
in the case of a Shelf Registration Statement such amendments and supplements as
are necessary to effect and maintain the effectiveness of such registration
statement for the period specified in Section 2.1(b);
(c) subject to Section 2.2(b), enter into such customary
agreements (including, if requested, an underwriting agreement in customary
form) to take all other appropriate action as a majority in interest of the
Holder shall reasonably request in order to facilitate any disposition of
Registrable Securities by such Holder;
(d) 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;
(e) (i) 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;
(f) furnish such number of prospectuses and other
documents incident thereto, including any amendment of or supplement to the
prospectus, as any Holder from time to time may reasonably request;
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(g) promptly notify the selling Holders of Registrable
Securities, the sales or placement agent, if any, therefor and the managing
under writer or underwriters, if any, thereof and confirm such advice in
writing, (i) 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, (ii) 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, (iii) 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, (iv) if at any time the
representations and warranties of the Company contemplated by Section 3 cease to
be true and correct in all material respects, (v) 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 (vi) at any time when a
prospectus is required to be delivered under the Securities Act, that such
registration statement, prospectus, prospectus amendment or supplement or
post-effective amendment, or any document incorporated by reference in any of
the foregoing, contains an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;
(h) obtain the withdrawal of any order suspending the
effectiveness of such registration statement or any post-effective amendment
thereto at the earliest practicable date;
(i) if requested by any managing underwriter or
underwriters, any placement or sales agent or any Holder of Registrable
Securities, promptly incorporate in a prospectus supplement or post-effective
amendment such information as is required by the applicable rules and
regulations of the Commission and as such managing underwriter or underwriters,
such agent or such holder specifies should be included therein relating to the
terms of the sale of such Registrable Securities, including, without limitation,
information with respect to the principal amount of Registrable Securities being
sold by such Holder or agent or to any underwriters, the name and description of
such Holder, agent or underwriter, the offering price of such Registrable
Securities and any discount, commission or other compensation payable in respect
thereof, the purchase price being paid therefor by such underwriters and with
respect to any
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other terms of the offering of the Registrable Securities to be sold by such
Holder or agent or to such underwriters;
(j) furnish to each Holder of Registrable Securities
included in such registration statement, each placement or sales agent, if any,
therefor, each underwriter, if any, thereof and the respective counsel referred
to in Section 2.4(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;
(k) cause all Registrable Securities covered by such
registration to be listed on each securities exchange or inter-dealer quotation
system on which similar securities issued by the Company are then listed;
(l) provide a transfer agent and registrar for all
Registrable Securities covered by such registration and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration;
(m) 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;
(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
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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; and
(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).
2.5 Delivery of Prospectus Supplement. In the event that the
Company would be required, pursuant to Section 2.4(g) above, to notify the
selling Holders of Registrable Securities, the placement or sales agent, if any,
therefor and the managing underwriters, if any, thereof, the Company shall as
soon as reasonably practicable prepare and furnish to each such Holder, to each
placement or sales agent, if any, and to each underwriter, if any, a reasonable
number of copies of a prospectus supplemented or amended so that, as thereafter
delivered to initial purchasers of Registrable Securities, such prospectus shall
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing. Each Holder of
Registrable Securities agrees that upon receipt of any notice from the Company
pursuant to Section 2.4(g) hereof, such Holder shall forthwith discontinue the
disposition of Registrable Securities pursuant to the registration statement
applicable to such Registrable Securities until such Holder shall have received
copies of such amended or supplemented prospectus, and if so directed by the
Company, such Holder shall deliver to 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 reasonable information regarding
such Holder and such Holder's intended method of distribution of such
Registrable Securities as the Company may from time to time request in writing.
Each such Holder agrees to promptly notify the Company of any inaccuracy or
change in information previously furnished by such Holder to the Company or of
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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 of a material fact contained in any
registration statement, prospectus, or other document incorporated by reference
therein, or compliance, or any omission to state therein a material fact
required to be stated therein or incident to such registration, qualification or
necessary to make the statements therein not misleading, and will reimburse each
such indemnified person for any reasonable 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 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).
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(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 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 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
reasonable 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), 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
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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:
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(a) 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;
(b) make and keep available public information as defined
in Rule 144 under the Securities Act at all times;
(c) 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
(d) furnish any Holder upon request a written statement by
the Company as to its compliance with the reporting requirements of Rule 144,
and of the Securities Act and the Exchange Act, a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents as a
Holder may reasonably request in availing itself of any rule or regulation of
the Commission (including Rule 144A) allowing a holder of Registrable Securities
to sell any such Registrable Securities without registration.
2.9 Hold-Back Agreements. If requested by the Company or any
underwriter of securities of the Company, Holders shall not sell or otherwise
transfer or dispose of any Common Stock (other than pursuant to such
registration) during the period 15 days prior to and 180 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 2% of the then outstanding Common Stock of the Company.
