RITE AID CORPORATION
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made as of the 12 day of
June, 2001, by and between Rite Aid Corporation (the "Company"), a corporation
organized under the laws of the State of Delaware, and each purchaser, whose
name and address is set forth on the signature page hereof, together with their
permitted transferees (the "Purchasers").
WHEREAS, the Company desires to issue and sell to the Purchasers, and the
Purchasers desire to purchase from the Company, shares ("Shares") of the
Company's Common Stock, par value $1.00 per share (the "Common Stock"); and
WHEREAS, the Company proposes to enter into this same form of purchase
agreement with certain other investors (collectively, the "Other Purchasers")
and to consummate sales of Shares to the Other Purchasers on substantially the
same terms and conditions. The term "Placement Agent" shall collectively mean
Xxxxxxx Xxxxx Xxxxxx Inc. and Credit Suisse First Boston Corporation.
NOW THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, the Company and the Purchasers do hereby agree as follows:
1. Agreement to Sell and Purchase the Shares. At the Closing (as defined in
Section 2 herein), the Company will, subject to the terms and conditions of this
Agreement, sell to the Purchasers, and the Purchasers will, subject to the terms
and conditions of this Agreement, buy from the Company, the number of Shares set
forth on the signature page hereto at a purchase price of $7.50 per Share (the
"Purchase Price"). The obligations of the Purchasers are several and not joint.
2. Delivery of the Shares at the Closing. The closing of the sale to, and
the purchase by, the Purchasers of the Shares (the "Closing") shall occur at the
offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Four Times Square, New
York, New York 10036-6522, simultaneously with Closing of the Refinancing (as
defined herein) (the "Closing Date"). At least two business days prior to the
time of the scheduled Closing, the Company shall deliver to one or more
custodians for the Purchasers, one or more certificates registered in the name
of the nominee of the custodian, evidencing the Shares (the "Share
Certificates") and notify counsel to the Purchaser of such delivery. The
custodians will execute such documents reasonably necessary to evidence receipt
of such Share Certificates. If for any reason, the Closing does not occur within
forty-eight hours of the Company's delivery to the custodians of the Share
Certificates, the custodians shall immediately return such Share Certificates to
the Company or an authorized representative thereof. At the Closing, the Company
will deliver to the Purchaser (i) the Legal Opinions set forth in Section 3.22
herein, (ii) an executed copy of the Registration Rights Agreement (as defined
herein), and (iii) the Officer's Certificate set forth in Section 6.1(e) herein.
At the Closing, the Purchasers will deliver to the Company (i) the aggregate
Purchase Price in immediately available funds to an account designated by the
Company in writing, and (ii) an executed copy of the Registration Rights
Agreement (as defined herein).
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As used herein, the term "Refinancing" shall mean the Company's refinancing
of its Senior Credit Agreement dated as of June 12, 2000 on terms and conditions
not materially less favorable to the Company than the terms of that certain bank
commitment letter attached as Exhibit A hereto and without the waiver by the
Agents (as such term is defined in the Commitment Letter) of any material
condition contained therein (the "Commitment Letter").
3. Representations, Warranties and Covenants of the Company. The Company
hereby represents and warrants to, and covenants with, the Purchasers as
follows:
3.1 Organization. The Company is duly organized and validly existing
and in good standing under the laws of Delaware, and has all requisite corporate
power and authority to enter into this Agreement and the Registration Rights
Agreement (as defined herein) and to consummate the transactions contemplated
hereby and thereby. Each subsidiary of the Company listed on Exhibit 21 to the
2001 10-K (as defined herein) (collectively, the "Subsidiaries") is duly
organized and except for those Subsidiaries included on Schedule 3.1 herein, is
validly existing and in good standing under their respective jurisdiction of
organization.
3.2 Validity. The execution, delivery and performance of this
Agreement and the Registration Rights Agreement, and the consummation of the
transactions contemplated hereby and thereby, have been duly authorized by all
necessary action, corporate or otherwise, on the part of the Company. This
Agreement and the Registration Rights Agreement have been duly executed and
delivered by the Company and constitute legal, valid and binding obligations of
the Company enforceable against it in accordance with their terms.
3.3 Issuance, Sale and Delivery of the Shares. The Shares have been
duly authorized for issuance and sale to the Purchasers pursuant to this
Agreement, and, when issued, sold and delivered in accordance with this
Agreement against payment therefore of the consideration expressed herein, will
be duly and validly issued, fully paid and non-assessable and will be free of
restrictions on transfer other than restrictions on transfer set forth under
this Agreement. The issuance of the Shares is not subject to preemptive rights.
3.4 Capital Stock. As of June 1, 2001 and without giving effect to the
transactions contemplated by this Agreement and the proposed agreements with
Other Purchasers, the authorized capital stock of the Company consisted of (i)
600,000,000 shares of Common Stock, of which approximately 403,761,696 shares
were issued and outstanding and (ii) 20,000,000 shares of preferred stock, of
which 3,360,237 shares of Series B Preferred Stock were outstanding. The
outstanding shares of Common Stock and Preferred Stock are validly issued, fully
paid and non-assessable and have been issued in compliance with applicable law.
None of the outstanding shares of Common Stock or Preferred Stock are entitled
to cumulative voting rights or preemptive rights. Except as set forth on
Schedule 3.4 hereto, the Company has outstanding no option, warrant or other
commitment to issue or to acquire any shares of its capital stock or any
security or obligations convertible into or exchangeable for its capital stock,
nor has it given any person or entity any right to acquire from the Company or
sell to the Company any shares of its capital stock. Schedule 3.4 hereto sets
forth as of the date hereof the outstanding shares of Common Stock, assuming the
exercise of all outstanding options and warrants, the conversion of all
securities or obligations convertible into or exchangeable for
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shares of its Common Stock and the issuance of the maximum number of shares of
Common Stock subject to outstanding commitments of the Company.
