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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
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RITE AID CORPORATION
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(Name of Issuer)
COMMON STOCK
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(Title of Class of Securities)
767754104
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(CUSIP Number)
Jonathan D. Sokoloff
Green Equity Investors, L.P.
333 South Grand Avenue, Suite 5400
Los Angeles, CA 90071
(213) 625-0005
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(Name, address and telephone number of person
authorized to receive notices and communications)
December 12, 1996
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(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13D to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Note. Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 2 Pages
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CUSIP NO. 767754104 13G PAGE 2 OF 2 PAGES
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Green Equity Investors, L.P.
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
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SEC USE ONLY
3
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SOURCE OF FUNDS
4
00
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEM 2(d) OR 2(e) [_]
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
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SOLE VOTING POWER
7
NUMBER OF 9,344,571
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
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EACH SOLE DISPOSITIVE POWER
9
REPORTING 9,344,571
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
9,344,571
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
13
7.61%
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TYPE OF REPORTING PERSON*
14
PN
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*SEE INSTRUCTION BEFORE FILLING OUT!
Page 2 of 2 pages
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ITEM 1. SECURITY AND ISSUER
This Statement relates to 9,344,571 shares (the "Rite Aid Shares") of the
Common Stock, par value $1.00 per share ("Rite Aid Common Stock"), of Rite Aid
Corporation, a Delaware corporation ("Rite Aid"). The principal executive
offices of Rite Aid are located at 30 Hunter Lane, Camp Hill, PA 17011.
ITEM 2. IDENTITY AND BACKGROUND
(a) - (c), (f). This Statement is being filed by Green Equity Investors,
L.P., a Delaware limited partnership ("GEI"), which is an investment
partnership. GEI's address is: 333 South Grand Avenue, Suite 5400, Los Angeles,
CA 90071.
(d) During the last five years, none of GEI, Leonard Green & Associates,
L.P. (GEI's general partner and a Delaware limited partnership, "LGA"), or the
general partners of LGA has been convicted in a criminal proceeding.
(e) During the last five years, none of GEI, LGA or the general partners of
LGA has been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction as a result of which any of GEI, LGA or the general
partners of LGA was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On December 12, 1996, pursuant to an Agreement and Plan of Merger, dated as
of October 13, 1996, as amended (the "Merger Agreement"), between Rite Aid and
Thrifty PayLess Holdings, Inc. ("TPH"), TPH merged into Rite Aid (the "Merger").
As a result of the Merger, among other things, each share of Class A Common
Stock and Class B Common Stock of TPH were converted into the right to receive
0.65 shares of Rite Aid Common Stock (the "Exchange Ratio"). Immediately prior
to the Merger, GEI was the holder of 14,139,600 shares of Class A Common Stock
of TPH and 236,664 shares of Class B Common Stock of TPH (together, such
14,376,264 shares being referred to as the "TPH Shares"). Based on the Exchange
Ratio, GEI received the 9,344,571 Rite Aid Shares in exchange for the TPH Shares
pursuant to the Merger.
ITEM 4. PURPOSE OF TRANSACTION
GEI received the Rite Aid Shares as a result of the Merger (see Item 3.
above). GEI holds the Rite Aid Shares for investment purposes. The Rite Aid
Shares are subject to the applicable provisions of a Stockholder Agreement dated
as of October 13, 1996 among GEI, Rite Aid and certain individual stockholders
of Rite Aid (the "Stockholder Agreement"), which provides, among other things,
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for (i) certain restrictions on the actions of GEI for a period of four years
from the date of the Merger Agreement (including a limitation on any
acquisitions or agreements to acquire any additional voting securities of Rite
Aid in excess of 1% of Rite Aid's outstanding shares, not counting for these
purposes the Rite Aid Shares), and (ii) certain registration rights with respect
to the Rite Aid Shares, including both "demand" and "piggyback" rights. The
Stockholder Agreement is filed as Exhibit 1 hereto and is incorporated by
reference herein.
Pursuant to a request made by TPH under the Merger Agreement prior to the
consummation of the Merger, on January 8, 1997, Leonard I. Green was elected to
the Board of Directors of Rite Aid for a term expiring at Rite Aid's 1999 Annual
Meeting of Stockholders. Mr. Green (through an entity controlled by him) is a
general partner of LGA.
Other than as described herein, GEI has no plans or proposals which relate
to or would result in: (a) the acquisition by any person of additional
securities, or the disposition of securities, of Rite Aid; (b) an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving Rite Aid or any of its subsidiaries; (c) a sale or transfer of a
material amount of assets of Rite Aid or any of its subsidiaries; (d) any change
in the present board of directors or management of Rite Aid, including any plans
or proposals to change the number or terms of directors or to fill any existing
vacancies on the board; (e) any material change in the present capitalization or
dividend policy of Rite Aid; (f) any other material change in Rite Aid's
business or corporate structure; (g) changes in Rite Aid's charter, bylaws, or
instruments corresponding thereto or other actions which may impede the
acquisition of control of Rite Aid by any person; (h) causing a class of
securities of Rite Aid to cease to be authorized to be quoted on the National
Association of Securities Dealers Automated Quotation System; (i) a class of
equity securities of Rite Aid becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (j) any
action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) GEI is the beneficial owner of 9,344,571 Rite Aid Shares, or
approximately 7.61% of the outstanding shares of Rite Aid Common Stock.
(b) GEI has sole voting and dispositive power with respect to the shares of
Rite Aid Common Stock held by it. The sole general partner of GEI, LGA, has the
power to direct the voting and investment of securities held by GEI. The address
of LGA is 333 South Grand Ave., Suite 5400, Los Angeles, CA 90071. The general
partners of LGA (collectively,
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the "LGA Partners") are GANMAX, Inc. (a corporation controlled by Gregory J.
Annick), Willow III, Inc. (a corporation controlled by Jennifer Holden
Dunbar), Tardy-Green, Inc. (a corporation controlled by Leonard I. Green) and
Jonathan D. Sokoloff, and each of their addresses is c/o LGA, 333 South Grand
Ave., Suite 5400, Los Angeles, CA 90071. LGA, as general partner of GEI, and the
LGA Partners, as general partners of LGA, may be deemed to share beneficial
ownership of the shares beneficially owned by GEI, but disclaim any such
beneficial ownership.
(c) Other than as described in Item 3 above, GEI did not have any
transactions in Rite Aid Common Stock in the last sixty (60) days.
(d) See (b) above.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Other than the Stockholder Agreement, there are no contracts, arrangements,
understandings or relationships between GEI and any other person with respect to
any securities of Rite Aid.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1. Stockholder Agreement dated as of October 13, 1996 by and
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between Rite Aid Corporation and Green Equity Investors, L.P. and joined in by
the individual stockholders of Rite Aid Corporation named therein.
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SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: January 10, 1997
Green Equity Investors, L.P.,
a Delaware limited partnership
By: Leonard Green & Associates, L.P.,
a Delaware limited partnership,
its general partner
By: /s/ Jonathan D. Sokoloff
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Jonathan D. Sokoloff
General Partner of Leonard
Green & Associates, L.P.
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EXHIBIT INDEX
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<TABLE>
<CAPTION>
Exhibit Description Page
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<S> <C> <C>
1 Stockholder Agreement dated as of
October 13, 1996 by and between Rite Aid
Corporation and Green Equity Investors,
L.P. and joined in by the individual
stockholders of Rite Aid Corporation
named therein.
</TABLE>
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EXHIBIT 1
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STOCKHOLDER AGREEMENT
AGREEMENT, dated as of October 13, 1996, by and between Rite Aid
Corporation, a Delaware corporation ("Parent"), Green Equity Investors, L.P., a
Delaware limited partnership (referred to herein as the "Stockholder"), and
joined in by the Individual Stockholders for the purpose set forth in Section
11.