ARTICLE III
Liquidated Damages
3.1 The parties agree that the Holders of Registrable
Securities would suffer damages, the extent of which would not be feasible to
determine, if the Company does not cause the Shelf Registration Statement to be
declared effective by Effectiveness Date. Accordingly, in such event, the
14
Company will pay such holders an amount or amounts determined in accordance with
Section 4.2, it being agreed that such payments shall be made by the Company as
liquidated damages and not as a penalty. The liquidated damages will be payable
in cash upon written notice of the Holders to the Company. No liquidated damages
will accrue after the declaration of effectiveness of the Shelf Registration
Statement.
3.2 If the Shelf Registration Statement is not declared
effective on or before the Effectiveness Date, as described in Section 4.1,
liquidated damages will accrue from the Effectiveness Date at the rate of 0.25%
of the aggregate principal value of the 10.5% Senior Secured Notes due September
2002 surrendered by Liberty pursuant to the Exchange Agreement ("Aggregate
Principal Value") per month, pro-rated for periods of less than a full month. If
the Shelf Registration Statement is not declared effective on or prior to
November 15, 2001, the rate of liquidated damages will increase to 0.50% per
month, which rate will increase by an additional 0.25% at the end of each period
of 90 days in which the Shelf Registration Statement is not declared effective,
up to a maximum liquidated damages rate of 2.0% of the Aggregate Principal Value
per month.
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 and any obligation of the Company to pay liquidated damages
pursuant to Article IV shall survive until such obligation has been satisfied in
full.
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
15
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
enforce able 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 the transfer
of Registrable Securities by such Holder.
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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 a majority in
interest 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 a majority 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:
00 Xxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq, Senior Executive Vice
President and General Counsel
Telecopier: (000) 000-0000
with a copy to
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopier: (000) 000-0000
17
if to Liberty :
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx
with a copy to:
The Xxxxxxxxx Law Group, P.C.
00 Xxxxxxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
Liberty may, by written notice given to the Company in accordance with this
Section 6.6, change the address to which such notice or other communications are
to be sent to it. All such notices and communications shall be deemed to have
been given on the date of delivery thereof, if delivered by hand, on the fifth
day after the mailing thereof, if mailed, on the next day after the sending
thereof, if by overnight courier and when receipt is acknowledged, if
telecopied.
5.7 Inspection. So long as this Agreement shall be in effect,
this Agreement and any amendments hereto shall be made available for inspection
by any Holder at the principal offices of the Company.
5.8 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
5.9 Headings. Article, section and paragraph headings are
inserted for convenience only and do not constitute a part of this Agreement.
5.10 Integration. This Agreement and the documents referred to
herein or delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof. There
are no restrictions, agreements, promises, representations, warranties,
covenants or under takings with respect to the subject matter hereof other than
those expressly set forth or referred to herein. This Agreement supersedes all
prior agreements and under standings between the parties with respect to this
subject matter.
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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.
19
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth above.
RITE AID CORPORATION
By:__________________________
Name:
Title:
LIBERTYVIEW FUNDS L.P.
By:__________________________
Name:
Title:
LIBERTYVIEW FUNDS L.L.C.
By:__________________________
Name:
Title:
LIBERTYVIEW GLOBAL VOLATILITY
FUND L.P.
By:__________________________
Name:
Title:
20
EXHIBIT A
Selling Securityholder Notice and Questionnaire
The undersigned holder of shares of the common stock of Rite Aid
Corporation (the "Company") that are Registrable Securities (as that term is
defined in the Registration Rights Agreement, dated as of May 24, 2001 (the
"Registration Rights Agreement") by and among the Company and LibertyView Funds
L.P., LibertyView Funds LLC, and LibertyView Global Volatility Fund and L.P.,
and understands that the Company has filed with the Securities and Exchange
Commission (the "Commission" a registration statement (the "Shelf Registration
Statement" for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the "Securities Act"). All capitalized terms not otherwise
defined herein shall have the meaning ascribed thereto in the Registration
Rights Agreement.
Each beneficial owner of Registrable Securities is entitled to the
benefits of the Registration Rights Agreement. In order to sell or otherwise
dispose of any Registrable Securities pursuant to the Shelf Registration
Statement, a beneficial owner of Registrable Securities generally will be
required to be named as a selling securityholder in the related prospectus,
deliver a prospectus to purchasers of Registrable Securities and be bound by
those provisions of the Registration Rights Agreement applicable to such
beneficial owner (including certain indemnification provisions, as described
below). Beneficial owners are required to complete and deliver this Notice and
Questionnaire prior to the effectiveness of the Shelf Registration Statement so
that such beneficial owners may be named as selling securityholders in the
related prospectus at the time of effectiveness. Upon receipt of a completed
Notice and Questionnaire from a beneficial owner following the effectiveness of
the Shelf Registration Statement, the Company will, as promptly as practicable,
file such amendments to the Shelf Registration Statement or supplements to the
related prospectus as are necessary to permit such holder to deliver such
prospectus to purchasers of Registrable Securities. The Company has agreed to
pay liquidated damages pursuant to the Registration Rights Agreement under
certain circumstances as set forth therein.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and the related prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and the related prospectus.