3.5 Compliance with Other Instruments. Neither the execution and
delivery by the Company of this Agreement or the Registration Rights Agreement,
nor the consummation of the transactions contemplated hereby or thereby, nor the
issuance and sale of the Shares will (a) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary is bound or to which any of the property or assets of
the Company or any Subsidiary is subject, (b) result in any violation of the
provisions of the certificate of incorporation or by-laws of the Company or any
Subsidiary or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
Subsidiary or any of its respective properties, (c) result in the creation under
any agreement or instrument of any lien, security interest, encumbrance or other
claim upon any of the respective assets of the Company or any Subsidiary, or (d)
create in any person or entity any right to terminate any agreement with the
Company or otherwise exercise any rights against the Company or cause any
payment or performance obligation of the Company to be accelerated, except in
each case (a-d) as would not, individually or in the aggregate have a material
adverse effect on the business, results of operations, prospects or financial
condition of the Company (as such business is presently conducted and as it is
presently proposed to be conducted) ("Material Adverse Effect").
3.6 Governmental Consents. No consent, approval or authorization of,
or declaration or filing with, any governmental authority or agency or any
securities exchange on the part of the Company is required for the valid
execution and delivery of this Agreement and the Registration Rights Agreement,
the consummation of the transactions contemplated hereby and thereby, or the
valid offer, issue, sale and delivery of the Shares pursuant to this Agreement
other than the filings with the Securities and Exchange Commission required to
comply with its obligations under the Registration Rights Agreement. The Company
is not in violation of any of the listing requirements of the New York Stock
Exchange, except where such violation would not, individually or in the
aggregate, have a material adverse effect on (i) the Shares, (ii) the ability of
the Company to perform its obligations under this Agreement and the Registration
Rights Agreement, or (iii) the assets, business, properties or financial
condition of the Company (as such business is presently conducted and as it is
presently proposed to be conducted).
3.7 Offering Materials. The Company has not distributed and will not
distribute prior to the Closing Date, any offering material in connection with
the offering and sale of the Shares other than (i) the Company's Annual Report
on Form 10-K for the fiscal year ended March 3, 2001 (the "2001 10-K"); (ii) the
Company's Preliminary Proxy filed with the Securities and Exchange Commission
(the "SEC") on May 21, 2001 (the "Preliminary Proxy"); (iii) the Company's
Definitive Proxy filed with the SEC on May 31, 2001 (the "Definitive Proxy");
and (iv) and any other document filed by the Company with the SEC since October
11, 2000 through the Closing Date (together with the 2001 10-K, the Preliminary
Proxy and the Definitive Proxy, the "SEC Documents") pursuant to its reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
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3.8 Environmental and Safety Laws. Neither the Company nor any
Subsidiary is in violation of any applicable statute, law or regulation relating
to the environment or occupational health and safety, except where any such
violations would not, individually or in the aggregate, have a Material Adverse
Effect, and to the best of the Company's knowledge, no material expenditures are
or are reasonably expected to be required in order to comply with any such
existing statute, law, or regulation.
3.9 Litigation. Except as disclosed in the SEC Documents or on
Schedule 3.9 hereto, there is no action, suit, proceeding, or investigation
pending, or to the Company's knowledge, currently threatened against the Company
or any Subsidiary that questions the validity of this Agreement or the
Registration Rights Agreement, or the Company's ability to consummate the
transactions contemplated hereby or thereby, or that might have, either
individually or in the aggregate, a Material Adverse Effect.
3.10 Compliance With Laws. Except as disclosed in the SEC Documents or
on Schedule 3.9 hereto, neither the Company nor any Subsidiary has received any
notification from any governmental entity (i) asserting a violation of any law,
statute, ordinance or regulation or the terms of any judgments, orders, decrees,
injunctions or writs applicable to the conduct of their respective business;
(ii) threatening to revoke any license, franchise permit or government
authorization; or (iii) restricting or in any way limiting its operations as
currently conducted or proposed to be conducted, except where any such
violations would not, individually or in the aggregate, have a Material Adverse
Effect.
3.11 Changes. Except for transactions contemplated by this Agreement
and the Registration Rights Agreement, or as disclosed in the SEC Documents or
on Schedule 3.11 hereto, and other than transactions conducted in the ordinary
course of business, since March 3, 2001, there has not been:
(a) any change in the assets, liabilities, financial condition,
or operating results of the Company, that have not been and
are not expected to be, individually or in the aggregate,
materially adverse to the assets, business, properties,
prospects or financial condition of the Company (as such
business is presently conducted and as it is presently
proposed to be conducted);
(b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the business,
properties, prospects or financial condition of the Company
(as such business is presently conducted and as it is
presently proposed to be conducted);
(c) any waiver or compromise by the Company of a valuable right
or of a material debt owed to it;
(d) any satisfaction or discharge of any lien, claim, or
encumbrance or payment of any obligation by the Company;
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(e) any material change to a material contract or arrangement by
which the Company or any of its assets is bound or subject;
(f) any material change in any compensation arrangement or
agreement with any key employee, officer, director or
stockholder;
(g) any sale, assignment, or transfer of any patents,
trademarks, copyrights, trade secrets, or other intangible
assets;
(h) any resignation or termination of employment of any key
officer of the Company; and the Company, to the best of its
knowledge, does not know of the impending resignation or
termination of employment of any such officer;
(i) receipt of notice that there has been a loss of, or material
order cancellation by, any major customer of the Company;
(j) any mortgage, pledge, transfer of a security interest in, or
lien, created by the Company, with respect to any of its
material properties or assets, except liens for taxes not
yet due or payable or contested by the Company in good
faith;
(k) any loans or guarantees made by the Company to or for the
benefit of its employees, stockholders, officers, or
directors, or any members of their immediate families, other
than travel advances and other advances made in the ordinary
course of its business, except for certain short term loans
made by the Company to its officers described on Schedule
3.11 hereto;
(l) any declaration, setting aside, or payment of any dividend
or other distribution of the Company's assets in respect of
any of the Company's capital stock, except for dividends
paid-in-kind on outstanding Series B Preferred Stock or any
dividends payable on the proposed Series C Preferred Stock,
or any direct or indirect redemption, purchase, or other
acquisition of any of such stock by the Company;
(m) any other event or condition of any character that would
reasonably be expected to have a Material Adverse Effect; or
(n) any agreement or commitment by the Company to do any of
the things described in this Section 3.11.