RECITALS
A. Immediately prior to the execution of this Agreement, Parent and
Thrifty Payless Holdings, Inc., a Delaware corporation (the "Company"), have
entered into an Agreement and Plan of Merger (as such agreement may hereafter be
amended from time to time, the "Merger Agreement"), pursuant to which the
Company will be merged with and into Parent (the "Merger"); and
B. As an inducement and a condition to entering into the Merger
Agreement, Parent has required that Stockholder agree, and Stockholder has
agreed, to enter into this Agreement simultaneously with Parent's entry into the
Stockholder No. 1 Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound hereby, agree as follows:
1. CERTAIN DEFINITIONS. In addition to the terms defined elsewhere
herein, capitalized terms used and not defined herein have the respective
meanings ascribed to them in the Merger Agreement. For purposes of this
Agreement:
(a) "Beneficially Own" or "Beneficial Ownership" with respect to any
securities means having "beneficial ownership" of such securities as determined
pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Without duplicative counting of the same securities by
the same holder, securities Beneficially Owned by a person includes securities
Beneficially Owned by all other persons with whom such person would constitute a
"group" within the meaning of Section 13(d) of the Exchange Act with respect to
the securities of the same issuer.
(b) "Existing Shares" means shares of Company Common Stock
Beneficially Owned by Stockholder as of the date hereof.
(c) "Securities" means the Existing Shares together with any shares of
Company Common Stock or other
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securities of the Company acquired by Stockholder in any capacity after the date
hereof and prior to the termination of this Agreement whether upon the exercise
of options, warrants or rights, the conversion or exchange of convertible or
exchangeable securities, or by means of purchase, dividend, distribution, split-
up, recapitalization, combination, exchange of shares or the like, gift,
bequest, inheritance or as a successor in interest in any capacity or otherwise.
2. DISCLOSURE. Stockholder hereby agrees to permit Parent to publish
and disclose in the Registration Statement and the Proxy Statement/Prospectus
(including all documents and schedules filed with the SEC), and any press
release or other disclosure document which Parent, in its sole discretion,
determines to be necessary or desirable in connection with the Merger and any
transactions related thereto, Stockholder's identity and ownership of Company
Common Stock and the nature of its commitments, arrangements and understandings
under this Agreement. Parent will provide Stockholder with a copy of any
proposed disclosure and will provide Stockholder with a reasonable opportunity
to comment thereon.
3. VOTING OF COMPANY COMMON STOCK. Stockholder hereby agrees that,
during the period commencing on the date hereof and continuing until the first
to occur of (a) the Effective Time or (b) termination of this Agreement in
accordance with its terms, (i) Stockholder will not sell or transfer any
Securities or any interest therein to any person, other than a wholly owned
Subsidiary of Stockholder, and (ii) at any meeting (whether annual or special
and whether or not an adjourned or postponed meeting) of the holders of Company
Common Stock, however called, or in connection with any written consent of the
holders of Company Common Stock, Stockholder will appear at the meeting or
otherwise cause the Securities to be counted as present thereat for purposes of
establishing a quorum and vote or consent (or cause to be voted or consented)
the Securities (A) in favor of the adoption of the Merger Agreement and the
approval of other actions contemplated by the Merger Agreement and this
Agreement and any actions required in furtherance thereof and hereof; (B)
against any action or agreement that would result in a breach in any respect of
any covenant, representation or warranty or any other obligation or agreement of
the Company under the Merger Agreement or this Agreement; and (C) except as
otherwise agreed to in writing in advance by Parent in its sole discretion,
against the following actions (other than the Merger and the transactions
contemplated by this Agreement and the Merger Agreement): (1) any Takeover
Proposal or Acquisition Agreement (other than the Merger or the Merger
Agreement) and (2)(u) any change in a majority of the persons who constitute the
Company Board; (v) any material change in the present capitalization of the
Company, including without limitation any proposal to sell a substantial equity
interest in the Company or its Subsidiaries; (w) any amendment of the Company's
Certificate of Incorporation or By-laws; (x) any other change in the
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Company's corporate structure or business; or (y) any other action which, in the
case of each of the matters referred to in clauses (2)(u), (v), (w) or (x), is
intended, or could reasonably be expected, to impede, interfere with, delay,
postpone or materially adversely affect the Merger and the transactions
contemplated by this Agreement and the Merger Agreement. Stockholder may not
enter into any agreement or understanding with any person the effect of which
would be inconsistent with or violative of any provision contained in this
Section 3.
4. SUBSEQUENT STOCKHOLDER ACTIONS. (a) For a period of four years
from and after the Effective Time, at any meeting (whether annual or special or
whether or not an adjourned or postponed meeting of the holders of Parent Common
Stock) or in connection with any written consent of the holder of Parent Common
Stock, Stockholder will vote or consent (or cause to be voted or consented) all
shares of Parent Common Stock howsoever acquired then held of record or
Beneficially Owned by Stockholder in accordance with the recommendations of the
Board of Directors of Parent.
(b) If Parent becomes entitled to a Termination Fee pursuant to
Section 7.3 of the Merger Agreement and the Company consummates a Takeover
Proposal or enters into an Acquisition Agreement with any other party during the
12 months following the termination of the Merger Agreement, subject to the last
sentence of this Section 4(b), with respect to Securities for which Stockholder
receives cash consideration pursuant to the Takeover Proposal or Acquisition
Agreement, Stockholder will immediately upon the receipt thereof pay to Parent
an amount in cash (if positive) (the "Differential Amount") equal to (i) the net
pre-tax cash proceeds received by Stockholder with respect to the shares of
Company Common Stock or other Securities of the Company, including any shares of
Company Common Stock into or for which any Securities are convertible,
exchangeable or exercisable, of Stockholder (such shares, the "Subject Shares")
in such transaction or in a sale of any of the Securities to a third party that
was initiated by Stockholder within 12 months after the date that the Merger
Agreement is terminated minus (ii) the product of (A) 65% of the average closing
sales price for Parent Common Stock on the NYSE Composite Tape for the five NYSE
trading days immediately preceding the first public announcement of the
transaction in which the Subject Shares are sold (such amount, the "Basis
Amount") times (B) the number of Subject Shares. Any non-cash consideration
received by Stockholder in a transaction otherwise of a type described above as
part of the net proceeds ("Other Consideration") will be held by Stockholder
until Stockholder shall have received in cash upon the sale or other disposition
of such Other Consideration an amount equal to the Basis Amount times the number
of Subject Shares, whereupon all other securities or proceeds thereof will be
immediately paid to Parent.
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(c) For a period of four years from the date hereof, except within the
terms of a specific written request from the Parent, Stockholder will not, and
will use its best efforts to cause each of its Affiliates controlled by it not
to, propose or publicly announce or otherwise disclose an intent to propose, or
enter into or agree to enter into, singly or with any other person or directly
or indirectly, (i) any form of business combination, acquisition or other
similar transaction relating to the Parent or any subsidiary of the Parent, (ii)
any form of restructuring, recapitalization or similar transaction with respect
to Parent or any such subsidiary, or (iii) any demand, request or proposal to
amend, waive or terminate any provision of this Agreement, and except as
aforesaid during such period Stockholder will not, and will use its best efforts
to cause each of its Affiliates controlled by it or any of its representatives
as a principal not to, (1) acquire, or offer, propose or agree to acquire, by
purchase or otherwise, any voting securities of Parent, in excess of 1% of
Parent's outstanding shares (not counting for these purposes any shares of
Parent Common Stock acquired pursuant to the Merger), (2) make, or in any way
participate in, any solicitation of proxies with respect to any such voting
securities (including by the execution of action by written consent), become a
participant in any election contest with respect to Parent, seek to influence
any person with respect to any such voting securities or demand a copy of the
list of the stockholders or other books and records of Parent, (3) participate
in or encourage the formation of any partnership, syndicate or other group which
owns or seeks or offers to acquire beneficial ownership of any such voting
securities or which seeks to affect control of Parent or has the purpose of
circumventing any provision of this Agreement, (4) otherwise act, alone or in
concert with others (including by providing financing for another person), to
seek or to offer to control or influence, in any manner, the management, Board
of Directors, or policies of Parent, or (5) make any proposal or other
communication designed to compel Parent to make a public announcement thereof in
respect of any matter referred to in this Section 4(c).