Notice
The undersigned beneficial owner (the "Selling Securityholder") of
Registrable Securities hereby gives notice to the Company of its intention to
sell or otherwise dispose of Registrable Securities beneficially owned by it and
listed below in Item 3 (unless otherwise specified under Item 3) pursuant to the
Shelf Registration Statement. The undersigned, by signing and returning this
Notice and Questionnaire, understands that it will be bound by the terms and
conditions of this Notice and Questionnaire and the Registration Rights
Agreement.
The undersigned hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:
Questionnaire
1. (a) Full Legal Name of Selling Securityholder:
____________________________________________________________________________
(b) Full Legal Name of Registered Holder (if not the same as (a) above)
through which Registrable Securities listed in (3) below are held:
____________________________________________________________________________
(c) Full Legal Name of DTC Participant (if applicable and if not the same
as (b) above) through which Registrable Securities listed in (3) below
are held:
2. Address for Notices to Selling Securityholder:
____________________________________________________________________________
____________________________________________________________________________
Telephone:__________________________________________________________________
Fax:________________________________________________________________________
Contact Person:_____________________________________________________________
3. Beneficial Ownership of Registrable Securities:
(a) Type and Principal Amount of Registrable Securities beneficially owned:
_______________________________________________________________________
_______________________________________________________________________
(b) CUSIP No(s). of such Registrable Securities beneficially owned:
_______________________________________________________________________
_______________________________________________________________________
4. Beneficial Ownership of the Company's securities owned by the Selling
Securityholder:
Except as set forth below in this Item (4), the undersigned is not the
beneficial or registered owner of any securities of the Company other than the
Registrable Securities listed above in Item (3).
(a) Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:
(b) CUSIP No(s). of such Other Securities beneficially owned:
_______________________________________________________________________
_______________________________________________________________________
5. Relationship with the Company:
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (5% or more) has
held any position or office or has had any other material relationship with
the Company (or their predecessors or affiliates) during the past three
years.
State any exceptions here:
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
6. Plan of Distribution:
Except as set forth below, the undersigned (including its donees or
pledgees) intends to distribute the Registrable Securities listed above in
Item (3) pursuant to the Shelf Registration Statement only as follows if at
all): such Registrable Securities may be sold from time to time directly by
the under signed or alternatively, through underwriters, broker-dealers or
agents. If the Registrable Securities are sold through underwriters or
broker-dealers, the Selling Securityholder will be responsible for
underwriting discounts or commissions or agent's commissions. Such
Registrable Securities may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at varying prices
determined at the time of sale, or at negotiated prices. Such sales may be
effected in transactions (which may involve block transactions) (i) on any
national securities exchange or quotation service on which the Registrable
Securities may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions other wise than on such
exchanges or services, or in the over-the-counter market, or (iv) through
the writing of options. In connection with sales of Registrable Securities
or otherwise, the undersigned may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the Registrable
Securities and deliver Registrable Securities to close out such short
positions, or loan or pledge Registrable Securities to broker-dealers that
in turn may sell such securities.
State any exceptions here:
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
Note: In no event will such method(s) of distribution take the
form of an underwritten offering of the Registrable Securities without the prior
agreement of the Company.
The undersigned acknowledges that it understands its obligation to
comply with the provisions of the Exchange Act and the rules thereunder relating
to stock manipulation, particularly Regulation M thereunder (or any successor
rules or regulations), in connection with any offering of Registrable Securities
pursuant to the Shelf Registration Statement. The undersigned agrees that
neither it nor any person acting on its behalf will engage in any transaction in
violation of such provisions.
The Selling Securityholder hereby acknowledges its obligations under
the Registration Rights Agreement to indemnify and hold harmless certain persons
as set forth therein.
Pursuant to the Registration Rights Agreement, the Company has agreed
under certain circumstances to indemnify the Selling Securityholders against
certain liabilities.
In accordance with the undersigned's obligation under the Registration
Rights Agreement to provide such information as may be required by law for
inclusion in the Shelf Registration Statement, the undersigned agrees to
promptly notify the Company of any inaccuracies or changes in the information
provided. herein that may occur subsequent to the date hereof at anytime while
the Shelf Registration Statement remains effective. All notices hereunder and
pursuant to the Registration Rights Agreement shall be made in writing at the
address set forth below.
By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and the
related prospectus. The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or amendment of
the Shelf Registration Statement and the related prospectus.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated:
Beneficial Owner
By:_________________________________
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO
RITE AID CORPORATION. AT:
00 Xxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq, Senior Executive Vice President and
General Counsel
Facsimile: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