3.12 Integration. Neither the Company nor any affiliate (as such term
is defined in Rule 501(b) under the Securities Act) nor any person, firm or
corporation acting on its behalf, has directly or indirectly, sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or will be integrated with
the sale of the Shares in a manner that would require the registration of the
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Shares under the Securities Act. For purposes of Sections 3.12, 3.14 and 3.20 of
this Agreement, we have assumed that the Placement Agents (i) will not solicit
offers for or offer Common Stock by any form of general solicitation or general
advertising (as those terms are defined in Regulation D of the Securities Act),
and (ii) will solicit offers for Common Stock only from, and will offer Common
Stock only to, institutional investors that it reasonably believes to be
"Accredited Investors" as defined in Rule 501(a)(1), (2), (3), or (7) under the
Securities Act.
3.13 Permits. Each of the Company and the Subsidiaries has all
franchises, permits, licenses, and any similar authority necessary for the
conduct of their business as now being conducted by it, except for those
franchises, permits, licenses the lack of which would not have a Material
Adverse Effect, and the Company believes it can obtain, without undue burden or
expense, any similar authority for the conduct of its business as presently
conducted or proposed to be conducted. Neither the Company nor any Subsidiary is
in default under any such franchisees, permits, license or other similar
authority except where such default would not have a Material Adverse Effect.
3.14 Offering. Assuming the truth and accuracy of the Purchasers'
representations and warranties set forth in this Agreement, the offer and sale
and issuance of the Shares as contemplated by this Agreement are exempt from the
registration requirements of the Securities Act, and neither the Company nor any
authorized agent acting on its behalf will take any action hereof that would
cause the loss of such exemption.
3.15 Intellectual Property. Each of the Company and the Subsidiaries
own or possess sufficient legal rights to all patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, information and
proprietary rights and processes necessary for their respective business as now
conducted and as proposed to be conducted without conflict with, or infringement
of, the rights of others, except where the failure to have such rights,
individually or in the aggregate, would not have a Material Adverse Effect.
3.16 Employee Relations. To the best of the Company's knowledge, there
is no strike, labor dispute or union organization activities pending or
threatened between the Company and its employees. To the best of its knowledge
and except as disclosed in the SEC Documents, the Company has complied in all
material respects with all applicable state and federal equal opportunity and
other laws related to employment. The Company is not aware that any officer or
key employee, or that any group of key employees, intends to terminate
employment with the Company, nor does the Company have any present intention to
terminate the employment of any of the foregoing.
3.17 Additional Information. Since October 11, 2000, the Company has
timely filed, and at the Closing Date, the Company will have timely filed, all
reports, schedules, forms, statements and other documents required to be filed
by it with the Securities and Exchange Commission pursuant to the reporting
requirements of the Exchange Act. The Company represents and warrants that as of
their respective filing dates, the information contained in the 2001 10-K
(without exhibits) and the Definitive Proxy, complied with the requirements of
the Exchange Act or the Securities Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to the 2001 10-K and
the Definitive Proxy, except for the failure to include certain financial
information as described therein, and
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neither the 2001 10-K nor the Definitive Proxy (including all exhibits included
in the 2001 10-K and the Definitive Proxy and all financial statements and
schedules thereto and documents incorporated by reference therein), at the time
they were respectively filed with the SEC, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3.18 Terms of Other Purchasers' Agreements. Except as set forth on
Schedule 3.18 herein and other than certain closing mechanics and covenants
related to publicity and the use of such Other Purchaser's name, the terms,
conditions, rights and benefits contained in this Agreement and the Registration
Rights Agreement are the same terms, conditions, rights and benefits as those
contained in the Other Purchasers' Stock Purchase Agreement and Registration
Rights Agreement, or any other similar agreement. Except as set forth on
Schedule 3.18 herein, neither the Company nor any underwriter acting on behalf
of the Company has entered into any separate agreement with any Other Purchaser
to provide different or more favorable terms, including, but not limited to
terms that provide any Other Purchaser liquidity for the Shares, or any form of
compensation or value in the event the filing or effectiveness of any the
registration statements required by the Registration Rights Agreement is
delayed, or withdrawn, or suspended; provided, however, that this representation
shall not include that certain Stock Purchase Agreement dated May 17, 2001, by
and between the Company and Transamerica Investment Management, LLC and the
Other Purchasers named therein.
3.19 Brokers. There is no broker, investment banker, financial
advisor, finder or other person which has been retained by or is authorized to
act on behalf of the Company who might be entitled to any fee or commission for
which the Purchasers will be liable in connection with the execution of this
Agreement or the transactions contemplated hereby.
3.20 Offering of Securities. Neither the Company nor any person, firm
or corporation acting on its behalf has sold or offered the Shares or any
similar securities of the Company to, or solicited any offers to buy any thereof
from, or otherwise approached or negotiated with respect thereto with, any
person or persons in such manner as would subject the offering, issuance or sale
of any of the Shares to the provisions of Section 5 of the Securities Act.
Neither the Company nor any person, firm or corporation acting on behalf of the
Company has taken or will take any action which would subject the offering,
issuance or sale of any of the Shares to the provisions of Section 5 of the
Securities Act.
3.21 Investment Company Status. Neither the Company nor any Subsidiary
is, or upon consummation of the sale of the Shares will be, an "investment
company," a company controlled by an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company" as such terms are defined in the Investment Company Act of 1940, as
amended.