5. COVENANTS, REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER.
Stockholder hereby represents and warrants to, and agrees with, Parent as
follows:
(a) Ownership of Shares. Stockholder is the sole record and
Beneficial Owner of Existing Shares consisting of 14,139,600 shares of A Common
Stock and 236,664 shares of B Common Stock. On the date hereof, the Existing
Shares constitute all of the Shares owned of record or Beneficially Owned by
Stockholder. Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in Sections 3 and 4 hereof,
sole power of disposition, sole power of conversion, sole power to demand
appraisal rights and sole power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of the Existing Shares with no
limitations, qualifications or restrictions on such rights,
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subject to applicable securities laws, and the terms of this Agreement.
(b) Corporate Authorization. This Agreement has been duly and validly
executed and delivered by Stockholder and constitutes a valid and binding
agreement enforceable against Stockholder in accordance with its terms except
(i) as may be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors rights and (ii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(c) No Conflicts. Except for filings, authorizations, consents and
approvals as may be required under the HSR Act, the Exchange Act and the
Securities Act, (i) no filing with, and no permit, authorization, consent or
approval of, any state or federal Governmental Authority is necessary for the
execution of this Agreement by Stockholder and the consummation by Stockholder
of the transactions contemplated hereby and (ii) none of the execution and
delivery of this Agreement by Stockholder, the consummation by Stockholder of
the transactions contemplated hereby or compliance by Stockholder with any of
the provisions hereof will (A) conflict with or result in any breach of the
organizational documents of Stockholder, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which Stockholder is a party or by which Stockholder
or any of its properties or assets may be bound, or (C) violate any order, writ,
injunction, decree, judgment, statute, rule or regulation applicable to
Stockholder or any of its properties or assets.
(d) No Encumbrances. Except as applicable in connection with the
transactions contemplated by Sections 3 and 4 hereof, the Existing Shares at all
times during the term hereof, will be, Beneficially Owned by Stockholder, free
and clear of all liens, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances whatsoever,
except for any such encumbrances or proxies arising hereunder.
(e) No Finder's Fees. No broker, investment banker, financial advisor
or other person is entitled to any broker's, finder's, financial adviser's or
other similar fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of Stockholder.
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(f) No Solicitation. Stockholder will not, and will cause its
affiliates and officers, directors, employees, partners, investment bankers,
attorneys, accountants and other agents and representatives of Stockholder and
such affiliates (such affiliates, officers, directors, employees, partners
investment bankers, attorneys, accountants, agents and representatives of any
person are hereinafter collectively referred to as the "Representatives" of such
person) not to, directly or indirectly (i) initiate, solicit or encourage, or
take any action to facilitate the making of, any offer or proposal which
constitutes or is reasonably likely to lead to any Takeover Proposal or any
inquiry with respect thereto or (ii) in the event of an unsolicited Takeover
Proposal for the Company or any affiliate of the Company, engage in negotiations
or discussions with, or provide any information or data to, any person (other
than Parent, any of its affiliates or representatives) relating to any Takeover
Proposal. Stockholder will notify Parent orally and in writing of any such
offers, proposals, or inquiries relating to the purchase or acquisition by any
person of Securities (including, without limitation, the terms and conditions
thereof and the identity of the person making it), within 24 hours of the
receipt thereof. Stockholder will, and will cause its Representatives to,
immediately cease and cause to be terminated any and all existing activities,
discussions or negotiations, if any, with any parties conducted heretofore with
respect to any Takeover Proposal relating to the Company, other than discussions
or negotiations with Parent and its affiliates. Notwithstanding the
restrictions set forth in this Section 5(f) Stockholder may publicly announce or
disclose the terms of this Agreement and the Merger Agreement. For purposes of
this Agreement, the Company is not deemed to be an Affiliate of Stockholder.
(g) Restriction on Transfer, Proxies and Non-Interference.
Stockholder will not, directly or indirectly, prior to the Merger, (i) offer for
sale, sell, transfer, tender, pledge, encumber, assign or otherwise dispose of,
or enter into any contract, option or other arrangement or understanding with
respect to or consent to the offer for sale, sale, transfer, tender, pledge,
encumbrance, assignment or other disposition of, any or all of the Securities or
any interest therein except as provided in Section 4(b); (ii) grant any proxies
or powers of attorney, deposit the Securities into a voting trust or enter into
a voting agreement with respect to the Securities; or (iii) take any action that
would make any representation or warranty of Stockholder contained herein untrue
or incorrect or would result in a breach by Stockholder of its obligations under
this Agreement.
(h) Reliance by Parent. Stockholder understands and acknowledges that
Parent is entering into the Merger Agreement in reliance upon Stockholder's
execution and delivery of this Agreement.
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(i) Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto will execute and
deliver such additional documents and take all such further lawful action as may
be necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF PARENT. Parent hereby
represents and warrants to Stockholder as follows:
(a) Organization. Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, has all
requisite corporate power or other power and authority to execute and deliver
this Agreement and perform its obligations hereunder. The execution and
delivery by Parent of this Agreement and the performance by Parent of its
obligations hereunder have been duly and validly authorized by the Board of
Directors of Parent and no other corporate proceedings on the part of Parent are
necessary to authorize the execution, delivery or performance of this Agreement
or the consummation of the transactions contemplated hereby by Parent.
(b) Corporate Authorization. This Agreement has been duly and validly
executed and delivered by Parent and constitutes a valid and binding agreement
of Parent enforceable against Parent in accordance with its terms, except (i) as
may be limited by applicable bankruptcy, insolvency or similar laws affecting
creditors rights and (ii) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought.
(c) No Conflicts. Except for filings, authorizations, consents and
approvals as may be required under the HSR Act, the Exchange Act and the
Securities Act, (i) no filing with, and no permit, authorization, consent or
approval of, any state or federal Governmental Authority is necessary for the
execution of this Agreement by Parent and the consummation by Parent of the
transactions contemplated hereby and (ii) none of the execution and delivery of
this Agreement by Parent, the consummation by Parent of the transactions
contemplated hereby or compliance by Parent with any of the provisions hereof
will (A) conflict with or result in any breach of the certificate of
incorporation or by-laws of Parent, (B) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which Parent is a party or by which Parent or any of
its properties or assets may be
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bound, or (C) violate any order, writ, injunction, decree, judgment, statute,
rule or regulation applicable to Parent or any of their respective properties or
assets.
(d) No Finder's Fee. No broker, investment banker, financial adviser
or other person is entitled to any broker's, finder's, financial adviser's or
other similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Parent.
7. STOP TRANSFER; LEGEND. (a) Stockholder agrees with, and
covenants to, Parent that Stockholder will not request that the Company register
the transfer (book-entry or otherwise) of any certificate or uncertificated
interest representing any of the Securities, unless such transfer is made in
compliance with this Agreement.
(b) In the event of a stock dividend or distribution, or any change in
the Company Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like other than
pursuant to the Merger, the terms "Shares and Securities" will be deemed to
refer to and include the shares of Company Common Stock as well as all such
stock dividends and distributions and any shares into which or for which any or
all of the Securities may be changed or exchanged and appropriate adjustments
shall be made to the terms and provisions of this Agreement.