3.22 Legal Opinions. At the Closing, Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, counsel to the Company, will deliver its legal opinion to the
Purchasers with respect to (i) the Company's due incorporation and valid
existence under the laws of the state of Delaware; (ii) the due execution,
authorization and delivery of this Agreement and the Registration Rights
Agreement; (iii) corporate power and corporate authority to execute and
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deliver this Agreement and the Registration Rights Agreement; (iv) no violation
of the Company's Certificate of Incorporation or Bylaws or certain specified
laws; (v) enforceability of this Agreement and the Registration Rights
Agreement; (vi) no registration of the Shares; and (vii) the Shares are duly
authorized, fully paid and non-assessable, each of such opinions in (i) through
(vii) subject to customary qualifications, assumptions and carve-outs for a
transaction of this nature. At the Closing, the Senior Executive Vice President
and General Counsel of the Company will deliver its legal opinion to the
Purchasers with respect to no violation of material contracts of the Company,
such opinion subject to customary qualifications, carve-outs and assumptions for
a transaction of this nature.
4. Representations, Warranties and Covenants of the Purchasers. Each
Purchaser, severally and not jointly, represents and warrants to, and covenants
with, the Company as follows:
4.1 Organization. The Purchaser is validly existing under the laws of
its jurisdiction of organization. The Purchasers are funds advised by Xxxxxx
Investment Management, LLC or affiliates thereof, and have all requisite power
and authority to enter into this Agreement and the Registration Rights Agreement
and to consummate the transactions contemplated hereby and thereby.
4.2 Validity. The execution, delivery and performance of this
Agreement and the Registration Rights Agreement, and the consummation of the
transactions contemplated hereby and thereby, have been duly authorized by all
necessary action, corporate, trust or otherwise, on the part of the Purchaser.
This Agreement and the Registration Rights Agreement have been duly executed and
delivered by the Purchaser and constitute valid and binding obligations of the
Purchaser enforceable against it in accordance with their terms.
4.3 Governmental Consents. No consent, approval, authorization,
waiting period or other order of any court, regulatory body, administrative
agency or other governmental body is required on the part of the Purchaser for
the execution and delivery of this Agreement and the Registration Rights
Agreement or the consummation of the transactions contemplated hereby or
thereby.
4.4 Ability to Protect Its Own Interests and Bear Economic Risks. The
Purchaser represents that by reason of the business and financial experience of
its management, the Purchaser has the capacity to evaluate the risks and merits
of, and make an informed decision with regard to, an investment in the Company
and the transactions contemplated by this Agreement. The Purchaser further
represents that the Purchaser is able to bear the economic risk of an investment
in the Shares, and has an adequate income independent of any income produced
from an investment in the Shares and has sufficient net worth to sustain a loss
of all of its investment in the Shares without economic hardship if such a loss
should occur.
4.5 Accredited Investor. The Purchaser represents that it is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
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4.6 Access to Information. The Company has made available to the
Purchaser all reports, schedules, forms, statements and other documents filed by
the Company with the SEC from October 11, 2000 through the Closing Date pursuant
to the reporting requirements of the Exchange Act, and the Purchaser has
received physical delivery of all such documents, records and information which
the Purchaser has requested, and has had adequate opportunity to ask questions
of, and receive answers from, the Company's officers, employees, agents,
accountants, and representatives concerning the Company's business, operations,
financial condition, assets, liabilities, and all other matters relevant to its
investment in the Shares.
4.7 Advice of own Counsel. The Purchaser has, with respect to all
legal matters relating to this Agreement and the offer and sale of the Shares,
relied solely upon the advice of the Purchaser's own counsel and has not relied
upon or consulted the counsel to the Placement Agent or counsel to the Company.
4.8 Restrictions on Dispositions. The Purchaser understands and agrees
that the Shares have not been, and will not upon issuance be registered under
the Securities Act, and each certificate or other document evidencing any of the
Shares shall be endorsed with the legend in substantially the form set forth
below, as well as any other legends required by applicable law. The Purchaser
covenants that the Purchaser shall not transfer the Shares represented by any
such certificate without complying with the restrictions on transfer described
in the legends endorsed on such certificate and understands that the Company
shall refuse to register any transfer of Shares not complying with the following
legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES
ACT"), OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE
SECURITIES LAWS. THESE SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR OTHERWISE ASSIGNED UNLESS (A) COVERED BY AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS, OR (B) EXEMPTIONS
FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE. AS
A CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE
COMPANY MAY REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL OR
SUCH OTHER EVIDENCE REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT
THAT NO REGISTRATION OR QUALIFICATION IS LEGALLY REQUIRED FOR SUCH
TRANSFER
4.9 Acquisition for Own Account. The Purchaser is acquiring the number
of Shares set forth on the signature page hereto, for its own account and for
investment and not with a view toward distribution in a manner which would
violate the Securities Act. The Purchaser will not, directly or indirectly,
offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to
buy, purchase or otherwise acquire or take a pledge of) any of the Shares except
in compliance with the Securities Act, the rules and regulations thereunder and
any
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applicable state securities laws. The Purchaser has, in connection with its
decision to purchase the number of Shares set forth on the signature page
hereto, not relied upon any representations or other information (whether oral
or written) other than the representations and warranties of the Company
contained herein.
4.10 Permitted Transfer. The Purchasers may transfer Shares to any
fund or account advised by Xxxxxx Investment Management, LLC or any affiliate
thereof if the transferee is a qualified institutional buyer (as defined in Rule
144A under the Securities Act of 1933, as amended) and agrees in writing to be
bound by the terms hereof.
5. Negative Covenants of the Company. From the date hereof through the
Closing Date, the Company shall, except as contemplated by this Agreement or the
Commitment Letter, or as consented to by the Purchaser or reasonably necessary
to consummate the Refinancing, operate its business in the ordinary course and
substantially in accordance with past practice. From the date hereof through the
Closing Date, the Company shall promptly advise the Purchaser of any change that
is reasonably likely to cause a representation or warranty to be untrue, cause a
covenant to be unsatisfied, or would have a Material Adverse Effect. Nothing
contained in this Section 5 will prevent the Company from consummating any
additional debt-for-equity exchanges, or any sale of the Company's equity or
debt securities or the other transactions, in each case, as contemplated by or
required by the Commitment Letter.
6. Conditions of Parties' Obligations.
6.1 Conditions of the Purchaser's Obligations. The obligations of the
Purchaser under Sections 1 and 2 hereof are subject to the fulfillment prior to
or on the Closing Date of all of the following conditions, any of which may be
waived in whole or in part by the Purchaser.
(a) Continued Accuracy of the Company's Covenants,
Representations and Warranties. The representations and
warranties of the Company contained in Section 3 shall be
true and correct on and as of the Closing Date with the same
effect as though such representations and warranties had
been made on and as of the Closing Date (except to the
extent expressly made as of an earlier date, in which case
as of such earlier date).
(b) Consents and Waivers. All authorizations, approvals, or
permits, if any, of any governmental authority or regulatory
body of the United States or of any state or any stock
exchange or of any third party that are required in
connection with the issuance and sale of the Shares pursuant
to this Agreement shall be duly obtained and effective as of
the Closing Date.
(c) No Material Adverse Change. There shall be no material
adverse change in the business, properties, prospects, or
assets of the Company from and after the date of this
Agreement.
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(d) Consummation of the Refinancing. The Company shall
simultaneously with the Closing, consummate the Refinancing.
(e) Officer's Certificate. The Company shall have delivered to
the Purchasers, a certificate dated the Closing Date,
executed by the Senior Executive Vice President and General
Counsel of the Company, certifying the satisfaction of the
conditions specified in (a), (b), (c) and (d) of this
Section 6.1.
(f) Registration Rights Agreement. The Purchaser and the Company
shall have executed and delivered the Registration Rights
Agreement (as defined herein).
(g) Legal Opinions. The Company shall have delivered to the
Purchasers, the Legal Opinions set forth in Section 3.22
herein.
6.2 Conditions of the Company's Obligations. The obligations of the
Company under Sections 1 and 2 hereof are subject to the fulfillment prior to or
on the Closing Date of all of the following conditions, any of which may be
waived in whole or in part by the Company.
(a) Continued Accuracy of Purchaser's Covenants, Representations
and Warranties. The representations and warranties of the
Purchaser contained in Section 4 shall be true and correct
on and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as
of the Closing Date (except to the extent expressly made as
of an earlier date, in which case as of such earlier date).
(b) Consents and Waivers. All authorizations, approvals,
permits, or the expiration of any waiting periods, if any,
of any governmental authority or regulatory body of the
United States or of any state or any stock exchange or of
any third party that are required in connection with the
purchase of the Shares pursuant to this Agreement shall be
duly obtained and effective as of the Closing Date.
6.3 Conditions of Each Party's Obligations. The respective obligations
of each party to consummate the transactions contemplated hereunder are subject
to the parties being reasonably satisfied as to the absence of (i) litigation
challenging or seeking damages in connection with the transactions contemplated
by this Agreement, and (ii) any provision of any applicable law or regulation,
or any judgment, injunction, order or decree prohibiting or enjoining the
transactions contemplated by this Agreement.
7. Survival of Representations, Warranties and Agreements. The covenants
and agreements of the Company contained herein shall survive the Closing,
provided, however, notwithstanding any investigation made by any party to this
Agreement or by the Placement Agent, all representations and warranties made by
the Company and the Purchasers herein shall
11
survive until the later of (i) twelve months from the Closing Date, and (ii) one
hundred and eighty days after the effective date of the Shelf Registration
Statement (as such term is defined in the Registration Rights Agreement). Any
claim for indemnification made pursuant to Section 11 herein arising out of the
inaccuracy or breach of any representation or warranty must be made prior to the
termination of the applicable survival period, in which case such representation
or warranty which is the subject of such claim shall survive with respect to
such claim until the final resolution hereof.
8. Registration Rights Agreement. Simultaneous with the execution and
delivery of this Agreement, the Company and the Purchasers will enter into a
registration rights agreement in substantially the form attached as Exhibit B
hereto (the "Registration Rights Agreement").
9. Broker's Fee. There is no broker, investment banker, financial advisor,
finder or other person which has been retained by or is authorized to act on
behalf of any Purchaser who might be entitled to any fee or commission for which
the Company will be liable in connection with the execution of this Agreement or
the transactions contemplated hereby. Each Purchaser acknowledges that the
Company will pay to the Placement Agent a fee in respect to the sale of the
Shares to the Purchaser.
10. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed by first-class registered or
certified airmail, confirmed facsimile or nationally recognized overnight
express courier postage prepaid, and shall be deemed given when so mailed and
shall be delivered as addressed as follows:
(a) if to the Company, to:
Rite Aid Corporation
00 Xxxxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Senior Executive Vice President and General Counsel
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
or to such other person at such other place as the Company shall designate to
the Purchaser in writing; and (b) if to any Purchaser, at its address as set
forth at the end of this Agreement, or at such other address or addresses as may
have been furnished to the Company in writing.
11. Indemnification.
(a) The Company will indemnify each Purchaser, each of its directors,
officers, agents, employees, representatives and controlling
12
persons against all expenses, claims, losses, damages and liabilities
(or actions, proceedings or settlements in respect thereof) arising
out of any inaccuracy or breach or any representation or warranty made
by the Company (for as long as such representations and warranties
survive pursuant to Section 5 hereof), or the breach of any of the
agreements or covenants contained in this Agreement, and will
reimburse each such indemnified person for any legal and any other
expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability or
action. It is agreed that the indemnity agreement contained in this
Section 11 shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is
effected without the consent of the Company (which consent shall not
be unreasonably withheld or delayed).