(c) Stockholder will duly execute and deliver to Parent an
Affiliate's Letter prior to the Closing.
(d) Stockholder will promptly after the date hereof surrender to the
Company all certificates representing the Securities, and the Company will place
the following legend on such certificates in addition to any other legend
required thereon:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER PURSUANT TO AND OTHER PROVISIONS OF A
STOCKHOLDER AGREEMENT, DATED AS OF OCTOBER 13, 1996, BY AND BETWEEN
RITE AID CORPORATION, GREEN EQUITY INVESTORS, L.P. AND CERTAIN OTHER
PERSONS."
8. REGISTRATION RIGHTS. Stockholder and the limited partners of
Stockholder, acting through Stockholder or, if Stockholder shall not then exist,
through Leonard Green & Associates, L.P., following a distribution to such
limited partners of Common Stock received in the Merger pursuant to
Stockholder's agreement of limited partnership (a "Distribution") (provided that
the number of shares of Parent Common Stock subject to any request for such
registration represents at least 50% of the total shares of Parent Common Stock
received by Stockholder pursuant to the Merger that are then Beneficially
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Owned by Stockholder and all such limited partners taken as a whole) will be
entitled to cause Parent to register Parent Common Stock Beneficially Owned by
it and received pursuant to the Merger in accordance with the terms and
conditions of Appendix A hereto, which are incorporated herein by reference.
9. TERMINATION. This Agreement will terminate upon the earlier of
(i) the consummation of the Merger and (ii) the termination of the Merger
Agreement in accordance with its terms, except that the covenants and agreements
set forth in Sections 4(b) and 8 hereof will survive any termination of this
Agreement for the terms specified therein and the terms of Sections 4(a), 4(c)
and 8 will survive the consummation of the Merger. Notwithstanding the
foregoing, after the Effective Time (a) the provisions of Section 4 will
terminate as to Stockholder at any time after which Stockholder ceases to own at
least 2% of the outstanding shares of Parent Common Stock and (b) if there has
been a Distribution, the covenants and agreements of Stockholder set forth in
Section 4 will terminate and be of no further force and effect unless the
persons or entities receiving the Distribution would constitute a "group" within
the meaning of Section 13(d) of the Exchange Act with respect to the securities
of Parent.
10. MISCELLANEOUS.
(a) Entire Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersede all
other prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof.
(b) Binding Agreement. Stockholder agrees that this Agreement and the
obligations hereunder will attach to the Securities and will be binding upon any
person or entity to which legal or Beneficial Ownership of such Securities shall
pass, whether by operation of law or otherwise, including without limitation
Stockholder's legal representatives or successors or other transferees (for
value or otherwise) and any other successors in interest. Notwithstanding the
foregoing, this Agreement will not apply to any transferee of Stockholder that
is not an Affiliate controlled by Stockholder provided that such transferee
becomes such in a transaction not in breach of this Agreement.
(c) Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder will be assigned or delegated (whether by
operation of law or otherwise) without the prior written consent of the other
parties, provided that Parent may assign, in its sole discretion, its rights,
interests and obligations hereunder to any direct or indirect wholly owned
Subsidiary of Parent, but no such assignment will relieve Parent from any of its
obligations hereunder if such assignee does not perform such obligations.
Subject to the
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preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and assigns.
(d) Amendment and Modification. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated, except upon
the execution and delivery of a written agreement executed by the parties
hereto.
(e) Notices. All notices and other communications hereunder will be
in writing and will be deemed given if delivered personally, telecopied (which
is confirmed) or sent by an overnight courier service, such as FedEx, to the
parties at the following addresses (or at such other address for a party as will
be specified by like notice):
If to Stockholder:
Green Equity Investors, L.P.
c/o Leonard Green & Associates, L.P.
333 S. Grand Avenue, Suite 5400
Los Angeles, CA 90071
Attn: Leonard I. Green
Telecopy: (213) 625-0005
copy to:
Irell & Manella LLP
333 S. Hope Street, Suite 3300
Los Angeles, CA 90071
Attn: Edmund M. Kaufman
Telecopy: (213) 620-1555
if to Parent or the Individual Stockholders, to:
Rite Aid Corporation
30 Hunter Lane
Camp Hill, Pennsylvania 17011
Attn: Chief Executive Officer
Telephone: (717) 761-2633
Telecopy: (717) 975-5905
copy to:
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, NY 10022
Attn: Robert A. Profusek
Telephone: (212) 326-3939
Telecopy: (212) 755-7306
(f) Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void,
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unenforceable or against its regulatory policy, the remainder of the terms,
provisions, covenants and restrictions of this Agreement will remain in full
force and effect and will in no way be affected, impaired or invalidated.
(g) Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties will be
entitled to the remedy of specific performance of the terms hereof, in addition
to any other remedy at law or equity.
(h) No Waiver. The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, will not constitute a waiver by such party of
its right to exercise any such or other right, power or remedy or to demand such
compliance.
(i) No Third Party Beneficiaries. This Agreement is not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
(j) Governing Law. This Agreement will be governed and construed in
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflict of laws thereof.
(k) Jurisdiction. Each party hereby irrevocably submits to the
exclusive jurisdiction of the Court of Chancery in the State of Delaware in any
action, suit or proceeding arising in connection with this Agreement, and agrees
that any such action, suit or proceeding will be brought only in such court (and
waives any objection based on forum non conveniens or any other objection to
venue therein); provided, however, that such consent to jurisdiction is solely
for the purpose referred to in this Section 10(k) and will not be deemed to be a
general submission to the jurisdiction of said Court or in the State of Delaware
other than for such purposes. Each party hereto hereby waives any right to a
trial by jury in connection with any such action, suit or proceeding.
(l) Descriptive Headings. The descriptive headings used herein are
for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
(m) Counterparts. This Agreement may be executed in counterparts,
each of which will be considered one and the same agreement and will become
effective when such counterparts have been signed by each of the parties and
delivered to the
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other parties, it being understood that all parties need not sign the same
counterpart.
(n) Termination of Existing Shareholders Agreement. Stockholder
hereby covenants and agrees that, as of the Effective Time and without further
action, the Stockholders Agreement will be terminated and deemed null and void
and of no further force and effect.
11. THE INDIVIDUAL STOCKHOLDERS. The persons executing this
Agreement under the caption "Individual Stockholders" on the signature page
hereof are executing this Agreement solely so that this Agreement will
constitute a "stockholders' agreement" within the meaning of Section 218(c) of
the DGCL and will not have any rights or obligations hereunder except rights to
enforce Section 4(a).
12. SIMULTANEOUS AGREEMENT. This Agreement is entered into
simultaneously with a Stockholder Agreement among Stockholder No. 1, Parent and
certain other persons.
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IN WITNESS WHEREOF, Parent, Stockholder and the Individual
Stockholders have caused this Agreement to be duly executed as of the day and
year first above written.
RITE AID CORPORATION
By: /s/ Martin L. Grass
----------------------------------------
Martin L. Grass
Chairman of the Board
and Chief Executive Officer
GREEN EQUITY INVESTORS, L.P. a Delaware limited
partnership
By: LEONARD GREEN & ASSOCIATES, L.P., a Delaware
limited partnership
By: /s/ Jonathan D. Sokoloff
----------------------------------------
Jonathan D. Sokoloff
INDIVIDUAL STOCKHOLDERS
/s/ Martin L. Grass
--------------------------------------------
Martin L. Grass
/s/ Franklin C. Brown
--------------------------------------------
Franklin C. Brown
/s/ Elliot S. Gerson
--------------------------------------------
Elliot S. Gerson
/s/ Frank M. Bergonzi
--------------------------------------------
Frank M. Bergonzi
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APPENDIX A
----------
REGISTRATION RIGHTS
-------------------
1. DEFINITIONS. For purposes of this Appendix A, the following
terms will have the following meanings:
"Blackout Period" means a Section 6(a) Period or a Section 6(b)
Period.