(b) Each Purchaser, severally and not jointly, shall indemnify the
Company, each of its directors, officers, agents, employees,
representatives and controlling persons against all expenses, claims,
losses, damages and liabilities (or actions, proceedings or
settlements in respect thereof) arising out of any inaccuracy or
breach of any representation or warranty made by the Purchaser (for as
long as such representatives and warranties survive pursuant to
Section 5 herein), or the breach of any of the agreements or covenants
contained in this Agreement, and will reimburse each such indemnified
person for any legal and any other expenses reasonably incurred in
connection with investigating and defending or settling any such
claim, loss, damage, liability or action. It is agreed that the
indemnity agreement contained in this Section 11 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 Purchaser (which consent shall
not be unreasonably withheld).
(c) Each party entitled to indemnification under this Section 11 (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
13
counsel reasonably acceptable to and paid for by the Indemnifying
Party but otherwise at the Indemnified Party's expense, and provided,
further, that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 11 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 11 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. 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.
12. Termination. Either party to this Agreement may terminate this
Agreement by giving written notice to such other non-terminating party if the
Closing has not occurred by July 13, 2001; provided, however, that the right to
terminate this Agreement under this Section 12 shall not be available to any
party who is in breach of this Agreement and such breach has not been waived by
the other party hereto, or whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Closing to
occur on or before July 13, 2001. If this Agreement is terminated pursuant to
this Section 12, then all rights and obligations of the parties hereunder shall
terminate without any liability of either party to the other party; provided,
however, that Sections 21, 24 and 26 shall survive any termination of this
Agreement.
13. Amendment. This Agreement may not be modified or amended except
pursuant to an instrument in writing, signed by the Company and the Purchaser.
The observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively) only with the written consent
of the Company and the Xxxxxxxxx.
00
00. Headings and Subheadings. The headings and subheadings of the various
sections of this Agreement have been inserted for convenience of reference only
and shall not be deemed to be part of this Agreement and are not to be
considered in interpreting or construing this Agreement.
15. Severability. In case any provision contained in this Agreement should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
conflicts of law provisions thereof.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
18. Jurisdiction. Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby may be brought in any federal
or state court located in the State of New York, and each of the parties hereby
consents to the jurisdiction of such courts (and of the appropriate appellate
courts therefrom) in any such suit, action or proceeding and irrevocably waives,
to the fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
in any such court or that any such suit, action or proceeding which is brought
in any such court has been brought in an inconvenient forum. Process in any such
suit, action or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court. Without limiting
the foregoing, each party agrees that service of process on such party as
provided in Section 8 shall be deemed effective service of process on such
party.
19. No Implied Waiver. No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
20. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
21. Expenses. Each of the Company and the Purchasers shall pay and be
responsible for all of its respective fees and expenses incurred in connection
with the preparation and negotiation of this Agreement and the consummation of
the transactions contemplated hereby. Notwithstanding the foregoing, the Company
will pay at the Closing, reasonable legal fees and expenses of one counsel
representing all of the Purchasers, in an amount not to exceed
15
$35,000; provided, however, that if the Closing does not occur and the failure
of the Closing to occur is a result of the breach of this Agreement by the
Purchasers which breach has not been waived by the Company, or the Purchaser's
failure to fulfill any obligations under this Agreement, then the Company shall
not have any liability for any fees or expenses of the Purchasers.
22. Entire Agreement. This Agreement contains the entire agreement among
the parties hereto with respect to the subject matter hereof and such Agreement
supersedes and replaces all other prior agreements, written or oral, among the
parties hereto with respect to the subject matter hereof.
23. Successors and Assigns. Except as otherwise provided herein, the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
24. Publicity. Except as required by law or by obligations pursuant to any
listing agreement with, or requirement of, any national securities exchange or
national quotation system on which the Common Stock is listed, admitted to
trading or quoted, the Company shall not, without the prior written consent of
the Purchaser make any public announcement or issue any press release which
includes the name of the Purchaser or any Affiliate of the Purchaser with
respect to the transactions contemplated by this Agreement. The Company agrees
that it will not use in advertising or publicity the names of the undersigned,
Xxxxxx Investment Management, LLC, any of its partners or employees, any of the
funds or accounts managed by it or any of its affiliates, or any trade name,
trademark, trade device, service xxxx, symbol or any abbreviation, contraction
or simulation thereof, in any case without the prior written consent of Xxxxxx
Investment Management, LLC.
25. Listing of Shares on the New York Stock Exchange. The Company shall
promptly take all action reasonably necessary in order to list the Shares on the
New York Stock Exchange.
26. Notice of Limitation of Liability. A copy of the Agreement and
Declaration of Trust of each Xxxxxx fund or series investment company (each a
"Fund") that is a Massachusetts business trust is on file with the Secretary of
Sate of The Commonwealth of Massachusetts and notice is hereby given that this
Agreement is executed on behalf of the Trustees of the relevant Fund as Trustees
and not individually and that the obligations of this Agreement are not binding
upon any of the Trustees, officers or shareholders of the Fund individually but
are bind only upon the assets and property of such Fund.
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
RITE AID CORPORATION
By: __________________________________
Name:
Title:
PURCHASER
Print or Type: Name of Purchaser
(Individual or Institution): ________________________________
Name and Title of Individual(s)
representing Purchaser (if an
Institution):
Name: ______________________________________
Title: _____________________________________
Name: ______________________________________
Title: _____________________________________
Number of Shares
to be Purchased Aggregate Price
---------------------- ---------------------
Signature by: Individual Purchaser or Individual(s)
representing Purchaser:
----------------------------
Name:
Title:
----------------------------
Name:
Title:
Address: ----------------------------
----------------------------
EXHIBIT A
COMMITMENT LETTER
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
SCHEDULE 3.1
Thrifty Wilshire, Inc
Reads, Inc.
Leader Drugs, Inc.
Rite Aid of Massachusetts, Inc.
The Xxxx Company
PL Xpress Inc.
SCHEDULE 3.4
CAPITAL STOCK
Rite Aid Common Stock Outstanding as of June 1, 2001: 403,761,696
3,360,237 Series B, $100 Par, Preferred Stock Convertible to Common Stock
at $5.50 per Share: 61,095,218
In the Money Stock Options (a) 44,787,450
-----------
Common Stock on a Fully diluted Basis as of June 1, 2001: 509,644,364
Debt for Equity Exchanges Agreed to and Priced but Not Yet Settled:
Exchange of RCF Facility for stock 8,562,174 (b)
Exchange of RCF Facility for stock 12,654,598 (b)
-----------
21,216,772
-----------
Common Stock on a Pro Forma Fully diluted Basis as of June 1, 2001: 530,861,136
===========
(a) Includes 37.4 million shares which are not yet vested.
(b) May be issued initially as Series C Convertible Preferred Stock.
Not Included in the Above Total are the Following:
A. $152,016,000 of 5.25% Convertible Subordinated Noted due 2002 that are
convertible into 27.672 shares of common stock per $1,000 note.
B. Warrants held by X. X. Xxxxxx to purchase 2,500,000 shares of Rite Aid
common stock at $11.00 per Share.
C. Private debt for equity exchanges that were agreed to but not yet priced:
$31,500,000 Exchange of 10.5% Notes Due 9/15/02 for stock
$15,300,000 Exchange of 10.5% Notes Due 9/15/02 for stock
$2,200,000 Exchange of RCF Facility for stock
$14,477,000 Exchange of Bank Debt for stock
$6,504,000 Exchange of 10.5% Notes Due 9/15/02 for stock
$10,000,000 Exchange of 10.5% Notes Due 9/15/02 for stock
-----------
$79,981,000
D. Shareholder suit settlement for 20,000,000 shares of common stock.
E. 3,000,000 common stock purchase warrants proposed to be issued in
connection with the exchange of $152 million of the Company's 10.5% Senior
Secured Notes for a new series of 12.5% Senior Secured Notes due 2006.
F. 7,559,599 stock options that are not in the money including 1,583,750
shares not yet vested.
G. 26,573,426 shares of common stock to be issued for $150 million.
SCHEDULE 3.9
LITIGATION
Federal Investigations
There are currently pending federal governmental investigations, both civil
and criminal, by the SEC and the United States Attorney, involving our financial
reporting and other matters. We are cooperating fully with the SEC and the
United States Attorney. We have begun settlement discussions with the United
States Attorney for the Middle District of Pennsylvania. The United States
Attorney has proposed that the government would not institute any criminal
proceedings against the Company if we enter into a consent judgment providing
for civil penalty payable over a period of years. The amount of the civil
penalty has not been agreed to and there can be no assurance that a settlement
will be reached or that the amount of such penalty will not have a material
adverse effect on our financial condition and results of operations.
The U.S. Department of Labor has commenced an investigation of matters
relating to our employee benefit plans, including our principal 401(k) plan,
which permitted employees to purchase our common stock. Purchases of our common
stock under the plan were suspended in October 1999. In January 2001, we
appointed an independent trustee to represent the interests of these plans in
relation to the company and to investigate possible claims the plans may have
against us. Both the independent trustee and the Department of Labor have
asserted that the plans may have claims against us. The investigations, with
which we are cooperating fully, are ongoing and we cannot predict their
outcomes. In addition, a purported class action lawsuit on behalf of the plans
and their participants has been filed by a participant in the plans in the
United States District Court for the Eastern District of Pennsylvania.
These investigations and settlement discussions are ongoing and we cannot
predict their outcomes. If we were convicted of any crime, certain contracts and
licenses that are material to our operations may be revoked, which would have a
material adverse effect on our results of operations and financial condition. In
addition, substantial penalties, damages or other monetary remedies assessed
against us, including a settlement, could also have a material adverse effect on
our results of operations, financial condition and cash flows.
Stockholder Litigation
We, certain of our directors, our former chief executive officer Xxxxxx
Xxxxx, our former president Xxxxxxx Xxxxxx, our former chief financial officer
Xxxxx Xxxxxxxx, and our former auditor KPMG LLP, have been sued in a number of
actions, most of which purport to be class actions, brought on behalf of
stockholders who purchased our securities on the open market between May 2, 1997
and November 10, 1999. All of these cases have been consolidated in the U.S.
District Court for the Eastern District of Pennsylvania. On November 9, 2000, we
announced that we had reached an agreement to settle the consolidated securities
class action lawsuits pending against us in the U.S. District Court for the
Eastern District of Pennsylvania and the derivative lawsuits pending there and
in the Delaware Court of Chancery. Under the agreement, which has been submitted
to the U.S. District Court for the Eastern District of Pennsylvania for
approval, we will pay $45 million in cash, which will be fully funded by our
officers' and directors' liability insurance, and issue shares of common stock
in 2002. The shares will be valued over a 10 day trading period in January 2002.
If the value determined is at least $7.75 per share, we will issue 20 million
shares. If the value determined is less than $7.75 per share, we have the option
to deliver any combination of common stock, cash and short-term notes, with a
total value of $155 million. As additional consideration for the settlement, we
have assigned to the plaintiffs all of our claims against the above named
executives and KPMG LLP. Several members of the class have elected to "opt-out"
of the class and, as a result, if the settlement is approved by the court, they
will be free to individually pursue their claims. Management believes that their
claims, individually and in the aggregate, are not material.
Drug Pricing and Reimbursement Matters
On October 5, 2000, we settled, for an immaterial amount, and without
admitting any violation of the law, the lawsuit filed by the Florida Attorney
General alleging that our non-uniform pricing policy for cash prescription
purchases was unlawful under Florida law.