"Business Day" means a day, other than a Saturday or Sunday, on which
banking institutions and securities exchanges in New York, New York are required
to be open.
"Counsel to Stockholder" means the single law firm reasonably
acceptable to Parent from time to time representing Stockholder.
"Effective Period" means a period commencing on the date of this
Agreement and ending on the earlier of (i) the first date as of which all
Registrable Securities cease to be Registrable Securities and (ii) the date on
which such Stockholder may sell all of the Registrable Securities in accordance
with Rule 145(d)(3) under the Securities Act.
"Inspectors" has the meaning specified in Section 7(l).
"NASD" means the National Association of Securities Dealers, Inc.
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by any Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
"Records" has the meaning specified in Section 7(l).
"Registrable Securities" means Parent Common Stock acquired by
Stockholder pursuant to the Merger and any securities received in any
distribution thereon and in connection therewith unless and until all such
Parent Common Stock may be publicly sold by Stockholder under Rule 144 under the
Securities Act within a 90-day period.
"Registration Expenses" means any and all reasonable expenses incident
to performance of or compliance with this Agreement, including without
limitation, (i) all SEC, NASD and securities exchange registration and filing
fees, (ii) all fees and expenses of complying with state securities or blue sky
laws (including reasonable fees and disbursements of counsel for any
<PAGE>
underwriters in connection with blue sky qualifications of the Registrable
Securities), (iii) all printing expenses, (iv) all fees and expenses incurred in
connection with the listing of the Registrable Securities on any securities
exchange or automated quotation system pursuant to Section 7(h), (v) the fees
and disbursements of counsel for Parent and of its independent public
accountants, (vi) the reasonable fees and expenses of any special experts
retained by Parent in connection with the requested registration, and (vii) out-
of-pocket expenses of underwriters customarily paid by the issuer to the extent
provided for in any underwriting agreement, but excluding underwriting
discounts, commissions and transfer taxes, if any, fees and expenses of Counsel
to Stockholder and all the fees and expenses of Stockholder incident to its
offering or sale of Registerable Securities.
"Registration Hold Period" means a Section 7(e) Period or a Section
7(m) Period.
"Registration Statement" means any registration statement of Parent
referred to in Sections 7(c) or (d), including any Prospectus, amendments and
supplements to any such registration statement, including post-effective
amendments, and all exhibits and all material incorporated by reference in any
such registration statement.
"Related Securities" means any securities of Parent similar or
identical to any of the Registrable Securities, including without limitation
Parent Common Stock and all options, warrants, rights and other securities
convertible into, or exchangeable or exercisable for, Parent Common Stock.
"SEC" means the Securities and Exchange Commission.
"Section 6(a) Period" has the meaning specified in Section 6(a).
"Section 6(b) Period" has the meaning specified in Section 6(b).
"Section 7(e) Period" has the meaning specified in Section 7(e).
"Section 7(m) Period" has the meaning specified in Section 7(m).
"Shelf Registration" means a registration statement on an appropriate
form pursuant to Rule 415 under the Securities Act (or any successor rule that
may be adopted by the SEC).
"underwritten registration" or "underwritten offering" means an
underwritten offering in which securities of Parent are sold to an underwriter
for reoffering to the public.
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2. SECURITIES SUBJECT TO THIS APPENDIX A. The securities entitled to
the benefits of this Appendix A are the Registrable Securities. For the
purposes of this Appendix A, Registrable Securities will cease to be Registrable
Securities when and to the extent that (a) a Registration Statement covering all
of the Registrable Securities has been declared effective under the Securities
Act and Registrable Securities have been disposed of pursuant to such effective
Registration Statement or three years has passed since such Registration
Statement was declared effective, (b) all of the Registrable Securities are
distributed to the public pursuant to Rule 144 (or any successor provision then
in force) under the Securities Act, or (c) all of the Registrable Securities
have ceased to be outstanding.
3. PIGGY-BACK REGISTRATION RIGHTS. (a) Whenever during the
Effective Period Parent proposes to file a registration statement under the
Securities Act relating to the public offering of Parent Common Stock for cash
pursuant to a firm commitment underwritten offering (other than pursuant to a
registration statement on Form S-4 or Form S-8 or any successor forms, or filed
in connection with an exchange offer or an offering of securities solely to
existing stockholders or employees of Parent), Parent will (i) give written
notice at least 15 Business Days prior to the filing thereof to Stockholder,
specifying the approximate date on which Parent proposes to file such
registration statement and advising Stockholder of its right to have any or all
of the Registrable Securities then held by Stockholder included among the
securities to be covered thereby, and (ii) at the written request of Stockholder
given to Parent at least five Business Days prior to the proposed filing date,
include among the securities covered by such registration statement the number
of Registrable Securities which Stockholder shall have requested be so included
(subject, however, to reduction in accordance with Section 3(b)). Parent will
use commercially reasonable efforts to cause the managing underwriter of the
proposed underwritten offering to permit the Registrable Securities so requested
to be included in the Registration Statement for such offering to be included in
such offering on the same terms and conditions as any similar securities of
Parent included therein.
(b) In the event Stockholder desires to participate in an offering
pursuant to Section 3(a), Stockholder may include Registrable Securities in any
Registration Statement relating to such offering to the extent that the
inclusion of such Registrable Shares will not reduce the number of shares of
Parent Common Stock to be offered and sold pursuant thereto by Parent and by any
person exercising demand registration rights with respect to such offering. If
the lead managing underwriter selected by Parent for an underwritten offering
pursuant to Section 3(a) determines that marketing factors require a limitation
on the number of Parent Common Stock to be offered and sold by the stockholders
of Parent in such offering, there will be included in the offering only that
number of Parent Common
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Stock, if any, that such lead managing underwriter determines will not
jeopardize the success of the offering of all Parent Common Stock that Parent
desires to sell for its own account. In such event and provided the managing
underwriter has so notified Parent in writing, the number of shares of Parent
Common Stock to be offered and sold by stockholders of Parent, including
Stockholder, desiring to participate in such offering will be allocated among
such holders of Parent Common Stock first, pro rata among securities to be
registered pursuant to demand registration rights and second, pro rata among
securities to be registered pursuant to piggyback registration rights. From the
date hereof for as long as Stockholder has any right to require registration of
Registrable Securities pursuant to this Agreement, Parent will not enter into
any agreement, except for the Stockholder No. 1 Agreement, with respect to
Parent Common Stock which provides for registration rights of any third party
that would have the effect, if exercised, of permitting a reduction in the
number of Stockholder's Registrable Securities includable in a registration
pursuant to this Agreement other than on a pro rata basis with other holders of
registration rights.
(c) Nothing in this Section 3 will create any liability on the part
of Parent to Stockholder if Parent for any reason should decide not to file a
registration statement proposed to be filed under Section 3(a) or to withdraw
such registration statement subsequent to its filing, regardless of any action
whatsoever that Stockholder may have taken, whether as a result of the issuance
by Parent of any notice hereunder or otherwise.
(d) A request by Stockholder to include Registrable Securities in a
proposed underwritten offering pursuant to Section 3(a) will not be deemed to be
a request for a demand registration pursuant to Section 4.
4. DEMAND REGISTRATION RIGHTS. (a) Upon the written request by
Stockholder at any time commencing on the Closing Date and continuing through
the Effective Period that Parent effect the registration with the SEC under and
in accordance with the provisions of the Securities Act of all or part of
Stockholder's Registrable Securities (which written request will specify the
aggregate number of shares of Registrable Securities requested to be registered,
the form of registration statement to be used, with Parent's reasonable consent,
and the means of distribution), Parent will file a Registration Statement
covering Stockholder's Registrable Securities requested to be registered within
20 Business Days after receipt of such request; provided, however, that Parent
will not be required to take any action pursuant to this Section 4:
(i) if prior to the date of such request Parent shall have
effected two registrations pursuant to this Section 4;
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<PAGE>
(ii) if Parent has effected a registration pursuant to Section 3
within the 90-day period next preceding such request which permitted
Stockholder to register all of its Registrable Securities;
(iii) if Parent shall at the time have effective a Shelf
Registration pursuant to which Stockholder could effect the
disposition of all of the Stockholder's Registrable Securities in the
manner requested;
(iv) if the Registrable Securities which Parent shall have been
requested to register shall have a then-current market value of less
than $50,000,000, unless such registration request is for all
remaining Registrable Securities; or
(v) during the pendency of any Blackout Period.
(b) Stockholder may distribute the Registrable Securities covered by
such request by means of an underwritten offering or any other lawful means, as
determined by Stockholder and the form of the registration statement shall be
subject to Stockholder's reasonable approval.
(c) A registration requested pursuant to this Section 4 will not be
deemed to be effected for purposes of this Section 4 if it has not been declared
effective by the SEC or become effective in accordance with the Securities Act
and the rules and regulations thereunder or its effectiveness has not been
maintained for the applicable period required hereunder.
(d) Stockholder may, at any time prior to the effective date of the
Registration Statement relating to such registration, revoke such request by
providing a written notice to Parent revoking such request. In such event,
Stockholder will reimburse Parent for all its out-of-pocket expenses incurred in
the preparation, filing and processing of the Registration Statement; provided,
however, that, if such revocation was based on (i) Parent's failure to comply in
any material respect with its obligations hereunder or (ii) the occurrence of a
Blackout Period, such reimbursement will not be required.
(e) Parent will not include any securities which are not Registrable
Securities in any Registration Statement filed pursuant to a demand made under
this Section 4 without the prior written consent of Stockholder.
5. SELECTION OF UNDERWRITERS. In connection with any
underwritten offering pursuant to a Registration Statement filed pursuant to a
demand made under Section 4, Stockholder will have the right to propose a
managing underwriter or underwriters to administer the offering, which Parent
may in its sole discretion reject, in which case the managing underwriter or
underwriters
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<PAGE>
shall be selected by Stockholder from a list of six nationally prominent
underwriters selected by Parent in its sole discretion.
6. BLACKOUT PERIODS. (a) If (i) during the Effective Period,
Parent files or proposes to file a registration statement (other than in
connection with the registration of securities issuable pursuant to a continuous
"at the market offering" pursuant to Rule 415(a)(4) under the Securities Act, an
employee stock option, stock purchase, dividend reinvestment plan or similar
plan or pursuant to a merger, exchange offer or a transaction of the type
specified in Rule 145(a) under the Securities Act or a registration of debt
securities not in any way exchangeable, convertible or exercisable for common
stock of Parent) with respect to any securities of Parent, and (ii) with
reasonable prior notice, (A) Parent (in the case of a non-underwritten offering
pursuant to such registration statement) advises Stockholder in writing that a
sale or distribution of Registrable Securities would adversely affect such
offering or (B) the managing underwriter or underwriters (in the case of an
underwritten offering other than an underwritten offering of indebtedness that
is not convertible into or exchangeable or redeemable for any capital stock of
the Company or any Subsidiary of the Company) advise Parent in writing (in which
case Parent will notify Stockholder), that a sale or distribution of Registrable
Securities would adversely affect such offering, then Parent will not be
obligated to effect the initial filing of a Registration Statement pursuant to
Section 4 during the period commencing on the date that is 30 calendar days
prior to the date Parent in good faith estimates (as certified in writing by an
officer of Parent to Stockholder following a request for registration pursuant
to Section 4(a)) will be the date of the filing of, and ending on the date which
is 90 calendar days following the effective date of, such registration statement
but in no event for more than 120 consecutive days (a "Section 6(a) Period").
(b) If the Board of Directors of Parent determines in good faith that
the registration and distribution of Registrable Securities (i) would materially
impede, delay or interfere with any pending financing (other than a financing of
the type described in Section 6(a)), acquisition, corporate reorganization or
other significant transaction involving Parent or (ii) would require disclosure
of non-public material information, the disclosure of which would materially and
adversely affect Parent, and, in the case of clause (ii), Parent is concurrently
forbidding purchases or sales in the open market by senior executives of Parent,
Parent will promptly give the stockholder written notice of such determination
and will be entitled to postpone the filing or effectiveness of a Registration
Statement for a reasonable period of time not to exceed 120 calendar days (a
"Section 6(b) Period"); provided, however, that in connection therewith Parent
will be required to deliver to Counsel to Stockholder (as identified at such
time to the Company) a general statement, signed by an officer of Parent and
accompanied by a
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Board resolution, describing in reasonable detail the reasons for such
postponement or restriction on use and an estimate of the anticipated delay.
Parent will promptly notify Stockholder of the expiration or earlier termination
of a Section 6(b) Period.
(c) Notwithstanding anything in this Section 6 to the contrary, (i)
the beginning of any Blackout Period will be at least 120 calendar days after
the end of the prior Blackout Period, and (ii) the aggregate number of days
included in all Blackout Periods and all Registration Hold Periods during any
consecutive 12-month period during the Effective Period will not exceed 180
calendar days.