The filing of the complaint by the Florida Attorney General, and our press
release issued in conjunction therewith, precipitated the filing of a purported
federal class action in California and several purported state class actions,
all of which (other than those pending in New York that were filed on October 5,
1999 and those pending in California that were filed on January 3, 2000 ) have
been dismissed. A motion to dismiss the action in New York is currently pending.
On May 30, 2001, a complaint filed in New Jersey in which the plaintiff made
similar allegation and which the trial court dismissed for failing to state a
claim upon which relief could be based was reinstated by the appellate court. We
believe that the remaining lawsuits are without merit under applicable state
consumer protection laws. As a result, we intend to continue to vigorously
defend against them and we do not anticipate that if fully adjudicated, they
will result in an award of damages. However, such outcomes cannot be assured and
a ruling against us could have a material adverse effect on the financial
position and results of operations of the company as well as necessitate
substantial additional expenditures to cover legal costs as we pursue all
available defenses.
We are being investigated by multiple state attorneys general for our
reimbursement practices relating to partially-filled prescriptions and
fully-filled prescriptions that are not picked up by ordering customers. We are
supplying similar information with respect to these matters to the Department of
Justice. We believe that these investigations are similar to investigations
which were, and are being, undertaken with respect to the practices of others in
the retail drug industry. We also believe that our existing policies and
procedures fully comply with the requirements of applicable law and intend to
fully cooperate with these investigations. We cannot, however, predict their
outcomes at this time.
An individual acting on behalf of the United States of America, has filed a
lawsuit in the United States District Court for the Eastern District of
Pennsylvania under the Federal False Claims Act alleging that we defrauded
federal health care plans by failing to appropriately issue refunds for
partially filled prescriptions and prescriptions which were not picked up by
customers. The Department of Justice has not decided whether to join this
lawsuit, as is its right under the law, and its investigation is continuing. We
have filed a motion to dismiss the complaint for failure to state a claim.
If any of these cases result in a substantial monetary judgment against us
or is settled on unfavorable terms, our results of operations, financial
position and cash flows could be materially adversely affected.
Store Management Overtime Litigation
We are a defendant in a class action pending in the California Superior
Court in San Diego with three subclasses, comprised of our California store
managers, assistant managers and managers-in-training. The plaintiffs seek back
pay for overtime not paid to them and injunctive relief to require us to treat
our store management as non-exempt. They allege that we decided to minimize
labor costs by causing managers, assistant managers and managers-in-training to
perform the duties and functions of associates for in excess of forty hours per
week without paying them overtime. We believe that in-store management were and
are properly classified as exempt from the overtime provisions of California
law. On May 21, 2001, we entered into a Memorandum of Agreement with the
plaintiffs under which, subject to approval of the court, we will settle this
lawsuit for a maximum of $25.0 million, a charge for which was taken in fiscal
2000. The settlement amount is payable in four equal installments of 25%, the
first of which is payable upon final court approval of the settlement and the
balance is payable six, 12 and 18 months thereafter.
Other
We are subject from time to time to lawsuits arising in the ordinary course
of business. In the opinion of our management, these matters are adequately
covered by insurance or, if not so covered, are without merit or are of such
nature or involve amounts that would not have a material adverse effect on our
financial condition, results of operations or cash flows if decided adversely.
SCHEDULE 3.11
CHANGES
Rite Aid Corporation
Restricted Stock Loans issued 5/01-6/15/01
Vested In Rate: 4.25%
Name SS# Shares Gross Income Total W/H Loan Amt. Interest Total
---------------------- -------------- ------- ------------- ------------- ------------- ----------- -------------
Xxxxxx ###-##-#### 10,000 $ 84,500.00 $ 28,096.25 $ 28,096.25 $ 107.96 $ 28,204.21
------- ------------- ------------- ------------- ----------- -------------
Non ss.16B Officer 10,000 $ 84,500.00 $ 28,096.25 $ 28,096.25 $ 107.96 $ 28,204.21
------- ------------- ------------- ------------- ----------- -------------
Gerson ###-##-#### 12,500 $ 106,750.00 $ 47,877.38 $ 47,877.38 $ 2074.90 $ 49,952.28
Hall ###-##-#### 36,591 $ 312,487.14 $ 140,150.49 $ 140,150.49 $ 6073.80 $ 146,224.29
Xxxxxxx ###-##-#### 124,622 $1,064,271.88 $ 477,325.94 $ 477,325.94 $ 20,686.22 $ 498,012.16
Xxxxxxxx ###-##-#### 12,500 $ 106.750.00 $ 47,877.38 $ 47,877.38 $ 2,074.90 $ 49,952.28
Xxxxxx ###-##-#### 382,387 $3,265,584.98 $1,464,614.87 $1,464,614.87 $ 63,473.06 $1,528,087.93
Xxxxxxx ###-##-#### 247,841 $2,116,562.14 $ 949,278.13 $ 949,278.13 $ 41,139.55 $ 900,417.68
Sari ###-##-#### 8,750 $ 74,725.00 $ 33,514.17 $ 33,514.17 $ 1,452.43 $ 34,966.60
Sorkin ###-##-#### 8,750 $ 74,725.00 $ 33,514.17 $ 33,514.17 $ 1,452.43 $ 34,966.60
Xxxxxxxx ###-##-#### 124,622 $1,064,271.88 $ 477,325.94 $ 477,325.94 $ 20,686.22 $ 498,012.16
------- ------------- ------------- ------------- ----------- -------------
ss.16B Officers 958,563 $8,186,128.02 $3,671,478.47 $3,671,478.47 $159,133.49 $3,830,591.97
------- ------------- ------------- ------------- ----------- -------------
Total Loan Amounts 968,563 $8,270,628.02 $3,699,574.72 $3,699,574.72 $159,221.45 $3,858,796.18
======= ============= ============= ============= =========== =============
SCHEDULE 3.19
OTHER PURCHASERS' AGREEMENTS
The obligations of the Fidelity Purchasers and American Century Purchasers are
several and not joint.