7. REGISTRATION PROCEDURES. If and whenever Parent is required to use
commercially reasonable efforts to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Agreement,
Parent will, as expeditiously as possible:
(a) prepare and file with the SEC a Registration Statement with
respect to such Registrable Securities on any form for which Parent then
qualifies or which counsel for Parent deems appropriate, which form is subject
to Stockholder's reasonable approval and which form is available for the sale of
the Registrable Securities in accordance with the intended methods of
distribution thereof (including, if so requested by Stockholder, distributions
under Rule 415 under the Securities Act pursuant to a Shelf Registration
Statement), and use commercially reasonable efforts to cause such Registration
Statement to become and remain effective;
(b) prepare and file with the SEC amendments and post-effective
amendments to such Registration Statement and such amendments to the Prospectus
used in connection therewith as may be necessary to maintain the effectiveness
of such registration or as may be required by the rules, regulations or
instructions applicable to the registration form utilized by Parent or by the
Securities Act or rules and regulations thereunder necessary to keep such
Registration Statement effective for up to 90 calendar days, in the case of an
underwritten offering, or 360 calendar days, in any other case including a Shelf
Registration (or longer period in the event of a Registration Hold Period during
such 90 or 360 calendar days, as provided in this Section 7) and cause the
Prospectus as so supplemented to be filed pursuant to Rule 424 under the
Securities Act, and to otherwise comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
Registration Statement until the earlier of (i) such 90th or 360th calendar day
(or longer period) and (ii) such time as all Registrable Securities covered by
such Registration Statement have ceased to be Registrable Securities; provided
that a reasonable time before filing a Registration Statement or Prospectus, or
any amendments or supplements thereto, Parent will furnish to Stockholder, the
managing underwriter and their respective counsel for review and
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comment, copies of all documents proposed to be filed and will not file any such
documents to which any of them reasonably object prior to the filing thereof;
(c) furnish to Stockholder such number of copies of such Registration
Statement and of each amendment and post-effective amendment thereto (in each
case including all exhibits), any Prospectus or Prospectus supplement and such
other documents as Stockholder may reasonably request in order to facilitate the
disposition of the Registrable Securities by Stockholder (Parent hereby
consenting to the use (subject to the limitations set forth in the last
paragraph of this Section 7) of the Prospectus or any amendment or supplement
thereto in connection with such disposition);
(d) use commercially reasonable efforts to register or qualify such
Registrable Securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as Stockholder reasonably
requests, and do any and all other acts and things which may be reasonably
necessary or advisable to enable Stockholder to consummate the disposition in
such jurisdictions of the Registrable Securities owned by Stockholder, except
that Parent will not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction where, but for the
requirements of this Section 7(d), it would not be obligated to be so qualified,
to subject itself to taxation in any such jurisdiction or to consent to general
service of process in any such jurisdiction;
(e) notify Stockholder at any time when a Prospectus relating to any
such Registrable Securities is required to be delivered under the Securities Act
within the appropriate period mentioned in Section 7(b) of Parent's becoming
aware that the Prospectus included in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits 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 (the period
during which Stockholder is required to refrain from effective public sales or
distributions in such case being referred to as a "Section 7(e) Period"), and
prepare and furnish to Stockholder a reasonable number of copies of an amendment
to such Registration Statement or related Prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such Prospectus shall not include 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,
and the time during which such Registration Statement shall remain effective
pursuant to Section 7(b) will be extended by the number of days in the Section
7(e) Period;
(f) notify Stockholder at any time,
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(i) when the Prospectus or any Prospectus supplement or post-
effective amendment has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when the same
has become effective;
(ii) of any request by the SEC for amendments or supplements to
the Registration Statement or the Prospectus or for additional
information;
(iii) of the issuance by the SEC of any stop order of which
Parent or its counsel is aware or should be aware suspending the
effectiveness of the Registration Statement or any order preventing
the use of a related Prospectus, or the initiation or any threats of
any proceedings for such purposes;
(iv) of the receipt by Parent of any written notification of the
suspension of the qualification of any of the Registrable Securities
for sale in any jurisdiction of the initiation or any threats of any
proceeding for that purpose; and
(v) if at any time the representations and warranties of Parent
contemplated by Section 7(i)(i) cease to be true and correct in any
material respect;
(g) otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make available to Stockholder
an earnings statement which shall satisfy the provisions of Section 11(a) of the
Securities Act, provided that Parent will be deemed to have complied with this
Section 7(g) if it has satisfied the provisions of Rule 158 under the Securities
Act;
(h) use commercially reasonable efforts to cause all such Registrable
Securities to be listed on any securities exchange or automated quotation system
on which Parent Common Stock is then listed, if such Registrable Securities are
not already so listed and if such listing is then permitted under the rules of
such exchange or automated quotation system, and to provide a transfer agent and
registrar for such Registrable Securities covered by such Registration Statement
no later than the effective date of such Registration Statement;
(i) enter into agreements (including underwriting agreements) and
take all other appropriate and reasonable actions in order to expedite or
facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into and whether
or not the registration is an underwritten registration:
(i) make such representations and warranties to Stockholder and
the underwriters, if any, in form,
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substance and scope as are customarily made by issuers to underwriters
in comparable underwritten offerings;
(ii) obtain opinions of counsel to Parent thereof (which counsel
and opinions (in form, scope and substance) will be reasonably
satisfactory to the managing underwriters, if any, and Stockholder)
addressed to Stockholder and the underwriters, if any, covering the
matters customarily covered in opinions requested in comparable
underwritten offerings and such other matters as may be reasonably
requested by Stockholder and the managing underwriter, if any;
(iii) obtain "cold comfort" letters and bring-downs thereof from
Parent's independent certified public accountants addressed to
Stockholder and the underwriters, if any, such letters to be in
customary form and covering matters of the type customarily covered in
"cold comfort" letters by independent accountants in connection with
underwritten offerings;
(iv) if requested, provide indemnification in accordance with
the provisions and procedures of Section 10 to all parties to be
indemnified pursuant to said Section; and
(v) deliver such documents and certificates as may be reasonably
requested by Stockholder and the managing underwriters, if any, to
evidence compliance with Section 7(e) and with any customary
conditions contained in the underwriting agreement or other agreement
entered into by Parent.
(j) cooperate with Stockholder and the managing underwriter or
underwriters or agents, if any, to facilitate, to the extent commercially
reasonable under the circumstances, the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing the securities
to be sold under such Registration Statement, and enable such securities to be
in such denominations and registered in such names as the managing underwriter
or underwriters or agents, if any, or Stockholder may request;
(k) if reasonably requested by the managing underwriter or
underwriters or Stockholder, incorporate in a Prospectus supplement or post-
effective amendment such information as the managing underwriters and
Stockholder agree should be included therein relating to the plan of
distribution with respect to such Registrable Securities, including without
limitation information with respect to the purchase price being paid by such
underwriters and with respect to any other terms of the underwritten offering of
the Registrable Securities to be sold in such offering and make all required
filings of such Prospectus supplement or post-effective amendment as promptly as
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practicable upon being notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;
(l) provide Stockholder, any underwriter participating in any
disposition pursuant to such Registration Statement and any attorney, accountant
or other agent retained by Stockholder or underwriter (collectively, the
"Inspectors") reasonable access to appropriate officers of Parent and Parent's
subsidiaries to ask questions and to obtain information reasonably requested by
any such Inspector and make available for inspection all financial and other
records and other information, pertinent corporate documents and properties of
any of Parent and its subsidiaries and affiliates (collectively, the "Records")
as may be reasonably necessary to enable them to exercise their due diligence
responsibilities; provided, however, that the Records that Parent determines, in
good faith, to be confidential and which it notifies the Inspectors in writing
are confidential will not be disclosed to any Inspector unless such Inspector
signs a confidentiality agreement reasonably satisfactory to Parent but in any
event permitting disclosure by an Inspector if (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission of a
material fact in such Registration Statement or (ii) the release of such Records
is ordered pursuant to a subpoena or other order from a court of competent
jurisdiction; provided further, however, that any decision regarding the
disclosure of information pursuant to clause (i) may be made only after
consultation with counsel for the applicable Inspectors. Stockholder agrees that
it will promptly after learning that disclosure of such Records is sought in a
court having jurisdiction, give notice to Parent and allow Parent, at Parent's
expense, to undertake appropriate action to prevent disclosure of such Records;
(m) in the event of the issuance of any stop order of which Parent or
its counsel is aware or should be aware suspending the effectiveness of the
Registration Statement or of any order suspending or preventing the use of any
related Prospectus or suspending the qualification of any Registrable Securities
included in the Registration Statement for sale in any jurisdiction, Parent will
use commercially reasonable efforts promptly to obtain its withdrawal; and the
period for which the Registration Statement will be kept effective will be
extended by a number of days equal to the number of days between the issuance
and withdrawal of any stop orders (a "Section 7(m) Period"); and
(n) reasonably cooperate to make available members of senior
management of Parent to participate in any meetings and conferences or "road
shows" with potential purchasers of the Registrable Securities as the
underwriters (if any) or the Stockholder may reasonably request, the parties
recognizing that the regular responsibilities of such managers will take
priority over any such activities.
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Parent may require Stockholder to furnish Parent with such information regarding
Stockholder and pertinent to the disclosure requirements relating to the
registration and the distribution of such securities as Parent may from time to
time reasonably request in writing. Upon receipt of any notice from Parent of
the happening of any event of the kind described in Section 7(e), Stockholder
will forthwith discontinue disposition of Registrable Securities pursuant to the
Prospectus or Registration Statement covering such Registrable Securities until
Stockholder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 7(e), and, if so directed by Parent, Stockholder will
deliver to Parent (at Parent's expense) all copies, other than permanent file
copies then in Stockholder's possession of the Prospectus covering such
Registrable Securities current at the time of receipt of such notice.
8. REGISTRATION EXPENSES. Parent will pay all Registration Expenses
in connection with all registrations of Registrable Securities pursuant to
Sections 3 and 4 upon the written request of Stockholder, and Stockholder will
pay (a) any fees or disbursements of Counsel to Stockholder and (b) all
underwriting discounts and commissions and transfer taxes, if any, and other
fees, costs and expenses of Stockholder relating to the sale or disposition of
Stockholder's Registrable Securities pursuant to the Registration Statement.
9. REPORTS UNDER THE EXCHANGE ACT. Parent will:
(a) file with the SEC in a timely manner all reports and other
documents required of Parent under the Exchange Act; and
(b) furnish to Stockholder, during the Effective Period,
forthwith upon request (i) a written statement by Parent that it has
complied with the current public information and reporting requirements of
Rule 144 under the Securities Act and the Exchange Act and (ii) a copy of
the most recent annual or quarterly report of Parent and such other reports
and documents so filed by Parent.
10. INDEMNIFICATION; CONTRIBUTION. (a) Indemnification by Parent.
Parent will indemnify and hold harmless Stockholder, its officers, directors,
agents, trustees, general partners and each person who controls Stockholder
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act), against all losses, claims, damages, liabilities and expenses
(including reasonable attorneys' fees, disbursements and expenses) incurred by
such party pursuant to any actual or threatened action, suit, proceeding or
investigation arising out of or based upon (i) any violation by Parent (or its
officers, directors or controlling persons) of any federal or state law, rule or
regulation applicable to Parent and relating to any action required or inaction
by Parent (or such other person) in connection with or relating to any
Registration
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Statement, (ii) any untrue or alleged untrue statement of material fact
contained in the Registration Statement, any Prospectus or preliminary
Prospectus, or any amendment or supplement to any of the foregoing, or (iii) any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
Prospectus or a preliminary Prospectus, in light of the circumstances then
existing) not misleading, except in each case insofar as the same arise out of
or are based upon any such untrue statement or omission made in reliance on and
in conformity with information with respect to such indemnified party furnished
in writing to Parent by such indemnified party or its counsel expressly for use
therein. In connection with an underwritten offering, Parent will indemnify the
underwriters thereof, their officers, directors, agents, trustees, general
partners, and each person who controls such underwriters (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) to the same
extent as provided above with respect to the indemnification of Stockholder.
Notwithstanding the foregoing provisions of this Section 10(a), Parent will not
be liable to Stockholder (or any officer, director, agent, trustee or
controlling person thereof), any person who participates as an underwriter in
the offering or sale of Registrable Securities or any other person, if any, who
controls Stockholder or underwriter (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act), under the indemnity agreement
in this Section 10(a) for any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense that arises out of Stockholder's or
such other person's failure to send or deliver a copy of the final Prospectus to
the person asserting an untrue statement or alleged untrue statement or omission
or alleged omission at or prior to the written confirmation of the sale of the
Registrable Securities to such person if such statement or omission was
corrected in such final Prospectus and Parent had previously furnished copies
thereof to Stockholder or such other person in accordance with this Agreement.
(b) Indemnification by Stockholder. In connection with the
Registration Statement, Stockholder will furnish to Parent in writing such
information, including the name and address of, and the amount of Registrable
Securities held by, Stockholder, as Parent reasonably requests for use in such
Registration Statement or the related Prospectus and will indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section
10(a)) Parent or any underwriter, as the case may be, and any of their
respective affiliates, directors, officers, agents, trustees and controlling
persons (within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act), against any losses, claims, damages, liabilities and expenses
resulting from (i) any violation by Stockholder (or its officers, directors,
agents, trustees or controlling persons) of any federal or state law, rule or
regulation relating to action required of or inaction by
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Stockholder (or such other person) in connection with its offer and sale of
Registrable Securities and (ii) any untrue or alleged untrue statement of a
material fact contained in, or any omission or alleged omission of a material
fact required to be stated in, such Registration Statement or Prospectus or any
amendment or supplement to either of them or necessary to make the statements
therein (in the case of a Prospectus, in the light of the circumstances then
existing) not misleading, but only to the extent that any such untrue statement
or omission is made in reliance on and in conformity with information with
respect to Stockholder furnished in writing to Parent by Stockholder or its
counsel specifically for inclusion therein.
(c) Conduct of Indemnification Proceedings. Any person entitled to
indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the receipt by such indemnified party of any written
notice of the commencement of any action, suit, proceeding or investigation or
threat thereof made in writing for which such indemnified party may claim
indemnification or contribution pursuant to this Agreement (provided that
failure to give such notification will not affect the obligations of the
indemnifying party pursuant to this Section 10 except to the extent the
indemnifying party shall have been actually prejudiced as a result of such
failure). In case any such action is brought against any indemnified party and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it wishes,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who may
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under these
indemnification provisions for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation, unless in the reasonable judgment of any indemnified party a
conflict of interest is likely to exist, based on the written opinion of
counsel, between such indemnified party and any other of such indemnified
parties with respect to such claim, in which event the indemnifying party will
be obligated to pay the reasonable fees and expenses of such additional counsel.
No indemnifying party, in defense of any such action, suit, proceeding or
investigation, may, except with the consent of each indemnified party, consent
to the entry of any judgment or entry into any settlement (which consent will
not be unreasonably withheld) which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such action, suit, proceeding or
investigation to the extent the same is covered by the indemnity obligation set
forth in this Section 10. No indemnified party
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may consent to entry of any judgment or enter into any settlement without the
consent of each indemnifying party (which consent will not be unreasonably
withheld).
(d) Contribution. If the indemnification from the indemnifying party
provided for in this Section 10 is unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party, will contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities and expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified party in connection with the actions which resulted in
such losses, claims, damages, liabilities and expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party and indemnified party will be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such indemnifying
party or indemnified party, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such action. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above will be deemed to include, subject to
the limitations set forth in Section 10(c), any legal and other fees and
expenses reasonably incurred by such indemnified party in connection with any
investigation or proceeding. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 10(d) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 10(d), no underwriter will be required to contribute
any amount in excess of the underwriting discount or commission applicable to
the Registrable Securities underwritten by it. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Stockholder's obligation to contribute is several
in the proportion that the proceeds of the offering received by Stockholder
bears to the total proceeds of the offering, and not joint. If indemnification
is available under this Section 10(d), the indemnifying parties will indemnify
each indemnified party to the full extent provided in Section 10(a) or 10(b), as
the case may be, without regard to the relative fault of said indemnifying
parties or indemnified party or any other equitable consideration provided for
in this Section 10(d).
(e) Certain Limitations. In no event will Stockholder be liable or
required to contribute any amount under this Section 10 or otherwise in respect
of any untrue or alleged
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untrue statement or omission or alleged omission for amounts in excess of the
amount by which the total price at which the Registrable Securities of
Stockholder were offered to the public exceeds the amount of any damages which
Stockholder has otherwise been required to pay by reason of such untrue
statement or omission.
(f) Nonexclusivity. The provisions of this Section 10 will be in
addition to any liability which any indemnifying party may have to any
indemnified party and will survive the termination of this Agreement.
(g) Underwriter Indemnification. Notwithstanding anything to the
contrary, the indemnification for an underwriter will be modified (to the extent
requested by the underwriter) to conform to that which is customary for such
underwriter, to the extent set forth in their underwriting agreement.
11. PARTICIPATION IN UNDERWRITTEN OFFERINGS. Stockholder may
not participate in any underwritten offering pursuant to Section 3 hereunder
unless Stockholder (a) agrees to sell Stockholder's Registrable Securities on
the basis provided in any underwriting arrangements approved by Parent in its
reasonable discretion and (b) completes and executes all questionnaires, powers
of attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
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